RAILWAYS

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SUMMARY
  • The Indian Railways network spans more than 68,442 km1, as of March 2018.
  • The Indian Railways runs 12,617 trains that carry 23 mn passengers on a daily basis.2
  • The Indian Railways currently employees 1.3 mn3 (as of March 2018).
  • The Indian Railways aims to be the driver of India’s economic growth and development by being safe, financially viable and environmentally friendly.4 The focus to achieve this goal is through resolution of key concerns such as passenger experience, zero fatality, cost, sustainability.5
REASONS TO INVEST
  • The railway infrastructure segment allows 100% foreign direct investment (FDI), opening opportunities for participation in projects such as high-speed railways, railway lines to and from coal mines and ports, electrification, high-speed tracks and suburban corridors.6
  • The Indian Railways aims to invite private equity through individuals, NGOs, trusts, charitable institutions, corporates, etc. to provide passengers with a better experience. Some measures taken in this regard include:
    • Battery-operated carts to facilitate movement for senior citizens and differently-abled at stations.
    • Standard ramps for barrier-free entry at 2,350 stations
    • Non-slippery walk ways from the parking lots to the stations at 1,410 stations.
  • The Ministry of Railways is making provisions to involve Public Private Partnership (PPP) investments to boost passenger amenities. These amenities include foot-over bridges, escalators and lifts at all major stations, automatic ticket vending machines (ATVM) at railway stations for dispensation of tickets, computerised passenger reservation system (PRS), introduction of alternate train accommodation scheme for waitlisted passengers, “Vikalp”, etc.
  • The National High-Speed Rail Corporation Limited (NHSRCL) has launched the high-speed train corridor project between Ahmedabad and Mumbai.7 The project, commonly referred to as the ‘Bullet Train’ project, is being implemented with technical and financial assistance from Japan. The high-speed railway line covers a distance of 508.2 km8 in approximately two hours with an operating speed of around 320 kmph.9 It is expected to become operational by 2023. Of the total project cost, 81% is in the form of a loan from Japan International Coeporation Agency (JICA).10 While most of the corridor is proposed to be on an elevated track, there will be a stretch that will be under the sea.11
  • The Dedicated Freight Corridor Corporation of India Limited (DFCCIL) is an undertaking by the Ministry of Railways to overlook planning, development and mobilisation of financial resources, construction, maintenance and operation of the Dedicated Freight Corridors. Two projects have been commissioned under the DFCCIL – the Eastern Dedicated Freight Corridor (1,856 km) and the Western Dedicated Freight Corridor (1,504 km). These corridors provide India with the opportunity to create one of the world’s largest freight operations.12 It is predicted that 92 mn tonnes of traffic would move through the Eastern Dedicated Freight Corridor. The Dedicated Freight Corridors are also expected to reduce GHG emissions.13
  • Certain stations have been identified to be developed as per international standards with modern facilities and passenger amenities on the lines of newly developed airports, using PPP model.
  • The ‘Green Energy Project’ of the Indian Railways is important, given the growing concern for environmental pollution, depleting fossil fuels and global warming. The Indian Railways has started making use of solar and wind energy sources to meet their energy requirements.14 A proposal is in place to harness solar energy by utilizing rooftop spaces on railway stations, other railway buildings and land, through the PPP model. Indian Railways aims to achieve 5 GW of their energy requirements through solar energy, with 3.9 GW from utility scale projects and the remaining from the rooftop. This would result in 25% of the Indian Railways’ electricity mix derived from renewables by 2025. The Indian Railways has signed an MoU with GAIL (India) Ltd to provide infrastructure facilities for supply of natural gas to their workshops, production units and depots. This replacement is expected to reduce costs by INR 20 crore per annum for the Indian Railways.15
  • Project Swarn has been initiated to improve passenger experience of the Rajdhani and Shatabdi Express Trains. The dimensions that will be worked on are coach interiors, toilets, onboard cleanliness, staff behaviour, catering, linen, punctuality, security and on-board entertainment.16
  • The Ministry of Railways is making efforts to reduce travel time for passenger trains by increasing the speeds of all long-distance passenger trains and introducing semi high speed trains that may eventually replace Shatabdi and Rajdhani trains.17 ‘Mission Raftaar’ was announced in the railway budget 2016-17 which aims to double the average speed of freight trains and increase the average speed of all non-suburban passenger trains on selected routes by 25 kmph in the next five years.18
  • Speed enhancement projects have been initiated to raise the speed of trains on two routes – New Delhi-Mumbai Central and New Delhi-Howrah – to 160 to 200 kmph. Speed enhancement project includes works such as fencing, removal of level crossings, train protection warning system (TPWS), mobile train radio communication (MTRC), automated and mechanised diagnostic systems, etc.19
  • The Central Organisation for Railways Electrification (CORE) has electrified a total of 29,288 route kilometre (RKM) till 2017-18, which accounts for about 43.5% of the total RKM of the Indian Railways.20
  • The antiquated signalling system is going to be revamped in phases to enhance safety and increase average speed of trains. The new European Train Control System-2 (ETCS2) will allow for increased train speeds, which will in turn help run more trains with the same infrastructure. The move will also enhance safety on the tracks.21
STATISTICS
  • The Indian Railways operates more than 20,000 trains every day, to move more than 3 mn tonnes of freight traffic and more than 23 mn passengers daily.22
  • In 2017-18, 29,376 km of railway line was electrified.
  • The total track length of the Indian Railways is 123,236 km, connecting 7,318 railway stations.
  • A total of 13,452 passenger trains and 9,141 goods trains are operated daily.
  • Between April 2014 and December 2018, 3,601 bridges have been repaired, strengthened, rehabilitated or rebuilt by the Indian Railways.23
  • The construction of the 4.9 km long Bogibeel Bridge was completed. It is the longest rail-cum-road bridge in India and reduces the journey time from Itanagar to Dibrugarh to only five hours from 24 hours.24
  • The Indian Railways achieved the country’s highest ever freight loading in 2018-19. Freight earnings are expected to be valued at US$ 20.5 bn in budget estimates (BE) 2019-20.25
  • The first phase of the Eastern Dedicated Freight Corridor (Bhadan to Khurja, 200 km) and Western Dedicated Freight Corridor (Rewari to Madar, 200 km) have been completed.26
FDI POLICY

