Four months after Prime Minister Narendra Modi questioned the need for total electrification of the country’s rail network, the PM-led Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved 100 per cent electrification of the Indian Railways, tentatively by 2021-22, settling a decades-long debate.
When complete, this will make Indian Railways one of the largest electrified railway networks in the world — after China, which has 87,000 km (around 68 per cent of its network) electrified — and the only large railway with 100 per cent electrification. Currently, around 48 per cent of the country’s 61,680 km broad gauge railway network is electrified. These are mostly traffic-intensive routes, signifying healthy return on investments.
According to the existing arrangement already in the works, this was to increase to around 78-80 per cent in the business-as-usual mode, by bringing another 17,000 km under electrification in the next few years. The Cabinet’s decision on Wednesday takes this to a full 100 per cent coverage, with the move to electrify the remaining 13,675 route km. However, this approval does not cover 3,479 km of metre gauge and 2,209 of broad gauge network.
Sources said the Cabinet’s approval may indicate a slight softening of stand on the part of the Prime Minister. “100 per cent electrification target should be examined with reference to global practice where a mix of diesel and electric traction is the preferred norm,” the minutes of the PM’s review meeting had stated, adding, “Diesel traction will remain relevant in many areas. Premature condemnation of diesel locos must not be resorted to.”
Instead of financially justifying electrification of each route, as is the convention, Railways has taken approval for what it calls “umbrella works” for the entire 13,675 km. Sources said these electrification projects may be given out as large Engineering Procurement and Construction (EPC) packages, inviting big companies.
The cost of the remaining electrification is estimated at Rs 12,134.50 crore. Responding to The Indian Express query, the ministry said the rate of return (ROR) on investment is “about 32 per cent”. A railway project needs to have an ROR of at least 12 per cent to be financially viable. The funds will be sourced from Extra Budgetary Resources (Institutional Finance), the ministry said, which usually means borrowing from outside.
Over the past year, there have been divergent views in the higher levels of government on the prudence of going for one kind of traction choice. Railways Minister Piyush Goyal has been a vocal supporter of 100 per cent electrification. “It makes no sense to calculate ROR on individual projects in piecemeal. Return on investment must be calculated on the whole project, considering its benefits in a comprehensive manner,” said a top Railway Board official. He said that since around 80 per cent route was to be electrified, extending the coverage to the remaining 20 per cent became “an operational compulsion” to optimise efficiency.
Explaining the decision, Goyal told reporters that the Prime Minister’s thinking was that Railways would be brought back into profit through savings achieved by electrification. “It will reduce dependency on crude import and also help in efforts to mitigate climate change,” he said. The government statement claimed the move would generate around 20.4 crore man-days of direct employment during the period of construction.
Railways has a fleet of 5,526 diesel engines. Goyal said on Wednesday that diesel engines would be used in emergencies and for strategic use. The government is in a joint venture with General Electric to produce 1,000 high-horsepower diesel locomotives from Marhowra in Bihar over the next 10 years for Rs 14,656 crore. Goyal said there are numerous possibilities on what to do with them in the light of the changed traction policy of the Railways.
“We will need (diesel) engines for back-up whenever there is any problem in the electric system. We will need diesel engines in the border areas,” he said. “We can look at exporting these engines also. So various opportunities and possibilities are there,” he said. Goyal also said that the diesel engines would be converted into electric ones during the periodic overhaul of each engine, so that the diesel fleet gradually turns electric. The ministry has projected that after full electrification, the transporter will save Rs 13,500 crore annually on fuel bill.
“And the process of electrification takes time also. Our idea is that electrification should become the primary source, ensuring that we don’t add to pollution,” said Goyal.