Siemens announces Equity Investment in predictive Locomotive Maintenance Specialist ‘Wi-Tronix’

Duane Hong, Wi-Tronix Vice President Customer Success; Larry Jordan, Wi-Tronix President and Chief Technology Officer; Johannes Emmelheinz, CEO of Customer Services at Siemens Mobility Division; Mike Heilmann, Wi-Tronix Executive Vice President; Lisa Matta, Wi-Tronix Vice President Product Development

Siemens has made what it describes as a “strategic equity investment” in predictive locomotive maintenance specialist Wi-Tronix, United States. While both companies have agreed not to release details of the transaction, Wi-Tronix will remain a standalone company led by its founder.

Siemens and Wi-Tronix, headquartered in Bolingbrook, Illinois, near Chicago, U.S., are launching a partnership to expand digital predictive maintenance for rail services. Through the integration of their technologies, and joint development of new innovations, the companies seek to move the industry toward the objective of one hundred-percent availability of safe, efficient service. Siemens has made a significant equity investment in Wi-Tronix. Both companies have agreed to maintain confidentiality regarding financial details of the deal.  The two companies plan to integrate their technologies and develop innovations to expand railway digital predictive maintenance with the ambitious objective of achieving 100% availability.

Wi-Tronix is a provider of remote monitoring, video analysis and predictive diagnostic systems for rolling stock and rail infrastructure, making critical data available to operators in real time through its Software as a Service (SaaS) solution. Worldwide, approximately 12,000 locomotives – primarily in the U.S., Canada, Mexico, and Australia – are equipped with Wi-Tronix technology and connected with SaaS-based solutions. Among them are the 70 electric Siemens ACS-64 locomotives operated by Amtrak, the American passenger service corporation.

“Wi-Tronix is a leading innovator in real-time monitoring for rail,” explained Johannes Emmelheinz, CEO of Customer Services at Siemens Mobility Division. “The company has profound expertise in key technologies such as video analysis, providing unique information for both real-time and predictive applications. Partnering with developers of exceptional technologies is a key part of our strategy to deliver expansive digital services for predictive maintenance.”

“We were very deliberate in seeking the ideal partner to work with,” stated Larry Jordan, President and Chief Technology Officer (CTO) of Wi-Tronix. “Siemens shares our commitment to improving the world by making the transportation of people and goods safer, more reliable, and more efficient. This requires rail operators to have access to critical data which supports both real-time decisions and predictive maintenance. With their global reach and resources, we will accelerate development of our products and expand our footprint to serve customers across platforms around the world.”

Siemens operates a worldwide network of Mobility Data Services Centers to analyze masses of data that are continually collected from hundreds of sensors and controllers in trains, locomotives and rail infrastructure. On the basis of these analyses, early forecasts of system failures are made and recommendations for acute or scheduled maintenance are sent to technicians in the Siemens depots as well as to the operators.

  • With Wi-Tronix, Siemens expands its digitalized services for predictive maintenance in the rail sector 
  • Siemens makes a significant strategic equity investment in Wi-Tronix
  • Wi-Tronix to remain a standalone, founder-led company
  • The transaction has been executed in October 2017

Contact for journalists
Denise Senter
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Ellen Schramke
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For further information about the Mobility Division, please see: AG (Berlin and Munich) is a global technology powerhouse that has stood for engineering excellence, innovation, quality, reliability and internationality for more than 165 years. The company is active in more than 200 countries, focusing on the areas of electrification, automation and digitalization. One of the world’s largest producers of energy-efficient, resource-saving technologies, Siemens is a leading supplier of efficient power generation and power transmission solutions and a pioneer in infrastructure solutions as well as automation, drive and software solutions for industry. The company is also a leading provider of medical imaging equipment – such as computed tomography and magnetic resonance imaging systems – and a leader in laboratory diagnostics as well as clinical IT. In fiscal 2016, which ended on September 30, 2016, Siemens generated revenue of €79.6 billion and net income of €5.6 billion. At the end of September 2016, the company had around 351,000 employees worldwide. Further information is available on the Internet at is a leading provider of remote monitoring, video analytics, and predictive diagnostic solutions for high-value mobile assets in rail, marine, mining, and other industrial markets. Utilizing both edge computing and cloud-based SaaS services, Wi-Tronix provides real-time data aggregation and analytics on an unprecedented scale. Wi-Tronix works closely with its customers to improve the safety, service reliability, and operational efficiency of their transportation systems. The entire Wi-Tronix team is passionately committed to our global vision of saving lives and ensuring the most efficient and reliable movement of goods and people throughout the world. Wi-Tronix corporate headquarters are located in Bolingbrook, Illinois. For more information visit or follow Wi-Tronix on Twitter at @WiTronix.

(Left to right) Duane Hong, Wi-Tronix Vice President Customer Success; Larry Jordan, Wi-Tronix President and Chief Technology Officer; Johannes Emmelheinz, CEO of Customer Services at Siemens Mobility Division; Mike Heilmann, Wi-Tronix Executive Vice President; Lisa Matta, Wi-Tronix Vice President Product Development.


Alstom delivers first Locomotive bodyshell to India

India gets first high-power electric locomotive for freight trains from France. The Indian Railways inked a contract with the French company to manufacture 800 such train engines over the next 11 years.
Arrival of the shell of 12000 HP loco from Alstom France and its unloading at Haldia.

KOLKATA: The first bodyshell of 12000 HP loco for the fleet of 800 WAG12 twin-section electric locomotives which Alstom is to supply to Indian Railways was unloaded at Haldia in the Port of Kolkata on September 20, ready for delivery to the factory at Madhepura where the fleet will be assembled.

This first-of-its-kind high-power electric locomotive will be used to haul freight trains at twice the existing speed by next year.

In November 2015 the Ministry of Railways selected Alstom for a contract to supply the electric locomotives from a factory to be built by a joint venture of the manufacturer and Indian Railways (26%). Deliveries are scheduled for 2018-28.

This is the first major FDI (Foreign Direct Investment) project in the rail sector.

The contract allows for the first five locomotives to be imported, but the remaining 795 are to be manufactured locally in support of the government’s Make in India campaign.

The first such locomotive, estimated to cost about Rs 30 crore, will be assembled with components brought in from Alstom’s factories in France and will have its trial run by February next year.

The 9 MW locomotives with a maximum speed of 120 km/h will be a development of Alstom’s Prima family that includes locomotives supplied to Kazakhstan, with modifications to suit Indian requirements. They will be equipped with ABB transformers and Knorr-Bremse braking systems.

Indian Railways intends to use the locomotives to haul 6 000 tonne trains at 100 km/h on the Eastern Dedicated Freight Corridor, and on other routes to raise the average speed of heavy freight trains from between 25 and 30 km/h to between 50 and 60 km/h.

The contract allows for the first five locomotives to be imported, but the remaining 795 are to be manufactured locally in support of the government’s Make in India campaign.

The total contract is worth above three billion euro. This project includes the set-up of a plant at Madhepura (Bihar state) and two maintenance depots at Saharanpur (Uttar Pradesh state)and Nagpur (Maharashtra state). The delivery of the locomotives will spread between 2018 and 2028.

The locomotive will run at a speed up to 120 km/h.

The Railways is currently using 6,000HP locomotives for freight services. The increase in speed would also result in improving line capacity in the rail network, a railway official said.

As per schedule, 35 locomotives would be rolled out from the factory by 2020, 60 in 2021, followed by 100 every year till the target of 800 is completed.

Separately, GE Transportation has a similar deal to supply diesel locomotives for Indian Railways.


Firms vie to give Pune Railway station a face-lift on Swiss Challenge Model

Pune station is among the 23 railway stations, which are scheduled to be revamped along the lines of a ‘Swiss Challenge’ model. The ‘Swiss Challenge’ model of bidding is different than the conventional process. It allows the entity, which submitted the unsolicited bid itself, to match or better the best bid that comes out of the Swiss process.

PUNE: Six national and foreign infrastructure firms are vying to get the contract for redevelopment of the Pune railway station under the ‘Swiss Challenge’ model, the decision on which will be declared in a few months, said officials. Several bidders have approached the officials in the Pune Division and the Railway Board for the contract. Earnst and Young, which is appointed as an advisory firm, is in touch with the prospective bidders.

Pune station is among the 23 railway stations, which are scheduled to be revamped along the lines of a ‘Swiss Challenge’ model. The second phase of a mega modernisation programme is slated to kick off later this month. Passengers may soon get to enjoy “airport-like facilities”, said an official.

The Railway Board has identified 15 key parametres, including separate arrival and departure terminals, easy connectivity with local modes of transportation, such as bus or Metro, and accessibility from both sides of the city. Facilities such as food courts, retail outlets and medical facilities will also be made available.

“The project is getting good response from the infrastructure firms. As many as six companies have approahed us, in Pune and Delhi. Most of the work is being handled from Delhi. We have a liasoning officer in Pune too,” said a senior official in Pune Division.

The ‘Swiss Challenge’ model of bidding is different than the conventional process. It allows the entity, which submitted the unsolicited bid itself, to match or better the best bid that comes out of the Swiss process.

“Under the project, real estate development of land and air space belonging to the railways will be done. The private partner can exploit the space for commercial purposes. Redevelopment is on ‘as is where is’, through open invitation from interested parties with their designs and ideas,” said officials.

Officials added that the estimated cost of redevelopment of Pune railway station is 200 crore. The other stations scheduled for remodelling include Thane, Lokmanya Tilak Terminus, Mumbai Central, Bandra and Borivali.

Indian Railways on the fast track to undertake 70 Capacity Augmentation projects

NEW DELHI: Suresh Prabhu, the minister of railways, is a man in a tearing hurry. For he has to make up for the lack of any significant addition over the last two decades to the infrastructure of this 65,000-km-long network. Successive railway ministers, given to populism, have announced hundreds of new trains at the annual Rail Budgets, unmindful of whether there was adequate track capacity to run them or not. Resultantly, over the last two decades, no less than 5,000 such new trains have been added, taking the total tally of passenger trains to nearly 9,000, whereas the addition to freight during this period has been less than 1,000 trains.

Moreover, most of the new passenger trains have been the superfast variety, on the lines of those started by the late Madhavrao Scindia, who introduced the concept of fast intercity trains such as the Shatabdi Express in the 1980s. Nitish Kumar as the railway minister introduced a slew of Sampark Kranti Express trains, Lalu Prasad Yadav had his brand of Garib Rath, while Mamata Banerjee did one better with the Duronto Express trains which ran non-stop from source to destination.

The overcrowded tracks, 60% of which now carry over 100% and some even 150% of their designed capacity, have resulted in the freight trains taking a severe hit, with the average speeds dropping to an abysmal 25kph, since the passenger trains are always accorded precedence over freight.

Simultaneously, the reluctance of ministers over the last two decades to announce any meaningful hike in passenger tariff to keep up with inflation has resulted in the passenger business being subsidised at the cost of freight, whose tariff was hiked regularly to keep the Indian Railways from going in the red.

The double whammy of low average speeds and the hike in tariff each year adversely impacted Indian Railways’ freight business. It has not been able to attract any significant volumes of new business and merrily carried on with annual increments in bulk commodities such as coal, iron ore, limestone, cement, food grains, petroleum products, etc.

The absence of assured timetable in the running of special parcel express trains, comparatively high tariff, and rigidity in rules and regulations have resulted in the lucrative parcel business eluding the railways and continuing to prefer road sector.

With financing of infrastructure projects being assured by insurance giant LIC, whom minister Prabhu persuaded to provide a Rs 1.5 lakh crore loan, the Indian Railways has now been on the fast track to undertake 70 capacity augmentation projects.

Mostly for converting single lines to double or double to triple wherever the volume of traffic has gone beyond 100% of designed capacity, projects sanctioned so far with a total length of 7,663.93-km and costing Rs 75,700.28 crore range from a short 1.82-km bypass line at Khurda Road in Odisha costing Rs 25.72 crore to doubling of the 467-km track of the Pune-Miraj-Londa section costing Rs 3,627 crore. Chhattisgarh government and South Eastern Coalfields have been roped in for a JV with Ircon to finance a 122-km-long new line from Gevra Road to Pendra Road costing Rs 4,949.28 crore for movement of coal.

The world over, for railways, freight is the breadwinner, with passenger services restricted mostly to fast intercity or commuter services. However, India has the unique distinction of having two-thirds of its trains carrying passengers which earn just one-third of its total revenue. Prabhu aims to correct this aberration by creating adequate infrastructure, offering fast, safe and cost-effective rail transport for freight, regaining Indian Railways’ role as the nation’s economic lifeline.

Two new corridors, dedicated to carry freight, have also been in the works for almost a decade. The Eastern Corridor, a 1,278-km-long Ludhiana-Son Nagar alignment parallel to the existing grand trunk route, would meet the growing demand for coal by thermal power plants in the North from collieries in the East.

The Western Corridor—1,504-km-long from Delhi (Dadri) to Mumbai (JNPT)—will help export-import trade and also cater to the proposed DMIC. Expected to be commissioned sometime by end-2020, it will offer assured timetable running of freight trains, typically completing the Dadri to JNPT run in 24 hours.

Anticipated cost of Imphal-Jiribam Rail line pegged at Rs.9658 Crores

IMPHAL/NEW DELHI: Minister of State for Railways Rajen Gohain informed the Rajya Sabha yesterday that the Imphal-Jiribam rail line has been taken up at the anticipated cost of Rs 9658 crore while an expenditure of Rs 5278 crore has been incurred till March this year.

An outlay of Rs 1400 crore has been provided for 2017-2018 for the project, said Gohain and added that Imphal to Jiribam railway line is part of the Trans-Asian railway network.

Replying to questions raised by Rajya Sabha MP K Bhabananda, Gohain further said that the completion of the project depends on many factors such as land acquisition, forestry and wild life clearances, shifting of services, construction of road over and under bridges, law and order etc.

The proposed railway stations that will come up along the new line are Jiribam, Vangaichingpo, Kaimai, Kambiron Thingao, Khonsang, Awangkhul, Noney, Tupul, Haochong and Imphal, informed the Minister.

To other posers raised by K Bhabananda, MoS for Electronics and Information Technology, PP Chaudhury said that the Ministry of Electronics and Information Technology is implementing Digital India programme to transform India to a digitally empowered society and knowledge economy and added that State Wide Area Networks (SWANs), State Date Centres (SDCs), Common Service Centres (CSCs), State Service Delivery Gateways (SSDGs), e-District Mission Mode Project (MMP) have been implemented to help the Government Departments in the States and Centre.

NITI Aayog approves Rs.18000 Crore investment for Railways

NEW DELHI: NITI Aayog on Friday approved investments worth Rs. 18,000 crore for high-speed rail projects for major routes of Delhi-Mumbai and Delhi-Kolkata, Union Minister for Railways Suresh Prabhu said at an ASSOCHAM event here today.

“We are working on Gatiman Express which is India?s fastest train at 180 km per hour and trying for Mumbai-Delhi and Delhi-Kolkata which are major routes with a speed of maximum 200 km per hour (kmph) and that will be an investment of Rs. 18,000 crore which has already been approved by the NITI Aayog,” said Prabhu while inaugurating an ASSOCHAM International Conference RAILTECH 2017.

“When we proposed it, they were apprehensive but now everybody realises importance of it as it is a least-cost option, so we are trying to do that, you can imagine the trains can go at that speed from Delhi to Mumbai and how much travel time will be reduced,” added Prabhu.

He also said that Railways Ministry is working with many countries to increase the speed of operations, including France.

“There are a lot of studies which are going on and they are in a very advanced stage, so we will start implementing that in the next few months” time,? added the minister.

He added that the Government is working towards introducing cutting-edge technology of future in all aspects of railways with it not only being imported but being co-developed in India.

“We already had about six to eight months ago, a programme in which we called all the major technology developers who had not yet fully developed, commercialized the technology which can take the speed of railways to more than 600 kmph and we are already working with them, companies like Hyperloop,” added Prabhu.

Talking about the use of high-end technology on safety front, he said that self-propelled detection of tracks together with use of ultrasonic machines and geo-spatial technology to alert about unmanned railway crossings are underway.

On laying of railway tracks, he said that automatic track laying machines which are already being used on Dedicated Freight Corridor will now be tried all over the country.

“This has already resulted in increasing the speed of putting the track which was only three kms. per day to almost eight kms. per day and the target is to take it to 20 kms per day in the next three years and definitely we are on track for doing that,” added Prabhu.

He said considering that capital expenditure needed for optimal technology has gone from Rs. 30,000 crore a year to almost Rs. 2,75,000 crore in the last 2.5 years shows the commitment of the Government.

On the rolling stock, he said that two major locomotives are already in use with one from French transport giant Alstom. “It is going to bring in the best cutting edge technology, environment friendly, speed will be good, least fuel consumption and that will available in the next month?s time and that is going to be manufactured in India.”

He said that another locomotive factory would be set up in West Bengal, “We are yet to finalise the bid, but it will already be happening. That again will begin the best technology in fact, all the top global players are vying for it.”

Highlighting that the Government is taking all these steps in a very transparent manner, the Union Minister said that companies like Siemens have made a consortium in this regard. “So you can imagine how serious they are because otherwise they would have come on their own.”

Prabhu also informed that Railway Ministry has started working on revamping, refurbishing and retrofitting of 40,000 outdated coaches.

?We have already stopped manufacturing non-LHB coaches from April 1, next year and all the LHB coaches will be manufactured, so you can imagine the technological up-gradation that is happening at all levels,? he said.

He said that Railway Ministry has also completely revamped the ticket-booking mobile application with many services being made available on one single application. “This is going to bring in a completely different experience for the traveller because he can book it completely on his palm literally, not only booking but anything to do with railways.”

Talking about the recently held huge roundtable conference on technology, he said that Railway Ministry was engaging with all the top global players that had participated in the same.

?I think we have already taken very serious steps, to modernise and optimise the capacity of railway operations and the biggest other technology tool that we will be using and we have already started work on is rail cloud,? said Prabhu.

He said that Railway Ministry has also started working on enterprise resource planning (ERP) which has the potential to save up to Rs. 70,000 crore.

?We are also using technology for each and every aspect of railways, including managerial practices which includes our internal processes to ensure that efficiency is allowed and in fact we will try to plug every possible area where there is a leakage, hoodwinking possible and the system will be made foolproof,? said the Union Railway Minister.

Consortia of Alstom, Siemens and Stadler Bussnang eye Rs.2000 Crore Electric Rail Coach Factory project in WB

The government will own 26% in the joint venture. The final bidding will take place in December 2017

NEW DELHI: Three consortia led by multinational transportation giants Alstom, Siemensand Stadler Bussnang AG are in the race to set up an electric rail coach factory in West Bengal. 

The proposed rail coach factory that would produce coaches with aircraft-type interiors is expected to come up on railway land in Kanchrapara near Kolkata on a public-private partnership basis and will involve a total investment of Rs 2,000 crore. 

This is the second-largest tranche of foreign direct investment (FDI) in the rail sector under the government’s ‘Make in India’ initiative. The first major FDI in railways came in 2015 when projects to set up two locomotive factories were awarded at a total cost of Rs 3,300 crore. 

The three consortia – Siemens-Bombardier Transportation, CRRC Corporation of China-Alstom Transport and Stadler Bussang AG (Switzerland)-Medha Servo Drives – have already been shortlisted by the Indian Railways, a top railway official said. 

The government will own 26% in the joint venture. The final bidding will take place in December, the official said. 

The selected bidder would be required to manufacture and supply train sets comprising of nearly 5,000 electric rail cars over a period of 12 years and undertake their maintenance for another 13 years. 

The trains, fully made of stainless steel, would have automatic door closing facilities, CCTV cameras and LED lighting. 

“These trains would have a new generation propulsion system that would regenerate almost 40% of the power leading to savings in energy bills,” the official said. “Seating arrangements of the coaches that would be fully air-conditioned would be modified to increase passenger carrying capacity.” 

According to the railways, the factory would produce rolling stock worth Rs 50,000 crore in 12 years and would help railways save almost Rs 10,000 crore, compared to the imported value of these coaches. 

The project is part of the modernisation drive of Indian Railways.The modernisation of the railways brooks no delay. A revamped transport network would better deliver the goods going forward, as India picks up economic speed and the demand for logistics grows. In tandem, we need a change of track on populist rail tariffs. Passenger fares need to be reasonable, to cover costs and payback. And the railways’ social obligations need to be paid for by the three tiers of government. It would require transparency in rail accounting and reporting, as in any commercial setup.

World Bank to draw up a Blueprint for Indian Railways’ Rs.5 lakh Crore makeover

NEW DELHI: The World Bank will help draw up a granular makeover blueprint for the Indian Railways, which is investing Rs 5 lakh crore to transform itself from a colonial-era mass transporter into a strategic platform underpinning growth in Asia’s third-biggest economy.

The multilateral lending agency would partner the 164-year-old railroad network, the world’s fourth longest, to help the state transporter with investment and planning, digitisation and technology development, besides establishing a Railway University and the Rail Tariff Authority.

The bank, which has earlier worked with the Railways for financing the Eastern Dedicated Freight Corridor Project, will provide advisory services and programme management consultancy for this transformation exercise for 2-3 years.

“We needed this arrangement to build our capacity and deliver projects on a mission mode. World Bank’s expertise would be a great gain,” a top rail ministry official said.

Rail minister Suresh Prabhu has drawn up an ambitious plan to transform Railways with an investment of Rs 5 lakh crore in the next four years. For this year, the Railways would spend Rs 1.31 lakh crore to augment capacity.

On the planning front, the World Bank has proposed to set up an organisation for creating detailed forecasting models, traffic optimization and planning.

“Further, an infrastructure plan for the next 10-15 years, after a detailed analysis on freight and passenger growth expected in India, is also envisaged to be created. The bank would be drawing that up as well,” the official said.

In line with Prime Minister Narendra Modi’s Digital India programme, the Railways wants to roll out a ‘digital enterprise’ for which the bank will help integrate architecture and database management across its IT applications.

It would be sensible for Railways to tap multilateral funding. Resources should be leveraged from National Investment and Infrastructure Fund. The way ahead is to plan modular projects, which can generate cash reasonably quickly. IR need to keep a close tab on borrowings, given that operating ratio is in high nineties (over 90% of revenue earmarked for routine expenses). So, resource allocation and prioritising expenditure is important. Hence the rationale to access global expertise for programme management and attendant advisory services. It would optimise resource usage.

Annual investment in Railways has doubled since 2014, says Suresh Prabhu

“Indian Railways has been actively pursuing modernisation and expansion, and it has taken a number of reforms to improve transparency and efficiency, and the annual investment in Railways has doubled since 2014,” Union Minister of Railways Suresh Prabhu said in an interview to media, while also briefing at length on a number of topics including investments in the sector, private sector participation, various projects undertaken and the response Railways has received under the Make-in-India campaign.

When questioned about the status of the investments proposed in Indian Railways during 2016-2017, Railway Minister said that while Indian Railways has suffered because of under-investment which led to poor infrastructure growth in the rail sector for many decades, NDA government focused on improving investment in Railways with a view to create infrastructure and augment capacity. He said that Rs 1.5 lakh crore funding facility with LIC is secured and for projects, Railways have also taken loans from the World Bank, JICA and ADB. Railways also propose to set up a fund which will be structured with the assistance of the World Bank, wherein investments will be pooled from various investors for financing projects in the sector.

He said in mid-2015, Railways had finalised a medium-term investment plan of Rs 8.56 lakh crore and have considerably ramped up the investment made annually in Railways. The average investment between 2009 and 2014 was only about Rs 48,000 crore. As against the same, we achieved investments of Rs 93,000 crore and Rs 1.1 lakh crore in 2015-16 and 2016-17 respectively. In the current year, we propose to spend Rs 1.3 lakh crore, he added.

When asked about the key areas in which both private and public sector investment is expected, he said that Railways is very keen to engage with the private sector because of the efficiency of service delivery that they can bring into the Railways. A lot of work is outsourced, but Railways would like the private sector to come in and develop IR stations, goods sheds, logistic parks. Two loco factories are already being developed in the PPP (public-private partnership) mode and Railways hope to award one coach factory also through a similar process to the private sector. Railways have good success in the private freight terminals with 45 terminals having already been commissioned and now it has a target to take this number to 100.

“Indian Railways has taken up station redevelopment in a big way in PPP model. In fact, it launched one of the largest transit-oriented development programmes across the world worth Rs 100,000 crore,” he said. We have created a dedicated organisation for this purpose, namely Indian Railway Stations Development Corporation (IRSDC). Redevelopment of 400 stations will be done on e-bidding on “as is where is basis”; 12 stations have been handed over to IRSDC for redevelopment. Habibganj railway station in Bhopal has become the first railway station to be entrusted to a developer by a transparent bidding process. This station is under the management of the developer from March 1 this year. The work of redevelopment of Gandhinagar (Gujarat) railway station has started from January 9, 2017.

“Tenders for Anand Vihar, Bijwasan (Delhi) and Surat have been opened. 23 stations are to be bid out by this year. Out of these 23, 6 are in Maharashtra – Lokmanya Tilak Terminus, Pune, Thane, Mumbai Central, Bandra Terminus and Borivali. In the case of Pune, Bandra, Malaysian companies have expressed interest in bidding. It must be appreciated that station redevelopment process is a complex activity as it is to be undertaken even while the station is functional. Foreign countries have also expressed interest in the redevelopment of railway stations,” he said.

As regards the response from the global investors, especially under the Make-in-India campaign, he said that two loco factories are already being developed in Bihar under Make-in-India initiative. Electric and diesel locomotive factories at Madhepura and Marhowra have been awarded to Alstom and GE, respectively. These two projects would be one of the highest foreign direct investments in India amounting to order book of almost Rs 40,000 crore. The entire bid process has been conducted in a fair, transparent and competitive manner which has drawn international attention. Construction of both the factories and maintenance depots has been started and prototype locomotives are expected in 2018,” said Suresh Prabhu.

Under these two projects, some limited number of locomotives will be imported and a majority of locomotives will be manufactured in India itself. The contract provides suitable economic drivers which would ensure complete indigenisation of the manufacturing, which, in turn, will lead to a substantial development of ancillary manufacturing units and indigenisation of the locomotives, making it a true ‘Make in India’ proposition. The projects would also lead to the development of the region where the factory would be set up and also those where the maintenance facilities would be set up. In sum, the projects would bring in substantial development in these areas and also lead to the generation of direct and indirect employment.

With regard to engagement with state governments for their participation on Joint Venture model in the expansion of railways in different geographies, he said that Ministry of Railways (MoR) signed joint venture (JV) agreement for the formation of companies with nine state governments including Odisha, Kerala, Chhattisgarh, Haryana, Jharkhand, Gujarat, Madhya Pradesh, Andhra Pradesh and Maharashtra. So far, companies have been formed with four states, namely, Chhattisgarh, Gujarat, Kerala and Odisha. The formation of a company with Maharashtra is at advanced stages and will be concluded by next month. JVs would undertake project development works for an identified basket of projects, which will inter-alia include surveys, preparation of detailed project report (DPR) and getting requisite approvals, processing for sanctioning of identified projects and monitoring.

Union Minister for Railways said that the reforms being implemented in Indian Railways are unique and are being taken up for the first time after the independence. Powers were delegated and decentralised for improvement of efficiency and transparency with the effective implementation of e-tendering, e-auctioning, e-ticketing, e-governance, e-freight demand, e-catering, e-wheelchair, e-concierge.

Rail Development Authority (RDA) is being set up and it will act within the parameters of the Railway Act, 1989. RDA will determine tariff, ensure fair play and level playing field for stakeholder investment in railways, set up efficiency and performance standards and disseminate information on global best practices and benchmarking.

Besides, a web-enabled grievance redressal machinery (Nivaran) for both serving as well as retired railwaymen has been developed. An ERP (enterprise resource planning)-based human resource management system is proposed to be implemented all over Indian Railways and Rs 339.72 crore has been sanctioned for this purpose.

Indian Railways also commissioned 2,855 km of broad gauge (BG) lines, highest ever in 2016-17, which is 7.82 km per day. Our target is to increase BG line commissioning to 3,500 km in 2017-18 which means 9.6 km per day. He said that Railways intend to further increase the pace of rail line commissioning by keeping the target of 15 km a day in 2018-19 and then 20 km a day in 2019-20. “With state JVs coming into being, this pace will further accelerate substantially,” he added.

In case of DFCs, they are expected to be commissioned by 2019, he said, while elaborating that for both eastern and western DFCs, implementation schedules have been drawn up and are being monitored on a regular basis. These DFCs entail an investment of Rs 81,459 crore including land cost approved by the Cabinet Committee on Economic Affairs in June 2015. The cost for the project will be funded by a combination of debt from bilateral/multilateral agencies, equity from Ministry of Railways and public-private partnerships. The capital structure of Dedicated Freight Corridor Corporation of India (DFCCIL) will entail a debt-equity ratio of 3:1.

He further added that in his Budget Speech 2016-2017, he announced 3 new DFCs (i) East-West Corridor (2,328 km) (Kolkata-Mumbai), (ii) North-South Corridor (2,343 km) (Delhi-Chennai), and (iii) East Coast Corridor (1,114 km) (Kharagpur-Vijayawada) for which the studies are on.

Bangalore Metro inks MoU with Embassy Group to build Metro Station

With Rs.100-crore funding for Kadubeesanahalli station on ORR line, Embassy Group is the first corporate company to be part of the innovative funding model for Namma Metro.

BANGALORE: Kicking off its innovative financing model, the Bangalore Metro Rail Corporation Ltd (BMRCL) on Friday signed a memorandum of understanding (MoU) with the Embassy Group to build the Kadubeesanahalli Metro station.

Under the agreement, Embassy Group will pay Rs 100 crore to BMRCL in instalments. The group is the first corporate to sign the agreement under the public-private partnership scheme.

The station, to be located just outside the Embassy TechVillage on the Outer Ring Road, will be on the recently approved 17-km North-South Metro corridor linking Silk Board Junction with Krishnarajapuram.

The construction, according to the group, will be done in accordance with the façade designs and specifications approved by BMRCL. The period of concession and permission granted to Embassy Group will be for 30 years starting from the date of commencement of commercial operations and could be extended further on mutual terms.

The agreement mandates that the group will maintain Kadubeesanahalli Metro station, including housekeeping and maintenance, along with all the equipment, according to specifications laid down by the corporation.

“This move will help the park users greatly, as there will be a ramp access directly to the Metro station from Embassy TechVillage, and a dedicated access from the exit point of the station,” the group said in an official release.

The partnership also means the group will be entitled to utilise the pre-determined spaces for advertisements. “Embassy can also use the leasable retail space measuring approximately 3,000 sq.ft at the Metro station. Embassy will also have the advantage of leveraging the linear zone of 250 metres around the Kadubeesanahalli Metro station,” the release said.

The new Metro line will run between Central Silk Board in the south and Krishnarajapuram in the north. The Rs 4,202-crore project is being taken up under Phase 2A of the Namma Metro network and will have 13 stations covering the entire ORR IT corridor. To be completed in three years, the project is expected to benefit nearly 4.5 lakh people who work on this stretch. The ridership is projected to eventually grow to six lakh every day. The average speed of road travel on this stretch is currently 10 kmph. This is likely to increase to 34 kmph once the Metro is in place.

BMRCL had identified and invited private entities and companies to sponsor up to 25% of the total project cost. This was to pool funds as well as get corporates to participate in faster funding and completion of transportation projects.

Pradeep Singh Kharola, MD, BMRCL: The MoU signed between BMRCL and the Embassy Group is part of the innovative financing push by Namma Metro and we strongly believe that it will encourage corporates to come forward and contribute in developing the urban infrastructure and build a well-equipped modern city.

Malaysian firms eye Rs.5000 Crore station makeover kitty in 1st big FDI boost for IR

NEW DELHI: In potentially the first big FDI in railways, Malaysia’s state-owned Construction Industry Development Board (CIDB) will participate in the auction for redevelopment of Udaipur, Howrah, Indore, Secunderabad, Pune and Faridabad railway stations.

The estimated cost of redevelopment of these stations would be Rs 5,000 crore, a top rail ministry official said. CIDB Holding Malaysia has written to the Railway Board, saying it would participate in the ongoing Swiss challenge bidding process of these shortlisted stations on behalf of Malaysian companies.

