Tag Archives: Dedicated Freight Corridor

Guards in trains could be history in dedicated freight corridor as Railways experiment on sensors at end of wagons.

Guard service in freight trains may be a thing of the past once the dedicated freight corridor becomes operational with end wagons to be fitted with sensors. End to Train Telemetry (EOTT) is a device which makes it possible to monitor in the driver’s cab of the loco the brake pipe pressure in the last vehicle of the train. Doing away with deployment of guards in each freight train, the corridor will equip the rear end of a wagon with this modern electronic system at an estimated cost of Rs 5 lakh.

The driver will monitor the train movement through EoTT device and there will be no need of guards, according to Dedicated Freight Corridor Corporation (DFCC) Managing Director Adesh Sharma.

DFCC aims to eliminate service of 1,000 guards using the device. The total staff of DFCC for the operation of the 3344- km-long track is estimated to be around 8,800 only.
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While a guard cost about Rs 12 lakh a year to Railways, the EoTT is to cost around Rs 5 lakh.
Expected to be game changer in the freight transportation sector after it becomes fully operational by the next two years, the Rs 81,459-crore DFC project will also be free from all level crossings, a major safety hazard in rail network.
Contracts worth Rs 18,000 crore were awarded during 2016 for the DFC project, Sharma said here.

While 100 per cent contracts in the 1504-km-long Western DFC have been awarded, for the 1840-km-long Eastern DFC it is 87 per cent.
Ensuring unhindered movement of freight trains, Sharma said, “A total of 1,003 level crossings are planned to be eliminated which will help seamless movement of both rail and road traffic.”

There will be construction of 689 rail under bridges and 314 rail over bridges on cost sharing basis with states on the DFC track to make the entire track free from level crossings.
Focusing on reduction of the operational cost by 40 per cent, steps are being taken increase efficiency and doing away with guard service in freight trains with the help of latest technology, Sharma said.

DFCC is also using new track construction machine to lay 1.5-km-long track a day.
Once fully operational, DFC will be capable of carrying train load of 13000 tonnes with average speed of 75 km per hour against the current speed of 25 km per hour.

“It is taking about 72 hours to transport goods to Mumbai from here now and our aim is to deliver it within 24 hours on DFC track,” the DFCC MD said, adding “the entire track will be equipped with the most modern accident prevention system – TPWS.”

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Posted by on March 11, 2017 in Uncategorized



India eyes FDI to revive sinking railway sector

UNTIL a few years ago, travelling in a non-air-conditioned sleeper compartment of any express train of the Indian Railways was a joyful exercise. One could experience the vast countryside and the changing landscape, as the train hurtled through different states, even as one enjoyed the unfolding scenario from the relative comforts of the train.

But how things have changed, and for the worse. Today, it is often a nightmare to travel even in air-conditioned coaches of Indian Railways. Security is virtually non-existent, hygiene is an unheard of concept in most trains, and even prestigious services such as Shatabdi, Rajdhani and Duronto are losing their credibility, as hordes of unruly passengers — most without reservations and some without tickets — enter compartments and inconvenience the paying passengers.

Railway and security officials are conspicuous by their absence and there is no one to check the hooliganism. Toilets in most trains stink, and safely ensconced within the curtains, bedsheets and blankets provided by the railways are bugs and cockroaches. And at night, rats and other pests have a free run, even in air-conditioned compartments. Much of the food served in the trains is inedible.

Indian Railways, the 160-plus-year organisation, which carries more than 23m passengers every day, has been in a state of continuous decay, as ministers and politicians have ravaged its finances. Railway ministers have for years been announcing non-viable projects in politically important constituencies, introducing trains to their hometowns, without even studying the viability of the new launches.

And fears of alienating voters has prevented governments from raising fares, even adjusting for inflation and making provisions for increased wages to the army of railway employees. Consequently, railway finances have haemorrhaged over the decades.

Reformist railway ministers have been unceremoniously dumped in the past. When Suresh Prabhu, a chartered accountant, took over as railway minister last year, replacing an ineffective politician, there were hopes that the Narendra Modi government would finally be able to bring about much-needed changes in the organisation.

But while Prabhu draws up ambitious — often unattainable in the immediate future — plans and focuses on pie-in-the-sky projects, passenger services on Indian Railways continues to deteriorate. Safety too has taken a beating, with more than eight major accidents — including derailments and collisions — occurring so far this year.

Government leaders, including Prabhu, however, talk only about mega projects that will cost a fortune. One of the most bandied about is the concept of bullet trains. At a time when even fast express trains are unable to cross speeds of 100kmph, politicians are talking about introducing ‘bullet trains,’ speeding at 350kmph between Indian cities.

