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High Speed Rail
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High Speed Rail

Railways to acquire new rolling stock worth Rs 1.87 trillion in FY24

After a record budgetary allocation, the ministry of railways has plans to acquire new rolling stock worth over Rs 1.87 trillion in the upcoming financial year, according to the national transporter’s annual rolling stock programme for 2023-24 (FY24).

This plan includes 300 Vande Metro trains, 1000 eight-coach Vande Bharat trains, 35 hydrogen trains, and locomotives for freight augmentation in FY24.

While big-ticket items are expected to be brought out at a slower pace, the railways expect production of big-ticket items like Vande Metros and Hydrogen Trains to be set in motion in FY24.

Between financial outgo for tenders, awarded contracts, and these new assets, the railways expect net capital expenditure on rolling stock at Rs 47,000 crore in the upcoming fiscal year.

In her budget speech, Finance Minister Nirmala Sitharaman announced a Rs 2.4 trillion budgetary allocation for the ministry. While the railways will not have any borrowings from the market in the upcoming fiscal, many of these new proposals have a percentage financed through debt.

“This is a tentative plan of what the railways has got financial approval for, therefore the estimates and the financial structure of these procurements may not be exactly as mentioned in the programme. Moreover, large payments on these assets will mostly begin in FY25, where market borrowings may be used,” a senior railways official said.

While the national transporter’s focus was largely on the freight side owing to reduced passenger volumes during Covid-19, it has shifted its focus back on increasing passenger amenities and comfort.

One thousand eight-coach Vande Bharat trains will cost the railways Rs 65,000 crore, which the transporter is likely to finance from Rs 35,000 crore of budgetary funds and Rs 30,000 crore of debt. However, the plan has received only “token funding” of Rs 10,000 in the rolling stock estimates for FY24.

Railways plans to procure 10,000 Linke Hofmann Busch (LHB) coaches at Rs 27,500 crore, which is currently approved for an equal split between capital expenditure and borrowings.

Railways Minister Ashwini Vaishnaw had also announced Vande Metros, which he plans to roll out across the country for commuters to have a world-class inter-city shuttle-like experience. Three hundred rakes of these metros have been planned to be made for Rs 22,500 crore.

In the freight segment, the railways plans to procure 2000 locomotives for Rs 36,000 crore. A tender for producing 9000 HP locomotives was recently awarded to Siemens.

Close to 50,000 advanced technology freight wagons and 51,000 regular freight wagons are also in the pipeline for the upcoming fiscal. This is barely a year after it rolled out a plan to acquire 90,000 wagons to increase freight loading.

Under the National Rail Plan, the railways plans to have the highest modal share in the movement of goods by 2030, for which it will have to significantly invest in its infrastructure, experts said.