The letter from CIDB Holding Malaysia chairman Judin Abdul Karim, dated June 17, did not disclose names of Malaysian companies that would be participating. Indian Railways had held a road show in Malaysia in March this year to showcase Investment opportunities in India’s rail sector.

The Malaysian board had earlier sought station redevelopment contracts through nomination route, but the railways asked it to participate in the Swiss challenge auction to win contracts as India does not allow nomination route, said the official cited earlier.

In 2014, India allowed 100% FDI in railways through automatic route. So far, foreign firms have established two rail loco factories in Bihar with a total investment of Rs 3,500 crore. Malaysian investment in station redevelopment could mark the first major foreign investment in the operations side of railways. The railway official said that various
Japanese and South Korean investors have also expressed interest in station redevelopment projects. Indian Railways has lined up 400 stations for redevelopment.

Malaysian investment in station redevelopment could mark the first major foreign investment in the operations side of railways. The railway official said that various Japanese and South Korean investors have also expressed interest in station redevelopment projects.

GE Transportation unveils Locomotive for Indian Railways

NEW DELHI: GE Transportation, a rail industry major in the United States, has unveiled the first of the 1,000 Evolution Series diesel locomotives it is scheduled to produce for Indian Railways.

The locomotive was unveiled at the company’s plant at Erie in the US.

Hundred of the twin-cab 1676-mm gauge locomotives will be exported in finished form or as kits under the $2.6-billion joint venture agreement signed with the Ministry of Railways in November 2015.

The other 900 locomotives will be produced with mainly local components at the upcoming GE factory at Marhoura in Bihar under the government’s Make in India initiative, sources in Railways said.

Of the 1,000 locomotives ordered by Railways, 700 are of 4,500 HP and 300 of 6,000 HP.

Under the agreement, 100 locomotives will be produced annually.

Bright shades have been used on the locomotives to represent “the spices of the country.”

Red conveys energy while yellow reflects freshness.

Joint Venture

A joint venture company between the Ministry of Railways and GE Global Sourcing India Pvt. Ltd. has been formed to construct and run the locomotive factory.

The Ministry of Railways will hold 26% equity in the JV company.

The joint venture will maintain the fleet for 13 years from the start of production.

The deal includes clauses guaranteeing minimum levels of performance and technology.

GE will also develop infrastructure at Roza in Uttar Pradesh and Gandhidham in Gujarat to support long-term maintenance of the railway fleet.

The initiative was the first major foreign direct investment (FDI) in rail projects in the country after the limit was raised by the Union government in select railway sectors.

BMRCL to raise Rs.1,100 Crore via innovative funding for ORR Metro Line

BANGALORE: The Bangalore Metro Rail Corporation Ltd (BMRCL) will raise a major part of the cost for the Metro line project between KR Puram and Central Silk Board (Phase 2A) through innovative funding and leasing its land.

As per the gazette notification, the state government has set a three-year deadline for the Rs 4,202-crore project connecting two key traffic junctions on the Outer Ring Road (ORR) corridor.

The government has promised Rs 500 crore and the BMRCL has been told to raise Rs 1,100 crore through innovative funding and Rs 500 crore by leasing out its land. The BMRCL will borrow the remaining Rs 2,100 crore.

As part of innovative financing model, the BMRCL will provide direct connectivity to various IT parks from Metro stations through bridges.

Advertising, commercial and naming rights for the stations are other means, besides various cess and fees which are expected to generate a quarter of the project cost.

While noting that the project should be expedited and completed along with the Phase 2 in 2020, the state government has, however, set a rider. The BMRCL has been told to begin work on the project only after raising Rs 250 crore through leasing of land and get “firm commitment” of Rs 250 crore in the innovative funding model.

The 17-km line has 13 stations with KR Puram and Silk Board stations functioning as junctions connecting other Metro lines. Once operational, the line is expected to carry more than 3.5 lakh people.

An additional 2.5 km line will connect Baiyappanahalli depot to the line. As part of Phase 2, the BMRCL will build a depot at Kadugodi for which the state government has agreed in principle to provide 50 acres.

KR Puram-Silk Board Metro: Length – 17 km; Stations – 13; Cost – Rs 4,202 crore

Junctions: KR Puram and Silk Board stations to connect other lines

Serving Depot: Additional 2.5 km line to connect KR Puram to Baiyappanahalli depot

JICA to extend Rs.2000 Crore for Chennai Metro Rail

This assistance will further mitigate the road traffic, traffic accidents and traffic pollution

CHENNAI: Japan International Cooperation Agency (JICA) has extended Official Development Assistance Loan (ODA) of 33,321 million Japanese Yen (around Rs 2,000 crore) to the Chennai Metro Rail Ltd. (CMRL) for building of Mass Rapid Transport System.

The ODA loan’s conditions are very concessional, i.e. 1.4 per cent and 0.01 per cent interest rate and 30 years of repayment period (including 10 years of grace period).

This assistance from JICA will further mitigate the road traffic, traffic accidents and traffic pollution, and will eventually lead to balanced regional socio-economic development and enhancement of Chennai’s atmospheric environmental condition.

With the signing of this loan agreement for Chennai Metro Project, the cumulative loan amount provided by JICA for metro projects in India (including Delhi, Bengaluru, Kolkata, Mumbai and Ahmedabad Metro’s) exceeds 2.6 trillion Japanese Yen (around Rs 1.5 trillion).

Takema SAKAMOTO, Chief Representative, JICA India Office said, “When completed, this Project will provide improved access to public transport for the dense population comprising predominantly industrial workers to move towards the central business districts of Chennai for work. It will cover the centre business district area and residential cum institutional complex area of Chennai Metropolitan Area.”

Chennai is the fourth-largest metropolitan area in India. The population of Chennai Metropolitan Area was about 7.1 million in 2001 and 8.7 million in 2011. The density in Chennai city is about 25,000/km2 and it is the largest in the world, which overtook Mumbai and Kolkata.

The project will provide the additional Metro Rail System network of around nine kms as an extension of Corridor 1 from Washermanpet to Wimco Nagar, in addition to approximately 45 kms in the existing project from Washermanpet to Chennai Airport (Corridor 1) and Chennai Central to St. Thomas Mount (Corridor 2).

The extension of Corridor 1 is connecting growing northern part of Chennai (i.e. Korrukupet, Tondiarpet, Tiruvottriyur, etc.) with Chennai’s central area. The Chennai Metro is integrated with other forms of public and private transport including buses and sub-urban trains to facilitate seamless travel by commuters.

The Executing Agency for the Project is Chennai Metro Rail Limited (CMRL).

JICA has extended 150,274 million Japanese Yen (around Rs 9,000 crore) in concessional ODA loans over four tranches since 2008 for the development of around 45 kms metro rail system in Chennai. By adding this loan, the cumulative loan amount for Chennai Metro Project currently amounts to 183,595 million Japanese Yen (around Rs 11,000 crore).

JICA has extended 383,314 million Japanese Yen (around Rs 22,800 crore) in ODA loans since 1981 for all-round development in Tamil Nadu state.

Kochi-based ace Investor Porinju Veliyath bet on loss-making Cimmco Ltd, an arm of Titagarh Wagons

KOCHI: Porinju Veliyath, the closely watched Kochi-based fund manager, is betting on loss-making Cimmco Ltd, an arm of Titagarh Wagons.

The apparent reason why maverick fund manager, a popular face on business channels, has picked up around 1% stake in Cimmco is because the wagon maker is foraying into tractor manufacturing.

The new venture is the maiden consumer-facing business of the group which was so far reliant on the Railways.

A pilot run of the models was recently completed and preparations are on for a limited commercial launch, Umesh Chowdhury, vice-chairman, Cimmco, told.

Porinju’s investment firm Equity Intelligence Group has bought 2.12 lakh shares of Cimmco Ltd last week, NSE’s bulk deal data shows.

The development is not lost on the savvy investors who closely follow Porinju’s investment moves much like Rakesh Jhunjhunwala’s, pushing up the stock which got locked at the 20% upper circuit at Rs 88.20 on Friday. Porinju had picked up the shares at an average price of Rs 69.95 a piece.

But what makes a savvy value investor like Porinju bet on little known Cimmco that had in 2015 eroded half of its net worth due to faltering wagon orders and continues to make losses?

Cimmco is now slowly turning into a consumer-facing company with a bold play in the tractor business.

“We have started making the tractors from Cimmco under the brand Titagarh on a modest scale. It’s beyond pilot testing now but not yet reached commercial production levels,” said Chowdhury.

Being executed by Titagarh Agrico, earlier a wholly-owned subsidiary of Titagarh Wagons which has now been merged with Cimmco, the project has started with an initial investment of Rs 150 crore and a 76-acre facility for manufacturing tractors at Cimmco’s 250-acre plant at Bharatpur in Rajasthan.

Cimmco would be producing tractors ranging from 12 horsepower (hp) to 90 hp, with plans to ship 50,000 tractors over 5 years from Bharatpur, which is close to the high tractor-selling states of the north like Punjab and Haryana.

To execute the project, the Chowdharys of Titagarh Wagons had earlier picked up the CEO of Sonalika Group, Pranab Ghosal, to head the division.

Ghosal, as executive director and CEO, was instrumental in creating brand Sonalika, helping it achieve robust growth in sales in India and raise private equity for the group from Blackstone.

Sudhir Kashyap, who had earlier worked with Mahindra & Mahindra, now heads product development at Cimmco’s tractor division.

While wagon orders are now being released by the Railways after several years of glut, volumes are still low and Chowdhury is hopeful of revival.

“Railways currently has 2.5 lakh wagons and carries 30% of freight traffic. It’s a stated objective of the government to take this share to 50%. So, straight away, this 2.5 lakh becomes close to 5 lakh. And, if gross domestic product grows at 7%, this translates into additional demand for wagons. Again, an average life of a wagon is 25 years, which would translate into a 4% growth. So, even if the share of Railways in freight traffic remains at 30%, there could be additional 11% yearly growth,” Cimmco head says.

Porinju is bullish on select infrastructure stocks such as J Kumar Infra, and Sunil Hitech. He said investors should keep railway stocks such as Texmaco and Titagarh Wagons on their watch list.

He continued to hold Talwalkars, as he sees no impact on the business from the recent economic developments. Investors can also look at smaller well-managed companies such as Saksoft, Datamatics, Bombay Burmah Trading Corporation, HSIL, TCI, Orient Cement with a long-term view.

Railways examining Manglev Transport Method: says MOSR in Parliament

NEW DELHI: Indian Railways (IR) have floated an Expression of Interest (EoI) for designing, building, commissioning, operation, running and maintenance of levitation based train system on Public Private Partnership (PPP) basis. The salient features of the levitation based transportation system are as under:-

It is planned to be built on either elevated columns or underground.

Very high speeds can be achieved in such a ground based transport system.

The Specially designed vehicle carrying passengers / goods shall float above track or ground magnets by using principle of magnet attraction / repulsion.

Riding comfort of such vehicles is expected to be very good.

The levitation based trains shall be powered by electricity.

IR is aware that the current infrastructure cannot be utilized for levitation based transport system. IR’s initial thrust is on setting up a technology demonstration system of limited length to begin with. Thereafter it is planned to jointly develop and build a cost-effective solution of such a technology in collaboration with the chosen technology partner / partners. The responses of various Firms received against the Expression of Interest (EoI) are being studied/examined from various aspects which includes electrical requirement for the levitation based train system also.

The project is envisaged to be implemented on PPP basis.

This Press Release is based on the information given by the Minister of State for Railways Shri Rajen Gohain in a written reply to a question in Lok Sabha on 22.03.2017 (Wednesday).

Railway Ministry invites UAE investment for modernising Indian Railways

India’s Union Minister of Railways Suresh Prabhakar Prabhu says that he will be seeking ‘several tens of billions of dollars’ from UAE sovereign wealth funds for development of Railways Networks

DUBAI: India will invest $140 billion in its rail network over the next five years, according to the Indian Minister of Railways Suresh Prabhu, speaking in an interview with local media outlets.

The minister also revealed that his office has been in talks with UAE-based sovereign wealth funds this week, around the Middle East Rail event that began on Tuesday.

“We have requested that the government of the UAE look at the huge potential for investment that lies in Indian infrastructure, particularly in the railways. They are very keen to know more about this.”

“We’ve had good meetings with Mubadala and the Abu Dhabi Investment Authority (ADIA),” Prabhu said, adding that he hoped these issues would progress over the course of 2017.

When asked what amount he was seeking from the funds, Prabhu replied that his ministry had an appetite for “several tens of billions of dollars,” stating that whatever was made available, India would take.

ADIA is the third largest sovereign wealth fund in the world, holding approximately $792 billion in assets.

File Photo: Railway Minister Suresh Prabhu meeting with Dr.Ahmed Albanna, Ambassador of UAE to India during February

In January 2017, Prime Minster Narendra Modi said that his government was in “mission mode” when it came to rejuvenating the railways in India.

The Minister of Railways noted that Modi had previously described the railways as “the growth engine of tomorrow’s India”.

“Of the $140 billion we will be investing over the next five years, the majority will go towards India’s modernisation efforts, the introduction of new technologies, and increasing capacities,” he said.

Prabhu confirmed that the government of India has already raised as much as $65 billion, to be spent over the next two years.

He went on to state that India has allocated as much as $16 billion for safety measures, and $7 billion for energy efficiency.

New projects in the pipeline for the country also include a high-speed railway from Mumbai to Ahmedabad, in collaboration with the Japanese government, the conversion of two of India’s busiest routes, Mumbai to Dehli and Mumbai to Calcutta, in to medium-speed corridors, and an increase in the electrification of the country’s tracks “by more in the next five years than the last few decades combined,” Prabhu said.

Speaking on India’s relationship with the UAE, the minister remarked that “our Prime Minister attaches a great importance to this bilateral relationship with the UAE”.

“It’s been a very good visit to the UAE, and I’ve had interesting, fruitful meetings with the leaders of this country,” he said.

In January 2017, His Highness Shaikh Mohammad Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, conducted a state visit to India, where he was Chief Guest at India’s Republic Day celebrations.

Myanmar Parliament approves German loan for Locomotives project

Naypyidaw, Myanmar: Yesterday Parliament approved the Ministry of Transport and Communications proposal to take out a Euro 5 million loan from the KFW known as German Government-owned Development Bank to upgrade the Locomotive Shed (Ywahtaung) under the Myanmar Railways (MR).

Transport and Communications Minister Thant Zin Maung submitted the proposal to the Union Parliament on February 17.

The project’s objectives are the renovation the German made Locomotives running on the Mandalay-Myitkyina Railroad, to installation the Universal Wheel Lathe, major renovations to coaches and wagons, upgrading the Technical High School, capacity building training of staffs for the emergence of skillful and qualified human resources.

3.25 of the loan will be used for the renovation of seven locomotives and the purchase of a Universal Wheel Lathe, and 1 million will be used for the lathe’s maintenance.

Moreover, a quarter million of the loan will be spent on the purchase of supporting equipment for Railways Technical Training School (Ywahtaung) and fees for the State leaders.

The interest rate of the loan is 0.75 per cent per year and the suspension period is 10 years. The loan must be paid back within 30 years.

German Bank to Sanction ₹2,500 Crore for Amaravati Metro Rail

A.P. Government to begin work on the project soon, says Minister for Municipal Administration, Govt.of AP.

VIJAYAWADA: German bank KfW has agreed to sanction a loan of ₹ 2,500 crore for the much-publicised metro rail project in the city. With this, the State government is contemplating starting the work shortly.

The government proposes to construct two corridors with a length of 26 km. While one corridor will come up covering 12.5 km, the other will cover 13.5 km.

Phase-I by 2018

Another metro project, which was planned for Visakhapatnam, would be taken up on a Public Private Partnership (PPP) model. The government is proposing to construct two corridors in Visakhapatnam. The other two corridors are from Gurudwara to the Old Post Office and Tatichetlapalem to Park Hotel. The Visakhapatnam project is envisaged for completion by 2019.

Municipal Administration Minister P.Narayana on Thursday said the the government was planning to complete the phase-I in Vijayawada before 2018.

After opting out of the proposal to approach the Japanese International Cooperation Agency (JICA) for loan, the State government is heavily banking on funding by the German and French development banks KfW and Agence Francaise de Development (AFD) to put the Metro project on track.

The government is expecting a loan of ₹4,000 crore from these banks, which have in-principle approved the loan. They are yet to work out individual contributions.

The Amaravati Metro Rail Corporation (AMRC) held talks with various external funding agencies, including the European Investment Bank, World Bank and Asian agencies. The government also explored the ‘green route’ and planned to tap funds through the Climate Bonds Initiative, a U.K.-based non-profitable organisation.

The government opted out of JICA loan as it made clear that the soft loan would be ‘tied’ loan and insisted that 30 per cent of the loan component must be utilised for procurement of the rolling stock from Japan.

Logos invited

The Amaravati Metro Rail Corporation Limited (AMRCL) has invited logos for the prestigious project, to be submitted by February 20.

In a press release, AMRCL Managing Director N.P. Ramakrishna Reddy said there were about 165 metro rail and 450 light metro rail projects in the world and each one of them had its logo.

The logo for Amaravati should depict the Sunrise State, a train, tracks, water and greenery and local cultural traits / icons reflecting Amaravati history.

The best design will be awarded Rs.50000 and the second best design Rs.30000 and the third one Rs.20000. No prize money will be given for other contenders.

The art work/graphic designs can be submitted as hard copies, or soft copies through e-mail

Details of AMRC can be seen on the website

French & German firms to visit the Vijayawada in Feb for funding Amaravati Metro

The State government had already released Rs 300 crore for land acquisition for the project.

Vijayawada: Funding agencies from France and Germany will  be visiting the capital city again in the second week of February. Their proposed meeting with Amaravati Metro Development Authority officials is generating interest among the top bosses of the government, as they are worried about the recent protests at Nidamanuru over the land acquisition for Metro Rail works.

Two funding agencies from Germany and France have visited the capital city on November 10 to have a dialogue with Amaravati Metro Rail Corporation (AMRC) authorities. After JICA’s exit from investing in the project, the AMRC has been exerting all efforts to find out a meaningful investment partner and as part of it, representatives from KFW of Germany and AFD of France have visited the capital city. In fact, the state government has released Rs 300 crore for Vijayawada Metro Rail project in August last. The release of funds will help start the project.

AMRC MD N. Ramakrishna Reddy said that Mr Dubreuil Herve, Ms Rima LeCoguic and Mr Matthieu Verdure from AFD, and Ms Usha Rao, Mr Robert Valkovic and Ms Julia Scholtes from KFW have visited the capital city in November last for a dialogue over granting the loan or financial assistance worth Rs 4,000 crore. “They are visiting again in the second week of February to have a review over the progress of the project,” Mr Ramakrishna Reddy said.

In fact, a four-member Japan International Cooperation Agency (JICA) team inspected the proposed metro corridors in the city in the month of April. Mr Ramakrishna Reddy, who accompanied the team, said that the JICA loan of Rs 4,200 crore would be released by July. The loan was being given with a moratorium of 10 years was the condition then. However, the JICA has incorporated too many conditions later, which prompted the AMRC to drop the idea of sailing with them and the AMRC declared that it in August.

The State government had already released Rs 300 crore for land acquisition for the project, according to the AMRC managing director. The JICA team reportedly expressed willingness to sanction loan to the tune of Rs 3,600 crore prior to their visit in February. But, the AMRC sought the increase in the funding and sanction Rs 5,000 crore. However, the JICA team then only gave a clarity that it has not financed more than Rs 4,000 crore to this kind of project elsewhere in the world.

Railways offers investment-friendly environment for Investors

Government of India invites private sector to invest in rail infrastructure – said Rajen Gohain, Minister of State for Railways, at ASSOCHAM International Summit on Invest Rail held at New Delhi. The Minister said that Indian Railways had already set in consultative process on private investment.

rajen-gohain-at-assochamNew Delhi: Railways is keen to involve private players in development of rail infrastructure at more than 400 major stations in the country and offers “favourable” investment environment for the industry partners, Minister of State for Railways Rajen Gohain said here today.  The Minister on Wednesday urged the private sector to invest in railway infrastructure.

“Need of the hour in Indian Railways is the massive investment and new technology without which we cannot move to become a world class transporter,” Rajen Gohain said at an industry summit organised here. “Thus, the plan is to increase investment to nearly one trillion rupees in the next decade,” the minister said at ‘ASSOCHAM International Summit on Invest Rail’. “We are ready to offer an attractive and investment friendly environment, particularly looking at investment partners in more than 400 station building projects for high return on investment,” he said here at an event organised by industry body Assocham.

Gohain said the railways will have to move from merely developing rail infrastructure to other support services like technology upgrade, better logistic support and better passenger services in an integrated manner.

Stressing on the need of heavy infusion of funds in rail sector, Gohain said “Need of the hour in Indian Railways is massive investment and introduction of new technology, without which we cannot move to become a world class transporter. Thus, the plan is to increase investment to nearly Rs one trillion in the next decade.”

He said development of rail infrastructure will help reducing pollution.

“Investment in rail will thus help in the planets sustainable and environmental goals and help in meeting the greenhouse gas emission targets. In addition, rail offers a more stable and sustainable form of transportation. We, in Indian Railways, are thus trying to have a collaborative approach in bringing governments, local authorities, railways and other stakeholders on the same wave length for a more sustainable form of transport system,” Gohain said.

While India has the world’s fourth largest rail network, as it has been outstripped by china, which now has more than six times as much railway track following an intensive expansion and modernisation of its network over the past two decades.

Railyatri raises funds from existing investors

railyatri-foundersNew Delhi:, a platform for railway commuters, recently closed a fresh round of funding from existing investors — Infosys co-founder Nandan Nilekani and venture funds Bloom Ventures, Omidyar and Helion Ventures. Sources declined to share details on the quantum of investment.

The platform, which has an app as well as a portal, provides services primarily to train passengers, such as ticket-confirmation probability, food ordering and delivery in trains, hotel booking and information on hospitals located along train routes.

The app, which also provides bus-booking services, plans to start train-booking service as well, stated co-founder Manish Rathi.

The other players in this segment include Railways’ public-sector unit IRCTC and start-ups such as Trainman and ConfirmTKT.

Unlike the start-ups, IRCTC does not provide predictive analysis on ticket confirmation.

Assam to get Investment nudge from PCM Rail-One Germany

Siliguri: A rail equipment making company in Germany that is owned by a businessman in Bengal will send a team to the state soon to scout options to set up a unit to make sleepers.

PCM Rail.One AG, owned by the Siliguri-based PCM Group of Industries, has footprint across a number of countries, including the US.

Kamal Kumar Mittal, the chairman of the supervisory board of PCM Rail.One, said that during the chief minister’s visit to Germany this month representatives of PCM Rail.One AG were also there.

He said: “After the meeting, Jochen Riepl, the CEO of PCM Rail.One AG, announced that it would set up an industrial unit in Bengal to make composite railway sleepers. The investment will be from Germany while the employees will be the skilled workers from Bengal.”

The PCM group took over Rail.One in 2013.

Mittal said a tentative estimate of the investment would be Rs 250 crore. Senior officials of the company are in the process of preparing the detailed project report. Once ready, they will be here for a recce to visit and select the location for setting up the factory.

“This is indeed an important decision which has been taken after the chief minister’s visit,” Mittal said.

The German company was founded in 1895. Gradually, it forayed into the sector of railway sleepers and was known as Rail.One GmbH. One of the technologies that the company had developed is ballast-free rail tracks. After the acquisition of Rail.One, it was restructured and renamed PCM Rail.One AG.

“At the proposed unit, the company will make composite railway sleepers. These are not made of concrete but of plastic and other recyclable materials. The sleepers are costlier that concrete but more durable,” Mittal said.

“There are steady markets for such sleepers in some south-east Asian countries and in Austrialia. The idea is to send such sleepers from this proposed plant to these countries.”

He said: “The manner in which they (German businessmen) responded in Munich where the chief minister addressed them, is positive.”

The PCM Group, which has 17 subsidiary companies, is also planning to foray into the tourism sector, Mittal said.

“We have been selected through a tender by the state tourism department to set up a three-star resort at the tourist hub in Gazoldoba (in Jalpaiguri district). Also, we are planning to open another resort at Samsing Tea Estate (in the Dooars in Jalpaiguri district),” he said.

Personal insurance of Rs.10 Lakh @ Rs.0.92/Rail ticket: IRCTC

Travel InsuranceIndian Railway Catering and Tourism Corporation (IRCTC) made it to the much famed Fortune India Next 500 list of companies for the second consecutive year.

In an interview, A.K. Manocha, CMD/IRCTC said that the company’s plan to construct business lounges, like airports was earlier stalled but after repeatedly requesting the ministry and policy is now changed and IRCTC has successfully commissioned three of them.

He said that one is at Delhi which will be re-commissioned and given to a private sector operator on private-public partnership (PPP) mode to run and operate.

The other two are in Agra and Jaipur, he added.

On the upcoming personal insurance service, Manocha said that the price will start at Rs 0.92 per ticket and will provide an insurance for Rs 10 lakh.

It is expected to be launched in the next 10-15 days by Prime Minister Narendra Modi, he further said.

Below is the transcript of AK Manocha’s interview:

Q: You have made it to the list of Fortune-500 companies for the second year in a row. What is so unique about IRCTC?

A: IRCTC has been in the business of catering and tourism for the last 12 years. And we have been making a fortune every year. We are paying dividend to the government, we are making profits and even to the extent, when catering was taken away from IRCTC and turnover went down to Rs 500 crore, this year we grew to Rs 1,500 crore which is a threefold jump in about last six years.

And I would put it that last year we had a tough challenge also because catering was taken away.

Two years back of course, people were very depressed when catering was taken away. But then gradually our system recovered and our turnover came to somewhere around Rs 650-700 crore. But last year we touched Rs 1,100 crore, this year, 2015-2016 we touched Rs 1,500 crore and we hope that we will be able to beat it and go into Fortune-500.

We have jumped about 250-300 ranks for three years consecutively. And this year ranking will be coming sometime in January.

So, Rs 1,500 crore where we have jumped about 38 percent, we should be in the top-10 or top-15 of the Fortune-500, especially the vision of our Honourable Prime Minister and our Honourable Minister, who are continuously and very user friendly, we get a lot of prodding from the ministry to deliver quickly.

And of course, we want for certain broad guidelines. Sometimes, they take a lot of time, but still, whatever be the constraints of those issues, we have been able to improve the general style of the country and the railway men.

ak manocha irctcQ: I also want to talk about the passenger amenities because that is something IRCTC is continuously improving, be it water vending machines, be it bed rolls for non-ac passengers. What is the vision as far as passenger amenities are concerned?

A: Let us take it one by one. We have had mandated to construct executive lounges at the station which are business lounges, like airports. So, a few were built a few years back and then, the person who made it just left it because of the usual procedure where rent was increased several fold and land prices also circulate, also went up.

So, the rent became prohibitively expensive. So, after repeatedly requesting the ministry, we were successful in getting the policy changed. We have successfully commissioned three of them. One at New Delhi.

That will be re-commissioned, given to a private sector person on private-public partnership (PPP) mode to run and operate, one at Agra and another at Jaipur.

I am very sure another 45 will be coming not later than next June. And they can be as cheap as, say in Konkan Railway, they are running for Rs 25 per passenger for two hours and where you have WiFi facility and just AC, good comfort, privacy and all those facilities. We give of course, takeaway counter also. So, this is one issue.

Then we have been advised, after a lot of repeated chasing, ministry has agreed and Honourable Minister has already announced in the budget to go for upgradation of retiree rooms which are for people to stay. We are waiting for the policy guidelines. We have already done a pilot project in Katra station.

Q: I am glad you talked about services because we have heard that Railways is planning to come up with a lot of services and there are services such as WiFi or canteens, but it is the maintenance that is an issue. In our own ground reports, we found that maintenance is still one of the major problems of railways. How is IRCTC planning to work around that?

A: Most of the projects, I would say, I personally feel are one of the best models we could think of. They are on PPP mode. Let us take water vending machine which we have mentioned. We already tendered for 2,000 machines, awarded them and more than 500 machines have been installed in a large part of the country.

Another 1,500 are due for installation in about next one year’s time. We have tendered for another 1,000 and that response has been not so warm this time, I must admit. But 45-50 percent will still be finalised.

Q: You mentioned the response was not warm. Why was that?

A: The prime locations have gone, that is number one, because 2,000 is a big number. These were at 700 main stations. Then, the issue remains, some local issues like people must have found some difficulties in bureaucratic rigmarole, that is getting water, electricity connection and handling the local people or local population. But still, we are very sure that we will be able to install more than 5,000 machines in the next one and a half year.

In fact my ambition was to go many fold of this because this is so cheap. You get Rs 1 World Health Organisation (WHO) standard water, chilled water, refill and it gives employment.

So, you can imagine a Rs 5 lakh machine yielding about Rs 10-15 lakh a year. So, it is a lucrative business for most of the people. So, everywhere what we get is a licence piece which is quite good for us, I must admit.

Q: Taking further from water to toilets, you talked about namma toilets that you have installed in certain parts of the country. What is the plan from here on? How many stations are we going to see you covering in the future?

A: We have almost finalised tender for 29 locations. These are part of corporate social responsibility (CSR) and each namma toilet is not a cheap thing. It costs over Rs 17 lakhs. It is a pre-fabricated composite material toilet, consists of eight units, two male, one female, one divyang and four urinals. And biodigester can also be fitted on this. It is approve by Prime Minister’s Office.

The first one was launched by Honourable Cabinet Secretary and it is hugely popular also. The first one was installed by NBCC opposite Hyatt Hotel. So, now recently, one namma toilet was innovated by Honourable Railway Minister about three days back at Khar Road station, local station in Mumbai. Two more are getting installed in Mumbai area within the next 15 days, one at Andheri and another at Bandra.

Q: So you are planning to go pan-India with namma toilets?

A: Yes, and ‘namma’ means ‘us’ or ‘our in Kannada. So, just yesterday I have approved some 6 toilets to be placed on CSR along with water vending machines. So, we are expecting that this year, these 29 toilets should be ready in another two months time.

Q: You think the concept of portable toilets or namma toilets could help solve the sanitation problem that many railway stations are grappling with at this point in time?

A: Toilet sanitation has a host of issues. Namma toilet has the advantage that you can put biodigester. But a negative feature in that is if a plastic bottle or a plastic material is throw, it chokes it and it gives foul smell. They we are also building three glass-top coaches for tourism which is a new initiative.

Of course, we have taken help from Minister of Tourism. These will be ready in another 2-3 months time. And then once these are ready, it will be a swiss experience in India and we have also started dining car facility because we want our country to enjoy. The journey should not be just for the sake of journey.

It should be a pleasurable experience. You should have a high speed WiFi in the train, not only at selected stations. And of course, these can be commercially charged. These are viable options.

We are also going for rail museum upgradation for entertainment and other purposes which will start in another month or two months time. Then e-wheelchair, we extend it to several stations. Then e-bedroll is another initiative.

Then rail mitra seva which we have at some stations. Now we want to expand it several fold. And one thing more you must have heard is passenger insurance.

Q: I want to talk about personal insurance because that is an important service that your coming up with. Personal insurance for as low as Rs 2 per ticket?

A: No, it is Rs 0.92.

Q: Now that is phenomenal. How is that going to work out?

A: I was chasing it for the whole of last year. This has been my ambition that with such a huge population, travelling by train, it should be an asset and everybody should feel secure because government procedure settlement of claims are very lengthy, very cumbersome.

I have worked as Chief Claims Officer for the Northern Railway for three-four times and I have seen how people face the problem despite being monitored by PMO. So, with the pilot, our initial estimate given by one of the insurance companies was Rs 20. We were scared whether local people will go, commuters will go in mumbai.

But now, I am sure, we are starting with Rs 0.92. It is an insurance for Rs 10 lakh.

The pilot is going to be launched within the next 10-15 days by Honourable Prime Minister. Right now, we have given on single insurance that is Rs 10 lakh. It also covers Rs 7.5 lakh for permanent disability, Rs 2 lakh for hospitalisation and Rs 5,000 for baggage loss in case of death, etc.

But this is not my vision. My vision is that it should come down to Rs 0.1 per kilometre for ordinary commuter and next vision is that you do not have to buy even a ticket, your Aadhar card, you have got a credit card with you or debit card with you, it has all the data of Aadhar card linked to it and suppose you are given a card of say denomination of Rs 4,000 in mumbai.

