Indian Railways to rework freight loading plan as coal transportation falls

Banks on business from auto companies for transporting, mainly two-wheelers via railways

The Indian Railways is reworking its strategy on freight loading as the transportation of coal, which comprises half of its freight, is on a decline because of the Centre’s thrust on clean energy.
 

“Freight loading by the Railways in 2019-20 (FY20) is 1,223 million tonnes (mt), of which 50 per cent is coal and the rest other commodities,” Vinod Kumar Yadav, chairman of Railway Board, said here in a post-Budget conference.

The share of coal in railway freight is expected to come down to 40 per cent in the FY21, target for which is 1,265 mt.

Besides reduction in thermal production that is leading to a decline in coal transportation, overall transit cost for coal is being rationalised by the power companies, which would also bear an impact on freight.

Yadav said thermal power firms were also reworking their fuel transportation strategy to cut costs, which means “we also have to rethink our freight business”.

Coal production has seen a drop of 21 per cent in September, which subsequently led to a dip in electricity generation by 3.7 per cent in September.

For the past three financial years, freight traffic and revenue of railways was on an upward trend, owing to several policy measures taken by the government, he said. 

Freight traffic handled by the Indian Railways, however, almost remained static with a minor dip of 0.97 per cent during the first seven months of the financial year, owing to improved traffic from sectors such as minerals and ores, petroleum and container.

The national transporter is also banking on business from the auto companies for transporting, mainly two-wheelers via railways.

The Indian Railways will also be running Kisan Rail to build a seamless national cold supply chain for perishables, inclusive of milk, meat and fish. It would be done through public-private-partnership (PPP) arrangements.

There shall be refrigerated coaches in Express and freight trains as well, Finance Minister Nirmala Sitharaman said in her Budget speech.

She also said a proposal was under consideration for setting up a large solar power capacity alongside the rail tracks, on the land owned by the railways.

The Railway Board chairman said the Indian Railway had identified 51,000 hectares of land along tracks and vacant land for building the solar power plant with a capacity of 10 GW.  However, the current requirement for railways is 3.8 GW.

“We are in talks with states for utilising the surplus electricity generated by those plants,” Yadav said. 

The national transporter aims to feed its entire network with clean energy by 2030.

On the Budget, the industry said the Rail Budget had a strong focus on safety and passenger experience. 

“We feel that reinforcement on PPP will gain momentum in the coming years in India, resulting in faster development of railway infrastructure, including rolling stock,” Rajeev Joisar, country leader (India), Bombardier Transportation said.

“Setting up of Kisan rail through public-private-partnership will aid in ensuring efficient and safe railways in India,” Joisar said.

Bombardier is following the train operations project very closely and has discussed the project with senior railway officials. 

“It is too early to comment on our future course of action as we shall evaluate the project once tender specifications are finalised,” Joisar said.