Mallikarjun Kharge may hike electrification target to power railway coffers

Written by Rajat Arora | New Delhi | Updated: Feb 12 2014, 15:39pm hrs
Railway minister Mallikarjun Kharge is likely to give special thrust to route electrification in his vote-on-account speech in Parliament on Wednesday.

Hit hard by an increase in bulk diesel prices that have sent its annual fuel bill soaring by 15%, the railways has turned its attention on the neglected track electrification programme, increasing the target by around 300 km for the next fiscal to around 1,600 km. This would be the railways' biggest electrification drive.

We would be electrifying around 1,500-1,600 km of track in the next fiscal. We are also looking at public-private partnership (PPP) model for the same, a railway board official said.

The cost of electrification comes out to be around Rs 1 crore for every km. At present, the railways has electrified network of just 24,000 km of the total 64,000 km. Railways has a fleet of around 4,500 diesel locomotives and the same number of electric locos. It has an overall fuel bill of Rs 21,000 crore.

The cash-strapped transporter is also planning annuity-based public-private partnership (PPP) for its route-electrification projects. Under this model, the railways will pay contractors in annual installments. In the 12th Plan, the railways has set a target of electrification of 6,500-km route and it hopes to exceed the target with the annuity-based PPP route.

Route electrification could be the most successful railways PPP project . At present, running on diesel is three times costlier than electric route. So, whatever the railways save on the fuel can be paid to contractors annually. The national transporter feels such projects have good traction and returns on investments are faster which will interest foreign technology giants.

Railways is expecting private companies such as Alstom, Siemens, KEC and its own PSUs such as Ircon and Rites to invest.

In the current five-year plan, the railways has a PPP target of around Rs 1 lakh crore. Although its PPP record has not been very encouraging as other than port connectivity projects, no other big-ticket railway projects on PPP have taken off.