A Memorandum of Understanding (MoU) has been signed between Ministry of Railways and Coal India Limited here today. The MoU will lead to procurement of 2000 wagons (33 rakes) in the first outgo.
The agreement was signed in the presence of Union Minister for Railways, Shri Suresh Prabhu, Union Minister of State (Independent Charge) Coal, Power and New & Renewable Energy, Shri Piyush Goyal Union Minister of State for Railways Shri Manoj Sinha. Shri U.C. Joshi, Executive Director Freight Marketing on behalf of Ministry of Railways and Shri T.K. Sinha, General Manager, Project Monitoring Division on behalf of Coal India Limited signed the MoU.
Speaking on the occasion, Union Minister for Railways, Shri Suresh Prabhakar Prabhu said that this is a path-breaking agreement which will result into speedy supply of wagons for coal loading in dedicated circuits. Shri Prabhu informed that the initial investment of Rs. 500 crore will lead to anticipated investment of Rs. 5000 crore. Stating coal as mainstay of Railways, the Minister informed that the two-third of its revenue comes from the coal.
Union Minister of State (Independent Charge) Coal, Power and New & Renewable Energy, Shri Piyush Goyal said that the MoU will help in fulfilling the 1 billion tonne target of Coal India. Appreciating Ministry of Coal, the Minister said that there is no single power plant in the country today that falls in critical category. This became possible only because of the support of Ministry of Railways. Shri Goyal defined this MoU as first step in large partnership with the Ministry of Railways to serve people of India.
Speaking on the occasion, Member Traffic Railway Board Shri Mohd. Jamshed said that it is indeed a historic day today when two key economic Ministries of Govt. of India i.e. Ministry of Railways and Ministry of Coal have joined hands for facilitating increased transportation of coal through rail. Under the leadership of Hon’ble Minister of State for Coal, Shri Piyush Goyal, Coal India Ltd is targeting production of 1 Billion Tonnes of coal by 2020. Wagon availability will be a key factor for achieving this target by Coal India Ltd. By signing of the MOU today, Railways and Coal India Ltd will be entering into a strategic partnership which would ensure adequate wagon availability for meeting the transportation needs of coal produced by Coal India Ltd.
This strategic partnership between Railways and Coal India Ltd would not have been possible but for the motivation and guidance provided by both the Hon’ble Ministers. Today’s MoU will lead to procurement of 2000 high capacity wagons (33 rakes) in the first tranche which will facilitate increased evacuation of coal from Coal India sidings. This win endeavor will benefit the economy as a whole and the Railways, the coal sector and power sector in particular.
The MoU will benefit the economy as a whole and the Railways, the coal sector and power sector in particular. The remarkable part of this strategic partnership is that the wagons will be procured by Indian Railways on behalf of CIL. These wagons will lead to additional loading of 8-10 tons per wagon as compared to the conventional wagons of Indian Railways.
Initially, the rakes will be inducted and run in the 2 main coal loading Zones of IR i.e. South East Central coal sector and East Coast circuit. These rakes will be inducted in circuits for transporting coal from MCL Talcher & IB area and SECL to Paradip/Dharma ports, Vishakhapatnam area and the power houses of Nagpur/Raipur region. Under this strategic partnership, the wagons will be procured by Indian Railways on behalf of CIL, the maintenance of these wagons will be done by Railways at its own cost. Also, the brake vans will be provided by Railways itself.
The Logistics costs in India are amongst the highest in the World. The constituents of this cost are the transportation cost (39%), Warehousing (27%), Inventory carrying cost (24%), order processing 6% and administration about 4%.In India the share of the logistics cost is about 13% of the GDP and of this 3PL share is only 3%. In contrast in the USA the logistics costs are about 10% of the GDP and 57% of these is the share of 3PL logistics in the overall logistics. These figures are based on the assessment in the KPMG report on the skill gaps in the Indian logistics sector 2007.
The DFC will help to increase the speed of trains and hence reduce the transportation times which would also translate into lower inventory carrying costs. The DFC is designed for trains of 1500 meter length double of what IR runs today and from the beginning we may find 12000 tonne trains. The modern technology will help reduce the transportation costs and with the surplus transportation capacity it generates the market forces will come into play and we may see the freight tariff actually come down in the near future with an increase in the volumes. This is good as we may see a modal shift from road to rail which is good for the country and will also help in reducing the carbon emissions. It is estimated the savings in CO2 emissions will be about 457 million tonnes over the 30 year life of the project.
