Exclusive | Indian Railways plans to float tender worth Rs 25,000 crore to procure 60,000 wagons in July-Sept

Indian Railways

As part of its plan to increase the share of Indian Railways' (IR) freight traffic, the Ministry of Railways is planning to procure another 60,000 wagons at a cost of around Rs 25,000 crore.

Sources close to the development said that the ministry will in July-September float tenders for the procurement of the wagons, of which 10,000 may be aluminium.

"The ministry is finalising a tender to procure another 50,000 wagons and is also looking to float a separate tender to procure 10,000 aluminium wagons," a senior Railway Ministry official said.

He added that the new tenders are part of Indian Railways' long-term plan to increase the share of freight traffic carried by rail from the current share of 27 percent to 45 percent by 2030.

"Around 20,000 rakes (a rake refers to coupled coaches of a train but excluding the locomotive) from the second round of tenders will be procured by 2025, and the remaining will be delivered in between 2026 and 2028," the official said.

Emails sent to the ministry on the wagon purchase plan were not answered.

Another railway ministry official said that the quantum of aluminium wagons to be procured as part of the tenders is being discussed at the moment.

"Indian Railways is looking at launching a premium cargo service using aluminium rakes, which will not only be faster than conventional rakes but will also help manufacturers toward their environmental, social and governance (ESG) norms," the second official said, referring to the light-weight nature of the metal that will translate into lower energy consumption.

He added that customers willing to pay a premium for using aluminium goods trains will get ESG certificates from Indian Railways as these wagons save 14,500 tonnes of CO2 emissions, consume less energy and are corrosion-resistant.

"They are 100 percent recyclable and even after 30 years, they will be as good as new,” the second official added.

The new tenders are a part of the government's plans to deploy more than 1 lakh wagons in the coming years to increase freight loading to 2,000 million tonnes (MT) by 2024-25.

The railways loaded 1,512 MT of freight in 2022-23.

"Freight volumes increased 94 MT incrementally in 2022-23, and this year the expectation is that the volumes will rise by another 200-250 MT as wagons that were ordered last year start getting delivered," the first official said.

The proposed tender for wagons is on top of the railways’ June 2022 contracts worth Rs 23,500 crore for the supply of 60,000 wagons placed on Titagarh Wagons, Texmaco Rail & Engineering, Hindustan Engineering Industries, Commercial Engineer & Body Builders Co and Oriental Foundry.

Last month, Jupiter Wagons' managing director Vivek Lohia told Moneycontrol that they expect Indian Railways to come out with tenders for 50,000 to 80,000 new wagons in 2023-24.

Lohia added that his company plans to bid for these tenders and is eyeing new orders for a minimum of 20,000-odd wagons from the railways in the fiscal.

Indian Railways currently has a stock of about 320,000 wagons and will use the new wagons to supplement this capacity as part of its larger plan to cater to 45 percent of India's freight traffic by 2030.

Last year, the railways flagged off its first indigenously manufactured aluminium goods train rake in October. Made in collaboration with the wagons division of the Kolkata-based Besco Limited and aluminium major Hindalco, it also has a lower carbon footprint for every 100 kg of weight reduction in wagons, the railways had said.

The lifetime carbon saving was eight to 10 tonnes and this meant saving more than 14,500 tonnes of carbon for a single rake.

Indian Railways had added that aluminium rakes have an 80 percent resale value and a 10-year longer lifespan compared to normal ones but the manufacturing cost was 35 percent higher as the superstructure was all-aluminium.

Hindalco in a statement said that with the railways planning to deploy more than 1 lakh wagons in coming years, the potential annual CO2 reduction could be over 25 lakh tonnes, with around a 15 to 20 percent shift to aluminium wagons.