Indian Railways to invest about Rs 2,000-cr for expansion

Railway Minister Piyush Goyal today said Indian Railways will be making an investment of around Rs 2,000 crore, in the next couple of years, for expansion of its various manufacturing units across the country.

The capacity of the Rae Bareli coach factory alone is expected to be increased five times to 5,000 coaches per year, the minister said at a CII event in New Delhi. However, he did not divulge the timeline for the same.

The Indian Railways manufacturing capacity from its three factories -- Intergral 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 coaches.

At present, around 51,000 Integrated Coach Factory (ICF) coaches and 5,500 LHB coaches are made in the Kapurthala factory.

“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 in Rae Bareli is expected to take about one-and-a-half years or so and a similar time horizon for ICF is also expected. Once the modernisation work is complete, Indian Railways would 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 Indian Railways’ expansion plan would be complete by mid 2019-20.

Indian Railways has decided to shift to LHB coaches, but increasing production requires a sharp ramp up from the present annual coach production target of 2,435 coaches. The vendor capacity also needs to be increased accordingly. To this, Gupta said that the Railways was working towards increasing its vendor base.

Meanwhile, on the overall improvement of Indian Railways, Goyal said efficiency in operations and timely payments can save up to 30-40 per cent of the procurement cost for Railways.

The Railways procures material worth more than Rs 50,000 crore annually to cater to the needs for production and maintenance of rolling stocks, signaling, tracks and fuel. It had also identified a few high-value items, including high-speed diesel, where significant savings can be made during the current financial year (2017-18).

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