India aims to invest $137 billion in railways in next 5 years

[NKVD]

(Reuters) - The government unveiled plans on Thursday to invest $137 billion in its decrepit rail network over the next five years, heralding Prime Minister Narendra Modi's aggressive approach to building infrastructure needed to unlock faster economic growth.

Over the next year, India will increase investment by about a half to 1 trillion rupees ($16.15 billion) including funds raised by market borrowing.

To meet the five year target, investment will have to speed up even more after that, leaving economists questioning where the money would come from as the government has to rein in its fiscal deficit.

Presenting the rail budget two days before the Union Budget - also expected to hike infrastructure spending - Railway Minister Suresh Prabhu shied away from hiking passenger fares to finance the upgrades, but raised freight rates.

He said the budget "set the direction of a long and difficult road of reform."

Modi, who called the rail budget "a paradigm shift" is expected to use Saturday's Union Budget to lay out an economic vision focused on building the roads, power and technology needed to make India a leading global economy.

Prabhu, one of Modi's trusted economic aides, said he would raise funds from multi-lateral lenders, infrastructure and pension funds, as well as "monetizing" railway assets. He said the railway would not be privatized.

"Over the next five years, the railways have to undergo a transformation," Prabhu said in a speech that was short on details.

While India has the world's fourth largest rail network, it has been outstripped by China, which now has more than six times as much track following an intensive expansion and modernisation of its network over the past two decades.





QUESTION OF FUNDING

Providing jobs for 1.3 million people, the railway is India's largest single employer, and reform is politically sensitive. Successive governments have shied away from modernization, preferring instead to use the system to provide cheap transport and create jobs.

Economists welcomed the minister's decision to break with a populist budget tradition of announcing dozens on new trains for politically sensitive region, but said they would like to see more explanation of how the investment will be funded.

"I am little doubtful about the ways the railway minister will finance the huge capital expenditure as the budget lacks the specific detail, said Jyotinder Kaur, principle economist at HDFC Bank, New Delhi.

The rail budget - a relic of Indian's British colonial past - said the share of rail revenue available for investments would rise to 11.5 percent in the fiscal year starting on April 1, up from 8.2 percent in the current fiscal year.

Excluding market borrowing, the amount projected for investment in 2015/16 is up by 31 percent, signaling an increased commitment to infrastructure from federal funds.

State-run Indian Railways has more funds available thanks to a sharp drop in the price of diesel fuel that powers most Indian locomotives.

The finance ministry increased central funding for the railway to 400 billion Indian rupees ($6.47 billion) from 301 billion Indian rupees ($4.87 billion) budgeted in 2014/15.

The BSE Sensex reacted negatively to the speech, sinking 0.7 percent, with wagon makers Titagarh Wagons down 2.6 percent, while Texmaco Rail & Engineering lower 7 percent.

Passenger fares are subsidised by freight revenues that are high compared to other countries. Prabhu raised rates further, with a 6.3 percent hike for coal transport. He said he planned to raise the amount of freight carried to 1.5 billion tonnes a year, from 1 billion tonnes at the moment.

The minister said spending would be focused on improving and expanding existing railway lines, many of which are operating at more than full capacity, with the average speed of the country's best trains a sluggish 70 km (44 miles) per hour.

Accidents are common and trains, platforms and toilets on the network are often filthy.

($1 = 61.9400 Indian rupees)



(Additional reporting by Rajesh Kumar Singh and Aditya Kalra in New Delhi and Abhishek Vishnoi in Mumbai; Writing by Frank Jack Daniel; Editing by Douglas Busvine and Simon Cameron-Moore)

@Abingdonboy @sancho @IndoCarib @itachiii

 

[Diggy]

Any idea why markets reacted negatively , what were they expecting ?

overall it was a nice budget , the main challenge would be to make railways profitable and efficient.

whatever people might say about prabhu but for me dinesh trivedi is the unsung hero .
I hope he leaves TMC soon and joins BJP , sane people like him should have greater role in bengal politics . Of all the former railway ministers like nitish kumar , that *** kharge trivedis criticism was the most mature and genuine .

my respect for this man

 

[ADD BDM]

(Reuters) - The government unveiled plans on Thursday to invest $137 billion in its decrepit rail network over the next five years, heralding Prime Minister Narendra Modi's aggressive approach to building infrastructure needed to unlock faster economic growth.

