Indian Railways has been able to significantly cut its power procurement costs, thanks to the helpful intervention of RITES Ltd, a Central PSU under the ministry of railways. Addressing the media at a recent press conference in Mumbai, Rajeev Mehrotra, Chairman & Managing Director of RITES Ltd said that a complete study by a group of technical personnel from RITES Ltd was done to assess load requirement at various traction substations (TSS) of Indian Railways.
Accordingly, power is today procured from generators and through the transmission network of Central transmission utility Power Grid Corporation of India, this power is fed by state transmission utilities directly to the various traction substations. “This has resulted in tremendous savings for Indian Railways,” noted Mehrotra, adding that in several states Indian Railways is not procuring from power distribution companies but directly from generators. “Maharashtra is one such example,” the top RITES official said.
RITES Ltd is proposing an initial public offering of its equity shares, which is scheduled to open on June 20, 2018 and will close on June 22, 2018, with a price band of Rs.180-185 per share of face value Rs.10 each. The IPO of 25.2 million shares is a case of PSU disinvestment, representing an offer for sale by the President of India. The IPO consists of a reservation of 1.2 million shares for eligible employees and a net public offer of 24 million equity shares.
It should be mentioned here that in August 2013, Railway Energy Management Company Ltd was incorporated as a joint venture between RITES Ltd (equity stake: 51 per cent) and Indian Railways holding the remaining 49 per cent. REMCL undertakes, among other things, power procurement for the Indian Railways. Rajeev Mehrotra is also the Chairman and Managing Director of REMCL.
When asked about any plans of REMCL setting up its own transmission corridor, Mehrotra said that there are certain railway corridors where the load requirement was high and it would make sense to have a dedicated transmission network for the Indian Railways. “However, this could also mean duplication of investment,” cautioned Mehrotra. All the same, there are tentative plans on the anvil but there is no finalization on this count yet. “We are working on the feasibility. It is very early to say whether this is doable or not but there is a need being felt,” observed Rajeev Mehrotra. Sensing the increasing power requirements on the commissioning of the dedicated freight corridors, Mehrotra said that REMCL was looking at the Delhi-Mumbai and Delhi-Agra corridors. “If at all it happens, it will be in these two corridors.”
Industry sources, in an earlier interaction, had told T&D India that REMCL was keen on setting up a dedicated 220kV transmission corridor that would be hooked up to PGCIL’s grid. This would make REMCL procure power from generators (power plants) without the intervention of even transmission utilities.
The Indian Railways needs around 2,000 mw of electricity for traction purpose and so far REMCL has been able to procure 1,175 mw through medium term power purchase agreements, according to Ajay Gaur, Director (Finance), RITES Ltd. The remaining is purchased from discoms. Gaur interacted with T&D India at the sidelines of the press conference in Mumbai. Some state governments were not willing to give power through the Open Access (OA) route, noted Gaur. It may be mentioned that REMCL is also mandated with the task of setting up renewable energy plants whose electricity generation would be made available exclusively to the Indian Railways.
RITES Ltd is also doing its bid to support the massive railway electrification plans of Indian Railways. According to Ajay Gaur, RITES was undertaking projects on “cost-plus” basis. One of the projects underway was the electrification of the Ringas-Jaipur-Sawoi Madhopur route in Rajasthan, falling in the ambit of North Western Railway, one of the 16-odd zones of the Indian Railways. “In case we get more (railway electrification) projects, we will be more than happy to take them,” said Gaur.
Featured photograph shows a traction substation of South Central Railway, a division of Indian Railways