Rail Budget a major push for infrastructure creation

The rail budget has provided a major boost for the growth of infrastructure sectors. The budget has provisions for speeding execution of projects in key industries including power, coal, mining, ports and urban transport. Additionally, the renewed focus by the rail ministry on the much delayed Dedicated Freight Corridor (DFCC) project will help capturing the freight traffic currently locked up in these sectors.

The rail ministry will rope in the private sector and state governments concerned In order to complete the ambitious projects on time. “An investment of upto Rs 9,000 crore is expected under these projects including Rs 3,800 crore for port connectivity projects, Rs 4,000 crore for coal mine connectivity and Rs 800 crore for iron ore mines connectivity improvements,” rail minister Pawan Kumar Bansal said while presenting the budget in Parliament.

He said the private participation will he aided by the “Participative” Public Private Partnership (PPP) policy newly approved by the Union cabinet. Evacuation constraints owing to lack of rail connectivity have acted as a major dampener for fresh investment in power and coal sectors. The rail ministry is currently mulling floating a Special Purpose vehicle (SPV) with miner Coal India Ltd (CIL) and the Chhattisgarh government. The SPV will spend over Rs 4,000 crore in laying a 180-Kilometer line for evacuating coal from Mand Raigarh coalfield in Chhattisgarh.

Bansal said the ministry plans to mobilize over a lakh crore investment in these sectors through PPP mode in the 12th Plan. “Among the focus areas identified are elevated rail corridor, DFCC, redevelopment of stations, power generation and freight terminals,” he said, noting their high capital intensive nature and long gestation periods as concerns. The rail ministry has allocated Rs 1,000 crore each for setting up a land development authority and Indian Railway Station Development Corporation in 2013-14.

The minister also said that DFCCIL, the rail ministry’s arm executing the freight corridor project, has already completed land acquisition for 2,800-Km stretch on the Eastern and the Western arms of the project. He also said that a Rs 3,300 crore contract has been awarded for 343-Km Kanpur-Khurja section and construction contract for 1,500 KM on the two corridors would be awarded by end 2013-14. Additionally, preliminary studies have commenced for four future corridors.

As was expected the ministry’s plan expenditure in DFCC is set for a massive jump from Rs 1,542 crore (Revised Estimate) in the current financial year to Rs 7,124 crore in 2013-14. The rail ministry is already working on a 66-km stretch of the New Karwandiya-Durgawati section of the Sonnagar-Mughalsarai stretch (122 km) of the eastern corridor. It is to be commissioned by December.

Freight Traffic on the Golden Quadrilateral linking the four cities of Delhi, Mumbai, Chennai and Howrah – and its two diagonals Delhi-Chennai and Mumbai-Howrah – carries more than 55 per cent of revenue earning freight traffic of Indian Railways. The existing routes of Howrah-Delhi on the Eastern Corridor and Mumbai-Delhi on the Western corridor are highly saturated creating the need for dedicated routes.

The project ones commissioned would mark an inflexion point in the 150 year old history of Indian Railways which has so far run only mixed traffic across its network failing to capture high freight movement demand. The corridor would enable freight trains to run at an average speed of over 65 kmph as against 22 kmph currently.Focus back on Dedicated Freight Corridor.

http://www.business-standard.com/article/budget/rail-budget-a-major-push-for-infrastructure-creation-113022600520_1.html

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