L&T signs first EPC contract with Indian Railways

On August 4, 2017, Indian Railways signed its first Engineering, Procurement and Construction (EPC) contract with L&T for large electrification projects. Including this contract, Railways Ministry has signed total nine EPC (engineering, procurement, construction) contracts for electrification of railway lines at a cost of Rs. 2,800 crore.

Background Information:

Signing of EPC contracts is part of a strategy to speed up the electrification of railway lines. Currently, only 42% of the lines are electrified.

• Consequential to Prime Minister Narendra Modi’s target to double this in five years, this year’s Budget had announced the Railways would tap the EPC route for expediting electrification projects.
• Moreover, as per Comptroller and Auditor General of India (CAG) audit report on ‘Electrification Projects in Indian Railways’, the Indian Railways lost savings to the tune of Rs 3,006 crore on account of delays in execution of 21 railways electrification projects out of 29 projects which were examined.

Details about EPC Contracts Signed by Indian Railway:

The first EPC contract worth Rs. 1,050 crore was awarded to private sector engineering major L&T for electrifying 781 route kilometres.

• This contract has been awarded for electrification of Delhi Sarai Rohilla – Rewari and Alwr – Bandikui – Jaipur – Phulera – Ajmer (353 km) section at a cost of Rs 594 crore and Roha – Verna (428 km) of Konkan Railway at a cost of Rs. 456 crore.
• Besides, eight other agreements were also exchanged between Zonal Railways and Public Sector Undertakings for 1,735 km of electrification projects valuing Rs 1,746 crore.
• The Railways expects to cut its fuel bill by Rs. 3,300 crore annually by 2020-21, when electrification of 90% of all broad gauge tracks will be completed.
• Railway Minister Suresh Prabhu said the electrification mission, unveiled in November 2016, was not just about energy saving but also modernisation of Indian Railways.