Japan and China are keen to participate in such projects. According to A.K. Mittal, chairman, Railway Board, while several players are offering high-speed technology, it is only Japan that has come forth with technology and funding (it is willing to extend soft loans covering 80pc of the cost at an interest rate of less than 1pc).

But it has finally dawned on politicians that bullet trains come at a huge cost — the one being talked about, a 500km corridor between Mumbai and Ahmedabad, will cost about $15bn — and that passengers wouldn’t be able to pay the stiff fares. They have started scaling down the ambitions. Railway officials now talk of high-speed and semi-high speed trains that will zoom at 160kmph.

The soon to be launched Gatimaan express, a semi-high-speed train, will travel at a maximum speed of 160kmph, covering the distance between Delhi and Agra in 105 minutes.

THE NDA government has two ambitious railway projects; one relates to a proposed diamond quadrilateral of high-speed railway corridors, and the second is the dedicated freight corridors project, launched by the United Progressive Alliance (UPA) government a few years ago.

The quadrilateral covers four corridors — Mumbai-Delhi, Mumbai-Chennai, Delhi-Kolkata and Delhi-Chennai. Recently, the government firmed up the international consortia that will undertake technical feasibility studies for these high speed rail corridors.

While the quadrilateral is still at an early stage, the dedicated freight corridors project is finally moving at a faster pace. The Rs820bn project — covering the western corridor (from Dadri near Delhi to Mumbai) and the eastern corridor (from Ludhiana in Punjab to Dankuni in West Bengal) — is progressing rapidly.

Next month, the first stretch of the eastern arm, a 56km corridor in Bihar, is likely to be commissioned. The freight corridors envisage separating freight and passenger trains, enabling faster movement of the billion-tonnes of cargo handled every year, which brings in huge revenues for the railways. The Japan International Cooperation Agency is funding the western corridor, while the World Bank is financing the eastern one.

The NDA government has also opened up the railways sector for foreign direct investment (FDI). This is also part of the government’s Made in India initiative, which plans to boost the manufacturing sector.

Two global majors — General Electric and Alstom — have been awarded contracts worth Rs400bn for setting up two locomotive manufacturing factories in Bihar. The two plants will start supplying 200 locomotives — with a capacity of 6,000HP and 12,000HP — every year. At present, Indian Railways operates locos with a capacity of 4,000-6,000HP.

With the dedicated freight corridor getting ready, the railways would need hundreds of new locos to operate the freight trains. At present, it has more than 10,000 locomotives to haul passenger and freight trains. Last financial year, Indian Railways inducted about 650 locomotives, manufactured by state-owned workshops. Over the next two years, the annual production of locos is expected to almost touch 1,000.

Other plans on the anvil include setting up ‘world-class railway stations,’ beefing up the IT infrastructure and setting up a Rs1.1tr special fund to finance the new expansion. The government, however, has failed to bring in legislation for setting up an independent tariff authority to fix passenger fares and freight rates

And real reforms would roll in only when the government unshackles the organisation from the clutches of the ministry, providing autonomy to the various railway zones and making each one of them a profit centre.

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Posted by on December 1, 2015 in Uncategorized


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Work has progressed 10-fold in western, 3-fold in eastern corridor: Adesh Sharma

The commissioning of the Dedicated Freight Corridor is going to start in phases beginning March 2018. Adesh Sharma, the MD of the Dedicated Freight Corridor Corporation of India, in an interview with Bilal Abdi, explains how this mega infrastructure project will decongest the railway network for freight transport. It will also usher in a technological revolution of sorts in laying of new tracks and making available higher capacity locos and double stack containers. Excerpts:

What is the cost of both the corridors (east and west) and how are funds being managed?

Of the R81,459 crore total cost for both the corridors, R73,392 is the cost of construction and the remaining is the cost of land. The land cost is being borne by the Indian Railways and the land acquired will be in the name of railways.

How much land has been acquired?

The total land requirement for both the corridors is 11,550 hectares, and so far we have acquired 83% of it. Of the R73,392 crore, we have got JICA funding of R38,722 crore on the western corridor in the form of a soft loan, the interest is 0.1% and with hedging the cost to us comes to 7%. The eastern corridor is being funded by the World Bank; R13,625 crore has been provided in three phases.

And how much is the actual disbursal of money?

The total expenditure so far is R5,062 crore, including land. The work has begun on Khurja-Kanpur (eastern corridor) and Rewari-Palanpur (western corridor). It is also progressing on the Kanpur-Mughalsarai (east) and Vadodara-Vaitarna (west) sections.

What about the equity component?