Over the next year, India will increase investment by about a half to 1 trillion rupees ($16.15 billion) including funds raised by market borrowing.

To meet the five year target, investment will have to speed up even more after that, leaving economists questioning where the money would come from as the government has to rein in its fiscal deficit.

Presenting the rail budget two days before the Union Budget - also expected to hike infrastructure spending - Railway Minister Suresh Prabhu shied away from hiking passenger fares to finance the upgrades, but raised freight rates.

He said the budget "set the direction of a long and difficult road of reform."

Modi, who called the rail budget "a paradigm shift" is expected to use Saturday's Union Budget to lay out an economic vision focused on building the roads, power and technology needed to make India a leading global economy.

Prabhu, one of Modi's trusted economic aides, said he would raise funds from multi-lateral lenders, infrastructure and pension funds, as well as "monetizing" railway assets. He said the railway would not be privatized.

"Over the next five years, the railways have to undergo a transformation," Prabhu said in a speech that was short on details.

While India has the world's fourth largest rail network, it has been outstripped by China, which now has more than six times as much track following an intensive expansion and modernisation of its network over the past two decades.





QUESTION OF FUNDING

Providing jobs for 1.3 million people, the railway is India's largest single employer, and reform is politically sensitive. Successive governments have shied away from modernization, preferring instead to use the system to provide cheap transport and create jobs.

Economists welcomed the minister's decision to break with a populist budget tradition of announcing dozens on new trains for politically sensitive region, but said they would like to see more explanation of how the investment will be funded.

"I am little doubtful about the ways the railway minister will finance the huge capital expenditure as the budget lacks the specific detail, said Jyotinder Kaur, principle economist at HDFC Bank, New Delhi.

The rail budget - a relic of Indian's British colonial past - said the share of rail revenue available for investments would rise to 11.5 percent in the fiscal year starting on April 1, up from 8.2 percent in the current fiscal year.

Excluding market borrowing, the amount projected for investment in 2015/16 is up by 31 percent, signaling an increased commitment to infrastructure from federal funds.

State-run Indian Railways has more funds available thanks to a sharp drop in the price of diesel fuel that powers most Indian locomotives.

The finance ministry increased central funding for the railway to 400 billion Indian rupees ($6.47 billion) from 301 billion Indian rupees ($4.87 billion) budgeted in 2014/15.

The BSE Sensex reacted negatively to the speech, sinking 0.7 percent, with wagon makers Titagarh Wagons down 2.6 percent, while Texmaco Rail & Engineering lower 7 percent.

Passenger fares are subsidised by freight revenues that are high compared to other countries. Prabhu raised rates further, with a 6.3 percent hike for coal transport. He said he planned to raise the amount of freight carried to 1.5 billion tonnes a year, from 1 billion tonnes at the moment.

The minister said spending would be focused on improving and expanding existing railway lines, many of which are operating at more than full capacity, with the average speed of the country's best trains a sluggish 70 km (44 miles) per hour.

Accidents are common and trains, platforms and toilets on the network are often filthy.

($1 = 61.9400 Indian rupees)



(Additional reporting by Rajesh Kumar Singh and Aditya Kalra in New Delhi and Abhishek Vishnoi in Mumbai; Writing by Frank Jack Daniel; Editing by Douglas Busvine and Simon Cameron-Moore)

@Abingdonboy @sancho @IndoCarib @itachiii

so its ~28 Bn/yr ............

 

[sancho]

Can somebody tell me from experience, if there are actual changes in operations of the railway since the new government took over and hiked the prices and did they have done what they promised on, clean trains, more saftey...
Also what is the outcome of outsourcing parts of the stations to privat investors? With this huge investiments they now plan, it seems that it didn't worked out as the Government hoped and they didn't got the investments they hoped for.