The FDI Policy permits 100% FDI in railways infrastructure sector. FDI is permitted in the construction, operation and maintenance of the railway transport sector:27

  1. Suburban corridor projects through PPP model
  2. High-speed train projects
  3. Dedicated freight lines
  4. Rolling stock including train sets, and locomotives/coaches manufacturing and maintenance facilities
  5. Railway electrification
  6. Signalling systems
  7. Freight terminals
  8. Passenger terminals
  9. Infrastructure in industrial park pertaining to railways line/sidings including electrified railways lines and connectivity to the main railway’s line
  10. Mass Rapid Transport Systems

Further information can be viewed on Sectoral guidelines for Domestic/Foreign Direct Investment in Railways.

SECTOR POLICY
  • In 2016, the Ministry of Railways developed the National Rail Plan 2030.28 The aim of the Plan is to harmonise and integrate the rail network with other modes of transport to achieve a seamless multi-nodal transportation network across India.

For further information, log on to National Rail Plan, 2030.

  • In 2015, the ‘Foreign Rail Technology Cooperation Scheme’ was launched to achieve higher quality rail service for the nation. MoUs have been signed in the past for technical cooperation with a number of foreign railways or their entities.
  • The Indian Railways formulated the Policy for Participative Investment Models in Rail Connectivity and Capacity Augmentation Projects to attract private capital for accelerated construction of fixed rail infrastructure. The Policy aims to strengthen, modernise and expand the Indian Railways network.

The advantages of this policy for the investors are:

  1. Opportunity for returns from investment in rail project
  2. Ensures timely availability of rail infrastructure to the beneficiaries viz, ports, industries and states.

For further information, log onto Overview Framework.

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 2019-20:

