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RITES's SPV Model for Bengaluru Suburban Rail Service

RITES's SPV Model for Bengaluru Suburban Rail Service

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The special Purpose vehicle model that RITES has recommended in its 2012 report for implementing Suburban/Commuter Rail Service in Bengaluru

The special Purpose vehicle model that RITES has recommended in its 2012 report for implementing Suburban/Commuter Rail Service in Bengaluru

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RITES's SPV Model for Bengaluru Suburban Rail Service

  1. 1. SPV Model for Bengaluru Suburban Rail Service
  2. 2. Typical SPV Model SPVSponsors Contractors Suppliers Consumers Financial Institutions Capital Markets Project Praja-RAAG 2
  3. 3. Participants & Roles  Project Financing has many participants  Sponsors – Host Government, Private Enterprise  Development Company, i.e. Special Purpose Vehicle, which supervises the design, build and operational activities of the project  Financial Institutes – Who lends money to the project  Capital Markets – To raise funds from capital market via shares, bonds etc.  Suppliers, Contractors – Who will build the project  Consumers – Who will consume the goods and services from the project Praja-RAAG 3
  4. 4. Comparable Models in Suburban Rail Services in India  MMTS Hyderabad  South Central Railways, 100% owners  State Govt sharing the 50% cost for phase-1, 67% for Phase-2  No monitoring or continuous development mechanism to expand/update the services  SCR sole deciding authority, State govt has virtually no say.  Fares are based on IR fare regime.  No debt financing  MRVC Mumbai  SPV with GOI and State Govt (contributing 51% and 49% respectively) for 25 Crores as the initial capital  It only formulates the plans and rolls out the projects in consultation with GOM and GOI.  It charges a consultancy fee for preparing plans, procuring loans etc. Praja-RAAG 4
  5. 5. Comparable Models in Suburban Rail Services in India …Continued  MRVC Mumbai  IR collects surcharge and share 50% with MRVC  World Bank lending to GOI and GOM into respective shares.  Repayment by GOI and GOM  IR and MRVC jointly decides on project works  MRVC continuously monitors the project and takes up the improvements, additions and new ones.  GOI/ IR takes care of addition of track and signaling infrastructure, running of trains etc.  MRVC takes care of Non-Train activities including procurement of EMU’s, building stations, circulating areas etc.  GOM helps MRVC with building feeder roads  Fares are determined on ‘Sub-Urban’ Category Praja-RAAG 5
  6. 6. RITES’ Model for Bengaluru Suburban Rail Service  Based on MRVC, Mumbai Model  Consultancy Service Model  Reason, it doesn’t create separate exclusive assets like BIAL  It uses the existing and future enhanced IR infrastructure  Entity – Bengaluru Suburban Rail Corporation  Formulates plans, rolls out projects under GOI/GOK guidance  IR to undertake required Track and Signaling enhancements  IR to take care of running of trains, personnel  BCRC to take care of stations, Auxiliary areas, feeder roads and services with the help of GOK  Fares based on ‘Sub-Urban’ regime  Plus a surcharge to cover the BCRC consultancy Praja-RAAG 6
  7. 7. RITES’ Model for Bengaluru Suburban Rail Service  Funding  GOK and GOI to contribute 100 Crores in 50-50 partnership as the initial capital  Funding from financial institutes like World Bank, Asian Bank, Islamic Development Bank, IBRD  Stake Holders  Chairman – Nominated Railway Board Member  MD – Jointly decided by GOK and GOI  Board Members  Principal Secretary, UDD  Principal Secretary, IDD  Commissioner, DULT  Officials from State Revenue and Transport Department  GM-SWR, DGM – Bangalore Division  BMTC, BMRCL Nominees  CiSTUP Chairman ? Praja-RAAG 7
  8. 8. RITES’ Model for Bengaluru Suburban Rail Service  Working Executives  Chairman  Managing Director  Director - Planning & Projects  Work with stakeholders to draw project plans, roll out and execute the new projects  Responsible for projects by SWR as well as other Non-Rail projects needed for CRS operations  Director - Technical  Execution of Electrical and Mechanical projects  Procurement of EMUs, construction of EMU sheds  Maintenance and upgrade of Electrical and Mechanical services  Director – Finance  Control of BSRC finances Praja-RAAG 8

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