On that card itself, becomes your authority to travel in the train for most of your journey for a limited distance, 30-40 km and then next phase could be that you do not have to even buy a ticket.

Board a train, get down from the station and based on your GPS location, the money is debited from your mobile. Or a challan is sent to your home or to your employer, everyday stuff.

Q: But that is a lot of numbers there and a lot of visionary talks.

A: No, this is not visionary. This is a real talk. After six months you will say that it has happened less than six months. So, I will give you a few examples. I gave you example of Katra.

Our Honourable Minster is very keen that this thing is put on fast tracks. And I am sure in about 10-15 days time, we should be able to get policy on retiree rooms, policy on executive lounges, policy on catering and then you can see the changes. Like, we started Gatimaan Express for tourists. We have introduced the most lucrative brands in the country like Wagh Bakri Tea and Girnar Tea which are served in the airlines for as much as Rs 100-200. We are supplying at, we get not even Rs 5 for a cup of tea. So, despite being a loss, we want to show changes.

The minister has also keen that we set up base kitchens or food factories like Noida food factory. It has to be a unique experience and after some time, people should come from abroad, like they come to see Delhi Metro, they should come to travel in railways because they say flight is so boring.

Given the choice, I would also prefer to go for a station redevelopment. Right now Rail Land Development Authority (RLDA) is handling it. And I will not call it, sky is our limit.

Q: One avenue that you are looking at, station redevelopment right now, you talked about a lot of bottlenecks in implementation of services be it with the authorities that you are working with or the local people. What is IRCTC doing to ensure effective and timely implementation of various services that you are coming up with?

A: Since our minister is keen, we take a lot of help from the ministry to provide the local officials and since I am from the railways also, sometimes, personal contacts work, sometimes my visit to senior officers work, so we try to persuade them and show them a positive side. Like I said, water vending machine gives employment to so many people, so it is a win-win situation for everybody.

Consumer gets a cheap water, instead of Rs 20 water, he can just manage with Rs 1 glass or maybe half a litre in Rs 3. The other advantage is that licensee is very happy, he makes money.

Q: I also heard that IRCTC is looking at opportunities abroad that you have been approached by various authorities from different countries. What are the prospects that you are looking at and what are the collaborations that we can see IRCTC getting into in the future?

A: All international collaborations require help from Ministry and External Affairs Ministry. So there have been people, I can give the example of Mexico where Tourism Minister organised a presentation for everybody, but specific presentation was also organised, IRCTC tour on our most luxurious train called Maharaja in their country. Because they said we want to develop it in our country.

They were even looking forward for a tie-up for laying a railway line. And they also wanted that coach production or factory could also be laid.

Q: So, are you seeking the answers from the Railway Ministry?

A: I am totally bound by government rules. So, it has to be government to government agreement. If I am given a choice, I will camp there for three months and get the orders.

Q: You talked about prospects in redevelopment of stations. What is it that you are currently looking at and are you not happy with what you are doing at this point?

A: No, I am not. For me, a big project gives you a lot of opportunities to try your innovations and my vision is to go for at least maybe 50-100 stations to redevelop. Of course, I cannot touch a station like New Delhi unless we have big people. But as a country, our outputs are way below our expectations, country’s aspiration and not even one-millionth of our potential.

And mumbai is one of the ideal places to do. Mumbai any small station development. So I had asked for it, I did some survey. Now I am looking for partners who can deliver miracles in Mumbai area.

Q: And where? Is there any places that you have identified in Mumbai?

A: If you take another 50 stations in a few days time, I have no problem. We have been approached by reputed builders. Of course, one we are approaching on our own. We have been approached by big finance companies, huge institutions.

Q: So, you are not really happy with the current state of railways?

A: No, I am happy. Happy means what? I feel there is a huge potential. We are at the bottom of the pyramid.

Q: Not many people know that IRCTC is one of the biggest e-commerce players in the country. You deal with 5.5 lakh ticketing passengers every day? What are the avenues that we are looking at here? What sort of revenues that you generate on daily basis?

A: Every day, we pay Rs 65 crore as advanced to railways. If it is a weekend, we pay Rs 130 crore. If it is a three day vacation combined, we pay Rs 300 crore. This is transferred to bank.

We had some problems in ticketing. We announce the capacity, memory from which used to be 2,400, we took it to 15,000. Beyond that, we are slightly reluctant because of three reasons.

One reason is that if it becomes too fast, the tickets will vanish in few seconds. Right now, there are few minutes available for a person to buy a ticket. We have put a check that you cannot buy a ticket through internet in less than 35 seconds.

So, 35 seconds for feeding you data and 10 seconds because we find a lot of complaints about people or agents or unauthorised, unscrupulous people manipulating the software.

Q: Then are you taking some initiatives for that?

A: Yes, we have taken huge initiatives. We have got our software certified by the most reputed group in the country to certify any IT sites, a Government of India undertaking under Department Of Electronics.

That has certified our site to be safe and they carry out several tests which are called vulnerability tests, penetration tests, whatever sites which we locate as vulnerable.

Q: There were reports until a few months back of data theft and that huge number of passengers have lost their data to hackers. Are there any merits to these reports? Were you able to identify the hackers?

A: I will put the facts. As far as we are concerned, we do not find a single hacking case. As far as data theft is considered, the data which we came across, that is data which is available in the market easily. Credit card data, we do not take, we do not keep, we do not maintain, we do not want to maintain also. So, as soon as you go for bank data, the site takes you to the bank itself.

We never found our working to be slow which is an indication of hacking. Once you take link to Aadhar card, we have taken a lot of initiatives, you cannot buy a ticket before 35 seconds. So, that is one check. But from the counter you purchase, but after 35 seconds, once it starts, it is thousands of people clambering for same seats. It is basically demand and supply issue.

But then, yes, we cannot allow unauthorisation, we lodged first information report (FIR), some people were arrested, case has been taken up with them. And then as and when we find anything going wrong, we take a drastic action even against agent. If he gets the money refunded and it does not pass on, the penalties are very severe.

Q: So, you are exploring a lot of other avenues other than ticketing for that matter and you may just give Cleartrip and Make My Holidays a run for their money. How is the business doing as far as the holiday packages are concerned?

A: I will give you the story of Make My Trip of Mr Deep Kalra which he narrated about two months back. He said they came almost as the same time as IRCTC came to the market, internet ticketing.

We started with just 29 tickets and today, we have grown almost a half a million fold. Then he said, for five years, they had to leave the country because the payment system was not established. People were not willing to accept that credibility. And the IRCTC established the credibility so much that they came back and now, today they are one of the market leaders and they use our site and we have got more than 33 banks who use our site and we have got huge tie-ups with state governments and State Bank of India included and other banks also.

Q: And you are also tying up with a lot of companies. What are the other tie-ups that you are looking at and how well are these tie-ups doing?

A: We are keen for tie-ups with each and every person who can deliver us goods. Only thing, he has to meet our criteria. We have only one criteria. The growth should be explosive, so anybody who can meet this challenge and prove his worth is always welcome.

Like I said, station redevelopment, we want rail over bridge to be laid in a few days time, anybody who can meet this challenge is welcome because that is the toughest thing to make in Indian conditions for Indians, not worldwide.

Q: We also heard that IRCTC is exploring an avenue to come up with an e-wallet.

A: We have been running e-wallet. We were charging Rs 250. I reduced it to Rs 50 and for three months, we have made it to zero. We want people to come here, station has gone up several fold.

Then we want to link up to Aadhar Card also. So, we are bound by RBI regulations. But my dream is that each and every person through his bank or otherwise it is linked to our system so, through voter card or Aadhar card. So once that is linked, I told you I do not want anybody to even go for buying a ticket.

Q: Let me then ask you, I can now buy an air ticket from IRCTC website, I can book a hotel, I can book a car. How well is the business doing? You have such a big user base.

A: I want to grow 1,000 fold. It will take at least 1,000 days.

Q: One area where we have seen a lot of transformation is catering. You have recently come up with e-catering. You have tied up with big giants to serve people food on demand from whichever restaurant they like. What is the demand like as far as e-catering is concerned?

A: When we launched this initially, for a few months, we were stick to just 50-60 meals a day. That was because a lot of restrictions were there. And as soon as our minister opened for 400 stations, A1,A and B class stations and others, it has grown 55 times. We are already touched 6,000.

Average is close to 4,000. But that is too small a figure. So, 4,000 meals may look big for a private person, but for an entity like Indian railways or IRCTC, it is just a load for 4-5 trains. So, we are running hundreds of trains every day.

Like I tell my people and generally, people take 3-4 cups of tea every day. So, there are 2.5 crore people going on the train every day. So, at least 10-15 percent of reserved people.

IR to revamp Retiring Room Complexes at 600 Stations across country

Railway Retiring Rooms at 600 Stations across the country will undergo a major revamp as IRCTC plans to equip them with WiFi, Air-conditioners, Lockers, ergonomically designed furniture and aesthetically-designed washrooms, among various other facilities!

Retiring-RoomNew Delhi: Retiring rooms at 600 stations across the country will undergo a major revamp as IRCTC plans to equip them with air-conditioners, wifi connectivity and aesthetically-designed washrooms, among other facilities.

Railways currently manages around 2,000 retiring rooms or dormitories at more than 600 stations. The facility is meant to provide reasonable safe transit accommodation to bonafide passengers, who can book a retiring room for a maximum of 72 hours.

“We are in the process of floating tenders to engage reputed service providers for the maintenance, expansion and introduction of new facilities in retiring rooms on the PPP and renovate-operate-transfer (ROT) model,” IRCTC Chairman and Managing Director A K Monocha said .

“Renovation work will be carried out in a phased manner. To begin with, retiring rooms/dormitories at around 400 major stations will be taken up to provide upgraded services to rail passengers,” he added.

Railway Minister Suresh Prabhu had in his 2016-17 budget speech announced that “retiring rooms will be handed over to the Indian Railway Catering and Tourism Corporation to ensure that these can be managed in a professional manner.”

The revamped retiring rooms will have facilities like quality mattresses and linen, almirah/locker for luggage, LED TV, telephone and intercom, firefighting equipment, potable water and room heaters. They will be well furnished and properly lit.

Washrooms are to be aesthetically designed with modern facilities. There will also be wheel chairs for senior citizens and disabled persons.

IRCTC is also planning to provide some value-added services on payment basis, such as food and beverage in rooms, tour and travel services with local sightseeing, magazines and books, laundry facility, Internet, STD/ISD and Wi-Fi connectivity in the premises.

It will also ensure retailing of journey conveniences and travel requirements like gifts and toys. To top it all, there will be bell boy/porter service for luggage handling.

“IRCTC intends to provide an upgraded retiring room complex on lines of guesthouses with more personalised services and expanded food and beverage services,” he said, adding, “We will bring industry expertise to undertake the refurbishing work of the retiring room complexes.”

Currently, the facilities in retiring rooms include AC and non-AC rooms with attached/common bathrooms, AC and non-AC dormitories with common bathrooms, limited food and beverages services, and lockers.

Railways plans Rs 30000 Crore Infra Fund for Projects with high return rate

concor freight cargoNew Delhi: To attract investors for the expansion and modernisation of rail infrastructure, Railways is setting up a Rs 30,000 crore fund, first-of-its-kind for the national transporter, for implementation of remunerative projects across the country.

We are creating a fund of Rs 30,000 crore for setting up Railways of India Development Fund (RIDF), said a senior Railway Ministry official.

Investors like World Bank, National Infrastructure Investment Fund, pension and insurance fund and other institutional investors are expected to be part of the RIDF. However, the RIDF will invest only on those rail projects which have high rate of return.”RIDF will focus on new lines for freight movement or redevelopment of stations. It will not invest in those projects which are not remunerative,” he said.

A survey will be carried out before taking up the project. Projects with minimum rate of return ranging between 14 per cent and 16 per cent will be taken up by the RIDF.

Railways will seek the cabinet nod before setting up the infrastructure fund.

Since freight lines are more remunerative than passenger line, RIFD will focus on goods movement.

Currently, railways has undertaken many new lines projects which are socially desirable but economically non-viable.

Certain projects in the hilly and remote areas are being taken up to provide rail link to the people of those regions.

Railways is facing about Rs 32,000 crore shortfall in the passenger operation as it is heavily cross-subsidised from freight business.

Railways is set to make the PPP terms more attractive for Investors’

With the potential investors’ initial response to the public-private partnership (PPP) model for railway stations’ redevelopment being lukewarm, the government is set to make the terms more attractive for them to power up PPPs

Railways PPP ModelNew Delhi: With the potential investors’ initial response to the public-private partnership (PPP) model for railway stations’ redevelopment being lukewarm, the government is set to make the terms more attractive for them.

An extension of the land lease period from 45 years now to at least 70 years and supporting these ventures with viability gap funding are under active consideration, according to official sources. These apart, it is also likely that the model concession agreements (MCAs) will be reinforced with limited assured sources of revenue to investors to reduce their risks, the sources added.

While the Modi government has lined up plans to revamp 400 railway stations in the country by roping in private investors, only 15-20 projects will be up for grabs in the first phase. The bidding is being carried out under the so-called Swiss challenge method, where an eligible player submits a development proposal to the government, including the premium he is willing to pay the government. Once this proposal is made and due diligence is done, the government would accept counter-proposals from other eligible entities, while the entity which made the first proposal will enjoy the right of first refusal.

According to a senior railway official, private infrastructure players have asked for the lease period of the land to be extended from 45 years to 70-90 years. They have also asked for assured sources of revenue with rights to parking ticketing, platform ticketing and some catering rights.

Even though the ministry of railways is going all out to make the station development plan a success, market sources believe that lack of clarity on certain issues, persisting doubts about the feasibility of the projects and encroachment of land parcels at many major stations have kept investors wary.

“There is still no clarity over how the railway ministry is planning to take the development of these projects ahead. Not all stations have surplus land available to be given for commercial development. The government also need to assure the investors are encroached lands will be taken back and provided for development,” a senior executive from an infrastructure firm told FE.

According to official data, 21 of 85 A1 railway stations have encroached land and 35 such stations have no land available for commercial exploitation.

“The government is talking about commercial, residential and retail development. However, most of the stations that will come up for redevelopment are in Tier 2 and Tier 3 cities, where a revenue structure based on monetisation of land by way of creating office space and building residential projects, malls etc may not be viable in all cases.

“We would ideally like to see if there is any plan to develop logistics parks or hubs around these stations, which

will make more sense given the cargo volumes that railways carry, and will make for more commercial viability for the developer as well,” said an official from another infrastructure company. “Plus the onus of getting all the clearances from the local authorities lies with the developer; the whole process could potentially get very cumbersome, he added.

“We are addressing the concerns in the market.. we have a provision for compensating the developers who lose out in the bidding process for the expenses incurred by them to prepare the detailed project reports. As for local clearances, we have started forming joint ventures with different states so that the approvals come without costly delays,” a senior railway official mentioned told FE.

The ministry of railways has already signed MOUs in pursuance to forming joint ventures(JV) with nine states and is looking at signing MOUs with seven more states in the future for upgrading the railway infrastructure.

“Railways should first focus on creating a few success stories in terms of station re-development. Creating success stories is very important for investor confidence. Planning and design of the station should be done by the transporter as opposed to the private developer,” Abhay Krishna Agarwal, Partner infrastructure & PPP at E&Y said.

Market sources also state that as balance sheets of most of the private infrastructure companies like GMR, HCC, GVK, Jaypee and Gammon are stretched, many of them could be chary about taking up capital-intensive projects like railway station development.

Why Nandan Nilekani Has Boarded RailYatri App

Nandan NilakaniInfosys co-founder Nandan Nilekani’s personal investment in RailYatri has increased the visibility of the Rail Travel App.

60-year old Mr Nilekani, ranked 69th on the Forbes India Billionaire’s List with a net worth of $1.61 billion, made an undisclosed investment in RailYatri last month.

“What excites me about RailYatri is the fact that this is a new-age product made by Indians for Indians.

The RailYatri app, which intelligently harnesses the power of smartphones, data and mobile payments, has a huge opportunity of impacting the lives of millions of travellers,” Mr Nilekani said.

RailYatri is backed by venture capital funds such as Helion Ventures, Blume Ventures and Omidyar Network.

RailYatri’s co-founder and CEO Manish Rathi told that information for the app is crowd-sourced or the data is provided by users of the app.

“We use mobiles of the users to track the location of trains. Users tell us whether the ticket got confirmed or not and based on that we help future travellers,” he said. “The data which helps in decision-making is powered by other train travellers.”

Mr Rathi cited another example of how crowd-sourcing helps power the app. “You want to know the location of the train you are sitting on? In some sense, you are sharing your location to find it out. That location value is used to make predictions associated with other travellers.”

“When you get a value in return, you contribute to the information world.”

RailYatri uses analytics technology to make intelligent predictions that help travellers make decisions for their upcoming journeys. The app uses a traveller’s mobile GPS to predict train delay, coach position, on-time history of a train and whether the wait-listed tickets are likely to get confirmed.

It also enables travellers to book essential services such as premium on-board meals, bus tickets and budget rooms.

RailYatri has so far raised about $3 million.

Railways attracts $60mil FDI from Sept 2015 to Feb 2016

The Foreign Direct Investment (FDI) in the railways between September 2015 and February 2016 stood at $59.81 million, the Lok Sabha was informed on Wednesday.

As per data compiled by Department of Industrial Policy and Promotion (DIPP), the quantum of FDI during September 2015 to February 2016 is $59.81 million, minister of state for Railway Manoj Sinha told the Lok Sabha in a written reply.

He said agreements have been signed between Railways and Joint Venture Company for setting up of two locomotive factories at Madhepura (Electric) and Marhowra (Diesel) in Bihar costing about Rs 2600 crore entailing FDI inflow in rolling stock manufacturing.

While precise amount of FDI further expected can not be predicted or quantified, potential projects involving FDI include Dankuni and Kancharapara rolling stock factories and annuity projects of third line between Wardha-Nagpur, Kazipet-Vijaywada and Bhadrak-Nargundi.

Railways failed to commercialise its vacant land: Parliamentary Panel

With Indian Railways facing a financial crunch and looking for extra budgetary resources, a parliamentary committee report found that the Rail Land Development Authority (RLDA), set up for commercial development of vacant railway land to mobilize additional resources, has not been able to develop a single land since 2007.

The Railway Convention Committee in its report said that so far 60 sites measuring about 590 hectare of land have been identified and entrusted to RLDA for commercial development, out of which 47 sites have been selected by them for this purpose.

The committee expressed its anguish that not a single site, out of 47 sites identified by RLDS itself, has actually been commercially developed as yet to due to slump in the real estate sector, availability of free hold property in major cities where most of the commercials cities are located and inordinately long time taken for obtaining the change of land use.

What concerned the committee more is the reported reluctance on the part of some state governments to cooperate with the Railways.     The committee has stressed that the non-development of a single site commercially till date has tended to negate the very purpose of setting up of RLDA as such.

Calling for Railways to sort out the systematic deficiencies and take initiatives for urgent corrective measures, including requisite coordination with the state governments so as to enable RLDA to succeed in its ventures and mobilise additional financial resources for the Railways.

The committee noted that almost 3899 hectares of vacant land is under commercial licencing with the zonal railways for sliding connectivity, catering units, goods and it has fetched approximately Rs 1300 crore during 2014-15 to the Railways.

The committee suggested for innovative measures to attract developers to participate in the commercial development of vacant land which would enable mobilisation of increased financial resources for the Railways.

Railway has already set up a separate directorate to look into the extra budgetary resources including monetizing of land and other commercial spaces to get revenue.

Bullet Train project set to begin in 2018

SPV on Bullet Train to finalise Technical Details

The ambitious bullet (high-speed) train project between Ahmedabad and Mumbai will kick-start from 2018 after the conclusion of discussions at various levels between railway officials and representatives of Japan. While the initial cost was pegged at Rs 98,000 crores for the project, the government is now keen on an elevated corridor, which will add another Rs 10,000 crore to the overall project cost.

“We have covered a lot of grounds in the last three months, which involved discussions at various levels to get the project started. A joint working group which was constituted by the Prime Minister’s Office will be going to Japan for two days next month to hold further discussions on the loan negotiation,” said a senior official, adding that the government has now decided to go for an elevated corridor.

The Indian delegation will engage its Japanese counterparts in giving a major thrust to the “Make in India” initiative and also ensure larger involvement of Indian companies in the civil work of the project.

“The final location survey is now to be commissioned, which will examine the geological and hydrological aspects of the project. It will also look into the 21-km-long undersea tunnel portion of the project as well. The study will be fully funded by the Japan International Cooperation Agency,” the official said.

The high-speed corridor project is being funded with a soft loan by Japan of Rs 80,000 crores, while the railways and the state governments of Gujarat and Maharashtra will share the remaining cost of Rs 20,000 crores.

Technical experts of the railways and Japan have also held discussions on the design and certification of the high-speed corridor project. “The Japanese experts have stated that the elevated corridor will be fenced and, unlike Delhi Metro, there could not be movement of vehicles underneath,” said the official.

It has also emerged that not more than 20 per cent of the project cost would be spent on direct procurement from Japan, which will mostly be on train sets.

With the aim of launching the first high speed train in the country between and Ahmedabad, has stepped up ground work for starting construction work of the Rs 98,000 crore project in 2017.

“Our aim is to start the work at the earliest. It would take about seven years after the awarding of the contract for the project to be completed as a lot of new technologies would be used to construct the high-speed corridor,” said a senior Railway Ministry official involved with the bullet train project.

The special purpose vehicle (SPV) formed to implement the Mumbai-high speed bullet train project, is meeting tomorrow to finalise the technical details including standardization process for construction of tunneling, pillars, fencing and other requirement of the mega project.

The SPV has been named National High Speed Rail Corporation Limited comprising senior railway officials and the national transporter is in the process of appointing a CEO for the job.

Maharashtra and Gujarat will have equity of 25 per cent each, while the Railways will have 50 per cent in the SPV.

The bullet train is expected to cover 508 km between Mumbai and Ahmedabad in about two hours, running at a maximum speed of 350 kmph and operating speed of 320 kmph.

At present, Duronto Express takes about seven hours to cover the distance between the two financial centres.

Estimated to cost about Rs 97,636 crore, 81 per cent of the funding for the project will come by way of a loan from Japan. The project cost includes possible cost escalation, interest during construction and import duties.

It is a soft loan for 50 years at 0.1 per cent annual interest with 15 years’ moratorium, said a senior Railway Ministry official.

For timely completion of the project, a joint committee has been formed under the vice-chairman of NITI Aayog with the secretaries of the Department of Industrial Policy and Promotion (DIPP), Departments of Economic Affairs and Foreign Ministry as its members along with the Railway Board Chairman.

LIC India invests Rs.250 Crore in Konkan Railway bonds

KR is entrusted with construction and operation of Railway line along the west coast from Roha (Maharashtra) to Thokur (Karnataka)

irfc tax free bonds LIC IndiaMumbai: In a huge boost for the Konkan Railway Corporation’s expansion plans, the Life Insurance Corporation of India Limited (LIC India) has subscribed to Rs 250 crore worth of KR bonds. It will allow the railway firm to kickstart some projects announced as part of the 25th anniversary celebrations of KRCL.

In a press statement, Sanjay Gupta, Chairman-managing director of KR stated that the financial support received from LIC will go a long way towards assisting in the development of capacity augmentation and passenger friendly projects.

On the eve of the 25th Foundation Day celebration held on October 15, 2015, Railway Minister Suresh Prabhu had announced these projects. They included electrification of Konkan Railway route, construction of new halt stations and passenger terminals, doubling of Konkan Railway route, additional loop lines and stations for augmentation of section capacit.

KRCL is also expanding its reach by participating in projects which are meant for port connectivity (Jaigad Port connectivity project) or to provide rail connectivity to hinterlands (Chiplun-Karad Rail Link).

“The seminal role of LIC as a crucial partner in the development of Railways and KRCL under the visionary leadership of the Minister of Railways Suresh Prabhu, cannot be overemphasised,” Gupta said.

KR is a Government of India Public Sector Undertaking under the ministry of Railways entrusted with construction and operation of Railway line along the west coast from Roha (Maharashtra) to Thokur (Karnataka). Apart from Government of India, four State Governments—Maharashtra, Goa, Karnataka and Kerala—​have equity participation in KR.

Haryana to get Rail Coach Factory soon: Suresh Prabhu

Stressing on the need to create infrastructure for promoting growth, Union Minister Suresh Prabhu today said Indian Railways and Haryana government will soon set up a joint venture company for developing the rail network

Happenning HaryanaGurgaon: Railways Minister Suresh Prabhu announced on Monday that a rail coach factory would be set up in Haryana.

Addressing captains of industry in the two-day ‘Haryana Happening Global Investors Summit’ here, he said that in the recent rail budget, the government has decided to make huge investment in Haryana to expand the rail connectivity.

“We want to take the rail infrastructure at the next level so that Haryana will further become an infra hub and contribute significantly in growth of the country,” he said.

Prabhu also said that he was happy to announce to make the project of setting up of a rail coach factory in Haryana a reality. The factory is envisaged to be set up over an area of 120 acres.

Stressing on the need to create infrastructure for promoting growth, Union Minister Suresh Prabhu today said Indian Railways and Haryana government will soon set up a joint venture company for developing the rail network.

“We have signed joint venture agreements with 16 states for building rail infrastructure. Haryana is the first state which is now going to work with us as a partner to create a joint venture company in which we will develop railway infrastructure,” the Railways Minister said at ‘Happening Haryana Conclave’ here.

“We will try to operationalise this joint venture company in the next few days itself,” he added.

He also said that the Railways have decided to make huge investment in the state for developing new connectivity.

“We have decided to make rail factory a reality very soon. We have been discussing with Chief Minister. We are trying to get 120 acre land for that,” he said.

Inviting private investment, Prabhu said 400 railway stations are going to be modernise soon.  “India has 400 railway stations with huge eyeballs and 7 billion footfalls every year. So just imagine the opportunity for railway station re-development,” Prabhu said. “Our railway stations have a footfall of seven billion per annum so the investors can assess the feasibility and returns from such projects,” Prabhu said.

He said the ministry is mulling engaging the private sector to build 200 freight terminals over the next few years, the details of which will be worked out shortly. Faster movement of cargo can substantially reduce the cost of transportation, and the ministry is also mulling bringing out guidelines on cargo speed. The decision on integrated transport solutions would be made within the next few days, Prabhu added. He also said Haryana has capability to become a logistic hub for the north. Therefore, he said, Railway will be active partner for developing the state into hub.

Private Operators for Ahmedabad-Mumbai Bullet Train on RailMin Radar

New Delhi: In less than a month of the Cabinet approval for the Rs.98,000 crore Mumbai-Ahmedabad bullet train project, the rail ministry seems to have speeded up the pace of consultations on India’s first bullet train corridor. Among the proposals being looked at by the railway board is a suggestion to allow private operators to run the 508-kilometre high-speed line, officials said.

“One of the recommendations of the Panagariya Committee is to invite private firms to operate the project five years after its commissioning,” said a senior rail ministry official who did not wish to be quoted. “The idea is still very far-fetched. The project itself will take seven-eight years for completion,” he added. The Union Cabinet’s approval for the high-speed line was based on the recommendations of a committee headed by NITI Aayog Vice-Chairman Arvind Panagariya.

The empowered committee for innovative collaborations had approved the project favouring Japan over China for the low-cost funding up to 80 per cent of the cost proposed by Japan International Cooperation Agency (JICA) at 0.1 per cent interest rate (50-year repayment) apart from a commitment for technology transfer and local manufacturing for a specified period.

It had suggested Indian Railways can run the corridor for initial five years — after which private operators can come in — and railways could also formulate a policy enabling the private players to participate in the operations of the line, according to a report. Bullet trains are run by state-owned agencies in France and Germany, while the Japanese Shinkansen system of bullet trains was handed over to private companies after two decades of operation. In Taiwan, where the Sinkansen technology is being used since 2007, the rail operator has sought a bailout by the government to turnaround the troubled business.

Officials also said the ministry will incorporate a new special purpose vehicle (SPV) on the lines of the Delhi Metro Rail Corporation (DMRC) next month to implement the project with 50 per cent equity of the rail ministry. Of the rest, the Maharashtra and Gujarat state governments will contribute 25 per cent each. “Also, an empowered committee of secretaries will be set up to address project implementation issues. It will have secretaries of the Department of Economic Affairs and the Department of Industrial Policy and Promotion (DIPP) and the Railway Board chairman as members,” said a senior official.

The bullet train will be run on a standard gauge line covering 12 stations between Bandra Kurla Complex (BKC) in Mumbai and Sabarmati in Gujarat. The stations en route will include Thane, Virar, Boisar, Vapi, Bilimora, Surat, Bharuch, Vadodara, Anand and Ahmedabad. The train will have a maximum design speed of 350 km per hour (kmph) and an average operating speed of 320 kmph.

The bullet trains will comprise 10 cars with 750 seats in the beginning and will be scaled up to 16 car trains with 1,200 seats in future. The railways plans to run 35 trains per day each way to begin with in 2023 which will go up to 105 trains per day each way in 2053. The service will have an estimated ridership of 36,000 per day both ways (13 million per annum) initially. This is estimated to go up to 186,000 per day both ways (68 million per annum) by 2053.

The total journey time of the train will be 2.07 hours and an average tariff of 1.5 times the 1 AC class of the conventional rail network. The total construction cost of the project has been estimated at around Rs 70,915 crore, including land cost. The overall project stands at an estimated Rs 97,636 crore, including price escalation, interest and development charges and import duties.

Officials said the average per km cost of construction of the bullet train corridor works out to Rs 140 crore, while the project will have an internal rate of return (IRR) of four per cent and an economic IRR (that quantifies socio-economic benefits too) of 11.8 per cent. Some of the work packages of the bullet train contract will include either a Japanese company or a Japanese-led JV as prime contractor. Also, some of the identified goods which are manufactured in Japan will be procured from that nation.

ON THE FAST TRACK The rail ministry speeds up pace of consultations on Mumbai-Ahmedabad bullet train project. The Panagariya panel proposed allowing private operators to run the line 5 years after commissioning. The ministry to set up a DMRC-like SPV to implement the Rs 98k Crore, 508-km corridor. An empowered committee of secretaries to be set up to address project implementation issues. The bullet train to run on standard gauge, covering 12 stations between Bandra Kurla Complex in Mumbai and Sabarmati in Gujarat. The train will have a maximum design speed of 350 kmph and an average operating speed of 320 kmph. Initially, 10 cars, with 750 seats in each train, and 35 such trains to run per day, each way; the service will have ridership of 36,000 per day both ways. Per-km cost of construction of Rs 140 cr, internal rate of return of 4% and an economic IRR of 11.8 per cent

Railways fast-tracks Mumbai bullet train project, sets up Co

New Delhi: The railways ministry has fast-tracked the Mumbai-Ahmedabad bullet train corridor by setting up a separate company, on the lines of the Delhi Metro Railway Corporation (DMRC), which will build and operate the NDA government’s ambitious project.

The company will be registered in January. The process has already being initiated by Indian Railway Finance Corporation (IRFC), reflecting the state-run transporter’s intent to accelerate the actual work on the Modi government’s dream project expected to put the country’s railway sector in the big league.

To begin with, the company would be registered in the name of Indian Railways. At a later stage, the company would be made into a joint venture (JV) with equity participation of the Maharashtra and Gujarat governments. In the JV, the equity contribution of Railways is likely to be 50% while Maharashtra and Gujarat would have a stake of 25% each.

The public sector company is expected to build and also carry out train operations. It would provide access to private operators after five years of operation of the Mumbai-Ahmedabad corridor with a suitable revenue sharing arrangement.

The company, which will own the assets created on the corridor, would have effective independence in decision-making and would be run as a professional entity.

IR embarks on an ambitious path for Total Modernisation in Operation & Station Development

IR Modernisation suresh prabhuNew Delhi: With foreign collaborations in place, the Railways is embarking on an ambitious path for total modernisation in operation and station development. While France will develop Ludhiana and Ambala stations, which figure on the upcoming New Delhi-Chandigarh semi-high speed route, Japan’s assistance will be taken for solutions for critical technological challenges of the Railways, including running trains in times of fog.

