Rising investments in network expansion and decongestion in the railway sector have resulted in high growth in the railway equipment market. The entry of new manufacturers has widened the choice for project developers/contractors. Further, the introduction of new high-end technology in the sector has resulted in a higher-value equipment market than had been the case earlier. Also, the initiatives being taken as part of the Make in India programme are playing a major role in expanding the domestic business.
In an interaction with Indian Infrastructure at the recently held International Railway Equipment Exhibition, Dipankar Ghosh, chief executive officer (CEO) railway equipment division, Escorts, and Chirag Sethi, business head, railway traction power, Delta Electronics India Private Limited, discussed key aspects of their businesses, experience so far, roadblocks faced, potential areas for growth and the overall outlook for the railway equipment industry. Excerpts…
What are your views on the railway equipment industry? What is the key railway equipment being offered by Escorts?
The railway equipment industry is a big one, and is worth Rs 300 billion-Rs 400 billion. We, at Escorts, target a specific market segment. We target brake systems, shock absorbers and different types of rubber and friction products. Gradually, we are making inroads into new segments such as railway coach doors.
With the requisite approvals, and right technologies and products, a player can expect a lot from this market. We, as a company, have been growing at a compound annual growth rate of 25 per cent, and we expect to clock higher growth rates in the coming four to five years.
In the equipment industry, the gestation period is long. For us, approvals are in place and we have come out with a lot of new products.
What are the key challenges involved in the business?
In my opinion, excessive regulation or red-tapism is one of the biggest challenges. Apart from that, bureaucratic delays also hurt the business to a major extent. To give an example, about two decades back, China and India, were both net importers of defence goods. Today, China has become a net exporter but India still continues importing the same, as the sector is one of the most heavily regulated ones.
The need of the hour is to unleash the potential of the Indian equipment industry by working in a collaborative manner.
How is Escorts approaching the railway equipment market?
One of our top priority areas has been investing significantly in research and development (R&D). We have one of the best testing labs in the country that can test equipment rigorously. The idea is to build capacity for the long run. On the technology front, we are now bringing in global technology firms as partners.
Air-conditioning and toilet systems are the two segments that we would be eyeing in the near term. For toilet systems in particular, we would be looking at water-efficient and bio-digester technologies.
What is your overall outlook for the railway equipment sector?
We are quite bullish for the times ahead. We expect to grow by 30 per cent-plus. We are not interested in segments that are not very technology intensive. Instead, we would be looking at high-end technology solutions, and would invest in collaborating with global partners to deliver customised products .
What has been your experience in the railway sector so far?
We see Indian Railways’ (IR) current focus on infrastructure modernisation, increasing the speed potential and safety of operations, improving passenger amenities, as well as increasing the efficiency in energy consumption and overall operations. In this endeavour, product, system and solution suppliers will need to ably support the railways.
IR requires suppliers and technology providers to deliver high performance and reliable systems as per the requirements, wherein Delta Electronics is utilising its vast experience and expertise in power conversion technologies to provide solutions for the rail infrastructure and rolling stock segments. We have developed propulsion equipment for rolling stock and power quality restorers for railway applications.
What have been the major business enablers and roadblocks?
Traditionally, we have seen slower adoption of new technologies in the railway sector. However, now IR has become amenable to exploring and adopting new technologies to preserve its existing asset base as well as modernise the network. As Delta has extensive local footprint in India in terms of R&D capability as well as our own factories and wide service network, we are able to respond quickly by developing products and solutions to address IR’s requirements.
What are the key innovations and technol-ogies that set your product offerings apart from those of other companies?
The year 2019 has been special for us, wherein we launched new products for railways. These products clearly set us apart from the existing solutions available in the market.
Delta has successfully installed the first 25 kV direct connected power quality restorer on IR’s network to address the issues of power factor and harmonics. It will bring direct economic benefits to IR in terms of waiver of penalty/surcharge on account of poor power factor (PF) and high harmonic distortion as well as reduction in contracted maximum demand.
It is the first system in India that connects directly to 25kV AC, which has been installed on the IR network. The results achieved are in line with the requirements of IR, as well as the norms prescribed by the Institute of Electrical and Electronics Engineers and the Central Electricity Authority.
What are the key growth areas that the company is looking to target in the near to medium term?
Delta operates in different infrastructure domains. We are happy to see continued growth in the railway equipment market. Also, there is increasing focus on investing in new infrastructure and network modernisation.
Delta will continue to invest in rolling stock propulsion systems, which can meet the growing needs of electric locomotives, electric multiple units and mass transit applications.
Concurrent to IR’s mission of 100 per cent electrification of its network, we are focusing on providing innovative, clean and energy efficient solutions to ensure power quality at substations and the grid.
What is the overall outlook for IR’s energy management?
The major part of IR’s energy consumption is for traction loads. The current trend of adding rolling stock and the requirement for replenishing stock will result in sustained demand for rolling stock for the next few years. The technology of three-phase insulated-gate bipolar transistor (IGBT)-based propulsion adopted by IR enables operation near unity PF (when current and voltage waveforms are in phase) and is capable of energy regeneration.
Simultaneously, with increasing electrification resulting in the addition of traction and receiving substations, rail operators are gradually moving towards implementation of active power quality solutions which are compliant with the prescribed norms and can mitigate the twin problems of PF and harmonics, besides reducing the overall energy bill.
What has been Delta’s experience at the recently concluded IREE 2019?
Delta has been participating at the IREE regularly. This event draws wide participation from the Ministry of Railways to production units, zonal railways, design approval agencies, metro operators, component suppliers and system integrators.
This year, we showcased all our solutions relevant to the needs of rail infrastructure, which included 4k Laser Video Wall, automation solutions for station infrastructure and uninterrupted power supply, power supply solutions for signalling and telecommunications applications, rolling stock propulsion systems, electric vehicle chargers, solar inverter solutions and active power quality solutions for traction substations.