Upload
ibefindia
View
217
Download
0
Embed Size (px)
Citation preview
7/29/2019 Railways - August 2013
1/49
7/29/2019 Railways - August 2013
2/49
7/29/2019 Railways - August 2013
3/49
Worlds fourth-largestrail network
As of FY12, Indian Railways had 12,335 passenger trains carrying over 30 millionpassengers daily. On the commercial front, 975.2 million tonnes of freight was transportedvia trains in FY12
Growing public-privatepartnership
Private sector companies are being encouraged to participate in rail projects, which werelargely in the public domain. In December 2012, the Cabinet approved participativemodels for rail-connectivity and capacity augmented projects, which allows privateownership of some railway lines
Growth initiatives
Indian Railways is undertaking the construction of dedicated freight lines along thecountrys Eastern and Western corridors; this would increase productivity and reducetransportation cost. A special purpose vehicle has been set up for the same. Moreover, inMarch 2013, the Cabinet approved the Automobile Freight Train Operator Scheme toencourage automobile transportation through railways
Modernisation/technology upgradation
Indian Railways has launched mobile ticketing services, which enable customers toreceive tickets on short message service (SMS). Additionally, it plans to upgrade itscurrent systems to support bookings of 7,200 tickets per minute compared with the currentcapacity of 2,000 tickets
7/29/2019 Railways - August 2013
4/49
The engineering sector is delicensed;100 per cent FDI is allowed in thesector
Due to policy support, there wascumulative FDI of USD14.0 billion intothe sector over April 2000 February2012, making up 8.6 per cent of totalFDI into the country in that period
Growing demand
Source: Railway Budget 2013, Planning Commission, Aranca ResearchNotes: 2017F Forecast figure for 2017, MMT is Million Metric Tonnes
FDI is Foreign Direct Investment, FY is Indian Financial Year (April to March)
Growing demand
Increasing urbanisation coupledwith rising incomes (both urbanand rural) is driving growth in thepassenger segment
Growing industrialisation acrosscountry has increased freight
traffic over the last decade
Attractive opportunities
Freight traffic is set to increasemanifold, thanks to investmentsand private sector participation
Metro rail projects are beingenvisaged across many cities overthe next ten years
Policy support
Government has increased thescope of PPP, to beyond providing
maintenance and other suchsupporting roles
Government is providing new lines,increasing the rolling stock to buildup capacity
Higher investments
The government has beeninvesting heavily to upgrade
railway infrastructure Sector has been witnessing
increasing level of FDIparticipation over FY0812
2012
FreightTraffic
975 MMT
2017F
FreightTraffic
1,405 MMT
AdvantageIndia
7/29/2019 Railways - August 2013
5/49
Source: Ministry of Railways, Aranca Research
Indian Railways (IR) is
A departmental undertaking of Government of India (GOI), which owns and operates most of India's rail transport
Overseen by the Ministry of Railways
It has a total route network of about 64,600 kilometres (of which 29.98 per cent is double/multi-track) spread across 7,146stations.
Operates more than 19,000 trains every day
It has 239,321 wagons, 61,899 coaches, and 9,549 locomotives
IRs total assets at the end of FY12 amounted to USD61.7 billion.
Railways
Passenger
Freight
Around 975.2 million tonnes of freight was transported via
trains in FY12
These include a huge variety of goods like mineral ores, iron
and steel, fertilizers, petrochemicals, and agricultural produce
About 12,335 passenger trains were in operation in FY12
Over 30 million passengers travel by trains on a daily basis in
India
7/29/2019 Railways - August 2013
6/49
Source: Ministry of Railways, Aranca Research
India has the world's fourth largest rail network, which is also the second largest under single management
Net revenues(INR billion)
Passenger traffic(billion)
Freight traffic(million metric tonnes)
Number of stations
Running track(kilometres) 59,315
5,976
73.2
1.3
0.5
89,801
7,146
975.2
8.2
67.8
FY1951
FY12
7/29/2019 Railways - August 2013
7/49
Gross revenues trends over the years(USD billion)
Source: Ministry of Railways, Aranca Research* In Indian Rupee Terms
Notes: CAGR Compound Annual Growth Rate, E Estimates,B Budgeted, FY Indian Financial Year (AprilMarch)
Indian Railways revenues grew the fastest in three years toUSD21.7 billion in FY12, a 10.1 per cent y/y growth. TheRailway Ministry estimates revenues to grow 20.7 per cent*in 2013
Overall, revenues are expected to expand at a CAGR of12.1 per cent* during FY0714
Revenue growth has, in fact, been strong over theyears; during FY0712, revenues expanded at aCAGR of 9.9 per cent*
For FY14, the government has estimated revenuesto expand at a CAGR of 17.5 per cent* over FY12