The debt-equity ratio is 3:1. Earlier we kept a 2:1 ratio but we decided we need to take more loans. The equity support is given by the railways.

The land for DFC also includes railways’ existing land…

The DFC is being built parallel to the existing railway lines, but in congested areas and cities we have diverted the rail line because it is very difficult to acquire land in such places. Of the total land (11,550 hectares), 9,569 hectares or 83% has already been acquired. The original proposal was to go up to Son Nagar only, i.e. Ludhiana-Son Nagar (east side) and Dadri-JNPT (west side). Now Son Nagar to Dankuni extension will be done on PPP basis, the length of which is 525 km. The 1,500-km Dadri-JNPT is part of the western corridor and not an extension.

The commissioning time for both eastern and western corridors is December 2019. But we will start commissioning in phases, the first will be in March 2018, which will be Khurja-Kanpur and Rewari-Palanpur sections.

What will be the coverage in terms of area by these corridors?

If we see the traffic pattern, we have got six corridors which join four major cities, called the golden quadrilateral, and they are diagonals. This is 16% of the length of the Indian Railways and it carries 58% of the total freight traffic. All six routes are heavily congested. Since the land capacity utilisation is 130%, there is no possibility of adding new trains on these lines. We will take up all these six corridors, but for now we have taken only two corridors. Out of the four corridors, two will be sanctioned in some time—east-west connecting Kolkata to Mumbai; east coast connecting Kolkata to Vijayawada. South-west (Chennai-Goa) and south-north (Chennai-Delhi) are in the pipeline. The total cost of the four corridors will be $65 billion, and the total length will be 6,200 km.

Are you satisfied with the progress?

In the last one year, progress has been boosted 10-fold in western and three-fold in eastern corridor. We have awarded 66% of contracts on the eastern and 64% on the western corridor. Our contractors are global agencies and they are selected and monitored by JICA and World Bank. Most joint ventures on the western corridors are between Japan as a lead partner and any other player. Anybody can participate in the eastern corridor. The progress of execution will see a quantum jump after April 2016, as 90% of procurement would be completed.

Are you looking for a change in the funding pattern?

We will resort to multilateral funding. World Bank and JICA have shown interest. If all the corridors are completed, railways’ share in goods transport will rise to 50% from the current 36%.

Will the new land acquisition Act affect costs?

Since for the current corridors we have already acquired 83% of the land, for the rest 17% it will not affect the cost so much. We have started paying compensation according to the new land Act since January 2015. The Railway Board is examining how to comply with the employment (for local people) provisions is the new Act. There are more than 3 lakh affected persons and, obviously, we cannot give employment to everyone, but we are working on it. We could give a choice to the people between employment, lump-sum payment or annuity, in addition to the compensation being given. We have taken into account all these factors when arriving at the estimate of $65 billion. We depend on the evaluation done by the state government for the market price of land. There are about 1,500 court cases and about 7,000 arbitration cases, of which 3,536 arbitration cases have been resolved and 850 court cases are pending. Land acquisition will not be a constraint.

What is the value of tenders awarded till now?

We have awarded tenders worth R11,587 crore on the eastern corridor and R19,225 crore on the western corridor, making it a total of R30,812 crore.

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Posted by on November 27, 2015 in Uncategorized


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Railways Takes Green Initiatives For Reducing Green House Gas Emissions

Conservation of environment and natural resources for the present and future generations in a manner consistent with the aspirations of the country for growth and development.To Plan, promote, coordinate and oversee the implementation of environmental and forestry programmes in order to protect the environment and maintain a balance between conservation and development activities is the mission of Ministry of Environment and Forests & Climate Change (EF & CC)..

As everyone is aware that Transport is a key driver of economic growth and social development of our Country.The sector is however a major energy consumer.It accounts for more than half of India’s total Petroleum consumption and more than 25% of the overall energy needs (second only to industry), according to statistics available in 2013.It is also a significant contributor to the emissions generated by the country, accounting for about 13% of the emissions from the sector i.e. approximately 141 million tons of CO2 eq. in the year 2007.

According to Ministry of Environment & Forests and Climate Change (EF &CC), Govt. of India, the Green House Gas(GHG) Emissions from Transport sector in 2007 (million tonnes of CO2 ), for Road Transport Sector: the share of Passenger Traffic was 84.2% ; share of Freight Traffic was57.6% ; GHG emissions in tCO2eq. 123.24 (millions) : and share of GHG Emissions: 87.47% ; whereas Railways Sector ‘s figures are : share of Passenger Traffic was 14.1% ; share of Freight traffic was 42.4%; GHG emissions in tCO2eq. 6.11 millions and share of GHG Emissions was 4.33%.In regard to Aviation Sector (0.7 %) passenger traffic and share of freight traffic was 0.02% ; GHG emissions intCO2eq. 10.12 millions and share of GHG emissions was 7.18%.and in case ofNavigation Sector, the share of passenger and freight traffic is nil and GHG emission in tCO2eq. 1.42 millions and share of GHG emissionswas 1.12%.The total all Transport sectors,GHG emissions in tCO2eq. is 140.89 millions and share of GHG Emissions is100%.