“France has expertise in station development and accordingly we have assigned them the two stations of Ludhiyana and Ambala to develop in a manner that they become major hub and attractions. Japan is also going to help the Railways tap the land value capture in a manner that it becomes a major source of revenue,” said a senior official of the Railway Board.

Incidentally, the Railways has roped in France for the “speed enhancement” on New Delhi-Chandigarh to run 200 kmph trains. “France is conducting an execution study, which is a step ahead of feasibility study, and we actually are looking to unveil the semi-high speed mode on New Delhi-Chandigarh in a year’s time,” said the official.

The Railways is also undertaking trials of the LHB coaches being manufactured at the rail coach factury at Kapurthala to meet the 200 kmph requirements.

“We already have the LHB coaches being manufactured in the country in Kapurthala and Rai Bareli, which are designed to clock the speed of 180 kmph. With a few changes, we are seeking if they could clock the 200 kmph speed,” added the official.

Besides, the premier research and design operation (RDSO) of the Railways will partner with its Japanese counterparts to develop cutting-edge technologies in signalling, operation and maintenance.

“With Japan, we are looking at the possibility of their model to have electric sub-stations at 110 km stretch against our current practice of 30 km distance. Also, Japan cleans a train in flat nine minutes that we will seek to replicate,” added the official.

MOS (Railways) gives information on Railways PPP Projects to the Parliament

New Delhi: Ministry of Railways has planned to offer ‘A-1’ and ‘A’ category stations (about 400 stations), which are generally located in metros, major cities, pilgrimage centres & important tourist destinations, for redevelopment on ‘as is where is’ basis, by inviting open bids from interested parties with their designs and business ideas. General guidelines in this regard have been issued to Zonal Railways. As the entire cost of station development is to be met by leveraging commercial development of land and air space in and around the station, no railway funds are required to be allocated. The details of the ‘A-1’ and ‘A’ category stations, State-wise, including Tamil Nadu are appended. The bids from interested parties are not yet invited.

Indian Railway Stations Development Corporation Ltd. (IRSDC), a dedicated organization set up in 2012 has been entrusted with redevelopment of seven stations viz., Anand Vihar, Bijwasan, Chandigarh, Habibganj (Bhopal), Shivaji Nagar (Pune), Surat and SAS Nagar (Mohali) and Rail Land Development Authority (RLDA) has been entrusted with redevelopment of one station viz. Gandhinagar. Request for Qualification (RFQ) and Request for Technical Proposal (RTP) for one station viz. Habibganj have been finalized. RFQ for two more stations viz. Anand Vihar and Bijwasan have been invited.

S.No Name of station State S.No. Name of Station State S.No Name of station State
1 Visakhapatnam Andhra Pradesh 33 Tuni Andhra Pradesh 65 Mokama Bihar
2 Secunderabad Jn. -Do- 34 Warangal -Do- 66 Bapudham -Do-
3 Vijayawada -Do 35 Guwahati Assam 67 Motihari -Do-
4 Hyderabad -Do- 36 Barpeta Road -Do- 68 Narkatiaganj Jn. -Do-
5 Tirupati -Do- 37 Bongaigaon -Do- 69 Patna Sahib Jn. -Do-
6 Kacheguda -Do- 38 Dibrugarh Town -Do- 70 Rajendra Nagar (T) -Do-
7 SSP Nilayam -Do- 39 Jorhat Town -Do- 71 Raxaul Jn. -Do-
8 Palasa -Do- 40 Kamakya -Do- 72 Sagauli Jn. -Do-
9 Srikakulam Road -Do- 41 Lumding -Do- 73 Saharsa Jn. -Do-
10 Vizianagaram -Do- 42 Rangiya Jn. -Do- 74 Samastipur Jn. -Do-
11 Anantpur -Do- 43 Tinsukia -Do- 75 Sasaram Jn. -Do-
12 Anakapalle -Do- 44 Silchar -Do- 76 Sivan Jn. -Do-
13 Bhimavaram Town -Do- 45 Darbhanga Jn. Bihar 77 Jogbani -Do-
14 Chirala -Do- 46 Gaya Jn. -Do- 78 Katihar Jn. -Do-
15 Cuddapah -Do- 47 Muzaffarpur Jn. -Do- 79 Kishanganj -Do-
16 Eluru -Do- 48 Patna Jn. -Do- 80 Purnea Jn. -Do-
17 Gudur Jn. -Do- 49 Chhapra Jn. -Do- 81 Raiganj -Do-
18 Guntakal Jn. -Do- 50 Bhagalpur -Do- 82 Jamalpur -Do-
19 Guntur Jn. -Do- 51 Anugraha Narayan Road -Do- 83 Raipur Chhattis-garh
20 Kakinada Town -Do- 52 Ara Jn. -Do- 84 Bilaspur Jn. -Do-
21 Kazipet Jn. -Do- 53 Bhaktiarpur Jn. -Do- 85 Bhilai Power House -Do-
22 Khammam -Do- 54 Barauni Jn. -Do- 86 Champa Jn. -Do-
23 Kurnool Town -Do- 55 Betiah -Do- 87 Durg -Do-
24 Manchiryal -Do- 56 Buxar -Do- 88 Raigarh -Do-
25 Nellore -Do- 57 Danapur -Do- 89 Rajnandgaon -Do-
26 Nizamabad -Do- 58 Dehri-on-Sone -Do- 90 Delhi Jn. Delhi
27 Ongole -Do- 59 Hajipur Jn -Do- 91 New Delhi -Do-
28 Rajahmundry -Do- 60 Jamui -Do- 92 Hazrat Nizamuddin -Do-
29 Renigunta -Do- 61 Jayanagar -Do-
30 Samalkot Jn. -Do- 62 Khagaria Jn. -Do-
31 Tadepalligudem -Do- 63 Kiul Jn. -Do-
32 Tenali Jn. -Do- 64 Madhubani -Do-


S.No Name of station State S.No Name of station State S.No Name of station State
93 Anand Vihar Terminal Delhi 133 Jammu Tawi Jammu & Kashmir 174 Kanhangad Kerala
94 Adarshnagar Delhi -Do- 134 Udhampur -Do- 175 Kannur -Do-
95 Delhi Cantt. -Do- 135 Dhanbad Jn. Jharkhand 176 Kasargod -Do-
96 Delhi Sarai Rohilla -Do- 136 Tatanagar -Do- 177 Kayankulam Jn. -Do-
97 Delhi Shahdra -Do- 137 Daltonganj -Do- 178 Kollam Jn. -Do-
98 Vasco-Da-Gama Goa 138 Gomoh Jn. -Do- 179 Kottayam -Do-
99 Ahmedabad Gujarat 139 Koderma -Do- 180 Palakkad Jn. -Do-
100 Vododara -Do- 140 Parasnath -Do- 181 Payyannur -Do-
101 Rajkot -Do- 141 Jasidih -Do- 182 Shoranur Jn. -Do-
102 Surat -Do- 142 Madhupur -Do- 183 Thalassery -Do-
103 Anand -Do- 143 Bokaro Steel City -Do- 184 Tirur -Do-
104 Ankleshwar -Do- 144 Hatia -Do- 185 Tiruvalla -Do-
105 Bharuch -Do- 145 Ranchi -Do- 186 Vadakara -Do-
106 Bhavnagar Terminus -Do- 146 Bangalore City Karnataka 187 Bhopal Madhya Pradesh
107 Gandhidham -Do- 147 Yashwantpur -Do- 188 Jabalpur -Do-
108 Jamnagar -Do- 148 Gulbarga -Do- 189 Singrauli -Do-
109 Mahesana -Do- 149 Mangalore Central -Do- 190191 MorenaGwalior -Do--Do-
110 Nadiad -Do- 150 Mangalore Jn. -Do- 192 Indore -Do-
111 Navsari -Do- 151 Bangalore Cantt. -Do- 193 Nagda -Do-
112 New Bhuj -Do- 152 Bangarpet -Do- 194 Ratlam -Do-
113 Palanpur -Do- 153 Belgaum -Do- 195 Ujjain -Do-
114 Surendranagar -Do- 154 Bellary -Do- 196 Burhanpur -Do-
115 Udhana -Do- 155 Bijapur -Do- 197 Khandwa -Do-
116 Valsad -Do- 156 Davangere -Do- 198 Betul -Do-
117 Vapi -Do- 157 Dharwad -Do- 199 Bina -Do-
118 Veraval -Do- 158 Hospet -Do- 200 Damoh -Do-
119 Viramgam -Do- 159 Hubli -Do- 201 Habibganj -Do-
120 Ambala Cantt. Haryana 160 Kengri -Do- 202 Hoshangabad -Do-
121 Ballabgarh -Do- 161 Krishnaraja-puram -Do- 203 Itarsi -Do-
122 Faridabad -Do- 162 Mysore -Do- 204 Katni -Do-
123 Gurgaon -Do- 163 Shimoga Town -Do- 205 Maihar -Do-
124 Jagadhri -Do- 164 Raichur -Do- 206 Pipariya -Do-
125 Kalka -Do- 165 Yadgir -Do- 207 Rewa -Do-
126 Karnal -Do- 166 Trivandrum Central Kerala 208 Satna -Do-
127 Panipat -Do- 167 Ernakulam Jn. -Do- 209 Saugor -Do-
128 Rohtak -Do- 168 Thrisur -Do- 210 Vidhisha -Do-
129 Sonipat -Do- 169 Kozhikkode -Do- 211 CST Mumbai Mahara- shtra
130 Bhiwani -Do- 170 Alappuzha -Do- 212 Lokmanya Tilak (T) -Do-
131 Hisar -Do- 171 Aluva -Do- 213 Pune -Do-
132 Rewari -Do- 172 Chengannur -Do- 214 Nagpur -Do-



S.No Name of station State S.No Name of station State S.No Name of station State
216 Dadar Maharashtra 263 Beas Punjab 310 Kanyakumari Tamil Nadu
217 Thane -Do- 264 Chakki Bank -Do- 311 Karur Jn. -Do-
218 Solapur -Do- 265 Firozpur Cantt. -Do- 312 Katpadi -Do-
219 Mumbai Central -Do- 266 Jalandhar Cantt. -Do- 313 Kovilpatti -Do-
220 Bandra Terminus -Do- 267 Jalandhar City -Do- 314 Kumbakonam -Do-
221 Akola -Do- 268 Pathankot -Do- 315 Mayiladuthurai -Do-
222 Amravati -Do- 269 Patiala -Do- 316 Mettupalaiyam -Do-
223 Badnera -Do- 270 Phagwara -Do- 317 Nagercoil Jn. -Do-
224 Bhusawal -Do- 271 Rajpur Jn. -Do- 318 Rameshwaram -Do-
225 Chalisgaon -Do- 272 Sirhind -Do- 319 Salem Jn. -Do-
226 Jalgaon -Do- 273 Ludhiana -Do- 320 Tambaram -Do-
227 Kurduwadi -Do- 274 Bhathinda Jn. -Do- 321 Thanjavur Jn. -Do-
228 Latur -Do- 275 Jaipur Rajasthan 322 Trichy Jn. -Do-
229 Manmad -Do- 276 Jodhpur -Do- 323 Tirunelveli -Do-
230 Miraj -Do- 277 Ajmer -Do- 324 Tiruppur -Do-
231 Nasik Road -Do- 278 Kota -Do- 325 Tuticorin -Do-
232 Panvel -Do- 279 Sawai Madhopur -Do- 326 Villupuram -Do-
233 Sai Nagar Shirdi -Do- 280 Abu Road -Do- 327 Virudhunagar -Do-
234 Shegaon -Do- 281 Alwar -Do- 328 Mughalsarai U.P.
235 Ahmednagar -Do- 282 Bandikui -Do- 329 Allahabad -Do-
236 Daund -Do- 283 Barmer -Do- 330 Kanpur Central -Do-
237 Kolhapur -Do- 284 Bhilwara -Do- 331 Jhansi -Do-
238 Kopergaon -Do- 285 Bikaner -Do- 332 Agra Cantt. -Do-
239 Lonavla -Do- 286 Falna -Do- 333 Mathura Jn. -Do-
240 Ballarshah -Do- 287 Gandhinagar (Jaipur) -Do- 334 Gorakhpur Jn. -Do-
241 Chandrapur -Do- 288 Hanumangarh Jn. -Do- 335 Lucknow Jn. -Do-
242 Wardha -Do- 289 Lalgarh -Do- 336 Lucknow -Do-
243 Nanded -Do- 290 Marwar Jn. -Do- 337 Varanasi -Do-
244 Aurangabad -Do- 291 Nagaur -Do- 338 Bareilly -Do-
245 Jalna -Do- 292 Pali Marwar -Do- 339 Agra Fort -Do-
246 Nagarsol -Do- 293 Phulera -Do- 340 Aligarh -Do-
247 Parbani Jn. -Do- 294 Rani -Do- 341 Banda -Do-
248 Gondia -Do- 295 Sri Ganganagar -Do- 342 Chitrakut Dham Karvi -Do-
249 Dimapur Nagaland 296 Suratgarh -Do- 343 Etawah -Do-
250 Bhubaneswar Odisha 297 Udaipur City -Do- 344 Fatehpur -Do-
251 Puri -Do- 298 Jaisalmer -Do- 345 Lalitpur -Do-
252 Bhadrak -Do- 299 Bharatpur -Do- 346 Mahoba -Do-
253 Brahampur -Do- 300 Chittorgarh Jn. -Do- 347 Orai -Do-
254 Cuttack -Do- 301 Chennai Central Tamil Nadu 348 Phaphund -Do-
255 Jajpur-Keonjhar Road -Do- 302 Chennai Egmore -Do- 349 Raja Ki Mandi -Do-
256 Khurda Road -Do- 303 Coimbatore Jn. -Do- 350 Tundla -Do-
257 Rayagada -Do- 304 Madurai Jn. -Do- 351 Mirzapur -Do-
258 Sambalpur -Do- 305 Arakkonam Jn. -Do- 352 Azamgarh -Do-
259 Balasore -Do- 306 Chengalpattu Jn. -Do- 353 Ballia -Do-
260 Jharsuguda -Do- 307 Dindigul Jn. -Do- 354 Basti -Do-
261 Rourkela -Do- 308 Erode Jn. -Do- 355 Belthara Rd. -Do-
262 Amritsar Punjab 309 Jolarpettai Jn. -Do- 356 Deoria Sadar -Do-



S.No Name of station State S.No Name of station State
357 Gondia Jn. U.P. 383 Haridwar Uttarakhand
358 Khalilabad -Do- 384 Kathgodam -Do-
359 Mau Jn. -Do- 385 Rudrapur City -Do-
360 Akbarpur -Do- 386 Dehradun -Do-
361 Ayodhya -Do- 387 Kathgodham -Do-
362 Barabanki -Do- 388 Rudrapur City -Do-
363 Bhadohi -Do- 389 Roorkee -Do-
364 Chandausi -Do- 390 New Jalpaiguri West Bengal
365 Faizabad -Do- 391 Kharagpur -Do-
366 Ghaziabad -Do- 392 Asansol -Do-
367 Hapur -Do- 393 Bandel -Do-
368 Hardoi -Do- 394 Barddhaman -Do-
369 Janghai -Do- 395 Howrah -Do-
370 Jaunpur -Do- 396 Durgapur -Do-
371 Meerut Cantt. -Do- 397 Kolkata Terminal -Do-
372 Meerut City -Do- 398 Malda Town -Do-
373 Moradabad -Do- 399 Naihati Jn. -Do-
374 Muzaffarnagar -Do- 400 New Farakka -Do-
375 Pratapgarh -Do- 401 Rampurhat -Do-
376 Rae Bareli Jn. -Do- 402 Alipurduar Jn. -Do-
377 Rampur -Do- 403 Coochbehar -Do-
378 Saharanpur Jn. -Do- 404 New Alipurduar -Do-
379 Sahganj -Do- 405 New Coochbehar -Do-
381 Sultanpur -Do- 407 Digha -Do-
382 Unnao -Do- 408 Shalimar -Do-

This information was given by the Minister of State for Railways Shri Manoj Sinha in a written reply to a question in Lok Sabha today.

PPP Projects could be brought under proposed Rail Regulator’s ambit

Railways PPP ModelNew Delhi: Rail minister Suresh Prabhakar Prabhu plans to bring public private partnership (PPP) projects under the ambit of the proposed regulator for the rail sector. The idea is to turn around Indian Railways’ unsuccessful experience with PPP projects as part of larger reforms to boost investments through private participation.

Prabhu told that he would soon approach Parliament with the draft of the regulatory authority Bill seeking a debate on the controversial provision. “The three key elements of the regulator’s functions will be the framework and monitoring of passenger and freight tariffs, PPP and efficiency.”

The minister, who completed a year in office last month, clarified the regulator would not set tariffs but provide the framework for tariff setting with a view to improve efficiency and give final approval. “We are creating the regulator to tackle the issue of cross-subsidisation. The draft is ready and we will get it passed in Parliament soon,” he said.

The proposal is being finalised at a time the railways is struggling to cut down costs in the wake of falling freight volumes and the impact of the seventh pay commission recommendations. “It is easy to say we want to raise passenger fares and freight rates because of the pay commission impact. But would it be fair? Therefore, I am putting efficiency as a part of the regulator proposal,” Prabhu said.

According to officials, Indian Railways has undertaken 20 projects worth Rs 14,000 crore in the current Plan period including new lines, doubling and electrification projects on the PPP mode. While seven PPP projects of Rs 5,693 crore are under implementation as part of a joint venture model, an additional Rs 2,236 crore worth of projects are being executed through the customer-funded model. Also, three PPP projects worth Rs 3,016 crore are being implemented through the annuity route and in-principle approval has been given to six others worth Rs 3,078 crore. These models are part of the participatory policy for rail connectivity launched in 2012.

The rail ministry had recently awarded two locomotives projects involving around Rs 36,000 crore investments in Bihar to foreign firms – US-based GE and French firm Alstom.

The two PPP projects will start delivering high-horse power diesel and electric locomotives after 2018. Also, the ministry has announced plans to redevelop 400 stations through the PPP mode.

Prabhu had announced an investment plan of Rs 1 lakh crore for the current financial year in this year’s Budget including Rs 40,000 crore of the gross budgetary support or the Centre’s financial assistance, Rs 17,655 crore of market borrowings, Rs 17,793 crore of internal resource generation and Rs 5,781 crore to be raised through PPP.

Railways undertake Rs.14000 Crore PPP Projects

New Delhi: Railways have undertaken more than 20 projects worth Rs 14,000 crore during the 12th Five year Plan, including those for laying new lines, doubling the existing ones, enhancing port connectivity and electrifying its network under PPP model.

While seven PPP projects worth Rs 5693 crore are under implementation as part of joint venture model, as many others involving an expenditure of Rs. 2236 crore are being implemented under customer funded model, official sources said.

Three PPP projects worth Rs 3016 crore are being executed through the annuity route and in-principle approval has been accorded to six others worth Rs 3078 crore.

Faced with resource crunch for its mega investment plans, the public transporter is exploring various channels for raising funds.

“We are exploring the PPP models and joint ventures with state governments in a big way for funding infrastructure development,” said a senior Railway Ministry official.

Indian Railway has proposed Rs 8.56 lakh crore investment plan for the next five years and the national transporter expects to execute a sizable chunk of projects through Public-Private Partnership and in collaboration with states.

There are about 16 state governments which have given their in-principle approval for formation of special purpose vehicles (SPVs) to implement rail projects in their respective states, said the official.

Recently Odisha signed a Memorandum of Understanding (MoU) with Railways to form a SPV for implementation of rail projects in the state.

In order to attract private investment, railways have strengthened the PPP framework besides launching investor-friendly build, operate and transfer (BOT) annuity model to construct new tracks.

According to the official, the participatory policy for rail connectivity was launched in 2012 which has five models including non-government railway model, joint venture model, build operate and transfer model, capacity augmentation with funding provided by customers model and capacity augmentation through annuity model.

During 2002 and 2014, eight port connectivity projects worth about Rs 3153 crore were implemented. These covered the linking of Mundra Port and Pipavav-Surendranagar, Hassan- Mangalore, Gandhidham-Palanpur and Bharauch-Dahej gauge conversion projects. These projects have added about 1030 km of rail lines, the official said.

Besides, railways have offered 400 stations to be redeveloped with private participation for improving passenger amenities inviting open bids from interested parties.

UAE earmarks Railways, Housing, Ports & Roads for Investments in India

ADIANew Delhi: Oil-rich United Arab Emirates has identified key sectors including railways, housing, ports, roads and renewable energy (mainly solar) for investments in India as part of the $ 75 bn announced during Prime Minister’s August trip to the Gulf nation that marked a paradigm shift in bilateral strategic and economic partnership.

UAE had announced to investment a huge $ 75 bn for various sectors in India when Narendra Modi made a two-day trip to Abu Dabhi and Dubai last August – first by an Indian PM to the Gulf Nation in three decades. Earlier this month Finance Minister Arun Jaitley was in UAE to discuss this investment proposal among other issues and met senior officials of the Abu Dabhi Investment Authority (ADIA), one of the largest sovereign funds in the Gulf nation, officials from Adu Dabhi said.

ADIA would contribute to the $ 75 bn fund allotted for investments in India in sectors including railways, roads, housing, ports and renewable energy (solar initiatives) where the Modi government is seeking FDI to boost economy, officials from the Gulf State indicated. The Indian PM is likely to announce a Solar Mission at the Paris Climate change summit.

However, UAE is pushing to begin the process of investments in near future by various Ministries in keeping with Modi’s promise. “India is now a strategic partner for UAE and Abu Dabhi wants to invest in India’s growth and seeking expedition of the process on the ground,” a person familiar with the developments told.

With this goal in mind Jaitley met Sheikh Hamdan Bin Rashid Al Makhtoum, Minister of Finance UAE to discuss issues of mutual cooperation in field of economic and trade development during his trip there. His visit follows that of UAE’s Foreign Minister to India within weeks of Modi’s trip to Abu Dabhi and this shows the seriousness of both nations which have now expanded their counter-terror cooperation amid growing threat from IS and other terror groups in South Asia. Strengthening counter-terror cooperation also figured during Jaitley’s deliberations with UAE leadership.

The Finance Minister also invited large participation and investment in recently constituted National Investment and Infrastructure Fund (NIIF) by the Sovereign Wealth Funds and Pensions Funds of the UAE. He said that the investment in NIIF will ensure good returns on investment as the Government will invest these funds in infrastructure projects.

Jaitley also raised the issue of fresh negotiations among officials of India and UAE for finalizing the terms of reference of the new Bilateral Investment Promotion Agreement (BIPA) as the existing BIPA is expiring by this December. New BIPA will come in existence from next January.

UK Investors keen on India’s Railways and Rail Infra sectors

Railway Minister Successfully Concludes Two Day London Visit. The Two Sides (India-UK) Discussed Investments in Indian Infrastructure Including Rail Sector. Suresh Prabhu Addresses a High Level Investors Round-Table in London. Shri Suresh Prabhu also Visits London Stock Exchange. The Indian Delegation also Visits Railway Stations in London Area to Apprise itself with the Redevelopment of Stations. UK Investors Exhibit Positive Inclination to Commit Long-Term Funds for Infrastructure

Suresh Prabhu at LSE
Inida’s Railway Minister Mr.Suresh Prabhakar Prabhu at the London Stock Exchange during his recent UK visit

New Delhi: Indian Railways on Tuesday said that the United Kingdom-based investors have shown tremendous interest in committing long term funds for the infrastructure development in India.

United Kingdom-based investors’ interest in India’s infrastructure sector was revealed during Railway Minister Suresh Prabhakar Prabhu’s two day visit to London from October 29-30, 2015.

The British government and UK-based investors are keen to invest in India’s transport infrastructure, Railway MinisterSuresh Prabhu has said.

Prabhu was in London this week on the invitation of two senior UK government ministers – minister for government policy in the Cabinet Office Oliver Letwin and transport secretary Patrick McLoughlin – to hold meetings at 10 Downing Street and London Stock Exchange (LSE) to explore ways in which the UK can engage with India. During his two-day visit, Prabhu addressed a high level investors roundtable as well.

“This was quite an unusual event they organised for me, to invite all the top bankers, funds, investors at the level of decision-makers and the financial world’s who’s who to find out how they can contribute to India’s growth story,” he said at a press briefing at India House here. “The investors were unanimous in their appreciation of India’s growth effort and were positively inclined to commit long term funds for the infrastructure sector,” the railway ministry said in a statement.

“The investors welcomed the recent announcement permitting Indian corporates to issue rupee bonds overseas. The investors indicated that there would be good appetite for well-known names.”

“They were keen to find out how they can engage with India’s transport sector, particularly railways. We have embarked upon a very ambitious programme on reforming and advancing the railway network. They were all completely aware of it and were keen to participate,” the minister said.

Describing his visit as an “extremely useful” exercise from the perspective of “sensitising” the British government as well as London-based investors and transport operators, Prabhu added: “Infrastructure is critical and they are keen to participate in the infrastructure development of India.

“These were all the top funds of the world with headquarters in London who are aware that the key driver of growth for the global economy as a whole will be infrastructure. It has the ability to lift the global economy.

“And, today there is no other single country in the world which has so much of appetite for infrastructure investment as much as India,” said the participants. On 29th October, Indian Railway Minister Suresh Prabhu met with Rt Hon Oliver Letwin, Chancellor of the Duchy of Lancaster and Minister in charge of cabinet affairs Government of UK and Rt Hon Patrick McLoughlin, Secretary of State for Transport, Government of UK to discuss investments in Indian infrastructure and areas of mutual cooperation in the Rail sector. The proposed issuance of Rupee bonds overseas by Indian corporates was also discussed. The investors(banks/financial institutions) who participated in these interactions included Standard Life, Citibank, SBI UK, SBI Caps UK, Prime Bridge Investments, London Stock Exchange, Standard Chartered Bank, ANZ bank, HSBC bank, Kotak Mahindra. UK, Exim Bank of India, Blue Bay Investments, Black Rock Investments, Deutche Bank, U K Green Investment Bank, Russell Investments, Jupiter Asset Management, HSBC, SBI Capital, Investec, BAML, Redington and JP Morgan

In addition, the Indian delegation also visited three stations in London area where considerable redevelopment of property has taken place.

Prime Minister praises Suresh Prabhu for doing Good Work

Prime Minister Narendra Modi on Sunday declared that the Union Government to observe November 26 as “Constitution Day” while laying the Foundation Stone for the Rs.7900 Crore fourth terminal at country’s largest container port Jawaharlal Nehru Port Trust (JNPT) situated off the financial capital’s eastern seafront

Narendra Modi Suresh PrabhuNew Delhi: Barely a month after the PMO reportedly flagged the “less than satisfactory performance” of the railway ministry, Prime Minister Narendra Modi on Sunday praised railway minister Suresh Prabhu for doing good work.

Addressing a public meeting after laying the foundation stone for two Metro rail corridors (the Andheri East to Dahisar East and Dahisar to DN Nagar — that the Maharashtra government is looking to fast track) in Mumbai, Modi said, “Hamare Suresh Prabhuji ne railway mein bhi sach much mein uttam kaam kar ke dikhaya hai (our minister has also done really great work in railways).”

Modi said earlier there was apathy, whether it was in expansion of railway lines, gauge conversion or even phasing out diesel engines. The BJP-led government has set an ambitious target of completing the two elevated Metro lines by 2019. “Today, there is speed and the results are also visible,” he said, adding that there would be greater progress in the days to come.

Prime Minister Narendra Modi with Chief Minister Devendra Fadnavis at the foundation stone laying ceremony for Metro corridors from Dahisar to DN Nagar in Mumbai
Prime Minister Narendra Modi with Chief Minister Devendra Fadnavis at the foundation stone laying ceremony for Metro corridors from Dahisar to DN Nagar in Mumbai

The 18.6-km Dahisar-DN Nagar Line is pegged at Rs 4,994 crore, and will meet the existing 11.4-km Versova-Andheri-Ghatkopar Metro at the DN Nagar Metro station. The Delhi Metro Rail Corporation (DMRC) will take up one of the two corridors for implementation, and will be a consultant for the other line. Former Prime Minister Manmohan Singh had, in 2006, laid the foundation stone for the city’s first Metro corridor, the elevated 11.4-km Versova-Andheri-Ghatkopar Metro line, which was opened for public use only in 2014. In 2009, Pratibha Patil, the then president, performed a bhoomipujan for an elevated 32-km Charkop-Bandra-Mankhurd Metro, a project that never took off. Last year, former chief minister Prithviraj Chavan conducted a bhoomipujan for a 33.5-km Colaba-Bandra-Seepz underground Metro, the bids for which are currently being finalised.

Modi said the railways had allowed 100% FDI and a lot of interest was being shown by foreign countries in investing in rail infrastructure. He announced that a fresh project would be undertaken to convert 400 stations in the “heart of the cities” with state of the art facilities.

The PM’s praise for Prabhu came amid speculation and media reports that there could be a cabinet reshuffle after the Bihar elections. Earlier, media reports had said PM’s principal secretary Nripendra Misra had sent a note to the railway ministry citing the slow progress of projects such as station development and high-speed services.

India’s financial capital will now get additional railway network to serve its teeming millions who take trains to work. “Metro network is necessary for growing urban areas. while many may look at urban growth as a problem, I look at it as an opportunity,” said Modi.

More than half of Mumbai’s 15 million people use the railway network to commute down and up the triangular Manhattan-shaped island. So far, most of the commuters had to use the almost century old suburban trains, which have been served by creaky coaches overcrowded three to four times their normal capacity.

The suburban railway network also witnesses 10-20 people losing their lives every day while crossing tracks due to lack of overhead foot over-bridges or because of falling off overcrowded trains.

The modern Metro rail network promises to be safer, cleaner and faster. While most of it is elevated in the city that’s short of land, some parts of the new metro that’s being built, will also have some underground sections.

INR 100 Crore facility in 10-12 Ac to come up at Ajni to maintain 12000 HP Locos

wap7Nagpur: Buoyed by the successful maintenance of locos and transition of electric loco shed at Ajni, the Railway Board has offered another major facility and training centre to maintain 12,000 horse power (HP) locos at Ajni under the Nagpur Central Railway.

According to railway sources, the Rs.100 crore facility will come up in 10-12 acre with public-private partnership (PPP) near existing loco shed at Ajni where huge space is available. Railways is giving top priority to construction of freight related projects on PPP basis.

Divisional Railway Manager (DRM) OP Singh confirmed that project to maintain 12,000 HP locos was coming up at Ajni. “The electric locos that will be manufactured at Madhepura in Bihar will be maintained at Ajni. Tenders for the project have been opened and entire process is being handled and managed by the Railway Board,” Singh said.

The entire new facility will have the latest equipment. Ajni loco shed, spread in 18.5 acres, presently maintains WAG-7 & WAG-9 locos used for hauling freight trains and WAP-7 engines used for premium trains like Duronto and Rajdhani.

However, the locos currently maintained at Ajni are 6,000 HP locomotives. These engines can transport up to 5,500 tonne material consisting of 58 wagons. However, 12,000 HP engines will be able to ferry 10,000 tonne goods with double the number of wagons what are being used now.

Sources said the 12,000 HP locos would be operated on the Rs.81,459 crore ambitious dedicated freight corridor (DFC), meant for faster goods movement. The project is expected to be completed by 2019 and before the DFC is ready railways wants the basic infrastructure to be ready.

With the new loco maintenance facility, a training institute at the same place for staff has been planned. The project is expected to be in place in next two-three years. The decision was taken after executive director (electrical) Sudhir Kumar and DRM Singh had met in Nagpur. “The duo had also visited the spot at Ajni,” sources said.

The Ajni loco shed after its transition is continuously marching ahead. Despite having a capacity of maintaining 175 locos annually, it has achieved a target of 208, that too with existing staff and infrastructure. The locos maintained at Ajni are moving across the Indian Railways network.

The Ajni loco shed, set up in 1990, will complete 25 years on October 22, and Central Railway has planned a host of cultural and sports competitions to celebrate the success of the shed which has come a long way.

Rail link to Bhutan hinges on land nod

Thimpu: Bhutan is awaiting a land largesse from chief minister Mamata Banerjee to fulfil its dream of having a railway connectivity with India.

The land-locked Himalayan country has also rolled out the red carpet for investors from India to scoop up land in four industrial estates along the border.

In its effort to increase trade with India, Bhutan has been eagerly awaiting rail connectivity with its southern neighbour since 2005, when the proposal was made.