14.3
18.3 17.8 18.820.8
21.7 23.1
26.5
FY07 FY08 FY09 FY10 FY11 FY12 FY13E FY14B
CAGR: 12.1%
7/29/2019 Railways - August 2013
8/49
Passenger Earnings (in USD billion)
Source: Ministry of Railways, Aranca Research* In Indian Rupee Terms
Notes: CAGR Compound Annual Growth Rate, FY Indian Financial Year (AprilMarch)
In the last six years, revenues from the passenger segment has expanded at a CAGR of 10.5 per cent*. The FY14 Budgetprovides for a CAGR of 22.2 per cent* in revenues over FY12
Freight segments revenues have been on the rise; in FY12, revenues were up 11.6 per cent* over last year, the highestgrowth rate in the last four years
Earnings from Freight (in USD billion)
3.8
4.9 4.8 4.9
5.6 5.9
FY07 FY08 FY09 FY10 FY11 FY12
9.1
11.5 11.312.0
13.3 14.1
FY07 FY08 FY09 FY10 FY11 FY12
7/29/2019 Railways - August 2013
9/49
Revenue breakup, by segment (FY12)
Source: Ministry of Railways, Aranca Research
Freight remains the major revenue earning segment for therailways, accounting for 70.6 per cent of total revenues inFY12
Profits from this segment are used to cross-subsidise thepassenger segment
70.6%
29.4%
Freight
Passenger
7/29/2019 Railways - August 2013
10/49
Trends in passenger volumes (in millions)
Source: Ministry of Railways, Planning Commission, Aranca ResearchNotes: CAGR Compound Annual Growth Rate, F ForecastFY Indian Financial Year (AprilMarch)
Train travel remains the preferred means of communicationfor a large majority of Indians, a fact easily reflected byvolume and growth of passengers over the years
Passenger volumes are expected to expand at a CAGR of6.6 per cent to 11.7 million by FY17 from 6.2 million in FY07
The number of passengers travelling by trainreached 8.2 billion in FY12, up 7.2 per cent over theprevious fiscal year
Annual passenger volumes expanded at a CAGR of5.8 per cent during FY0712. According to the 12thFive-Year Plan, passenger volumes are expected toincrease at a CAGR of 7.4 per cent during FY1217
6.2 6.5 6.97.2
7.78.2 8.9
9.510.2 10.9
11.7
FY07
FY08
FY09
FY10
FY11
FY12
FY13F
FY14F
FY15F
FY16F
FY17F
CAGR: 6.6%
7/29/2019 Railways - August 2013
11/49
Number of Suburban passengers originating(in millions)
Source: Ministry of Railways, Planning Commission, Aranca ResearchNotes: CAGR Compound Annual Growth Rate, F Forecast
FY Indian Financial Year (AprilMarch)
Suburban passenger volumes have witnessed a constant increase in growth rates. The segment posted a growth of 7.8per cent in FY12 compared with 4.8 per cent in FY11 and 1.9 per cent in FY10
Meanwhile, non-suburban passenger volumes have grown consistently, averaging 7.3 per cent over the last three years
The 12th Five-Year Plan forecasts suburban and non-suburban passenger volumes to increase to 5.9 billion and 5.8 billion,respectively, by FY17
Number of non-suburban passengers originating(in millions)
3,802 3,8764,061 4,377
4,5454,855
5,186
5,540 5,917
FY09 FY10 FY11 FY12 FY13F FY14F FY15F FY16F FY17F
3,118 3,3703,590 3,847
4,323 4,651 5,0055,385
5,793
FY09 FY10 FY11 FY12 FY13F FY14F FY15F FY16F FY17F
7/29/2019 Railways - August 2013
12/49
745804
837 892926 975 1,038
1,1191,206 1,300
1,405
FY07
FY08
FY09
FY10
FY11
FY12
FY13F
FY14F
FY15F
FY16F
FY17F
Freight traffic (million tonnes)
Source: Ministry of Railways, Planning Commission,Aranca Research
Notes: CAGR Compound Annual Growth Rate, F ForecastFY Indian Financial Year (AprilMarch)
As of FY12, railways accounted for 31 per cent of Indiasfreight traffic
Freight traffic is expected to expand at a CAGR of 6.6 percent to 1.4 billion tonnes by FY17 from 745 million tonnes inFY07
Freight traffic reached 975 million tonnes in FY12, a5.3 per cent rise over the previous fiscal year
The figure has grown at a CAGR of 5.5 per cent overFY0712 and is expected to grow at a CAGR of 7.6per cent during FY1217
CAGR: 6.6%
7/29/2019 Railways - August 2013
13/49
Source: Relevant company annual reports and websites, Aranca ResearchNotes: PSU Public Sector Undertaking, DFC Dedicated Freight Corridor, SPV Special Purpose Vehicle
Company Business description
Navratna PSU under the Indian Ministry of Railways
It is a carrier, terminal operator and warehouse operator
SPV set up under the Ministry of Railways
Undertakes planning and development, mobilisation of financial resources and construction,
maintenance and operation of the Dedicated Freight Corridor (DFC)
SPV created by the Government of India
It builds engineering works required by Indian Railways
Mini Ratna PSU with one of the largest neutral telecom infrastructure providers in the country
It strives to modernise train control operation and safety system of Indian Railways
7/29/2019 Railways - August 2013
14/49
Source: Relevant company annual reports and websites, Aranca ResearchNotes: NTPC National Thermal Power Corporation, km Kilometres; * - Exchange rate as of 2008
