rail connectivity to ports in india anoop agrawal … · participative model policy of indian...

Rail connectivity to ports

In India

Anoop AgrawalMD/IPRCL

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Participative Model Policy of Indian Railway and SPVs for rail

connectivity to ports?

Key challenges and strategies in improving the connectivity.

What is the status of various connectivity projects at Indian ports?

What is the role and scope of Indian Port Rail Corporation Limited?

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Key issues that will be covered in this presentation

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1. Projects being financed by Ministry of Shipping (Major ports) -mainly in the port for improving the rail infrastructure within the port or in the immediate vicinity of the port. After the formation of Indian Port Rail Corporation Ltd, most of the new projects will be transferred to it.

2. Line capacity augmentation works, undertaken by Ministry of Railways –directly, or through RVNL or DFCCIL.

3. Rail Connectivity and Capacity Augmentation projects - JV,

NGR, Customer Funded etc., primarily by non-major ports (Under

Ministry of Railways Participative models in rail connectivity and capacity augmentation projects policy” of 10th December 2012)

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Categories of port connectivity projects

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Status of SPVs formed for connectivity

RVNL has formed six SPVs for providing port connectivity :

1. Kutch Railway Co Ltd- Kandla and Mundhra (Fully operational)

2. Bharuch Dahej Railway Co Ltd- Dahej Port, Gujarat (Fully operational)

3. Krishnaptanam Railway Co Ltd - Krishnapatnam, A.P (Partly operational)

4. Haridaspur Paradip Railway Co Ltd- Paradip Port, Orissa (Under construction)

5. Angul-Sukinda Railway Co Ltd- Paradip Port, Orissa (Under construction)

6.Dighi Roha Rail Ltd - Konkan Coast, Maharashtra (Land acquisition)

New SPVs for Port Connectivity :

1. JV of Konkan Railway and JSW Group- for connectivity to Jaigadh Port on Konkan Coast

2. JV of RVNL and Revas Port Ltd for Revas Port on Konkan Coast

IR had formed two SPVs earlier:

1. Pipavav Rail Corporation Ltd., for Pipavav Port

2. Hassan Mangalore Rail Development Co. Ltd. for Mangalore Port

Two port companies have provided rail connectivity at their own cost :

1. Adani Port- Mundhra, Gujarat~ 52 kms

2. Dhamra Port , Odisha ~ 60 kms

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Policy for Private Investment in Rail Projects

Ministry of Railways has framed a policy on 10th December 2012

“Participative models in rail connectivity and capacity augmentation projects”

The Policy defines the following models

1.Non-Government Railway Model (NGR)

2.JV Model for bankable sanctioned Railway projects (JV);

3. Build Operate Transfer (BOT) model,

4. Customer funded-Capacity Augmentation ; and

5. Annuity Model- Capacity Augmentation.

For port connectivity projects, developers are preferring NGR or JV models only.

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IR Policy Initiatives Non-Government Railway Model

Salient features of the model:

● Totally funded by private agency, that includes land acquisition● Train Operations by IR - Railway recovers cost of operations● Maintenance by developer or railway (at developer’s cost)● Infrastructure provider will get a user fee equivalent to 95% of apportioned

traffic revenue net of cost of operations

Comments:• Its a fairly popular model and major users of freight, specially strategic stake

holders, who can not do without railway connectivity are prepared to follow this.

• A number of companies operating under NGR model : Mundra (2002), Dhamra(2011), Astranga, Tuna Port

• The developer has to acquire land himself. • Certain resentment in paying 5% of apportioned earnings to IR when IR gets

incremental revenue due to the NGR

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IR Policy Initiatives JV Model for bankable sanctioned Railway projects

Salient features of the model:

●To be implemented by formation of JV with Railways or its PSU having a minimum of 26% equity.

●Construction and funding to be done by JV●Normal concession period 30 years. ●Railways will acquire the land at JVs cost and refund the cost of land at the end of

concession period without interest.●User fee equivalent to 50% of apportioned revenue

Comments:• Its a fairly popular model and strategic stake holders, specially those who prefer

land acquisition by the government opt for this.• A number of SPVs operating/under construction under JV model : PRCL (2002),

HMRDC(2009), KRC (2006), Bharuch-Dahej(2011), Krishnapatnam, Haridaspur-Paradip, Angul-Sukinda, Jaigarh are some of the joint venture projects

● The JV is entitled to only 50% of the apportioned revenue and has to maintain theline as well. These expenses leave little or no surplus for the JV, unless the volumeof traffic is very heavy (about 20 mn MT per annum on an average)

● RVNL has created six SPVs under the JV Model (or similar previous models) whereits equity stake in each SPV varies between 26% to 50%.