The strategy for reduction of energy usage as well as GHG emissions in the transport sector, for the period 2020-30 requires detailed assessment of Transport demand v/s possible growth modal share and the alternative fuel/energy efficiency options.Various mitigation efforts enumerated including projections for the year 2020 and 2030 are based on the available data from different sources along with the suitable assumptions, wherever required.

Green House Gas Mitigation Strategies of Indian Railways : Given the relative advantage of the efficiency of Rail based Transport, increasing the share of Rail mode for both passenger movement (regional, sub-urban and urban) and freight movement is vital not only for increasing overall efficiencies of transport sector, but also to reduce GHG emissions. Some of the measures planned by IR are:–(a) increasing the frequency, speeds and throughput of Passenger Traffic by Railmode. Capacity augmentation of routes, increasing average speed of passenger trains, augmenting the capacity of existing trains and increasing the frequency of trains wherever needed, is envisaged. (b) increasing Rail based intra urban, regional and sub-urban transport—Introducing Electrical Multiple Units (MEMUs)/ Diesel Multiple Units(DEMUs) on identified routes is proposed to facilitate better alternate options for the commuters, as compared to road transport. (c) Introducing High Speed Rail (HSR) Service—The number of passengers travelling by air has been increasing due to the easy availability of low cost airlines and rapidly growing disposable incomes in the country.(d)Increase in share off Freight Traffic by Rail Mode—while the freight movement by Railways has been increasing over the years in absolute terms, from nearly 44 billion tonne kms (BTKM) in 1950-51 to 601 BTKM in 2009-10, the share of rail mode in freight movement has decreased from more than 80% in 1950-51 to about 36% in 2013-14 (Planning Commission-2007).IR is aimed to bring up the share of Railways in the freight traffic by 2030.

Measures like, introduction of more Dedicated Freight Corridors, increase in Freight Train speed/Throughput, rationalisation of freight charges to attract loading in the empty directions, development of commodity specific wagons, increase in efficiency of loading through better “Tare to Weight Ration “, better solutions on logistics to Rail customers, etc.These efforts require sizable resource mobilisation also.

—Railway’s important component of Infrastructure—The Golden Quadrilateral of Indian Railways and it is diagonals carry a major portion of freight and passenger traffic and have got over saturated (16% of route Km carries 52% of passenger & 58% of freight).This has led to a serious capacity constraints in meeting the country’s transport demand and steady decline of IR share in the total transportation in the country.Thus, to meet the ever increasing need of transportation and recognizing the need for a quantum leap in the rail transport capacity, Ministry of Railways has embarked upon a long term strategic plan to construct high capacity, high speed Dedicated Freight Corridors along the Golden Quadrilateral and its diagonals.

In the first phase, two corridors viz., 1520 km. Mumbai-Delhi (Western Dedicated Freight Corridor) and 1856 km Ludhiana-Dankuni (Eastern Dedicated Freight Corridor) have been identified for construction.The specific objectives of these corridors are: to reduce unit cost of transportation, create rail infrastructure to carry higher throughput per train, offer Indian Railway customers guaranteed faster transit at economical tariff, increase Indian Railway’s share in the freight market and improve overall transport efficiency of the rail network as well as enhance IR’s share in the total land transportation in the country towards the ultimate target of 45% as per the project report.These two corridors are expected to be commissioned in phases from 2017 to 2019.

Development of Terminals including Logistic Parks—Indian Railways envisages expansion of terminals with logistic parks to provide end to end solutions for freight movement.Increase in share of contrainer traffic has also been envisaged for the same.Railways has initiated action to procure Distributed Powered Electrical Multiple Unit Train Sets for trains.These Train Sets are energy efficient, providing higher capacity with superior riding experience and are expected to reduce journey time by 20% on existing routes.Train Sets with Sleeper services between New Delhi-Howrah and New Delhi-Mumbai can facilitate almost overnight trains.

Traffic Growth in Rail Mode—Considering the various measure to be implemented and expansion of Railway’s infrastructure & Rolling Stock, traffic projections of IR are set to grow at the rate of 6% p.a. for passenger and 8% p.a. for freight transport between 2013-14 and 2029-30 in alignment with the Low Carbon Strategies for Inclusive Growth report of the Planning Commission (2014).The intermodal share of Rail Transport is likely to stabilise around 39% for Freight movement, as compared to the present level of share of 36%.

