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COVER STORY

“With four factories producing Vande Bharat trains simultaneously, signs of aggressive bidding as witnessed in other infrastructure
we should be able to do two or three Vande Bharat trains every segments like roads, railways, etc. As per ICRA’s analysis, about
week by the end of the next financial year. The focus is scaling up 58% of the projects (by value) were awarded at a premium over the
production. It will fulfil the Prime Minister’s vision of covering every base price, with 14% of the projects awarded at a premium of over
major city and small towns by Vande Bharat trains.” 20%. While 42% of the bids were awarded at a discount; majority
ICRA in its recent research report estimates that metro rail projects will of these were at a nominal discount and only 7% of winning bids
generate `800 billion of opportunities for construction companies were at discount of over 25%.
over the next five years. In India, 15 cities have operational metro Added Gupta, “Competitive intensity is expected to remain
networks of about 746 km (many of which are undertaking network moderate in the near to medium term, with the incumbents
expansion), while another seven cities of about 640 km have under- expected to benefit the most. Given that majority of the orders are
implementation metro projects. This apart, 1,400 km of metro rail funded by multilateral agencies as well as Central Government
projects worth `2 trillion are in the approval/proposal stage; of allocations, the cash conversion cycle of the industry participants
which a 352-km of new metro network has been approved, with will remain comfortable.”
the balance being in the proposal stage. With the Ministry of Railways working on a blueprint to start export of
Giving more insights on this, Abhishek Gupta, Sector Head & the indigenously manufactured Vande Bharat trains by 2025-26, the
Assistant Vice President, Corporate Ratings, ICRA, stated, “Given underlying design and technology is now garnering global attention.
the Government’s thrust for infrastructure Many of its features are novel in India, including technology that
development, the metro rail network is captures some of the energy trains generate when braking and
likely to witness 2.7 times expansion in the feeds it back to the power grid. The railways, in association with
next five years. Typically, the metro rail global firms, is working to develop ‘tilting trains’ — which can run
development cost ranges between `280- on curved tracks without slowing down — in India by 2025-26. At
320 crore/km for elevated metro and the least 100 of the 400 Vande Bharat trains to be manufactured by
cost could be much higher in the case of 2025 will use this technology.
an underground metro network. Civil construction forms ~35%-45% “We will have tilting trains in the country. We will tie up with a
of the overall cost. Given the large size of the metro projects, this technology partner for this. We will have this technology in 100
is likely to offer sizeable opportunities for construction companies Vande Bharat trains over the next two or three years,” the official
over the next five years.” said, adding that such trains are now operational in 11 countries
Due to the presence of a limited number of players in the sector, — Italy, Portugal, Slovenia, Finland, Russia, the Czech Republic, the
the competitive intensity has so far remained moderate with no UK, Switzerland, China, Germany and Romania.

16 CONSTRUCTION OPPORTUNITIES|FEBRUARY 2023