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Strategies for improving port connectivity

Multi pronged strategy for improving rail connectivity of the ports:

1. Faster turnaround of rakes at ports as well as at ICDs

A joint effort of ports and railways (in providing placement and removal, timely train examination, maintenance and repairs), and similar effort at ICD/destination. Increasing the rail handling

facilities at destinations is critical for improved port connectivity.

Reduction in non-productive time of each rake- by increasing the interval after which the rake is examined (already upto 9000 km between two examinations for some rakes)

2. Reduction in transit times-

Better operations by railways and improvement in port rail infrastructure as well as in rail handling facilities

3. Optimizing the utilization of the existing line capacity

A joint effort at the apex level- by way of pricing of all services by railways, Container Train Operators (CTO), ports, customs and shipping lines, longer and heavier bulk trains, double stack container trains

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1. Slow and cumbersome process of approval:

2. Land acquisition:

3. Obtaining approvals from Ministry of Environment and Forests etc.

4. Uncertainties of traffic/freight due to the nature of Railway Operations:

5. High capital cost, long gestation

The cost of construction of new railway lines has increased to about Rs20 crore per km in a typical port terrain

6. Operation and Maintenance Cost

For a new line to be viable, high volume (~ 20 million tons per annum) of throughput is required. Under JV model, 50% of Apportioned Earning will be paid to Railways for Operations.

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The key issues and challenges in implementing these

projects

Status of the Port Connectivity projects completed/under implementation

by Railways or RVNL

A detailed list is a part of this presentation for the sake of completeness.

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Port connectivity projects of Ministry of Railways

Update on Port Connectivity

Port Connectivity Projects by RVNL

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S.N Project NatureDistance

(Km)Approx Cost

(Rs. Cr)Present Status

1Panvel to Jasai (JNPT) -Maharashtra

Doubling 28.5 102 Completed

2Daitari to Banspani -Odisha (Paradip Port)

New Line 155 964 Completed

3Delhi to Rewari –Delhi & Haryana (Kandla Port)

Gauge Conversion 94.2 228 Completed

4Bhildi to Samdari – Raj. & Guj. (Kandla Port)

Gauge Conversion 223 490 Completed

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Ajmer - Phulera - Ringus –Rewari – Raj. & Haryana

(Kandla Port)


6Thanjavur to Villupuram –Tamilnadu -(Tuticorin Port)




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(Km)Approx Cost


7Cuddalore to Salem T.N. – (Tuticorin Port)

Gauge Conversion

193 260 Completed

8Vallaparpadm to Idapally –Kerala - (Cochin Port)

New Line 9 246 Completed

9Hospet to Guntakal –Karnataka –(Mangalore Port)

Doubling 115 340 Completed

10Panskura to Haldia – WB –(Haldia Port)

Doubling 14 29.5 Completed

11Arasekere - Hassan –Mangalore - Karnataka(Mangalore Port)

Gauge Conversion

230 312 Completed

12Gandhidham to Palanpur - Guj. (Mundra and Kandla Ports)

Gauge Conversion

301 451 Completed

13Bharuch - Samni – Dahej – Guj.– (Dahej Port )

Gauge Conversion

62 200 Completed

14Tomka to Banaspani – Odisha– (Paradip Port)

Railway Electrification

144 92 Completed





(Km)Approx Cost


15Haridaspur to Paradip Port - Odisha

New Line 82 1200~35% work has been completed

16Obulavaripalle toVenkatachalam –APKrishnapatnam Port

New Line 93 733~35 % work has been completed

17Krishnapatnam to Venkatachalam - APKrishnapatnam Port

Doubling with Electrification

16.5 86 Doubling completed.

18Rajgoda to Tamluk – WB -(Haldia Port)

Doubling 13.5 87 Completed

19Angul to Sukinda Odisha –(Paradip Port)

New Line 99 818 25% completed

20Sambalpur to Titlagarh Odisha – (Vizag Port)

Doubling 182 948 ~ 10% completed

21Raipur to Titlagarh

Odisha & Chhatisgarh –(Vizag Port)

Doubling 203 758 ~40% completed 15

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(Km)Approx Cost

(Rs Cr)Present Status

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Hospet - Tinaighat - Vasco-Da-Gama – Karnataka & Goa(Mormugao Port)

Doubling 307.4 212724% work has been completed

23Surat to Hazira – Guj. –(Hazira Port)

New Line 35 200 Not with RVNL

24 Rewas Port – Maha. New Line 26.1 450Sanctioned- SPV under formation

25 Dighi Port – Maha. New Line 41.6 770SPV of RVNL and DPL formed

26Vizhinjam International Seaport - Kerala

New Line 15 150

MOU has been signed bet. VISL & RVNL for implementation of Rail connectivity to VISL


Indian Port Rail Corporation Ltd.