Rail projects in India have typically been in the public sector domain
Private players were involved in allied activities such as track laying and maintenance, maintenance of coaches andwagons, construction of bridges, stations, signalling, and telecommunications works
Company Project details
Construction of 8 metro stations in Bengaluru
Construction of two elevated Metro stations at MG Road and Trinity Circle in Reach-1(inaugurated in September, 2011)
Gauge conversion of VilluPuram-Mayiladuthurai section
Installation and commissioning of signaling and telecommunications facilities at NTPC
Bagged an order of US$ 535.8* million in 2008 in consortium with Scomi Engineering to executethe countrys first monorail system in Mumbai
Executing an order for development of railway siding; this involves engineering, procurement, andconstruction work for a dedicated railway line of 38 km
7/29/2019 Railways - August 2013
15/49
Source: Ministry of Railways, Aranca ResearchNotes: PPP Public Private Partnership
In December 2012, the Cabinet approved the new policy of participative models for rail-connectivity and capacity augmentedprojects. The policy addressed private investors concerns, which included ownership of the railway line and repayment ofinvestment
This has led to renewed investor interest in the rail sector. Since then, railway authorities have received various proposals fromprivate investors and have already given approval (can now acquire land and begin construction) for four port connectivityprojects, which would ease congestion
This is in line with the governments 12th Five-Year Plan. It intends to raise investments worth USD18.4 billion through PPProute
Areas proposed for private investment during this period are likely to include elevated rail corridor in Mumbai, some parts ofdedicated freight corridor, freight terminals, redevelopment of stations, and power generation/energy saving projects
Other measures taken/proposed include:
Setting up of a modern signalling equipment facility at Chandigarh through the PPP route
Construction of new lines Bhupdeopur-Raigarh (Mand Colliery), Gevra Road-Pendara Road and doubling ofPalanpur-Samakhiali section through the PPP route
The Railways Ministry has already proposed for the development of 50 world-class stations in the PPP mode to improve andenhance rail infrastructure in the country
7/29/2019 Railways - August 2013
16/49
Demand for urbantransport
There is a rapid increase in demand for urban mass transportation systems in the country Several metro rail projects are in progress to improve connectivity within cities; the Delhi
Metro has emerged as an internationally acclaimed venture
M-ticketing and
E-ticketing
Indian Railways (IR) launched mobile ticketing services in August 2011. Users can nowuse mobiles to directly buy tickets, which would be delivered to them through a non-
transferable SMS The government plans to upgrade the e-ticketing system by year-end to support 7,200tickets per minute from 2,000 currently
International investment
IR has attracted increasing investments from overseas through strategic alliances withvarious countries over the last few years
Subsidiaries of foreign companies are being set up to cater to the huge demand offered byIR
Source: Ministry of Railways; Aranca Research
High speed rails IR is planning to build seven high-speed rail corridors to provide faster rail connectivity
across the country The trains will be capable of running at speeds up to 300 kilometre per hour
7/29/2019 Railways - August 2013
17/49
Governmentfocus on
infrastructurebuilding
Growth of freighttraffic due to
industrialisation
Rising demandfor urban masstransportation
Increasingprivate sectorparticipation
Improved safetyand
modernisation
7/29/2019 Railways - August 2013
18/49
Source: Ministry of Railways; Aranca Research
Passenger traffic went up by more than 15 times over FY19512012
Increasing incomes, both urban and rural, has made rail travel affordable to a large number of Indians
Urban population in India increased from 17.3 per cent of the total population in 1951 to 31.2 per cent in 2011; this has led toincrease in traffic between urban and rural areas in the country
Improvement of urban-rural connectivity by rail has been another major contributor to passenger growth
7/29/2019 Railways - August 2013
19/49
Passenger traffic growth index(195051 taken as the base year)
Indias per capita income at current prices (USD)
Source: Ministry of Railways, IMF, Aranca ResearchFY Indian Financial Year (AprilMarch)
Notes: F Forecast
100
279
394
614
728
1,084
1,189
1,288
1,403
1,505
1950-51
1980-81
1990-91
2000-01
2003-04
2007-08
2008-09
2009-10
2010-11
2011-12
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
0
500
1,000
1,500
2,000
2,500
2000
2002
2004
2006
2008
2010
2012
2014F
2016F
2018F
Per Capita Income, USD, LHS Annual Growth Rate
