The railway budget push to improve last-mile connectivity has come as a major relief for user industries in the sectors of coal, power, steel and shipping. The new rail link projects, when commissioned, would go a long way in reducing the time and cost overruns associated with transporting output, especially in the mining sector, which depends upon rail infrastructure for evacuation, the industry says.
A Coal India official said the minister’s announcement to take up 50 new projects for providing last-mile connectivity in 2012-13 has come as a major relief. “The new projects would relieve the evacuation of at least 30 million tonnes of coal that are likely to be stocked in the central Indian coalfields alone,” he told Business Standard.
The rail ministry has approached the ministries of coal, power, steel and shipping for identification of rail connectivity projects, rail minister Dinesh Trivedi on Wednesday said while presenting the budget. Also, 17 such projects have already been sanctioned and another 28 identified, he added. “Railways will interact with concerned utility stakeholders to take the process of connectivity forward, largely through the PPP (public-private partnership) route,” Trivedi said. In another major announcement for the user industries, the government is planning to set up a Logistics Corporation to provide last-mile servicing for freight traffic and management of existing railway goods sheds and muiltimodal logistics park.
Indian Railways earns Rs 68,000 crore annually by transporting commodities, including coal, steel, iron ore, cement and foodgrains on its network. This forms around 64 per cent of the national transporter’s overall annual earnings of Rs 106,000 crore.
The steel industry hailed the rail budget announcements saying the massive modernisation ramp-up would push up steel usage and transport across the country. Railway investment during the 12th five-year Plan is proposed to be Rs 7.35 lakh crore. It is almost four times the investment undertaken in the current Plan period. Railways would spend Rs 63,212 crore on track modernisation in five years (2012-17).
SAIL expressed optimism about the development. “New trains, railway stations, lines for Kolkata Metro and gauge conversion are positive indicators for increase in the country’s steel consumption — and hence for our company,” according to C S Verma, chairman of state-owned steel producer.