Promising Future

Opportunities galore in the railway sector    

The railway sector is poised to become one of the major drivers for economic growth in the country, given the huge Rs 10 trillion investment planned for the next four-five years. This investment will go towards network decongestion, network expansion and safety-related works which aim to address the carrier’s major concerns of safety, operational efficiency, declining modal share and overall competitiveness.

IR has set massive network expansion and decongestion targets. In the next few years, it plans to undertake 22,825 km of new line and 12,215 km of line doubling works. Besides, it plans to electrify at least 28,000 route km of railway network. Further, 3,360 km of length under the dedicated freight corridors is expected be commissioned by 2020.

Big opportunities: 2019-20 and beyond

The Station Redevelopment Programme is one of the most ambitious projects aimed at modernising and upgrading station infrastructure, entailing an investment of about Rs 1.1 trillion for the redevelopment of 600 stations. Geo-

graphically, Gujarat offers the maximum opportunity for investment at Rs 42 billion, followed by Delhi at Rs 19 billion. Punjab and Chandigarh together offer an investment opportunity of

Rs 19 billion for the redevelopment of the Amritsar and Chandigarh railway stations. The programme also offers opportunities for real estate development (hotels, eateries, multiplexes, shopping malls and office complexes, etc.), and the creation of multimodal transit hubs.

Construction of high speed rail (HSR) corridors is another major upcoming opportunity. The eight proposed HSR projects will entail an expenditure of at least Rs 13 trillion over the next 15-20 years. Six corridors on the Diamond Quadrilateral connecting the metropolitan cities (Delhi, Mumbai, Chennai  and Kolkata) have been identified for conducting feasibility studies for developing HSR projects. Apart from these, feasibility studies for two other HSR projects – Delhi-Amritsar and Chennai-Mysore – have been completed. Meanwhile, there are nine semi-HSR projects in the planning stage. These will entail an investment of at least Rs 874 billion.

Rolling stock will continue to be a focus area for IR. It plans to manufacture a total of 4,941 coaches in 2019-20 and 4,839 coaches in 2020-21. Besides, for 2019-20 and 2020-21, IR has set a target of manufacturing 725 electric locomotives during each year. It is also setting up 17 new manufacturing units at an estimated cost of Rs 390 billion.

With increasing reliance on dieselisation and electrification, IR has been reducing its fleet of steam locomotives. It has been taking initiatives to convert diesel locomotives to electric ones and had plans to produce 680 locomotives (electric and diesel) during 2018-19. Further, 725 electric locomotives will be manufactured in 2019-20, 2020-21 and 2021-22.

IR has decided to opt for the reverse auction method to decide on future tenders for procurement of 21,758 wagons at an estimated cost of Rs 56 billion – the largest such order for the national transporter. The order includes nine types of wagons, including covered, flat, open and brake vans to be supplied by the successful bidders in the next two years.

Given the mandate to ramp up the renewable energy share in its total energy mix, IR has set ambitious targets of setting up 1,000 MW and 200 MW of solar and wind power respectively by 2020.

New areas

IR is planning to work towards monetising its assets and undertaking revenue yielding activities. To this end, it has decided to promote new ideas and concepts for the enhancement of non-fare revenue. In May 2018, the New Innovative Non-Fare Revenue Ideas Scheme was launched.

IR is also coming up with initiatives and schemes to ramp up public-private partnership (PPP) projects in the sector. It has already taken up two stations for redevelopment through the PPP mode. Besides, the Charbagh (Lucknow, Uttar Pradesh), Ernakulam Junction (Kerala), Gomti Nagar (Lucknow, Uttar Pradesh), Delhi Sarai Rohilla (Delhi), Jammu Tawi (Jammu & Kashmir), Kota (Rajasthan), Kozhikode (Kerala), Madgaon (Goa), Nellore (Andhra Pradesh), Puducherry and Tirupati (Andhra Pradesh) railway stations are also planned to be taken up for redevelopment on a PPP basis. In a bid to reduce energy costs, IR aims to install 1 GW of solar power capacity by 2021 on a PPP basis based on project feasibility. Besides, to meet its increasing electrification requirements, IR also plans to lay over 8,500 km of transmission lines through the PPP mode in the coming years.

Future outlook

Experts have reiterated the fact that the sector is in desperate need of a revamp. Much more needs to be achieved in the areas of last-mile connectivity, development of rail-based multimodal logistics parks, stations and freight terminals, higher speeds of freight and passenger trains, etc. IR’s network expansion and decongestion plans are expected to create opportunities for project developers, EPC contractors, technology providers, rolling stock manufacturers, renewable energy developers, and transmission and distribution equipment providers.

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