7/29/2019 Railways - August 2013
20/49
Train Description
Duronto Express Non-stop point-to-point rail services
Connects metros and major state capitals of India
Rajdhani Express Air-conditioned trains linking major cities to New Delhi
One of the fastest trains in India with very few station stops
Shatabdi, Jan
Shatabdi Express Intercity seater-type trains for travel during day
Garib Rath Fully air-conditioned trains, designed for those who cannot afford to travel in
expensive trains such as Rajdhani and Shatabdi
Superfast Mail/ Express Trains that have an average speed greater than 55 kilometers per hour
Have an additional super-fast surcharge
Mail/ Express More stops than their super-fast counterparts
Stops only at relatively important intermediate stations
Passenger, FastPassenger
Slow trains that stop at most stations along the route
Low-cost alternative
Suburban trains Operate in urban areas
Usually stops at all stations and have unreserved seating accommodation
7/29/2019 Railways - August 2013
21/49
Freight traffic went up by more than 15 times over FY19512012
This traffic is due to the increasing levels of industrialisation across the country as is evident from the growth in the Index ofIndustrial Production (IIP) over the last decade
Increasing freight traffic is generated from these industries year-on-year which are spread out across the country
Source: Ministry of Railways; Aranca Research
7/29/2019 Railways - August 2013
22/49
Passenger traffic growth index(195051 taken as the base year)
Growth (YoY) in the Index of Industrial Production(IIP)
Source: Ministry of Railways, Ministry of Statistics andProgramme Implementation, Aranca Research
100
359
550
715
871
1,185
1,251
1,363
1,420
1,516
1950-51
1980-81
1990-91
2000-01
2003-04
2007-08
2008-09
2009-10
2010-11
2011-12
-8%
-4%
0%
4%
8%
12%
16%
20%
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
7/29/2019 Railways - August 2013
23/49
Source: Ministry of Railways, Aranca ResearchNotes: DFC Dedicated Freight Corridor, DFCCIL Dedicated Freight
Corridor Corporation of India Limited, JV Joint Venture
DFCCIL, a special purpose vehicle, was set up for implementing the DFC project under the administrativecontrol of the Ministry of Railways
The plan is to construct dedicated freight lines along the Eastern and Western parts of India
Total length: 3,300 kilometres; total estimated cost: USD16.7 billion; project scheduled for completion inFY17
Punjab - > Haryana - > UttarPradesh - > Bihar - > WestBengal
Uttar Pradesh - > Delhi - >Haryana - > Rajasthan - >Gujarat - > Maharashtra
Western Corridor Eastern Corridor
7/29/2019 Railways - August 2013
24/49
Source: Ministry of Railways, Aranca Research
Objectives
Increase railfreight share
throughcustomised
logisticservices Segregate
freight andpassenger
lines for
focusedapproach
Createadditional
freightcapacity to
meet demandIntroduce
time-tabledfreight
services toensure better
services
Adopt high-end
technologyfor real-timedata analysis
Reduce unitcost of
transportationand increaseproductivity
7/29/2019 Railways - August 2013
25/49
7691
64
91
2016-17 2017-22EDFC WDFC
Freight traffic projections on DFC (in MMT)
Source: KPMGNotes: CAGR Compound Annual Growth Rate,DFC Dedicated
Freight Corridor, EDFC Eastern Dedicated Freight Corridor,WDFC Western Dedicated Freight Corridor,
MMT Million Metric Tonnes
Freight traffic via DFC would increase at a CAGR of 5.4 percent to 182 MMT in 202122 from 140 MMT in 201617
Container traffic is likely to be an important constituent ofthe WDFC and is expected to grow to 5.3 million TEUs in202122 from 3.8 million TEUs in 201617
CAGR: 5.4%
7/29/2019 Railways - August 2013
26/49
DFC Model Mix (2016-17)
Source: KPMG
In the DFC scenario, added capacity and efficiency of the new infrastructure would result in an increased share of railwaynetwork to 87 per cent in 202122 from 84 per cent projected in 201617
DFC Model Mix (2017-22)
16%
84%
Road Share
Rail Share
13%
87%
Road Share
Rail Share
7/29/2019 Railways - August 2013
27/49
12th Five-Year Plan
An outlay of USD95.6 billion has been approved by the Planning Commission for railways.The railway ministry had proposed an outlay of USD100.9 billion
Details of the outlay are as under:(i) Gross Budgetary Support USD35.8 billion(ii) Internal Generation USD19.3 billion(iii) Extra Budgetary Resources USD40.5 billion
Participative modelsfor rail connectivity and
capacity augmentedprojects
This policy supersedes the R3i and R2CI policies notified earlier The policy provides for supplementing governments investment in rail infrastructure
projects by private capital flows The policy contains the following models: non-government railway; joint venture with
equity participation by railways; capacity augmentation through funding by customers;capacity augmentation annuity model applicability; and BOT
