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India : Railways Sector Report_August 2013
 

India : Railways Sector Report_August 2013

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Indian Railways has a total route network of about 64,600 kilometers (km) spread across 7,146 stations and operates more than 19,000 trains every day. Over 30 million passengers travel by trains on a ...

Indian Railways has a total route network of about 64,600 kilometers (km) spread across 7,146 stations and operates more than 19,000 trains every day. Over 30 million passengers travel by trains on a daily basis in India and around 975.2 million tonnes (MT) of freight was transported via trains in FY12.

The revenues of Indian Railways are expected to expand at a compounded annual growth rate (CAGR) of 12.1 per cent during FY07-14. Freight is the major revenue earning segment for the railways, accounting for 70.6 per cent of the total revenues in FY12.

Passenger traffic went up by more than 15 times over FY1951-FY12. Increasing incomes, both urban and rural, have 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 to increase in traffic between urban and rural areas in the country.

With rapid economic growth and increasing industrialisation, freight traffic is expected to grow at a CAGR of 7.6 per cent during FY12-17 to touch 1,405 million metric tonnes (MMT) by FY17. Indian Railways has set a target of having a freight market share of 50 per cent by 2030 from 30 per cent in 2010.

The Government of India is investing heavily in building rail infrastructure in the country and plans to invest US$ 153 billion during the 12th Five Year Plan.

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    India : Railways Sector Report_August 2013 India : Railways Sector Report_August 2013 Presentation Transcript

