Railways’ capex picks up pace, at Rs 94,000 crore till November

By Nivedita Mukherjee, 

Capital expenditure by the Railways, which was languishing at very low levels in April-July, has since picked up fast. Around Rs 94,000 crore or 58% of the FY21 target was spent till November-end, according to official data.

In April-November last year, the Railways capex was to the tune of Rs 96,000 crore. The nationwide lockdown had caused the Railways to lose much of the pre-monsoon momentum in project execution.

“The March-May phase is usually one of the most proactive for various activities concerning projects and we lost much of that time due to the lockdown,” a Railways official told FE. Heavier rainfall and flood-like situation in many parts of the country this year resulted in project disruptions.

Among the construction targets to be achieved this year are 3,750 km of new lines, gauge conversions, doubling/tripling of lines (all included) and electrification of 6,000 km of rail routes.

Though work on projects has picked up in the last few months, the Railways has another problem at hand, when it comes to expediting capex. The transporter has Rs 1.5 lakh crore worth projects which are stuck, due to the instructions issued by the Railway Board to zonal officers in July 2020 to rationalise expenditure. The instructions followed a finance ministry directive to put on hold infrastructure projects sanctioned in the current financial year as well as some projects approved in FY20, where work had remained stagnant.

The projects which are impacted cut across states and comprise Rs 8,500 crore worth ‘new projects’ approved in FY21. The Railways is currently undertaking work on projects with envisaged investments of Rs 9.5 lakh crore, including those carried over from the previous years.

According to sources, though the hold on projects is valid only till the end of FY21, there is uncertainty over whether the restrictions would be extended. Clarity is expected in Budget 2021-22.

The finance ministry’s rationale for the move was that the capital is mobilised for the projects, with reliance also on budgetary funds, which needed to be controlled due to acute fiscal constraints.

According to the Railway Board’s communiqué, “…new works/umbrella works included in Pink Book 2020-21 shall be kept in abeyance. However, those works which impact the safe running of trains and are considered essential and inescapable may be considered for sanction. Essentiality of such works will be examined by concerned additional member, additional member/works and additional member/revenue.”

It also said that ‘works which have been approved till 2019-20 but have made insignificant physical progress shall be kept frozen till further orders, except those which are essentially required for safe running of trains. Unutilised provision of umbrella works of 2018-19 and 2019-20, if any, may be suspended’.