 

[magudi]

Any idea why markets reacted negatively , what were they expecting ?

overall it was a nice budget , the main challenge would be to make railways profitable and efficient.

whatever people might say about prabhu but for me dinesh trivedi is the unsung hero .
I hope he leaves TMC soon and joins BJP , sane people like him should have greater role in bengal politics . Of all the former railway ministers like nitish kumar , that *** kharge trivedis criticism was the most mature and genuine .

my respect for this man

Today is Thursday - 'expiry date' for stocks. Stocks dipping is natural.

Can somebody tell me from experience, if there are actual changes in operations of the railway since the new government took over and hiked the prices and did they have done what they promised on, clean trains, more saftey...
Also what is the outcome of outsourcing parts of the stations to privat investors? With this huge investiments they now plan, it seems that it didn't worked out as the Government hoped and they didn't got the investments they hoped for.

It is true that government wasn't able to achieve the foreign investment they were looking for so they're shifting to private sector

Any idea why markets reacted negatively , what were they expecting ?

overall it was a nice budget , the main challenge would be to make railways profitable and efficient.

whatever people might say about prabhu but for me dinesh trivedi is the unsung hero .
I hope he leaves TMC soon and joins BJP , sane people like him should have greater role in bengal politics . Of all the former railway ministers like nitish kumar , that *** kharge trivedis criticism was the most mature and genuine .

my respect for this man

Things i liked most though

*no populism (more train, more tracks crap, though he mentioned trains and tracks will be sanctioned later on if need be even though not in budget)

*passed on benefits of decrease in fuel price by not increasing fares

*advanced booking Back to 120 days as it was earlier (very beneficial to me )

 

[Diggy]

Today is Thursday - 'expiry date' for stocks. Stocks dipping is natural.




It is true that government wasn't able to achieve the foreign investment they were looking for so they're shifting to private sector



Things i liked most though

*no populism (more train, more tracks crap, though he mentioned trains and tracks will be sanctioned later on if need be even though not in budget)

*passed on benefits of decrease in fuel price by not increasing fares

*advanced booking Back to 120 days as it was earlier (very beneficial to me )

can you please explain the highlighted part , dint knew about that


for me its was

* no hike in prices (off-course)

* usage of bio toilets

* i am optimistic about the other announcements too .


aur yeh 120 din pehle reservation ki kya zarrorat magudi ji , kya rahasya hai zara hame bhi bataye

 

[magudi]

can you please explain the highlighted part , dint knew about that


for me its was

* no hike in prices (off-course)

* usage of bio toilets

* i am optimistic about the other announcements too .


aur yeh 120 din pehle reservation ki kya zarrorat magudi ji , kya rahasya hai zara hame bhi bataye

First of all bro people might have been expecting a fare hike which led to slight disappointment but having said that railway budget don't impact stocks much, only very few railway linked companies are listed on market.
What i meant by expiration date is that trading contracts came to an end today so settlements on profit taking happens hence dip is natural.


Ps - am not good at explaining such stuff but you can always Google and find out more

 

[Ind4Ever]

Improving Indian Railways is a projects which has to to done with good sense for the next decade atleast. It's not a joke to achieve in 8 months . From this budget government is very clear about the road map. First to need to strengthen the existing infrastructure and make changes in working of the system . It will take long time .2015 is more like a year of planting seeds . If we want 1 lac trees even if we do it properly or even if we have good intent it will take its minimum time to get fruits out of it . It's too late already . GREAT BUDGET BY GOVT. ..

Another important and additional bonus news new trains will be announced in this budget session itself . Good they dint hiked the price but increased the freight cost . And they are planning to increase the transportation of coal from 1 billion to 1.5 billion . And fdi or privatisation of railway station will yield lots of benefits . These oppositions will have to take back their words in the next 4 years ... great job .

 

[Diggy]

First of all bro people might have been expecting a fare hike which led to slight disappointment but having said that railway budget don't impact stocks much, only very few railway linked companies are listed on market.
What i meant by expiration date is that trading contracts came to an end today so settlements on profit taking happens hence dip is natural.