  • Capital support of US$ 9.2 bn for the Indian Railways.29
  • Overall capital expenditure programme of US$ 22.7 bn.30
  • To eliminate all Unmanned Level Crossings on broad gauge.31
  • The operating ratio to improve to 95% in 2019-20 (BE).32
  • Semi high-speed ‘Vande Bharat Express’ introduced. It is the first train to be indigenously developed and manufactured in India.33
INVESTMENT OPPORTUNITIES
  • Suburban corridor projects through PPP34
  • High-speed train projects35
  • Upcoming dedicated freight lines36
  • Rolling stock including train sets and locomotives or coach manufacturing and maintenance facilities37
  • Railways electrification38
  • Signalling systems39
  • Freight terminals or logistics parks40
  • Passenger terminals41
  • Railways technical training institutes42
  • Testing facilities and laboratories43
  • Concessions in standalone passenger corridors (brand lines, hill railways, etc.)44
  • Non-conventional sources of energy45
  • Mechanized laundry46
  • Rolling stock procurement47
  • Bio-toilets48
  • Technological solutions for manned and unmanned level crossings49
  • Technological solutions to improve safety and reduce accidents50
FOREIGN INVESTORS
  • Alstom Transport Holdings B.V. (Netherlands)
  • Bombardier (Singapore)
  • Ansaldo STS (Australia)
  • GE Capital International (Mauritius)
  • Inversiones EN Concesiones (Spain)
KEY ACHIEVEMENTS
  1. Safety has been of foremost importance to the Indian Railways. There has been an 81% drop in the number of deaths from 152 during 2013-14 to 29 during 2018-19(till January).51
  2. The semi-high speed (160 kmph) self-propelled Train 18 is being manufactured in India, boosting the Government’s ‘Make in India’ initiative.52
  3. The Indian Railways has focused on digital initiatives to become more transparent and accountable.53
  4. India’s longest rail-road bridge connects Assam and Arunachal Pradesh, thus making the Northeast accessible by train.54
  5. Over 4,405 km of railway track renewal was carried out in 2017-18.55
SOURCES
  1. “Indian Railways”, Year Book 2017-18, http://www.indianrailways.gov.in/railwayboard/uploads/directorate/stat_econ/pdf_annual_report/Railway%20Year%20Book_2017_18.pdf, accessed on 12 May 2019
  2. “Indian Railways”, Year Book 2017-18, http://www.indianrailways.gov.in/railwayboard/uploads/directorate/stat_econ/pdf_annual_report/Railway%20Year%20Book_2017_18.pdf, accessed on 12 May 2019
  3. “Indian Railways”, Year Book 2017-18, http://www.indianrailways.gov.in/railwayboard/uploads/directorate/stat_econ/pdf_annual_report/Railway%20Year%20Book_2017_18.pdf, accessed on 12 May 2019
  4. “Indian Railways”, Indian Railways Vision & Plans 2017-2019 January 2017”, http://www.indianrailways.gov.in/Railways%20Presentation.pdf, accessed on 12 May 2019
  5. “Indian Railways”, Indian Railways Vision & Plans 2017-2019 January 2017”, http://www.indianrailways.gov.in/Railways%20Presentation.pdf, accessed on 12 May 2019
  6. “Department for Promotion of Industry and Internal Trade”, Changes in FDI Caps In Various Sectors, https://dipp.gov.in/sites/default/files/ru497_0.pdf, accessed on 13 May 2019
  7. “National High Speed Rail Corporation Limited”, https://www.nhsrcl.in, accessed on 13 May 2019
  8. “National High Speed Rail Corporation Limited”,2ND Annual Report 2017-18, https://www.nhsrcl.in/annual_report_files/Eng_2nd_Annual_Report_2017-18_NHSRCL.pdf, accessed on 13 May 2019
  9. “National High Speed Rail Corporation Limited”, https://www.nhsrcl.in, accessed on 13 May 2019
  10. “National High Speed Rail Corporation Limited”, https://www.nhsrcl.in, accessed on 13 May 2019
  11. “National High Speed Rail Corporation Limited”, https://www.nhsrcl.in, accessed on 13 May 2019
  12. “The World Bank”, Government of India and World Bank Sign $650 Million Agreement for the Easter Dedicated Freight Corridor Project, http://www.worldbank.org/en/news/press-release/2016/10/21/government-of-india-world-bank-sign-usd650-million-agreement-for-eastern-dedicated-freight-corridor-project, accessed on 13 May 2019
  13. “The World Bank”, Government of India and World Bank Sign $650 Million Agreement for the Eastern Dedicated Freight Corridor Project, http://www.worldbank.org/en/news/press-release/2016/10/21/government-of-india-world-bank-sign-usd650-million-agreement-for-eastern-dedicated-freight-corridor-project, accessed on 13 May 2019