Source: Ministry of Railways, Aranca ResearchNotes: R3i Railways' Infrastructure for Industry Initiative, R2CI is Railways Policy for
Connectivity to Coal and Iron Ore Mines, BOT Build Operate and Transfer
7/29/2019 Railways - August 2013
28/49
Automobile FreightTrain Operator Scheme
2013
To increase its share in automobiles transportation, Indian Railways notified a newscheme in March 2013 Automobile Freight Train Operator (AFTO). The schemeprovides logistic service providers and road transporters an opportunity to introduce theirown special wagons to run on the railways' network and avail of freight rebates in return.The requirements for the scheme are laid down as under:
Companies with minimum net worth of USD3.7 million or annual turnover of USD5.5million are eligible to participate in this scheme
A registration fee of USD0.9 million is required to be paid to the railway ministry on
approval as AFTOs Companies are required to introduce at least three rakes and make them operational
within six months from the commissioning of the first rake The freight rates would be notified from time to time for specific stock to be moved by
AFTOs The freight rebate would be incorporated in the freight rates specified for transportations of
automobiles Special wagons to be designed and developed by Research, Design and Standards
Organisation (RDSO) for induction by third-party logistics providers and road transporters
Each rake is to have a capacity to carry 318 small cars. The rake should be tested byRDSO
Source: Ministry of Railways, Aranca Research
7/29/2019 Railways - August 2013
29/49
R3i policy
Aimed at attracting private sector participation in rail connectivity projects in order to createadditional rail transport capacity
The policy allows for four models (a) Cost Sharing-Freight Rebate, (b) Full Contribution-Apportioned Earnings, (c) Special Purpose Vehicle (SPV), and (d) Private Line
R2CI
New policy initiated to improve rail connectivity to coal and iron ore mines It offers the developer involved in the construction of the line to levy a surcharge on the
freight over a period of 1025 years The policy has two models Capital Cost Model, and the SPV Model. While the Capital
Cost Model is relevant when there are two players, the SPV Model is intended for asituation where there are a large number of players
Source: Ministry of Railways, Aranca ResearchNotes: R3i Railways' Infrastructure for Industry Initiative, SPV Special Purpose
Vehicle, R2CI is Railways Policy for Connectivity to Coal and Iron Ore Mines
7/29/2019 Railways - August 2013
30/49
Railway Budget FY14
For FY14, the budget earmarks an outlay of USD11.7 billion, of which 40.9 per cent wouldbe funded through gross budgetary support and internal resources, while 23.8 per centwould be funded through borrowings. Moreover, USD1.1 billion would be mobilisedthrough the PPP route
The ministry expects a 9 per cent increase in freight earnings to USD17.2 billion in FY14Passenger earnings are expected to increase to USD7.8 billion during the same period.
Operating ratio is also expected to improve to 87.8 per cent in FY14
Wagon InvestmentScheme
Indian Railways launched the Wagon Investment Scheme in 2005 to offer freight rebatesand supply a guaranteed number of rakes for a period of 7 15 years for different types ofwagons
The Ministry of Railways has proposed to set up five wagon factories in Secunderabad,Bardhaman, Bhubaneswar/ Kalahandi, Guwahati and Haldia under the JV/ PPP model
It plans to procure 18,000 wagons during FY12
Source: Ministry of Railways, Aranca ResearchNotes: VSAT - Very Small Aperture Terminal
7/29/2019 Railways - August 2013
31/49
Key modernisationinitiatives
Rolling out a more user-friendly system, with internet ticketing timings increased to 23hours a day from 0030 hrs to 2330 hrs
A new e-ticketing system, which would support 120,000 users simultaneously at any pointin time compared with the existing 40,000 capacity, will be put in place by year end. Thesystem would be able to support the booking of 7,200 tickets per minute as against thecurrent capacity of 2,000
Launched mobile ticketing services in August 2011 and SMS in case if e-ticket notaccepted as valid proof of reservation
With the successful completion of initial testing, the Train Collision Avoidance System(TCAS) will be put to rigorous trials to validate its safety under complex operationalconditions
Introduction of Self-Propelled Accident Relief Trains (SPART) on trial basis with a view toestablish a fast and reliable disaster management system
A modern signalling system, a train-protection warning system, and a special railwaysafety fund have been initiated to ensure passengers security
Railway Budget FY14 focuses on improving passenger amenities such as free Wi-Fiaccess, pilot projects to help passengers contact onboard staff regarding coach
cleanliness, etc.