Improvement in Fuel Efficiency in Diesel Traction : The Specific Fuel Consumption(SFC) for diesel traction is expected to improve by 5.37% by 2020 as compared to 2013-14 and by 4.23% in the decade between 2020 and 2030.The measures planned to improve SFC up to 2030 through technological intervention, are – provision of Auxiliary Power Units(APU) on all diesel locos; Common Rail Electronic Direct Injection (CReDI)/Electronic Fuel Injection (EFI) system; Guidance for Optimized Locomotive Driving(GOLD); Multi Genset locomotives; Miller Cycle Turbocharger& Smart Multiple Units.

Improvement in Specific Energy Consumption (SEC) by introduction of EMUs with regenerative features:Adoption of 3 phase IGBT Technology for Electrical Multiple Units(EMUs)in Mumbai Suburban area is expected to result in significant improvement in SEC.It is expected to reduce emission of 600 tonnes of CO2 per annum per train due to regenerative braking features of the new EMUs (leading to reduction of about 1,00,000 tonnes of CO2 annually).Similarly, EMUs with regenerative braking in Kolkata Metro will significantly reduce energy consumption.

Introduction of latest Energy Efficient Locomotive Technology: It is expected to reduce 500 tonnes of CO2annually due to regenerative braking features of the new 6000 HP locomotives.The High Power (9000 & 12000 HP) Electric Locos which is under procurement by Indian Railways, will have latest energy efficient technology resulting in improvement in Specific Energy Consumption as well as reduction in much higher quantity of Green House Gas(GHG)emissions.

Technological improvement in Electric Locos: (i) Three phase technology for electric locos—Regenerative braking feature which enables regeneration of 15% power to back-feed to grid during braking. (ii) Fitment of 1000 KVA hotel load converter to supply to the utilities in trains.This would help in increasing the train capacity and reduce noise pollution. (iii) Provision of Energy-cum-speed monitoring system (ESMON) on all electric locomotives to monitor the driver performance leading to energy conservation.

Efforts on improving Energy efficiency on account of trailing Rolling Stock : With improvement in design of wagons and higher axle load permitted, the ‘ Pay load to Tare ratio’ of wagons improved from 3.1 to 3.44, resulting in better NTKM/GTKM ratio.Pay load to tare ratio will be further increased to 4.0 for ARI Gondola wagons and 4.21 for BOXN25 Design B.Commodity specific wagons are also being developed.These measures will enablehigher throughput and result in reduced GHG emissions for the same freight traffic.Besides, improved design Stainless Steel Coaches also provide higher carrying capacity.With increasing share of such coaches, PKM to GTKM ratio will improve resulting in reduced GHG emissions for carrying the same passenger traffic.

Improving Energy Efficiency on Non-Traction side:For non-traction installations over Indian Railways, such as Production Units, Workshops, Stations and Office buildings, etc., various energy conservation measures are underway.Adoption of energy efficient fittings, use of LEDs in passenger coaches and at Railway Stations, adoption of automation of pumps are key initiatives.Apart from this, IR has adopted mandatory procurement of at least 3 star or higher rated products for achieving energy efficiency.Provisions of Energy Conservation Building Code (ECBC) are also adopted suitably.

Green Buildings: Indian Railways(IR) has already taken initial steps to construct its major buildings as Green Buildings.In the recent past, IR has built two Green Buildings at Pune and Secunderabad. In both the buildings, a number of energy and water saving features, efficient waste management practices, use of recyclable materials, resource re-use and other measures for containing air and water pollution has been adopted/taken.Based on the experience gained, IR is proposing to build major service buildings and GreenBuildings in the period to come.

Use of Renewable Energy Sources : In order to achieve the target of sourcing of at least 10% electricity from Renewable energy resources, IR has taken initiatives for tapping “ Wind energy and Solar energy.”In this direction, IR have set up a target of installing 1000 MW capacity of Solar Energy Plants by 2020.Similarly about 170 MW capacity of Wind Mill is currently envisaged by Indian Ralways.During the period 2020 to 2030, similar projects will be planned based on availability of resources.