  14. “Indian Railways”, Indian Railways Green Energy Initiatives, http://www.irgreenri.gov.in/tile_windEnergy.html, accessed on 13 May 2019.
  15. “Ministry of Railways”, Indian Railways and GAIL (India) Limited sign an MoU for Use of Natural Gas in Railway Workshops and Production Units, http://www.pib.nic.in/Pressreleaseshare.aspx?PRID=1544527, accessed on 13 May 2019
  16. “Ministry of Railways”, Project Swarn in Railways, http://pib.nic.in/newsite/PrintRelease.aspx?relid=178376, accessed on 13 May 2019.
  17. “Ministry of Railways”, Mission Raftar of Indian Railways,  http://pib.nic.in/newsite/PrintRelease.aspx?relid=175373, accessed on 13 May 2019
  18. “Ministry of Railways”, Minister of Railways Unviels Mission 41k,  http://pib.nic.in/newsite/PrintRelease.aspx?relid=157400, accessed on 13 May 2019
  19. “Ministry of Railways”, Indian Railways and GAIL (India) Limited sign an MoU for Use of Natural Gas in Railway Workshops and Production Units, http://www.pib.nic.in/Pressreleaseshare.aspx?PRID=1544527, accessed on 13 May 2019
  20. “Central Organization for Railways Electrification”, CORE – Committed to Mission Electrification, https://core.indianrailways.gov.in/view_section.jsp?lang=0&id=0,294,302,532, accessed on 13 May 2019
  21. “Indian Railways”, ERTMS/ETCS – Indian Railways Perspective, https://iriset.indianrailways.gov.in/instt//uploads/files/1511780849022-1-article.pdf, accessed on 13 May 2019
  22. “Ministry of Railways”, National Rail Transport Seminar on the theme “Railways for Sustainable Development” held in New Delhi, http://pib.nic.in/newsite/PrintRelease.aspx?relid=175606, accessed on 13 May 2019
  23. “Ministry of Railways”, Inspection og ROBs by Indian Railways, http://pib.nic.in/PressReleaseIframePage.aspx?PRID=1562906, accessed on 13 May 2019
  24. “Ministry of Railways”, Five Year Achievements & Initiatives of Ministries of Railways and Coal, http://pib.nic.in/newsite/PrintRelease.aspx?relid=189131, accessed on 13 May 2019
  25. “Ministry of Railways”, Five Year Achievements & Initiatives of Ministries of Railways and Coal, http://pib.nic.in/newsite/PrintRelease.aspx?relid=189131, accessed on 13 May 2019
  26. “Ministry of Railways”, Five Year Achievements & Initiatives of Ministries of Railways and Coal, http://pib.nic.in/newsite/PrintRelease.aspx?relid=189131, accessed on 13 May 2019
  27. ”Reserve Bank of India”, Foreign Direct Investments (FDI) in India – Review of FDI policy – Sector Specific conditions – Railways Infrastructure, https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=9392&Mode=0, accessed on 13 May 2019
  28. “Ministry of Railways”, Minister of Railways inaugurates Website of National Rail Plan, 2030, http://pib.nic.in/newsite/PrintRelease.aspx?relid=155122, accessed on 13 May 2019
  29. “Indian Budget”, Ministry of Railways, https://www.indiabudget.gov.in/ub2019-20/eb/sbe80.pdf, accessed on 13 May 2019
  30. “Indian Budget”, Ministry of Railways, https://www.indiabudget.gov.in/ub2019-20/eb/sbe80.pdf, accessed on 13 May 2019
  31. “Indian Budget”, Ministry of Railways, https://www.indiabudget.gov.in/ub2019-20/eb/sbe80.pdf, accessed on 13 May 2019
  32. “Indian Budget”, Ministry of Railways, https://www.indiabudget.gov.in/ub2019-20/eb/sbe80.pdf, accessed on 13 May 2019
  33. “Ministry of Railways”, Five Year Achievement & Initiatives of Ministries of Railways and Coal, http://pib.nic.in/newsite/PrintRelease.aspx?relid=189131, accessed on 13 May 2019
  34. “Ministry of Railways”, Sectoral guidelines for Domestic/Foreign Direct Investment in Railways, http://www.indianrailways.gov.in/railwayboard/uploads/directorate/infra/downloads/FDI_10114.pdf, accessed on 12 May 2019
  35. “Ministry of Railways”, Sectoral guidelines for Domestic/Foreign Direct Investment in Railways, http://www.indianrailways.gov.in/railwayboard/uploads/directorate/infra/downloads/FDI_10114.pdf, accessed on 12 May 2019
  36. “Ministry of Railways”, Sectoral guidelines for Domestic/Foreign Direct Investment in Railways, http://www.indianrailways.gov.in/railwayboard/uploads/directorate/infra/downloads/FDI_10114.pdf, accessed on 12 May 2019