Ps - am not good at explaining such stuff but you can always Google and find out more

thanks , i will google it

 

[Ind4Ever]

Can somebody tell me from experience, if there are actual changes in operations of the railway since the new government took over and hiked the prices and did they have done what they promised on, clean trains, more saftey...
Also what is the outcome of outsourcing parts of the stations to privat investors? With this huge investiments they now plan, it seems that it didn't worked out as the Government hoped and they didn't got the investments they hoped for.

I don't think you expected to see miracle in just 8 months . Did you ? If you are it's completely wrong . Our railway system is in a mess which was created for decades . Think about it the toilets used in rail cabins are of same model of British had . More or less. The lader is completely horrible , no sufficient mobile charging pins . No cctv cameras installed . Till now . And you know what all will get provided from this budget .

From folding extendable laders to charging ports in general compartment also . From CCTV cameras to sms alerts on train arrivals , departure , delay etc. Now tickets can be booked before 100 days in advance . Wifi enabled to many more stations . 100s of them . Bio toilet . It's nice man . Better than lowering ticket cost . We reach by auto or cab to railway station like same or double the price of rail tickets sometimes . They must have increased the price if you ask me . Hope they will from next year or so

 

[sancho]

I don't think you expected to see miracle in just 8 months . Did you ?

It has nothing to do with my expectations, but with the government hiking the fares for a reason and opening the railway up for privat investment with a purpose in mind and I want to know of these aims were met at least to an extend or if nothing has changed. One point for example was, that they will hire more workers to clean and if I remember right, also to increase security. That should be achievable in 8th month, if not all around India, around the bigger cities with a visible increase of the workforce, shouldn't it?

 

[Abingdonboy]

(Reuters) - The government unveiled plans on Thursday to invest $137 billion in its decrepit rail network over the next five years, heralding Prime Minister Narendra Modi's aggressive approach to building infrastructure needed to unlock faster economic growth.

Over the next year, India will increase investment by about a half to 1 trillion rupees ($16.15 billion) including funds raised by market borrowing.

To meet the five year target, investment will have to speed up even more after that, leaving economists questioning where the money would come from as the government has to rein in its fiscal deficit.

Presenting the rail budget two days before the Union Budget - also expected to hike infrastructure spending - Railway Minister Suresh Prabhu shied away from hiking passenger fares to finance the upgrades, but raised freight rates.

He said the budget "set the direction of a long and difficult road of reform."

Modi, who called the rail budget "a paradigm shift" is expected to use Saturday's Union Budget to lay out an economic vision focused on building the roads, power and technology needed to make India a leading global economy.

Prabhu, one of Modi's trusted economic aides, said he would raise funds from multi-lateral lenders, infrastructure and pension funds, as well as "monetizing" railway assets. He said the railway would not be privatized.

"Over the next five years, the railways have to undergo a transformation," Prabhu said in a speech that was short on details.

While India has the world's fourth largest rail network, it has been outstripped by China, which now has more than six times as much track following an intensive expansion and modernisation of its network over the past two decades.





QUESTION OF FUNDING

Providing jobs for 1.3 million people, the railway is India's largest single employer, and reform is politically sensitive. Successive governments have shied away from modernization, preferring instead to use the system to provide cheap transport and create jobs.

Economists welcomed the minister's decision to break with a populist budget tradition of announcing dozens on new trains for politically sensitive region, but said they would like to see more explanation of how the investment will be funded.

"I am little doubtful about the ways the railway minister will finance the huge capital expenditure as the budget lacks the specific detail, said Jyotinder Kaur, principle economist at HDFC Bank, New Delhi.

The rail budget - a relic of Indian's British colonial past - said the share of rail revenue available for investments would rise to 11.5 percent in the fiscal year starting on April 1, up from 8.2 percent in the current fiscal year.

Excluding market borrowing, the amount projected for investment in 2015/16 is up by 31 percent, signaling an increased commitment to infrastructure from federal funds.

State-run Indian Railways has more funds available thanks to a sharp drop in the price of diesel fuel that powers most Indian locomotives.

The finance ministry increased central funding for the railway to 400 billion Indian rupees ($6.47 billion) from 301 billion Indian rupees ($4.87 billion) budgeted in 2014/15.

The BSE Sensex reacted negatively to the speech, sinking 0.7 percent, with wagon makers Titagarh Wagons down 2.6 percent, while Texmaco Rail & Engineering lower 7 percent.

