RAILWAYS

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SUMMARY
  • Indian Railways network spans more than 66030 kms, making it the world’s third largest rail network.
  • India has the fourth largest rail freight carrier in the world and has the largest passenger carrier.
  • Indian railways carry around 3.04 million tonnes and 22.4 million passengers of freight every day.
  • 1.3 million strong work force in Indian Railways.
REASONS TO INVEST
  • 100% Foreign Direct Investment (FDI) in the railway infrastructure segment has opened up opportunities for participation in infrastructure projects such as high-speed railways, railway lines to and from coal mines and ports, projects relating to electrification, high-speed tracks and suburban corridors.
  • Indian Railways aims to involve private equity through individuals, NGOs, trusts, charitable institutions, corporates, etc. to provide passenger amenities such as battery-operated carts to facilitate movement for senior citizens and differently abled, at stations. Certain measures taken in this regard include setting up of standard ramp for barrier free entry at 2350 stations, and non-slippery walk away from parking lot to building at 1410 stations.
  • The sector aims to boost passenger amenities by involving Public Private Partnership (PPP) investments in provision of foot-over bridges, escalators and lifts at all major stations. Few steps are already being taken in this regard, such as, online ticket booking along with cashless payment methods , provision of Automatic Ticket Vending Machines(ATVMs) at railway stations for dispensation of tickets, establishment of computerized Passenger Reservation System (PRS), introduction of alternate train accommodation scheme, “VIKALP”. And, various other premium services like Humsafar, Tejas, Antyodaya and coaches like DeenDayalu and Anubhuti.
  • Last-mile connectivity to boost business activity in and around ports and mines has been proposed through the formation of special purpose vehicle (SPV) companies under the PPP model.
  • National High Speed Rail Corporation Limited (NHSRCL) incorporated as a Special Purpose Vehicle for Mumbai-Ahmedabad High Speed Rail (MAHSR) Project with technical and financial underpinnings from Government of Japan. Mumbai-Ahmedabad High Speed Bullet Train has length of 508 kms, with a maximum design speed of 350 kmph and operating speed of 320 kmph. The total project cost is estimated to be USD 15.02 billion, with 81% of project cost funded by loan from Japan for 50 years at 0.1% annual interest with 15 years moratorium period.
  • Eastern Dedicated Freight Corridor of 1856 km length and Western Dedicated Freight Corridor of 1504 km length is under construction. By 2020-21, it is projected that 92 million tons of traffic would move through Eastern Dedicated Freight Corridor.
  • The development of identified stations to international standards with modern facilities and passenger amenities on the lines of newly developed airports, through PPP mode.
  • A proposal is in place to harness solar energy by utilizing rooftop spaces of railway stations, other railway buildings and land, through the PPP mode. Indian Railways aims to achieve 5 GW of its energy requirements through solar energy, with 1.1 GW coming from rooftop projects and 3.9 GW from utility scale projects. This would result in 25% of Railway’s electricity mix derived from renewables by 2025.
  • Under Project Swarn, 14 Rajdhanis and 15 Shatabdi trains are identified to improve passenger experience.
  • Speed Enhancement Projects to increase the speed of train to 160/200 kmph rolled out at a cost of USD 2.76 billion for two routes: New Delhi- Mumbai Central (including Vadodara- Ahmedabad) and New Delhi- Howrah (including Kanpur- Lucknow).
  • Under the “Mission Raftaar”, six routes have been identified for doubling the average speed of freight trains and increasing the average speed of all non-suburban passenger trains by 25 kmph in 5 years. During the year 2017-18, 51 train services have been speeded up by more than one hour.
  • To strengthen security, Indian Railways undertook installation of CCTV cameras at major railway stations, operationalization of security helpline 182, and development of Security App. State level security Committee for Railways has also been constituted for all State/UT’s.
  • Digital initiatives such as SFOORTI (Smart Freight Operation Optimization & Real Time Information) to monitor freight operations through Geographic Information System (GIS). In addition, passenger trains can also be monitored through this app.
  • During the last three years (2014-15 to 2016-17), 5186 route kilometres of railway lines have been electrified. Additionally, Indian Railways has prepared an action plan to electrify 24,400 route kilometers in five years (2016-17 to 2020-21).
STATISTICS
  • Increasing urbanization coupled with rising incomes (both urban and rural) is driving growth in the passenger segment. Growing industrialization across the country has increased freight traffic over the last decade.
  • Both passenger and freight traffic volumes have increased steadily in the recent years. While freight traffic witnessed a CAGR of 2.63% during 2010-2017, passenger traffic has registered a marginally lower CAGR of 0.85% during the same period.
  • The sector runs 13,329 trains carrying approximately 22.4 million passengers daily and connecting more than 7349 stations . Indian Railways runs more than 9221 freight trains, carrying about 3.04 million tonnes of freight every day.
  • The sector total track length is 121407 Km . It also comprises 70,937 coaches , 2, 77,987 wagons and 1.3 million employees.
  • During the year 2017-18, 48 trains speeded up to the category of superfast trains with an average speed of 55kmph and above.
  • A total of 3675 bridges have been repaired/ rebuilt over the period 2012-13 to 2016-17.
FDI POLICY

