Railways to invest ~2,000 crore in expansion

Railway Minister Piyush Goyal on Wednesday said the Indian Railways would invest around ~2,000 crore in expanding manufacturing units over the next couple of years.

The capacity of the Rae Bareli coach factory alone is expected to be increased five times to 5,000 coaches a year, said the minister at a Confederation of Indian Industry (CII) event in New Delhi.

However, he did not give the time-frame for this. The Indian Railways’ manufacturing capacity at its three factories — the Integral Coach Factory, Chennai (Tamil Nadu); Modern Coach Factory, Rae Bareli (Uttar Pradesh); and Rail Coach Factory, Kapurthala (Punjab) — is expected to be ramped up to 7,000-8,000 LHB (Linke Hofmann Busch, named after its German supplier) coaches from the current 4,000. “A major part of the investment would go to the ICF in Chennai,” Ravindra Gupta, member (rolling stock), Railway Board, told reporters in New Delhi.

According to Gupta, infrastructure improvement at the Modern Coach Factory is expected to take about one and a half years and a similar time horizon for the ICF is also expected. Once modernisation is complete, the Indian Railways will be in a position to ramp up its LHB manufacturing capacity to 7,000-8,000 coaches from the current 4,000. However, he added that the Indian Railways’ expansion plan would be completed by 2019-20. The Indian Railways has decided to shift to LHB coaches, but increasing production requires a ramp-up from the present annual coach production target of 2,435 coaches. The vendor capacity also needs to be increased accordingly. On this, Gupta said that the Railways was working towards expanding its vendor base.

Meanwhile, on the improvement of the Indian Railways, Goyal said efficiency in operations and timely payments could save 30-40 per cent of the organisation’s procurement cost. The Railways procures material worth more than ~50,000 crore annually for production and maintaining rolling stocks, signalling, tracks, and fuel. It had also identified a few high-value items, including high-speed diesel, in which significant savings can be made during 2017-18.

The Railways procures high-speed diesel worth ~15,000 crore a year and is the single-largest buyer of diesel in the country.