The revenue from the operations will remain with IR with the DFC being paid track access charges based on cost covering model with a return on equity. The DFC will generate surplus capacity on the IR routes on the golden quadrilateral and it is the need of the hour to see how this capacity can be used optimally so as to generate revenue for IR and also to fulfill the aspirations of the public. The DFC will become a reality by 2018-19.
It is well known that almost all rail operations in India are handled by the Ministry of Railways. The organization has its own facilities for production of locomotives and other rolling-stock besides a Research, Design and Standards organization to carry out research work in rail technology, standardization and application to attain self-sufficiency. Although Indian Railways has been continuously upgrading its technology but it has been primarily done through technology transfer from abroad.
The spirit of ‘Make in India’ is also the ripe time for new initiatives to build foundation for research in Indian Railways in collaboration with premier academic institutions. Minister for Railways, Shri Suresh Prabhakar Prabhu had announced in his Budget speech on 26th February 2015, the setting up of four Centres for Railway Research in select Universities. The MOU with University of Mumbai has already been signed in April 2015. Today the MOUs were signed with Indian Institutes of Technology at Kanpur, Madras and Roorkee, for setting up the Centres of Railway Research, fulfilling the Budget commitment in presence of Minister for Railways Shri Suresh Prabhakar Prabhu and Minister of State for Railways Shri Manoj Sinha. Specific areas of research in railway technology have been assigned to the respective IITs, with provision to identify more areas in the future. Shri Manoj Pande (ED/T&MPP) signed the MOU on behalf of Ministry of Railways while signatories from other side included prof. Amalendu Chandra, Dean Research & Development IIT Kanpur, Prof. Krishnan Balasubramanian, Dean Industrial Consultancy and Sponsored Research, IIT Madras and Prof. Manoranjan Parida, Dean Sponsored Research and Industrial Consultancy, IIT Roorkee. Chairman Railway Board Shri A.K. Mital, Member Staff Shri Pradeep Kumar and other senior officers were present on this occasion.
Speaking on the occasion Minister for Railways Shri Suresh Prabhakar Prabhu announced that with the signing of these MOUs, he is confident that these Centres for Railway Research would contribute immensely towards providing solutions for utilization of Railways’ assets in a more cost effective manner. The Government’s vision to see Indian Railways as one of the most progressive organizations in the world and also a net exporter of Railway technology to the world shall soon be realized. Shri Prabhu said that such partnership between railways and academic institutions will not only help railways and IITs but will also be helpful to the nation. He said it will also lead to spin off benefits to society. There is a need to implement new ideas on real time basis.
In his speech Minister of state for Railways Shri Manoj Sinha said that Indian Railways always believes in keeping itself abreast of latest technology. Referring to the problem of train movement during fog season specially in northern India, Shri Manoj Sinha called upon experts to work on a technique to find solution to this problem. He said that the technology to solve this problem should be practical and affordable.
In his address, Chairman Railway Board, Shri A.K. Mital said that signing of the MOUs between Ministry of Railways and IITs at Kanpur, Madras & Roorkee for setting up of Centres for Railway Research is an important step. In order to achieve growth rate of 10% per annum in the coming years, it is necessary that railways make use of the technology advancements in the field of Railway related technology as this will be a major contributor in improving the quality of services. Government has laid high priority on giving boost to this vital sector as the Railways is considered engine of growth.
Speaking on the occasion, Member Staff Railway Board Shri Pradeep Kumar pointed out that subjects on railway technology do not figure in the curriculum of the academic institutions. The natural corollary has thus been the lack of experts on railway technology in the academia. In most of the Institutions, there are either no professors having expertise on the subject or wherever there are a few with some knowledge on rail technology, they are out of sync with the latest technology and development for obvious lack of practical exposure/contact. Moreover the major technological advances are coming from out of India. This initiative of the Indian Railways to involve these premier academic institutions by setting up Centres for Railway Research will remove this gap to some extent.
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