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Indian Railways: an overview

October, 2013


Founded in 1853 by the British, the Indian Railways commenced their journey with a 53 km stretch between Mumbai and Thane. Since then, the core infrastructural segment has evolved on an immense pace, having the honor of being called one of the largest and busiest rail networks in the world. A network spread over 63, 000 route kms and having 7000 stations through the length and breadth of the country, Indian railways carry almost 12 million passengers.

Indian railways, significantly acknowledging crucial transport requirements of the core sectors, long-distance travel of people and commodities, account for almost 8.5 per cent of the organised employment of the country, either directly or indirectly.

Market Size

  • The Indian Railways generated total approximate earnings on originating basis of Rs. 65, 354.64 crore (US$ 10.61 billion) during 1st April 2013 to 30th September 2013 as against Rs. 58, 661.79 crore (US$ 9.52 billion) during the corresponding period last year, registering an increase of 11.41 per cent. While the total goods earnings increased by 9.67 per cent, total passenger revenue earnings shot up by 16.16 per cent.
  • The revenue earnings from other coaching amounted to Rs. 1, 850.22 crore (US$ 300.36 million) during 1st April 2013 to 30th September 2013. The total approximate numbers of passengers booked during 1st April 2013 – 30th September 2013 were 4257.55 million.

  • The Railways have also generated Rs. 29, 690.16 crore (US$ 4.82 billion) of revenue earnings from commodity-wise freight traffic during April-July 2013 as compared to Rs. 27, 515.90 crore (US$ 4.47 billion) during the corresponding period last year, registering an increase of 7.90 per cent.
  • The cumulative foreign direct investment (FDI) inflow into the railways related components sector stood at US$ 351.26 million from April 2000 to July 2013, according to statistics released by the Department of Industrial Policy and Promotion (DIPP).

Recent Developments

  • Indian Railway Catering and Tourism Corporation Ltd (IRCTC), Indian Railways’ online ticket selling portal, has recently launched a new application for Windows Phone and Windows 8 devices so as to enhance access to its e-ticketing portal. The new app, launched in association with Microsoft, provides 24x7 access to IRCTC services and facilitates better experience of booking tickets online. The user can use this new application to plan a trip, make railway reservations, check the PNR status and perform all the tasks already available on the IRCTC web site.
  • Meanwhile, the Japan International Cooperation Agency (JICA) has inked a formal development assistance loan agreement with the Government of India (GoI), for providing the first tranche of Rs 4, 553 crore (US$ 739 million) for the Mumbai Metro III Cuffe Parade-Bandra-SEEPZ project. The scope of the agreement includes construction of Mumbai Metro Line - 3 (32.5 km long underground line) including tunnels, stations, allied facilities, rolling stock, system component and consulting services. The project, to be executed by Mumbai Metro Rail Corporation, is expected to be complete in 2020. The State Government is planning to implement the project under engineering procurement construction (EPC) model and not through build operate transfer (BOT) mechanism.
  • Indian Railways has also signed an agreement with Rashtriya Ispat Nigam Limited (RINL) to set up what is possibly the country's largest wheel plant at an investment of Rs 1,100 crore (US$ 178.49 million) in Rae Bareli. The plant would annually manufacture one lakh forged wheels in the first phase for locos and high speed trains. Its capacity will be doubled in the second phase for production of over 2 lakh wheels per annum. The factory is planned to commence operations within 36 months from order placement date and will provide employment to about 500 to 600 people. The quality of wheels manufactured in the plant will be tested and certified by US-based certifying agency 'TTCI'.
  • Hyundai-Rotem consortium has supplied first coach to L&T Hyderabad Metro Rail Ltd., which was put on display recently. The elevated rail system, to be completely managed remotely, will not have any driver. The Hyundai-Rotem joint venture (JV) had bagged a large order for supply of rail coaches for the metro project being developed by L&T. Initially, 171 coaches for 57 trains will be supplied by Hyundai-Rotem and the rest in a phased manner, revealed an official statement. L&T had placed the Rs 1, 800 crore (US$ 292.08 million)-order with Hyundai-Rotem in 2012.
  • Indian Railways keep making efforts to improve their systems technologically and upgrade them time-to-time. In such an effort, the railway authorities have decided to install a new fuel-saving device called Auxiliary Power Unit (APU) in diesel locomotives which will result in annual savings of more than Rs 20 lakh (US$ 32,453.04) per locomotive. As of now this device has been installed in twelve existing diesel locomotives through retro-fitment.
  • APU is a self-contained unit containing a small diesel engine coupled to a compressor and alternator for battery charging. It has its own set of controls, accessories and is integrated to the existing microprocessor control system of locomotive.

Government Initiatives

India and Japan have recently signed a Memorandum of Understanding (MoU) in order to conduct a joint feasibility study of High Speed Railway system on the Mumbai-Ahmedabad route. The cost of the study, expected to be completed within 18 months from its initiation, will be shared equally by both the nations. It’ll basically do traffic forecasting, alignment surveys and undertake comparative Study of High Speed Railway Technology and System.

In order to enhance safety in railway operations, the Indian Railways is also installing a new technology which will enable the detection of problems and errors in rail passenger coaches, wagons and locomotives while on the run, according to a release by the Ministry of Railways.

The new maintenance techniques, known as Acoustic Bearing Detectors (ABD) & Wheel Impact Load Detectors (WILD), when used together are known as Online Monitoring of Rolling Stock (OMRS) systems. The system works by way of recording the noise and forces generated by coaches, wagons and locomotives in motion. An array of microphones and sensors are installed to detect the same. The sensors will take notice of any abnormal noise or change in force, thereby signalling that some component is not functioning properly. The system is a very viable option as it can be monitored remotely. The pilot project has been installed near Bakkas in Lucknow division of Northern Railway. The system has successfully detected a number of wheel bearing faults.

Road Ahead

Indian Railways are determined to get the related infrastructure and ancillary services at par with international standards. Deployment of new and modern techniques, timely technological up-gradations and regular monitoring of the operations prove the same.

In addition to that, Indian Railways is expected a clock a healthy 5.5 per cent growth in freight traffic in 2013-14 as against a 4 per cent growth for 2012-13, according to a report from the Centre for Monitoring Indian Economy (CMIE). This growth is expected to come on the back of a healthy growth in the freight traffic of commodities like coal, cement, iron ore for steel plants and fertilizers.

Exchange Rate: INR 1 = US$ 0.01624 as on October 18, 2013

References: Press Releases, Department of Industrial Policy and Promotion, Press information Bureau.