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The heady romance of India’s railways may be just a memory as the country continues its economic advance, but the iconic status of its railroads endures as the vast train network simultaneously enters a new age of importance.
With more than 13,000 passenger trains and 8,000 freight trains calling daily at 7,335 stations scattered along more than 126,000 kilometers of tracks, it is not only a powerhouse of connection but also a driving force of progress.
Since 2003, Rail Vikas Nigam Limited (RVNL) has played a pivotal role in taking the country’s rail network into the future as an extension of the government’s Ministry of Railways, undertaking the construction of new railway lines, doubling, gauge conversion and electrification on landmark projects.
The company has also played a significant role in the electrification of India’s railways, helping Indian Railways work toward its target of 100 percent electrification by 2025, which it is currently on track to achieve.
Vinay Singh has worked on many of RVNL’s most high-profile projects since joining the company in 2013. He had moved across from the Ministry of Railways, where he had been Executive Director Works, a position that gave him great exposure in the world of railways, dealing with top-level government officials on a daily basis, including the Prime Minister’s office.
The wealth of experience he has built up over the years encompasses every aspect of the rail industry, from planning, design, construction and monitoring of projects, making Singh the ideal choice to eventually lead the company.
His appointment as RVNL Director in 2019 came at a critical time for the company, coinciding with a milestone shift in the way it operates. Where previously RVNL had been responsible for developing railway infrastructure as required by the ministry, a significant shake-up meant it now had to bid for projects alongside its competitors.
The change saw RVNL’s Ministry of Railways pipeline immediately start to shrink. Today, ministry business only accounts for around US$4.2 billion of its total, a fraction of former levels, which sat at around US$10.8 billion.
It’s a decline that prompted Singh to take swift action.
“Since 2019, we have developed our business development unit and participated in a number of various tenders,” he reveals. “So far, we have won around INR30,000 crore [US$3.6 billion] of orders through bidding.”
However, a race to the bottom in terms of pricing within RVNL’s home market of India, which almost guarantees the success of the lowest bidder, has led the company to look further afield for more lucrative business opportunities.
“Now we have been permitted to work overseas too – we are not only confined to India,” he says. “The profit margin is much higher for overseas work, so now we are exploring opportunities in various other countries.”
RVNL has also signed a Memorandum of Understanding with the Government of Kyrgyzstan in Central Asia to execute a number of railway projects over there.
“Each railway project is costing somewhere around the region of INR18,000 crore [US$2.3 billion],” Singh explains.
These successes come on the back of a number of major deals closer to home, which include a deal with Russian company TMH International for the manufacturing of 120 Vande Bharat trains with sleeper coaches, and a number of subway projects within India.
The company is also broadening its expertise by venturing into port development with a project in the Maldives.
“We are exploring various opportunities in other infrastructure sectors such as solar projects, transmission lines and general electrical works,” Singh confirms.
“We are also partnering with Jackson Green to venture into solar projects in the Middle East and Central Asia region, and very shortly we’ll be signing a contract for the execution of the project worth roughly around INR3,000 crore [US$360 million].”
Those efforts are certainly being rewarded. Through a collaboration with private steel firm STEL, RVNL inked a US$7.2 million deal with the Energy Development Corporation in March to carry out the Rwanda Transmission System Reinforcement project and the Last Mile Connectivity project.
A number of road projects are also on the agenda within India in addition to a lucrative airport deal with the Airports Authority of India.
“We are widening our base and doing that in a cost-effective way. Our core values are quality, speed, transparency and the timely delivery of each project,” Singh points out.
“Over the years, we have developed a lot of expertise with a very limited team of people who are very committed and highly technically qualified in fact.”
Singh’s actions have certainly delivered a performance that is backed up with numbers. Turnover has risen dramatically from a yearly average of US$750 million across the five years from 2014–2018 to US$2.1 billion over the past four years under his leadership.
“In fact, last financial year was the highest we ever achieved with INR20,282 crore [US$2.4 billion],” he adds.
RVNL’s commissioning of projects has also risen by 130 percent over the past four years with its order book hitting an impressive US$7.8 billion earlier this year, just 50 percent of which was made up of rail projects – a testament to the success of Singh’s push toward diversification, along with all the other measures he has put in place.
“We have made a lot of systematic changes and have improved our contract management tendering process and the delegation of powers to project implementation units, as well as more and more mechanization,” he says.
Broadening its range of operations brings with it immense opportunities but also a fresh raft of challenges. Foremost among them is finding the workforce to work on such projects.
“Since we are widening our base into other sectors where our people don’t have the expertise, we need to get the manpower in the various fields who are technically qualified and who are competent in their roles,” Singh acknowledges.
