COAL TRANSPORTATION INDIAN RAILWAYS

Freight business TRANSPORTATION IS A DERIVED DEMAND & DEPENDS UPON THE GROWTH OF ECONOMY. RAILWAY FREIGHT BUSINESS LARGELY DEPENDENT UPON THE PERFORMANCE OF CORE SECTOR.

HISTORICAL GROWTH YEAR LOADING IN MT %AGE GROWTH GDP GROWTH (%)/ CORE SECTOR (%) 1950-51 73.2 3.8 2.0 % 2001-02 492.5 X TH PLAN 02-03 518.74 5.33 4.3 03-04 557.39 7.45 8.5 04-05 602.78 8.14 7.5 05-06 667.20 10.69 9.0 06-07 728.77 9.23 9.6 XI TH PLAN 07-08 794.21 8.98 9.0/ 5.2 08-09 833.31 4.92 6.8/ 2.8 09-10 887.99 6.56 8.0/ 6.6 10-11 921.51 3.77 8.4/ 6.6 11-12 969.78 5.24 6.5/ 4.4 12-13 1009.83 4.27 5.0/2.6

JOURNEY TO THE BILLION CLUB Indian Railways crossed the 1000 MT mark in originating freight loading in 2012-13. China, USA & Russia are the only other countries having Railways loading more than 1 Billion MT/year. The freight loading in 1950-51 was 73 MT. It crossed 500 MT in 2002-03. Another 500 MT added in 10 years-Avg 50 MT added per year in the last decade. How fast will we be adding the next 500 MT ?

STRATEGIES ADOPTED TO ACHIEVE HIGH GROWTH Enhanced Axle Load operations from 20.32 to 22.9 25 T on mineral routes. Extend to all routes. Develop wagons for 25 T. Targeted investments on low cost but high return traffic facility works incl terminals. HEAVIER, FASTER, LONGER—MANTRA FOR XIITH PLAN

%age Growth in IIP (Core Sector) %age growth in Loading %age Growth in IIP (Core Sector)

CONTRIBUTION OF FREIGHT BUSINESS TO IR EARNINGS

PERFORMANCE 2012-13 Total % variation (y-o-y) Coal 496.37 271154 546 Commodity Tonnes Originating (in MT) NTKMs (in millions) Average Lead (in km) Earnings ( in cr.) Coal 496.37 271154 546 36792.91 RMSP 15.58 9814 630 1387.25 Iron & Steel 35.28 33702 955 5181.63 Iron Ore 111.41 38149 342 7407.75 Cement 105.82 60036 567 8233.37 Foodgrains 48.28 62870 1302 6791.52 Fertilizers 45.92 40221 876 4732.16 POL 41.62 26770 643 4725.62 Containers 41.07 47969 1168 3827.48 other Goods 68.48 51135 747 5711.37 Total 1009.83 641820 636 84791.06 % variation (y-o-y) 4.13 0.32 -3.64 22.95

COMMODITY – LOADING SHARE

COMMODITY-EARNING SHARE

Loading on IR (Stock-wise) 11

Loading on IR (Stock-wise)- 2012-13 RAKES/DAY Coal RMSP + Iron Ore CEMT FG Fert POL Cont I&S Others Clinker TOTAL BOXN 245.2 52.9 1.9 1.2 7.1 24.8 15 348.1 BCN 2.3 0.6 74.8 44.7 41.9 27.4 192.9 STEEL RAKE 5.5 7.3 12.8 BOST 2.1 0.1 9.7 15.2 BOBR 86.5 CONT 85 BTPN 40.3 0.2 40.5 OTHER 0.3 23.6 5.7 14.2 61.4 336.4 77.2 78.8 45 43.1 46 37.7 77 16.2 842.4 12

COMMODITY-WISE PROJECTIONS (XII PLAN) 2011-12 2012-13 2016 -17 (Projection) CAGR 2012-13 TO 2016-17 (Reqd) Total Coal 455.8 496.4 700 8.9 RMSP 14.5 15.6 17 2.2 Total Iron & Steel 34.9 35.3 59 13.7 Total Iron Ore 104.7 111.4 151 7.9 Cement 107.7 105.8 161 11.1 Foodgrains 46.4 48.3 60 5.6 Fertilizers 52.7 45.9 56 5.1 POL 39.8 41.6 44 1.4 Total Container 38 41 80 18.2 Balance other goods 74.3 68.4 85 Total 969.8 1009.8 1413 8.8

