In a significant move to reduce Railways energy bill, Indian Railways Thursday started buying 300 MW power from Ratnagiri Gas Power, a government owned gas based power plant in Maharashtra for its traction power needs in Maharashtra region.

Indian Railways said, "This electric power is almost Rs 4 a unit cheaper in comparison to the present tariff being paid by Railways in Maharashtra. The procurement of power from Ratnagiri Gas Power will give a saving of about Rs 6 billion annually for Central and Western Railways both Railway Zones with headquarter in Mumbai."

Railways have been allocated 500 MW power from Ratnagiri plant. The procurement of remaining 200 MW power will also be done soon which will be utilized for traction power needs in other states.

The complete procurement of 500 MW in the coming days is expected to give a saving of about Rs 10 billion annually. In this way, the financial saving will continue to increase in the coming days. 

"This kind of initiative of saving energy cost by procuring power through open access as distribution licensee is in line with the Railway Minister Suresh Prabhu's mission to improve the Railway's financial Health using innovative methods," Indian Railways added.

This is for the first time that railways are drawing power under open access as distribution licensees in any state.