There has been an increase in demand for wagons from the private sector
We hope 2023 to be a momentous year for railways in India. The sector is charged up to take a quantum leap in terms of all-round performance within the next 4-5 years. Of the total capex in Union Budget FY23 for railways, track infrastructure constituted the highest share of 38%. This included doubling of lines, new line construction, track renewals, electrification, road over-bridge, and gauge conversion. This will continue in the year to come.
- VIVEK LOHIA
Managing Director, Jupiter Wagons Ltd
What could be the trends to look for in 2023 in railways sector?
We hope 2023 to be a momentous year for railways in India. The sector is charged up to take a quantum leap in terms of all-round performance within the next 4-5 years.
Of the total capex in Union Budget FY23 for railways, track infrastructure constituted the highest share of 38%. This included doubling of lines, new line construction, track renewals, electrification, road over-bridge, and gauge conversion. This will continue in the year to come.
A major change observed is that earlier orders from railways were scattered and not consistent. However, in the past few years, all tenders are issued with a long-term visibility of three years, thus ensuring a smooth flow of cash to contracting parties such as Jupiter Wagons.
How are you gearing up for the year ahead?
As India continues to build infrastructure, there has been a major uptick in orders from the cement, steel, and coal space. Apart from that, with the opening up of the warehousing sector to the private sector, there has been an increase in demand for wagons from the private sector. Jupiter Wagons Ltd (JWL) has around Rs 6,000-crore order book and currently produces 500 wagons a month. The target is to manufacture 8,000 wagons in the next year.
The National Rail Plan has laid down the roadmap for capacity expansion of the railway network by 2030. It plans to increase the modal share of railways in freight to 40-45% from the present level of 26-27%. Part of this scheme is the Dedicated Freight Corridors which are in their advanced stages of implementation and are expected to be completed by end of 2023.
50% of JWL's order book for wagons is from the non-railway sector and these customers are becoming conscious about wagon designs that are being bought. As a part of the modernisation plan, Indian Railways also plan to buy 50,000 new wagons. JWL is revamping the wagon space with completely new models and also offering long tenure maintenance contracts for the wagons.
Indian Railways have taken the high-speed passenger mobility route with the launch of indigenously built Vande Bharat trains and established the National High Speed Rail Corporation Limited. JWL has tied up with Dako for high-speed brake systems and with Kovis for brake discs' technology and expects Rs 1,000-crore business by 2025.
The Indian Railways has set a target of 100% electrification of its network by December 2023. As of now, they have electrified more than 81% of its broad-gauge network. This electrification will help in reducing carbon emissions and will help in making India's railway operations green.
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