The Indian Railways has one of the largest developed networks in the world. The premier transport and logistics organisation of the country has the largest rail network in Asia and is the world's second largest under single management. Railways are a major catalyst that triggers socio-economic growth.
The total approximate earnings of Indian Railways on originating basis during 1st April – 30th September 2011 were Rs. 48947.17 crore compared to Rs. 44337.86 crore during the same period last year, registering an increase of 10.40 per cent.
The total goods earnings have gone up from Rs. 29448.55 crore during 1st April – 30th September 2010 to Rs. 32439.00 crore during 1st April – 30th September 2011, an increase of 10.15 per cent. The total passenger revenue earnings during first six months of the financial year 2011-12 were Rs. 14017.69 crore compared to Rs. 12688.79 crore during the same period last year, registering an increase of 10.47 per cent.
Foreign direct investment (FDI) inflows worth US$ 223.28 million were invested into Railway Related Components between April 2000 to August 2011, according to the Department of Industrial Policy and Promotion (DIPP).
According to the Union Railway Budget for 2011-12 presented on February 25, 2011:
- Highest ever plan outlay of US$ 12.72 billion was proposed for Railways
- US$ 2.11 billion provided for new lines
- Aims at adding 25,000 route km to the railway network
- Will follow public private partnership (PPP) model in projects
- Special task force will be set up to clear investment proposals within 100 days
Investment Opportunities
Dedicated Freight Corridor Corporation of India (DFCCIL) has signed an agreement with the Japan International Cooperation Agency for its upcoming western corridor project at an investment of Rs 4,23,000 crore (US$ 94.03 billion). The project involves building of nine large industrial zones, high-speed freight line, three ports, six airports, a six-lane intersection-free expressway connecting Mumbai with Delhi and a 4,000-MW power plant.
Investors may look forward to US$ 2.26 billion of tax-free bond issue in 2011-12 from the Indian Railway Finance Corporation (IRFC), with Mr Pranab Mukherjee, Union Finance Minister, proposing such a move to fund infrastructure.
Investment Policy Updates
The Ministry of Railways has declared that the state-run transporter will observe 2011-12 as the “Year of Clean Energy", highlighting a slew of green measures taken by the ministry, including free supply of 14,000,00 CFLs (compact fluorescent lamps) to railways households and phasing out of incandescent lamps.
Under the Automobile Freight Train Operator (AFTO) scheme formulated by the Ministry of Railways, private players can invest in inducting and operating special wagons on its network. They would be offered 15 per cent rebate on freight rates for every rake loaded. In case of high capacity wagons, for every increase in throughput of 10 per cent, an additional two per cent rebate on freight rates would be offered.
The railways contribution to automobile transport is likely to go up to 25 per cent...
Sugato Sen
Senior Director
Society of Indian Automobile Manufacturers
WHAT'S NEW
The World Bank has signed a US$ 975 million loan agreement with the Indian government to set-up the Eastern Dedicated Freight Corridor that will help faster and more efficient movement of raw materials and finished goods between the Northern and Eastern parts of India.
The northern railways has opened India's longest railway tunnel piercing through the Pir Panjal range in Jammu & Kashmir. The tunnel is part of the ambitious Udhampur - Srinagar - Baramulla rail link project of Northern Railways.
The Indian Railways is expected to receive US$ 9.10 billion in 2011 through e-payment for moving freight traffic, fetching two-third of the total freight earnings of the country's largest employer. The e-payment as been made achievable through 1,500 terminal management system (TMS) and 800 nodes of TMS.
PARTICIPANTS IN VALUE CHAIN