Experiences from India Related to Railway Planning & Development Prof. Hemant Godbole,

Experiences from India Related to
Railway Planning & Development
Prof. Hemant Godbole,
National Academy of Indian
Railways, Vadodara
1
Agenda
1
• Background
2
• Planning
3
• Sources of Financing the CAPEX
4
• Progress Made
5
• Concerns and Course Correction
Measures
6
• Summary and Suggestions
2
Background
First Railway line in India, from
Bori Bunder to Thane, started on
16th of April 1853. .
With combined efforts of a private railway companies
and government agencies, network expanded,
reaching yearly pace of 1000 miles.
Expansion was fostered by
participation
of
private
companies as Government
guaranteed minimum rate of
return on capital employed.
3
Planning and Development
Pre- Independence
Post- Independence
Inclusive Planning
4
Pre- Independence
Budget
and
Accounts
• Separate Budget and Accounts since 1924
Capital
at
Charge
• Government Investments in Rlys’
Infrastructure to be treated as Loan
Financial
Indepen
dence
• Rlys to earn and spend own incomes
• Pay assured dividend on Loan
• Current Rate is 5%
Recommendations of Acworth Committee
5
Post- Independence
Planning
Commission
Plans
Part of GoI’s
5 Yr Plan
• Planning Commission started, with PM as
Ex- officio chairman
• First Plan started in 1950-51
• 12 Plans announced so far
• IR’s 5 Year Plan and Annual Plan are subsets
of GoI’s 5 Year Pan and Annual Plan
Five Year Plans Initiated
6
Evolution – Inclusive Planning
NITI
Aayog
• National Institution for Transforming India
replaces Planning Commission
Inclusive
• Involves State Governments in policy
making
Evolution
• Detailed contours are evolving
Shared Vision, Shared Resources
7
Sources of Financing the
CAPEX (Plan Expenditure)
Budgetary Support
• Every Year, IR Gets additional loan from GoI
• Typically, for additional Infrastructure yielding IRR of 14% or more.
• This is a major source of IR’s Annual Plan
Internal Provisions / Savings
• Internal Provisions like Depreciation Reserve Fund and Savings like
Development Fund and Capital Fund also help finance the Capex
Alternative Means
1.
2.
Taking Assets on Lease
Public-Public- Partnership
3.
4.
Public -Private-Partnership
SPV for Multimodal Service
8
Sources of financing CAPEXAlternative Means
1. Taking Assets on Lease
Indian Railway Finance Corporation (IRFC) incorporated in 1986
as a 100% Subsidiary of IR. It Borrows by issuing long term
bonds, purchases Rolling Stock, leases it to Railways. 70% of
such assets on the system now belong to IRFC.
2. Public Public Partnership
Konkan Railway Corporation Ltd (KRCL) is a Public-PublicPartnership with 51% equity by IR and 49% by four beneficiary
States. By 1998, It completed most difficult coastal line of 761
km and is operating it since. Great Engineering marvel, but
financially it is struggling.
9
10
Source: KRCL website
Sources of financing CAPEXAlternative Means
3. Public Private Partnership
Under National Rail Vikas Yojana 2002, RVNL (Rail Vikas Nigam
Ltd) was started for port connectivity and other projects. It
initiated many PPP based SPVs. Two of them are in profit by
now. They are:
• Kutch Railway Co. Ltd : converted 301 km of MG line to
BG, attained huge financial success.
• Bharuch Dahej Rail Co. Ltd which converted 62 km of NG
line to BG, built additional 5 km BG, making profit by
second year of operation.
Co-creating Value -Win Win situation
11
Kutch Railway Project Location
12
Sources of financing CAPEXAlternative Means
4. Multimodal Transport
•
•
•
•
•
Multimodal Transport through
Container Corporation (CONCOR)
Set up in 1988, now has 63
terminals
2013-14 sales INR 50 Billion,
Net Profit INR 10 Billion
Net worth INR 70 Billion
61.80% shares with IR
Very successful, shares fetch huge
market price.