SHARE OF COMMODITIES BY FIRST YEAR OF XII PLAN AND BY TERMINAL YEAR OF XII PLAN Commodity 2012-13 (%) 2016-17 (%) Total Coal 49.2 49.54 RMSP 1.5 1.20 Total Iron & Steel 3.5 4.18 Total Iron Ore 11 10.69 Cement 10.5 11.39 Foodgrains 4.8 4.25 Fertilizers 4.5 3.96 POL 4.1 3.11 Total Container 4 5.66 Balance other goods 6.8 6.02

COAL PERFORMANCE & PROSPECTS

Coal & lignite fields 16

Coal TRAFFIC ( in mt) Year Prod. Imports Total Avail. Loading by Rail Rail Co-efficient(%) 2007-08 491.01 54.04 545.05 338.30 62 2008-09 525.2 60.89 586.09 369.41 63 2009-10 566.1 75.61 641.71 396.10 2010-11 570.4 70.41 640.81 420.21 66 2011-12 583.1 101.29 684.39 455.80 67 2012-13 595* 125* 720 496.37 69

COAL – LOADING (in mt) (2007-08 to 2012-13) 18

COAL O-D FLOWS North India CCL / BCCL Gujarat NCL ECL CIC Korba IB TLHR M WCL SCCL Arabian Sea Bay of Bengal NTPC K AP Chennai

EVACUATION PLAN FOR IMPORTED COAL FOR TPS RAJ/PUN/HARYANA/UP NTPC-RSTP/VSTP/SSTP/TD/ UCR/DER/ BADARPUR WB/DVC/FKK/KLG KRPH+KPKD KRBA/BIA GUJ HLZ TLHR DHAMRA RDM+PRLI MAHA PRDP MUMBAI SMDR VZP KPCL KAKINADA KRISHNA CHENNAI

Identification of Growth Areas Coal Company 2012-13 2016-17 Increase in Production ECL 34 41 7 BCCL 31 36 5 CCL 48 83 35 NCL 70 90 12 WCL 42 45 3 SECL 118 130 MCL 108 140 32 NEC 1 TOTAL CIL 452 566 94

Coal-Challenges in XII Plan Fast development in the Power sector. Need to move more coal during the XII Plan. Additional capacity =82325 MW of coal based power generation. 9320 MW =pithead based and 10660 MW =shore based. Balance 62345 MW will require transportation of coal through Indian Railways. Power sector analysis gives total coal movement=740 MT by 2016-17. Production analysis gives total coal movement =700 MT by 2016-17. Increased movement from Captive mines and Port. Policies to promote connectivity. Development of infrastructure in the form of track capacities on major coal bearing routes. Development of last mile connectivity to coal blocks and newly developed mines.

RESOURCES FOR FREIGHT TRANSPORT Wagons- IR owned general purpose and Special wagons, Private Customer/Container/SFTO, Jointly Owned. Locomotives – Diesel and Electric Network Capacity. Terminals- Public Goodsheds, Sidings and Private Freight Terminals Manpower - esp Running staff Maintenance Capacity- Regular and Periodic Overhaul

ROLLING STOCK - IR Year Wagon Holding Wagon Acquisition Diesel Loco Holding Elect. Loco Holding Total Loco holding 2008-09 207,587 15,261 4964 3586 8550 2009-10 206,707 15,597 5022 3825 8847 2010-11 219,231 16,638 5137 4033 9170 2011-12 230,229 18,357 5197 4309 9506 2012-13 240,642 15,626 5391 4597 9988

WAGON INDUCTIONS BOXN+ BOBRN TOTAL Type of Wagon for commodity 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 (targeted) BOXN+ BOBRN 5781 5535 5619 11683 7000 10,600 TOTAL 11514 13434 16638 18357 15626 15666

