Tag Archives: rail network

Russia to help India set up high-speed railway projects

Russian officials are in talks with their Indian counterparts to help the country set up high-speed railways projects, a top railway official said in St Petersburg.

Vladimir Yakunin, president of Russian Railways, said they were keen to tie up with Indian Railways for the planned high-speed rail links, as the country has expertise in this area.

Yakunin, who was talking to journalists on the sidelines of the St Petersburg International Economic Forum, said that Russia and India had a relationship in technological matters, both defence and civilian, and this is likely to continue in the future.

He said earlier he had himself held discussion at top level with Indian politicians and officials on improving the signalling and safety infrastructure in India, so that the accidents happening on the Indian Railways network could be avoided.

Yakunin told IANS that the Russian Railways had some of the most advanced systems in place in these two areas, “but for some reason, there was no finalisation even after several rounds of talks two years ago”.

Yakunin, who has led the Russian Railways for the last 10 years, said discussions with Indian officials took place recently for a high-speed rail project in India, and “hopefully, something concrete should emerge soon”.
He said Russia already has several high-speed rail links and has plans to set up over 4,000 km of lines which can run trains at 400 km an hour. In addition, around 7,000 km of fast lines would be built that will be capable of running trains at 140 km to 200 km per hour.

The plan for expansion may “run into some rough weather” because of the sanctions against Russia after the Ukrainian crisis, according to Yakunin, but he said they will be able to “overcome the problem”.
China recently pledged to provide at least $5 billion to Russia for its rail network.

Russian Railways is spread over 85,000 km and has 1.3 million employees. It carries around one billion passengers a year and 1.2 billion tonnes of freight, fourth highest in the world behind the US, China and India. Its earnings have dipped by around 10 percent since the pre-sanction days.


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Posted by on June 20, 2015 in Uncategorized


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State aid for developing 6 rail stations

A small beginning has been made by the State towards Railway’s request for cost-sharing of projects by extending Rs.9.95 crore for developing and improving passenger facilities at six stations.

The Kollam, Kottayam, Ernakulam Junction, Ernakulam North, Thrissur, and Kozhikode railway stations will benefit from the assistance given by the State as part of a Central scheme to implement development works on the rail network.

Tenders had been awarded for the selected works at these stations. Official sources told The Hinduthat Rs.7.98 crore had been made available to Railways through the District Collectors of Thiruvananthapuram and Kozhikode.

Cost sharing

Officials said Railways had been urging the State to share the cost of projects for several years. The State was first asked to share 50:50 cost of the ambitious Sabari project that had been dragging on for years.

Jharkhand, Maharashtra, Karnataka, and Tamil Nadu had opted for the cost-sharing concept by signing an MoU with Railways for improving rail infrastructure.

Under the financial cooperation extended by the State, passenger facilities would be improved at each station at a cost of Rs.1.99 crore.

A retiring room, platform, and parking facilities had been proposed at the second entry to the Kollam station. Other works had commenced and tenders for parking facilities would be floated again, the sources said.

At the Kottayam station, a foot overbridge would be set up at the Ernakulam end, and platform one would be widened.

The circulating area at the second entry to the station would be improved.

A foot overbridge, building for PRS at the second entry, improvement of platforms one and two, and mini-shelters would come up at the Thrissur station.

An executive lounge, renovation of second class waiting hall, and improvement of the circulating area would be taken up at Ernakulam Junction while extension of platform two for accommodating 24 coaches and construction of retiring and dormitory rooms would be carried out at Ernakulam North under the scheme.

 The Hindu
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Posted by on June 10, 2015 in Uncategorized


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New firm for better rail connectivity at major ports to be registered soon

The Union shipping ministry’s plan for a company to work on enhanced port-rail connectivity is to bear fruition soon. The Special Purpose Vehicle (SPV) in this regard is likely to be registered by the end of next month.

The 12 major ports and Rail Vikas Nigam Ltd (RVNL, an arm of the railways ministry) will pool resources for the formation. Details of the first tranche of projects to be undertaken by the SPV are being discussed between the major ports and the  ministry. The initial projection is of at least Rs 200 crore. RITES, the government-owned engineering consultancy company, specialising in transport infrastructure, has been brought in to work on some of the feasibility reports for the potential projects.