(IPRCL)

VISION STATEMENT

To emerge as an efficient Rail Infrastructure Service provider Company with sound financial base

by adopting best Global Project Management and Operation & Maintenance Practices to bring

down the Unit Logistic Cost to the best in the world.

MISSION STATEMENT

IPRCL is committed to Technology Up-gradation, Innovation and adopting best Project

Management Practices to execute the Rail Infra Projects at and in connection with Major Ports of

India

IPRCL is committed to provide best possible Rail Infrastructure Services for optimizing the

commercial development of all Major Ports in India by ensuring the provision of infrastructural,

technological and human resources necessary for the profitable pursuit of port and marine-

related activities.

IPRCL shall also fill the communication gap between Port and Railway Authorities for efficient

Rail network so as to reduce UNIT cost of Cargo handling at Major Ports.

Vision & Mission Statement of IPRCL

Sagarmala – Port Led DevelopmentInitiative for Blue Revolution

• Four pillars of development

Port Modernization; Port Infrastructure Enhancement, including modernization and setting up of new ports

Port Connectivity; Coastal and Inland Waterway Projects, Port and Industrial Connectivity, connectivity to New and Dry Ports

Port Led Industrialization: 14 CEZs, 12 high potential industries

Coastal Community Development; Skill Development

IPRCL would be a tool in line with achieving the objective of Sagarmala

Indian Port Rail Corporation Limited is a Joint Venture Company between the 11 Major Portsunder the Ministry of Shipping and Rail Vikas Nigam Limited (RVNL) as equity shareholderunder the Companies Act, 2013 as public limited company with initial authorized capital of Rs.500 crores. The initial subscribed share capital is to be Rs.100 Crore.

Constituents of IPRCL

15%

11%

11%

11%7%

7%

7%

7%

6%

6%

5%

10%

Stakeholders of IPRCL

Jawaharlal Nehru Port Trust - 15.3% Visakhapatnam Port Trust - 10.80%

Kolkata Port Trust - 10.80% Paradip Port Trust - 10.80%

New Mangalore Port Trust - 7.20% Chennai Port Trust - 7.20%

Kandla Port Trust - 7.20% Kamarajar Port Limited - 7.20%

Mumbai Port Trust - 4.50% Mormugao Port Trust - 4.50%

V.O. Chidambaranar Port Trust - 4.50% Rail Vikas Nigam Limited - 10%

Pending Equity Contribution from :-

Mumbai Port Trust,

Mormugao Port Trust

New Mangalore Port Trust

MANDATE OF IPRCL

• To undertake projects for last mile connectivity to MajorPorts, and for Non-major ports (If the same are viable)

• Modernization of the rail infrastructure at ports (Major)

• Operate and manage the internal port railway system;

• To leverage the extant participative model of IR toenhance last mile connectivity as well as enhancement ofcapacity in embedded hinterland connectivity

• To raise financial resources for funding

• To assess intermodal gaps in handling rail cargo of MajorPorts and develop suitable solutions to enable seamlessflow of Cargo

Objectives of INDIAN PORT RAIL CORPORATION (IPRCL)

Factors affecting the handling capacity of Major Ports

• At present there is lack of communication between railway and port

authority which leads to the delay in evacuation of cargo from port and

effects the efficiency of handling capacity at major ports.

Lack of Coordination with Railway

• At present, while departments at some Ports seem over staffed, others

lack optimal and efficient manpower leading to lack of specialization and

labour unrest.

Manpower

• Operating procedure are not standard which leads to delay in the proper

functioning of the system as a whole.

Non-Standardization of Operating Procedure

• Each individual major port follows own bid process for awarding of the

project which may lead to delay in awarding of the projects.

Non- Standard Practices of Project Management

Factors affecting the handling capacity of Major Ports

• At most Major ports adequate rakes are not made available by

Railways; leads to delays and higher costs

Non Availability of Rakes

• Railway infrastructure at Major ports has not kept abreast with latest

technology like in signaling, crossings, placing an indent for clearance,

etc.

Lack of Implementation of Latest Technology i.e. signaling

• Regular maintenance of tracks is difficult for some ports with existing

staff

Non Maintenance of Tracks

Strategies Multi pronged strategy for improving efficiency of rail

evacuation system; Phase I

1. IDENTIFICATION OF bottlenecks in INTERNAL RAIL INFRASTRUCTURE OF ports

Track alignment and layout improvements

Signaling up gradation

RAILWAY ELECTRIFICATION works ?