    •       
    • World’s fourth-largest rail network • As of FY12, Indian Railways had 12,335 passenger trains carrying over 30 million passengers daily. On the commercial front, 975.2 million tonnes of freight was transported via trains in FY12 Growing public-private partnership • Private sector companies are being encouraged to participate in rail projects, which were largely in the public domain. In December 2012, the Cabinet approved “participative models for rail-connectivity and capacity augmented projects”, which allows private ownership of some railway lines Growth initiatives • Indian Railways is undertaking the construction of dedicated freight lines along the country’s Eastern and Western corridors; this would increase productivity and reduce transportation cost. A special purpose vehicle has been set up for the same. Moreover, in March 2013, the Cabinet approved the “Automobile Freight Train Operator Scheme” to encourage automobile transportation through railways Modernisation/ technology upgradation • Indian Railways has launched mobile ticketing services, which enable customers to receive tickets on short message service (SMS). Additionally, it plans to upgrade its current systems to support bookings of 7,200 tickets per minute compared with the current capacity of 2,000 tickets
    • • The engineering sector is delicensed; 100 per cent FDI is allowed in the sector • Due to policy support, there was cumulative FDI of USD14.0 billion into the sector over April 2000 – February 2012, making up 8.6 per cent of total FDI into the country in that period Growing demand Source: Railway Budget 2013, Planning Commission, Aranca Research Notes: 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 coupled with rising incomes (both urban and rural) is driving growth in the passenger segment • Growing industrialisation across country has increased freight traffic over the last decade Attractive opportunities • Freight traffic is set to increase manifold, thanks to investments and private sector participation • Metro rail projects are being envisaged across many cities over the next ten years Policy support • Government has increased the scope of PPP, to beyond providing maintenance and other such supporting roles • Government is providing new lines, increasing the rolling stock to build up capacity Higher investments • The government has been investing heavily to upgrade railway infrastructure • Sector has been witnessing increasing level of FDI participation over FY08–12 2012 Freight Traffic – 975 MMT 2017F Freight Traffic – 1,405 MMT Advantage India
    • 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 7,146 stations. Operates more than 19,000 trains every day It has 239,321 wagons, 61,899 coaches, and 9,549 locomotives IR’s 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
    • 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
    • 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 (April–March) Indian Railways revenues grew the fastest in three years to USD21.7 billion in FY12, a 10.1 per cent y/y growth. The Railway Ministry estimates revenues to grow 20.7 per cent* in 2013 Overall, revenues are expected to expand at a CAGR of 12.1 per cent* during FY07–14 Revenue growth has, in fact, been strong over the years; during FY07–12, revenues expanded at a CAGR of 9.9 per cent* For FY14, the government has estimated revenues to expand at a CAGR of 17.5 per cent* over FY12 14.3 18.3 17.8 18.8 20.8 21.7 23.1 26.5 FY07 FY08 FY09 FY10 FY11 FY12 FY13E FY14B CAGR: 12.1%
    • 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 (April–March) In the last six years, revenues from the passenger segment has expanded at a CAGR of 10.5 per cent*. The FY14 Budget provides for a CAGR of 22.2 per cent* in revenues over FY12 Freight segment’s revenues have been on the rise; in FY12, revenues were up 11.6 per cent* over last year, the highest growth 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 11.3 12.0 13.3 14.1 FY07 FY08 FY09 FY10 FY11 FY12
    • Revenue breakup, by segment (FY12) Source: Ministry of Railways, Aranca Research Freight remains the major revenue earning segment for the railways, accounting for 70.6 per cent of total revenues in FY12 Profits from this segment are used to cross-subsidise the passenger segment 70.6% 29.4% Freight Passenger
    • Trends in passenger volumes (in millions) Source: Ministry of Railways, Planning Commission, Aranca Research Notes: CAGR – Compound Annual Growth Rate, F – Forecast FY – Indian Financial Year (April–March) Train travel remains the preferred means of communication for a large majority of Indians, a fact easily reflected by volume and growth of passengers over the years Passenger volumes are expected to expand at a CAGR of 6.6 per cent to 11.7 million by FY17 from 6.2 million in FY07 The number of passengers travelling by train reached 8.2 billion in FY12, up 7.2 per cent over the previous fiscal year Annual passenger volumes expanded at a CAGR of 5.8 per cent during FY07–12. According to the 12th Five-Year Plan, passenger volumes are expected to increase at a CAGR of 7.4 per cent during FY12–17 6.2 6.5 6.9 7.2 7.7 8.2 8.9 9.5 10.2 10.9 11.7 FY07 FY08 FY09 FY10 FY11 FY12 FY13F FY14F FY15F FY16F FY17F CAGR: 6.6%
    • Number of Suburban passengers originating (in millions) Source: Ministry of Railways, Planning Commission, Aranca Research Notes: CAGR – Compound Annual Growth Rate, F – Forecast FY – Indian Financial Year (April–March) Suburban passenger volumes have witnessed a constant increase in growth rates. The segment posted a growth of 7.8 per 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 3,876 4,061 4,377 4,545 4,855 5,186 5,540 5,917 FY09 FY10 FY11 FY12 FY13F FY14F FY15F FY16F FY17F 3,118 3,370 3,590 3,847 4,323 4,651 5,005 5,385 5,793 FY09 FY10 FY11 FY12 FY13F FY14F FY15F FY16F FY17F
    • 745 804 837 892 926 975 1,038 1,119 1,206 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 – Forecast FY – Indian Financial Year (April–March) As of FY12, railways accounted for 31 per cent of India’s freight traffic Freight traffic is expected to expand at a CAGR of 6.6 per cent to 1.4 billion tonnes by FY17 from 745 million tonnes in FY07 Freight traffic reached 975 million tonnes in FY12, a 5.3 per cent rise over the previous fiscal year The figure has grown at a CAGR of 5.5 per cent over FY07–12 and is expected to grow at a CAGR of 7.6 per cent during FY12–17 CAGR: 6.6%
    • Source: Relevant company annual reports and websites, Aranca Research Notes: 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
    • Source: Relevant company annual reports and websites, Aranca Research Notes: 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 and wagons, 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 execute the country’s first monorail system in Mumbai • Executing an order for development of railway siding; this involves engineering, procurement, and construction work for a dedicated railway line of 38 km
