Railways lines up ₹96,000 crores revamp plan

Railways has lined up mega investment to scale up its operations, including a revamp of the signalling system across its network, a new $3-billion electric locomotive unit and a station development plan for large cities such as Mumbai. Together these projects could be worth over $15 billion (around Rs.96,000 crore).

Railway minister Piyush Goyal, who was in Davos last week, said that discussions are underway to ensure that the deals are structured in a way that local manufacturing gets a fillip and cost comes down. “We want to replicate the model that was used for LED bulbs, where the cost was brought down. If costs are lower and local manufacturing is ensured, we will scale up investments,” Goyal said.

Over the next few weeks, the railways is planning extensive consultations to work out a model that serves the twin goals with the minister maintaining that funds are not going to be a constraint. “There is enough budget and we have many options to raise resources,” he said.

The government has stepped up investment in railways as it seeks to modernise the creaking infrastructure, a result of low investment and overuse. Railways’ capex has increased from Rs.35,000 crore five years ago to Rs.1.3 lakh crore during the current fiscal, which is partly led by the need to step up public investment at a time when the private investment remains muted due to excess capacity and stressed finances of several Indian companies.

Complete modernisation of railways’ signalling system, including automation at a cost of Rs.78,000 crore, is expected to get approval in the Budget. The Budget is set to focus on electrification as railways has advanced the deadline for complete switch-over from diesel to electric by two years to 2020.

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