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Indian Railways plans to run on 100 per cent electricity by 2024 and become a net-zero emission network by 2030.

Indian Railways Industry Analysis

    Last updated on Dec, 3 2021

India has the fourth-largest railway system in the world, following the US, Russia and China. As of 2019-20, the Indian Railways had 13,169 passenger trains and 8,479 freight trains. As of 2019-20, it had a total route network of 67,956 kms and introduced 153 new passenger train in the same period. Indian Railways has logged the highest ever electrification of sections covering 6,015 Route Kilometer (RKM) in a single year during 2020-21. More than 5 times electrification was achieved during (2014-21) last seven years as compared to during 2007-14. By 2024, Indian railways will be run completely on electricity.

Revenue growth has been strong over the years. Indian Railways’ gross revenue stood at US$ 24.78 billion in FY20. RailTel, a PSU under the Railway Ministry, which provides fast and free Wi-Fi across the Indian Railways network, announced its highest ever consolidated income of Rs. 11,660.05 million (US$ 158.48 million) for FY19-20. This income figure is a growth of 12.3% over the consolidated income of the financial year FY18-19.

The gross revenue stood at Rs. 85,588.96 crore (US$ 11.44 billion) in FY22 (until September 2021).

Freight remains the key revenue earning segment for the Indian Railways, accounting for 79.1% of the total revenue in FY22 (until August 2021), followed by the passenger segment.

In FY22 (until August 2021), passenger earnings stood at Rs. 11,702.10 crore (US$ 1.56 billion) and freight earnings stood at Rs. 54,724.99 crore (US$ 7.30 billion).

Freight earnings stood at US$ 16.04 billion in FY21. In September 2021, freight earnings stood at US$ 1.45 billion and freight loading reached 106 million tonnes.

Freight earnings in FY21 stood at US$ 16.04 billion. The total passenger revenue April 2020 to February 2021 is Rs. 12,409.49 crores (US$ 1.70 billion) as against the Rs. 48,809.40 crore (US$ 6.7 billlion) for the corresponding period the previous year. Freight remains the major revenue earning segment for the Railways and accounted for 64% of its total revenue in FY20, followed by the passenger segment. The speed of freight trains increased to 44 kmph in FY21 from 24 kmph in FY20.

In June 2021, freight earnings stood at US$ 1.50 billion, which is 26.0% higher than last year’s earnings of US$ 1.19 billion, and freight loading reached 112.65 million tonnes, which is 11.19% higher than last year’s loading of 101.31 million tonnes.

In November 2020, India Railways announced that 40% of dedicated freight corridor (DFC) will be opened for traffic by end-FY21, while the entire 2,800 km route will be completed by June 2022.

Passenger traffic reached 8.10 billion and is estimated to reach 12 million by 2031. The freight traffic was at 1,232.64 million tonnes in FY21 and is estimated to stand at 2,024 MT by 2024.

In FY22 (until August 2021), passenger traffic stood at 887.63 million.

In FY22 (until August 2021), freight loading stood at 561.80 million tonnes compared with 430.75 million tonnes in FY21.

The punctuality performance of Indian Railways for mail and express trains increased to 75.67% during April-December 2019 compared to 68.19% during the same period last year.

Under the Union Budget 2021-22, the government allocated Rs. 110,054.64 crore (US$ 15.19 billion) to the Ministry of Railways. FDI inflows in railway-related components stood at US$ 1.23 billion from April 2000 to June 2021.

Under the Union Budget 2021-22, the government allotted Rs. 1,803.01 crore (US$ 249.07 million) for gauge conversion, Rs. 3,000 crore (US$ 414.43 million) for doubling tracks, Rs. 6,815.36 crore (US$ 941.51 million) for rolling stock and Rs. 2,448.30 crore (US$ 338.22 million) for signalling and telecom.

The Ministry of Railways plans to monetise assets including Eastern and Western Dedicated Freight Corridors after commissioning, induction of 150 modern rakes through PPP, station redevelopment through PPP, railway land parcels, multifunctional complexes (MFC), railway colonies, hill railways and stadiums.

With increasing participation expected from private players, domestic and foreign, due to favourable policy measures, both passenger and freight traffic is expected to grow rapidly over the medium to long term. The Government of India’s focus on infrastructure is a major factor which will accelerate growth of railways. Railways infrastructure plans to invest Rs 50 lakh crore (US$ 715.41 billion) by 2030.

