New Delhi: Indian Railways, a statutory body operating under the Ministry of Railways and managing the world’s third-largest railway network, has successfully reduced its electricity costs by more than Rs 5 crores in the Jhansi Division of North Central Railway. This substantial saving is a result of strategic procurement practices and effective management.
The savings, amounting to Rs 5.28 crores in the financial year 2024-25, were realised in April alone from ten stations in the Madhya Pradesh region. These stations include Datia, Hetampur, Gwalior, Bhind, Harpalpur, Niwari, Malanpur, Isha Nagar, Sank, and Basai. This cost-cutting initiative was made possible by purchasing electricity from the open market, allowing the division to benefit from competitive rates. A senior official from the Jhansi Division highlighted the significance of this achievement, noting that Indian Railways has adopted a practice akin to common consumers by comparing rates before making purchases, particularly for electricity. This approach, aimed at reducing expenditure, has proven to be effective and is expected to be implemented across other railway zones in the future. Indian Railways has also been leveraging other cost-saving measures. For instance, the Northern Railways has generated substantial revenue through the sale of scrap, positioning itself as the top zone in the country in terms of earnings from scrap sales. These funds are being reinvested to enhance passenger facilities and improve overall service quality.
Traditionally, Indian Railways has sourced electricity through two main channels direct purchases from the open market via a competitive bidding process, and trading on the Indian Energy Exchange (IEX). By buying electricity directly from power-generating companies that offer the best prices and trading excess electricity on the IEX, the railways optimise their energy procurement. Excess electricity is sold during the day when demand is lower, and bought back at night when demand peaks and tariffs are more favourable. This practice aligns with the railway’s operational requirements, as power usage spikes at night when most trains are running, while daytime usage is lower due to maintenance and repair activities. This innovative approach to electricity procurement not only curbs costs but also exemplifies Indian Railways’ commitment to financial prudence and operational efficiency. The ongoing adoption of such methods across different zones is expected to further enhance cost savings and service improvements, reinforcing the railways’ role as a pivotal player in India’s transport infrastructure.
