Published On: Thu, Nov 23rd, 2017

Railways saved Rs 5,600 cr in power bills in two years

New Delhi: The Railways on Thursday said it had saved about Rs 5,600 crore vis-a-vis the ‘Business As Usual’ (BAU) mode by procuring power directly under the open access arrangements.

Indian Railways succeeded in achieving a cumulative saving of Rs 5,636 crore

“The Indian Railways succeeded in achieving a cumulative saving of Rs 5,636 crore from April 2015 to October 2017 against the BAU mode by procuring power directly under open access arrangements,” a Ministry statement said.

The Ministry said the cumulative figure is likely to go up to Rs 6,927 crore by the end of March 2018, which is around Rs 1,000 crore more than the target.

It projected a cumulative saving of about Rs 41,000 crore in 10 years in electric traction bill, which has been named as ‘Mission 41K’.

The open access policy under the Electricity Act, 2003, allows consumers with electricity load above 1 megawatt to procure power directly from the market.

The Railways currently sources power through open access route in Maharashtra, Gujarat, Madhya Pradesh, Jharkhand, Rajasthan, Haryana, and Karnataka, and the Damodar Valley Corporation area.

Bihar, Uttar Pradesh, West Bengal, Tamil Nadu, and Telangana have also agreed to permit the Railways for flow of power though open access route, which is likely to start by next year, the Ministry said.

It said that as of now out of the Railways’ total requirement of about 2,000 MW for electric traction, more than 1,000 MW is flowing under the open access.

This has reduced the average cost in states where power is flowing under open access, to about Rs 5 from earlier over Rs 7 per unit.

“These savings will be utilised for taking up electrification of the rail network as part of Mission Electrification,” it said.

The Ministry said this move will further reduce its diesel bill and multiply savings in energy bill, taking it to about Rs 10,500 crore per annum in the next few years on 100 per cent electrification of the rail network.

Earlier, in November 2015, an order the Central Electricity Regulatory Commission had allowed the Railways to undertake transmission and distribution of electricity as a deemed licensee under the Electricity Act.

According to the Railways, it consumes around 2.8 billion litres of diesel a year, costing about Rs 18,000 crore, and 17.5 billion units of electricity. Currently, about 30 per cent of the fuel bill goes into paying the state taxes.

“This humble beginning with cutting input costs will strengthen financial resilience of the Railways, improve its resource mobilisation, and enable shifting of traffic from road to rail by making it more attractive,” it added.

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