Remote Bhutan aims to draw Investments in the Himalayan country (In the picture: Modi's Bhutan visit)
Remote Bhutan aims to draw Investments in the Himalayan country (In the picture: Modi’s Bhutan visit)

Former Prime Minister Manmohan Singh had in 2008 promised that the rail link – an 18km stretch from Hasimara in Bengal to Phuentsholing in Bhutan – would be established.

But as India is yet to deliver on the promise, Bhutanese authorities took the matter up with Mamata during her maiden trip to the country.

“A railway link with India can take the relationship and connectivity between the two countries to a new level…. But there have been some land-related issues. We think these problems can be resolved,” Bhutanese Prime Minister Tshering Tobgay said after the meeting.

The prospect of Indian investment on over 1,350 acres in the four industrial estates also came up for discussion during the meeting. The rail link is important because it would connect Bhutan’s commercial centre of Phuentsholing and the nearby industrial estate of Pasakha, where over 700 acres are available for industry.

While the exact land requirement for the railway project is yet to be announced, sources confirmed that there was an attempt to convince Mamata about the importance of the link for the overall economic development of the region.

Sources in the Indian side said the railway link project remained stillborn since Mamata’s protests over land in Singur and Nandigram created ripples elsewhere.

“There has been opposition from some tea garden owners and some residents over land acquisition for the project,” said a source.

When Mamata was asked about her stand on the railway link, the former railway minister said she was not aware of the project. Bhutanese sources also confirmed the possibility of “lack of communication” on the Indian side.

Elaborating on the issue, Mamata tossed alternative approaches.

“Our stand on land acquisition is clear and we will not allow any forcible acquisition…. But several other alternatives can be explored, like having an elevated track,” she said.

The Bhutanese authorities, sources said, were aware of political compulsions of their Indian counterparts and never pushed Delhi to deliver on its promise.

But now that the Tobgay government is trying to chart a new economic trajectory for the country – which grew at 6.8 per cent in 2014 – a railway link with India has assumed paramount importance.

Although India and Bhutan have road links, a rail link can give the economy a big push to the four industrial parks.

“We are inviting foreign direct investment from India and we want to assure investors that they would not have to worry about land,” said Norbu Wangchuk, the economic affairs minister of Bhutan, at a business conclave organised by the Indian Chamber of Commerce and its Bhutanese counterpart.

The decision to offer land for industrial estates seems to be a good strategy as availability of land has become a political hot potato in India. Recently, Bangladesh also offered to create a special economic zone for Indian investors in the country.

Although Mamata remained non-committal about the railway project, she said Bhutan and Bengal would work together for promotion of tourism and renewable energy. She also suggested setting up a steering committee to facilitate more trade.

Investment is the only way-out for Modernisation & Resource Mobilisation on IR

Suresh Prabhu Union RMJodhpur: Investment is the only way out to address the paucity of resources in Indian Railways, which has been “plaguing” the much needed modernisation of the rail service, Union Minister Suresh Prabhu said here.

In the city to address the 91st Annual General Meeting of All India Railway Men’s Federation, the minister said that the Indian Railways has been functioning with limited resources and the government has been working hard to arrange finance for its modernisation.

He said that although the modernisation of the Indian Railways has already been affected but it has not been progressing in the “desired manner and with desired pace” for want of funds, route development, signal development, bullet trains etc.

“We are compelled to run 150 trains against the capacity of 100. We are not able to meet the freight load. All these are clear indicators of the railway being heavily under-resourced,” he said.

The Railway Minister noted that Indian Life Insurance Corporation has agreed to lend Rs 1.5 lakh crore for the rail service, with the Reserve Bank of India agreeing to cut the interest on loan by half per cent.

Identifying the development of Indian Railways with the development of the nation, Prabhu called upon the employees, who had assembled to attend the conference, to address the issue of corruption.

He said that the practise of travelling without tickets was eroding the revenue of the Indian Railways and the ministry had launched a campaign to discourage the practise in order to plug the revenue leak.

Referring to rail safety, Prabhu called upon the railway employees to work in unison to ensure safety and informed that a safety drive would be launched.

Indian Railways will exceed Rs 8.5 Lakh Crore 5 Year Capex target: Suresh

Station development project to attract 20 billion USD: Suresh Prabhu

New Delhi:  Days after a report that the Prime Minister’s Office had expressed concern over a slow pace of spending by the railways, minister Suresh Prabhu said they’d “far exceed” the capital expenditure target of Rs 8.5 lakh crore set for the five years till 2019, including this financial year’s budget target of a little over Rs 1 lakh crore. Maintaining that funds will not be a problem for completing infrastructural projects for the Railways, the Minister said the capital expenditure for this year will surpass the budget estimates.

Suresh Prabhu at a seminarThe Minister was talking to reporters here on Monday on the 11th edition of International Railway Equipment Exhibition (IREE), scheduled from October 14 to 16 at Pragati Maidan. The IREE is organised by the Railway Ministry and the Confederation of Indian Industry. Prabhu said almost 89 per cent of the budget announcements made by him have been fulfilled.

“We will easily surpass the target. The budget did not talk about the Dedicated Freight Corridor project, the funding for which, Rs 82,000 crore, was recently approved by the cabinet. We have already issued contracts worth Rs 15,000 crore in the six months of the current financial year. The rest will come soon,” he told reporters.

Additional spending would, he said, materialise from two other initiatives by the ministry. One is “using the money from customers like Coal India and Steel Authority of India for rail evacuation projects, for which memorandums of understanding are being signed with state governments and port connectivity projects.”

RM declarationsPrabhu also said he had, in a meeting last week with World Bank chief Mulyani Indrawati, discussed the possibility of creating a $30 billion fund to finance key rail projects. “We will make an announcement at the right time,” he said, refusing to share details but disclosing the Bank would act as anchor investor for creation of the proposed fund.

The minister said additional funding of $15-20 bn would soon materialise from implementation of the government’s plan to award contracts for redevelopment of 400 stations on the Swiss Challenge method, a model of project development under public-private partnership which was recently approved by the cabinet.

He also announced a plan to seek Rs 1.5 lakh crore from Life Insurance Corporation for investments in railway projects with a high rate of return has been approved by the board of the state-owned insurer. “Also, 17 states have given their approval for investments through creation of joint ventures for new line capacity creation projects. Putting all this together, we will exceed the Rs 8.5 lakh crore plan,” he said.

Prabhu also said at least Rs 70,000 crore will come “within the next few months” from award of two contracts — for setting up diesel and electric locomotive factories in Bihar, and supply of 15 electric multiple unit train sets or 315 railcars for improving the speed of Rajdhani and Shatabdi trains. Bids for the loco factories were opened by the ministry earlier this month; it is yet to announce the winners.

The Minister announced that the Railways has taken an ambitious programme of electrifying about 10,000 km of railway lines in the next five years. When asked for details of the funding, he said the government will announce it at the appropriate time. “Discussions are still taking place,” he added.

Prabhu said discussions with Japan and South Korea have progressed to build water-less odour-less toilets in trains. He said Google has offered cooperation to set up WiFi connectivity in stations and platforms.

Suresh Prabhu’s plans to put IR back on track yet to gain Speed

Going by the stagnant spends on core capex in the five months to August, however, railway minister Suresh Prabhu’s plans to put Indian Railways back on track don’t seem to have gathered speed just yet

New Delhi: Armed with Rs 1,50,000 crore from Life Insurance Corporation (LIC) and lots of room to raise money through bonds, one was expecting Suresh Prabhu to ramp up the pace of capex. After all, it’s the roads and railways sectors that are supposed to be driving expenditure to kickstart the economy. Going by the stagnant spends on core capex in the five months to August, however, the railway minister’s plans to put Indian Railways back on track don’t seem to have gathered speed just yet.

investments rlysCheck out the capex that’s done directly by Indian Railways – electrification, doubling, conversion of gauges and so on – and it hasn’t budged. Numbers crunched by Ambit Capital show that at Rs 14,700 crore, the growth rate is zero%. To be sure some of it could be work-in-progress and it’s possible the trend could reverse in a few months time, but it’s surprising spends on rolling stock are down 60% year-on-year while those on track renewals are down 24%y-o-y. Some of this has been offset with higher spends on other areas – for instance, more new lines are being built and more of them electrified.

Also, the minister had, in a recent presentation, indicated there would be a focus on doubling – badly needed on routes such as Delhi-Kolkata – electrification; but even though the spends on doubling are up 62% y-o-y, it’s shade below the required run rate.

But total spends are going up – 12% y-o-y to Rs 21,300 crore – with much of this channeled into joint ventures and SPVs of Northern Railways. That investment will no doubt bear fruit too but in the meantime Indian Railways needs to launch some big projects. In this context, CMIE’s assessment that there haven’t been too many announcements for large projects in the last 12 months, except for the Delhi-Chennai high-speed venture and a couple of others, isn’t encouraging.

The other piece of bad news is that although revenues have risen 10% y-o-y,so far this year they’re about 8% below target.

This is one reason the operating ratio of 92.6% has stayed above the targetted 88.5% for the first five months. To be sure there’s no reason this can’t get better in the coming months if revenues pick up but there is a slowdown in the economy and even in good times the OR has not fallen below 90%.

As Ambit’s Nitin Bhasin points out while the long-term strategy for Indian Railways is well thought out with room for private sector participation, there is concern on the capacity of the ecosystem to award and execute $16 bn in the current year and $30 billion annually for the next four years thereafter. The sooner Indian Railways is able to rope in the private sector the better because it’s not going to be easy to try and do 500-600 kms of doubling every year through the railway PSUs or even electrify 2,000 kms a year. It must also get going on switching to commercial accounting; that will give the team a good idea of the returns on the investment and help it fob off political pressure for unviable projects.

GE to invest in India’s Rail, Power, Healthcare sectors

CEO Jeff Immelt says the company is keen to invest much more in India and in projects to boost its infrastructure in various sectors. The announcement comes ahead of GE’s chairman and CEO Jeff Immelt’s visit to India later this month

Jeff Immelt Chief Executive Officer, GE
Jeff Immelt Chief Executive Officer, GE

Mumbai: General Electric Co. is looking to make further investments in India’s rail, power and healthcare sectors, the company said in a statement on Friday.

The announcement comes ahead of company chairman and chief executive officer (CEO) Jeff Immelt’s visit to India later this month. Investments in the country have doubled in the past five years to $3 billion, the company said.

“India is a growth engine for Asia, and we see huge potential for the country in the manufacturing space. Infrastructure is a key driver of India’s growth.

We are keen to invest much more in India and in projects to boost its infrastructure in sectors such as rail, power and healthcare. These efforts will have a ripple effect on the overall economic growth in India and beyond,” Immelt said in a statement on Friday.

The company said as part of its Make in India initiative, it has increased the levels of local sourcing by 20% for locomotives, 30% for power equipment and 15% for aviation. “India may soon become a global centre of excellence for certain components,” the company said.

GE is also looking to form a public-private partnership in Bihar, in line with the existing partnerships it has with seven states for healthcare. Earlier this year, the company announced a $200 million investment in its multi-modal manufacturing facility in Pune, Maharashtra.

Indian Railways plan for World Bank-backed Railway Fund

With Seed Capital from the Multilateral Body, the Fund will address Repayment Concerns of Investors

Indian Railways (IR) has initiated talks with the World Bank to create a fund that would help pool in long-term debt from other foreign investors like insurance and pension funds, expected to play a critical role in meeting the transporter’s massive capital investment plans announced in the last rail Budget.

worldbank rlysAccording to the plan, the multilateral body would provide the seed capital for the proposed fund and the railways would contribute periodically to it drawing from its own or budgetary resources. A senior railway ministry official told FE that the rationale behind the proposal is to provide a level of comfort to potential foreign investors, especially foreign pension and insurance funds to invest in IR’s projects, including in capacity expansion and complementary services. In parallel, the projects where these investments will be made would be made more attractive by devising them with clear revenue-generating potential.

A number of foreign pension funds have evinced interest in investing in the IR and deliberations will take place with some Canadian funds in October. If the World Bank-supported fund takes shape quickly, the sources said, it will certainly address the concerns of these institutional investors with regard to IR’s repayment facility.

The official said that the ministry of finance has already taken up a feasibility study with the World Bank for setting up this fund. The study would be completed in three months and a final call will be taken by the government base on its outcome. Sources said that other institutions like ADB and International Finance Corporation have also shown interest in getting associated with the fund.

In the rail Budget for FY16, the government envisaged a huge Rs 8.5-lakh-crore capital investment for the country’s rail network and complementary facilities over five years. Of this, Rs 2.56 lakh crore has to come from gross budgetary support, Rs 1 lakh crore from internal resource generation, Rs 1.2 lakh crore from the state joint ventures, Rs 1.3 lakh crore from the PPP mode, Rs 2.5 lakh crore from borrowing, another Rs 1 lakh crore from rolling stock lease and rest Rs 1.5 lakh crore from institutional financing.

As a big boost to this exercise, LIC has already committed Rs 1.5 lakh crore over five years and the IR has planned to draw Rs 17,000 crore from this in the current financial year, which, the officials say, can be increased if there is a need. The talks are also on with the Employees’ Provident Fund Organisation (EPFO) but the problem in getting funds from the EPFO is that it will come at a higher interest rate than that from LIC, which is at around 8%, said an official, and added that the discussions are going on to find a working mechanism.

Suresh Prabhu rolls-out Red Carpet for Investors in the closed-doors of BSE Tower

Mumbai: Railway Minister Suresh Prabhu today asked foreign funds and domestic investors to replicate with the railways their success in the telecom, power and road sectors as the national transporter needs a whopping Rs 1 trillion in funds this year and Rs 8.5 trillion over the next five years.

“You have successfully invested in the telecom and power and roads sector, but never in the railways. The government also didn’t invest during the past two decades and so we’ve chalked out a five-year plan under which we are looking at an investment of Rs 1 trillion this financial year and Rs 8.5 trillion over the next five years,” Prabhu told a gathering of overseas investment bankers and domestic funds led by insurers and financial institutions.

The closed-door meeting at the BSE Tower here this evening, where Prabhu rolled out the red carpet for foreign funds and domestic investors, included multinational i-bankers, FIIs, domestic insurers like LIC and other financial institutions, sources said.

However, the minister was quick to admit that private investment in a public service like the railways will take time.

“We are looking at private sector investments, too, though we know it will take time,” the minister was quoted as saying by one of the participants.

Most railway lines are running at 100 per cent of their capacity, leading to heavy congestion. Hence, investments are needed to ease rail traffic, he said, adding that it will cost Rs 10 crore for laying a 1-km rail link and Rs 6 crore for doubling/ tripling of an existing railhead.

Stating that most of the funds for railways come either from public institutions like LIC, which has committed to subscribe Rs 1.5-trillion worth of RFC bonds, or through budgetary support, Prabhu said that given the state of public finances, railways need large funds from the private sector.

Explaining the need for capital investment, the minister, who was praised for his radical reforms in the power sector during his tenure in the previous NDA ministry, said “for improving rail infrastructure we need to invest 10 per cent of the total infrastructure GDP of $2 trillion over next five years.

“This means we need to invest $200 billion annually in the railways over the next five years, after which we need an annual investment of 1.5 times more than this (or $350 billion) for the next five years,” Prabhu said.

Offering a break-up of rail finances, he said it has three main sources of revenue generation — passenger and freight fares, and budgetary support.

However, Prabhu said that while as much as 65 per cent of the rolling stock was passenger trains, they generate only 30 per cent of revenue, leaving 70 per cent of revenue to be mobilised by freight trains, which constitute only 35 per cent of the rolling stock.

On rail modernisation plans, he said the national transporter is on its way to constructing 400 model railway stations this fiscal year. He also said that as many as 79 of the announcements made in the rail budget for the year have already been implemented.

On involving the states in railway development, he said, “We have already signed MoUs with Maharashtra and Odisha and are on our way to doing the same with a total of 17 states.”

He added that Maharashtra has agreed to pump in Rs 10,000 crore over the next 10 years.

“On the part of the Railways, we will be investing Rs 70-80,000 crore in Maharashtra over next five years,” he said.

Talking about the dedicated freight corridor project, he said that out of the Rs 82,000 crore approved by the Cabinet last month, railways has already floated tenders for Rs 19,000 crore.

On the two proposed locomotive units with FDI participation – one electric and the other diesel – he said tenders will be floated by the end of this month and a number of MNCs have evinced interest in the project.

Rail Operation by Private Firms on IR Network not permissible: MOS (Rlys.)

Private Freight Terminal Services on PPP Model acceptable; says MOSR in Parliament

mosr parlNew Delhi: Rail operation on Indian railway network by private firms is not permissible, said MOS (Railways) Mr.Manoj Sinha. However, he added, “private firms can transport commodities using Indian Railway network in containers and can also develop freight terminals”. The permission to run container trains by private players is in vogue since 2006 and so far 17 companies have taken license to run containers trains on Indian Railways of which 15 are active. Under the scheme the rakes are owned by Container Train Operators and Indian Railways has the exclusive right to haul the brakes on its networks. Private freight terminals are developed under Private Freight Terminal Policy of 2010 which was revised in 2015. So far 59 proposals of Private Freight Terminal (PFT) have been received out of which 24 terminals have been notified and 35 granted ‘in principle’ approval.

On the Zonal Railways, no passenger/freight train services are currently operated by the private sector. However, Container services offered by licensed private players are operated by Indian Railways. Such services are operated on Pan-Indian Railway basis instead of Zonal Railway basis. The income earned from such operation in 2014-15 was Rs. 4868.92 crore (Provisional). Policy instructions exist for operation and maintenance of retiring rooms at stations through private licensees on payment of annual license fees. Public toilets at more than 850 railway stations have been brought under the ‘Pay & Use’ scheme with the participation of private sector. Instructions have been issued for operation of passenger ticketing terminal through authorized agents on fixed licenses and commission sharing basis, under the Yatri Ticket Suvidha Kendra (YTSK) scheme. The likely revenue from recently introduced Yatri Ticket Suvidha Kendra (YTSK) scheme cannot be assessed at it is dependent on demand.

Such partnerships encourage investments and result in better services to users and have no direct impact on number of employees.

This information was given by the Minister of State for Railways Shri Manoj Sinha in a written reply to a question in Lok Sabha today.

Railways to form SPVs for infra development with 17 States: Suresh Prabhu

Rail SPVPanaji: Railway Minister Suresh Prabhu today said his ministry will form special purpose vehicles (SPVs) with 17 states to develop railway infrastructure.

“We are creating a special purpose vehicle with each state separately. There are 17 states, who have shown interest. It would be a joint venture,” Prabhu told PTI on the sidelines of the function to flag off local train at Pernem station in north Goa.

He said Goa, North-Eastern states and Jammu and Kashmir are not included in this scheme.

“For the 17 states, we will create SPVs. The state will invest the capital, along with the Centre, in this company (SPV), which will be used for development of railway infrastructure,” the minister said.

According to Prabhu, Maharashtra has decided to invest Rs 10,000 crore for next five years in this company to develop railway infrastructure..

“We are creating a special purpose vehicle with each state separately. There are 17 states, who have shown interest. It would be a joint venture,” Prabhu told PTI on the sidelines of the function to flag off local train at Pernem station in north Goa.

He said Goa, North-Eastern states and Jammu and Kashmir are not included in this scheme.

“For the 17 states, we will create SPVs. The state will invest the capital, along with the Centre, in this company (SPV), which will be used for development of railway infrastructure,” the minister said.

According to Prabhu, Maharashtra has decided to invest Rs 10,000 crore for next five years in this company.

“Now all the states are interested in signing. This is a good thing. We can develop additional infrastructure and bandwidth,” he said.

He also announced 250 additional trains to clear the rush during forthcoming Ganesh Chaturthi festival, which would be celebrated across Maharashtra’s Konkan region and Goa in September.

“Ganesh chaturthi is the most important festival in Goa. We have decided to run 250 additional trains to clear the rush,” Prabhu told a gathering at Pernem Railway Station today, where he flagged off the train between Pernem and Karwar.

Several railway divisions, including Konkan Railway Corporation Ltd (KRCL), Central Railway, Southern Railway and others, will pitch in to ply the special trains.

Prabhu said 17 stations on KRCL route will have wi-fi facility and escalators will be installed in the stations, including Margao, Ratnagiri, Kankavali and Thivim.

Railway Minister to meet BFSI Heads in Mumbai today

Suresh Prabhu to hold closed door meeting at BSE with Financial Market players today

BFSI SectorMumbai: Ministry of Railways are convening a meeting in Mumbai on Friday with representatives of Banking, Financial Services and Insurance (BFSI) to sensitize the finance community of emerging investment opportunities in the Railway Sector.

Leading investment bankers, stock brokers and economists have been invited for the meeting.  This is a follow up on the Banks’ and Financial Institutions’ Conclave held in Delhi on July 21.

Railway Minister who is expecting a whopping investment of $120 billion in next five years for railways, may seek discussion on innovating ways to finance the cash-strapped national transporter. A PIB release said, “The meeting of senior railway officials with Heads and CEOs of FIs and a few corporates is being organized at the initiative of the Minister of Railways Suresh Prabhu who had in his maiden Railway Budget unveiled massive investment plans for strengthening and modernizing the key Railway infrastructure in the country.”

Union Minister of Railways Suresh Prabhu, Chairman/Railway Board Mr.Mittal and Indian Railways Financial Commissioner are scheduled to address the meeting.

The meeting is being held in Mumbai this time to increase exposure and visibility to the investment plan of Railways. The Indian Railway Finance Corporation (IRFC) which is the financial intermediary for the Railways is co-hosting the meeting.

Indian Railways has not got any big investment for the in last 20-25 years but huge fund flow is expected as government has allowed FDI in certain segments like coach manufacturing, station development, suburban rail and high-speed network. Key area where huge money could be mobilised by government is Prabhu’s idea to modernisation of 400 railway stations through open bids. This could see huge corporate interest.

A study of country’s major railway stations like Sealdah and Howrah show that thousands of crores of rupees flow via small businesses on railway platforms. Most of this money is unaccounted for and the government gets no share of it. Also, many stall operators and book sellers of major railway stations have been getting the government contract continuously for many years. The railway minister now plans to change such norms and raise funds through PPP route.

“Prabhu mainly wants to assess the investor sentiment and psyche to know how effectively the investments could flow and what are the various models that should be followed,” said a banker who has been invited for the meet.

Jaipur Metro to opt PPP Model for Phase-II Metro Rail project

Jaipur: The Jaipur Metro Rail Corporation (JMRC) looks forward to receiving positive response from foreign companies to construct Jaipur Metro phase II, under public private partnership (PPP) after making a successful presentation.

JMRC, till date, has approached six foreign companies and negotiations are underway. JMRC chairman and managing director N C Goel said, “A technical team of The Construction Industry Development Board (CIDB) Malaysia is in the city for three days to learn the feasibility of the project. Earlier, a Malaysian delegation led by Secretary General Ministry of Works called Goel in June to discuss the possibilities of partnership.”

An official said American firm Tony J Morris, CEO and president, Maglev Technology Inc, will visit JMRC on August 17.

After detailed deliberations, it was agreed with China Civil Engineering Construction Corporation (CCECC) will prepare the proposals for taking project under PPP model and will submit it to JMRC. Similarly, Korea Rail Network Authority (KRNA) has expressed strong interest in executing Phase II vide their letter dates July 24 , 2015 . “As per the request from embassy of Republic of Korea, a meeting was held between Korean delegation led by assistant minister MOLIT and JMRC officials in July . To take this forward the delegation will visit Jaipur between August 17 to 25,” said an official.

In November, a three-member team of the Industrial Enterprise, Singapore, which gives nod to various international investments, visited Jaipur. JMRC officials claimed that as there are many similarities between the second phase of Jaipur Metro and Singapore Metro, the PPP will be a successful model.

A senior official said the estimate cost for phase II is Rs 10,000 crore. It has been proposed that the state government will provide 40% as viability gap funding to the awarded company. The remaining amount, which is 60 %, will be borne by the state government and the company.

Also, the operation and maintenance of phase I (B) will only be handed over after the firm completes phase II.

Centre kick-starts FDI, PPP in Railways; begins work with Model Concession Agreements

New Delhi: Attracting foreign direct investment (FDI) in the Railways is finally getting the push with the government. The Railways ministry is initiating a move to create model concession agreements in order to kick-start the process of attracting FDI and private investments, close to 8 months after it came up with sectoral guidelines for such investments in November.

The ministry has just started the process of appointing consultants for preparing model concession agreements for those areas where private and foreign investments have been allowed.

Areas where such investments would be allowed are operation of private passenger trains, concession of standalone passenger corridors, construction, upgradation and maintenance of any new or existing freight terminal owned by the Railways, setting up of technical training institutes, testing facilities and laboratories and technological solutions for level crossings and for improving safety and reducing accidents.

“For the purposes of this assignment, the consultants are expected to go through best possible international and domestic agreements of a similar nature and suggest a framework which will be acceptable to stakeholders including financial institutions,” the document for consultants who would prepare model concession agreement said.

For concession of standalone passenger corridors, the asset would be transferred to a special purpose vehicle at a pre-specified nominal value and the concession period will be for a period between 10-15 years.

For freight terminal projects as well there would be a transfer of assets and the revenues would be shared under the concession agreement.

While model concession agreements already exist for urban rail systems and construction of private lines, many of the permissible activities detailed in the sectoral guidelines will require preparation of concession agreements under which investments can be made.

According to the Dibek Debroy committee which submitted its report in June, earlier policies of Indian Railways for private ownership of rolling stock have not brought in the desired level of investments, primarily due to the perception of a lack of level playing fields.

The government had earlier decided to allow FDI in areas like suburban corridor projects through PPP, high speed trains, Mass Rapid Transport Systems, dedicated freight lines, rolling stock including train sets, locomotives or coaches manufacturing and maintenance facilities, rail electrification, signaling systems, freight and passenger terminals and facilities to manufacture railway lines or sidings.

Economy will grow 2-3% faster if more investments are made in Railways: Suresh Prabhu

Pune: The Indian economy will register an increased growth by 2-3% if the country’s railway network is pumped with a massive investment to boost the connectivity, Railway Minister Suresh Prabhu said.

“The Indian economy will grow by 2 to 3% more with increased investments in the railways as reforms in transportation sector are vital to exploit full growth potential of the country,” Prabhu said at a function in Pune last night.

Citing the example of China, he said, “China made massive investment in the railways and showed that a country can accelerate development by boosting connectivity.” Pointing out that congestion was one of the main problems faced by the Indian railways, the minister said doubling and tripling of the lines can happen only with a hike in investment in the sector.

He said the tendering process of the railways and other commercial decisions were not being handled by the railway minister in the NDA government, as far as the delegation and decentralisation of power to the departments is concerned.

“This has resulted in less loitering by agents in the Rail Bhavan,” he said.

“The Railway minister now works only on policy execution. Decentralisation of power of decision making, if necessary, is in the interest of a transparent administration,” he noted.

The cabinet had recently cleared development plans for 400 railway stations, Prabhu said, adding that the railways should be seen as a new medium of development for the country in future.

Potential Players for BOT Projects queue up for Bidding as Tariff projected in the RFQ year linked to WPI Annuity

The sweetened BOT plan with a novel model that guarantees the developer inflation-indexed 80% of his half-share of projected revenue from rail lines built under the build operate and transfer however may not be sweet enough for potential Bidders as the railways will continue to exclusively undertake operation of trains on the system and determine tariffs, they allege.

New Delhi: A novel model that guarantees the developer inflation-indexed 80% of his half-share of projected revenue from rail lines built under the build operate and transfer (BOT) system could finally attract private investors into capacity augmentation projects in the Indian Railways, government source say.

The new BOT model would also give the developer full right to revenue between 80% and 120% of what is projected at the time of bidding (RFQ stage) without having to share it with the railways, the sources added. In case the actual revenue is 120-150% of the projected level, 50% of the additional receipts would need to be shared with the national transporter and 75% if the revenue turns out to be higher still.

Although officials were optimistic of the new design of the concession, they said the BOT awards in the current fiscal would likely be through the annuity model. “We are receiving an increasing number of enquiries from potential bidders for BOT projects thanks to the railways assuming large part of the traffic risk. But given the processes involved, the bidding under the new model could commence only from the next financial year. Over the next two-three years, many BOT projects would be thriving on the ground,” a rail ministry official said.

He added that the improved BOT model was designed to allay investor fears, caused by the issues of (lack of) control of the network and interoperability that are specific to the railway sector.

However, analysts pointed out that the sweetened BOT concession model too doesn’t go far enough. Even under the proposed BOT model, it may be noted, the railways will continue to exclusively undertake operation of trains on the system and determine tariffs. Private investors would look for a system where they could also be train operators and collect revenue as passenger fares and freight and share it with the railways as track access charges.

Under the new BOT model, the concession period will be 25 years and the bidding criterion would be the (progressive) premium to be paid by the developer or the grant (viability gap funding) he expects from the government in the reverse-bidding method. Besides the promise of seamless operations, the railways would also procure the land required for the project (90% of the land would be in the transporter’s possession before the bidding starts) and secure all requisite approvals and permits.

Source said the main comfort for the private developers under the new BOT model is the mitigation of risk from lower-than-projected freight traffic. The tariff projected in the RFQ year is escalated annually with linkage to wholesale price index. The land will be leased to the developer by the railways on nominal fee and lease will be co-terminus with the concession period.

Although the policy to rope in the private sector for the country’s railway infrastructure enhancement was put in place in 2002, investor interest remained largely lukewarm: Just Rs 2,700 crore was invested by private players in the sector in the subsequent decade. As against this, investment commitments to the tune of Rs 10,000 crore have come since 2012, the rail ministry official cited above said.

The use of private funds for development of India’s railway infrastructure is currently limited to small stretches of rail lines built by “stakeholder” industries (mainly port companies and industries that use the rail network for freight transportation). These are mostly first- or last-mile connectivity projects to ports, large mines, industrial parks, clusters and also include feeder routes to the dedicated freight corridors. The models adopted include pure private-sector projects of the size of up to Rs 500-600 crore, joint venture projects with any one of the railway PSUs, where the stakeholder private firm, selected through the “direct permission” route, is assigned a majority (usually 74%) stake.

In pure private projects developed by stakeholder industries on a nomination basis, the development is carried out on private land and assets are not transferred to the railways at any stage. In the JV model, the railways helps the JV acquire the land at its cost; the ownership of the land, leased to the JV on a nominal fee of Re 1 per annum , vests with the government, and once the lease period is over the land goes to the government on payment of purchase price sans interest.

The key difference between the exiting models and the (now-improved) BOT model is that while the former ones are meant to largely cater to traffic provided by the stakeholder industry itself (although subject to common carrier principle), the latter would help in the expansion of the railway’s mainstream network.

In November last year, the railways opened almost all major railway-related activities, except, in the main, running of trains and tariff fixation, to foreign direct investment. Apart from last-mile rail connectivity projects, private investments have taken place in creation of freight terminals, procurement of rolling stock and in container services

Chandrababu Naidu bats for Manufacturing Plants of Mitsubishi’s Rail and Electric Divisions in AP

During his three-day visit to Japan, Andhra Pradesh Chief Minister Chandrababu Naidu will make a strong pitch for investments in Andhra Pradesh.  He will spend a day at the 9th World Congress on High-Speed Rail-2015 at Tokyo to understand about the evolving High Speed Rail Technologies and its associated industry, and will discuss with the representatives of High Speed Rail and Bullet Train manufacturing Companies for investment in Vizag, Tada and Krishnapatnam in Andhra Pradesh

AP CM Naidu in JapanTokyo: Andhra Pradesh Chief Minister N Chandrababu Naidu, who had christened the new capital city of the State after ancient Buddhist town Amaravati with an intention to woo investors from Buddhist countries, has made an all-out attempt on Monday to persuade Japanese business giants to invest in the reorganised State.

Naidu held talks with some of the leading Japanese corporations including Mitsubishi and Fuji Electric and Japanese International Cooperation Agency for potential cooperation.

Mitsubishi expressed interest to set up Japan Information and Study Centre at Andhra University. This Centre will promote Japanese language courses and introduce locals to the Japanese culture. The Mitsubishi team evinced interest in taking part in the Chennai-Bangalore industrial corridor and Krishnapatnam industrial node.