Passenger fares are subsidised by freight revenues that are high compared to other countries. Prabhu raised rates further, with a 6.3 percent hike for coal transport. He said he planned to raise the amount of freight carried to 1.5 billion tonnes a year, from 1 billion tonnes at the moment.

The minister said spending would be focused on improving and expanding existing railway lines, many of which are operating at more than full capacity, with the average speed of the country's best trains a sluggish 70 km (44 miles) per hour.

Accidents are common and trains, platforms and toilets on the network are often filthy.

($1 = 61.9400 Indian rupees)



(Additional reporting by Rajesh Kumar Singh and Aditya Kalra in New Delhi and Abhishek Vishnoi in Mumbai; Writing by Frank Jack Daniel; Editing by Douglas Busvine and Simon Cameron-Moore)

@Abingdonboy @sancho @IndoCarib @itachiii

One thing I like about Modi is that he keeps his promises realistic and thus achievable- 100 GWs of solar power by 2020, 100 smart cities by 2030, the "clean India campaign", adopt a village for MPs etc etc. Practical and in their own way changing India thus I like the target is 2019 this is actually pretty soon and by setting such a timeline Modi is stating an intent to deliver which I like a lot.

 

[Ind4Ever]

It has nothing to do with my expectations, but with the government hiking the fares for a reason and opening the railway up for privat investment with a purpose in mind and I want to know of these aims were met at least to an extend or if nothing has changed. One point for example was, that they will hire more workers to clean and if I remember right, also to increase security. That should be achievable in 8th month, if not all around India, around the bigger cities with a visible increase of the workforce, shouldn't it?

It will take time my friend . Giving a contract is not that easy task . Right person should be given the task in systematic manner. Now this is the real year for start up. Give him 5 years u lol see th difference . He asked for 10 years in his campaign . Am sure the change will be something we been wanted . I don't see any reason for this new government to do harm to India . SO works are going on . 60 years of mess can't be rectified in a 5 years . Take our defence for example . Damn sure this GOVT want to make our armed forces a world class but creating funds and manufacturing weapons takes lots of time .

 

[Abingdonboy]

In all, Prabhu plans to increase India’s track length from 114,000 kilometre to 138,000 km by 2016—and improve the railway’s passenger carrying capacity to 30 million from 21 million currently.

But there will be sharp focus on augmenting existing infrastructure.

Over 1,200 sections of the railways are on the high-density network, the minister said, of which 492 are running at more than 100% of their capacity. Meanwhile, 228 sections run at capacity utilisation between 80% and 100%.


That sort of strained capacity means that trains tend to run much slower than they can.


“In the next five years, our priority will be to significantly improve capacity on the existing high-density networks,” Prabhu explained. “Improving capacity on existing networks is cheaper. There are no major land acquisition issues and completion time is shorter.”


In this budget, the rail ministry has sanctioned 77 projects, which cover 9,400 km of doubling, tripling and quadrupling of lines, as well as electrification. In all, this will cost the government Rs96,182 crore ($16 billion).



And Prabhu intends to increase the annual freight carrying capacity to 1.5 billion tonnes from the existing 1 billion tonnes. To do this, the Indian Railways has decided to fast-track work on 7,000 km of double/third/fourth lines and commission 1,200 km of track this year to improve last mile connectivity.




With a number of power and steel projects facing delays due to railway constraints, Prabhu wants to partner with India’s public sector companies such as Coal India Limited and Steel Authority of India to jointly set up freight infrastructure.



Deven Choksey, founder and managing director of K R Choksey Securities, told Quartz that the railway budget is “strong fundamentally.”




“The ministry is smartly taking care of commitments rather than only talk about intent,” Choksey explained, “and the government has laid out a roadmap which is pro-reforms.”




“He chose to deviate from the usual trend,” Vishwas Udgirkar, partner at Deloitte Touche Tohmatsu, said. “Unlike in the past when railway ministers wanted to highlight their achievement, Prabhu has given a clear direction about the plans.”




