The Indian Railways is planning to procure electricity directly from the generator of its choice.
With this Railway Minister Suresh Prabhu is targeting a savings of Rs 3,000 crore per annum through the open access of electricity.
Rlys is targeting to save Rs 3000 cr per year by procuring electricity directly from power generators of its choice.https://t.co/vA40ny2jAT
— Ministry of Railways (@RailMinIndia) November 12, 2016
Indian Railways has long been a bulk procurer of electricity from different states but the state-owned distribution companies have been charging the national transporter at industrial rates. This meant the Railways paying for electricity nearly double the rates commercially available in the market, thus inflating its cost.
So far the ministry has received clearances from BJP-ruled states of Maharashtra, Gujarat, Madhya Pradesh and Jharkhand. The Railways is in talks with other states to have their clearances to draw power from these states’ transmission lines.
Railways is the largest energy consumer in the country with about 2.8 billion litres of diesel and 17.5 billion units of electricity a year. While the diesel cost is Rs 18,000 crore a year, the power bill is around Rs 12,300 crore. After the salary and pension, the energy bill is the highest expenditure in railways, Mital said.
After the salary and pension, the energy bill is the highest expenditure in railways, according to Railway Board Chairman A K Mital.
In addition, the national carrier is also planning to import crude oil directly and refine it at Indian Oil Corporation’s (IOC) Vadodara unit.
By having open access of electricity and crude oil imports, the Railways look to save Rs 35,000 crore on fuel bill in next 10 years.