Indian Railways to triple Freight Traffic, follow Reciprocation Policy for Foreign Cos.,

IR plans to procure Rs 20 billion-worth rails from the private sector for the first time in last three decades.

NEW DELHI: The Indian Railways is planning to triple its freight traffic to 3 billion tonne by 2030 through a series of measures including the implementation of the dedicated freight corridors. The railways is also looking to come out with a “reciprocation” strategy on bidding for major projects under which companies from only those countries would be allowed to bid where Indian companies are also allowed. 

According to Union railway minister Piyush Goyal, the plan was to increase the railway share in the overall goods movement to 50 per cent from the current share of around 35 per cent. “As we are taking steps to become a $10 trillion economy, we want to increase the share of railways freight traffic to 3 billion tonne from the current 1.1 billion tonne,” he said.

A senior railway official indicated that even though growth and policy targets are set, the Railways wants safety as its first priority. The railways completed record 476-kilometer track renewal in the month of December. It expects to touch 3,500 kilometer of track renewal in 2017-18.

To boost this further, it plans to procure Rs 20 billion-worth rails from the private sector for the first time in last three decades.

The companies that participated for the tendering process include Sumitomo Corporation, Angang Group International, Voestalpine Schienen, East Metals, CRM Hong Kong, British Steel France Rail, Jindal Steel and Power and Atlantic Steel.

RITES listing this fiscal

Among the planned disinvestment of railways public sector undertakings RITES may be the first one to get listed during the current financial year only. The Railways want to first seek out IRFC’s deferred tax liability of Rs 65 billion.

He added that while the listing of Ircon is on track, Indian Railway Catering and Tourism Corporation’s (IRCTC) is currently kept on hold. If Rites gets listed, the engineering consultancy arm of railways will become only the second railway subsidiary to get listed on a stock exchange after Container Corporation of India Limited (CONCOR). The government wants to raise at least Rs 500 crore from the listing of RITES alone. It is likely to be followed by divestment in another railway subsidiary Ircon International.

Key points

* Railways plans for Rail PSUs IRFC and IRCTC IPO on hold
* Railways in talks with corporate affairs ministry to look into deferred tax liability
* IRFC has Rs 66 billion deferred tax liability
* IRFC valuation is depressed because of tax liability
* RITES likely to file DRHP by end of January