Source: Ministry of Railways, Aranca Research
7/29/2019 Railways - August 2013
32/49
Investments during the 11th Plan (USD billion)
ApprovedOutlay
200708 2008-09 2009-10 2010-11 2011-12*Total 11th
PlanExcess/Shortfall
2012-13**
Gross
BudgetarySupport15.8 2.2 2.2 3.7 4.3 4.4 17.0 3.0 4.4
InternalGeneration
22.4 3.7 4.1 2.6 2.5 1.9 14.7 (5.1) 3.5
ExtraBudgetaryResources
19.8 1.3 1.6 2.1 2.1 3.4 10.7 (6.9) 3.0
Total 58.0 7.2 7.9 8.4 8.9 9.7 42.3 9.1 11.1
Source: Planning Commission, Aranca Research* - Revised Expenditure, ** - Budgetary Expenditure
7/29/2019 Railways - August 2013
33/49
Cumulative FDI inflows from April 2000(USD million)
Source: Department of Industrial Policy & Promotion, Aranca ResearchNotes: FDI Foreign Direct Investment; Cumulative from April 2000 to
March 2008 and so on
Since FY08, cumulative FDI inflows into the sector hasincreased fivefold
In FY13, the figure stood at USD270.3 million
57.375.3
109.6
132.8
240.3
270.3
FY08 FY09 FY10 FY11 FY12 FY13
7/29/2019 Railways - August 2013
34/49
Source: Ministry of Railways, Aranca ResearchNotes: ICT Information and Communication Technology,
PPP Public Private Partnership
To modernise Indian Railways, the focus is on two
fundamental drivers Safety and Growth and along
a five-pronged strategy
Modernise core assets They are key revenue
generating assets
Explore new revenue models To meet the
funding needs for modernisation and growth
Review projects To ensure financial viability,
social benefits, and timely implementation
Focus on enablers For a holistic and long term
approach to modernisation and execution
Mobilize resources To capitalise on an
opportunity
Key focus areas
CoreAssets
Track andbridges
SignallingRollingstock
Stations andterminals
Revenue
ModelsPPPs Land
Dedicatedfreight
corridors
High
speed trains
Projects Review of existing and proposed projects
Enablers ICTIndigenous
developmentSafety
Resources Funding Humanresource Organisation
7/29/2019 Railways - August 2013
35/49
Source: Ministry of Railways, Aranca ResearchNotes: Km Kilometres, IR Indian Railways, UTS Ultimate Tensile Strength,
CST9 Central Standard Trial-9, PSC Pre Stressed Concrete
Sleepers have been upgraded from
wooden, steel, and CST-9 to PSC sleepers
Heavier section and high tensile strength
rails are being used (52kg/60kg 90 UTSrails are being used in place of 90R/52kg
72UTS rails)
As of FY12, total length of welded track on
main lines of IR was 79,113 km, of which
65,500 km was with long-welded rails and
the rest with short-welded rails
There is a progressive shift to flash butt
welding which is superior in quality to
Alumino Thermic (AT) welding
Adequate capacity for production of
concrete sleepers to meet the present
requirement of IR has been developed
During FY12, 6.9 million broad-gaugemono-block concrete sleepers and 10,359
sets of PSC turnout sleepers were
produced
In FY12, 924 bridges, including 12
distressed bridges, were rehabilitated
Modern bridge inspection and management
system has been adopted, which include
non-destructive testing techniques, under
water inspections, fibre composite
wrapping, integrity testing etc.
