At present, the railways has almost 38% (24,800 km) of its network electrified that carries almost 67% of the freight traffic and 51% of the passenger traffic. The power bill of the railways at present is Rs 10,880 crore whereas its diesel bill is around Rs 22,000 crore. This shows how important is faster electrification in reducing the national transporter's expenses on energy and also cutting the country's oil import bill.
The cost of electrification is around Rs 1.5 crore per kilometer.
The Rakesh Mohan committee had suggested that the railways take up electrification on a priority basis and said it should be seen as a means of cutting use of fossil fuel energy for rail transport.
Route electrification could be the most successful of the public-private partnership (PPP) projects being undertaken by railways. At present, running on diesel is more than two times costlier than the electric route. So, whatever the railways save on the fuel can be paid to contractors annually. We understand that such projects have good traction and returns on investments are faster which will interest foreign technology giants, a railway board official said.
The cash-strapped railways will carry out a part of this electrification drive on the annuity-based PPP model. As a pilot project, the railways has proposed four routes to be electrified under this model. Under the annuity 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.
Railways is expecting private companies such as Alstom, Siemens, KEC and its own PSUs such as Ircon and Rites to invest in the electrification projects.