The Indian Railways is likely to deliver 58 super critical as well as 68 critical projects worth more than Rs.1,15,000 crore (US$ 15.44 billion) in the next few years. 27 super critical projects will be completed by December 2021, while two projects will be handed over by March 2022. 29 super critical projects—spanning 1,044 kms and costing Rs. 11,588 crore (US$ 1.5 billion)—have been commissioned. Four projects worth Rs. 1,408 crore (US$ 189.05 million) have been completed and the remaining projects are targeted for completion by March 2024.

Indian Railways completed eight major capacity enhancement projects by taking advantage of the coronavirus lockdown. These projects included three super critical projects with a combined length of 68km, three critical projects with a combined length of 45km, upgradation of the entire 389km railway line from Jhajha in Bihar to Pandit Deen Dayal Upadhyaya junction in Uttar Pradesh and a new 82km port connectivity line to Paradip.

In FY21-22, the Indian Railways announced to complete several projects. The Railway Ministry has identified 56 projects in various railway zones that will be completed in February-March 2021. In April 2021, Indian Railways completed the arch closure of the under-construction Chenab Bridge which is the world’s highest railway bridge. Chenab Bridge is 1315 m long and will be 35 meters higher than Eiffel Tower in Paris. The total cost of the bridge is estimated to be Rs. 1,486 crore (US$ 200.46 million) and the design life of the bridge is said to be 120 years.

As of October 2021, Indian Railways completed electrification work of total 649 route kilometers, from Katihar to Guwahati, over the Northeast Frontier Railway, boosting the route’s connectivity.

In August 2021, Indian Railways Organisation of Alternative Fuels (IROAF) invited bids for trains based on hydrogen fuel cell for the Indian Railways Network to promote green railways.

As a part of the Railways’ plans to upgrade its network, the Ministry announced that all non-AC sleeper coaches will be replaced by AC coaches for trains running >130 kmph. This move has been taken as a technical necessity for high-speed trains with the bonus of improving passenger experience.

Indian Railways is also looking at other areas of revenue generation such as the following: a) Change in composition of coaches so that it can push the more profitable AC coach travel; b) Additional revenue streams by monetising traffic on its digital booking IRCTC; and c) Disinvesting IRCTC

In July 2021, the Ministry of Railways received bids from the private and public sectors to operate 29 pairs of trains with about 40 modern rakes, entailing an investment of ~Rs. 7,200 crore (US$ 966.74 million).

On July 25, 2021, the Indian Railways Station Development Corporation (IRSDC), a nodal agency of the Ministry of Railways spearheading the re-development of railway stations across the country, claimed that the two railway stations will be redeveloped at an indicative cost of Rs. 1,285 crore (US$ 172.54 million) in four years.

The Indian Railways has decided to undertake electrification of Broad Gauge (BG) rail lines in a mission mode and is likely to complete the process by 2023-24. Of the 64,689 kms of broad gauge route, 45,881 kms has been electrified and the remaining 18,808 kms route is yet to be electrified. About Rs. 21,000 crore (US$ 2.8 billion) is estimated to be spent on electrification of the remaining BG routes.

In October 2021, India and Nepal signed an MoU (Memorandum of Understanding), for a proposed US$ 3.15 billion railway line project, to connect Kathmandu and the Indian border town, Raxaul.

In October 2021, Indian Railways announced a plan to establish ~500 multi-modal cargo terminals under the ‘PM GatiShakti’ programme, with an estimated outlay of Rs. 50,000 crore (US$ 6.68 billion) in four-five years. Through this plan, the government plans to integrate various modes of transportation for seamless movement of parcel and bulk cargo (e.g., coal and steel).

In May 2021, the Government of India and European Investment Bank (EIB) signed a finance contract for the second tranche of US$ 182.30 million for the Pune Metro Rail project.

In January 2021, Hyundai Motor India Ltd. (HMIL) has announced that it has exported 125 cars to Nepal via the Indian Railways. The export is claimed to be eco-friendly and the first-ever by the company. With this step, the company is aiming to reduce carbon footprint by 20,260 tonnes.

In February 2021, Indian Railways called for ‘Request for Qualification (RFQ)’ for redeveloping New Delhi railway station under a public-private partnership, with an estimated project cost of Rs. 5,000 crore (US$ 690.75 million).

Railways is leading India’s fight against climate challenge and is taking significant steps towards meeting its ambitious goal of being a net zero carbon emissions organisation by 2030 and meeting India’s Intended Nationally Determined Contributions (INDC) targets.

Indian Railways Industry Report (September, 2021)
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Indian Railways

Freight Traffic Projections on Dedicated Freight Corridor (in MMT)



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