K&R Rail Engineering Ltd Management Discussions

Indian Economy: Railways

The Indian Railway Budget 2025-26 focused heavily on massive capital expenditure ( Rs.2.65 lakh crore) for infrastructure, electrifying lines, safety ( Rs.1.16 lakh crore), and new trains (200 Vande Bharat, 100 Amrit Bharat), aiming for higher freight (1.88 lakh cr) & passenger (92,800 cr) revenues, targeting 98.43% operating ratio, and accelerating new lines, doubling, and station redevelopment to boost capacity and modernization.

Key Highlights of the Budget: -

- Capital Expenditure (Capex): Rs.2,65,200 crore allocated, maintaining high investment for infrastructure.

- Revenue Targets: Aiming for Rs.3.02 lakh crore total revenue, with freight at Rs.1.88 lakh crore and passenger revenue at Rs.92,800 crore.

- Fleet Expansion: Approval for 200 Vande Bharat trains, 100 Amrit Bharat trains, and 17,500 general coaches.

- Safety & Modernization: Rs.1.16 lakh crore for safety initiatives (track renewal, signalling) and new ROBs/RUBs.

- Infrastructure Growth: Significant funds for new lines ( Rs.32k cr), track doubling ( Rs.32k cr), and gauge conversion.

- Operating Ratio: Projected at 98.43%, showing improved efficiency.

- Electrification: Expected to be fully completed by end of FY 2025-26.

- Freight Capacity: Targeting 1.6 billion tonnes cargo capacity, making Railways second largest globally.

- Focus Areas:

- Passenger Experience: More modern trains (Vande Bharat, Amrit Bharat) for better short-distance connectivity.

- Safety: Continued focus on Kavach system, track upgrades, and level crossing elimination.

- Infrastructure: Aggressive expansion of network (new lines, doubling) and station redevelopment.

- Sustainability: Full electrification and renewable energy push.

The Union Budget for 2025-26 did not announce entirely new rail corridor programs, but focused on the continued, accelerated development of the three major economic railway corridors announced in the previous interim budget (2024-25).

The three ongoing economic corridors are:

- Energy, Mineral, and Cement Corridors: Aims to provide efficient transportation for key raw materials.

Port Connectivity Corridors (Rail Sagar): Designed to improve connectivity between ports and the rail network.

2 - High-Traffic Density Corridors (Amrit Chaturbhuj): Focused on decongesting the busiest routes of the existing network.

The budget allocated substantial funds for new line construction and ongoing projects across various states as part of the overall infrastructure push. The total capital expenditure allocation for the Railways in FY 2025-26 was Rs.2.65 lakh crore.

Specific ongoing projects receiving allocations in the 2025-26 budget include:

- Mumbai-Ahmedabad High-Speed Rail: Received Rs.19,000 crore.

- Delhi-Ghaziabad-Meerut RRTS: Allocated Rs.2,918 crore.

- Rishikesh-Karnaprayag New Line: Work is in advanced stages for this 125 km project in Uttarakhand.

- New lines in Odisha: Ongoing projects include Gunupur-Therubali and Junagarh- Nabarangpur new lines.

The governments long-term plan aims to lay 40,000 km of new tracks under these corridor programs to enhance network capacity and eliminate ticket waitlists by 2030-31.

Overall, while the economy is well poised to deliver strong growth and Railway Infrastructure coupled with Housing demand will play a major role in Infrastructure development in India.

K&R Rail Engineering Limited to meet the last Rail connectivity has bid for the following Projects for the following clients: -

1) Subarnarekha Port Private Limited taking off from Amarda Road Station.

2) Vedanta Aluminium Proj ect at Lanjigarh

3) Heidelberg Cement (India) Limited at SSTPP, Khandwa (M.P.).

4) Crest Steel Limited taking off from Rasmara station (Durg) Chhattisgarh.

5) AMNS for Development of Gati Shakti Cargo Terminal at Dalki, Barbil

6) Ultratech Cements Limited at Maihar Cement Works, P.O. Sarla Nagar, Satna, M.P

7) Aditya Birla Cements Limited at Sarlanagar Cement Works, Sedam.

K&R Rail Engineering Limited has entered into a strategic MOU with the Indian Port Rail Corporation Limited (PRCL) for executing Projects of more than 500 Crores.

Global Economy: Railway

Railways has globally emerged as the choice of mass transit system because it helps in mitigating the global concerns wrt. the climate change, sustainable development etc. Therefore, all the countries with aspirations to develop further are taking cue from countries like Saudi Arabia, UAE, Japan, South Korea, E.U., China, Singapore and building modern Railway Infrastructure.

Major railway infrastructure expansion is happening globally, led by China (massive HSR network), the Middle East (Saudi Arabia, Iraq investing heavily), India (Mumbai-

3 Ahmedabad HSR), Southeast Asia (Thailand, Malaysia projects), Europe (Frances Grand Paris, Ukraines EU link), US (Bipartisan Infrastructure Law), and new African projects connecting landlocked nations like Burkina Faso, Mali, Niger, with major players like India and China financing international links like the China-Kyrgyzstan-Uzbekistan Railway.

Key Regions & Countries:

- Asia:

· China: World leader, constantly expanding its vast network and funding Belt & Road projects.

· India: Mumbai-Ahmedabad HSR, plus IRCONs international projects in Bangladesh, Sri Lanka.

o Southeast Asia: Jakarta-Bandung HSR (Indonesia), Malaysias East Coast Rail Link, Thailands Bangkok-Nong Khai project.

o Central Asia: China-Kyrgyzstan-Uzbekistan railway beginning construction.

- Middle East:

o Saudi Arabia: Leading with numerous large-scale projects like the Riyadh Metro.

o Iraq & Oman: Significant ongoing rail investments.

- Africa:

o West Africa: Burkina Faso, Mali, Niger building a major trans-Sahel railway.

o Egypt, Algeria, Morocco: Modernizing trams and building new lines with international backing.

- Europe:

o France: Grand Paris Express (major metro expansion).

o Ukraine: Building European-gauge lines from the west for better EU integration.

o Baltics (LT, LV, EE): Building Rail Baltica to connect to the EU network.

- North America:

o USA: Historic investment via the Bipartisan Infrastructure Law for passenger rail.

These investments focus on high-speed rail, urban metro systems, freight corridors, and improving connectivity, driven by economic growth, trade, and modernization goals.

4 HUGE OPPORTUNITY IN RAIL INFRASTRUCTURE IN MIDDLE EAST AND AFRICA. STRATEGY TO LEVERAGE THE OPPORTUNITIES:

K&R Rail Engg. Ltd. Is working towards utilizing the existing strengths to address the markets and augmenting it capacities both in terms of offered services and products. Key strategies that we intend to act upon:

- Establishing Consortium and JVs: We are looking forward to establish consortium and JVs with partners offering supplementary skills to address more projects.

- Establishing Global Foot Prints: We have going to establish an office in Saudi Arabia to address the upcoming projects in Middle East.

K&R Rail Engineering Limited in increasing their footprints in Saudi Arabia to capture the business in the Middle East.

K&R Rail Engineering Limited is finalising shortly a Joint Venture / MOU Agreement with Awj - Holding for executing Railway infrastructure Project in Saudi Arabia.

With this we propose to meet the united goal to improve our core competence, add complementary skills and products and address the market in India and abroad.