Railway tracks play a pivotal role in expediting the economic growth of a country by enabling seamless transportation of freight and passenger traffic, thereby generating revenues. The Indian Railways’ (IR) network is congested and overutilised, resulting in slower train speeds and loss of potential revenue. To overcome these shortcomings, IR is focusing on constructing new lines, doubling the existing ones and converting narrow gauge to broad gauge. However, despite the attention the progress has been dismal. Since 2013, IR’s network has increased from 65,432 km to 67,404 km in 2017 (till August 2017), posting a meagre compound annual growth rate of 0.74 per cent. In order to improve the prevailing conditions, the government has set ambitious targets entailing huge investment opportunities for contractors.
Over the years, tardy expansion and augmentation of IR’s network has resulted in congestion of railway lines. Over 65 per cent of the high-density lines including Delhi-Howrah, Delhi-Mumbai, Mumbai-Howrah, Howrah-
Chennai, Mumbai-Chennai and Delhi-Guwahati have exceeded the 100 per cent line capacity utilisation benchmark, thereby compromising safety and slowing the speed of freight wagons. In light of this, the government has set ambitious targets for new track laying works, renewal of existing lines and their electrification.
For the year 2018-19, the government has set a target of 1,000 km each for laying of new lines and gauge conversion works. Besides, IR is aiming to double 2,100 km of railway lines. The current year’s target for new lines has witnessed a massive increase of 148.8 per cent from the previous year’s revised target of 402 km. The gauge conversion target has also increased by 74.2 per cent from the 574 km target set in 2017-18. Besides, the target set for doubling has also surged by a massive 122 per cent from the previous year’s revised estimates of 945 km. These huge capacity expansion plans will enhance IR’s efficiency.
The renewal and maintenance of existing rail track infrastructure is also critical for increasing the speed and load of trains. Track renewal works are sanctioned either on the basis of traffic carried or the severity of existing conditions (such as corrosion, rail fractures, wear and tear). The targets for track renewal during the period 2013-14 to 2017-18, saw an upward trend, from 2,100 km in 2013-14 to 3,600 km in 2017-18. With regard to the actual implementation, all targets have been surpassed except those in 2016-17. In 2015-16, the target achievement stood at 112 per cent, after which it declined to 93 per cent in 2016-17. For 2018-19, a track renewal target of 3,900 km has been fixed, an 8 per cent increase from the previous year’s target.
The targets for line electrification have been increasing steadily over time, from 1,200 km in 2012-13 to 2,000 km in 2016-17. In 2017-18, the target was doubled to 4,000 km. Till December 2017, 59 per cent of the target had been achieved with about 2,367 km lines electrified. For 2018-19, an electrification target of 6,000 route km has been set. Besides, IR has prepared an action plan to electrify 38,000 route km during the five-year period 2017-18 to 2021-22. This will result in 100 per cent electrification of broad gauge rail routes.
There exists a huge investment potential in decongesting the rail network by developing new lines. As per the budget allocations for 2018-19, Rs 97.55 billion has been allocated to new lines, Rs 23.46 billion has been allocated for taking up gauge conversion work, and funds to the tune of Rs 6.51 billion have been allocated for doubling projects. Substantial thrust has been laid on track renewal works with a budgeted estimate of Rs 114.5 billion for implementation. Besides, over the next five years, the government is expected to invest $140 billion to modernise its rail network.
Private sector participation
With network expansion and decongestion plans on the anvil, there will be significant business opportunities for private contractors, consultants, equipment and technology suppliers, material suppliers and other ancillary market segments. The government is also planning to give operations of some railway lines to private players to enhance competition in the sector. Besides, the procurement of about 0.31 million tonne of rails from alternative sources such as private companies is being considered.
Going forward, with IR targeting to commission about 4,000 km of new lines at an average of 19 km per day and electrification of 6,000 km of rail lines, network capacity will be significantly enhanced. Further, these proposed works will provide increased opportunities for private players as well.