LOCO INDUCTION Type HORSE POWER/ TRACTIVE EFFORT 2011-12 2012-13 2013-14 (Target) DIESEL WDG4 4500/52T 149 209 190 WDG3A 4 30 WDG5 5500/54 WDM3 3100/30.5T 35 58 50 WDP4 4500/41T 32 22 70 TOTAL 216 293 340 ELECTRIC WAG9 6000/46----52T 45 53 95 WAG7 5000/44 185 173 80+38 ex. BHEL WAP4/5/7 6000/ 83 79 100 313 305 275+38 ex. BHEL

High Density Corridor (Golden Quadrilateral + Diagonals) 16% of route Km carries 52% of passenger & 58 % of freight Delhi Kolkata Mumbai Chennai

DEDICATED FREIGHTCORRIDOR NETWORK LUDHIANA DELHI KOLKATA MUMBAI Sanctioned projects Unsanctioned projects VIJAYAWADA VASCO CHENNAI 28 28 28

Coal Routes Requirement 2016-17 DFC and doubling of B route via Lucknow + Shivpur Tori for Captive DFC- for Imported 32 MT/53 MT CCL, ECL, BCCL HWH MUMBAI

HWH MUM HWH Rewari Doubling 3rd line between Champa - Jharsuguda Alwar Mathura HWH New line required between Korba-Annupur + Connectivity to Raigarh-Mand KORBA Strengthening MCL IB MUM HWH MCL TLHR +25 3rd line MOU-GOL No work planned between Durg-Nagpur 3rd line between Durg to Bhattapara MAS

Doubling works in progress – Enhancement of capacity S.No Name of Project 1 Kalyan-Kasara 2 Wardha-Nagpur 3 Bhopal-Bina 4 Bina-Kota 5 Habibganj-Bhudni-Itarsi 6 Bhadrak-Nergundi 7 Champa-Jharsuguda 3rd line 8 Talcher-Sambalpur 9 Bilaspur-Urkura 10 Khodri-Annupur with flyover at Bilaspur 11 Champa - Byepass line 12 Salka Road-Khongsara - Annuppur Doubling (90 km) 13 Durg-Rajnandgaon 3rd line 14 Kalumna-Nagpur

PROCESS OF LOADING CIL IR Pithead Crushing Transporting to siding Supplying Rake IR Dispatches

CIL LOADING-REDUCING BANDWIDTH LOADING IN THE YEAR R MONTH 2008 2009 2010 2011 2012 2013 JAN 163 168 169 172 184 210 FEB 170 173 194 208 MARCH 174 178 176 180 196 223 APRIL 158 153 155 200 MAY 150 147 154 160 182 JUNE 145 152 186 JULY 138 143 164 175 188 AUG 135 146 157 156 SEPT 141 131 OCT NOV 177 187 DEC 162 201

PATH AHEAD FIRST MILE CONNECTIVITY CRUCIAL: ALL WEATHER ROADS, TRUCKS,ETC. REDUCED BAND WIDTH:LOADING UNIFORMLY THROUGHOUT THE YEAR WITH BAND OF MAX 10 RAKES BETWEEN MINIMA AND MAXIMA. AT PORTS SUPPLIES TO BE CONTINUOUS – NO SPURTS. REDUNDANCY IN HANDLING INFRASTRUCTURE INCL STORAGE SPACE.

DPS & LONG HAUL New wireless technology under procurement: - Distributed power , suited for Long Hauls - Shorter braking distance; more speed - Saves crew & paths STRATEGY FOR XIITH PLAN OPERATIONS NEW COAL SIDINGS TO ACCOMMODATE LONG HAUL:PLAN WIRELESS

STATUS OF MAJOR COAL CONNECTIVITY PROJECTS Tori-Shivpur line- Stage-II forest clearance received from MOEF-TDC - June’16- Project included in Budget 2001-02 -Potential for 60 MT incremental traffic Shivpur-Kathautia line- Land acquisition applications filed for processing Stage I forest clearance Jharsuguda-Barpalli-Sardega line- Application for Stage-I forest clearance filed with State Government – TDC - Dec’14- Potential for 60 MT incremental traffic Coal connectivity projects in Mand area in SECR-Two JV Companies Chhattisgarh East Railway Ltd. and Chhattisgarh East-West Railway Ltd. registered – Land acquisition being processed- Potential for 60 MT incremental traffic