100% FDI under automatic route is permitted for the following:

  • Construction, operation and maintenance of suburban corridor projects through PPP.
  • High speed train projects.
  • Dedicated freight corridors.
  • Railway electrification.
  • Signaling systems.
  • Freight terminals.
  • Passenger terminals.
  • Infrastructure in industrial parks pertaining to railway line/siding including electrified railways lines and connectivity to main railway line.
  • Mass Rapid Transport Systems (MRTS)
SECTOR POLICY
  • Ministry of railways inaugurated National Rail Plan -2030 to provide long term prospective to planning for augmenting the railway NETWORK. It also envisages to integrate the rail network with other modes of transport to achieve multi-modal transportation network across the country.
  • Launch of Foreign Rail Technology Cooperation Scheme to attract private sector investment in railways under PPP mode.
  • Policy on Participative Models for Rail Connectivity & Capacity Augmentation Projects:
  • Indian Railways are operating in the core sector of the economy. To strengthen, modernise and expand the railway network, the investment requirement is huge. Private sector participation would be required for accelerated construction of fixed rail infrastructure. For this purpose, railways has formulated participative investment models for its existing shelf of projects and also for new projects. These models have only general provisions while the specific issues are decided on a case-to-case basis depending on the model of private investment, Ministry of Railways will either grant direct permission or go in for competitive bidding for award of concession. Under this Policy, the following can participate in the development of railway infrastructure:
    • State Governments
    • Local bodies
    • Beneficiary industries
    • Ports
    • Large import and export companies
    • Co-operative Societies and other body corporate
    • Infrastructure and Logistics providers
    • Person of Indian Origin (PIO)
    • Overseas Corporate Bodies (OCB) (After foreign investment promotion board clearance)
    • Foreign Direct Investor (After foreign investment promotion board clearance)
FINANCIAL SUPPORT

FOR MANUFACTURING ACTIVITY:

State Incentives:

  • State governments offer additional incentives for industrial projects. Incentives are in areas such as rebates in land cost, relaxation in stamp duty on the sale or lease of land, power tariff incentives, concessional rates of interest on loans, investment subsidies/tax incentives, backward areas subsidies and special incentive packages for mega projects.
  • Ministry of Railways is in a continuous process to sign Joint Ventures with the states to expedite the process of railway network. Government of Jharkhand is the 9th state to form a Joint Venture with Ministry of Railways to construct rail line of 222 km at a cost of USD 0.33 billion .

Export Incentives:

  • Various kinds of incentives on exports are available under foreign trade policy.

Area based Incentives:

  • Incentives for units in Special Economic Zones (SEZ) / National Investment & Manufacturing Zones (NIMZ) as specified in respective Acts or setting up of projects in special areas such as the North-east, Jammu & Kashmir, Himachal Pradesh & Uttarakhand.

KEY POINTS IN THE RAIL BUDGET 2018-19:

For the year 2018-19, capital expenditure on railways has been pegged at USD 22.85 billion, with a focus on capacity creation. This includes:

  • Wide procurement of rolling stock-12,00o wagons, 5160 coaches, and 700 locomotives.
  • Redevelopment of 600 major railway stations
  • Electrification of 4000 kilometers of railway lines
  • Renewal of 3600 kilometers of track lines
  • Gearing up construction of Eastern and Western Dedicated Freight Corridors.
  • Mumbai’s local trains deemed to have 90 kilometers of double line tracks, entailing a cost of over 11,000 crores.
  • Building of 150 kilometers of additional suburban network at a cost of over USD 6.15 billion, including elevated corridors on some stations.
  • Building of 160 kilometers of suburban network in Bengaluru at a cost of USD 2.61 billion.
INVESTMENT OPPORTUNITIES
  • Components manufacturing
  • Infrastructure projects
  • High speed train projects
  • Railway lines to and from coal mines and ports
  • Projects relating to electrification, high-speed tracks and suburban corridors
  • Dedicated freight corridors
  • The re-development of railway stations
  • Power generation and energy-saving projects
  • Freight terminals operations
  • Setting up of wagon, coaches and locomotive units
  • Gauge conversion
  • Network expansion
FOREIGN INVESTORS
  • EMD (USA)
  • Bombardier Transportation (Canada)
  • GE (USA)
  • Siemens (Germany)
  • Alstom (France)
KEY ACHIEVEMENTS
  • First semi-high speed train- Gatimaan Express launched: top speed 160 km/hr
  • JV agreements worth INR 40,000 crore signed with M/s Alstom and M/s GE
  • Mumbai-Ahmedabad high speed rail project sanctioned at INR 97,636 crore
  • Highest investment of INR 15,000 crore through PPP projects during 2015-16
SOURCES
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