Adequate financing: The key to unlocking the potential of global rail industry

The global railway industry was expected to reach around € 213 bn by 2024 however,with the outbreak of the pandemic, the rate has been significantly lower than what was predicted.Amid the new normal, a drastic change in mobility behaviour is already happening with an increasing number of people working from home and many opting to commute via private vehicles.

As a result, the financial situation of many rail operators is in a problematic state due to decrease in ticket revenue.

While in most countries, the losses incurred are being compensated by the government, there is a need of active participation from private players as well and more investors for rail infrastructure. Moreover, with climate protection becoming a thing of utmost concern in today's time, boosting the rail sector becomes all the more important. While companies like Bombardier Transportation and CRRC are some of the world's top manufacturers of railway technologies, the emerging ones are also disrupting the global railway industry on a grand scale.

In USA, the top second railway market globally, we have companies like RailPod that are transforming the entire railway landscape significantly. RailPod is a Boston-based start-up that seeks to make rail infrastructure safer, more cost-effective and efficient through automated vehicles. Integrated with sensor technology and cloud-based data processing service, these vehicles are used to provide heaps of real-time information –from the condition of tracks and other assets to detecting any broken rail, to the rail operators. The company said that replacing human workforce with vehicles significantly reduces the risk, time and cost of accessing remote areas.

Other than that, among the countless tech start-ups that are contributing to the overall global rail industry is Munich-based Konux. It was founded in 2014 to enable digitization of the rail industry. The company combines machine learning and IoT to deliver software solutions for operation, monitoring and maintenance of railway infrastructure at a reduced cost. Attributing to the disruptive technology it has developed, Konuxhas been nominated among the 30 most promising "Technology Pioneers" by the World Economic Forum in 2017. Soon after its establishment, the company raised over $2m seed round from Silicon Valley business angels followed by another round of series B funding in the successive years. Among its list of investors include Boundary Holding, an AI investment firm, founded by Rajat Khare.

Even though the number of emerging companies for rail technology is substantial, what is more important is investments and funding to push these companies to new heights and back their goals. Moreover, R&D in this sector should be incentivised amongst research institutes and organisations working in the same field, to unlock their maximum potential.