According to a report by ICICI Securities, Indian Railways (IR) has announced an ambitious investment plan costing INR 16.7 lakh crore by 2031 with the goal of modernising railway operations and strengthening infrastructure. High-speed rail (HSR) projects, track electrification, dedicated freight corridors (DFCs), and station renovations will be the main areas of investment.
The report highlights that IR is prioritising the redevelopment of 1,309 railway stations and the expansion of DFCs to enhance logistics and efficiency. Notably, private sector participation is increasing, with companies like Larsen & Toubro (L&T) securing substantial contracts for these initiatives.
A key objective of this massive investment is to improve railway speed and operational efficiency. The government is actively working on new HSR corridors, including the Mumbai-Ahmedabad bullet train project, which is already in progress. Additionally, seven more HSR corridors are planned, though their implementation timelines remain uncertain.
India’s freight transportation is set to improve significantly with the expansion of DFCs. While the Eastern and Western DFCs have been completed, three additional corridors are in the pipeline. These developments aim to streamline goods transportation, reduce costs, and improve overall efficiency.
The budget allocation for Indian Railways has been witnessing steady growth, rising from INR 1.55 trillion in FY21 to an estimated INR 2.65 trillion in FY25, reflecting a robust CAGR of 14%. A substantial portion of this investment is earmarked for the redevelopment of railway stations.
The government has opted for the engineering, procurement, and construction (EPC) model for station upgrades. As of February 2024, work has commenced on 508 stations, while foundation stones have been laid for the redevelopment of another 553 stations, creating a business opportunity valued at INR 190 billion. However, the report suggests that major station redevelopment contracts were awarded over the past two to three years, limiting immediate opportunities in this segment.
This extensive investment initiative is poised to modernise Indian Railways, enhance passenger experiences, and improve freight transportation efficiency, marking a significant step towards a more advanced and streamlined railway network in India.
Source: ET Travel World
