THE passenger coaches, locomotives, and wagons operated by Indian Railways (IR) have traditionally been manufactured by IR itself at various facilities across the country. The railway currently has 84,863 coaches, 13,215 locomotives and 3,180,896 freight wagons. Yet much of this fleet is showing its age.

IR’s LHB coaches, which form the backbone of the passenger fleet and are an early example of collaboration with private manufacturers, were introduced at the start of this century. IR’s fleet of EMD locomotives, which haul its conventional coaches, were introduced in 2001. The railway also remains heavily reliant on its fleet of Alco diesel locomotives, which have been in service since the 1960s, while upgraded versions of French and Japanese electric locomotives introduced in the 1950s, and ABB locomotives introduced in the 1990s, remain the mainstay of traction fleet.

There have also been limited updates to the design of the IR wagon fleet to increase maximum speed or capacity.

Nevertheless, this situation has been changing rapidly as IR increasingly engages with a range of international suppliers to deliver more modern equipment from both its own and new sites in India to meet the requirements of the government’s Make in India policy.

Contracts for the supply of higher-performing imported coaches, wagons and locomotives traditionally included a Transfer of Technology (ToT) clause. However, in recent years, the Indian government has relaxed this as a pre-condition in contracts while opening up IR’s production units and workshops to private manufacturers for the first time.

India’s prime minister, Mr Narendra Modi, whose National Democratic Alliance (NDA) came to power in 2014, has vowed to lead IR “on a new journey of modernisation.”

One of the most high-profile outcomes of this new policy occurred in November 2015 when contracts worth a combined Rs 400bn ($US 4.88bn) were awarded to GE Transportation (now Wabtec) and Alstom to build locomotive manufacturing plants in Bihar state at Marhaura and Madhepura respectively.
The deal included a firm commitment from IR to purchase 1000 diesel locomotives from Wabtec and 800 electric locomotives from Alstom over a 10-year period. The first Prima locomotive built by Alstom entered service in May 2020 and the manufacturer has gone on to deliver more than 300 units. Wabtec also celebrated delivering its 500th locomotive to IR in February.

IR signed another significant locomotive supply agreement at the end of 2022. Under the $US 3.5bn contract, Siemens will manufacture 1200 6.6MW electric freight locomotives over 11 years at IR’s Dahod facility in Gujarat.

Financial bids have also been opened and contracts awarded for the manufacture of 200 16-car Vande Bharat EMUs at IR’s factories in Latur and at the Integral Coach Factory (ICF) in Chennai. The TMH-RVNL joint venture of Russian manufacturer Transmashholding and Indian public-sector undertaking Rail Vikas Nigam will build 120 of these trains, while the remaining 80 EMUs will be manufactured by a consortium of Titagarh Wagons and Bharat Heavy Electricals (BHEL). The contracts, which also include maintenance over 35 years, are worth Rs 580bn.

Surging budgetary allocations for capital expenditure in the last nine years - from Rs 500bn in 2013-14 to Rs 2.4 trillion in 2023-24 - have included significant spending on new fleets, upgrades and equipment. The latest allocation includes Rs 375bn for new rolling stock and fleet modernisation, a significant increase from the Rs 79bn provided in 2022-23.

A total of 2121 new electric locomotives were manufactured between 2019-20 and 2021-22, and the target is to manufacture a further 3570 locomotives between 2022-23 and 2024-25. New passenger coach production in the same period is expected to increase to 2256.

“IR’s institutional knowledge as a manufacturer will gradually vanish if such policies continue.”

IR official

Indeed, railways minister, Mr Ashwani Vaishnaw, confirmed after the budget was announced in February that IR plans to let contracts for 2000 locomotives, 10,000 LHB coaches, 300 Vande Metro trains for suburban duties, 35 hydrogen-powered trains, 50,000 advanced technology freight wagons and 51,000 conventional freight wagons in the next two years. Alstom, Siemens, Wabtec, Stadler-Medha, CAF-Jupiter Wagons, Talgo-Bharat Forge and Transmashholding have all emerged as key players in India’s rail market and are primed to benefit.

