Growing Indian Metro Railway Sector
The Indian Metro Rail system has traveled from 35 Km (including 27 Km of Kolkata Metro) in 2002 to 638.91 km in last 17 years and currently has 13 operational metro systems in 18 cities.
This already decent sized metro system is expanding rather ambitiously. It is estimated that by 2024 approximately 600 km of metro lines shall be made operational through expansion of existing systems and completion of 5 under-construction metro systems in Navi Mumbai, Pune, Kanpur, Bhopal and Indore city. A further 1050 Km are expected to be added over a 5 year period starting 2024, making a total of 1650 Km of additional network in next 10 years. There are 7 more cites of India- Agra, Patna, Surat, Meerut, Visakhapatna, Varanasi and Dehradun (Doon Valley) which have metro projects in planning stage and 10 cities: Gwalior, Guwahati, Srinagar, Coimbatore, Ludhiana, Prayagraj, Ranchi, Jabalpur, Bareilly, Gorakhpur where metro projects have been proposed.
After a very long gap between India’s first Calcutta (Kolkata) Metro project in 1984 which was undertaken by the Indian Railways, Delhi Metro Rail Corporation Ltd. (DMRC) had inaugurated the first section of its metro rail project in 2002. Looking at the immense success of Delhi Metro, new systems were developed in Bangalore, Mumbai, Lucknow and other cities in order to ease the heavily loaded urban transportation infrastructure.
10 years from now India is expected to have 32+ operational metro rail systems. This mass transit system is proving to be an effective solution for urban transportation, supporting the growth of rapidly growing cities. This immense growth is directly impacting the demand for modern metro coaches and emergence of a thriving Metro Rail Coach Industry in India.
Indian Metro Rail Coach Industry
As per the data collected from the official websites of various metro rail corporations, 2505+ metro coaches are in operation as of 31st March 2019. Way back in 2009, first eight metro coaches of DMRC were imported from Germany and were brought to India by AN- 24 aircraft. Since then, with steady increase in demand for metro systems, three coach manufacturing units have been setup in India.
In 2002, Bharat Earth Movers Limited (BEML), an Indian Public Sector Undertaking signed a technical collaboration agreement with South Korean Hyundai Rotem and became the first to indigenously manufacture for Delhi Metro Phase-I and had supplied 220 metro cars for the same contract. BEML has been successful in supplying over 1,100 metro cars to various projects in India and just this February bagged a large order of Rs. 400 Cr. / 42 metro cars for Bangalore Metro Rail Corporation Ltd and another other of 378 metro cars worth Rs. 3015 Cr. is under execution for Mumbai Metro corridor 2A, 2B and 7.
In 2008, Canada based Bombardier – Rail equipment division had set up a plant at Savli, Gujarat with an investment of EUR 33 million (approx. INR 225 Cr.) . Bombardier Transportation has served various metro projects such as Bangalore Metro Phase II, Ahmedabad Metro, Mumbai Metro Phase III and has supplied Bombardier’s largest fleet in the World to DMRC comprising 776 metro cars.
In 2012, French multinational – Alstom Transport India Ltd. established its manufacturing plant spread over 156 acres in Sri city, Andra Pradesh and since then Alstom has served various projects such as Chennai, Kochi, Lucknow and Mumbai Metro. In September 2018 the company bagged a new order of 248 cars worth Rs. 2,500 Cr for Mumbai Metro line 3. In an article in Business standard dated on 6th Dec 2018 Alain Spohr, MD (India and South Asia), Alstom Transport India Ltd. said “The current capacity of the facility was 20 cars per month and the utilization was 16-18 cars a month. A second line shall be ready by second quarter of the financial year 2019 as the company order books are growing for domestic as well as export.”
Imported Metro Coaches – Indicative of High Demand
In addition to it technical collaboration with BEML, Hyundai Rotem of South Korea has been supplying metro cars for a number of projects in India: DMRC phase I, II & III, Bangalore metro, Hyderabad metro, and is working on 96 coaches worth Rs. 1,025 Cr for Ahmedabad Metro. The coaches of Ahmedabad Metro are being manufactured at its facility in Changwon, South Korea and expected to be delivered by 2020.
In 2018, CRRC Nanjing– an affiliated company under China’s CRRC Corporation had supplied 76 cars to Noida Metro for Rs. 800 Cr. from its manufacturing units in China. Other CRRC companies, CRRC Dailan supplied 69 metro coaches for Nagpur Metro, whereas Zhuzhou supplied 36 coaches for Gurgaon Metro and has orders of 12 coaches for Navi Mumbai Metro.
India Now Exporting Metro Coaches
In 2014, it was a new era for Indian exports when Alstom Transport India Ltd. received the Sydney metro project order. The 108 coaches “Make In India” rolling stock order for Sydney Metro was manufactured at Alstom’s Sri city facility and last coaches were delivered in December 2018. Alstom has now bagged another export order for light metro rail project in Montreal worth $1.4 billion for 106 trains with a total of 212 coaches (2 coach trains).
