Informist, Tuesday, Mar 23, 2021

By Priyal Mahtta

NEW DELHI – RITES Ltd is developing prototypes of standard gauge locomotives and coaches, as these locomotives have the potential to open new international markets for the company, Chairman and Managing Director Rajeev Mehrotra told Informist.

The 1,435-mm standard gauge is the most widely used railway track gauge system globally, with around 60-70% of the world's railway systems deploying it.

Apart from most regular and high-speed railway systems, metro rail systems, including some in India, also run on standard gauge.

The company currently supplies broad gauge and cape gauge locomotives to various countries, including 

Bangladesh, Sri Lanka, and Mozambique, among others, apart from catering to the domestic market.

Most railway tracks in the Indian subcontinent are broad gauge, which at 1,676 mm is the broadest in use for regular passenger operations.  

The development of standard gauge rolling stock will help RITES enter a highly competitive segment globally.

Manufacturers from countries like China, Japan, and Germany, among others, compete aggressively to supply standard gauge rolling stock all over the world.

The company’s export segment accounts for about 22% of its total order book, which stood at 65.34 bln rupees as of Dec 31. Its revenues from the segment were hit in Apr-Dec following the spread of COVID-19.

The public sector company’s exports picked up in the current quarter with the export of two 3,000-hp cape gauge locomotives to Mozambique. RITES recently entered the cape gauge rolling stock segment.

This was RITES' first-ever export of cape gauge rolling stock and the company plans to export cape gauge locomotives and coaches to more markets. At just 1,067 mm, the cape gauge falls under the narrow gauge category.

Mehrotra said that the increased focus on Southeast Asian and African countries on developing their transport infrastructure bodes well for RITES, giving the company greater opportunity to venture into these markets.

When asked which international orders RITES is currently trying to bag, Mehrotra said the company has bid for numerous export orders, but declined to give details.

The infrastructure construction company also expects to push its revenues from the Indian Railways' railway line electrification program, a key turnkey segment opportunity for the company. The Indian Railways plans to complete the electrification of all its tracks by 2023.

"The electrification works awarded to us around three years ago are near completion, and we have recently secured electrification works worth Rs 475 crore (4.75 bln rupees). The revenue is expected to start flowing (from these new orders) from FY22," Mehrotra said.

Its subsidiary, REMC Ltd, which facilitates power procurement for Indian Railways, is likely to see a two-fold jump in these orders from the government by 2023, in view of the electrification plan.

Mehrotra said RITES also aims to secure more orders related to electrification and doubling of train tracks and construction of rail over bridges and rail under bridges, going forward.

He further said the government’s push for the development of metro rail systems in more parts of the country would also open more avenues for the company, which has considerable experience in the segment.

In India, RITES is currently working on three metro projects in Ahmedabad, Nagpur, and Pune. Apart from these, it is also working on the Mauritius metro rail project.

The National Infrastructure Pipeline’s recent expansion to about 7,600 projects, likelihood of higher investments in sectors such as railways, road, ports, urban transport and mobility, and the introduction of the National Rail Plan to expand network capacity are set to create opportunities for RITES over the next few years, Mehrotra said.

At 1449 IST, shares of RITES were 2.4% higher at 250 rupees on the National Stock Exchange.  End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Aditya Sakorkar

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