    • Source: Ministry of Railways, Aranca Research Notes: PPP – Public Private Partnership In December 2012, the Cabinet approved the new policy of “participative models for rail-connectivity and capacity augmented projects”. The policy addressed private investors’ concerns, which included ownership of the railway line and repayment of investment This has led to renewed investor interest in the rail sector. Since then, railway authorities have received various proposals from private investors and have already given approval (can now acquire land and begin construction) for four port connectivity projects, which would ease congestion This is in line with the government’s 12th Five-Year Plan. It intends to raise investments worth USD18.4 billion through PPP route Areas proposed for private investment during this period are likely to include elevated rail corridor in Mumbai, some parts of dedicated 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 of Palanpur-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 and enhance rail infrastructure in the country
    • Demand for urban transport • 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 now use 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 7,200 tickets per minute from 2,000 currently International investment • IR has attracted increasing investments from overseas through strategic alliances with various countries over the last few years • Subsidiaries of foreign companies are being set up to cater to the huge demand offered by IR 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
    • Government focus on infrastructure building Growth of freight traffic due to industrialisation Rising demand for urban mass transportation Increasing private sector participation Improved safety and modernisation
    • Source: Ministry of Railways; Aranca Research Passenger traffic went up by more than 15 times over FY1951–2012 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 to increase 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
    • Passenger traffic growth index (1950–51 taken as the base year) India’s per capita income at current prices (USD) Source: Ministry of Railways, IMF, Aranca Research FY – Indian Financial Year (April–March) 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
    • 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, Fast Passenger • 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
    • Freight traffic went up by more than 15 times over FY1951–2012 This traffic is due to the increasing levels of industrialisation across the country as is evident from the growth in the Index of Industrial 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
    • Passenger traffic growth index (1950–51 taken as the base year) Growth (YoY) in the Index of Industrial Production (IIP) Source: Ministry of Railways, Ministry of Statistics and Programme 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
    • Source: Ministry of Railways, Aranca Research Notes: 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 administrative control 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 in FY17 Punjab - > Haryana - > Uttar Pradesh - > Bihar - > West Bengal Uttar Pradesh - > Delhi - > Haryana - > Rajasthan - > Gujarat - > Maharashtra Western Corridor Eastern Corridor
    • Source: Ministry of Railways, Aranca Research Objectives Increase rail freight share through customised logistic services Segregate freight and passenger lines for focused approach Create additional freight capacity to meet demand Introduce time-tabled freight services to ensure better services Adopt high- end technology for real-time data analysis Reduce unit cost of transportation and increase productivity
    • 76 91 64 91 2016-17 2017-22 EDFC WDFC Freight traffic projections on DFC (in MMT) Source: KPMG Notes: 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 per cent to 182 MMT in 2021–22 from 140 MMT in 2016–17 Container traffic is likely to be an important constituent of the WDFC and is expected to grow to 5.3 million TEUs in 2021–22 from 3.8 million TEUs in 2016–17 CAGR: 5.4%
    • 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 railway network to 87 per cent in 2021–22 from 84 per cent projected in 2016–17 DFC Model Mix (2017-22) 16% 84% Road Share Rail Share 13% 87% Road Share Rail Share
    • 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 models for rail connectivity and capacity augmented projects • This policy supersedes the R3i and R2CI policies notified earlier • The policy provides for supplementing government’s 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 Research Notes: R3i – Railways' Infrastructure for Industry Initiative, R2CI is Railways Policy for Connectivity to Coal and Iron Ore Mines, BOT – Build Operate and Transfer
    • Automobile Freight Train Operator Scheme 2013 • To increase its share in automobiles transportation, Indian Railways notified a new scheme in March 2013 – Automobile Freight Train Operator (AFTO). The scheme provides logistic service providers and road transporters an opportunity to introduce their own 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 USD5.5 million 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 by RDSO Source: Ministry of Railways, Aranca Research
    • R3i policy • Aimed at attracting private sector participation in rail connectivity projects in order to create additional 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 10–25 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 a situation where there are a large number of players Source: Ministry of Railways, Aranca Research Notes: R3i – Railways' Infrastructure for Industry Initiative, SPV – Special Purpose Vehicle, R2CI is Railways Policy for Connectivity to Coal and Iron Ore Mines
    • Railway Budget FY14 • For FY14, the budget earmarks an outlay of USD11.7 billion, of which 40.9 per cent would be funded through gross budgetary support and internal resources, while 23.8 per cent would be funded through borrowings. Moreover, USD1.1 billion would be mobilised through the PPP route • The ministry expects a 9 per cent increase in freight earnings to USD17.2 billion in FY14 Passenger 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 Investment Scheme • Indian Railways launched the Wagon Investment Scheme in 2005 to offer freight rebates and supply a guaranteed number of rakes for a period of 7 – 15 years for different types of wagons • 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 Research Notes: VSAT - Very Small Aperture Terminal
