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July, 2012


The Indian Railways (IR) is the world's fourth largest rail network with a total network of about 64,000 kilometre (km) spreading across 7,000 stations, with more than 18,000 trains operating every day. Over 22 million passengers travel by trains on a daily basis in India. The Railways transport around 2.5 million tonnes (MT) of freight via trains on a daily basis.

The Indian Railways is a major catalyst to infuse socio-economic growth in the Indian economy. In addition, it is the second largest organisation under a single management in the world.

Sector Structure/ Market Size

The Railways have generated Rs 21,027.96 crore (US$ 3.80 billion) of revenue earnings from commodity-wise freight traffic during April-June 2012 as compared to Rs 16,507.66 crore (US$ 2.98 billion) during the corresponding period last year, registering an increase of 27.38 per cent. Railways carried 244.81 MT of commodity-wise freight traffic during April-June 2012 as compared to 233.66 MT carried during the corresponding period last year, registering an increase of 4.77 per cent.

The cumulative foreign direct investment (FDI) inflow into the railways related components sector stood at US$ 246.30 million from April 2000 to April 2012, according to statistics released by the Department of Industrial Policy and Promotion (DIPP).

Industry Initiatives

  • GVK Power and Infrastructure Ltd has received environmental clearance from the Government of Queensland, Australia, for its Alpha coal and rail project. The company has set aside US$ 10 billion for the project. The project is being run by Hancock Coal Pty Ltd, in which 79 per cent is owned by GVK
  • Spain's Construcciones y Auxiliar de Ferrocarriles (CAF) plans to set up a manufacturing unit in India to tap the increasing demand for railway vehicles and equipment. "There is a tremendous opportunity in India. Also, I think it can be the hub for the entire Asia. It is an important market for us and we need to become Indian to cater to the market," as per Juan Jose Garcia, International Division Director, CAF. The firm has recently won a Rs 780 crore (US$ 140.79 million) order to manufacture 14 rakes (each rake consists of six coaches) for Kolkata Metro Railway Corporation Ltd (KMRCL)
  • Besco Ltd's foundry division unveiled their advanced wagon manufacturing unit at Baruipur, West Bengal. It will have an annual production capacity of 3,000 wagons. The total outlay is estimated to be Rs 120 crore (US$ 21.66 million)
  • Fairwood, the company that is introducing the pod car in India in a tie-up with the UK-based Ultra, plans to set up a manufacturing factory in the National Capital Region in Noida, Greater Noida or Gurgaon over the next four five months. The firm plans to make the manufacturing unit a base for export to other countries such as Malaysia, Philippines and Vietnam
  • Coal India Ltd plans to invest Rs 7,500 crore (US$ 1.35 billion) to develop railway tracks and related infrastructure to evacuate coal from Chhattisgarh, Jharkhand and Odisha. These tracks would help the company to acquire around 100 MT of additional coal from each of the States
  • Calcutta Tramways Corporation (CTC), the operator of Asia's oldest functional tram services, plans to introduce 'cafeteria trams' in Kolkata. During the initial stage, four trams will be converted into moving hotels and will run in Central Kollata, Victoria Memorial and Race Course areas
  • The Ludhiana Metro project worth Rs 10,300 crore (US$ 1.86 billion), which will be completed in five years, was approved by Mr Parkash Singh Badal, Chief Minister, Punjab, on July 17, 2012

Government Initiatives

The contracts for the Sonnagar-Dankuni section of the Dedicated Freight Corridor, elevated rail corridor in Mumbai and locomotive factories in Madhepura and Marhowra would be awarded this year, according to the target set by Dr Manmohan Singh, Prime Minister of India. The first project to take off is the elevated rail corridor of Mumbai connecting Churchgate and Virar, with total investment to the tune of Rs 20,000 crore (US$ 3.61 billion).

Moreover, a total of 929 stations have been identified for development during 2009-10 to 2012-13 under Adarsh station scheme. A total of 550 stations have been developed under the scheme so far. Station redevelopment of four or five stations will be done via public-private partnership (PPP) mode.