PowerGrid eyes lion’s share of Rs 25000 Crore Track Electrification

New Delhi: State-run Power Grid Corp (PGCIL) is eyeing a big chunk of Indian Railways’ Rs 25,000-crore project to electrify 24,000 kms of rail tracks in five years. “Power Grid will try to get as much share as possible of the 24,000 km rail electrification project. This is a big business opportunity for us,” a source said.

Earlier this month, Indian Railways engaged three PSUs – Power Grid, IRCON and RITES – to fast track the pace of rail track electrification project. Indian Railways has already allotted the electrification work of 761 kms of railway lines at a cost of Rs 888.96 crore to Power Grid Corp (PGCIL).

The source said, “Though it has not been decided whether there would be competitive bidding for this ‘Mission Electrification’ but Indian Railways wants to complete the task at an investment of not more than Rs 20,000. Thus Power Grid is preparing itself to prove its prowess through implementation of the task allocated to it and offering competitive rates.”

At present, Indian Railways is spending around Rs 1 crore to electrify 1 km of rail track. Besides implementation of the task at hand, Power Grid would have to be cost competitive so that Indian Railways brings down cost of electrification by at least 20 per cent, an expert said.

Indian Railways has planned to electrify 4,000 kms of rail tracks in 2017-18 and 6,000 kms in subsequent years so as to electrify 90 per cent of broad gauge network railways by 2020-21. The electrification project will help the government cut down on crude imports and also ensure faster movement of trains on these tracks, and is expected to help railways save around Rs 10,000 crore annually. At present, around 35,000 kms of rail tracks are unelectrified. Indian Railways consumes around 2.8 billion litres of diesel annually – costing around Rs 18,000 crore, a nearly 18 per cent of its working expenses.

Indian Railways plan to save Rs 3000 crore of its Energy Bill

Railways, the country’s largest energy consumer plan to save Rs 3000 crore of its energy bill every year by procuring electricity directly from power generators of its choice.

Railways is targeting a savings of Rs 3,000 crore per year through the open access of electricity, Railway Board Chairman A K Mital said at the Economic Editors’ conference here.

We have got clearances from Maharashtra, Gujarat, Madhya Pradesh and Jharkhand which have given their consent to our proposal of procuring power directly from generators, he said.

Mital further said railways in talks with other states to have their clearances to draw power from these states’ transmission lines.

Rajasthan and Chattisgarh have given an in principal consent and we are in talks with other states, Mital said.

Railways is the largest energy consumer in the country with about 2.8 billion litres of diesel and 17.5 billion units of electricity a year. While the diesel cost is Rs 18,000 crore a year, the power bill is around Rs 12,300 crore.

After the salary and pension, the energy bill is the highest expenditure in railways, Mital said.

The Central Electricity Regulatory Commission has authorised the Railways to undertake transmission and distribution of electricity as a deemed licensee under the Electricity Act.

Railways will also save on fuel bill as it has speeded up the route electrification work.

Asked about its direct import of crude oil plan, he said we are in discussion with concerned authorities for availing the permission for direct import.

On rail tariff authority, Mital said it is called Rail Development Authority and and we are in the process of setting up the authority either through legislative route or by an executive order.

He said besides fixing tariff, it will also examine the scope of PPP projects in rail sector.

About the timeline, he said we are in consultation stage and a draft proposal is in the circulation seeking suggestions. The authority will be either set up by an executive order or through a legislative bill.

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