Coal connectivity rly projects Name of projects length (in km) Cost (in cr.) Piparwar Railway Siding of CCl 30 127.34 Ashoka siding of CCL 12.5 129 Tori-Shivpuri New BG Line 43 1094 Shivpur-Kathauria New BG line 47.7 1250 Shivpur-Chatti Bariatu and Hazaribagh-Banadag siding 23   Koderma-hazaribagh-Barkakana-Ranchi New BG line 189 Koderma-Tilaiya New line 64 Angul-Talcher bulb line Rail corridor connecting Angul-Talcher line 5200 New line Bhadrachalam-Sattupalli 56.27 337 Rail connectivity in Mand area in SECR Provision of 2nd siding at Himgir station, Kanika Additional lnk from Vasundhara area with SECR 24 Renovation of Chainpur-Sarubera siding Improvement of Dudhi chua siding of NCL 37

Completed and commissioned. Port : LIST OF PORT CONNECTIVITY PROJECTS IN PROGRESS S.No. Railway Connected to Port Name of Project Cost (Rs. Cr.) TDC (tentative) 1 CR Mumbai Dedicated freight line between Wadala and Kurla 104 2016-17 2 Mumbai & JNPT Panvel-Pen doubling 190.99 2013-14 3 ECOR Paradip Haridaspur-Paradip new line. 1000 NF 4 Vishakhapatnam Kottavalasa-Simhachalam North 4th line doubling 100.76 Completed and commissioned. 5 Vizianagram-Kottavalasa 3rd line 248.16 6 Vishakhapatnam, Dhamra, Paradeep Rajatgarh-Barang doubling 275.2 2014-15 7 Khurda Road-Barang 3rd line 221 8 SER Haldia Doubling of 1) Panskura-Haldia section 1) Rs 86.91 2) Rs 171.02 Rajgoda-Tumluk – completed and commissioned. Tamluk-Basulya (52%) work completed. 38

Port CONNECTIVITY PROJECTS - IN PROGRESS S.No. Railway Connected to Name of Project Cost (Rs. Cr.) TDC (tentative) 9 SCR Krishnapatnam Obulavarpalle- Krishnapattanam new line 930 Venkatachalam-Krishnapatnam – completed and commissioned. Balance is in progress. (25%) -NF. 10 SR Ennore The new Chord line. (Puttur – Attipattu) 527 NF 11 SWR Marmogao Hubli-Ankola 337.82 12 Marmogao, Mangalore Kottur-Harihar via Harpanhalli 354.06 Completed. Residual works in progress. (96%). 13 Doubling of Hospet –Vasco section 2127 2016-17 14 WR Kandla Gandhidham-Adipur doubling 28.56 Completed and Commissioned. 15 Viramgam-Surendranagar doubling 271.88 2013-14 16 Bhildi-Viramgam gauge conversion 589.43 NF (55%) 39

RAIL CONNECTIVITY & CAPACITY AUGMENTATION- PARTICIPATIVE MODELS Ministry of Railways notified a PPP policy in Dec’12 for attracting private investment for accelerated growth of rail infrastructure. State Governments, Local bodies, Beneficiary industries, Ports, Large import and export companies, Infrastructure and Logistics providers, Foreign Direct Investors can participate Advantageous for State Governments, industry and investors Ministry of Railways to grant direct permission or go in for competitive bidding for award of concession.

PARTICIPATIVE MODELS-OBJECTIVES Supplementing Government investment in rail infrastructure projects by private capital flows. Involving the States in creation/development of rail infrastructure for the common public good. Timely creation of rail transport capacity to avoid supply-demand mismatch. Ensuring availability of transport capacity consistent with the expected GDP growth.

NON-GOVERNMENT RAILWAY MODEL Applicable to first and last mile connectivity projects at either end of the rail transportation chain providing connectivity to ports, large mines, logistics parks or other similar industries/ cluster of industries. Funds to be fully mobilised by the project developer without any participation by the Railways. Land for the line to be acquired by the Project Developer to provide connectivity with the main line railway system. Railway land for providing connectivity may also be made available on lease/license as per extant policy. IR will pay user fee for the usage of infrastructure. User fee will be calculated on the basis of apportioned share of 95% freight.

