India Eyes Ambitious Modernization, Expansion of Railways System

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Everything about India’s growth script is gigantic.

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Take the Indian Railways (IR) expansion drive, for example.

The IR a few days ago floated a global tender to procure rails, and, get this – 700,000 metric tons of it.

Two things unique about this development – the quantity and the fact that for the first time the IR has decided to invite private parties to supply the rails.

The Indian government has earmarked about $132 billion to upgrade a creaking network, established when the British ruled India, which includes huge track-laying projects to modernize passenger and freight movement.

So far, the state-run steel supplier Steel Authority of India Limited (SAIL), held a monopoly of supplying rails to IR. But now, with the Ministry going in for a global tender, not only foreign players but even domestic steel companies — such as Jindal Steel & Power Ltd., one of the biggest non-state steelmakers — could benefit.

The additional rail tracks will help the railways towards clearing the track renewal backlog.

Some important notes:

  • Indian Railways is the country’s largest employer with 1.4 million personnel.
  • The carrier has a track length of around 115,000 kilometers, making it the world’s largest railway network under a single management.
  • It runs around 20,849 trains daily and transports 23 million passengers and 3 million tons of freight.
  • It operates 10,773 locomotives, 63,046 coaches and 245,000 wagons.

Going forward, IR is contemplating a mega-renovation in partnership with state and central administrations. The plan includes constructing elevated corridors for Indian cities like Mumbai and Delhi, alongside existing rail tracks, for which a portion of the new rails will be used.

SAIL, according to a report by news agency Reuters, has failed to supply rails to Indian Railways.

India’s steel ministry, said the news report, had asked SAIL to make sure it met its target of 1.14 million tons of supplies in 2017-18. Reuters earlier reported the upgrade for the IR was at risk because of rail shortages from SAIL. Between April and August, SAIL could supply only 70% of its monthly targets set for Indian Railways.

For 2017-18, SAIL has committed to providing only 1.14 million tons, against a requirement for 1.46 million tons.  SAIL, which has posted losses for nine straight quarters, is targeting capacity additions of 2 million tons a year.

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IR expects annual demand for steel rails to rise to 1.5 million tons in the year ending March from about 800,000 tons in the prior 12-month period.

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