It was reliably learnt that Mitsubishi agreed to set up a cluster near Krishnapatnam, bringing in all their subsidiaries to one place and importantly setting up of the Mitsubishi’s newly launched Traction Inverter All SiC-Power Module manufacturing plant at Krishnapatnam to cater for Asia-Pacific region from the east coast of Andhra Pradesh, as part of Make in India policy.

The Chief Minister is also expected to meet Japanese Prime Minister Shinzo Abe to invite him to take part in the foundation stone laying ceremony of new capital city, scheduled to take place on October 22.

According to sources, Naidu already took the clearance from Prime Minister Narendra Modi to extend invitation to the Japanese Premier for the grand function, which will be graced by Modi himself.

On Monday, Naidu will be meeting representatives of Fuji Electric Co., Ltd, Mitsubishi Motors Corporation, Mayekawa, Sumitomo Corporation, Mizuho Bank, Ltd, which is the integrated retail and corporate banking unit of Mizuho Financial Group.

On Tuesday, he is expected to hold confabulations with the top brass of SoftBank Group Corporation, which is a Japanese multinational telecommunications and Internet corporation, and Mizuho Financial Group, which is one of the prominent financial institutions in the world. Followed by this, Naidu is expected to visit world’s most important meeting for high-speed rail ‘UIC High-Speed Rail 2015’ being held at Tokyo from 7th to 10th July, 2015 and expected to meet more than 1,000 attendees from across the globe to exchange views on the development and achievements of high-speed rail worldwide.  It is learnt that the World Congress on High Speed Rail 2015 will feature international rail experts on transportation policy and technology. It will bring the public and private sectors together to provide insight and identify best practices for implementing high-speed rail projects at every stage – from planning, financing, and construction, to operations and management. Also, the Congress will feature an exhibit showcasing high-speed rail products and services.

During the tour, Naidu will clinch several key deals with the Japanese companies in order to set up their branches in AP. “Mizuho Financial Group is likely to enter into an agreement with the AP government to provide its services to the State to transform it into an industrial hub,” an official said.  Tokyo-based NEC Corporation, a multinational provider of information technology services and products, is expected to make an agreement with the AP Technology Services Limited (APTS) to provide IT solutions to the State government’s efforts to develop smart cities in the State. Naidu is also expected to call on Japanese Finance Minister in order to seek loans from the Japanese financial institutions for construction of the new capital city. In fact, seeking to promote Japanese investments in AP, Chief Minister Naidu during his earlier visit to Japan promised the investors in that country that his government would set up dedicated industrial townships and clusters for Japanese citizens comprising in AP. He also told them that Japanese schools would also be set up in the State.

“Make AP as a destiny for Japanese investments, build another Tokyo in new capital region of AP there you have so many opportunities. I want to do business most efficiently and for that I am assuring you ease of doing business through speedier clearances, infrastructure and good governance,” Naidu told a Japanese delegation during its recent tour to Hyderabad.

Besides a battery of top officials from the State government, Finance Minister Yanamala Ramakrishnudu and Municipal Administration Minister P Narayana are accompanying Naidu during his visit.

Rail Travel App Provider ‘Railyatri’ raises funding

New Delhi:, an India train travel related App provider company, said on Tuesday it has raised undisclosed funding led by Helion Venture Partners along with Omidyar Network and existing investors, Blume Ventures and Ujama.

For, owned by Noida-based Stelling Technologies, this is the second round of early stage funding. “This round of funding will be used for consolidating its product leadership in the domain, and to accelerate growth,” RailYatri said in a note. Rahul Chandra, Managing Partner of Helion, will join the Board of the Company.

Co-founded by Manish Rathi, Kapil Raizada and Sachin Saxena, the RailYatri mobile app was launched in 2014.

It provides rail travel-related information, including train status, platforms, seat availability predictions, facilities at stations, personalised alerts, and access to essential travel services such as meals and taxi. The company has partnered with taxi services firms across 20 cities and food vendors across 300 stations.

RailYatri provides information for over 9,000 locations and 14,500 trains, including local trains and metros. It claimed that in its first year of launch, the Android App crossed 1 million downloads.

MoU for SPV, Concession Agreement for Jaigad Port Connectivity Signed and MUTP-3 Launched

Signing of MoU for formation of Special Purpose Vehicle (SPV) for speedy implementation of railway projects in Maharashtra in the august presence of Shri Suresh Prabhakar Prabhu, Hon’ble Minister of Railways and Shri Devendra Fadnavis, Hon’ble Chief Minsiter of Maharashtra at Sahyadri Guest House, Malabar Hill, Mumbai on 28.6.2015
Signing of MoU for formation of Special Purpose Vehicle (SPV) for speedy implementation of railway projects in Maharashtra in the august presence of Shri Suresh Prabhakar Prabhu, Hon’ble Minister of Railways and Shri Devendra Fadnavis, Hon’ble Chief Minsiter of Maharashtra at Sahyadri Guest House, Malabar Hill, Mumbai on 28.6.2015

Mumbai: Ministry of Railways and Government of Maharashtra signed a Memorandum of Understanding (MoU) for Special Purpose Vehicle (SPV) for speedy implementation of railway projects in Maharashtra in the august presence of Shri Suresh Prabhakar Prabhu, Hon’ble Minister of Railways and Shri Devendra Fadnavis, Hon’ble Chief Minsiter of Maharashtra at Sahyadri Guest House, Malabar Hill, Mumbai on 28.6.2015. Shri Sunil Kumar Sood, General Manager, Central Railway represented the Ministry of Railways and Shri Gautam Chatterjee, Additional Chief Secretary (Transport and Ports) represented Government of Maharashtra as the signatories to sign the MoU.

Speaking on the occasion, Shri Suresh Prabhakar Prabhu, Hon’ble Minister of Railways said 75 lakh people travel daily in Mumbai Suburban System. Due increase in population, the services are inadequate because Mumbai suburban system is lifeline of Mumbai. That’s why MUTP-3 has been launched at an approximate cost of Rs.11000/- crore. In fact it has been discussed with the Chief Minister so as to include elevated road option along with elevated rail corridor even if the cost increases.

He further said the GDP of Maharashtra is the highest in the country and if Maharashtra progresses, then the nation progresses. The SPV is an umbrella organisation of Indian Railways and Govt. of Maharashtra and it is a great step forward. He also added that the signing of concession agreement between KRCL and JSW Infrastructure for the 33 km rail line costing Rs.771 Crore, connecting Jaigad port with Digni on Konkan Railway is achieved in record time. It is also serving a larger public interest for development of backward region.

Shri Devendra Fadnavis, Hon’ble Chief Minister of Maharashtra while addressing the gathering said today is an important day in the history of Maharashtra. He said earlier due to lack of participation by State in the railway projects it delayed the execution of the projects. But now for the projects in Maharashtra in which State Government is partner, people will use the facility during the next 5 years. He said that State Government can explore the possibility of elevated road along with railway corridor above the railway line. He also said integrated transport system with single ticketing will enable people to use public transport in a big way. He appreciated the Hon’ble Minister for Railways for his fast decision making and execution.

Shri Subhash Desai, Guardian Minister Mumbai City, and Shri Divakar Raote, Hon’ble Minister of Transport, Maharashtra and Shri Arvind Sawant, Hon’ble MP also spoke on the occasion. S/Shri Rajan Vichare, Ramdas Athawale, Dr. Shrikant Shinde, Hon’ble MPs and Shri Mangal Prabhat Lodha, Sunil Prabhu and Smt. Manda Mhatre, Hon’ble MLAs were also graced the occasion.

Shri Sunil Kumar Sood, General Manager, Central Railway welcomed the gathering. Shri Prabhat Sahai, CMD, MRVC gave vote of thanks. Shri Narendra A. Patil, CPRO, Central Railway compered the programme

In addition to this, signing of concession agreement of Jaigad Port connectivity between Konkan Railway and Jaigad Digni Railway Ltd, Launched MUTP-III and implemented e-office in Mumbai Railway Vikas Corporation.

The proposed SPV is a joint venture Public Sector Company namely Maharashtra Rail Infrastructure Development Company (महाराष्ट्र लोहमारग पायाभूत विकास कंपनी) with registered office in Mumbai with 50% shares each between Ministry of Railway and Govt of Maharashtra under the Railways Act 1989.

Maharashtra Govt plans Special Purpose Vehicle for faster execution of Rail projects

Mumbai: To fast-track pending railroad projects in Maharashtra, the state government has sent a proposal to the Union railway ministry for setting up a special purpose vehicle (SPV) to execute these lines.

This SPV route with states, which railway minister Suresh Prabhu is stressing to push railway projects, will make available institutional finance for infrastructure addition without burdening the Centre or the state’s coffers.

The Maharashtra government had agreed to share 50% of the costs of eight proposed and pending rail routes, including the Ahmednagar-Beed-Parli Vaijanath railway. For this, the state cabinet recently approved Rs 1,413 crore.

Last week, prime minister Narendra Modi had reviewed the progress on the Rs 2,826-crore projects, which were pursued by senior BJP leader and former union minister lateGopinath Munde in his lifetime.

“We have sent a proposal to the railway ministry regarding setting up of an SPV. Now, it is for the ministry to respond,” said a senior official from the state transport department. “Forming an SPV will enable us to take up projects faster and on priority,” he said.

The officer stated that this would make projects bankable, which meant that the entity could raise funds from financial institutions and execute works faster.

A debt equity ratio of 30:70 with the state and the railways holding an equal share of equity has been proposed.

SPVs are joint ventures between two or more agencies. An example is the Mumbai Rail Vikas Corporation which was formed in 1999 by the state and the railways to fund rail projects on the Mumbai suburban network under the Mumbai Urban Transport Project.

“Once the SPV is formed and stakeholders like the state and central governments are on board, it will decide on which projects are to be taken up for execution,” the official said.

The projects

  • Ahmednagar-Beed-Parli Vaijanath
  • Vadsa-Desaiganj
  • Wardha-Yavatmal-Nanded
  • Karad-Chiplun
  • Nagpur-Nagbhid
  • Pune-Nashik
  • Gadchandur-Adilabad
  • Manmad-Dhule-Indore

However, the last three are yet to be officially sanctioned.

First Meeting of Advisory Board for Railway Financial matters held; Minister meets Board, Bankers on investment

New Delhi: Chairing the first meeting of the newly-constituted Advisory Board on Financial Matters, Union Minister of Railways Suresh Prabhu on Monday drew the attention to the huge investment requirement in Railways and the various sources and structures under consideration to mobilize the required resources. He discussed with leading bankers ways in which resources could be mobilised for railways. The minister briefed leading bankers on the huge investment requirement of the Railways. During the discussions several suggestions were made for attracting domestic and international funds, steps required to give comfort to investors/lenders and to ensure sustainability of the funding models.

Prabhu also highlighted the complex task of various projects with discrepancies in their returns. Minister of State for Railways Manoj Sinha was also present during the discussion. The Railway Minister in his Railway Budget had announced setting up of an Advisory Board dealing financial aspects. The Board consisting of top names of the financial world is expected to guide and advise on matters of sourcing investments into Railway infrastructure development. A Financial Services Cell has also been created in the Ministry to focus on this aspect.

The members of the Advisory Committee are Chairman ICICI Bank KV Kamath, SBI Chairperson Arundhati Bhattacharya, Executive Chairman of IDFC Rajiv Lall and Founder of The Quintillion Media Pvt. Ltd Raghav Bahal. Railway Board Chairman AK Mital and members of the Railway Board, other senior officers of the Ministry and Managing Director, IRFC too attended the meeting.

“Several suggestions were made by members of the advisory board for attracting domestic and international funds, besides steps needed to be taken up to give comfort to investors or lenders and to ensure sustainability of the funding models,” said the official.

Prabhu in his Rail Budget speech had announced an investment of Rs.8.5 lakh crore in Railways in the next five years. In this regard the Ministry has already signed a MoU with LIC of India for a funding assistance of Rs.1,50,000 crore. The Annual Plan size for 2015-16 was also doubled to cross Rs.1 lakh figure in 2015-16.

The advisory board was proposed by Mr Suresh Prabhu in the Parliament.

Railway Ministry slashes Private Freight Terminal (PFT) fees to woo investments

Application fee cut from Rs 1 crore to Rs 10 lakh in drive to liberalize policy, attract private-sector participation in Railways

New Delhi:  The railway ministry has begun liberalizing its private freight terminal (PFT) policy, dismantling entry barriers by slashing application fees and one-time charges to attract greater private-sector participation, a railway official said on the condition of anonymity.

The liberalization of the policy is in line with the government’s emphasis on encouraging private investment in the capital-intensive railways sector and honours a pledge made in the railway budget.

PFTs are platforms that handle third-party freight.

The application fee for private companies to develop and run these terminals is being significantly reduced—from Rs.1 crore to Rs.10 lakh. This is expected to encourage more investors to participate in the plan, said the railway official.

A one-time fee for loading iron ore that stood at Rs.5 crore is also being done away with. Further, the government has done away with a stipulation that made it mandatory for a railway siding with more than one user to convert the siding for use in a PFT.

“These measures for relaxation have been decided on. However, further liberalization is also under consideration,” said the official.

The railways has received 56 applications for PFTs since 2010. So far, 21 PFTs have become functional and they have brought in Rs.300-500 crore in private investment.

The remaining 35 applications could bring in another Rs.900-1,000 crore.

Railway minister Suresh Prabhu in the rail budget presented on 26 February said the national transporter will address the issues that are discouraging investments in PFTs.

The PFT policy was issued in 2010 and revised in 2012 to open this segment for private investment. Under this policy, a private investor can develop and operate a freight terminal on private land on the basis of a revenue-sharing model with the railways.

“We intend to address these issues urgently so that the proliferation of these terminals is not hampered. We will, in the next three months, review the wagon leasing scheme, special freight train operator scheme, private freight terminal scheme and liberalized wagon investment scheme for making them more liberal, broad-based and attractive to our partners from the private sector,” Prabhu said in his budget speech.

The railway official said the ministry is holding consultations with stakeholders on the schemes Prabhu mentioned as well.
PFTs also figure in the report of a committee on improving the financial health of the Indian Railways, headed by former banking secretary D.K. Mittal.

In a report submitted in December, the committee recommended that the Indian Railways improve multi-user access to terminals or sidings by harmonizing the policy for access to all PFTs, tracks and railway sidings.

It also suggested the creation of an empowered group in the Railway Board to assess and recommend a unified policy for freight terminals.

“Railways needs to be more pragmatic about the private freight terminal policy as it is a freight-generating resource. With increased private participation in freight terminals, the customer-facing activities will become more efficient and customer-friendly. The measures being taken to liberalize it are good, but there is room for further relaxation keeping in mind the potential this area has to attract private investment. Measures such as those suggested by the D.K. Mittal committee can be considered,” said Abhaya Agarwal, a partner at EY Llp who oversees the infrastructure practice at the consultancy.

Private participation in Railways, not Privatisation: Bibek Debroy

There are 8,000 stations on the railway network. Of these, from a revenue point of view, there will be just about 20 stations.  It is our duty to turn it into profits, said Bibek Debroy

Niti Aayog Vice-Chairman Arvind Panagariya will be suggesting a Roadmap for the Creation of the Rail Regulator.  The Model is already there, said Bibek Debroy 

Bibek DebroyThere have been multiple reports on the Indian Railways during the current NDA regime. While railway minister Suresh Prabhu ruled out any attempt at privatisation, he has initiated steps that could facilitate the entry of private investment in many areas of railway operations, including running of trains. Niti Aayog member Bibek Debroy, who heads the committee on revamping the railway’s operations, which has suggested an elaborate framework for this, says the chances of implementing measures to change the way the railways has been run for years are much better now than in the past. He explains Santosh Tiwari and Anup Jayaram how the NDA government is moving ahead with the job. Excerpts:

Do you think the suggestions to increase private sector participation in the railways have been wrongly perceived as privatisation?

Our interim report talks about facilitating private sector entry in various aspects of railway operations. I think I made a mistake which I will rectify in the final report. Chapter 1 is the introduction and Chapter 2 is on privatisation, while Chapter 3 is specific to Indian Railways. The chapters are written by individual members, which I put together.

In terms of logical sequencing, the current Chapter 2 should come at the end. We should talk about Indian Railways first and then about the problems.

So, the solution, the privatisation part, will be towards the end in the final report. Isn’t it?

Yes, the private entry part and not privatisation. We have not mentioned privatisation anywhere and this should be very clear.

The chapter on the entry of private sector will go at the end. We shall do that in the final report, which will be out by end-June.

The four major points in our report relate to commercial accounting, track access, decentralisation and independent regulator. Most people do not have any problems with these issues.

You have suggested far-reaching changes in the railway workforce. There have been some concerns on this count…

The genuine concern is that the people who should actually be upset are, oddly enough, not upset, which is the Railway Protection Force (RPF). The only people who are upset, apart from Railway Board members, are the Railway Board Secretarial Services. They are really upset.

We have called a meeting of the Divisional Railway Managers (DRMs)—not all of them, but 15 or 20. We need to get the reactions of the DRMs who, in fact, represent the railways.

The proposed rail regulator is supposed to balance the interests of the private sector and the public. Will the role of the railway regulator be primarily recommendatory or will it be binding?

We have said that the regulator should be accountable to Parliament and that it should be binding except for passenger fares. Access to tracks, freight tariffs and standards will be binding. For passenger fares, we said the market still does not exist, or the market is not mature enough; so, it is recommendatory. But otherwise it is binding, and has an independent budget. That is the essence of it. We have also said the social costs should be worked out.

The regulator will also vet the calculations. The problem, however, is how do you have people with the requisite capacity.

The railway minister has now entrusted the job of suggesting a model for the rail regulator to the Niti Aayog vice-chairman Arvind Panagariya. Will this be different from what you have suggested?

He will be suggesting a roadmap for the creation of the rail regulator. The model is already there.

For running of private trains, access to tracks would be critical. Isn’t it?

What matters is access to important tracks. It is partly a transitory problem. Once the freight corridors kick off, the railways will have a lot of capacity. That is not going to happen eastwards. For the corridor to happen, I need all the land, it’s not good if I get 90%. The last time I checked, there was some land to be acquired.

You have also suggested changes in the accounting process so that it is easy to ascertain the social burden. This would mean there would be no Rail Budget. Will it happen next year?

It will be commercial accounting. First, we are talking about relationships with the Union government. I stop giving you dividends. You give me gross budgetary support, I calculate the social costs. The social costs may be forcing me to run a train in the Northeast. If it is not part of the national highway thing, then you reimburse the Union government. What we want to happen is that you give your Aadhaar number and there is a direct benefits transfer.

Where it will not work are the suburbs. There it is not that easy—state governments will take the burden. What we have not said in the report is that we could hand over the Kolkata Metro with all its assets to the state government.

Similarly, we could hand over Mumbai suburban with all its assets to the state government. We have said that in a guarded way in the report. If I decide to close down Kapurthala rail coach factory and the Punjab government gets upset, then you give the factory to the Punjab government. They will probably be happy. The same applies if I take Raebareli outside the railway system.

On integrating the Railway Budget, what we said is that the separate Railway Budget should be phased out proportionately and merged with the General Budget. One bit we have not fleshed out is on existing workers losing benefits. The one that is very difficult to quantify is the monetary value of free government passes on the railways.

Then we gave up, since it is impossible to quantify that. In the size of the Railway Budget, it does not matter. There is a huge chunk of retirements happening in the near future, anyway.

For any meaningful reform, you need to have data at one place so that it can be analysed properly. With multiple organisations within the railways, how well do they integrate data?

The problem is that the Centre for Railway Information Systems (CRIS), Indian Railway Catering and Tourism Corporation (IRCTC) and RailTel do not talk to each other. Why do you think everyone is struggling in providing wi-fi on trains. The fibre is owned by RailTel, which is sitting on it. The CRIS, on its part, will not give the data to the IRCTC.

This cannot be solved unless you have something like a chief technology officer sitting in the Rail Bhavan and reporting directly to the railway minister. We realised we cannot get data. The CRIS has got this superb data and software on ticketing for freight side and reserved passengers. They also collect very good real-time data on train positions, essentially GPS. But the CRIS is very happy giving it to private operators. Private apps on Android get data from the railways and provide information to mobile users.

The railways has a huge land bank which can be monetised. This can be utilised for augmenting revenue from other sources. How far can this help?

There is land, but it is not as much as you think. A lot of land will be required for building additional tracks in the future. There are 8,000 stations on the railway network. Of these, from a revenue point of view, there will be just about 20 stations.

The railway ministry is slated to take a final view on the recommendations of the committee after it submits its final report. Will there be any major changes?

Besides the reorganisation of the chapters, there will not be any major changes in the recommendations. However, there will be some minor tweaking wherever required.

Idea of Privatization gives ‘No Guarantee’ of successful performance of Railways

Privatization is no guarantee of successful performance of an organization. Private entrepreneurs can be as much blighted and blinkered as the government can be in running business organizations

Railways Minister Suresh Prabhu has ruled out privatization of Indian Railways, which is a reiteration of the government stand on the subject. Prime Minister Narendra Modi had also rejected the idea some months ago. The stand of the NDA government is not different from that of the previous governments. Privatization is no guarantee of successful performance of an organization. Private entrepreneurs can be as much blighted and blinkered as the government can be in running business organizations. What does the rising NPAs of public sector and private banks suggest? One thing, that businessmen too can go wrong in their projections and operations. Besides, which one business house of India is capable of taking over Indian Railways? And if you give it to scores of them, what guarantee is there that all of them will perform to the maximum making Indian Railways the biggest profit-making organization?

A government-appointed committee headed by economist Bibek Debroy has recommended privatization of Indian Railways, suggesting that the ministry of railways be responsible only for policymaking and private players be allowed to run passenger and freight operations. There are other advocates of privatization who cite the example of Japan. The Japanese government owned and ran National Railways which was plagued with low productivity, high labour costs, loss of share of transport markets and massive debts – pretty much problems similar to what Indian Railways are facing. In the late 1980s, the Japanese government decided to privatize rail operations. It split passenger services into six vertically integrated networks and created a single national freight operator that paid access charges to the passenger companies. Privatization ‘succeeded’ in Japan, according to champions of privatization. Productivity has more than doubled and labour costs have been cut with reduction in staff strength. Should we assume that if an idea has worked in one country it should work everywhere? Privatization of national railways has not worked in the UK, for instance.

The idea central to privatization of national railways is to split the national networks into many networks and hand each over to a company and let the companies compete against each other. A variation would be a public-private mix in which both the private rail companies and Indian Railways operate in passenger and freight sectors. Even to think in these terms, however, we have to first make an assessment of how private sector participation has fared in capital-intensive projects. PPPs have not worked with Indian Railways. One of the main reasons is the demand of the private partner for full freedom on decision making with only half the share in investment. The government cannot be expected to give away its authority to regulate or control decisions. The Indian Railways should definitely work toward decentralization of decision making in order to cut out red tape, but at the same time the private sector must appreciate that PPP does not mean full privatization. Unfortunately, none of the PPP models the Indian Railways tried for doing business with private investors – for station development, construction of freight terminals, and new lines to provide for port connectivity – has worked satisfactorily. To think of going for a wholesale privatization of Indian Railways when even PPP models have not worked is to head for a disaster in rail transportation.

True, Indian Railways have poor finances. Their revenue is inadequate and profit very low. They are unable to meet their operational costs of passenger and other coach services. The government does not have the means to provide fund allocations to it. In short, the Indian Railways do not have the money for development or meeting costs of passenger and freight operations. They need injection of private funds. They need investors who can bring in money, better technology and cost reduction ideas. They can explore the possibility of opening up train operations – both passenger and freight – in certain sections to private sector and see how it works. Introduction of market competition could achieve higher efficiency in rail transport if things go well. But it has to be in parts. And the Indian Railways must keep the ultimate control in its hands in so far as assets such as land and the goals such as larger public interest and employment generation are concerned.

New firm for better Rail connectivity at Major Ports to be registered soon

New Delhi: The Union shipping ministry’s plan for a company to work on enhanced port-rail connectivity is to bear fruition soon. The Special Purpose Vehicle (SPV) in this regard is likely to be registered by the end of next month.

The 12 major ports and Rail Vikas Nigam Ltd (RVNL, an arm of the railways ministry) will pool resources for the formation. Details of the first tranche of projects to be undertaken by the SPV are being discussed between the major ports and the  ministry. The initial projection is of at least Rs 200 crore. RITES, the government-owned engineering consultancy company, specialising in transport infrastructure, has been brought in to work on some of the feasibility reports for the potential projects.

It will be registered under the Companies Act, with an initial authorised share capital of Rs 100 crore, divided into a million equity shares of Rs 1,000 each. The initial capital will be Rs 500 crore, with further provision to raise the cap. The 12 major ports are to contribute Rs 90 crore of the Rs 100 crore, each having equity shares. RVNL will contribute the remaining Rs 10 crore.

“The SPV will undertake modernisation of rail infrastructure at ports, raise financial resources for handling port-related railway projects and also operate and manage the internal port railway systems,” said a ministry official.

In 2013-14, about 28 per cent of the total cargo handled by major ports was transported by Indian Railways, to and from the hinterland. Non-major ports handle 60-90 per cent of their cargo volumes through the rail network.

Haryana to enter into SPV with Indian Railways to strengthen the Railway Network in the State

Chandigarh (CDG): Haryana government today announced that it will enter into a partnership with Indian Railways by forming Special Purpose Vehicle to strengthen the rail network in the  state. A MoU in this regard will soon be signed between both  the Stake holders.

The Chief Minister was addressing the mediapersons on the completion of six months of the present BJP Government in the  State here today said that “he had met the Union Railways Minister, Suresh Prabhu twice and requested him to complete all the pending rail projects in the State be it the start of new trains, electrification of existing railway lines and construction of Railway Over Bridges (RoB) and Railway Under Bridges (RuBs).”

He said that under the Central Government’s new Land Acquisition Act, barring defense projects, affordable housing, infrastructure, industrial corridor, railways etc, no land would be acquired without the farmer’s consent.

Mr Khattar said that the State Government would announce its new Industrial Policy within next 15 days which would spur growth in all districts of the State and also generate ample employment opportunities for youth. The new industrial policy would aim at the growth of all industries especially Micro Small and Medium Enterprises (MSMEs).

While referring to the Swachh Bharat Abhiyan (SBM), he said that the first meeting of Sub Group constituted for the implementation of this programme headed by Andhra Pradesh Chief Minister N Chandrababu Naidu on the SBM has been held yesterday at New Delhi which was also attended by him.

He also said that on his request, the next meeting of this Sub would be held at Chandigarh in the month of May where Ministers and Chief Ministers of about ten States would participate. He said that to inculcate the spirit of cleanliness among the children, the State Government is considering to start one period on Swachhta in schools from first to 10th standard.

Government has stronger resolve to look for Innovative Solutions to generate & sustain the resource model for Rlys

A democracy by its very foundation promises to offer voice to each opinion that is raised within and outside set boundaries by its citizens. But when the opinion mounts to millions, the voice could be as thunderous as one could ever imagine. This is so true for the Indian Railways which is close to every Indian citizen’s heart, being a part of their memories in some form or the other. The railways ferries close to 23 million passengers per day, thus tickling myriad emotions and opinions, if not more. To satisfy each opinion may not be possible for an entity like the railways that is at the crunch of arguably the most coveted resource of all—cash.

The present government has shown stronger resolve to look for innovative solutions to generate and sustain the resource model. An important step toward it has been the introduction of 100 per cent foreign direct investment (FDI) in rail infrastructure. The Bibek Debroy committee set up in September last has come out with its recommendations, most of which seem to be in sync with the purpose for which it was formed: mobilisation of resources for major projects and restructuring of railways. Some of the recommendations are well-thought out and we might see them being implemented in the years to come. The only problem seems to be that most recommendations seem outrageously idealistic on paper and may never be realised. Any corporate restructuring may have tremendous repercussions and here we are not talking of any other organisation but a giant elephant that may take down governments with it if it happens to fall. The assumption that the private sector will only come in if there is fair and open access to infrastructure is a far-fetched one. Creating separate competition for the railways may go unaccepted with a number of associations and I don’t see it happening at least for as long as I can foresee.

If we study the ministry of railways’ sectoral guidelines for domestic/foreign direct investment, it clearly lists 17 key areas that it opens up for investment by both domestic private players or through FDI inflows. Of the 17, many don’t seem to be inviting participation of a lot of domestic players due to either the sheer magnanimity of the projects or due to the technical expertise involved. Most of the key areas, like the modern signalling systems, high-speed train projects, non-conventional energy, technological solutions for manned and unmanned level crossings, technological solutions to introduce safety mechanisms can only see the light of day if joint ventures are set up with foreign countries that have a strong and advanced rail network.

Domestic Indian firms don’t have the requisite technological expertise as far as these areas are concerned. FDI from countries like Japan, France, Russia, Canada and the US that have the best rail networks needs to flow in in most of the sectors listed. If we look at the figures of the cumulative FDI inflows between 2000-2014, the numbers aren’t too encouraging as far as investment projections are concerned. Out of the total inflows in the period, 35 per cent has come from Mauritius alone with Japan accounting for just 7 per cent, the US 6 per cent with Russia registering a paltry 0.40 per cent and Canada another meagre 0.22 per cent. What these numbers suggest is that these haven’t really been very attractive investment areas for foreign investors. Nor have the countries with expertise in modern rail networks been the prime investors in India.

If we look at the FDI figures of a country like Russia, the stark difference lies in the areas it attracted FDI inflows. Manufacturing attracted around 46.9 per cent of the FDI projects there and created around 98 per cent of the total FDI jobs. Indian FDI figures are dominated by the services sector that accounts for around 17.47 per cent of the total inflows. As far as non-conventional energy sources are concerned, between 1991 and 2014, its share in India were just 1.45 per cent of the total FDI inflows. If history has anything to suggest, the data is pointing only towards one direction.

The PM’s France visit has at least sealed the deal for a joint execution study for the upgrade of the Delhi-Amritsar railway line to a semi-high speed network and redevelopment of stations. All the focus and energy must be to encourage domestic players to tie up with foreign ones through joint ventures or technology partnerships, just like the one with France. When the PM pitches Make in India to German investors as a national movement, allaying fears of red tape and complex tax structures, he is not be barking up the wrong tree.

Apart from the “sophisticated” areas, there are very few avenues for small entrepreneurs as well. The ministry has tried to leverage its biggest asset: land. Areas like mechanised laundry and bio-toilets have the potential to attract domestic investment from private players. But how much interest have the players shown after the new regulations were announced or how much interest can the proposals draw is a separate matter. Very few private players have shown interest in the past and to bank on them may prove to be a fatal assumption. As suggested by the Bibek Debroy committee, complete shifting of the regulatory authority from the government to a separate regulatory authority may not be feasible for an organisation such as the Indian Railways. Instead of setting up separate bodies, it can follow a multidivisional structure with each zone acting as a division and as a separate profit centre. Ultimate decision-making powers and policy making should be centralised with the corporate office, i.e, the railway board.

The railways might well let go of the non-core activities as recommended, but in phases. When the private sector hasn’t been too keen to jump in, there is no guarantee of the same happening anytime soon. The golden dilemma of the Indian Railways doesn’t seem to be clearing out as decision making no longer remains an easy task when a billion lives are dependent on it and even more eyes waiting for a chance to pounce on for criticism.

17 State Govts responded to Partner with Ministry of Railways for development of Rail Projects: MOSR

New Delhi: Ministry of Railways has approached all State Governments to form Special Purpose Vehicles (SPV) jointly with Ministry of Railways to undertake mutually identified rail infrastructure projects for project development, resources mobilization and monitoring. 17 State Governments have responded showing their interest in this regard.

This information was given by the Minister of State for Railways Shri Manoj Sinha in written reply to a question in Rajya Sabha today.

New JVs to push rail connectivity in Odisha; says Ramesh Majhi

Bhubaneswar (BBS): The railway ministry is planning more special purpose vehicles (SPVs) or joint ventures (JVs) to augment rail connectivity and expedite implementation of pending railway projects in Odisha, said commerce and transport minister Ramesh Majhi.

He was recently in New Delhi to attend signing of the tripartite pact on a SPV for evacuation of coal from Talcher coalfields.

“I discussed railway projects for Malkangiri and Nabarangpur districts with Union railway minister Suresh Prabhu. He assured that these projects will be taken up through SPVs,” Majhi said.

