Why Union Cabinet approved bifurcating one of the railways’ biggest revenue-generating zones

Sub: Eco

Sec: Infra

Context:

Recently, the Union Cabinet approved the creation of the South Coast Railway (SCoR) zone. Prime Minister Narendra Modi laid the foundation stone of the South Coast Railway headquarters in Visakhapatnam, Andhra Pradesh, in early January.

South Coast Railway zone:

The SCoR zone is the 18th zone of the Indian Railways and was established to cater to the growing passenger and freight demands in the region. It is created under the Andhra Pradesh Reorganisation Act of 2014, which led to the formation of Telangana state.
The new zone will be carved out from the East Coast Railway (ECoR) and South Central Railway (SCR).
The South Coast Railway Zone will cover a significant portion of Andhra Pradesh, parts of Telangana, and Tamil Nadu.

Reasons for the Creation of South Coast Railway Zone:

Item 8 of Schedule 13 (Infrastructure) of the Andhra Pradesh Reorganisation Act mandated the examination of creating a new railway zone.
The new zone aims to improve operational efficiency and provide focused services to meet growing passenger and freight demands.
The zone will support the industrial and agricultural growth in the region, enhance logistics for key ports like Visakhapatnam and Krishnapatnam, and boost tourism to cultural landmarks such as Tirupati.

Division of Waltair Railway Division:

The Waltair Railway Division, one of the largest revenue-generating divisions of Indian Railways, was previously under the East Coast Railway. With the creation of SCoR, the division has been divided into two parts:
Visakhapatnam Railway Division: The first part of the Waltair division, which will be included under SCoR and renamed as Visakhapatnam Railway Division.
Rayagada Railway Division: The second part of the Waltair division will remain under ECoR and will be converted into a new division with headquarters at Rayagada, Odisha.

Why is the Waltair division significant?

The Waltair division is an important source of revenue for the railways, primarily because its freight traffic is linked to the mining and steel industries of Odisha and Chhattisgarh.
In FY 2023-24, the East Coast Railway loaded 250 million tons of freight, surpassing all records in Indian Railways, with Waltair contributed significantly to this figure, particularly in freight from mining areas.