Improvement in Energy Intensity in Railway System:Indian Railways is the most efficient mode of transport for both passenger as well Goods movement.Though, Railway is one of the significant consumers of energy in the country, with the amount of energy used for transporting per unit of Goods as well as Passengers being the lowest in the country.In the year 2004-05, the energy intensity for Passenger traffic was reported as 71 TJ/BPKM which was substantially lesser than the taxis (1338 TJ/BPKM) and bus (196 TJ/BPKM).For the movement of Freight, the energy intensity of Railways was 91 TJ/BTKM as compared to HCVs (i.e. 1125 TJ/BTKM).As a result of various energy efficiency improvement programme described in previous paras, the Railways’energy Intensity is expected to further decrease by the years 2020 and 2030 progressively.

Improvement in Emission Intensity & GHG mitigation programmes over IR: The specific efforts and initiatives on IR for mitigating environmental impacts due to Rail operations in order to reduce GHG emissions, has resulted in desired outcomes.The emission intensity of Indian Railways has reduced from the value of 12.38tCO2per million GTKM in the base year 2005 to 10.81 tCO2per million GTKM in the year 2014 ( a decrease of 12.7).This amounts to annual savings in GHG emissions to the tune of 3 million tCO2in the year 2013-14 over the base year.The emission intensity is targeted for further reduction by about 23% by the year 2020 and over 31% by the year 2030, as compared to the base year 2005.These targets will lead to annual saving of 9 million tCO2and 23 million tCO2respectively in the years 2019-20 and 2029-30 as compared to projected emissions using base year intensity.


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Posted by on November 20, 2015 in Uncategorized


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Indian Railways will exceed Rs 8.5 lakh cr investment target by ’19 says Railway Minister.

Railway minister Suresh Prabhu is confident that he will be able to exceed Rs 8.5 lakh crore investment target by 2019. Elaborating further, he says there are 400 station development plans underway for which he is in talks with investors from Singapore, China, Korea and Japan.

He also adds that railways is looking at Rs 60,000-70,000 crore plan for Make-in-India programme. Prabhu says the dedicated freight corridor has got investments of Rs 17000 crore in six months, and more tenders will be issued under freight corridor programme.

He further says that the railways cannot rely on just increasing freight rates for revenues. He is also working on a plan to end cross-subsidisation of freight rates and passenger fares.

Indian Railways got the first tranche of money from LIC on Tuesday of Rs 2,000 crore. Prabhu says, after LIC, railways is in talks with IDBI. He is also working on a plan to monetise assets including strategic divestment of rail PSUs.

Below is the verbatim transcript of Suresh Prabhu’s interview with Ronojoy Banerjee on CNBC-TV18.

Q: Let me first start by asking you Rs 2,000 crore you have now got from Life Insurance Corporation (LIC). How and when will this money be invested?

A: First of all the problem in railways has been lack of investment which has lead to congestion, which has lead to delays in trains running, which has lead to limitation of handling the amount of freight that we can handle which is two thirds of revenues for the railways. It has also affected customer service. It has created safety issues. So, first of all of this needs money. The money if you want to raise only from increasing freight which is not desirable or getting more money from the Finance Ministry which in turn is also worrying. So, we said we will not go by that. So, at first when I was preparing the budget I said, let me identify the need for investment. On that basis we created this Rs 8,50,000 crore. We are not borrowing not even half of that but we have a complete planning about how we will raise the resources and therefore money from LIC is the best option for railways. 30 years repayment, linked to government securities (G-sec) so, now the rate has fallen again because of the interest rate falling down and also matching with the requirement of LIC because LIC policyholders will also be benefitting because of railway growth story.

Q: So, today you have got a tranche of Rs 2,000 crore. Tell our viewers where will this money this Rs 2,000 crore be invested primarily?

A: All money which is going is going for doubling, tripling, or somewhere where the congestion removal or traffic facilities. These are all very high payback money. In fact if you go by equity payback, basically you can work out IRR based on project IRR or you can go on equity internal rate of return (IRR). If you go by equity IRR, the IRR will be even 20 percent plus. This is how the State Bank of India (SBI) cap has worked out for us because I said I knew this but let me ask the professional to work out on this. So, therefore equity IRR will even be higher and that is what always happens. When you take institutional finance the equity IRR improves considerably because the project IRR remains the same but if you have financed the entire project from internal resources IRR is low. So, these are the best way to improve your IRR and also to get your equity IRR.

Q: One pillar of your tenure so far as the railway minister which is still less than one year is of under investment as you said. However already in the first two quarters you have exceeded the target that you had set. It was Rs 28000 crore, end of September it is Rs 33000 crore. So, then we are well on track to exceed the Rs 1 lakh crore that you have set for yourself for this financial year?