JOINT VENTURE MODEL Applicable for bankable New line and Gauge Conversion projects having clearly identifiable stake holders. Financial participation will be through equity participation in the JV. The JV will be a joint venture with Railways as a partner with IR or its PSU holding a minimum of 26% equity shares. Other partners will be selected from the stakeholders such as users of the line like ports, mines etc. Project will be assigned to the JV by Ministry of Railways on nomination basis. Land acquisition will be done either by Indian Railways at the JV's cost or by the JV itself as mutually decided. Project construction will be done by the JV. Revenue stream of the JV shall be established through revenue apportionment from freight operation for the project line. IR will pay to the JV apportioned revenue net of O&M cost as applicable. Concession period will be normally 30 years including the Construction period.

BOT MODEL WITH COMPETITIVE BIDING Applicable to the sanctioned Railway projects where it is not possible to identify a stakeholder or strategic investor who can take a lead in making investment in the project line. The projects under this model will generally be long rail corridors carrying traffic generated from various streams. Selection of investors will be done through competitive bidding process. Premium or grant ( through viability gap) will be the bidding parameter. Land acquisition for the project will be done by the Railways at their cost. Land will be owned by the Railways. The concessionaire will design, build, finance, maintain and transfer the railway line at the end of concession period. User fee to be paid by IR to concessionaire @ 50% of the apportioned Freight. Concession period will be fixed at 25 years, including the construction period.

CAPACITY AUGMENTATION-FUNDING BY CUSTOMER Doubling/Third line/Fourth line, etc works to be undertaken through this model where some customers are beneficiaries of the capacity addition and may be interested in funding the full/ part of the project for expeditious completion/commissioning. The project will be sanctioned as a railway project on the basis of an MOU/Agreement entered into between Railways and the Customer. The project will be constructed, maintained and operated by Railways. The ownership of the line and its operation and maintenance will always remain with Railways. Railways will pay upto 7% of the amount invested through freight rebate on freight volumes every year till the funds provided by the project beneficiary is recovered with interest at a rate equal to the prevailing rate of dividend payable by Railways to General Exchequer at the time of signing of the agreement.

CAPACITY AUGMENTATION-ANNUITY MODEL This model is applicable to sanctioned doubling, third line and fourth line projects where it may not be possible to find funding from any specific user. Project will be appraised, approved and awarded following the procedure laid down by Government for PPP projects. Land acquisition and shifting of structures to the extent required would be done by IR. The concession would be for financing and construction. Supervision and certification of construction would be carried out by IR under guidelines Train operations and maintenance will be by IR. The concessionaire would be paid through annuity for limited predetermined period. Annuity will be determined through competitive bidding. Annuity payments will be budgeted and paid on a committed basis.

CHALLENGES for the Railways during the XII Plan Period 40% increase in freight traffic from the terminal year of the XI Plan to the terminal year of the XII Plan. Traffic to double if we consider passenger traffic. To be carried on existing infrastructure without DFC. Incremental of 80 MTPA as against best ever of 65 MTPA. Throughput enhancement works other than DFC have to be prioritized for completion on an urgent basis. EAST-WEST AND NORTH-SOUTH DFC TO START. Proliferation of 25 t/30t axle load running for iron ore. Raising the current axle load regime from 22.82 tonnes to 25 tonnes. INDUCTING 25T WAGON FOR COAL +14-17% EXTRA

MANTRA--FOR XIITH PLAN HEAVIER FASTER LONGER PROLIFERATE 22.9 T AXLE LOAD RUNNING ON ALL ROUTES NEW WAGONS TO RUN AT 100KMPH LOADED AND 100KMPH EMPTY DISTRIBUTED POWER SYSTEM AND LONG HAULS ARE SOLUTIONS TO GENERATE ADDITIONAL THROUGHPUT AND OVERCOME CAPACITY CONSTRAINTS UPGRADE IRON ORE ROUTES AND DFC FEEDER ROUTES TO 25T AXLE LOAD GET 25T AXLE LOAD WAGONS ON PRIORITY 48

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