Public Private Partnership (PPP) in Railways

By Chairman Railway Board Government of India

Conference of Chief Secretaries on PPP in Infrastructure 20th May, 2006

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

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 .

Public Partnership in Rail Infrastructure Projects Participation of States through SPV for financing Projects • Karnataka – K-RIDE – HMRDC • Maharashtra – MRVC • Gujarat – Kutch Railway Company .

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

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 .

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 .

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 .

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 .

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 .

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 .

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

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

Traffic Projections Route 2004-05 (Million Tonnes) 56 (32Trains*) 17 5 (15Trains**) 2021-22 (Million Tonnes) 137 (89Trains) 33 46 (70Trains) Incremental (Million Tonnes) 81 (57Trains) 16 41 (55Trains) Eastern Western Container on Western Route (Lakh TEUs) *Trains indicated each way. **Trains on Western Corridor is inclusive of Bulk and Container .

Amritsar Nagal Dam Chandigarh Dedicated Freight Corridor Ludhiana-Son Nagar with Extensions to Durgapur/Bokaro/Tatanagar Legend: Main Route Feeder Route Ludhiana Bhatinda Ambla Saharanpur Panipat Meerut Hapur Harduaganj Khurja Tundla Kanpur Unchahar Paricha Allahabad Mughal Sarai Son Nagar Gomoh Asansol Katni Bondamunda Durgapur Tata Nagar .

G ANDHI DHAM M u n d ra P o rt K A N D LA P o rt R A JK O T H a z ira P IP A V A V P A L A N PU R M EH SA N A A H M ED A BA D V IR A M -G A M V ADODARA SURAT V A LSA D OKHA V A SA I R O A D M UM BAI D IV A T hal M u m b a i P o rt .P R O P O S E D F R E I G H T C O R R ID O R (W E S T E R N ) L U D H IA N A L E G E N D :M A IN R O U T E FEE D E R RO U TE H IS S A R D ELH I R EW A RI J A IPU R J O D H PU R LUNI PH U L ERA T U N D LA AGRA M A R W A R JN .

Crores) 782 8159 1473 602 346 1465 4025 4289 Kolkata. Cost (in Rs. .APPROXIMATE STATE-WISE LENGTH OF TRACK AND COST OF DEDICATED FREIGHT CORRIDOR ON BOTH WESTERN & EASTERN ROUTES STATE Bihar Uttar Pradesh Haryana Punjab Delhi Maharashtra Gujarat Rajasthan West Bengal Jharkhand 91+139* 1031 213 109 45 192 527 557 229 * 180* Kms. No cost * Kilometerage in States on account of extension of Eastern Corridor to estimate has been made for the extension between Sonnagar-Kolkata.

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

Opportunities under PPP for State Governments • • • • • • Rail Connectivity to SEZ Logistics Hubs Financing of remote area projects Warehousing/ICD’s ROB/RUB’s Rail Connectivity to Minor Ports .

Thank You .

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