The new sleeper version of the popular Vande Bharat Express railway coaches represents an expansion of Indian Railways’ premium offering, building on the successful rollout of the air-conditioned Vande Bharat Express with luxury cushioned seating.
The RVNL–TMH consortium undertaking the project is currently working on a prototype of the sleeper car, with the 120 trains expected to be rolled out over the next seven years. The project is estimated at US$4.2 billion, with a 35-year maintenance agreement also in place.
Partnerships are an essential part of building an extended knowledge base, with RVNL lucky to be able to attract the best in its respective businesses because of its stature in the infrastructure landscape and because of the way it conducts its supplier relationships.
“Once we have a very good relationship with our strategic suppliers, then we are able to give them confidence,” Singh reflects.
“Not only that, then they’re ready to work and they’re ready to walk the extra mile, so it becomes very cost effective. That really helps us to execute the projects at the minimum cost so that our profit margin is also there. I think that has really helped us.”
Over the years, RVNL has struck up and subsequently nurtured many mutually beneficial relationships with industry-leading infrastructure construction firm Power Mech Projects and rail infrastructure company Tracks and Towers Infratech.
Engineering firm TUMAS India and civil construction and infrastructure company GPT Infraprojects are also valued partners while, in the area of road and bridge construction, it works closely with MG Contractors.
Sharing expertise with such partners is another highly beneficial part of having a strong network, particularly as keeping pace with the latest technological innovations is essential in order to make each project profitable in a highly competitive market.
“If you are taking on work at a very low rate and very low margin, then we have to do some innovation and some value engineering to get the project executed to ensure a healthy profit margin on these projects,” Singh says.
But those shifts in the way rail work is allocated mean that many of India’s major infrastructure companies that used to contract to RVNL in its work for the Ministry of Rail are now competing for the same business in the open market.
“There are definitely a lot of challenges for RVNL,” he admits.
“That’s why we are trying to evolve, focus on technological innovation and value engineering because now we are competing with the entire private sector and the government sector.
“So we also have to follow all the government rules and regulations. We are trying to overcome all this because it’s very difficult to follow all the rules and regulations of the Government of India and compete with all private companies at the same time.”
Despite this barrage of hurdles, Singh is confident of the outlook for RVNL, especially with so many exciting projects underway.
Last year, it was awarded Navratna status, which is awarded to public sector companies giving them financial autonomy to invest up to US$120 million without having to seek approval from the government. It was the 13th public sector enterprise to receive the prestigious title.
While rail now only accounts for 50 percent of its order book, it remains a crucial area of business. In the 2022–2023 financial year, RVNL successfully commissioned 1,044 kilometers of new line and doubling, crossing the 1,000-kilometer threshold for the second year in a row.
Now, with Indian Railways planning to ramp up its operations in the coming years, the rail sector holds yet more potential for RVNL. Toward the end of last year, Indian Railways signaled its intention to introduce an additional 3,000 trains to its network over a five-year period to cater to rising passenger numbers on the back of population growth.
Furthermore, in April, Prime Minister Narendra Modi’s directive to prepare a 100-day ‘people-friendly’ plan for the new government saw a number of rail initiatives make headlines. These included the rollout of yet more of the Vande Bharat sleeper coaches, the launch of the final stretch of the Udhampur–Srinagar–Baramulla rail link project, and India’s first vertical lift railway bridge.
It is clear that RVNL has no intention of missing out on the opportunities at hand. In December, its joint venture with Karnataka Rail Infrastructure Development Company succeeded in its US$14.7 million tender for a major upgrade of Varkala Sivagiri Railway Station in Kerala. Then in March, the company won an order worth US$23.1 million from Rajasthan Rajya Vidyut Prasaran Nigam to construct eight grid substations and their associated lines and bays.
But even with these wins coming in at a steady pace, RVNL continues to seek opportunities from a broader array of infrastructure development, a strategy that is standing it in strong financial stead.
“We have a lot of projects and now through our various contexts, I think we’ll have maybe seven-to-eight billion in projects in another six months,” Singh reveals.
The company’s robust standing, even in challenging times, comes from having a technically strong team and solid finances, according to Singh.
“The unique feature that we have is that we can take up the project from concept to commissioning,” he explains.
“That means we can conceive any plan for any project – right from doing the survey preparation of a detailed project report, then getting the proper sanction, inviting the tenders, having the contacts and then executing.
“Before, we were confined to the Indian railways, but now we are going global. We have to expand – we don’t have any choice. If we want to survive then we have to expand our business.”
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