In a significant move to strengthen India’s railway communication and information technology infrastructure, state-owned REC Ltd. has inked an agreement to provide ₹30,000 crore in funding to RailTel Corp. of India. This partnership was formalized through a memorandum of understanding (MoU) signed on Thursday and is set to bolster various projects over the next five years. These projects encompass telecom, IT services, railway signaling systems, and the implementation of the KAVACH train collision prevention system.
The collaboration outlined in the MoU goes beyond domestic projects, extending to the possibility of financing overseas ventures. These international projects are related to high-speed rail, metro systems, IT network development, and the upgradation of railway networks. The focus will be on bilateral discussions and infrastructure projects in Southeast Asia and Eastern Africa, aligning with RailTel’s current areas of concentration.
RailTel Corp. of India, a central public sector enterprise under the Ministry of Railways, is a prominent provider of telecom infrastructure and information and communication technology (ICT) services. The company operates an extensive optic fiber network that spans across India, making it an integral part of the country’s digital and communication infrastructure.
The MoU was officially signed by T.S.C Bosh, REC’s executive director for Infrastructure and Logistics, and Jasmeet Singh Marwah, RailTel’s company secretary. Following the signing, both entities expressed interest in exploring further collaborative ventures, with a particular focus on areas such as renewable energy and smart metering.
REC Ltd., which achieved Maharatna status in September 2022, has been diversifying its scope beyond the power sector. The company recently entered into a partnership with Punjab National Bank to co-finance up to ₹55,000 crore in power and infrastructure projects. Furthermore, REC has committed to funding various thermal and green hydrogen projects in Odisha, with a total investment of ₹40,358 crore.
The financial commitment from REC to RailTel comes at a time of strong financial performance for the company. In the September quarter, REC reported a remarkable 38.71% year-on-year increase in its consolidated net profit, reaching ₹3,789.90 crore. The revenue from operations also witnessed a substantial rise, increasing by 17.39% during the same quarter to ₹11,688.24 crore. These figures underline REC’s financial stability and capacity to support vital infrastructure projects, such as those in the railway and information technology sectors.
The collaboration between REC and RailTel is poised to play a pivotal role in advancing India’s railway communication and IT infrastructure. It reflects the nation’s commitment to enhancing its transportation and technology networks, thereby contributing to economic growth and modernization.
