The Konkan Railway Corporation Limited (KRCL) is charting a new growth path, undertaking several projects to enhance connectivity and improve freight volumes. Sanjay Gupta, chairman and managing director, KRCL, tells Shubhra Tandon about the road ahead for the network. Excerpts:
What are the opportunities you are looking to tap?
We are taking several initiatives to improve connectivity between the ports and industries of Maharashtra, Goa, and Karnataka and the hinterland. We are also undertaking doubling of the entire 714-km section and this should aid the growth of ports and industries. The corporation has already partnered with JSW Ports Limited for providing connectivity to Jaigad port. In addition, it has taken up rail- based NTPC projects and is likely to bag railway projects. We are also undertaking electrification of the entire section. This will ensure better performance and integrate the line with the adjoining railway network.
What investments will these projects need and how would you source them?
These projects will need over R19,500 crore. The doubling work will cost Rs 11,000 crore. Construction of the Chiplun-Karad rail link will be done at a cost of R3,200 crore; the Vaibhavwadi-Kolhapur section will need
Rs 3,500 crore; Jaigad-Dighni is a R800-crore project; and electrification will cost Rs 710 crore. Part doubling of the Roha-Veer section is under way. These projects would be funded through a combination of equity from Indian Railways/Konkan Railway and debt.
What benefits would these projects bring in their wake?
Electrification should lead to annual savings of Rs 150 crore in our operating costs. At present, R600 crore worth of projects are under progress. Work on the USBRL project in Jammu & Kashmir has picked up and in the next 2-3 years all tunnels and the Chenab Bridge would be ready. In 2016-2017 itself, it is likely to generate R650 crore of revenue.
How was your financial performance in FY16?
We reported as much as 22% growth in revenues, on the back of an increase of 24% in freight revenue, 4% in passenger revenue, and 50% in projects .
What are the challenges you face?
Funding the planned projects is obviously one of the biggest challenges. Also, the development of ports and the freight business is closely linked to the economic growth of the country. Considering the number of ports that are to be set up, there is likely to be stiff competition between them. The terrain of the western coastline itself is very challenging for railway projects and growth of industry. Also, getting statutory clearances for projects is a task, being a time-consuming process.
