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India Inc bets big on Railways 5-year expenditure plan

CEOs of Indian companies enthused about Railways' Rs 8.5 lakh crore 5-year outlay

BS Reporters  |  Mumbai 

Indian companies are expecting the Railways to give orders from its Rs 8.56 lakh-crore investments, planned in the next few years, with chief executive officers (CEOs) saying this will come as a major economic stimulus package for their companies.

The Railways will spend money in redevelopment of stations, setting up Wi-Fi networks, solar power networks, track renewals and electrification of existing tracks.
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“With the emphasis on on an on-going basis, this reinforces the government’s commitment in making railway infrastructure development its priority. An increase of 52 per cent in budgetary allocation to Rs 1,00,011 crore, railway track electrification of 6,608 km in 2015-16, an of Rs 8,686 crore, increase of 84 per cent year-on-year for doubling, tripling and four-lining, PPP mode for last-mile projects and 20 per cent increase in track length to 138,000 km are big positives for us,” said R D Chandak, managing director (MD) & CEO, KEC International, a RPG Group company, which has a portfolio of Rs 500 crore of railway projects.
 

The redevelopment of railway stations is good news for construction companies such as L&T, HCC and Gammon, which can bid for the projects in the public-private partnership (PPP) basis. The plans to set up CCTVs and offer wireless internet connections is a boost for listed companies such as SmartLink and CMC, which make the for providing Wi-Fi networks.

Another big equipment supplier, Europe-based Alstom, said a vibrant PPP model will lead to rapid modernisation of railways and will offer huge scope for private players to contribute in areas such as signalling, track renewal and electrification. 

“It will also allow the Indian Railways to induct from the private sector, new technologies based on lifecycle costs rather than merely the capital cost of procurement. We hope the continuous push to network decongestion, gauge conversion, upgraded rolling stock and new lines will make the Railways far more efficient and commercially viable organisation,” said Bharat Salhotra, MD, Alstom Transport India Ltd. Companies like Taxmaco and Kalindee Rail Nirman will be big beneficiaries when the railways gives orders for signalling and telecommunication equipment.

“The has aimed to give a facelift to the image of Railways through digitisation and modernisation than any big or new reform measures. Some emphasis like increasing the speed in nine corridors will surely help in reducing the logistics lead time and therefore benefit the industries. Other announcements like Transport Development Corporation, multi modal depots, etc., are all welcome measures as these are bound to improve the delivery capability,” said S V Sukumar, partner strategy & operations, KPMG in India.

“However the has not addressed the main concern of logistics cost for the India Inc and that will continue to remain high. Unfortunately, this is not going to help our ‘Make in India’ campaign,” he said.

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