It will be registered under the Companies Act, with an initial authorised share capital of Rs 100 crore, divided into a million equity shares of Rs 1,000 each. The initial capital will be Rs 500 crore, with further provision to raise the cap. The 12 major ports are to contribute Rs 90 crore of the Rs 100 crore, each having equity shares. RVNL will contribute the remaining Rs 10 crore.

“The SPV will undertake modernisation of rail infrastructure at ports, raise financial resources for handling port-related railway projects and also operate and manage the internal port railway systems,” said a ministry official.

In 2013-14, about 28 per cent of the total cargo handled by major ports was transported by Indian Railways, to and from the hinterland. Non-major ports handle 60-90 per cent of their cargo volumes through the rail network.

Business standard

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Posted by on May 3, 2015 in Uncategorized


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Railways: Lifeline of the nation

In the long run, the railways must be commercially viable and public support for the railways should be restricted to,

Equity support for investment by the corporatized railway entities..

For funding the universal service obligations that it provides. .

In the interim, there is scope for public support of railways, through assistance via the general budget.

The Economic Survey recommends that greater public investment in the railways would boost aggregate growth and the competitiveness of Indian manufacturing substantially. Discussing the specific role of Indian railways in driving future Indian growth, the survey says that there is merit in the case for reviving public investment as a key engine of growth in the short run – not to substitute for private investment but to compliment and promote further private investment.

The Survey says that public investment in an efficient rail network can have positive effect on both manufacturing and aggregate output and the effects are permanent. It advocates that there is a need for bold, accelerated programme of investment in dedicated freight corridors (DFCs) that can parallel the Golden Quadrilateral in the road sector alongwith associated industrial corridors.

The present government can do for the neglected railways sector what the previous NDA government under the then Prime Minister Atal Bihari Vajpayee did for rural roads. This impetus has the potential to boost greater private investment and do so without jeopardising India’s public debt dynamics. Such an initiative will transform Indian manufacturing industry with “Make in India” becoming a reality. With the separation of freight traffic, passenger trains can then be speeded up substantially with marginal investments, the Survey analyses.

The Survey calls for large public investment in railways as there is a strong case for channeling resources to transport infrastructure in India given the widely known spillover effects of transport networks to link markets, reduce a variety of costs, boost agglomeration economies, and improve the competitiveness of the economy, especially manufacturing which tends to be logistics –intensive.

Today, the ‘lifeline of the nation’ operates over 19,000 trains carrying 23 million passengers and over 3 million tonnes of freight per day while employing over 13 lakh people. In part, these large gains derive from the current massive under-investment in the railways.

The Survey indicates that successive plans have allocated less resources to the railways compared to the transport sector and the share of railways in the total plan outlay is currently only 5.5 per cent vis-à-vis about 11 per cent for the other transport sectors and its share in overall development expenditure has remained low at below 2 per cent over the past decade.

China invests eleven times as much in per capita terms and underinvestment in the Indian Railways is also indicated by congestion, strained capacity, poor services, and weak financial health. Greater public investments once utilised efficiently can help the railways to overcome some of these problems.

However, any public support should be clearly linked to serious reform: of the structure of the railways; of their adoption of commercial practices; of rationalising tariff policies; and through an overhaul of technology.
Economic Survey of India 2014-15

Hans India

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Posted by on April 25, 2015 in Uncategorized


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Railway Privatisation And Other Pipe Dreams

The railways were introduced in the country by the British over 160 years back. Some 144 expert committees later, attempts are again being made to put the Indian Railways (IR) on track. That’s because rather than running smoothly, the organisation — which undoubtedly is a life line for the country — is in free fall. In order to put a halt to this perilous state, Bibek Debroy and a team of 7 experts manned the 145th committee, which was set up last year by the Modi government to come out with a blue print to reorganise and restructure the IR once and for all!

Despite being the fourth-largest rail network in the world, with interests ranging from construction, manufacturing to financing, medical care for employees and yes, running trains, currently, the state of affairs of IR is so bad that it has no money to spend on capital expenditure. Ergo, the list of over 110 recommendations form part of an interim report before a final report is made.

In the exhaustive list of recommendations made, there are two critical ones that draw attention — Liberalisation, or the allowing of private entry and converting the organisation over a period of time to a government-owned company — like a good PSU running efficiently. In fact, the first is listed as an immediate need, while the second is more of a long-term or gradual process of say after seven years along with other reform measures.

Let’s limit ourselves to the immediate one — that on the recommendation that the private sector should be allowed in running both freight and passenger trains in competition with IR, for which there should be “open access for any new operator who wishes to enter the market for operating trains with non-discriminatory access to the railway infrastructure and a level playing field” says the committee.