To boost rail connectivity in Maoist-hit Malkangiri and Nabarangpur, the state government had proposed Jeypore-Nabarangpur and Jeypore-Malkangiri railway projects. Besides providing land for free, it had announced to bear 50% and 25% construction cost of Jeypore-Nabarangpur and Jeypore-Malkangiri lines respectively.

Majhi said he demanded rail connectivity to all 30 districts in the state.

On January 8, the state government accepted the Centre’s proposal to partner in railway projects for expeditious implementation. The SPV, where both the ministry and the state government will have equity participation of 49% and 51% respectively, is a step in that direction.

The SPV will conduct techno-economic survey to assess the requirement of railway infrastructure in unconnected backward regions, besides that of industries, ports and mining areas. Industries, ports, business houses and infrastructure companies can also be part of the SPV, official sources said.

Due to fund shortage and other hurdles, a number of railway projects in the state are hanging fire. These include Khurda-Balangir railway project (289 km, sanctioned in 1994-95), Haridaspur-Paradip rail line (82 km, sanctioned in 1995-96), Angul-Duburi-Sukinda SPV project (90 km, sanctioned in 1997-98), Talcher-Bimlagarh (154 km, sanctioned in 2004-05) and Jaleswar-Digha rail line (40 km, sanctioned in 2010-11).

For 2015-16, the state got Rs 2,514 crore against its demand of Rs 3,200 crore for construction of new lines, gauge conversion, doubling, boosting passenger amenities, improving traffic facilities, safety and electrification.

Demand for Grants for Rlys for 2015-16 passed; Rely on Borrowings to fund Capital Investments: Rail Minister

New Delhi: Indian Railways’ has to rely on borrowings to fund its capital investments and such a strategy will not lead the public transporter into a debt trap, Suresh Prabhu, Union Railways Minister, has said.

“All our efforts including borrowing are to improve the health of Railways. By borrowing, we are not putting Railways to danger”, Prabhu said in Lok Sabha replying to the discussions on the demand for grants for Railways for 2015-16.

Prabhu highlighted that most of the advanced railway networks — Japan, Germany, China — had all borrowed money to build infrastructure.

The Lok Sabha later passed through a voice vote the demands for grants for Railways for 2015-16. The relevant appropriation Bills were also introduced and passed.

Prabhu said that Railways had to look at borrowings as its internal revenue generation was not adequate to entirely fund the required capital investments.

“One can generate more revenues only when we make more investments. To make more investments, the internal revenue generation is not adequate and so we are looking to borrow”, he told the Lok Sabha.

During his reply, Prabhu almost ran into some controversy when he remarked that he was confused by the recent report of the Standing Committee on Railways.

At one side, the Standing Committee wanted Railways to undertake projects looking at the bankability. Somewhere else in the same report, the Standing Committee is said to have urged Railways to undertake socially important projects.

However, Prabhu later assured the members of the lower house that all the suggestions of the Standing Committee would be duly considered by his Ministry (Railways).

In his reply, Prabhu also said that efforts are on to set up state-specific Special Purpose Vehicles (SPVs) which could then undertake intra-State projects and the revenues could then flow into these SPVs.

Mallikarjun Kharge, former Railways Minister and Leader of Congress in Lok Sabha, said that the standing committee report was “not politically motivated”.

Minimise Re-investment Risk through Tax-Free Bonds: Sector Observers

Tax-free bonds are set for a comeback in the next few months, with the government giving a nod to state-owned Indian Railway Finance Corporation and National Highways Authority of India to sell these.

Since the returns of these bonds will be linked to the yield on government securities (G-secs), they are likely to fetch 7-7.25 per cent per annum, lower than the 8.5-9 per cent these offered in 2013-14. Sector observers believe there is likely to be less appetite for such bonds this time from high net worth individuals (HNIs), because of other attractive investment opportunities in equities and long-term bond funds.

Despite lower rates, experts feel these bonds make sense for those in the highest tax bracket. “We are in a declining interest rate scenario and it makes sense to lock-in at these rates for a tenure of 10-20 years. These are ideal instruments for HNIs because of the tax efficiency they offer,” says Ajay Manglunia, head of fixed-income markets at Edelweiss Financial Services.

Beside the coupon rate, investors will also benefit from capital gains if interest rates move south during the next few years. Yields on 10-year government bonds have fallen about 100 basis points, to 7.8 per cent from 8.85 per cent, in the past one year.

At an interest rate of 7-7.25 per cent, the effective pre-tax return for a person in the highest tax bracket works out to be 10.5-11 per cent. “There is no one in the market right now who would pay that kind of a return on AAA-rated paper,” says Dwijendra Srivastava, chief investment officer (CIO), debt, Sundaram MF.

These rates are much higher than post-tax yields from bank fixed deposits (FDs). For instance, the effective post-tax yield for a typical bank FD of one to three years, paying 8.5 per cent per annum, works out to be 5.5 per cent.

There are, however, competing investment options HNIs can look at – fixed maturity plans (FMPs) offered by mutual funds (MFs) and preference shares issued by companies. Investors with a shorter investment horizon can look at three-year FMPs, which offer an indexation benefit and a post tax yield of 7.6-8 per cent. “The returns will be higher than tax-free bonds but if interest rates decline in the coming months, returns in a tax-free bond will be comparable to or better than the debt MF returns, owing to capital gains,” says Umang Papneja, CIO, IIFL Wealth Management.

Preference shares, on the other hand, can be a good choice for investors with a longer time horizon, say experts. Dividend from preference shares are paid annually but the issue size is typically limited to Rs 500-1,500 crore. “Tax-free bonds offer better liquidity than preference shares, and are more tax-efficient when compared to debt MFs if the investment horizon is less than three years,” says Papneja.

The coupon or interest on tax-free bonds is typically paid annually and tax-free. Capital gains on units held for less than a year are added to your income, while gains on units held for more than 12 months are taxed at 10 per cent, or 20 per cent with indexation, whichever is lower.

10-20% bracket

Tax-free bonds might not be ideal for those in the 10-20 per cent tax bracket, say experts. “Someone in the 20 per cent bracket will get about 8.75 per cent taxable equivalent yield, which does not offer a significant spread over a bond or FD available in that tenor with rates of 8.3-8.75 per cent,” says Srivastava.

FDs could make more sense to investors in the 10 per cent tax bracket. For example, the post tax return on an FD offering 8.5 per cent will be around 7.65 per cent for these investors, higher than the yield on tax-free bonds. “Those in the 20 per cent tax bracket can look at five-year tax-free FDs, which can give returns of 8-8.5 per cent, with effective yield working out to about 10.46 per cent, as they are compounded quarterly,” says Srivastava.

However, premature withdrawal in FDs might mean paying a penalty or having to settle for lower interest rates. On Thursday, the Reserve Bank of India allowed banks to offer differential interest rates for deposits above Rs 15 lakh. The rates on premature withdrawal deposits are likely to be lower than normal rates. Tax-free bonds are fairly liquid, as the units are listed on the exchanges.

Besides FDs, those in the 10-20 per cent tax brackets can look at non-convertible debentures, which can fetch post tax returns of anywhere between 7.1 and 8.5 per cent.

According to Manglunia, investors in the 10 and 20 per cent tax bracket can still invest into tax-free bonds, provided they participate for capital gains over the next 12 to 18 months, and not for holding till maturity. Manglunia expects interest rates to decline by 40-50 basis points during the same period, resulting in capital gains of four to five per cent.

There could be another advantage for these investors. Retail applicants investing below Rs 10 lakh in tax-free bonds in the previous issues were offered a 55 bps lesser yield over the G-sec, while HNIs were given a 80 basis points lesser yield. A similar concession might be given for upcoming issues. This means if a 15-year G-sec is quoting at 7.9 per cent, HNIs will get the bonds at 7.1 per cent, while retail investors will get it at 7.35 per cent, resulting in higher capital gains.

Railways chalked-out a detailed Roadmap for facilitating Private Participation in Railways: Suresh Prabhu

New Delhi: Railway Minister Suresh Prabhu has said that a detailed roadmap for facilitating private participation in Indian Railways has been chalked out by the Ministry. The ministry has organised at least three large investor meets apart from overseas roadshows in the past eight months to sell projects worth Rs 90,000 crore.  The Bibek Debroy Committee, which was set up to suggest ways to mobilise resources for the Indian Railways and restructure the Railway Board, has favoured privatisation of rolling stock: wagons and coaches. This has given rise to the impression that private companies will soon be permitted into profitable operations, while the public sector struggles to maintain the required infrastructure.

In his report, Debroy has looked at the railway restructuring experiences from multiple countries, including Japan, the United Kingdom, Germany, Sweden, Australia and USA. He says in these countries, which opened up to competition, the entry of competitors lowered prices and led to better services.

Debroy panel link increase in passenger fares to better passenger services, create a separate company for railway infrastructure, open access for any new operator who wishes to enter the market for operating trains, separate suburban services and run them as joint ventures with state governments and private entry into running both freight and passenger trains in competition with Indian Railways Separation of rail track from rolling stock were proposed in the interim report.

In the UK, the privatisation of railways was rolled out in 1993 with the separation of railways into 25 train operating companies which were privatised, separation of infrastructure from operation, and appointment of a regulator which granted licences. “The key lesson from the UK is to retain the rail-track and infrastructure as a publicly-owned monopoly, while opening up rolling stock operations for passengers and freight to the private sector,” Debroy has said in his 323-page report.

Thus, he recommends following the key features of various international models with focus on the British experiment to achieve two main aims: changing the institutional structure between the government and the Indian Railways and increasing competition. Most of the other recommendations follow from these.

It has said it is imperative to split the three roles of policy making, regulation and operations. Ultimately, it suggests unbundling Indian Railways into two independent organisations: one responsible for the track and infrastructure and another that will operate trains. It has suggested setting up a company which will own the railway infrastructure.

“Provision needs to be made for open access for any new operator who wishes to enter the market for operating trains with non-discriminatory access to the railway infrastructure and a level playing field,” the panel has said. It has also recommended amending the Indian Railways Act to allow the private operators to levy tariff. In other words, instead of being fixed by the Indian Railways, fares will be decided by the market.

A senior rail ministry official says segregation of infrastructure and operations has been done the world over. “It leads to simplification of cost recovery for the money spent by the government in setting up the infrastructure. It would be profitable as the government would charge the operator.” He adds that in case the infrastructure becomes profitable, there is no bar on the government to have its own operator in the interest of competition. This is what is happening in container business where the government has its own operator, CONCOR, in addition to 15 other private operators. “The problem is that currently, there is no competition as both maintaining the infrastructure and running the operations are done by the government. Similar segregation has worked well in the aviation sector,” he says.

But the British Railway has its share of critics. In a recent research paper, An illusion of success: The consequences of British rail privatisation, Manchester University scholar Andrew Bowman has shown how rising passenger numbers, increased profits and inflated franchise payments to government enabled the train operating companies to argue that privatisation has been successful and delivered on its promises.

Alongside vague assurances about competition, management freedom and increasing the focus on customers’ needs, a significant measurable promise was the (eventual) total transfer of costs and financial risks to the private sector, he said. “The system of rail privatisation set out in Britain has achieved almost the exact opposite. The state has been burdened with the financial risks and costs of the rail infrastructure. Meanwhile, the system of accounting creates artificial profitability in an activity that would otherwise be entirely uneconomic for the train operating companies.”

So far, the private sector’s participation in railways has been muted in India, compared to sectors like ports, telecom, electricity, airports and roads. Several attempts have been made in the past to involve the private sector in wagon procurement and leasing, freight trains and container operations, terminals and warehousing facilities, catering services, and other rail infrastructure through schemes framed by the ministry.

What are the lessons to be learned from these mostly failed efforts? High costs and lower returns, policy uncertainty, absence of a regulator to create a level playing field, the lack of incentives for investors and procedural or operational issues have significantly restricted private sector participation.

Consider, for instance, the wagon investment schemes. The Own Your Wagon Scheme was launched in1992 to tap the private sector for augmenting wagon supply. Under the scheme, private sector firms could procure wagons either through Indian Railways or directly from approved wagon builders, own them and lease them to the railways. In return, they would be paid an annual lease charge. This scheme was revised and recast as the Wagon Investment Scheme in 2005 and the Liberalized Wagon Investment Scheme in 2008. In 2008, yet another scheme was launched to introduce the concept of leasing of railway wagons. Despite several amendments, these schemes did not achieve success.

The story is similar for Container Policy Liberalization, Special Freight Train Operator Scheme, Automobile Freight Train Operator Scheme, Private Freight Terminals Policy and even the Dedicated Freight Corridor Project.

But is there enough corporate interest? The investor meets hosted by the ministry have been attended by representatives of Reliance Infrastructure, Larsen & Toubro, Siemens, Adani Ports, GMR, Tata Infrastructure, Gammon, Jindal Steel and Power, JSW, Bombardier, GE, Alstom, Electromotive Diesel, Bharat Heavy Electricals, NMDC, HSBC and JPMorgan. Most investors in these meets have complained of a lack of permanence in policy governing privatisation but there is no dearth of interest, according to the ministry.

“Indian Railways have informed us of the new policies that have been finalised. We are keen (to invest) and are watching the developments in railways sector,” said an executive of a private company who did not want to be named after one such investor meet recently. He added that there is an attempt to correct the imperfections in earlier policies on private participation.

Let Private Sector invest in Rolling Stock; IR should cease direct investment in Wagons/Rakes/Locos: Mittal Panel

According to the Mittal panel, the railways’ non-fare revenue needs to be increased from an abysmal 3% now to 10-20% in a time-bound manner

A panel tasked with finding new avenues for raising the Indian Railways’ revenue, reducing its expenditure and monetising its assets has recommended that the transporter should cease to make direct investments in wagons, locomotives and passenger trains and let the private sector fund the rolling stock.

Currently, the Indian Railway Finance Corporation (IRFC) which borrows for the railways, owns the rolling stock procured and receive lease rentals from the transporter.

Under a public-private partnership (PPP) model, the private companies as train operators can realise revenue as passenger fares and freight from the users and share it with the the railways as track access charges, experts said.

They added that the new model would require a regulator to ensure the compatibility of the tracks with the modern trains that the private sector will likely bring in. The railways, of course, will need to run trains in sectors and routes where private interest is absent.

The DK Mittal committee, which submitted its report to the government a few weeks ago, also suggested a sharp increase in market borrowings by the IRFC to an annual  R25,000 crore (more than double the level in FY15) and external commercial borrowings (ECBs) by railway PSUs like IRCON and RITES to fund “capital expenditure”.

graph-page1The cash-strapped transporter, producing meagre surpluses, spent a below-par R65,798 crore for capital investments in FY15 but in the 2015-16 Budget, railway minister Suresh Prabhu laid the road map for a huge R8.5-lakh-crore capital investment in the rail network and complementary facilities over the next five years, pinning hopes on investments from PSUs, multilateral funding and pension and insurance funds.

According to the Mittal panel, the railways’ non-fare revenue needs to be increased from an abysmal 3% now  to 10-20% in a time-bound manner.

Stating that a 10% of non-fare revenue would mean a substantial Rs 15,000 crore, the panel listed ways to achieve the target: monetisation of non-operating assets like vacant land (seen at 48,000 hectares), giving advertisement rights to aggregators (corporate houses may be allowed to brand trains and stations) and station-development (suburban stations must utilise their Floor Area Ratio to create commercial space). “The potential of Rs 8,000 crore per annum (as non-fare revenue) can be realised over the next 3-4 years, if IR starts to have appropriate emphasis, time-bound plans and targets, and allocates resources with adequate autonomy for the same. Target should be 5% of tariff based revenue in 2016-17 and 10% in 2020-21,” the panel said.

Suggesting the ways to expedite monetisation of vacant railways land, the panel said identification of such land should be completed by September 2015 and stressed that 1,000 hectares of land should be entrusted with the Rail Land Development Authority (RLDA) every year for leasing out. The RLDA set up in 2007, has so far been given just 900 hecrates of land, scattered over 100 cities and towns and has generated a measly Rs 1,370 crore as lease rentals. (Recently, 590 hectares of these land was taken back from RLDA by the Railway Board for lack of clear titles; while the RLDA says it is adequately empowered to get the states change the land use, the railways blame other factors including lack of due diligence by the authority).

According to the Mittal committee, the RLDA needs to be empowered with suitable delegations of powers. “The Railways should make a policy to allow RLDA to decide on use of such lands, which are not needed for its use, for residential, commercial or mixed use, to maximise the revenues, without approval from Railway Board,” it said.

The panel added that the RLDA should be authorised to execute transfer of land to state government on behalf of Railways Board for getting land use change approval from them. “Railway should write to the concerned department of state governments which deals with Master Planning indicating provisions of Indian Railways Act about land use with the request to permit change of land use on the request of RLDA.”

Calling for creation of record of land inventory, the panel said it needs to be digitised and mapped to a GIS database. “The land that is not required now and is identified as not required even in the future needs to be handed over to RLDA, along with land of the narrow gauge /metre gauge lines which have been discontinued in part or full. Unused land around microwave tower/stations should also be leveraged after dismantling of such towers.”

Given the high level of cross-subsidisation of passenger segment, the panel proposed a policy framework where fares can increase at the rate of 25% of consumer price inflation on a quarterly basis. “Tariff should be increased by 2 paise per passenger kilo metre every 2months for Second class tickets (including suburban and intercity trains) till break-even point is reached. This is in addition to normal annual increases,” it said.

According to the panel, the number of coaches for all trans, where demand exists, should be immediately increased to 21, then to 24 and further to 26/28, subject to demand. “Preference for incremental coaches should be given to AC3 tier subject to demand on that route.” Average speed of all long-distance trains, according to the panel, should be increased to more than 55 kmph. At present, average speed of mail express is 50.4 kmph, passenger trains 36.1 kmph and freight trains is 25 kmph.

The panel said the exports by railway PSUs (of locomotives etc. to African and some Asian countries) could be increased from around Rs 1,000 crore now to Rs 5,000 crore by FY17 with 10% growth in subsequent years. Analysts, however, doubted the feasibility of achieving such a jump in exports, citing intense competition from China which provides export credit to their railway infrastructure exporters. It said IRFC should be given access to Rural Infrastructure Development Fund by the Reserve Bank of India. The firm has financial assets worth Rs 75,000 crore at present.

Debroy Panel calls for rationalizing Railway employee strength

New Delhi: Noting that the staff cost (including pensions) is the single most significant expenditure item accounting for lion’s share in railways total expenditure, Debroy panel has strongly suggested to rationalize the number of employees working in the state transporter.

Of the total workforce of around 13.3 lakh, railways data relating to the various group ‘D’ categories indicates that as on October 1, 2014, there were around 5.7 lakh sanctioned posts and 4.7 lakh employees on rolls belonging to these categories in train operations. The numbers does not include staff of production units and “other units” of railways.

Noting that enormity of their sheer numbers makes the costs of these employees quite substantial, the panel found that large number of these categories still continue to carry out jobs and responsibilities that are now quite obsolete, for instance Bhisty, Mochi, Sarang, dhobi etc. The provision of telephone-attendant-cum-dak-khalasi (TADK) needs to be reviewed dispassionately for its discontinuation, it said.

The committee noted that the real problem is the composition of the workforce, with a shortage in the core skill operations of running trains, suggesting pruning in number of peons, khalasis and other such categories through rightsizing and outsourcing and eliminating a number of obsolete group ‘D’ categories that are no longer relevant.

At the same time, it asked to take steps to increase the output of staff at the relatively lower levels whose functions are linked to safety such as gangmen, trolley-men etc through multi-tasking, adoption of better technology, retraining and efficiency enhancing measures etc.

The seven-member panel founds that in railways substantial recruitments have been for non-core activity such as for RPF/RPSF, medical, education and group ‘D’ which has created shortage in the core skilled operations of running trains. The panel noted that this is the opportune time for restructuring as retirements in Groups C and D will increase from 54,937 in 2014-15 to 57,233 in 2015-16, 57,682 in 2016-17 and 57,284 in 2017-18, before beginning to taper off.

It was noted that the work performed by a large number of these categories can easily be outsourced at much cheaper rates and the responsibilities of many of these categories can be combined through multi-tasking. The panel noted that despite significant technological improvements and automation, there has not been commensurate rationalization of staff.

It was found that spending on staff was unmanageably high and growing at an alarming rate as the staff costs constituted 48% of ordinary working expenses and 34% of gross traffic receipts in 2013-14. Pension outgo and staff costs put together were 51.3% of gross traffic receipts. The total expenditure for 2013-14 was Rs 1,31,465 crore, while the total receipts were at Rs 1,43,214 crore.

The panel has suggested withdrawal from non-core activities such as managing RPF, running schools and medical services to cut the expenditure. Of the total workforce, there are 57,312 Railway Protection Force (RPF) and Railway Protection Special Force (RPSF) personnel within groups ‘C’ and ‘D’.

The railways, which run a medical service with an infrastructure of 125 hospitals, 586 health units and 14,000 beds, employ 2,597 medical officers and 54,000 paramedical staff. It also runs one degree college and 168 railway schools.

For officers, the panel suggested to merge the existing eight organized Group ‘A’ services into two services i.e. the Indian Railway Technical Service (IRTechS) comprising the existing five technical services and the Indian Railway Logistics Service (IRLogS), comprising the three non-technical services.

Privatisation: Allow private players to do business directly with public only after Rail Regulator in place

Over the past few decades the railways has been losing share both in freight and passenger traffic. Hence it’s time to take a relook at the behemoth.

The Bibek Debroy-headed committee outlined a seven-year plan for transforming the transport monolith into a “government-owned Special Purpose Vehicle”.

It said the Railway Board should be overhauled to permit the entry of private stakeholders, but refrained from recommending full privatisation of the railways.

The committee called for bifurcation of the railways to separate the functions of track and infrastructure development from the business of operating trains and suggested setting up of an infrastructure corporation to undertake track and signalling work.

Citing examples of railways around the world, the panel recommended creation of an independent Railway Regulator of India to oversee the function of the commissioner of railway safety.

The report made a strong case for transparency and efficiency to attract public-private and foreign investment as the world’s fifth largest rail network suffers from chronic underinvestment.

The upshot of the recommendations of the Bibek Debroy committee is that the Indian Railways is reaching a point where it needs investment which is something Railway Minister Suresh Prabhu had also acknowledged in his budget speech.

The idea of attracting investment in rolling stock is praiseworthy and it can be executed in two ways – One, by allowing private firms to establish their units and then sell to the railways, although this may take a little more time; and two, by privatising the units under the Indian Railways, but this may face political opposition. But the devil is always in the detail. When it comes to the rolling stock, the question will remain as to whether the private initiative will be in just the supply of the stock and accepting a one-time payment, or giving the stock on lease to the Indian Railways.

The more difficult part is the laying down and maintenance of tracks, and how to put a mark-up on the maintenance part. Given the difficulties in land acquisition, will any private party be interested in track laying? The same goes for signalling.

Also the suggestion of the panel that there should be a Railway Regulatory Authority has to be handled deftly so that it does not encroach upon the powers of the Railway Board. This fits in well with the E Sreedharan committee’s suggestion to decentralise procurement to prevent losses due to cartelisation.

What is most prescient is the panel’s suggestion that the railway establishment should be unbundled into two entities, one running freight and passenger trains and the other handling infrastructural work. This will mean the virtual corporatisation of the railway system.

But what is premature is allowing private firms to directly provide the freight and passenger service because the private parties are bound to ask for a free hand in setting rates, and the whole matter may land in the lap of the regulator. Allowing private players to do business directly with the public should perhaps be deliberated on at greater length before a decision is taken.

Posco backs out of Paradip Rail project

Bhubaneswar (BBS): South Korean steel major Posco has withdrawn from the Haridaspur-Paradip rail link project – a move indicating that the fate of the company’s eight-million-tonne steel plant now hangs in balance.

Chief executive officer of the Haridaspur rail project P.K.Mishra said, “The company has withdrawn from the project and asked for the return of its money.”

The company had provided around Rs 27.5 crore for land acquisition for this project. The rail link was crucial for the Posco project as the company planned to get the raw material using this link from the mineral rich belt of the state.

A special purpose vehicle (SPV) was formed in 2006 to expedite the project, and Posco was a part of the SPV, christened as Haridaspur Paradip Railway Company Limited. Rail Vikash Nigam Ltd (RVNL) holds a major share of 48.43 per cent in the SPV.

While two central PSUs – the Paradip Port Trust and Steel Authority of India Limited (SAIL) – are part of the SPV, the state government’s Industrial Infrastructure Development Corporation Limited (IDCO) of Odisha is one of the shareholders.

After Posco withdrew from the project, Jindal Steel Private Limited, Essel Mining and Industries Limited, Rungta Mines Limited and MSPL remain the other partners in the SPV. All of them have business interests in the state.

The rail line is expected to carry about 19 million tonnes of traffic annum. “Posco was the strategic partner in the project. If in future, it wants to use the rail link, it can use it by paying the freight,” said Mishra.

However, Mishra said the rail project work would not be hampered by Posco’s withdrawal.

“There is no dearth of funds for the project. The work is going on smoothly. The land acquisition process has been satisfactory and construction of bridges is almost over,” he said. According to the schedule, the project would be over by 2017.

Sources said Posco decided to withdraw from the project after it apprehended that the company would get no more mines as the Mines and Minerals Development and Regulation Act had come into force.

Steel and mines minister Prafulla Mallick said: “We have raised the issue with the Centre, including Union mines minister Narendra Singh Tomar. But, if they don’t come up with new regulations, what can we do?”

In another development, the state government’s inter-departmental committee’s meeting would be held on Saturday to take a decision on opening of the 29 mines which have been lying closed.

Posco seeks Refund from Odisha Rail Line Undertaking

Bhubaneswar (BBS): South Korean steel giant Posco has sought refund from a rail line undertaking to be set up in partnership with Odisha government citing change in company law but said it wasn’t pulling out from the USD 12 billion steel project in the state.

“For railway (SPV) we cannot continue keeping deposit any further due to changed company law,” Posco India Spokesperson IG Lee said.

Posco had joined hands with the state government along with SAIL, Rail Vikas Nigam and other players in 2006 to form a Rs 590 crore special purpose vehicle (SPV) for development of a 78-km long Paradip-Haridaspur rail line in Odhisa.

Denying reports that the company is pulling out from the multi-billion project in the state, he said: “We are still on Odisha project. Money refund is not for the steel plant land. Rail Infra refund is as per the changed company law last year.”

Lee also said six employees have “voluntarily” resigned and denied it was any sign of Posco pulling out from the project.

The steel maker’s proposed USD 12 billion project at Jagatsinghpur district in Odisha for producing 12 million tonne per annum (MTPA) is viewed as the largest FDI in India.

It has, however, been stalled for about a decade on account of regulatory hurdles, including delays in land acquisition.

Posco had entered into a pact with Odisha government on June 22, 2005 for the plant, which included iron ore mine development.

However apart from the delays, in a fresh blow to the company, last month the Centre said the company would be required to participate in auction to get iron ore mines to feed its facility instead of direct allotment as assured earlier.

Steel Minister Narendra Singh Tomar had said that the company, which was assured Khandadhar iron-ore mine via dispensation route will have to participate in the auction process to get a mining lease.

Posco was previously promised the Khandadhar iron ore mine by the state for its mega steel plant, considered as the biggest FDI in India, but the actual allocation never happened due to delays in regulatory approvals.

Although the company has a memorandum of understanding with the Odisha government that assured allocation of mining leases, the passage of a Bill in Parliament that made allocation of all mines through auction route only, the agreement with the state will have no value.

In 2013, Posco had scrapped the 6 MT steel project in Karnataka over land and mineral hurdles. The Odisha project was also scaled down to initial 8 MT after it failed to acquire the desired quantity of land.

Last month POSCO had inaugurated a USD 709 million steel mill in Maharashtra to scale up its presence in the country.

Railways to revamp PPP Cell for projects worth Rs.8.56 Lakh crore

New Delhi: The railway ministry has set up a committee to boost its Public-Private Partnership (PPP) cell to make it ‘more effective, customer-friendly and result-oriented.’

What it boils down to is this: with the railways requiring Rs 8.65 lakh crore between 2015 and 2019 for mega projects, partnering with the private sector is the best bet.

Of particular interest are two projects – the Oval Maidan-Churchgate-Virar and the CST-Panvel elevated corridors. Both are expected to be executed on the PPP model.

The two projects are worth over Rs 40,000 crore (in 2012 prices) and have been moving at a snail’s pace for the past couple of years.

In fact, the Oval Maidan-Churchgate-Virar elevated corridor is almost defunct with the state and the railways failing to sign the all-important State Support Agreement since May 2012.

As a result, many private players which initially participated in the road show for the project, withdrew from the fray later.

The CST-Panvel corridor, too, is moving slowly with railway officials claiming that the chances of it coming up, with high-speed air-conditioned trains as envisaged, arise only if the proposed Navi Mumbai airport comes up.

There is also a plan for an elevated corridor between CST and Kalyan, though it is still in its nascent stages.

Officials welcomed the move to revamp the PPP cell. “The railways plans to spend Rs 1 lakh-odd each for rolling stock and wagons and for station development and logistics parks.

“These are avenues that will almost necessarily go the PPP way. So creating a conducive atmosphere at the railway ministry is paramount. We don’t need a situation like the Churchgate-Virar elevated corridor where private firms, one after the other, opted out because of the yawning communication gap between the state government and the railway ministry,” said a senior Mumbai railway official.

The committee -The committee will be headed by retired 1973 batch IAS official Ajay Shankar who has worked with railway minister Suresh Prabhu when the latter was power minister between September 2000 and August 2002 in the A B Vajpayee government. Shankar and Prabhu jointly worked on the preparation and enactment of the Electricity Act, 2003, that became law in May 2003. He has a Masters in Political Science from Allahabad University and a Masters in Economics from Georgetown University, Washington D.C.

Ajay Shankar Committee constituted to review the existing PPP Cell in Railway Board

New Delhi: The Ministry of Railways has decided to constitute a Committee headed by Shri Ajay Shankar, IAS (Retd.), former Secretary, Department of Industrial Policy & Promotion (Govt. of India) to review the existing Public Private Partnership (PPP) Cell in the Railway Board. The Committee will recommend measures needed to make the Cell more effective, customer friendly and result oriented. The Infrastructure Directorate of Railway Board will be the Nodal Directorate for functioning of the Committee and Executive Director/Traffic (PPP) Railway Board will be the Secretary to the Committee.

Railways finalises first-of-its-kind Model Concession Agreement for BOT projects to be funded under PPP Scheme

New Delhi: With funding of projects becoming the biggest challenge for the railways, Suresh Prabhu is going all out woo private investors with industry-friendly policies.

His team has finalised a first-of-its-kind Model Concession Agreement for BOT projects to be funded under the PPP scheme, guaranteeing the private investor an 80% return of the projected revenue irrespective of the actual returns from the project.

Providing the much-needed comfort cushion, the railways have also decided to take care of the inflationary risk. It has assured the investor that whether there is a hike in freight and passenger fares or not, the returns will go up by five to six per cent every year depending upon the inflation.

This is a major departure from the earlier agreements where the investor was not assured of any returns on his investment and had to bear the inflation factor too. Four projects have been identified by the railways to be implemented under this new BOT agreement. These include the Wardha-Nagpur third line, Bhuj-Nalia doubling, Kazipet-Vijaywada third line and Bhadrak-Nargundi third line.

“The 70-km Wardha-Nagpur line is the first to be taken up. It is not just the projected traffic but also how it translates into monetary worth that is being calculated. It is only then that the railways can give an assurance on the projected revenue,” explained a senior Railway Board official.

This is the first time that the railways would be calculating the financial worth of projects. Earlier, the agreements only took into account the traffic projections on the line. “This alone was not enough for an interested investor. It would be difficult for him to judge a project based only on traffic projections. It is crucial to explain it in terms of revenue,” the official added, based on railways’ past experience with private investors.

Officials said that major changes are underway even in the way the project reports — both technical and financial — are prepared. “The investors want independent financial assessment of the project. We are planning to get consultants to do the assessment and write the financial reports,” the Railway Board official said. They were looking at project management consultancy not only to prepare the report but also manage the entire bid process.

“It is not easy to get these things done in an organisation so bound by bureaucratic processes,” he added.

