New Delhi [India], March 26 : Indian Railways (IR) has planned a massive investment of Rs 16.7 lakh crore by 2031 for various infrastructure projects, as per a report by ICICI Securities.
According to the report, this investment will focus on station upgrades, freight corridors, high-speed rail (HSR) projects, and electrification of tracks to enhance railway operations.
The report said, "IR plans to invest approx. INR 16.7trn by 2031 in freight corridors, HSR, and station upgrades. Key projects include redeveloping 1,309 stations and expanding DFCs".
It highlighted that IR is prioritizing the redevelopment of 1,309 railway stations and the expansion of dedicated freight corridors (DFCs). Private sector participation is also increasing, with major companies like Larsen & Toubro (L&T) securing significant contracts for these projects.
A key objective of this investment is to improve railway speed and efficiency. The government is focusing on the development of new HSR corridors and additional DFCs to enhance logistics and reduce transportation costs.
Two DFCs--Eastern and Western--have already been completed, while three more are in the pipeline. These new corridors aim to make goods transportation more efficient and cost-effective. Regarding high-speed rail projects, the Mumbai-Ahmedabad bullet train project is already underway.
Additionally, the government has planned seven more HSR corridors, though their implementation may take time. The report suggests that immediate opportunities in this segment remain limited.
The budget allocation for Indian Railways has been increasing steadily. The outlay has grown from Rs 1.55 trillion in FY21 to an estimated Rs 2.65 trillion in FY25, reflecting a compound annual growth rate (CAGR) of 14 per cent over the period. The redevelopment of railway stations is a major part of this plan.
The government has chosen the engineering, procurement, and construction (EPC) route for station upgrades. As of February 2024, work has begun on 508 stations, while the remaining stations are yet to enter the construction phase. In the same month, the government also laid the foundation for the redevelopment of 553 railway stations, presenting a business opportunity worth Rs 190 billion.
However, the report noted that major station redevelopment contracts were already awarded in the past 2-3 years.
It said "given the fact that the big stations (in terms of size) for redevelopment have been awarded in the past two to three years, we expect limited opportunity ahead."
This massive investment plan is expected to significantly modernize Indian Railways, enhance passenger experience, and improve freight transportation efficiency in the coming years.