The rationale for allowing private entry in running rolling stock using the existing rail is well understood and appreciated. For starters, IR’s spending “…is such that it doesn’t have funds capital expenditure… IR spends so much on revenue expenditure that it is unable to invest in capital expenditure”. In 2014-15, “46% of the resources for financing plan expenditure came from budgetary support, 3% from the Railway Safety Fund, 23% from internal resources and 27% from extra-budgetary resources” says the report.

The Union government has no money. So IR really can’t borrow from them. Raising fares is a tricky affair. And there is limit for that as well. And then you also can’t borrow from the market despite the IR having a separate budget with assets spread across the length and breadth of the country.

This is because IR doesn’t have a commonly recognised balance sheet (with a profit & loss statement) to directly borrow money from the market. In IR “one doesn’t know how much a specific train costs, one doesn’t know how much of profits a specific train brings in” say the report.

A sample of five Durontos (introduced barely 8 years back) — running over 1,500 km — show that each of them operate on losses. Every time they run non-stop from their point of origination to their destination — they incur a loss. Granted some sections or lines may not be remunerative — like in any other business — but are needed as a social service. Yes any government sponsored activity would have positive externalities — but they don’t really always enter the pocket of implementing organisation.

While the jury is still out on how to impute the real value of starting a service and benefits thereof, the important point to make is: Is open access as demonstrated in Britain going to work in IR? It hasn’t worked in other sector — like in the electricity sector of the country — where open access was allowed by law more than a decade back.

The same questions arise. For instance, would there be a surcharge?

Why is a surcharge needed? First, treat it as a compensation to meet the upkeep of the network as well as compensation of loss of revenue for IR themselves when passengers or freight opt for the private option. Second, what surcharge would IR levy to allow open access — or in other words what fee would IR charge to allow a private operator run its own train — from say X to Y? If the surcharge is such that it makes it financially unviable to start a train with all the services better than a Rajdhani (assuming that is the best currently) — then open access won’t work.

For example: if it costs say Rs 90/per passenger to run a private train and make a small profit by recovering a charge of Rs 95 per passenger (assuming the train doesn’t always run on full capacity) — then a surcharge of Rs 5 over Rs 90 would not allow the new private operator to start a new train. To compound the problem what if IR ran a similar from train departing say 20 minutes before or later and charges Rs 92?

Yes, there is a need for a rail regulator, but the surcharge he would sanction is the real dilemma. Then there’s the example of Delhi’s Airport Express Metro, where the infrastructure was built by Delhi’s metro rail company while the operations or rolling stock was bid out to private players. The successful bidder suspended services barely two years of operations over disagreements on speed and safety of the structure. How does one tackle that? Yes plenty questions can be raised. Finding viable answers is going to be the key test going further.

IR is at a critical junction where its unique way of accounting doesn’t allow it to raise money from the market. Neither does the government have money to keep putting in money in IR where payments are not predictable. Nobody would disagree if one were to say “… it is right and proper that the tax-payer, the State, should get a fair and stable return from the money it has spent on its Railways”. But that was said some 90 years back by the British government that prompted to start a distinct railway budget to keep track of the growth and finances of what had become an important life line those days.

The concept of rail budget has been retained but reduced to a political gimmick of announcing schemes aimed at the pleasing the voter — some of which never even get implemented on ground. Taking that chance away from the future politicians is a real challenge. In 2007 the then rail minister Lalu Prasad claimed a turnaround of the railways with a surplus of Rs 20,000 crore (which many noted experts said was profits. Well, the railways don’t have a profit & loss statement). The minister got his headline and attention. His logic behind the budget was if you don’t milk a cow completely or properly — it would fall sick!

But today the organisation has operating ratios of 90-95% (you spend all you earn). Using the logic of milking a cow, you can’t do it beyond a particular point. If you do so, it will not survive. It would be quite tempting for the present Modi government to quickly start reform and allow private trains and open access. And leave the rest for later. That won’t do. The Debroy committee warns that their recommendations should be implemented as a package rather than by a process of ‘pick and choose’.

Will it be done?



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Posted by on April 16, 2015 in Uncategorized


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India to Spend Billions Revamping Massive Rail Network

India will spend $137 billion to revamp its massive rail network – the fourth largest in the world.

