As the Railways gears up to drive India’s infrastructure growth, the Ministry of Railways is looking away from traditional methods of financing track laying and maintenance machinery on its own and is increasingly looking at contractualising the process through private players.
“The role of India’s construction equipment industry in supplying critical equipment to facilitate the growth is crucial to the endeavour,” said Anilkumar Lahoti, Chairman of the Railway Board. Mr. Lahoti was addressing the 4th annual financial conclave of the Indian Construction Equipment Manufacturers Association in New Delhi on Thursday.
Charting out the modernisation plans, Mr. Lahoti said as the Railways geared up for expansion, the Ministry was planning to have long term contracts for getting track works done. “The machines are quite expensive, ranging anywhere from ₹10 crore to ₹100 crore. This will also need finance. So, we are planning to pay in terms of output or availability of machines to contractors,” he said.
According to internal estimations drawn out by the Railways, Mr. Lahoti said that at least 2,000 sophisticated track construction and maintenance machinery would be required in the next six to seven years.
Logistics costs
While cost of transportation by the Railways which stood at ₹1.6 per tonne/km was half that of road (₹3.6 per tonne/ km), according to the National Rail Plan, it was found that the share of Railways in the entire transportation output was around 27%. “The share of the Railways in transportation should ideally be around 42% to 45% Currently, the result of lower share of Railways is that our logistics costs are around 14% of GDP which is quite high. In developed economies this is 8% to 9% of the GDP. Therefore, it is important to invest in the railway sector to bring down our logistics costs,” Mr. Lahoti said.
Additionally, Mr. Lahoti emphasised that the CO2 gas emission in the Railways was much lower at 11.5 grams per tonne/km as compared to 101 grams per tonne/km in road transport. “There is nine times reduction in CO2 emission if you are transporting by rail,” he said.
The Ministry of Railways had launched Mission 3,000 million tonnes, which would help lay out infrastructure that would double the transportation output by the Railways from current 1,512 million tonnes of freight traffic in 2022-23 to its double at 3,000 million tonnes by 2030. “To augment the capacity of our existing network, we are building terminals to handle the cargo, increasing the speed of travel, bringing in rolling stock and creating maintenance facility for the rolling stock. We envisage to add 35,000 km of track by 2030,” Mr. Lahoti said.
The railway sector had been an important end user for the construction industry and the thrust included mainstream railway, dedicated freight corridors, high speed rails and metro services. Mr. Lahoti further added, “Demand of new age and sophisticated construction equipment is expected to rise as we are increasing the pace of construction and also demanding better quality from our contractors.”
“We are also planning to eliminate 18,000 level crossings and it will require construction of as many bridges,” Mr. Lahoti said. By the next 25 years, for meeting the demands of transportation we might have to add one lakh km of track, he said.
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