LOCOMOTIVES; PURCHASE OR LEASE for Internal Port

2. Execution of internal port projects at faster pace

QUICK APPROVAL OF DPRs

Faster execution

Strategies

3. Faster turnaround of rakes at ports as well as at ICDs

A joint effort of Ports and Railways (in providing placement and

removal, timely train examination, maintenance and repairs)

Better operations management; Rake, Loco and crew

management

Indian Port Rail Corporation Ltd. (IPRCL)

Major Projects under planning by IPRCL

To develop a dedicated rail freight corridor connecting coal field of “IB Valley-Talcher” with the ports of Paradip and Dhamra for evacuation of thermal coal and for the movement of the imported coal to the thermal power stations; R-C-R , to minimize Logistic Cost

Last Mile Rail Connectivity for development of Colachel Port in KanyakumariDistrict of TamilNadu.

Providing railway connectivity from VoC Port (V.O.Chidambaranar or Tuticorin) to Power Plants.

Expansion of rail network around JNPT to cover 3 ICDs

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Projects for Up-gradation of Internal Rail Infra of Ports 21 Works given to IPRCL

DPR prepared for 13 (Cost Rs 815 Croes)

Work on 4 already commenced

Work on 5 to commence before Dec 2016

Land acquisition/ROW issue to be settled on 2

DPR under preparation for 8 (Cost Rs 1100 Crore except Talchar-Paradip where the scope is under review)

Work on these Projects likely to commence during 2017-18

Projects for Last Mile Connectivity to Ports

VoCPT

Rail/Conveyor Connectivity from the Port to Power Plants

To boost Coastal Shipping of Sagarmala Project

Cost Rs 300 Crores

SPV is to be formed and work may be executed on NGR/JV model of Ministry of Railways

Rail-Road Connectivity to Colachel Port

DPR and survey for the last mile rail/road connectivity for development of Colachel Port in KanyakumariDistrict

Cost of Rail Connectivity is approx. 300.00 Crores

Revised Cost for Road Connectivity is Rs.350.00 Cr


Indian Port Rail Corporation Ltd.- Strategic partnership

IPRCL is planning to enter into a strategic partnership for strengthening rail based evacuation systems in Ports

with one or more internationally renowned Rail Infra companies; like DB Int of Germany

The partnership is expected to bring latest Rail Infra Technology for heavy haul and modern Project Management techniques

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Other Opportunities

• Rail Connectivity to Western DFC

• Rail Connectivity to New Green Field Major Ports; Vadhavan and Sagar Ports

• Leasing of Locomotives for improving Internal Port Operations



New SPV promoted by Ministry of Shipping

Government has accorded high priority to port connectivity projects. Towards thisend, the Ministry of Shipping has formed a Special Purpose Vehicle (SPV) namelyIndian Port Rail Corporation Ltd. with Major Ports and RVNL as equity partners forundertaking Port Connectivity Projects.

Objectives:To provide efficient rail evacuation systems and undertake projects involving last mile

connectivity to Major Ports,

Modernization of evacuation infrastructure in ports, operate and manage internal Port Railway system and

Raise financial resources for funding port related Connectivity Projects.

Jan 18 2016

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Indian Port Rail Corporation Ltd. Projects taken up by IPRCL

Modernization of evacuation infrastructure, including internal port rail systems and operations, loading/unloading of railway wagon, etc. in :

Kandla Port

Paradip Port

Vishakhapattnam Port

Mangalore Port

Improving rail connectivity of following ports:

Haldia

Chennai (Harbour of Madras)

Kamarajar Port (Ennore Port).

Vishakhapattnam

A number of studies to explore the options for improving the productivity in port operations

Jan 18 2016

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Major Projects under planning by IPRCLTo develop a dedicated rail freight corridor connecting coal field of “IB

Valley-Talcher” with the ports of Paradip and Dhamra for evacuation of thermal coal and for the movement of the imported coal to the thermal power stations.

Track length ~ 540 km, Estimated cost~ Rs.10,000 crore for the 1st Phase

Last Mile Rail Connectivity for development of Colachel Port in Kanyakumari District of TamilNadu.

Providing railway connectivity from VoC Port (V.O.Chidambaranar or Tuticorin) to Power Plants.

Expansion of rail network around JNPT to cover 3 ICDs

Implement the track modifications in feeder lines of DFCCIL

Jan 18 2016

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IPRCL is planning to enter into a strategic partnership for development of rail based evacuation systems in Ports with one or more internationally renowned companies.

The partnerships are expected to expedite the rapid development, improvement, modernization and extension of rail and logistics infrastructure to and from Ports.

Jan 18 2016

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rail connectivity to ports in india anoop agrawal … · participative model policy of indian...

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