In 2017, Bombardier also got export orders for 450 metro rail coaches to be supplied to Australia and components to be supplied to Brazil, Australia and Saudi Arabia.
The ‘Make In India’ Push
To push Indian manufacturing and meet rising demand of metro coaches, in 2017 Government of India laid special emphasis under the “Make in India” initiative and made it mandatory to procure a minimum of 75% of train cars and minimum of 25% of critical equipment and sub-systems from within the Country. For this foreign suppliers can either set up independent manufacturing facility or be in partnership with Indian Manufactures. Seeing the vast scope many companies have already made their moves.
The center is also trying to bring standardization in the metro rail space with the help of RDSO (Research Designs & Standards Organisation). The car width has been set at 2.9 meters and 3.2 meters. The maximum operating speed has been set at 80 Kmph with a design speed of 90 Kmph. The metro trains shall some in three configurations: three-car, six-car or nine-car instead of present four-car, six-car and eight-car.
Indian Metro Coach Business
As per the current data approximately 2,505+ coaches have been in use for over 638.91 Km of Indian metro rail network. Each coach has an average price about Rs 10+ Cr. aggregating to a metro coach business of more than Rs 25,050 Cr.
As per the present estimate, in coming five years the demand in India would be for 2,500 metro coaches and system length shall be about 600 Km. Thus a Rs. 25,000 Cr. business is envisaged for metro cars industry in India from Indian orders over next 5 years. Similarly for the next 5 year period starting 2024 the new demand is expected to be of 4500 coaches approx and a resulting business of Rs. 45,000 Cr for the metro coach industry from Indian orders alone. This makes the Indian demand for metro coaches over the next 10 years to approx. 7,000 coaches which translates to an expected business of 70,000 Cr.
India is also a low cost producer and still has lower wages. This clubbed with big domestic opportunities makes India an attractive hub for Metro Coach Industry. New Indian and Global players are expected to enter into metro coach manufacturing in India.
Proposed Rail Coach Factories in India
Some companies have already made strides or taking initial steps towards manufacturing rail coaches in India:
Indian Railway is all set to establish a manufacturing unit for metro rail coaches / rolling stock at MCF (Modern Coach Factory) based at Rae Bareilly which is expected to be the first factory where coaches are produced through industrial robots. As per an article in Economic Times dtd. 18th Oct 2018 Rajesh Agarwal, member (rolling stock), Railway Board mentioned that the Railways has got approval from Maharashtra government for manufacturing coaches for two metro trains. The present plan is to make six metro coaches, each estimating to cost Rs. 8 Cr. in comparison to Rs. 12 Cr. for similar coaches procured from China or other countries as per Mr. Agarwal. This expansion is expected to cost Rs. 480 Cr.
Central PSU and Maharatna company Bharat Heavy Electrical Ltd. (BHEL) in collaboration with Kawasaki Heavy Industries Ltd (KHI) of Japan, is ready to build its factory for manufacturing rolling stock (coaches). The project is estimated to cost Rs. 800 Cr. and shall be setup in a 1 acre area at BHELs Bhopal Unit. Already Rs. 300 Cr. has been approved for construction. According to an article in Dainik Bhaskar dtd. 11th October 2018, D.K Thakur ED, BHEL Bhopal mentioned that Kawasaki shall provide technology support for making stainless steel coaches. Metro coaches of proposed Indore and Bhopal metro projects are expected to be manufactured at this factory.
Maharashtra Metro Rail Corporation Limited- MahaMetro headquartered in Nagpur is also Planning to set up coach manufacturing unit at its proposed plant in Butibori, Nagpur. As mentioned in an article in Times of India dtd 8th Sept. 18, MahaMetro source said, “We have two options for setting up the plant. First and preferable one is that we form a joint venture with a coach manufacturer. If we don’t get any response then we will set up the plant on our own. Our supplier can then use our facility. We will need funds from central government in both cases.” MahaMetro aims to make 100 coaches a year.
To promote manufacturing in Nagpur, Maha Metro plans to make 75% of coaches for Pune Metro in its proposed Butibori facility (near Nagpur). Hence this condition has been incorporated in the tender for the purchase of the coaches. This may encourage other players like Siemens, Titagarh, Kaff or CRRC to manufacture in Maharashtra.
Further down South from Maharashtra, Hyderabad based Medha Servo (Part of Medha Group – Supplies propulsion equipment to Indian Railways) has also signed an MoU with Telangana Government for setting up Rail and Metro coach factory in Hyderabad with Rs 800 Cr. of investment.
India – Emerging Global Hub for Metro Coaches
Huge planned expansion of metro rail in 32+ Indian cities has created a lucrative and still largely untapped Metro Rail Coach Industry. Indian Government’s huge and stringent ‘Make in Indian’ push and India’s ability to manufacture at lower than global costs is encouraging manufacturers to setup units in India. With three operational metro rail coach factories, two coach factories at advanced stages and another two metro car factories under active planning, India is set to become a global hub for metro coach manufacturing and the necessary ancillary industry around it including many critical components. India is set to become a major exporter of Metro Coaches around the World.