The railways ferry nearly 23 million passengers daily and transport 3 million tons of freight over a network that spans 64,000 kilometers. With 1.3 million people on its payroll, it is India’s largest employer.

But although it is called the country’s lifeline, much of the rail infrastructure is creaking and outdated. Accidents claim scores of lives every year, trains are overcrowded, and dilapidated tracks slow rail speeds.

Blaming the problem on “chronic underinvestment for a long time,” Railway Minister, Suresh Prabhu said over the next five years the government will modernize trains, introduce faster trains on key routes, build more rail lines and separate freight corridors.

“The gains to the economy will be immense: better services, improved connectivity for all citizens including the poorer segments of our society, lower costs and improved competitiveness,” Prabhusaid. “Investment in the railways will have a large multiplier effect on the rest of the economy.”

The investment will partly come from savings due to the steep decline in international prices of diesel, which powers Indian trains. Funds will also be raised from multilateral lenders, infrastructure and pension funds and what the government calls “monetizing rail assets.”

Investment long overdue

Experts have commended the new focus. Despite urgent calls for upgrading the network, previous governments preferred to spend funds on introducing new trains to satisfy the need for cheap transportation.

Rajiv Kumar, an economist with the independent Center for Policy Research in New Delhi, said investment in infrastructure is critically needed to stimulate economic growth.

“It was needed yesterday, or it was needed day before, so it is music to everybody’s ears,” he said. “I am actually hoping that investment will exceed the $137 billion dollars. Because that is what is really needed to bring Indian railways at par with other rail systems in Asia and the world, where it was 30 years ago, it was on par, and now it has lagged behind significantly. ”

The government’s push to upgrade infrastructure comes as the government’s latest Economic Survey forecast growth of 8.1- 8.5 percent in the coming fiscal year. That would make India the fastest growing among the world’s big economies.

Saying that India has reached a “sweet spot”, the report said the country is on track to hit double digit growth in the coming years.

The numbers are based on a new method of measuring growth. That method is questioned by some experts, who say although the economy is gaining momentum, many sectors are still sluggish and need time to recover from a long slowdown.

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Posted by on March 4, 2015 in Uncategorized



India to have New York’s Grand Central-like railway stations by 2017

India by 2017 will have five or six top-class railway stations on the pattern of monumental Grand Central Terminal, New York, or famed Gare d’Austerlitz terminus in Paris, a top Railway Board official has said.

“We should be seeing something great coming up at five or six places in the country in next two to three years … This is in line with other stations all over the world. If you go to New York Central or Gare d’Austerlitz where you have top class terminal with facilities like mall,” Railway Board Chairman Arunendra Kumar told PTI.
Kumar said work on the projects would start soon and is likely to be completed within three years.

“Station developments will come up very differently. It is one area which is constantly coming up that station must be the concept of a mall experience. We want to benchmark to global standards,” he said. These stations would attract passengers and facilitate business, he said.

Indian Railways is the largest rail network in Asia and the world’s second largest under one management, running 11,000 trains a day on its about 1,10,000 km tracks.

Kumar said apart from station modernisation, port connectivity was another area of focus for railways with Rs 16,000 crore worth of projects underway.

“We are paying real emphasis to port connectivity. We have had good amount of progress this year. We have given clearance to about seven projects worth Rs 16,000 crore and we can do even more based on the request we get,” he said. He said FDI has been opened in ten sectors of Railways which covered almost all areas of its working.

“We have displayed our intentions and also identified the projects that can be taken up under FDI and in case industry needs more projects that they would like to fund we would consider that… Anything which improves the movement of passengers, their convenience and has impact on the growth of Indian economy, that we will accord priority,” Kumar said.

FDI assumes significance in the context of high speed trains too, he said adding “the High speed line study is being done on Mumbai to Ahmedabad route… this thing is going to be a game changer. Wherever high speed has come it is not only railway but society as a whole has gone a complete change.”

He said mammoth investments were required in high speed trains as laying of tracks cost Rs 100 crore per km in comparison to Rs 10 crore a km for normal trains.

“Government has made its intentions clear… Delhi Chennai route has been offered to Chinese to study and come back,” he said, adding that it takes about nine to 10 years to flag off such trains.

Indian Railways is the growth engine of Indian economy, he said adding, “So far whatever constraints we have, Indian Railways has never been in the reds. It has always been making profit though we subsidise heavily.”


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Posted by on December 21, 2014 in Uncategorized


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