A: Rs 1 lakh crore is something which I had mentioned in my Budget for which Rs 27000 crore you are comparing is the right thing. However additionally ultimately as a economy as a whole will benefit when you make investment into railway sector. So, dedicated freight corridor already in last 6 months Rs 17000 crore worth of tenders have been issued which were not issued aggregately for last six years. Remaining fiscal we will be able to issue the tenders for most of it. We are already finalising contracts worth Rs 60000-70000 crore of manufacturing in India from the top companies of the world. This will again bring in new investment.

Q: When do we start seeing this?

A: I cannot announce it just now because elections are there etc. Thirdly we did SPVs with state governments with our customers like coal, steel, that itself will bring in another several thousands of crore. Fourth, is something which we are doing with the state governments. In the next 5 years 17 states would invest a huge amount of money along with us. So, Maharashtra has already set aside Rs 10,000 crore for this. Rs 10,000 crore their money and Rs 10,000 crore we put in, we leverage it.

Q: So five-year target of Rs 8.5 lakh crore that you have, you are well on track?

A: More than that because Rs 8.5 lakh crore never included the possibilities of investing like this. Then, 400 station development which is already opened up and which should happen but we are trying to get a lot of support from others. I have already talked to Singapore companies, today Australian minister was here, I requested him, China, Japan, Korea all these countries are being mobilised.

I had a meeting with the Foreign Minister to request her to mobilise all the missions. All of that put together should get huge investment into railway station and that again will spur the economy. So, when we talk about investment into the railway as a sector it is not just Budget which is the one source investment that is coming in, that source anyways is being done but additionally a large amount of money is coming into the railway system which is not reflected into the Budget. So, when you compare the Budget numbers, there we are on track but more than that is something which is coming in which is not even mentioned in the Budget.

Q: It is much more than just looking at it purely from the perspective of Budget and we are well on track to exceed Rs 8.5 lakh crore.

A: Also the one point I forgot is PSUs. Konkan Railway is starting doubling plan by leveraging their own balance sheet. Konkan Railway is not having doubling tracks and also electrification. Konkan Railway can easily save Rs 200 crore every year only because they electrify the tracks. So, just imagine the repayment ability of the Konkan Railway.

Q: We understand that the railway is also internally been working on a plan to make strategic divestments in some of their rail PSUs. Can you throw some light on that?

A: Today that is little premature to talk about it.

Q: Are you putting at least as a thought?

A: I don’t want to give an answer which is not appropriate at this stage. We are trying to monetise all the assets of railways, part of monetisation plan is something which we are doing in terms of station development which can bring in huge amount of money. All over the world the railways get 30-40 percent of their revenue from non-rail operations, India is hardly anything. So, this is one way of increasing a stream of revenue for the railways from the sources other than core railway operation.

Similarly 500 wi-fi at the station which again will bring revenue to the railways. So, these are the various ways of monetising it. I will not be able to tell you more. I always believe in do first and announce later.

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Posted by on October 28, 2015 in Uncategorized


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Bibek Debroy: Gauging the problem

This is a cliched claim that floats around freely, especially on the Net. The Romans used chariots, yoked to two horses. The chariots created ruts on the roads. If a chariot’s width didn’t match the rut exactly, it keeled over. Thus standardisation occurred across all those chariots, measured as the distance between the wheels. The Romans built roads all over England and replicated those ruts. There were horse-drawn carriages and carts. There were horse-drawn tramways and horse-drawn railways in collieries. They also stuck to the same width. Thus railways developed the standard gauge of four feet and 8.5 inches (1,435 mm) and the same gauge got transported to the US. Space shuttles had solid rocket boosters (SRB). Railway tunnels are a fixed percentage wider than tracks and SRBs had to pass through such tunnels. Therefore the design of a space shuttle was based on the backsides of two Roman horses.

In several details we needn’t get into, this yarn isn’t true, rollicking good though it might be. There was no standardisation of gauge across those early British collieries. There was a range from 1,219 mm to 1,524 mm. Indeed, George Stephenson did base gauge of his Stockton and Darlington Railway on the width of horse-drawn carts used in collieries. But that gauge was 1,422 mm, not 1,435 mm. He tried out 1,435 mm on Liverpool and Manchester Railway and found that to be better on curves. Thus the switch to 1,435 mm, but only on railways Stephenson built, and somewhat later.

For invention purposes, I have cited George Stephenson (the father) and Robert Stephenson (the son) almost synonymously and it is difficult to delink the two. Did you know Robert Stephenson wasn’t quite happy with 1,435 mm? Left to choose a gauge afresh, he reportedly said, “I would take a few inches more, but a very few.” Did you know that in 1845, in the UK, there was a Royal Commission on Railway Gauges? This led to a Gauge Act. There were too many gauges floating around: 1,435 mm, 2,134 mm and narrow gauges. But there was still incomplete standardisation, in the UK and the US. For instance, in the US, there was greater standardisation in the north than the south and this inefficiency in managing railway networks was cited as a reason for the Confederacy’s defeat. If one leaves narrow and metre gauge aside, there is standard gauge (1,435 mm) and broad gauge. But broad gauge also differs across countries. Ours may be 1,676 mm, but the range across countries varies from 1,520 mm to 2,140 mm. There were differences within Europe too, and the European Union (EU) struggled quite a bit with gauge unification.