Sources in the ministry said that it took long hours of discussions with the finance department to come up with the Model Concession Agreement. “Now that we are offering guarantee to the investor, we have been cautioned to pick projects, to be implemented under this, with great care. The projects have to be revenue generating,” an official said. The Wardha-Nagpur line that has been chosen, for example, is believed to be a “safe project”. The existing two lines are already saturated and the third line sorely needed to relieve pressure from the overburdened lines. Former Railway Board chairman Vivek Sahai told that the new agreement was a positive move, and that he himself had struggled to get some of these things off the ground, especially railways bearing the risk of inflation.

17 States consented to form SPVs with Indian Railways for faster completion of Rail Projects: MOSR

New Delhi: There are 154 New Line, 42 Gauge Conversion, 166 Doubling and 54 Railway Electrification projects across the country with throwforward of Rs. 2,85,652 crore. For Railway Electrification projects, the throwforward as on 1st April 2014 has been estimated to be Rs. 6,692 crore. Ministry of Railways has approached all State Governments to form Special Purpose Vehicles (SPV) jointly with Ministry of Railways to undertake mutually identified rail infrastructure projects for project development, resources mobilization and monitoring. Seventeen State Governments have consented to form the SPVs. To reduce delays on account of land acquisition, security issues and forestry clearances etc, meetings are held with State Officials at various levels and different Ministries of Central Government from time to time.

This information was given by the Minister of State for Railways Shri Manoj Sinha in written reply to a question in Rajya Sabha today.

Business Transformation Council to increase private investments in Rlys: Prabhu at Railways@2020 Conference

ASSOCHAM Conf on Railways in IndiaNew Delhi: Railway Minister Suresh P. Prabhu on Wednesday said the Indian Railways will set up a business transformation council (BTC) to enhance partnership with private sector investors and raise efficiency and speed in implementing the Rs 8.5 lakh crore projected investment in coming five years.

Prabhu, who inaugurated the international conference on Railways @ 2020 organized by The Associated Chambers of Commerce and Industry of India (ASSOCHAM) here, said the Ministry of Railway has signed an MoU with the Life insurance Corporation (LIC) which will bring Rs. 25 billion dollar to Indian railway in the next five years at very attractive rate of interest.

He revealed that the World Bank would also support the five year expansion plan besides “Other Multi-Lateral Agencies” like the Asian Development Bank (ADB) and the International Finance Corporation (IFC) and other source.

Prabhu invited industry involvement in the Rs 8.5 lakh crore railway plans.

Railway Minister Suresh Prabhu and other dignitaries while launching a publication on ASSOCHAM Conference on 'Railways @ 2020'
Railway Minister Suresh Prabhu and other dignitaries while launching a publication on ASSOCHAM Conference on ‘Railways @ 2020’

“Partnership with the private sector will be one of the thrust areas in operationalizing the MoUs and in opening up huge development in the railways,” he pointed out.

He assured transparency in the implementation of the plan.

“Railways are the harbingers of growth in India” he said.

Describing the Railway’s expansion and modernization programme as key to the success of the ‘Make in India’ scheme of the Prime Minister, Prabhu referred to the ongoing coal mines auction that had fetched the government an ‘Unimaginable’ Rs. two lakh crores.

“Indian Railways have now to develop the capacity to haul all the additional coal that would be mined now,” he said.

Highest ever Funding of Rs.1.5 Lakh Crore for Railways – MoU Signed with LIC India

The Union Minister for Railways, Suresh Prabhakar Prabhu and the Union Minister for Finance, Corporate Affairs and Information & Broadcasting, Arun Jaitley witnessing the signing of a memorandum of understanding (MoU) between Ministry of Railways and Life Insurance Corporation of India, in New Delhi on March 11, 2015. The Minister of State for Railways, Manoj Sinha is also seen in the picture

New Delhi: Just within fifteen days of presenting the Railway Budget 2015-16, the Minister of Railways Shri Suresh Prabhakar Prabhu fulfilled yet another commitment of his Budget announcement by achieving the highest ever funding of Rs. 1.5 lakh crore for Railways. In this historic landmark achievement, a Memorandum of Understanding (MoU) was signed between the Ministry of Railways and Life Insurance Corporation (LIC) in the presence of the Minister of Finance Shri Arun Jaitley and the Minister of Railways Shri Suresh Prabhakar Prabhu at a function here today. The signatories of MoU were Smt. Rajalakshmi Ravikumar, Financial Commissioner, Ministry of Railways and Shri S.K.Roy, Chairman, LIC.

Union Minister of Railways Shri Suresh Prabhu exchanging the signed copies of the MOU with Shri Arun Jaitley, Union Minister for Finance, Corporate Affairs and Information & Broadcasting
Union Minister of Railways Shri Suresh Prabhu exchanging the signed copies of the MOU with Shri Arun Jaitley, Union Minister for Finance, Corporate Affairs and Information & Broadcasting

Speaking on the occasion, the Railway Minister said that this is the first such step in its endeavour to make Indian Railways prosperous in the future. He said that with such encouraging initiatives, the Ministry of Railways will be able to augment its resources for speedier execution of projects. Shri Suresh Prabhu said that the resultant enhanced throughput of traffic is likely to further increase the capacity to carry more to meet with a growing transportation demand leading to a robust economy. He thanked the officials of the Finance Ministry, LIC and the Railway Ministry for working together as a team to make this deal a big success.

Under this MoU, LIC will make available to the Ministry of Railways/its entities a Financial Assistance with a limit of 1,50,000 crore over the next five years for implementing Railway projects. The Financial Assistance will be available from the Financial Year 2015-16. In his Budget Speech, Shri Suresh Prabhu had announced his intention of meeting a part of the total Plan Budget of Rs 1,00,011 crore for the financial year 2015-16, through extra budgetary resources, such as market borrowings by tapping low cost long term funds. The challenge has been successfully met in a substantial measure by the signing of this MoU for mobilising resources.

Union Railways Minister Suresh Prabhu, Financial Commissioner (Railways) Rajalakshmi Ravikumar, LIC Chairman, SK Roy and Financial Services Secretary Hasmukh Adhia during MoU signing between Railway Ministry and LIC, in New Delhi on Wednesday
Union Railways Minister Suresh Prabhu, Financial Commissioner (Railways) Rajalakshmi Ravikumar, LIC Chairman, SK Roy and Financial Services Secretary Hasmukh Adhia during MoU signing between Railway Ministry and LIC, in New Delhi on Wednesday

There would be a five-year moratorium on interest and loan repayment and the rest of the terms would be negotiated while signing the finance assistance agreement.

The Minister of State for Finance, Shri Jayant Sinha, the Minister of Railways, Shri Manoj Sinha were also present on the occasion. Also present on the occasion, among others, were Shri A.K.Mital, Chairman, Railway Board, Shri Hasmukh Adhia, Secretary (FS), Railway Board Members and senior officials from Ministry of Finance, Ministry of Railways and LIC.

Earlier, just a few days after the presentation of Railway Budget 2015-16, the Minister of Railways Shri Suresh Prabhakar Prabhu fulfilled commitment of his budget announcement by launching a ‘Customer Complaint Web Portal and Mobile Application’. This ‘Customer Complaint-cum-Suggestion’ portal and mobile App which can be freely downloaded, is very useful as one can track the status of the complaints which he or she registered on this portal with the help of mobile App. Soon after his taking over as the Minister of Railway,, Shri Suresh Prabhu started the process of welcoming suggestions from the people to further improve the passenger services and valuable suggestions on this newly launched portal can be incorporated in all possible ways, if found suitable.

Amid Rail FDI push, foreign players falter doing business in India

UGL, an Australian conglomerate, has just written down fully its investments in its joint venture with Texmaco, while CAF of Spain has abandoned its Kolkata Metro project

While there’s excitement over likely inflow of foreign investment in the railway industry, ground reality is quite different when it comes to some of the few foreign players which are already present.

UGL, a $2.5 billion Australian conglomerate with presence in rail, transport & technology systems, power, resources, water and defence, has just written down fully its investments in its joint venture with Texmaco due to poor demand for specialty wagons.

On the other hand, Construcciones y Auxiliar de Ferrocarriles, or CAF, of Spain has abandoned its project to supply coaches to Kolkata Metro Railway over a dispute, sources said.

“A $9.7 million investment made in India to establish bogie manufacturing as part of a low-cost supply chain in the production of locomotives for the coal and iron ore markets has been fully written down,” Sydney-based UGL revealed in its half yearly earnings, showing its whole investment in the joint venture as impairment charge.

“Reduction in freight rail growth impacting production throughput in India,” UGL told analysts explaining why the impairment was done.

UGL has built a world class manufacturing centre for rail industry components for freight and passenger rolling stock using state-of-the-art facilities like robotic welders.

The plant, based out of Texmaco’s Belgharia plant near Kolkata, has a product line capable of producing platforms and headstocks for passenger and freight rolling stock including diesel and electric locomotives, electric multiple units, coaches and wagons, and also flat packed container and other specialist rail wagons for both Indian and international markets.

The decision to impair the investment has also taken top Texmaco officials by surprise but is being seen as symptomatic of the state of affairs at the railway-related industrial economy where sufficient demand is yet to show up.

This is in sharp contrast to the recent upswing in sentiment around railway stocks triggered by the decision of railway minister Suresh Prabhu on Sunday to give green signal to two big-ticket foreign direct investment proposals worth about Rs 2,400 for setting up diesel and electric locomotive plants.

The predicament of CAF of Spain is somewhat different.

CAF had, in consortium, won a contract to supply to Kolkata Metro Rail Corp (KMRC) 14 rakes of six coaches each for the East-West Metro corridor competing against biggies like Kawasaki-Toshiba-Mitshubishi.  The project, however, has fallen through and CAF is believed to have abandoned the project, sources in KMRC said.

“There were disputes and differences with regard to the execution of the contract. CAF has approached and invoked dispute resolution mechanism,” an official of KMRC said.

CAF was supposed to produce these air-conditioned metro coaches with a maximum passenger capacity of 2,136 pax/train with speed of up to 90 km an hour.

These details about the project has been taken off from CAF’s website signifying its exit and mail sent to the company asking for its comment remained unanswered.

LIC to invest Rs.1.5 Lakh Crore in Bonds issued by various Railway entities like IRFC, beginning next fiscal

LIC’s hard bargain ensures Good Pricing in Rail Bonds

Mumbai: Financial powerhouse LIC has made a hard bargaining for its Rs 1.5 trillion investments in Railway bonds by ensuring a coupon rate above 10 basis points higher than 10-year benchmark government paper. “We have just signed an agreement with the Railways to invest Rs 1.5 trillion in their 30-year bond over the next five years.

State-run insurance major Life Insurance Corporation of India Ltd (LIC) on Wednesday committed Rs 1.5 lakh crore to the Indian Railways for development of various commercially viable projects in one of the largest railway networks in the world.

The investment would be made over a period of five years. “LIC has taken the task of supporting Indian Railways.  The investment would be done in bonds issued by various railway entities such Indian Railways Finance Corporation (IRFC), beginning next fiscal.

It is a commercial decision. LIC will invest Rs 1.5 lakh crore over a period of five years,” Finance Minister Arun Jaitley said here.

On an average, LIC will be subscribing bonds worth Rs 30,000 crore over next five years, its Chairman S K Roy told after the signing of MoU between Indian Railways and LIC.

When asked about that what kind of interest rate LIC would earn from this investment, Roy said, “The rate is yet to be finalised. Since it is would be a commercial decision, it would be win-win situation for both.”

Railways to set up separate Body to enhance Ties with Private Investors

New Delhi: Seeking technical cooperation for upgradation of rail infrastructure with foreign countries, Railways Minister Suresh Prabhu today said the national transporter can grow faster based on the partnership model.

The Minister also said that a new body would be set up to enhance partnership with private investors, and raise efficiency and speed in implementing rail projects.

“We need partnership which is our thrust area which I have mentioned in my budget speech. Partnership can help railways grow faster,” Prabhu said at an international conference on railways organised by ASSOCHAM and attended by Ambassadors of China, France and Czech Republic.

“We seek partnership with many of you and I look forward for Railways becoming a growth engine, Railways becoming the wheels of social transformation.

Detailing the aspects, he said, “There can be technical cooperation with other countries for upgradation of railway infrastructure like track maintenance, locomotives, signalling system to meet the global benchmarking. We have to design new locomotives, rolling stock which will be more user friendly and energy efficient.”

Minister also said that Foreign Rail Technology Cooperation Scheme would be launched to help in technology upgradation.  “We intend to introduce technology portal to invite innovative technological solutions. Railways propose to move from preventive to predictive maintenance. We propose to launch Foreign Rail Technology Cooperation Scheme and we will set up ‘Kayakalp’ to help in technology upgradation,” he said.  “We have also announced the setting up of regulatory framework. We are going to set up a Kaya Kalp Council for business transformation for railways and it will be headed by a very distinguished person,” he said.

Focusing on partnership, Prabhu said, “All of us will work together in the spirit of partnership to make railways better. We are signing MoUs with most of the states for executing rail projects. We will operationalise these MoUs after signing.”

Highlighting the public transporter’s role in Indian economy, he said, “Railways have to play a significant role in Indian economy’s growth. We must have transparency, efficiency and speed for implementing the projects.”

Prabhu also said that whatever was announced in the Rail Budget is under implementation. Terming Railway’s expansion and modernisation programme as key to the success of Prime Minister Narendra Modi’s ‘Make in India’ scheme, Prabhu referred to the ongoing coal mines auction that has fetched the government an “unimaginable” Rs 2 lakh crore.

“Indian Railways have now to develop the capacity to haul all the additional coal that would be mined now,” he said.

Railways needs to become the link between different parts of the country and to make that happen, we cannot rely on one source of funding that is the gross budgetary support from Finance Ministry, he said.

Railways would take help from the World Bank and other multi-lateral agencies like the Asian Development Bank (ADB) and the International Finance Corporation (IFC) for its expansion and modernisation plan.

The Minister underlined the importance of reducing of expenditure in Railways, saying steps are being taken in this regard.

“We have to reduce the cost and this is very important. We must reduce the cost of buying electricity and we are going to have to increase capacity of power generation. We must find ways to buy electricity at lower rates than the market rate,” he said.

Prabhu also asserted that Railways is far more “environment-friendly transportation system than any other mode of transportation.”

He said steps are being taken to make Railways a vibrant social transformation engine in the next few years

Railway Ministry receives Rs.10000 Crore investment commitment from Private Sector: MOSR

Funds are for 19 projects under different participative models of Domestic and Foreign Direct Investment

New Delhi: The railways ministry has received investment commitments to the tune of Rs 10,000 crore from private sector companies for development of 19 projects under participative models of domestic and foreign direct investment (FDI), minister of state for railways Manoj Sinha told Parliament on Monday.

However, there has been no specific investment proposal since the opening of FDI in rail transport last year, Sinha added. An investors’ meet was organised on December 5 and discussions with potential investors were held to attract private investments, Sinha said.

The ministry had issued sectoral guidelines for domestic and foreign direct investment in November 2014, identifying various areas for private participation. This includes suburban corridors through public private partnership, high-speed rail, dedicated freight lines, rolling stock including train sets and locomotive manufacturing facilities and railway electrification.

The guidelines cover signalling system, freight terminals, passenger terminals, testing facilities and laboratories, non-conventional sources of energy, mechanised laundry, rolling stock procurement and bio-toilets. The ministry had also issued a participative policy for rail connectivity and capacity augmentation in December, which provides five models for building rail connectivity.

According to Sinha, the government has identified the Mumbai-Ahmedabad route as the first corridor to conduct feasibility study for deployment of high-speed rail services. For this sector, two studies have been undertaken – a joint feasibility study co-financed by India and Japan and a business development study by France’s railways.

The government is also undertaking a feasibility study for a diamond quadrilateral network of high-speed trains comprising four lines — Delhi-Mumbai, Mumbai-Chennai, Chennai-Kolkata, and Kolkata-Delhi — and two diagonals —Delhi-Chennai and Mumbai-Kolkata. The total length of the network will be 10,000 km. The Delhi-Chennai section has been identified for a feasibility study in cooperation with the Chinese government.

Govt encourages Private/Foreign Direct Investment in Railway Sector: MOSR in Parliament

New Delhi: The Ministry of Railways has issued Sectoral guidelines for Domestic/Foreign Direct Investment (FDI) in November, 2014. The following areas have been identified for Private/Foreign Direct Investment:

  1. Suburban corridors through Public Private Partnership (PPP);
  2. High speed train projects;
  3. Dedicated freight lines;
  4. Rolling stock including trains sets and locomotive/coaches manufacturing and maintenance facilities;
  5. Railway electrification;
  6. Signaling system;
  7. Freight terminals;
  8. Passenger terminals;
  9. Testing facilities and laboratories;
  10. Non- Conventional Sources of Energy;
  11. Railway Technical Training Institutes;
  12. Concessioning of standalone passenger corridors (branch lines, hill railways etc.);
  13. Mechanized Laundry;
  14. Rolling stock procurement;
  15. Bio-toilets;
  16. Technological solutions for manned and unmanned level crossings;
  17. Technological solutions to improve Safety and reduce accidents.

Modernisation of existing assets and improvement in passenger amenities is an important and ongoing process on Indian Railways. The areas include track and bridges, mechanized maintenance of track, automatic signalling, higher capacity wagons, electrification, new generation diesel and electric locomotives, green toilets on passenger trains, modernization of stations and terminals, quality of bed linen, provision of 24X7 helpline, ticketing, catering services, entertainment facilities on-board, enhancement of train capacity, Wi-Fi facility at stations etc.

Also a Participative Policy for rail connectivity and capacity augmentation was issued on 10.12.2012 which provides five models for building rail connectivity.

No specific investment proposal has been received since the opening of FDI in Rail Transport. However, approximately ` 10,000 crore private investment have been committed for 19 projects under different participative models.

An Investors Meet was organised on 5th December, 2014 and discussions with potential investors have been held to attract private investments.

This information was given by the Minister of State for Railways Shri Manoj Sinha in written reply to a question in Lok Sabha today.

Kanchrapara Rail Coach Factory identified for Domestic or Foreign Direct Investment

Kanchrapara (KPA): The proposed rail coach factory at Kanchrapara, announced in 2009-10 by then railway minister Mamata Banerjee, in 2009-10 when she was railway has not been shelved. The white paper submitted in Parliament by railway minister Suresh Prabhu on February 26 lists it as one of the projects identified for domestic or foreign direct investment in the railways. The ministry of railways has also revised the cost from Rs 1,000 crore to Rs 1,200 crore.

The ministry wants both factories to be built on Build Operate Transfer (BOT)/Build Operate Own (BOO)/Joint Venture (JV) or Annuity basis. The Kanchrapara factory will have to build 500 EMU/MEMU coaches every year and the contract will be awarded to the party that offers the lowest price per EMU/MEMU.

“The conventional EMU rakes in the Mumbai suburban network are being replaced with new ones that have regenerative brakes. These EMUs adopt a three-phase technology with Insulated Gate Bi-polar Transistor (IGBT)-based system capable of regenerating 25-30% of the energy utilized. The trains draw power from an overhead source and regenerate energy while braking. The system converts this back to electrical energy, thus reducing consumption,” an railway board officer said.

With the railways requiring more such IGBT rakes, the need for a production unit has gone up. The facility may also come in handy for the railways’ plans to run long-distance trains at 160-200km per hour along existing routes by using imported train sets.

“The train sets will have about 21 AC coaches each with comfortable interiors. As all coaches will have traction, these trains will have greater acceleration and draw less energy. The travel time between two cities will come down significantly. The railways plans to import a few train sets and then start manufacturing them in India. If the factory at Kanchrapara becomes a reality, this facility may be utilized later for manufacture of train sets. Many of these will be required as the plan is to use them for all Rajdhanis and Shatabdis,” the officer said.

Railway Minister approves 2 FDI Projects for setting up Diesel & Electric Locomotive Plants in Bihar at Rs.2400 Crore

New Delhi: In line with Prime Minister Narendra Modi’s “Make in India” campaign, Railway Minister Suresh Prabhu has finally given green signal to the two much awaited big-ticket FDI proposals for setting up diesel and electric locomotive plants in Bihar at a cost of Rs 2,400 crore.

Ending the suspense over the fate of Madhepura electric locomotive plant and Marhora diesel locomotive plant, Railways has finalised the financial bidding for the high-value joint venture projects after considerable delays, re-thinking and prolonged due diligence amid repeated revision of bidding documents.

The Request for Proposals (RFP) containing financial bidding documents for both the plants are ready and the shortlisted bidders have been intimated the same, said a senior Railway Ministry official.

While four global firms — Alstom, Siemens, GE and Bombardier — have been shortlisted for the proposed electric locomotive factory at Madhepura, two multinationals — GE and EMD – are vying to bag the diesel locomotive plant at Marhora.

The estimated cost of the factories is about Rs 1,200 crore each. The financial bidding will be opened on August 31 and there will be two pre-bid meetings held in between, the official said.

With the government allowing 100 per cent FDI in the railway sector, setting up of the two locomotive plants in joint venture model is crucial for Railways to give a boost to its infrastructure. The two projects are among top eight infrastructure projects being monitored by the PMO.

The Madhepura plant will manufacture 800 electric locomotives of 12,000 horse power (HP) over 11 years. While five electric locomotives will be imported, 795 will be manufactured at Madhepura, as per the bidding condition.

Marhora plant will produce 4500 HP and 6,000 HP diesel locomotives using state-of-the-art technology.

In the course of about 10 years after commissioning, the proposed Marhora plant is expected to manufacture about 1,000 diesel-electric locomotives, that is 100 locomotives annually.

While 700 diesel locomotives will be equipped with 4,500 horse power (HP), 300 diesel locomotives will be manufactured with 6,000 HP, said the official.

Railways will have 26 per cent equity while the global players will have 74 per cent equity in each of the plants at Madhepura and Marhora.

CNR Corporation and CSR Corporation, both based in China, had submitted qualifying bids through request for quotation (RFQ) for both the factories but were rejected in the qualifying bid in May 2014.

The proposals for the diesel and electric locomotive factory in Bihar were announced in 2008 by the then Railway Minister Lalu Prasad.

Both factories are to be set up in PPP model and there are many changes in the bidding documents over the clauses of transfer of technology and maintenance since the announcement.

“In order to give a boost to the infrastructure sector, setting up of these two factories on PPP mode is crucial for the current economy scenario and the PMO is also monitoring these projects,” the official said.

Bidding documents were earlier discharged on November 2011 and Railways called for fresh proposals for the two factories.

Scope of maintenance work for the proposed factories was revised significantly and amended bid documents were approved by the Cabinet on January 20 last year and subsequently RFQ followed by RFP for both plants were finalised, the official said.

Govt may ease FDI norms for NRIs to boost Capital Inflow in Railways

New Delhi: The government is set to liberalise foreign direct investment norms for non-resident Indians as part of its efforts to boost capital flows in railways.

The department of industrial policy and promotion (DIPP) has sought Cabinet approval to allow NRI non-repatriable funds to be considered on a par with domestic investment instead of FDI and exempted it from sectoral restrictions, limits and approvals.

The move is expected to give a big push to sectors such as Railways as well as Defence that require large investments, in line with the ‘Make in India’ campaign launched by Prime Minister Narendra Modi.

“In order to encourage NRIs to put in their money in India, we are trying to allow non-repatriable investment as domestic and not FDI. We have sought approval of the cabinet in this regard,” said a government official, who did not wish to be identified. Non-repatriable investment is one that an NRI cannot take back to the foreign country.

“This will be an absolute game changer for FDI restricted sectors. Many sectors including Railways, Retail, Defence, etc, have NRI non-repatriable investment. When they want to issue shares to NRIs over the sectoral limit, they do not get approvals. This will be a very big move for Defence, I&B, Retail and others. It will make sectors very open,” said Girish Vanvari, national head of tax at KPMG India.

The government had last year set up a committee to look into the possibility of treating non-repatriable NRI funds as domestic investment. The Modi government has liberalised FDI norms for a slew of sectors including defence, railways, medical devices and insurance, and it is keen to tap into foreign capital, including from NRIs.

We want NRI money to flow in directly. They have a lot of money and want to invest here. We will allow people to invest in dollars and let them earn in rupees. We want them to put money in defence, railways, etc,” said the official cited earlier. The move, if approved, will allow NRIs to invest in the country without taking government approval that is a prerequisite for a number of sectors.

Civil aviation sector is an exception as it already allows NRIs to invest up to100% against an FDI cap of 74% cap for scheduled air transport service and up to 49% for non-scheduled air carriers.

The higher capital flows could also help finance the current account deficit, estimated by the economic survey at 1% of GDP during 2015-16. The move could be seen as part of efforts to promote ease of doing business in the country, a parameter on which India is ranked a poor 142 out of 189 countries in World Bank’s report.

The Modi government is aiming to push India into the top 50 countries in the next few years. FDI inflows grew 24% during the nine months to December in the current fiscal. In the past few months, the government has opened up railways infrastructure to 100% foreign funding and raised the FDI cap in defence to 49% from 26% earlier.

It wants to indigenise defence production and reduce dependence on imports. In a policy change in August last year, it allowed more than one Indian company to hold 51% share, leading to a slew of approvals involving private players that had been pending for the last five-six years.

Railway Ministry seeks cooperation of State Govts for speedier execution of Projects

New Delhi: The Ministry of Railways has approached all state governments to form a joint Special Purpose Vehicles (SPV) for speedier execution of ongoing and new projects.

The proposed SPV’s role would be to undertake project development, resource mobilization and monitoring of mutually identified rail infrastructure projects.

The ministry has also sought the cooperation from state governments to develop railway infrastructure like stations, road under- bridges, road over bridges and laying of additional lines.

This is coordinated by various levels of Ministry of Railways and as well as state governments. Such assistance is normally in the form of land acquisition, law and order, encroachments removal, temporary closure of roads, shifting of utilities etc.

State government’s response, in general, has been positive and cooperative towards railway works.

Railways likely to get Rs.15000-20000 Crore investment from LIC India for Capacity Augmentation at low interest rate

Railways in talks with LIC and Ministry of Finance on funding pact. Railway Minister expected to sign a deal in two weeks by which insurer will invest surplus funds in rail infrastructure

New Delhi: To finance its ambitious plans of massive capacity augmentation works, the Railways is all set to get fresh infusion of funds from the country’s largest insurer, LIC of India, as unveiled in by Railway Minister Suresh Prabhu in the Rail Budget on Thursday.

Railway Board sources said the matter looks ready to be formalised within a fortnight. An amount of Rs 15,000-20,000 crore for this year and years thereafter has been discussed with the company in meetings anchored at times by the Finance Ministry. This paves the way for a new kind of financing for the funds-starved transport behemoth.

LIC sources confirmed that the move is at an advanced stage and modalities are being finalised. A formal announcement is expected shortly.

Railway Board Chairman A K Mital said the talks were on. “We have spoken to LIC… We are looking for a longterm relationship with them. Obviously when we take money, we will look at competitive rates (of interest),” Mital told to media persons.

Prabhu’s budget calculations, which projected a plan size of Rs 1 lakh crore for the next fiscal year, had a gaping hole of Rs 17,136 crore — money that Prabhu said he would raise by institutional financing. Since past efforts to get funds from outside parked into railway projects have met with little success, there was concern about Prabhu’s claims.

The mode through which LIC can channel the funds to Railways is being discussed. There is no mechanism which allows direct transfer of funds to Railways. Involving its arms like RVNL or IRFC or even the Finance Ministry is under discussion. Funds from LIC, to be taken as investment under the head of Extra Budgetary Resources (Institutional Finance), will be at cheaper-than-market rates. Sources indicated rates between 7 and 9 per cent.

A generous helping from the Finance Ministry is being believed to have resulted in Railways’ entreaties meeting with success. LIC gets around Rs 2 lakh crore per year in collection of premiums. It parks 25 per cent of that or around Rs 50,000 crore into equity markets.

But the remaining money is always channeled into risk-averse investments, like government bonds and suchlike. The investment into railways is supposed to be from this chunk of the funds.

Railway officials said it was a win-win situation for both the parties. Even if Railways matches the rate of return that traditional government bonds and such instruments offer, it would be paying less interest than its market other borrowings.

Prabhu’s budget document had made the assertion that depending on the success of the funds infusion from external sources, the plan size might actually increase.

Finding funds to transform the nation’s decrepit railway network into an efficient and modern freight transporter is critical to Prime Minister Narendra Modi’s vision of making India a manufacturing hub and speeding up economic growth. The reluctance of successive governments to raise passenger fares has left the railways with little money to spend on upgrading its network. Traditionally, it has increased freight rates to keep passenger fares low, losing market share to road transport. Across the world, infrastructure is supported by long-term funds such as pension, insurance and provident funds, said Vinayak Chatterjee, chairman and managing director, Feedback Infra Pvt. Ltd, an infrastructure consultancy. “These funds involve the life savings of people and so are mostly invested in projects with assured cash flows and low risk.

Indian Railways is a public entity with a monopoly and a large amount of assured cash flows. Its engagement with LIC, the country’s insurance behemoth, to raise funds is very much in order,” Chatterjee added.

Indian Railways is estimated to generate a surplus of Rs.7,278.46 crore in the year to 31 March and expects to nearly double that to Rs.14,265.71 crore in the following year. A white paper released by the railway ministry on 26 February estimated that pending projects alone require Rs.2 trillion to complete.

In December, LIC said that it planned to invest Rs.3 trillion in the year ending 31 March, half of which will be in government bonds. It added that the infrastructure and real estate sectors would be its primary focus. LIC, India’s largest money manager, has total assets worth at least Rs.20 trillion.

Speaking at a Confederation of Indian Industry conference in New Delhi on Sunday, the Railway Minister said he was soon going to announce an agreement with a financial institution to tie up funds for investment, without naming the institution. “May be in the another 10-12 days’ time…we’ll sign an agreement with financial institutions to get more than what has been budgeted in my proceeds for this year as the money that is available for financing of the railways, in fact much more than that,” Prabhu said.

For the five years ending 31 March 2019, railways has planned investments in a dedicated freight corridor, high-speed rail and elevated corridor (Mumbai), rolling stock production, station development and logistics parks, among others. The government doubled the plan size for railways by earmarking Rs.1 trillion for the fiscal year 2015-16. Out of its own coffers, the government will provide Rs.40,000 crore as budgetary support, Rs.10,050 crore higher than the current fiscal, in line with its thrust on boosting infrastructure.

The railways expects to raise Rs.40,000 crore from extra budgetary resources in the next fiscal year. It plans to approach financial institutions, public sector units and multilateral development agencies to raise the funds. Prabhu said on Sunday that railways is also keen to sell tax-free bonds for raising funds. Further, he expects a significant proportion of funds raised by the proposed National Investment and Infrastructure Fund to be allocated to the railways.

Finance minister Arun Jaitley announced the formation of an investment and infrastructure fund, and tax-free bonds for raising funds for investment in rail, roads and irrigation in his budget speech.

Railways to sign MoUs with Investors in 10-15 days: Suresh Prabhu

New Delhi: Indian Railways is going to sign within a fortnight  memoranda of understanding (MoUs) with some multilateral and financial institutions for funds to augment its existing capacity, railway minister Suresh Prabhu said on Sunday.

Prabhu had, in his maiden rail budget, announced the ministry’s plans to attract investments worth Rs 17,000 crore during 2015-16 from various public sector undertakings (PSU), multilateral and financial institutions.

“There is a very large amount of money which is committed for railways. We will sign MoUs in 10-15 days”, the minister said.

The ministry is already in talks with Coal India (CIL) to set up special purpose vehicles (SPV) for each state.

Railways has planned to invest Rs 1,00,011 crore next financial year. Out of this, it will get some Rs 40,000 crore in the form of gross budgetary support from the finance ministry and will borrow Rs 17,655 crore from the market.

Apart from institutional investments, it hopes to receive Rs 5,781 crore through the PPP mode, and the rest Rs 17,793 crore from internal accruals.

According to the minister, the monetisation of railways’ land assets will be a major source of funds in near future.

Addressing the concern of various stakeholders about whether the cash-starved railways is planning to sell its assets to generate funds, Prabhu said, “We are not going to sell our lands. There are various other ways to get money out of it. Monetising the assets does not necessarily mean selling.”

“You sell lands to get money but if we can do it without selling, then why do we need to sell? We may require it later for our own needs”, he added.