Tenders were recently called for the supply of 2856 air-conditioned coaches for the Mumbai Vikas Railway (MRVC). However, for inexplicable reasons, they were withdrawn. More positively, technical bids have been opened for the supply of another 100 Vande Bharat EMUs at ICF and financial bids are likely to be opened later this year. Tenders for the supply of another 800 6.6MW electric locomotives, to be manufactured at IR’s Banaras Locomotive Works (BLW), and another 100 16-car, 160km/h Vande Bharat trains, which will be produced at IR’s facility at Sonipat, are expected to be called this year.

Separately, the National High-Speed Rail Corporation (NHSRCL), the agency delivering the Mumbai - Ahmedabad high-speed line, which is currently under construction, issued a tender last month for the supply of the first lot of 24 Shinkansen high-speed trains at an estimated cost of Rs 110bn.

Cause for concern

There is nothing wrong with the national government’s drive to upgrade and modernise IR rolling stock. Questions, however, are being asked about what has been described as the government’s “disproportionate” focus on the privatisation of rolling stock production in India.

Industry experts are concerned that some contracts with the private sector to manufacture new fleets at IR facilities do not make provision for technology transfer. These contracts also include long-term maintenance agreements. Observers argue that such policies will threaten IR’s institutional knowledge and expertise in rail technology.

“This is not necessarily a good move, as IR, from being a manufacturer, will turn into a buyer of rolling stock,” said an IR official wishing to remain anonymous. “IR’s institutional knowledge as a manufacturer will gradually vanish if such policies continue.”

This view is not shared by Mr Dinesh Trivedi, a former railways minster and a senior figure within the ruling BJP party, who describes IR as one of “the world’s most professional organisations and capable of taking up any project.”

IR awarded Wabtec a contract for 1000 diesel locomotives, with Wabtec celebrating delivering its 500th locomotive in February. Photo: Wabtec

Another concern is that IR’s fleet upgrade plans are based on growth projections for freight and passenger traffic, which at their best are wildly optimistic, and at their worst, just plain wrong.

For example, according to estimates published in the National Rail Plan 2030 (NRP) freight traffic was projected to reach 4709 million tonnes in 2019. However, only 1221.5 million tonnes were actually carried that year. Estimates for the following years are even more ambitious: 6366 million tonnes in 2026, 8220 million tonnes in 2031, 11,780 million tonnes in 2041 and 15,583 million tonnes in 2051.

Rail freight’s modal share stands at 27% compared with 64% for road, 5% for coastal shipping, and 2% each for inland waterways and pipelines. If the NRP projections are to be met, rail’s modal share will have to increase to 40-45% by 2030, a tall order given recent trends.

Overall freight traffic in the last three years has grown from 720 billion tonne-km in 2020-21 to 872 billion tonne-km in 2021-22, and 899 billion tonne-km in 2022-23.

The NRP makes similarly bold projections for passenger growth: from 9457 million passengers in 2021 to 12,214 million in 2031, 15,470 million passengers in 2041 and 19,469 million passengers in 2051. Over the last three years, passenger traffic increased from 231 billion passenger-km to 590 billion passenger-km and 1003 billion passenger-km. The growth rate has only been approximately 1% for passenger traffic and 3% for freight.

Exponential growth in both the number of passenger services operated and passengers carried seems unlikely given that major routes and stations are already saturated and inadequate consideration is currently given to improve the infrastructure to deliver the required level of growth.

On Mumbai’s suburban network, for example, trains usually operate at 2min 30s headways. Doubling capacity here is simply impossible without rebuilding stations to accommodate more passengers and trains.

“Even if funds are made available, it would be logistically impossible for IR to attend to such tasks at the overcrowded stations in Mumbai,” a ministry official said.

Officials add that projected freight movements are likely to be impacted by wider economic trends. For example, plans by oil companies to shift from liquid fuel to gases are expected to reduce demand for rail transport in the coming years. Rail is also susceptible to changes in government economic policy. The introduction of the Goods and Services Tax (GST) in July 2017, which ended the requirement for inter-state permits, resulted in a rapid decline in rail freight demand in the short term, although volumes did recover.