India had its own battle over gauges. Both Lord Dalhousie and F W Simms, the consulting engineer for East India Company, wanted a gauge broader than 1,435 mm. Lord Dalhousie wanted 1,829 mm and Simms favoured 1,676 mm. Why couldn’t India have adhered to 1,435 mm? East India Company directors had a curious worry: “the continued action of violent winds, and the influence of the vertical sun”. These climatic conditions would make 1,435 mm unsuitable. Despite Lord Dalhousie’s preference for a uniform gauge, that didn’t materialise. Primarily because of lower costs, narrow and metre gauge proliferated. I read an apocryphal account of how Lord Mayo made three Indian males sit next to each other, measured the distance and thus decided the metre gauge width. But this account is probably of the same genre as the one of Roman horses. Under the Indian Railways’ (IR) plan of gauge conversion, Project Unigauge, all narrow and metre gauge lines are being converted to broad gauge. However, this still makes India an outlier, in the sense that several countries have standard gauge (1,435 mm). Standard gauge makes acquisition of rolling stock and related stuff easier, which is why Metro railways have standard gauge, not broad gauge.

Dedicated freight corridors also operate on broad gauge. The heights/weights of wagons are more than those of conventional lines, but the gauge is identical. Train lengths, train loads, axle loads and maximum speeds are also more along freight corridors. On gauge, as was Lord Dalhousie’s intention, the Indian Railways’ desire has always been for interoperability and standardisation. Despite Lord Dalhousie, several different gauges existed. If all mobile phones had similar chargers, life might be simpler. But the different Indian Metro railways seem to function satisfactorily with completely different kinds of power systems, without standardisation. Despite unification of gauge, the EU discovered interoperability becomes impossible because of differences in rolling stock and signalling, controlling and telecommunication systems. These are all integrated systems, with gauge only one of the components. As systems, they represent technology, characterised by intellectual property rights and developed independently. Perhaps there is an analogy with the way the Indian Railway Conference Association (IRCA) was formed in 1903, later transforming into the Research Designs & Standards Organisation (RDSO). Anything like the IRCA, developed through industry bodies, focuses on coordination. But something like the RDSO focuses on control and standardisation. Standardisation and uniformity may or may not have had a role when the IR was a closed system. However, as the IR opens up, we need to recognise railway technology only exists in a few countries and these aren’t interoperable.
The writer is a member of the National Institution for Transforming India Aayog.

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Posted by on October 11, 2015 in Uncategorized


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Indian Railways to pick up speed in capex

After flak from the Prime Minister’s Office, Indian Railways is set to step up the accelerator by awarding contracts for dedicated freight corridor and redevelop stations to unlock the value of its real estate.

In his letter dated September 6 to Railway minister Suresh Prabhu, Prime Minister’s Principal Secretary Nripendra Mishra raised a number of concerns over the functioning of the Indian railways.

Railways needed to expedite Plan Expenditure, stick to the targets set by the Niti Aayog and have an effective PPP cell in the ministry, said the letter, which was reviewed by Bloomberg TV India.

Since the Railway’s plan expenditure for 2015-16 was at over Rs one lakh crore, which is way above the Rs 50,000-60,000 crore annually in the last three years, the ministry needed to “organize the implementation machinery in a more effective manner”, the letter said.

The Plan expenditure in the first quarter has been Rs 17,000 crore and it needed to be “expedited”.

When contacted, Prabhu told Bloomberg TV India: “The railway’s investment cycle picks up from September-October.  We will award all the contracts of the dedicated freight corridor project by the end of the current financial year. Also, we are looking at unlocking the real estate value at the railway stations. Redevelopment of 400 railway stations, which is currently underway, will fetch us anywhere around Rs 80,000 crore to Rs 90,000 crore.”

Mishra suggested that Railways should abide by Niti Aayog guidance. According to the official, it said that the railway ministry has not achieved the goals set by the Niti Aayog. This could be a reference to the Bibek Debroy panel’s report, which has not been implemented by the railways amid strong protests from the railway’s labour unions.—after-pmo-flak–railways-to-pick-up-speed-in-capex

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Posted by on September 30, 2015 in Uncategorized