Indian Railways : Opportunities for Investment. Mukul Saran Mathur Executive Director /PPP September 2016

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1 Indian Railways : Opportunities for Investment Mukul Saran Mathur Executive Director /PPP September 2016

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3 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

4 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

5 Transportation Statistics ( ) 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 )

6 INVESTMENT PLAN Item Network Decongestion (including Dedicated Freight Corridor + electrification, Doubling + electrification & traffic facilities) 5 years USD bn Network Expansion (including electrification) National Projects (North Eastern & Kashmir connectivity projects) 6.50 Safety (Track renewal, bridge works, Road Over Bridge, Road Under Bridge and Signal &Telecom) Information Technology / Research 0.83 Rolling Stock (Locomotives, coaches, wagons production & maintenance) Passenger Amenities 2.08 High Speed Rail & Elevated corridor Station redevelopment + logistic parks Others 2.20 TOTAL

7 Investment Focus 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

8 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

9 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

10 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.

11 Dedicated Freight Corridor Western corridor JNPT to Dadri (1504 kms) Eastern corridor Ludhiana to Dankuni (1839 kms) 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

12 Station redevelopment IRSDC a specialized organization created: Habibganj station financial bids finalized and Development Agreement signed in July 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

13 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.

14 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.

15 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

16 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 crores.

17 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 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.

18 High Speed Train project Mumbai to Ahmedabad - 1 st corridor to be implemented; 350kmph Cost: USD 15.4 bn Financial & technical partner Government of Japan Construction period 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

19 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

20 Status of Model documents Model Document NGR Joint Venture Customer Funded BOT EPC Financial Consultant MSS for Urban system Annuity Status Prepared and Approved Prepared and Approved Prepared and Approved Prepared and Approved Prepared and Approved Prepared /Tenders invited Prepared and Approved Prepared and under Approval

21 Solar Energy Initiatives For harnessing Solar Energy, 50 MW through PPP tendering process has started & details available on Indian Railway website : d/uploads/directorate/ele_engg/pdf/final%20 Model%20%20RFQ%20.pdf. Railways will soon float tenders for additional 100 MW rooftop & land based solar plants.

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