RAILWAY

INFRASTRUCTURE

MARKET OVERVIEW

Indian Railways is one of the largest railways in the world. With

more than 109,000 km of track, it has been an integral part of
India’s transport network for more than 150 years. It is also the
world’s largest employer, with 1.6 million workers.

Until just two years ago, the railways were on the verge of
bankruptcy, amid a loss of market share to road transport and an
accompanying decline in revenues. But coinciding with the
appointment of Lalu Prasad Yadav as minister, officials have
managed a remarkable turnaround of the company, cutting costs
and introducing round-the-clock loading to reduce train
turnaround times from seven to five days, which increased the
network's loading capacity by 25%.

Indian Railways is looking to build on this momentum with

ambitious plans to upgrade its infrastructure. Already, the rapid
rise in international trade and domestic cargo is putting a great
strain on the Delhi-Mumbai and Delhi-Kolkata rail tracks. This
pressure is likely to continue, as the Ministry of Railways forecasts
that freight traffic will grow 8-10% annually and passenger traffic
6-8% annually in the coming years.

OPPORTUNITIES

To meet these challenges, Indian Railways—which is managed by

the Government of India—has announced an ambitious
investment agenda worth C$87.5 billion over the next 10 years.

The biggest railway project—and India’s largest infrastructure

project—is the dedicated freight corridor. The corridor will initially
encompass western and eastern routes with 2,700 route km
(equivalent to 5,000 km of track) at a cost of C$5.5 billion. The
corridor will link the ports of western and eastern India to New
Delhi and the Punjab. The corridor project is being implemented
through a special project vehicle created through a mix of
engineering, procurement and construction and public-private
partnership methods. Other freight corridors are to follow, leading
to 11,500 km of dedicated freight corridors.
The ministry has also tentatively identified 16 railway stations for
modernization: New Delhi, Chhatrapati Shivaji Mumbai, Howrah,
Chennai Central, Amritsar, Ahmedabad, Bangalore, Bhopal,
Bhubaneshwar, Chandigarh, Lucknow, Mathura, Pune, Patna,
Secuderabad, and Thiruvananthapuram.

Plans also involve 6,000 km of doubling and port connectivity,

12,000 km of gauge conversion, the upgrade of feeder routes, the
modernization of freight terminals, and the augmentation of
manufacturing capacity of rolling stock.

In December, the railway minister said that Indian Railways would

announce in March ambitious plans to speed up its modernization
efforts, with special attention to rail projects in the north-east,
north Bihar, Kerala and West Bengal.

Opportunities for private sector participation include design,

construction and maintenance, freight terminals, logistics parks
and inland container depots. Areas identified for public-private
partnerships include railway stations, special project vehicles for
the manufacturing of locomotives, coaches/other railway
equipment, and the operation of container trains.

Fourteen companies have been licensed as qualified operators of

container trains. These include:
• Adani Logistics (www.adanigroup.com)
• Bothra Group (www.bothragroup.com)
• Central Warehousing Corp. (http://cewacor.nic.in/)
• Container Corp. of India (www.concorindia.com)
• Delhi Assam Roadways Corp. (www.darcl.com)
• Dinesh/Emirates Trading Agency
• Gateway Distriparks
(www.gateway-distriparks.com/newsite/index.asp)
• Hind Terminals (www.hindterminals.com)
• India Infrastructure Leasing (JV between Hindustan
Infrastructure and APL, a subsidiary of Singapore-based
NOL)
• JM Baxi and Co
• MICT (P&O Ports)
• Pipavav Rail Corp. (www.pipavavrailway.com)
• Reliance Infrastructure Leasing (www.ril.com)
• Sical Logistics (http://sical.in/)

Government Policies:
• No plans to privatize operation of the railways
• 100% FDI permitted in railway infrastructure under the
automatic route (no approval process required)
Nodal Agencies:

Ministry of Railways
www.indianrailways.gov.in

Indian Railways has a number of subsidiaries set up to execute

railway and other infrastructure projects:

Container Corp. of India

www.concorindia.com

Railtel Corp. of India

www.railtelindia.com

RITES
www.rites.com

Rail Vikas Nigam Ltd.

www.rvnl.org

IRCON International Ltd.

www.irconinternational.com

Mumbai Rail Vikas Corp.

www.mrvc.indianrail.gov.in

Indian Railway Finance Corp.

Konkan Railway Corp. Ltd.

www.konkanrailway.com

Other Indian companies active in the sector:

Patel Engineering
www.pateleng.com

Balaji Railroad Systems

www.barsyl.com

Bharat Wagon & Engineering (government owned)

www.bbunl.com/co_bharat.html