Track upgradation and welded rails Sleepers and bridges
7/29/2019 Railways - August 2013
36/49
Source: Ministry of Railways, Aranca ResearchNotes: WDG5 (W Wide/broad gauge, D Diesel-powered,
G Made for hauling goods, 5 above 5000hp)
Design and development of
5500 HP WDG5 diesel
locomotive for faster, longer
and heavier trains Development of high-
sensitivity thermal imaging
camera with online scanning
facility to improve the
reliability of electric traction
system
Development of 25 KV HV
connector for multipleoperation of WAP5
locomotives with one
pantograph in raised
condition
Unreserved ticketing services(UTS)
UTS has been made
functional at 5,690 locations
with 10,508 terminals as of
April 2013 More than 90 per cent of
unreserved tickets are now
generated through UTS
A total of 6.65 billion
passengers were served
(total earnings of USD2.26
billion) in FY11 as compared
to 5.88 billion passengers(total earnings of USD199.86
million) in FY10
Terminal ManagementSystem (TMS)
TMS generates online
railway receipts and has
been deployed at 631 field
locations during FY11 During FY11, USD6.95 billion
of freight payment was
realised through e-payment
mode, which accounts for 58
per cent of total freight
collected
Increasing Operationalefficiency
7/29/2019 Railways - August 2013
37/49
Source: Press information Bureau, GOI and News websitesNotes: SPV Special Purpose Vehicle
PSU Public Sector Undertaking
Salient features
It has been created with the view of making the IndianRailway stations world class as a publicprivatepartnership venture (PPP)
A memorandum of understanding (MoU) for the SPV
was signed between two railway PSUs the Irconinternational Limited (IRCON) and the Rail LandDevelopment Authority (RLDA)
The SPV will have an initial corpus of USD20.8 billionwith 51:49 equity between Ircon and RLDA
Need and importance
To meet with the aspirations of rail users and tofacilitate them with better facilities
To augment and improve passenger related amenitiesat stations to high standards
To have modern stations which would be functional,
customer-oriented and well equipped with propercirculation area and railway operation facilities
It will be designed to provide well designedconcourses, high quality waiting spaces, easy accessto the platforms, congestion-free platforms, moderncatering facilities, hotels and other facilities
7/29/2019 Railways - August 2013
38/49
CountryNetwork
length (km)
Number of
employees
(000s)
Passengers
carried
(million)
Passenger
distances
(billion km)
Freight
carried
(million
tonnes)
Freight
distance
(billion km)
Number of
locomotives
Number of
coaches
Number of
wagons
(000s)
USA 226,706 187 26 9 1,775 2,820 23,990 1,186 475
Russia 84,158 1,128 1,280 173 1,344 2,090 12,063 33,955 567
China 63,637 2,067 1,287 690 2,624 2,211 17,222 42,471 571
India 63,327 1,406 6,219 695 728 4,810 8,110 43,124 208
Canada 57,042 34 4 1 313 353 2,947 595 98
Germany 33,897 231 1,835 75 273 91 4,128 17,537 96
France 29,488 166 1,097 84 106 42 4,289 15,973 33
South Africa 24,487 36 533 15 181 109 3,301 1,723 112
Japan 20,050 132 8,907 253 36 23 1,170 25,244 9
Australia 9,639 13 54 1 177 46 509 663 11
Source: Ministry of Railways, Aranca ResearchNote: Figures are as of Dec 09
7/29/2019 Railways - August 2013
39/49
Average rate per passenger km. (in rupees)
Source: Ministry of Railways, Aranca Research
Freight revenue accounts for major share of total railway revenues in India (71 per cent share in in FY12)
Major freight railways such as the US, China and Russia have one-fourth the freight rate compared to India
Indian Railways charges higher freight tariff in order to cross-subsidise the passenger fares and make them affordable tothe public. This is why the passenger fares were not increased in tandem with the rising costs over the years; in fact, fareshave gone down in a few cases
Average rate per tonne km. (in rupees)
0.25
0.26
0.260.26
0.26
0.27
FY 07 FY 08 FY 09 FY 10 FY 11 FY 12
0.85
0.89
0.940.95
0.97
1.01
FY 07 FY 08 FY 09 FY 10 FY 11 FY 12
7/29/2019 Railways - August 2013
40/49
Average freight revenue per tonne kilometre(2009)
Ratio of average passenger fare to average freightrates (2009)
Source: World Bank, Aranca Research
100
112
122
185
207
218273
281
327
395
751
USA
Canada
Russia
China
Japan
France
Italy
South Africa
Spain
India
Germany
0.3
0.3
0.3
0.4
0.7
0.9
0.9
1.1
1.2
1.3
1.4
India
Pakistan
Vietnam
Greece
Thailand
IndonesiaMalaysia
Austria
China
France
Korea
7/29/2019 Railways - August 2013
41/49
Revenues from traffic operations (USD million)
Source: Delhi Metro website, Annual Reports,
Aranca Research
Revenues from traffic operations increased at a CAGR of37.5 per cent during FY0812 to USD236.0 million
Average ridership increased to 1.9 million in June 2012 from0.9 million in FY10, marking an increase of more than 100per cent
Phase III of the project was approved in August, 2011 and
covers a route length of 103.1kms and 67 stations
Finalized Phase IV of the project which would cover area ofmore than 115kms
Total operational network across Phase I and PhaseII spans 190 kilometres and covers 143 stations
66.0
91.8
109.8
195.6
236.0
FY 08 FY 09 FY 10 FY 11 FY 12
CAGR: 37.5%
7/29/2019 Railways - August 2013
42/49
Source: Press Information Bureau, GOI and News WebsitesNotes: SPV Special Purpose Vehicle
