Fiscal viability no longer sole criterion for rail projects
RAILWAYS & METRO RAIL

Fiscal viability no longer sole criterion for rail projects

Since enlarging rail connectivity to far-flung, backward and hilly areas may not be financially viable, the government has decided to give weightage to “intangible benefits” like social, environmental and network effects of such projects.

The policy change will help the government to justify connectivity projects of new lines, gauge conversion, doubling of lines, etc, even if they do not generate financial returns. The Railways will now not have to struggle to obtain financial sanction for these projects.

The Ministry of Railways has sent a set of four new project proposals for appraisal to the Niti Aayog, justifying their investment based on this new ‘Modified Economic Internal Rate of Return’ model. These are: 30 km Kalyan-Murbad new line, 300 km Jalna-Jalgaon new line doubling of 98 km Ankai-Aurangabad (all three in Maharashtra); and the 100 km Sabarmati-Sarkhej-Dholera new line in Gujarat.

The Niti Aayog considers only projects which entail an investment of over Rs 500 crore. “Many more projects will be taken up on this concept in the future,” a Railway ministry spokesperson said. In the current financial year 2022-23, Railways has allocated Rs 670 billion for capital spend on new lines, gauge conversion and doubling of lines.

As per the toolkit devised by the Railway Ministry, the project assessment would have to answer questions like travel time savings, savings in reduced road stress, increased safety, savings in fuel overall for the country, savings in vehicle operating cost, savings accrued due to reduction in pollution and the like.

See also:
Paras RailTech bags contract of track work for Delhi Metro Pink Line
MMRDA re-invited tender for Mumbai Metro Line-4’s Mogharpada Depot


Your next big infra connection is waiting at RAHSTA 2025 – Asia’s Biggest Roads & Highways Expo, Jio World Convention Centre, Mumbai. Don’t miss out!

Since enlarging rail connectivity to far-flung, backward and hilly areas may not be financially viable, the government has decided to give weightage to “intangible benefits” like social, environmental and network effects of such projects. The policy change will help the government to justify connectivity projects of new lines, gauge conversion, doubling of lines, etc, even if they do not generate financial returns. The Railways will now not have to struggle to obtain financial sanction for these projects. The Ministry of Railways has sent a set of four new project proposals for appraisal to the Niti Aayog, justifying their investment based on this new ‘Modified Economic Internal Rate of Return’ model. These are: 30 km Kalyan-Murbad new line, 300 km Jalna-Jalgaon new line doubling of 98 km Ankai-Aurangabad (all three in Maharashtra); and the 100 km Sabarmati-Sarkhej-Dholera new line in Gujarat. The Niti Aayog considers only projects which entail an investment of over Rs 500 crore. “Many more projects will be taken up on this concept in the future,” a Railway ministry spokesperson said. In the current financial year 2022-23, Railways has allocated Rs 670 billion for capital spend on new lines, gauge conversion and doubling of lines. As per the toolkit devised by the Railway Ministry, the project assessment would have to answer questions like travel time savings, savings in reduced road stress, increased safety, savings in fuel overall for the country, savings in vehicle operating cost, savings accrued due to reduction in pollution and the like. See also: Paras RailTech bags contract of track work for Delhi Metro Pink Line MMRDA re-invited tender for Mumbai Metro Line-4’s Mogharpada Depot

Next Story
Real Estate

Vitizen Hotels Signs Deal at Manyata Tech Park

Vikram Kamats Hospitality, as part of its ongoing expansion in key metropolitan markets, announced that its material subsidiary, Vitizen Hotels, has signed a long-term lease agreement for a 45-key hotel property at Manyata Tech Park, Bengaluru.Strategically located in the city’s prominent IT hub, the property is well-positioned to serve corporate travelers, business professionals, and long-stay guests. The addition aligns with the company’s asset-light growth model, leveraging long-term leases to expand its footprint in high-demand urban markets.The hotel is expected to strengthen the comp..

Next Story
Infrastructure Transport

CONCOR Signs MoU with BPIPL to Operate Container Terminal at Bhavnagar Port

Container Corporation of India (CONCOR) has signed a Memorandum of Understanding (MoU) with Bhavnagar Port Infrastructure (BPIPL) on September 4, 2025, in New Delhi to operate and maintain the upcoming container terminal at the northside of Bhavnagar Port, Gujarat.BPIPL had earlier entered into an agreement with the Gujarat Maritime Board (GMB) in September 2024 for the port’s development. Under this arrangement, 235 hectares of land has been leased to BPIPL for 30 years, with provision for expansion by an additional 250 hectares.The new terminal is expected to significantly enhance logistic..

Next Story
Infrastructure Transport

Concord Launches India’s First Indigenous Zero-Emission Rail Propulsion

Concord Control Systems (CCSL), a leader in embedded electronics and critical rail technologies, has announced the development of India’s first fully indigenous zero-emission propulsion system, marking a significant step toward the country’s railway electrification and net-zero goals for 2030.Powered by Lithium Iron Phosphate (LFP) batteries and featuring a DC chopper-based drive, the propulsion system eliminates idling losses common in diesel engines, offering higher efficiency, lower costs, and zero emissions.What sets this innovation apart is its completely indigenous design. Except for..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?