  37. “Ministry of Railways”, Sectoral guidelines for Domestic/Foreign Direct Investment in Railways, http://www.indianrailways.gov.in/railwayboard/uploads/directorate/infra/downloads/FDI_10114.pdf, accessed on 12 May 2019
  38. “Ministry of Railways”, Sectoral guidelines for Domestic/Foreign Direct Investment in Railways, http://www.indianrailways.gov.in/railwayboard/uploads/directorate/infra/downloads/FDI_10114.pdf, accessed on 12 May 2019
  39. “Ministry of Railways”, Sectoral guidelines for Domestic/Foreign Direct Investment in Railways, http://www.indianrailways.gov.in/railwayboard/uploads/directorate/infra/downloads/FDI_10114.pdf, accessed on 12 May 2019
  40. “Ministry of Railways”, Sectoral guidelines for Domestic/Foreign Direct Investment in Railways, http://www.indianrailways.gov.in/railwayboard/uploads/directorate/infra/downloads/FDI_10114.pdf, accessed on 12 May 2019
  41. “Ministry of Railways”, Sectoral guidelines for Domestic/Foreign Direct Investment in Railways, http://www.indianrailways.gov.in/railwayboard/uploads/directorate/infra/downloads/FDI_10114.pdf, accessed on 12 May 2019
  42. “Ministry of Railways”, Sectoral guidelines for Domestic/Foreign Direct Investment in Railways, http://www.indianrailways.gov.in/railwayboard/uploads/directorate/infra/downloads/FDI_10114.pdf, accessed on 12 May 2019
  43. “Ministry of Railways”, Sectoral guidelines for Domestic/Foreign Direct Investment in Railways, http://www.indianrailways.gov.in/railwayboard/uploads/directorate/infra/downloads/FDI_10114.pdf, accessed on 12 May 2019
  44. “Ministry of Railways”, Sectoral guidelines for Domestic/Foreign Direct Investment in Railways, http://www.indianrailways.gov.in/railwayboard/uploads/directorate/infra/downloads/FDI_10114.pdf, accessed on 12 May 2019
  45. “Ministry of Railways”, Sectoral guidelines for Domestic/Foreign Direct Investment in Railways, http://www.indianrailways.gov.in/railwayboard/uploads/directorate/infra/downloads/FDI_10114.pdf, accessed on 12 May 2019
  46. “Ministry of Railways”, Sectoral guidelines for Domestic/Foreign Direct Investment in Railways, http://www.indianrailways.gov.in/railwayboard/uploads/directorate/infra/downloads/FDI_10114.pdf, accessed on 12 May 2019
  47. “Ministry of Railways”, Sectoral guidelines for Domestic/Foreign Direct Investment in Railways, http://www.indianrailways.gov.in/railwayboard/uploads/directorate/infra/downloads/FDI_10114.pdf, accessed on 12 May 2019
  48. “Ministry of Railways”, Sectoral guidelines for Domestic/Foreign Direct Investment in Railways, http://www.indianrailways.gov.in/railwayboard/uploads/directorate/infra/downloads/FDI_10114.pdf, accessed on 12 May 2019
  49. “Ministry of Railways”, Sectoral guidelines for Domestic/Foreign Direct Investment in Railways, http://www.indianrailways.gov.in/railwayboard/uploads/directorate/infra/downloads/FDI_10114.pdf, accessed on 12 May 2019
  50. “Ministry of Railways”, Sectoral guidelines for Domestic/Foreign Direct Investment in Railways, http://www.indianrailways.gov.in/railwayboard/uploads/directorate/infra/downloads/FDI_10114.pdf, accessed on 12 May 2019
  51. “Ministry of Railways”, Five Year Achievements and Initiatives of Ministries of Railways and Coal, http://pib.nic.in/newsite/PrintRelease.aspx?relid=189131, accessed on 13 May 2019
  52. “Government of India”, Initiatives & Achievements of Ministry of Railways in the Year 2018, https://pibindia.wordpress.com/2018/12/31/initiatives-achievements-of-ministry-of-railways-in-the-year-2018/, accessed on 13 May 2019
  53. “Ministry of Railways”, Five Year Achievements and Initiatives of Ministries of Railways and Coal, http://pib.nic.in/newsite/PrintRelease.aspx?relid=189131, accessed on 13 May 2019
  54. “Government of India”, Initiatives & Achievements of Ministry of Railways in the Year 2018, https://pibindia.wordpress.com/2018/12/31/initiatives-achievements-of-ministry-of-railways-in-the-year-2018/, accessed on 13 May 2019
  55. “Government of India”, Initiatives & Achievements of Ministry of Railways in the Year 2018, https://pibindia.wordpress.com/2018/12/31/initiatives-achievements-of-ministry-of-railways-in-the-year-2018/, accessed on 13 May 2019
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