Cabinet approves 100% electrification of railways at a cost of Rs 121.34 bn

This comes at a time when General Electric is set to come up with a diesel locomotive manufacturing unit at Marhowra in Bihar

The Union Cabinet on Wednesday approved a proposal for 100 per cent electrification of all the broad gauge (BG) routes of Railways by 2021-22.

It cleared the proposal for electrification of the balance un-electrified BG routes of Indian Railways comprising 108 sections, covering 13,675 route kilometers (RKM), at a cost of Rs 121.34 billion. This comes at a time when global giant General Electric (GE) is set to come up with a diesel locomotive manufacturing unit at Marhowra in Bihar. 

The Railways had ordered GE to supply 1,000 fuel-efficient Evolution series locomotives in November 2015. The $2.5-billion contract was for 11 years. The deal, involving an investment of $200 million by GE, is expected to create at least 6,000 direct and indirect jobs. 

An earlier comment by Railways Minister Piyush Goyal on converting the GE plant to electric had triggered a controversy, with the company coming out in public. “We will use GE engines as backup on normal routes and also in border areas where it is required,” Goyal said on Wednesday.  

After the planned electrification, there would be a reduction in the consumption of high-speed diesel oil by about 2.83 billion litres per annum, reducing emissions.

Currently, around two-thirds of freight and more than half of the passenger traffic in Indian Railways moves on electric traction. However, electric traction accounts for just 37 per cent of the total energy expenses of Indian Railways. Due to this advantage, post-electrification, Indian Railways is likely to save Rs 135.1 billion per annum in fuel bill and the same will improve its finances. “Plans are already in place to make it 78 per cent immediately,” he added. 

The approved electrification will generate direct employment of about 204 million man days during the period of construction.

In the last four years, Rs 171.65 billion has been spent on electrifying 16,815 RKM. Interestingly, experts indicate that electrifying low-traffic routes is not financially prudent. The Railways consumes 17.5 billion units of electricity. In 2015-16, its electricity bill stood at Rs 110 billion; it dropped to Rs 90 billion in 2016-17. The average per unit cost dropped from Rs 6.75 a unit in 2015-16 to nearly Rs 6 a unit in 2016-17.

In July, the Comptroller and Auditor General had come out with its report that stated the GE project was not “in sync with the overall strategic vision of Railways”. It further added that diesel locomotives procured under this agreement would have no scope for productive utilisation in the Indian Railways network in future.