And this is what EY India’s partner and PPP leader Abhaya Agarwal had to say: “Aiming investments towards completion of ongoing projects and projects in congested corridors is the right step towards improving productivity and making the Indian Railways financially self-sustainable.”




Prabhu has a long ride ahead to get the Indian Railways back on track—but at least he’s off to a good start.


The verdict on India’s railway budget is out: Suresh Prabhu has kept it real – Quartz



Good stuff all in all, a list of achievable but still significant measures to be taken and this will almost certainly be adding to India's economy in the long run

 

[Abingdonboy]

And in an attempt to fix the mess, India’s railway minister Suresh Prabhu is banking on technology.


“Every dynamic and thriving organisation needs to innovate and reinvent its practices,” Prabhu said in his budget speech (pdf), explaining that he intends on introducing a “spirit of innovation” in the beleaguered railways.


From bio-toilets to faster online ticket booking, the ministry of railways has tried to leverage technology to make things easier—and better—for its passengers.


The Indian railways’ research arm—Research, Design & Standards Organisation—has been asked to collaborate with the Indian Space Research Organisation to develop a device that would provide audio and visual warnings at unmanned level crossings. The device will use geo-spatial technology to provide the warnings.




Out of some 30,300 level crossings, more than 11,000 are unmanned. Between 2011 and July 2014, close to 500 people died in accidents at unmanned level crossings.




“Our ultimate objective is to eliminate all unmanned level crossings by construction of road over bridges and road under bridges,” Prabhu said during his speech.



Next month, the railways will launch a mobile app for passengers to lodge complaints. This app will be initially available in Jammu & Kashmir, Punjab, Haryana, Himachal Pradesh, Uttaranchal, Uttar Pradesh, Delhi and Chandigarh. It will subsequently be rolled out nationwide.




The Indian Railways is also planning a text message-based service that will notify passengers about the arrival and departure time of trains.


In his budget speech, Prabhu said that Wi-Fi is already available in all A1 and A category stations—and now the service will be extended to B category stations as well.




Stations with annual earnings of more than Rs50 crore from passenger services fall into “category A1” while those with annual earnings between Rs6 crore and Rs50 crore fall into “category A.”




Stations in “category B” have annual earnings from passenger services between Rs3 crore and Rs6 crore.




India has a total of 75 stations in “category A1,” 332 in “category A2″ and 302 stations in “category B.”




In April 2013, the railways launched its Wi-Fi service on the Howrah-New Delhi Rajdhani Express. The system uses a satellite communication link; A satellite antennae is installed in one of the two power cars of the train and linked to Wi-Fi radios present in every coach.




The ministry has plans to set up Wi-Fi connectivity at 400 railway stations across India and intends to extend it to Shatabdi and Duronto in addition to Rajdhani Express.


Freight traffic is one of the biggest source of income for the Indian Railways. In 2013, it earned Rs85,262.6 crore ($13.81 billion) by carrying goods.




The ministry is going to introduce radio frequency identification (RFID) technology that would allow real-time tracking of freight and freight wagons. RFID consists of a chip and an antennae that transmits a radio signal which can be used to track the movements of a parcel or a wagon.





The government intends to install 17,000 bio-toilets in 2015.




The Indian Railways partnered with the Defence Research & Development Organisation (DRDO) to build bio-toilets. These toilets, which are fitted below the lavatories, convert human waste into water and gas (methane and carbon dioxide) with the help of a bacteria that was collected by DRDO from Antarctica.




The first train to be fitted with a bio-toilet was the Gwalior-Varanasi Bundelkhand Express in 2011. Since then, the number of coaches with bio-toilets have grown steadily, from 57 in 2011 to 17,388 currently.



India’s ministry of railways has been trying relentlessly to develop new technologies for passenger safety.




“We also propose to install Train Protection Warning System and Train Collision Avoidance System (TCAS) on select routes at the earliest,” Prabhu said.




The TCAS helps to prevent train accidents caused due to errors made by drivers. For instance, it automatically applies brakes if the driver jumps the red signal or when two trains are coming from the opposite direction on the same track. Moreover, the TCAS will help trains to run safely during heavy fog.

How one of the world’s largest railways is using technology to reinvent itself – Quartz