PSU Public Sector Undertaking
Key success factors
Coordinated and well collaborated effort from variousgovernment agencies for timely completion of theproject
Availed overseas financing to cover 60 per cent of thecosts to ensure expedition of the projects execution
Involvement of consultants from across the world withextensive experience both technological andmanagerial in the field
Salient features
The capital cost of completion of Phase I has beenestimated at USD2.2 billion, saving about USD125.0million from the budgeted expenditure
The phase was completed three years ahead ofschedule
Average duration of major tenders was nineteen days,compared with the three to nine months that is thenorm
7/29/2019 Railways - August 2013
43/49
Freight traffic (million tonnes)
The government is investing heavily in building rail
infrastructure in the country. The government
plans to invest USD153 billion during the 12 th Five-
Year Plan
With increasing participation expected from private
players both domestic and foreign due to
favourable policy measures, freight traffic isexpected to grow rapidly over the medium to long
term
Railways has set a target of having a freight
market share of 50 per cent by 2030 from 30 per
cent in 2010
745 804 837 892926 975
1,038 1,119
1,2061,300
1,405
FY07
FY08
FY09
FY10
FY11
FY12
FY13E
FY14E
FY15E
FY16E
FY17E
With rapid economic growth and increasing
industrialisation, freight traffic is expected to touch
1,405 million metric tonnes by FY17
This indicates a CAGR of 7.6 per cent over FY1217
CAGR: 6.6%
7/29/2019 Railways - August 2013
44/49
Source: Ministry of Urban Development, Concor, Aranca Research
Investments expected in metro rail networks in India: USD42 billion by 2020
Amount invested so far: USD16.7 billion
Name of projectEstimated cost (USD
billion)Length of project
(kilometres)(Estimated) Date of
completion
Delhi Mass Rapid Transit SystemPhase I
2.2 65.1 November 2006
Delhi Mass Rapid Transit SystemPhase II
1.1 124.6 August 2011
Kolkata Metro Rail Project 1.1 14.7 201415
Bengaluru Metro Rail Project 2.4 42.3 September 2012
Hyderabad Metro Project 2.5 71.2 2013
Mumbai Metro Project Phase-II 1.7 31.9 2016
Chennai Metro Rail Project 2.3 45.1 201415
7/29/2019 Railways - August 2013
45/49
Manufacturers Association for Information Technology (MAIT)
4th Floor, PHD House, Opp. Asian Games Village,
New Delhi 110 016, India
Tel: 91 11 26855487
Fax: 91 11 26851321
E-mail: [email protected]
Website: www.mait.com
Consumer Electronics and Appliances Manufacturers
Association (CEAMA)
5th Floor, PHD House
4/2, Siri Institutional Area, August Kranti Marg
New Delhi110 016
Telefax: 91-11-46070335, 46070336
E-mail: [email protected]
Website: www.ceama.in
7/29/2019 Railways - August 2013
46/49
CAGR: Compound Annual Growth Rate
FDI: Foreign Direct Investment
FY: Indian financial year (April to March)
So FY12 implies April 2011 to March 2012
DFC: Dedicated Freight Corridor
DFCCIL: Dedicated Freight Corridor Corporation of India Limited
PPP: Public-private partnership
IIP: Index of industrial production
R2CI: Railways Policy for Connectivity to Coal and Iron Ore Mines
R3i: Railways' Infrastructure for Industry Initiative
CST 9: Central Standard Trial-9,
SPV: Special Purpose Vehicle
7/29/2019 Railways - August 2013
47/49
USD: US Dollar
Wherever applicable, numbers have been rounded off to the nearest whole number
7/29/2019 Railways - August 2013
48/49
Year INR equivalent of one USD
2004-05 44.95
2005-06 44.28
2006-07 45.28
2007-08 40.24
2008-09 45.91
2009-10 47.41
2010-11 45.57
2011-12 47.94
2012-13 54.31
Exchange Rates (Fiscal Year)
Year INR equivalent of one USD
2005 45.55
2006 44.34
2007 39.45
2008 49.21
2009 46.76
2010 45.32
2011 45.64
2012 54.69
2013 54.45
Exchange Rates (Calendar Year)
Average for the year
7/29/2019 Railways - August 2013
49/49
India Brand Equity Foundation (IBEF) engaged Aranca to prepare this presentation and the same has been prepared by
Aranca in consultation with IBEF.
All rights reserved. All copyright in this presentation and related works is solely and exclusively owned by IBEF. The
same may not be reproduced, wholly or in part in any material form (including photocopying or storing it in any medium
by electronic means and whether or not transiently or incidentally to some other use of this presentation), modified or in
any manner communicated to any third party except with the written approval of IBEF.
This presentation is for information purposes only. While due care has been taken during the compilation of this
presentation to ensure that the information is accurate to the best of Aranca and IBEFs knowledge and belief, the
content is not to be construed in any manner whatsoever as a substitute for professional advice.
Aranca and IBEF neither recommend nor endorse any specific products or services that may have been mentioned in
this presentation and nor do they assume any liability or responsibility for the outcome of decisions taken as a result of
any reliance placed on this presentation.
Neither Aranca nor IBEF shall be liable for any direct or indirect damages that may arise due to any act or omission onthe part of the user due to any reliance placed or guidance taken from any portion of this presentation.