    • Key modernisation initiatives • Rolling out a more user-friendly system, with internet ticketing timings increased to 23 hours a day from 0030 hrs to 2330 hrs • A new e-ticketing system, which would support 120,000 users simultaneously at any point in time compared with the existing 40,000 capacity, will be put in place by year end. The system would be able to support the booking of 7,200 tickets per minute as against the current capacity of 2,000 • Launched mobile ticketing services in August 2011 and SMS in case if e-ticket not accepted 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 operational conditions • Introduction of Self-Propelled Accident Relief Trains (SPART) on trial basis with a view to establish a fast and reliable disaster management system • A modern signalling system, a train-protection warning system, and a special railway safety fund have been initiated to ensure passengers’ security • Railway Budget FY14 focuses on improving passenger amenities such as free Wi-Fi access, pilot projects to help passengers contact onboard staff regarding coach cleanliness, etc. Source: Ministry of Railways, Aranca Research
    • Investments during the 11th Plan (USD billion) Approved Outlay 2007–08 2008-09 2009-10 2010-11 2011-12* Total 11th Plan Excess/ Shortfall 2012-13** Gross Budgetary Support 15.8 2.2 2.2 3.7 4.3 4.4 17.0 3.0 4.4 Internal Generation 22.4 3.7 4.1 2.6 2.5 1.9 14.7 (5.1) 3.5 Extra Budgetary Resources 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
    • Cumulative FDI inflows from April 2000 (USD million) Source: Department of Industrial Policy & Promotion, Aranca Research Notes: FDI – Foreign Direct Investment; Cumulative from April 2000 to March 2008 and so on Since FY08, cumulative FDI inflows into the sector has increased fivefold In FY13, the figure stood at USD270.3 million 57.3 75.3 109.6 132.8 240.3 270.3 FY08 FY09 FY10 FY11 FY12 FY13
    • Source: Ministry of Railways, Aranca Research Notes: 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 Core Assets Track and bridges Signalling Rolling stock Stations and terminals Revenue Models PPPs Land Dedicated freight corridors High speed trains Projects Review of existing and proposed projects Enablers ICT Indigenous development Safety Resources Funding Human resource Organisation
    • Source: Ministry of Railways, Aranca Research Notes: 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 UTS rails 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-gauge mono-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
    • Source: Ministry of Railways, Aranca Research Notes: 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 multiple operation 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 Management System (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 Operational efficiency
    • Source: Press information Bureau, GOI and News websites Notes: SPV – Special Purpose Vehicle PSU – Public Sector Undertaking Salient features • It has been created with the view of making the Indian Railway stations world class as a public–private partnership venture (PPP) • A memorandum of understanding (MoU) for the SPV was signed between two railway PSUs – the Ircon international Limited (IRCON) and the Rail Land Development Authority (RLDA) • The SPV will have an initial corpus of USD20.8 billion with 51:49 equity between Ircon and RLDA Need and importance • To meet with the aspirations of rail users and to facilitate them with better facilities • To augment and improve passenger related amenities at stations to high standards • To have modern stations which would be functional, customer-oriented and well equipped with proper circulation area and railway operation facilities • It will be designed to provide well designed concourses, high quality waiting spaces, easy access to the platforms, congestion-free platforms, modern catering facilities, hotels and other facilities
    • Country Network 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 Research Note: Figures are as of Dec ‘09
    • 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 to the public. This is why the passenger fares were not increased in tandem with the rising costs over the years; in fact, fares have gone down in a few cases Average rate per tonne km. (in rupees) 0.25 0.26 0.26 0.26 0.26 0.27 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 0.85 0.89 0.94 0.95 0.97 1.01 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12
    • Average freight revenue per tonne kilometre (2009) Ratio of average passenger fare to average freight rates (2009) Source: World Bank, Aranca Research 100 112 122 185 207 218 273 281 327 395 751 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 Indonesia Malaysia Austria China France Korea
    • Revenues from traffic operations (USD million) Source: Delhi Metro website, Annual Reports, Aranca Research Revenues from traffic operations increased at a CAGR of 37.5 per cent during FY08–12 to USD236.0 million Average ridership increased to 1.9 million in June 2012 from 0.9 million in FY10, marking an increase of more than 100 per 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 of more than 115kms Total operational network across Phase I and Phase II 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%
    • Source: Press Information Bureau, GOI and News Websites Notes: SPV – Special Purpose Vehicle PSU – Public Sector Undertaking Key success factors • Coordinated and well collaborated effort from various government agencies for timely completion of the project • Availed overseas financing to cover 60 per cent of the costs to ensure expedition of the project’s execution • Involvement of consultants from across the world with extensive experience – both technological and managerial – in the field Salient features • The capital cost of completion of Phase I has been estimated at USD2.2 billion, saving about USD125.0 million from the budgeted expenditure • The phase was completed three years ahead of schedule • Average duration of major tenders was nineteen days, compared with the three to nine months that is the norm
    • 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 12th Five- Year Plan • With increasing participation expected from private players – both domestic and foreign – due to favourable policy measures, freight traffic is expected 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 745 804 837 892 926 975 1,038 1,119 1,206 1,300 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 FY12–17 CAGR: 6.6%
    • 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 project Estimated cost (USD billion) Length of project (kilometres) (Estimated) Date of completion Delhi Mass Rapid Transit System Phase I 2.2 65.1 November 2006 Delhi Mass Rapid Transit System Phase II 1.1 124.6 August 2011 Kolkata Metro Rail Project 1.1 14.7 2014–15 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 2014–15
    • 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: contact@mait.com Website: www.mait.com Consumer Electronics and Appliances Manufacturers Association (CEAMA) 5th Floor, PHD House 4/2, Siri Institutional Area, August Kranti Marg New Delhi –110 016 Telefax: 91-11-46070335, 46070336 E-mail: ceama@airtelmail.in Website: www.ceama.in
    • 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
    • USD: US Dollar Wherever applicable, numbers have been rounded off to the nearest whole number
    • 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
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