Indian Railways : Opportunities for

Investment

Mukul Saran Mathur

Executive Director /PPP

September 2016

Source : www.mapsofindia.com

IR – Network and Resources

• 66,030 Route Km

• Predominantly Broad Gauge (1676mm) – 58,825km (86%)

• 33% of total route km Electrified (22,224 Km)

• 7,112 Stations

• 10,773 Locomotives

• 2,54,006 wagons & 68,558 coaching stock including EMU’s & DEMUs

• 3 Passenger Car Manufacturing Units,2 Locomotive Manufacturing Units, 2 Wheel and Axle Plant and 1 Locomotive Rebuilding Plant

• 1.33 Million Employees

IR – Role & Characteristic

• Lifeline of the nation – IR carries one third of the total

freight traffic (tonne kilometers) of the country

It carries…

• 66% of all Coal

• 87% of all Fertilizer

• 80% of all Iron Ore

• 40% of all Cement

• 17% of all POL

• 22% of all Food grain

• Employs 1.33 million directly

• Complexity of Operations

• Intense Freight-Passenger interaction on common infrastructure

• High Density Corridor (Golden Quadrilateral + Diagonals) 16% of route Km

carries 52% of passenger & 58 % of freight

• Electrified Routes (33%) carries 65% GTKM

Transportation Statistics (2014-15)

– Freight Operations

• 1095 million Ton

• 681 billion NTKM

• Average lead -622 km

• Earnings of Rs 103,100 crore ( US $15.8 billion )

– Passenger Operations

• Daily passenger 22.5 million

• 8224 million Originating Passengers

– 54% suburban, 46% non suburban

• 1147 billion Passenger KM

– 14% suburban, 86% non suburban

• 13,000 passenger trains per day

• Passenger Revenue of Rs 42,189 crore ( US $6.5 billion )

– Gross Revenue Rs 1,56,710 crore ( US $ 24 billion )

– Working Expenses Rs 1,42,995 crore ( US $ 22 billion )

INVESTMENT PLAN 2015-2020

6

Item 5 years

USD bn

Network Decongestion (including Dedicated Freight

Corridor + electrification, Doubling + electrification &

traffic facilities)

33.22

Network Expansion (including electrification) 32.17

National Projects (North Eastern & Kashmir

connectivity projects) 6.50

Safety (Track renewal, bridge works, Road Over

Bridge, Road Under Bridge and Signal &Telecom) 21.17

Information Technology / Research 0.83

Rolling Stock (Locomotives, coaches, wagons –

production & maintenance) 17.00

Passenger Amenities 2.08

High Speed Rail & Elevated corridor 10.83

Station redevelopment + logistic parks 16.67

Others 2.20

TOTAL 142.67

Revenue generating projects Dedicated freight corridor Large scale doubling Mine and port connectivity

Terminals (passenger & freight) & logistic parks Thrust on customer requirements & passenger amenities Projects for enhancing safety

Track renewal – mechanized laying, inspection & maintenance Signalling – Train Protection Warning System/Train Collision Avoidance

System Elimination of unmanned level crossings by constructing road under/over bridges

Through put enhancement works Higher HP locos, higher axle loads, high capacity wagons,

light weight coaches

7

Investment Focus

Areas for Private Investment

• Building rail connectivity's/ Capacity augmentation

• Rolling Stock manufacturing

• Station Redevelopment/ Modernisation

• Wagon Investment Schemes

• Private Freight terminals

• Private Container Operators

• Solar Power Generation

New partnerships

• State Governments – cooperative federalism

– Projects to be executed by raising debt or through PPP

– Social projects also to be implemented

• Customers/corporates

– Coal India, NMDC, SAIL, NTPC

• Private entities

– Joint ventures

• Financial

– Life Insurance Corporation of India for financing Railway projects,

credit facility of USD 25 bn available over 5 years

FDI in Rail Sector

FDI is permitted in construction, operation and maintenance

of the following:

• Suburban corridor projects through PPP.

• High speed train projects

• Dedicated freight lines.

• Rolling stock including train sets and locomotives/coaches

manufacturing and maintenance facilities.

• Railway Electrification.

• Signaling systems.

• Freight terminals.

• Passenger terminals.

• Infrastructure in industrial park pertaining to railway line/sidings including

electrified railway lines and connectivity to main railway line.

• MRTS.

Dedicated Freight Corridor

•DFC (Eastern & Western Corridors) being

executed at a cost of USD 12.6 bn;

expected to be completed by 2019

•Will add 3300 kms of freight line to IR network

•Financial partners - World Bank and JICA

•Planned implementation of East Coast (Rs

56,749 cr, US $ 8.7 billion ) and East West

Rs 1,10,529 cr , US $ 17 billion ) DFC

Western corridor – JNPT to Dadri (1504 kms)

Eastern corridor – Ludhiana to Dankuni (1839 kms)

Station redevelopment

• IRSDC a specialized organization created: •Habibganj station financial bids finalized and Development

Agreement signed in July 2016.

