What irfc company do?
Posted on December 15, 2024The Indian Railway Finance Corporation (IRFC) is a public-sector enterprise under the Ministry of Railways, Government of India. It acts as the dedicated financial arm of Indian Railways, primarily engaged in raising funds to support the expansion, modernization, and operation of railway infrastructure.
Here's what IRFC does:
Financing Indian Railways:
IRFC borrows money from domestic and international markets through bonds, loans, and other financial instruments and lends it to Indian Railways for capital expenditures like procurement of rolling stock (trains, coaches, wagons), development of railway infrastructure, and electrification.
Leasing Rolling Stock:
IRFC purchases railway assets such as locomotives, wagons, and passenger coaches and leases them to Indian Railways. Indian Railways pays lease rentals over time, ensuring predictable cash flow for IRFC.
Supporting Infrastructure Development:
Funds raised by IRFC are used for projects like laying new railway lines, upgrading stations, modernizing signaling systems, and other infrastructure needs.
Market Borrowing:
IRFC raises funds through the issue of tax-free bonds, green bonds, and other financial instruments, catering to both domestic and international investors.
In essence, IRFC enables Indian Railways to meet its capital investment requirements without directly burdening the government budget.
From whom IRFC purchases railway assets such as locomotives, wagons, and passenger coaches?
IRFC does not directly manufacture or procure railway assets like locomotives, wagons, and passenger coaches. Instead, it finances these purchases on behalf of Indian Railways, which is responsible for identifying suppliers and placing orders.
Indian Railways procures these assets from various manufacturers, including:
Indian Public Sector Units (PSUs):
Integral Coach Factory (ICF), Chennai: Manufactures passenger coaches, including Vande Bharat trains.
Rail Coach Factory (RCF), Kapurthala: Produces modern passenger coaches.
Modern Coach Factory (MCF), Rae Bareli: Specializes in LHB (Linke Hofmann Busch) coaches.
Chittaranjan Locomotive Works (CLW), West Bengal: Produces electric locomotives.
Diesel Locomotive Works (DLW), Varanasi (now Banaras Locomotive Works): Manufactures diesel locomotives.
Private Companies (Domestic and International): Indian Railways also sources rolling stock from private manufacturers through tenders and partnerships. For example:
Companies like Titagarh Wagons, Texmaco, and BEML manufacture wagons and specialized rolling stock.
Global companies like Alstom and Bombardier (now part of Alstom) supply locomotives and advanced metro coaches.
Joint Ventures and Foreign Collaborations:
For high-tech locomotives and other advanced technologies, Indian Railways partners with foreign firms. For instance:
The Madhepura Electric Locomotive Factory is a joint venture with Alstom for high-power electric locomotives.
The Marhowra Diesel Locomotive Factory is a collaboration with GE (General Electric) (now Wabtec).
IRFC's Role:
IRFC provides the funds required for these purchases, and the assets are leased to Indian Railways under long-term agreements. This ensures that Indian Railways has the necessary resources to modernize and expand its fleet without directly drawing on government funds.