India must adopt broad gauge for high-speed rail: Siemens Mobility

Mamuni Das New Delhi | Updated on January 23, 2018

TILAK RAJ SETH, Executive Vice-President, Siemens Mobility

Decision-making is getting faster, procurement more decentralised now, says Executive Vice-President

The Indian Railways should adopt broad gauge for its proposed high-speed network of over 250 kmph, said Tilak Raj Seth, Executive Vice-President, Siemens Mobility, a division of Siemens Ltd. Siemens has provided signalling and electrification products to the Railways, Delhi Metro, Chennai Metro, Rapid Metro, and is now eyeing business potential in the Railways’ plans for semi-high-speed and high-speed trains, Seth told BusinessLine. Edited excerpts from an interview:

Siemens is present in the high-speed rail segment across the world. What are your views as India embarks on the high-speed rail project?

Siemens has done high-speed rail works in Europe (Germany, France, the UK), Russia, China and Spain. High-speed rail can change economic growth, as seen in China, Japan and Europe. India is close to what Europe has done, as it is geographically polycentric. Also, India has 25,000 km of electrified tracks (out of 67,000 km of rail network). So, when you have such a network, you also want to create inter-operability.

Moreover, if you have a high-speed network, you want trains to run limited times a day. Tracks not getting used in the remaining part of the day can be used to move freight. For instance, Germany runs high-speed trains in the morning and freight at night, because they have a common track gauge.

While India is yet to decide on the gauge — though there seems to be a semi-concrete decision to have standard gauge — we feel India would need broad gauge. Otherwise, the high-speed network will exclude the 67,000-km rail network. Also, inter-operability will help lower unit transportation costs for high-speed. In due course, India’s existing tracks need to be upgraded for higher speeds, and inter-operability will help this.

When Delhi Metro adopted broad gauge, there was a furore as the costs were getting pushed up.…

Delhi Metro wanted to do standard gauge, and the Railways wanted them to have broad gauge to ensure inter-operability. Metros, which are intra-city networks, never become inter-operable with the mainline. But, high-speed is a mainline case. Historically, other countries have high-speed standard gauge network because their legacy networks were so. Also, coaches and locomotives of the mainline network are heavier and have higher crashworthiness than Metro rail cars. Even high-speed trains have high crashworthiness. All this together indicates why high-speed rail should be broad gauge.

As far as the cost is concerned, if China, Spain and Russia are using gauges broader than the standard ones and have tackled the cost element, so can India. As we walk into a national high-speed programme, we must address core issues such as inter-operability. India should also look for alternative methods of funding instead of only aided loans.

Many high speed projects, such as in Taiwan or Channel Tunnel between London and Paris, adopted public-private partnership but had to fall back on government support. What is the most reasonable funding route then?

I think funding is not the issue. The issue is risk distribution between the State and private investor. As long as the revenue, fare box revenue, risk is not put on the private partners, the projects will find a place.

If there is revenue risk, why should a project be put together? And, if there is no revenue risk, why should the State not take it over?

While soft loans may not be available, there are other options, such as supplier finance, multi-lateral funding. The main thing is that cost over the lifecycle cannot be very different even if it is a soft loan, as no lunch is free. Soft loans can also be tied-loans, which limit the vendor pool.

Wouldn’t the same happen in supplier finance?

There could be more than one vendor. If you take European funding, there could be more than one supplier. Funding will have to be a basket of commercial funding and soft funding from wherever the supplier comes.

That would mean a lot of heads together on project structuring…

When the German delegation met the Indians recently, there was an agreement to have a German initiative on high- speed rail, which would mean a lot of heads coming together, including from German government, on technology, operation, financing and training.

Have you seen any change in the functioning of the Indian government of late?

One critical change is that procurement has become decentralised. So, the Minister and Board members take pride in that. Also, decision-making is getting faster and has improved significantly.

Published on October 19, 2015

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