“There is a big need to modernise the rail fleet, but rail management appears to be pursuing a vendor-driven approach at present,” a ministry official said. “IR should avoid the trap of getting saddled with glitzy locomotives and coaches at huge costs, without adding value to train operations.”

Such theories are described as “alarmist and imaginary” by infrastructure economist, Dr Jaijit Bhattacharya, who points out that “a big shake-up was needed” after little to no development in the last 20 to 30 years. “Instead of the usual practice of approaching issues with an incremental approach by adopting the retrofitting method, IR has taken the bull by the horns,” Bhattacharya says. “The results will start showing in next 20 to 30 years.”

The Indian government’s think tank NITI Aayog published a paper in 2020 outlining strategies to modernise IR through introducing the latest technology, implementing world-leading best practice and pursuing greater efficiency. That organisation is similarly urging IR to stay the course. “India must deploy the best available resources worldwide using the public-private partnership (PPP) model,” says NITI Aayog CEO, Mr Amitabh Kant.

The elephant in the room

The challenges facing IR are readily apparent in the policy to introduce Vande Bharat EMUs across the network.

Under what is widely considered to be one of Modi’s pet projects, 26 Vande Bharat EMUs have been introduced so far. Estimated to cost Rs 1.2bn each to build, the associated expenditure required to put them into service is substantial - an estimated Rs 180bn to build new facilities or upgrade existing depots to maintain the new trains.

Other issues have also emerged. Only one of the new trains, which operates on the Delhi - Rani Kamlapati (Habibganj) line, has achieved the maximum design speed of 160km/h. Another train deployed on the Delhi - Varanasi line, which was the first to service in February 2019, is the only Vande Bharat to achieve an average operating speed of more than 90km/h.

The majority of the new EMUs have been logging an average speed of 63-72km/h, or in some cases, 80-85km/h, comparable with the locomotive-hauled Shatabdi inter-city trains which have been in service since July 1988. Manufacturing of these trains still takes place at ICF but at an estimated cost of less than Rs 800m.

“Instead of planning to introduce expensive Vande Bharat trains on unprofitable routes and proposing variants such as the Vande Suburban and Vande Sadharan, IR should be focusing on the Vande Bharat Sleeper.”

Mr Sudhanshu Mani, ICF general manager

“A better option would have been to increase production of the Shatabdi trains by importing the passenger friendly and comfort features of the Vande Bharat, while a few Vande Bharat trains could have been manufactured as a technology demonstrator,” says former IR general manager, Mr S K Luthra. “The Shatabdi trains could be run with two locomotives to enable a faster turnaround, with a locomotive at the front and rear of the train.”

In contrast with the original plan to operate 16-car Vande Bharat EMUs, nine of the 26 trains delivered so far are eight-car sets. IR, it seems, is in a hurry to meet the government’s target to have 400 Vande Bharat trains in service by 2025. Yet this rushed approach does not appear to have translated into increased ridership. IR recently decided to slash fares on several routes, including some where the Vande Bharat trains operate, due to occupancy rates of less than 50%.

“Instead of planning to introduce expensive Vande Bharat trains on unprofitable routes and proposing variants such as the Vande Suburban and Vande Sadharan, IR should be focusing on the Vande Bharat Sleeper,” says former ICF general manager, Mr Sudhanshu Mani, who is known as the father of the Vande Bharat. “Upgrading track and signalling to enable the new rolling stock to achieve its speed potential is also of critical importance. Such tasks need more commitment and focus.”

Luthra feels that loosening IR’s control over rolling stock design and manufacturing was a backwards step, arguing that the government could have boosted autonomy by converting the production units and public-sector undertakings into corporate entities. “Such a policy initiative could have enabled IR to retain ownership of rolling stock manufacturing,” he says.

Bhattacharya dismisses these concerns, emphasising that ownership of technology is not being taken away. “International vendors are being engaged to build the next level of semi high-speed and high-speed trains,” he says. “IR will eventually come to acquire enhanced skills in the manufacture of modern trains and locomotives.”

Despite the concerns and the ongoing debate, with strong political backing, IR is pushing ahead with its fleet renewal and modernisation policy. India is already one of the hottest global markets for railway rolling stock and equipment. And if all of the promised orders come to fruition, it will remain so for years to come.