Indian information technology firms are sensing a Rs 1,000-2,000 crore business opportunity even as they evinced keen interest in participating in the multi-crore technology upgrade plans of the Indian Railways announced on Tuesday.

The railways are planning to invest Rs 250,000 crore over the next five years to expand its network, modernise and upgrade the technology, all in a bid to provide world-class facilities to passengers.

Consequently, investment in IT projects will be increased to several thousand crore rupees over the next five years, according to Railway Minister Lalu Prasad. A major part of this investment will be in the nature of public-private partnerships and domestic IT firms stand to benefit in a major way. Taking a cue, the IT index rose 1.8 per cent on the Bombay Stock Exchange.

IT firms like Satyam Computer Services [Get Quote], for instance, see a Rs 1,000-2,000 crore opportunity in the technology upgrade of the Railways. Other IT firms like Infosys [Get Quote], Tata Consultancy Services [Get Quote] and Wipro [Get Quote] too stand to bag sizeable deals.

Moreover, security equipment manufacturers like Zicom (up 5 per cent on the BSE) and Bartronics (up 8.5 per cent on the BSE) could get orders for surveillance equipment installation and smart cards and radio frequency identification tag projects, respectively. Zicom has already installed closed circuit TVs [Get Quote] at select railway stations on Western Railway.

Attention is being focused on IT applications in three core areas � freight service management, passenger service management and general management. Modern technologies like geographical information systems, global positioning systems and RFID will be applied progressively.

Ranjan Tayal, head (India), Satyam, explained that the Indian government is looking at IT as a strategic tool. "As a company, we are doing request for proposals with the Indian Railways in the areas of asset management, usage of RFID and use of kiosks and portals. It is very early to put numbers to the contract size. But assuming these deals will be for a period of 5-10 years, the opportunity could be in the size of Rs 1,000-2,000 crore," he added.

S Venkatramani, VP and head (India operations), TCS, said: "The railways have been on a transformational path and this budget continues the momentum. The thrust on PPP schemes for upgrading workshops and others will see IT firms in a much more broader role."

Wipro Infotech (the Middle East, India and Asia-Pacific IT business of Wipro Technologies) too had identified the Indian Railways as a key strategic account for the last several years.

"The Indian Railways, which first started focusing on IT for internal purposes, has started leveraging this for passenger satisfaction. About 18 months ago, we first started engaging with the Railways, and have already bagged large projects," said K S Viswanathan, chief executive, India Geography, Wipro Infotech.

Sudhir Rao, MD & CEO, Bartronics, concurred: "It's been a favourable budget from an IT perspective. Most importantly, the announcement will give a tremendous boost to some of the IT projects that have been on the back burner due to bureaucratic hurdles. We have been working with the Indian Railways in the smart cards area, but today's announcement clearly hints at a much broader implementation of this technology. We clearly see a Rs 100-crore opportunity in the first year itself. RFID-related projects will also see a push � especially the announcement of setting up eight depots. We have done an RFID implementation for one of the Container Corporation of India [Get Quote] depots."