Convenient Conveyance for Customer: Faster, Smarter, Better
13
Progress Made
14
Network expansion and
Gauge Conversion
ROUTE KILOMETRE
1951
1991
2014
BROAD GAUGE
25,258
34,880
58,177
METRE GAUGE
24,185
23,419
5,334
4,153
4,068
2,297
53,596
62,367
65,808
1991
2014
NARROW GAUGE
TOTAL
TOTAL TRACK KILOMETRE
1951
BROAD GAUGE
42,013
72,174
1,07,513
METRE GAUGE
29,536
32,122
6,688
6,075
4,562
2,564
77,624
1,08,858
1,16,765
NARROW GAUGE
TOTAL
Total Track Kilometers of BG grew by 160% since 1951
*
15
Development from 1950-51
ITEM
Electrified Route Km
1950-51
2013-14
% Variation
388
21615
5470
5127
19,887
289
Running track Kms (all Gauges)
59,315
89,987
52
Freight carried (Million Tonnes)
73
1059
1344
66,517
11,58,742
1642
1,284
8,420
556
87,986
15,28,124
1637
8,54,678
36,43,423
327
11
5.13
(-)54
Double/ multiple route length (Kms)
Passenger Kms (Millions)
Passengers Originating (Millions)
Seat/berth capacity(suburban)
Seat/Berth Capacity(non Suburban)
Wagon Turn around(Days)
16
Railways’ Share of Investment in Five Year Plans
I
II
III
IV
V
VI
VII
VIII
IX
X
XI
XII
(1951- (1956- (1961- (1969- (1974- (1980- (1985- (1992- (1997- (2002- (2007- (201256)
61)
66)
74)
79)
85)
90)
97) 2002) 07)
12)
2017)
Total Plan Outlay
(INR Billion)
Transport Sector as a
Whole
((INR Biillion)
Railways
(INR Billion)
Transport Sector
Outlay as a
percentage of Total
Railway Outlay as
Percentage of total
Railway Outlay as
Percentage of
Transport Outlay
20
47
86 158 290 1093 2187 4855 8140 15256 36769 76698
4
11
20
25
2
7
13
9
15
66 165 323 457
22
24 23 16
14
13
11
15 15
6
5
6
50
66 67 37
37
47
41 140 295 652 1176 2598 6132 12042
14 13 14
8
7
840 1898 4192
17
6
6
56 50 39
32
17 16
5
6
31 35
Though the plan size has grown exponentially, Railways’ share is dwindling
17
Causes of Concern
1. Reduced Investment
While on one hand, there is an impressive Development in the physical
assets and performance over last six decades, proportion of investment in
Railways within transport sector steadily declined.
For sustenance of ecology and economy, this needs to be corrected.
2. Budget Allocation and Project Prioritization
Railway Budget Speech in July 2014, mentions:• Focus has been on sanctioning projects, rather than completing. Less
than half of the projects, sanctioned in last 30 years, are completed
• Thin spread
• Near Plan Holiday.
18
Causes of Concern
3. Congested Network
65% of sections on High Density Network (HDN) routes are saturated.
18% network carrying 56% traffic
19
Corrective Measures underway
1. Quantum jump in Investment
• Plan size more than doubled in 2015-16 to
INR 1000 Billion
• Medium term perspective, investment of INR
8560 Billion proposed in 2015-19. Emphasis
on Network Decongestion, Expansion, Station
Development, High Speed Rail.
• Institutional Finance, routing it through PSU
bonds for bankable projects. MOU with LIC of
India for Term Loan of INR 1500 Billion signed
20
Corrective Measures underway
2. Improved Rail Port Connectivity
• For improved supply chain services, Sagarmala project, to bridge hinterland and ports.
• SPV with 90% equity by major ports and 10%
by RVNL being formed for substantially
reducing dwell time of cargo at ports and
bringing down overall logistics costs.
21
Corrective Measures underway
3. Prioritization of Projects
High Level Committee of Officers have prioritized
Projects which would
• enhance capacity,
• remove bottlenecks,
• expedite last mile completion,
• provide alternate routes,
• enhance safety
22
Summary
Impressive physical progress notwithstanding, there
was chronic underinvestment in IR in recent years
Besides, thin spread of resources has taken its toll.
Course correction measures like pump priming IR with
alternative means, port connectivity etc. being taken.
23
Suggestions for Sri Lanka
More Demand
Congestion
Less Supply
Smooth Flow
Demand
Supply
Analyse and Manage Demand and Supply
24
Supply Management
•
•
Based on PHPDT (Peak Hour Peak Direction Traffic) in
various arteries in city like Colombo, plan Light Metro
(LM)
• Say, for PHPDP of about 10000
3 car LM with 5 -10 minute frequency
• PHPDP 20-30 (000), 6 car, more frequency
• Only if PHPDP is 40 to 50 (000), full Metro with 6 to 8
cars at frequency of 2.5 minutes is justified.
• Construction will spur economic activity, multiplier
effect.
Increase availability of public transport by increasing
frequency, speed, space
25
Demand Management
•
•
•
•
Promote, incentivize public transport, car-pooling
Restrict truck movement in cities in day time, permit it
freely in night. Day time they may move intercity.
Encourage BPOs that typically work in nights, thus
reducing day time demand, also enhancing employment
opportunities and earning FOREX from Western Countries.
Promote training in IT.
• This will help “working from home”, reducing travel
demand.
• Will help online ordering by customers, avoiding going
to markets
26
Demand Management
• Where possible, promote two shift working, say, between 6 to
14 and 14 to 22 hours.
• Dispersal of offices, work places and markets
• Building / promoting satellite centers at the outskirts of cities
(like Navi Mumbai)
• Promoting Export Processing Zones, manufacturing units in
less developed areas with tax exemptions /concessions.
• Restrict /Shift /holidays to different days in week instead of on
Saturday / Sunday, where possible
27
Demand and Supply Management
• Roll-on-roll-off trucks like in Konkan Railway, wherever
possible
• Think win- win.
28
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