Fiscal viability no longer sole criterion for rail projects
RAILWAYS & METRO RAIL

Fiscal viability no longer sole criterion for rail projects

Since enlarging rail connectivity to far-flung, backward and hilly areas may not be financially viable, the government has decided to give weightage to “intangible benefits” like social, environmental and network effects of such projects.

The policy change will help the government to justify connectivity projects of new lines, gauge conversion, doubling of lines, etc, even if they do not generate financial returns. The Railways will now not have to struggle to obtain financial sanction for these projects.

The Ministry of Railways has sent a set of four new project proposals for appraisal to the Niti Aayog, justifying their investment based on this new ‘Modified Economic Internal Rate of Return’ model. These are: 30 km Kalyan-Murbad new line, 300 km Jalna-Jalgaon new line doubling of 98 km Ankai-Aurangabad (all three in Maharashtra); and the 100 km Sabarmati-Sarkhej-Dholera new line in Gujarat.

The Niti Aayog considers only projects which entail an investment of over Rs 500 crore. “Many more projects will be taken up on this concept in the future,” a Railway ministry spokesperson said. In the current financial year 2022-23, Railways has allocated Rs 670 billion for capital spend on new lines, gauge conversion and doubling of lines.

As per the toolkit devised by the Railway Ministry, the project assessment would have to answer questions like travel time savings, savings in reduced road stress, increased safety, savings in fuel overall for the country, savings in vehicle operating cost, savings accrued due to reduction in pollution and the like.

See also:
Paras RailTech bags contract of track work for Delhi Metro Pink Line
MMRDA re-invited tender for Mumbai Metro Line-4’s Mogharpada Depot


Since enlarging rail connectivity to far-flung, backward and hilly areas may not be financially viable, the government has decided to give weightage to “intangible benefits” like social, environmental and network effects of such projects. The policy change will help the government to justify connectivity projects of new lines, gauge conversion, doubling of lines, etc, even if they do not generate financial returns. The Railways will now not have to struggle to obtain financial sanction for these projects. The Ministry of Railways has sent a set of four new project proposals for appraisal to the Niti Aayog, justifying their investment based on this new ‘Modified Economic Internal Rate of Return’ model. These are: 30 km Kalyan-Murbad new line, 300 km Jalna-Jalgaon new line doubling of 98 km Ankai-Aurangabad (all three in Maharashtra); and the 100 km Sabarmati-Sarkhej-Dholera new line in Gujarat. The Niti Aayog considers only projects which entail an investment of over Rs 500 crore. “Many more projects will be taken up on this concept in the future,” a Railway ministry spokesperson said. In the current financial year 2022-23, Railways has allocated Rs 670 billion for capital spend on new lines, gauge conversion and doubling of lines. As per the toolkit devised by the Railway Ministry, the project assessment would have to answer questions like travel time savings, savings in reduced road stress, increased safety, savings in fuel overall for the country, savings in vehicle operating cost, savings accrued due to reduction in pollution and the like. See also: Paras RailTech bags contract of track work for Delhi Metro Pink Line MMRDA re-invited tender for Mumbai Metro Line-4’s Mogharpada Depot

Next Story
Infrastructure Energy

REC Transfers HVDC Project to Power Grid

REC Limited has successfully handed over the Special Purpose Vehicle (SPV) for a High-Voltage Direct Current (HVDC) transmission project to Power Grid Corporation of India Limited (PGCIL). This strategic move aligns with the nation's objectives to strengthen its power transmission network. Key Highlights: Project Overview: The HVDC project, under the inter-state transmission system (ISTS) initiative, is a critical component of India's push toward robust and efficient electricity transmission. It aims to handle bulk power transfer across long distances while ensuring minimal losses. Role of RE..

Next Story
Infrastructure Transport

NF Railway Collaborates with IIT Guwahati

The Northeast Frontier (NF) Railway has signed strategic Memorandums of Understanding (MoUs) with IIT Guwahati to foster technological advancements and improve railway operations in the region. This partnership focuses on innovative solutions to enhance safety, efficiency, and sustainability in rail infrastructure. Key Highlights: Purpose of MoUs: The collaboration aims to leverage IIT Guwahati's expertise in technology and research for implementing cutting-edge solutions across railway operations. Key areas of focus include: Automation and digitization in maintenance. Sustainability initiati..

Next Story
Infrastructure Transport

Danapur Division Modernization Plans Revealed

The Railway Board has unveiled ambitious plans for the expansion and modernization of the Danapur Division, a critical hub under the East Central Railway. The initiative focuses on infrastructure development, enhanced passenger amenities, and operational efficiency. Key Highlights: Scope of Modernization: The Railway Board's blueprint emphasizes: Upgrading existing infrastructure to accommodate more passenger and freight traffic. Improving station facilities, such as platforms, waiting areas, and connectivity. Introducing advanced signal systems for safer and smoother operations. Freig..

Hi There!

"Now get regular updates from CW Magazine on WhatsApp!

Join the CW WhatsApp channel for the latest news, industry events, expert insights, and project updates from the construction and infrastructure industry.

Click the link below to join"

+91 81086 03000