•Surat Station –Integral multi modal hub to be developed. 90

years lease fro commercial development has been approved

•Anand Vihar, Bijwasan , Chandigarh, Shivaji Nagar ,

Gandhinagar approvals are in process

•Developing over 400 stations to international standards with

modern facilities & passenger amenities on lines of PPP

•Land and space-rights of station buildings to be leveraged

•Multiple options – PPP, foreign railways, multilateral funding, etc

•Over USD 15bn investment expected in next four years

Private Participation in Container Sector

• Private Operators permitted in 2006

• Container Growth around 12.8% since opening

• 16 operators apart from CONCOR (company owned by

Indian Railways)

• New Operators have procured 128 rakes and

developed 14 terminals with investment of approx USD

810 mn

• CONCOR owns 249 rakes and 63 terminals and have

invested approx US $ 1 billion since opening of sector.

Loco Factories

• Electric Locomotive Factory/ Madhepura ( Bihar)

– A JV between IR and Alstom

– Supply of 800 Locomotives (12000 HP) for 11 years

– Maintenance of 250 Locos for 13 years

– MOR to provide land

• A Diesel Loco Manufacturing Factory at Marhowra

– A JV between IR and GE

– Supply of 1000 Locos in 11 years

– Maintenance of locos for 13 years

• Dankuni Electric Locomotive factory

– 200 (9000 HP) Electric Locomotives.

– 40 Locos import and 160 manufacturing in India

– Selection of bidder in process.

Coach Manufacturing Units

• Rail Coach Factory at Kanchrapara (West Bengal)

– Estimated Cost Rs 860 crores ( US $ 13.2 million)

– JV for manufacture of 500 EMU/MEMU coaches per annum.

– Selection of JV partner is in process.

– 3 EMUs would be imported and the balance would be made in

India.

• Electric Multiple Unit Train sets

– Procurement of 315 cars Electric Multiple Unit Train sets.

– Out of 315 Cars 40 could be imported and balance 275 to be

Made in India.

– Fresh RFQ is in process.

• Rail Coach Factory, Palakkad, Kerela

– Manufacture of 400 coaches per annum.

– JV to be finalised with 26% from MOR

– Project cost Rs. 550 crore (US $ 8.4 million )

– RFQ will be floated shortly

Private Freight Terminals

Terminals (green field or brown field) to come up only on private

land.

Can provide value added logistics related services and charge for

the same

Free to charge for services provided by them.

Recent liberalisation

So far, 73 proposals have been received.

27 PFT have been commissioned and functioning.

PFT at 42 locations and are various stages of commissioning.

Under PFT scheme, the anticipated private investment is

approximate Rs. 1300 crores.

Wagon Investment and Leasing schemes

• 12 rakes procured by GATX for lease to container train operators.

Investment is approx Rs 126 crore.

• Approval has been given for procurement of 3 rakes of BRNA

wagons to M/s. JSPL under SFTO scheme for movement of long

welded rails. Expected investment is approx. Rs 36 crore.

• Total expected investment under LWIS approx Rs. 1345 crores.

• Approval for 12 rakes has been given under AFTO scheme. Out of

which, 7 rakes have been inducted . Investment approx. Rs. 93

crores.

• An MOU for initial investment of Rs 500 crores by M/s Coal India

Ltd. for procurement of 2000 high capacity wagons (33 rakes). Total

anticipated investment by M/s Coal India Ltd. is Rs 5000 crores.

High Speed Train project

• Mumbai to Ahmedabad - 1st corridor to be implemented;

speed @ 350kmph

• Cost: USD 15.4 bn

• Financial & technical partner – Government of Japan

• Construction period 2017-2023

• New SPV formed in February 2016

• Semi – high speed corridors: Delhi- Agra (implemented),

studies: Delhi- Chandigarh (France), Chennai-Bangalore–

Mysore (China), Delhi-Mumbai (Korea), Delhi-Kanpur,

Nagpur-Bilaspur, Mumbai-Goa, Mumbai-Ahmedabad,

Chennai-Hyderabad, Nagpur-Secunderabad

Rail Connectivity/Capacity Augmentation

• Participative Policy 2012 with five different model

1. Non Governmental Private line model

2. JV model

3. Capacity Augmentation through Customer funding

4. BOT through competitive bidding

5. Capacity Augmentation through – Annuity model

Status of Model documents

Model Document Status

NGR Prepared and Approved

Joint Venture Prepared and Approved

Customer Funded Prepared and Approved

BOT Prepared and Approved

EPC Prepared and Approved

Financial Consultant Prepared /Tenders invited

MSS for Urban system Prepared and Approved

Annuity Prepared and under

Approval

For harnessing Solar Energy, 50 MW

through PPP tendering process has started & details available on Indian Railway website :http://www.indianrailways.gov.in/railwayboard/uploads/directorate/ele_engg/pdf/Final%20Model%20%20RFQ%20.pdf . Railways will soon float tenders for additional 100 MW rooftop & land based solar plants.

Solar Energy Initiatives

Thanks

ms.mathur@gmail.com