Opportunities for Public-Private Partnerships in Railways

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Opportunities forPublic-Private Partnerships in
Railways

• 20th May 2006

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Background

• High Growth Rate of Economy will generate Huge
  Transportation Demand
• Pressure on existing Rail Network calls for
  Expansion of Capacities
• Reducing cost of operation will require keeping
  pace with Technology
• Capacity generation and Modernization will
  require Mobilization of Huge Funds
• More than Rs. 47,000 Crores required to complete
  almost 240 sanctioned Projects

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Public Partnership in Rail Infrastructure Projects

• Background
• State Government offered Financial Participation
• Navi Mumbai connectivity through CIDCO in 1986
• Creation of Konkan Railway Corporation in 1990
  with State initiatives
• Sub-urban Projects in Mumbai, Chennai and Kolkata

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Public Partnership in Rail Infrastructure Projects

• Participation of States through SPV
• for financing Projects
• Karnataka
• K-RIDE
• HMRDC
• Maharashtra
• MRVC
• Gujarat
• Kutch Railway Company

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Public Partnership in Rail Infrastructure Projects

• Cost sharing in Rail Infrastructure
• Projects
• Jharkhand -6 projects
• Karnataka -3 Projects
• Maharashtra- 3 Projects
• Tamil Nadu- 3 Projects
• West Bengal-1Project
• Andhra Pradesh- 1 Project
• Haryana- 1 Project

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Rail Projects through PPP

• Surendranagar-Pipavav Gauge Conversion (PRCL)
• Pipavav Rail Corporation Limited
• Connectivity to Pipavav Port
• Gandhidham-Palanpur Gauge Conversion (KRC)
• Kutch Railway Company
• Improving Connectivity to Mundra Kandla Port

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Recent Initiatives

• Private parties to run container trains
• Wagon Investment Scheme
• Development of Rail-side Warehouses Logistic
  Parks
• Strengthening Rail Port Connectivities
• Development of Dedicated Freight Corridors

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Private Operators for Container Operation

• Sector Opened in 2006
• Licenses offered for various corridors (Exim
  Domestic) to 14 players
• Rs 540 Crore generated as fees
• Generation of Terminal Wagon Capacity
• ROR of approximately 20 for investors

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Wagon Investment Scheme

• Launched in 2005-06
• Wagon procurement
• Guaranteed supply of rakes for loading
• 10 rebate on freight charges
• Rs 250 crore generated from 25 Rakes

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Development of Rail Side Warehousing

• Door-to-Door service
• Land at nominal fees by Railways
• 5 minimum revenue to be shared with Railways
• Lease period 30 years
• MoU with CWC has been signed to set up rail side
  warehouse at 22 locations. Agreement finalised
  for 10 locations

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Development of Logistics Parks

• Objective
• Complete logistics solution
• Reduction in Door Bridging Cost
• Development of multi-user/ multi-commodity rail
  handling and warehousing facilities
• State Government are invited to participate in
  the venture

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Port Connectivity Works

• Rail Connectivity provided to Mundra and Pipavav
  Port
• Connectivity Strengthened for Mundra , Kandla and
  Mangalore Port
• Strengthening / New Port Connectivity through SPV
  route being explored for Paradip, Krishnapatnam,
  Dahej and Hazira Ports by RVNL

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Dedicated Freight Corridors

• Capacity Augmentation considering growth in
  Container ,Coal, Iron Steel
• 2700 km Corridor on Eastern Western Routes will
  cost Rs. 22,000 Crore
• Incremental Traffic of 97 million tonne and 4
  million TEU projected by 2021-22 on both
  corridors

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Traffic Projections
Route 2004-05 (Million Tonnes) 2021-22 (Million Tonnes) Incremental (Million Tonnes)
Eastern 56 (32Trains) 137 (89Trains) 81 (57Trains)
Western 17 33 16
Container on Western Route (Lakh TEUs) 5 (15Trains) 46 (70Trains) 41 (55Trains)
Trains indicated each way. Trains on Western
Corridor is inclusive of Bulk and Container
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APPROXIMATE STATE-WISE LENGTH OF TRACK AND COST
OF DEDICATED FREIGHT CORRIDOR ON BOTH WESTERN
EASTERN ROUTES
STATE Kms. Cost (in Rs. Crores)
Bihar 91139 782
Uttar Pradesh 1031 8159
Haryana 213 1473
Punjab 109 602
Delhi 45 346
Maharashtra 192 1465
Gujarat 527 4025
Rajasthan 557 4289
West Bengal 229 -
Jharkhand 180 -
Kilometerage in States on account of extension
of Eastern Corridor to Kolkata. No cost
estimate has been made for the extension between
Sonnagar-Kolkata.
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Challenges Ahead

• Massive Capacity Augmentation ahead of Demand
• Resource Mobilisation
• Induction of appropriate technologies in Rolling
  Stock
• Reducing Unit Cost of Operation

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Opportunities under PPP for State Governments

• Rail Connectivity to SEZ
• Logistics Hubs
• Financing of remote area projects
• Warehousing/ICDs
• ROB/RUBs
• Rail Connectivity to Minor Ports

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Thank You