India : Railways Sector Report_August 2013

World’s fourth-largest
rail network
• As of FY12, Indian Railways had 12,335 passenger trains carrying over 30 million
passengers daily. On the commercial front, 975.2 million tonnes of freight was transported
via trains in FY12
Growing public-private
partnership
• Private sector companies are being encouraged to participate in rail projects, which were
largely in the public domain. In December 2012, the Cabinet approved “participative
models for rail-connectivity and capacity augmented projects”, which allows private
ownership of some railway lines
Growth initiatives
• Indian Railways is undertaking the construction of dedicated freight lines along the
country’s Eastern and Western corridors; this would increase productivity and reduce
transportation cost. A special purpose vehicle has been set up for the same. Moreover, in
March 2013, the Cabinet approved the “Automobile Freight Train Operator Scheme” to
encourage automobile transportation through railways
Modernisation/
technology upgradation
• Indian Railways has launched mobile ticketing services, which enable customers to
receive tickets on short message service (SMS). Additionally, it plans to upgrade its
current systems to support bookings of 7,200 tickets per minute compared with the current
capacity of 2,000 tickets

• The engineering sector is delicensed;
100 per cent FDI is allowed in the
sector
• Due to policy support, there was
cumulative FDI of USD14.0 billion into
the sector over April 2000 – February
2012, making up 8.6 per cent of total
FDI into the country in that period
Growing demand
Source: Railway Budget 2013, Planning Commission, Aranca Research
Notes: 2017F – Forecast figure for 2017, MMT is Million Metric Tonnes
FDI is Foreign Direct Investment, FY is Indian Financial Year (April to March)
Growing demand
• Increasing urbanisation coupled
with rising incomes (both urban
and rural) is driving growth in the
passenger segment
• Growing industrialisation across
country has increased freight
traffic over the last decade
Attractive opportunities
• Freight traffic is set to increase
manifold, thanks to investments
and private sector participation
• Metro rail projects are being
envisaged across many cities over
the next ten years
Policy support
• Government has increased the
scope of PPP, to beyond providing
maintenance and other such
supporting roles
• Government is providing new lines,
increasing the rolling stock to build
up capacity
Higher investments
• The government has been
investing heavily to upgrade
railway infrastructure
• Sector has been witnessing
increasing level of FDI
participation over FY08–12
2012
Freight
Traffic –
975 MMT
2017F
Freight
Traffic –
1,405 MMT
Advantage
India

Source: Ministry of Railways, Aranca Research
Indian Railways (IR) is –
A departmental undertaking of Government of India (GOI), which owns and operates most of India's rail transport
Overseen by the Ministry of Railways
It has a total route network of about 64,600 kilometres (of which 29.98 per cent is double/multi-track) spread across 7,146
stations.
Operates more than 19,000 trains every day
It has 239,321 wagons, 61,899 coaches, and 9,549 locomotives
IR’s total assets at the end of FY12 amounted to USD61.7 billion.
Railways
Passenger
Freight
• Around 975.2 million tonnes of freight was transported via
trains in FY12
• These include a huge variety of goods like mineral ores, iron
and steel, fertilizers, petrochemicals, and agricultural produce
• About 12,335 passenger trains were in operation in FY12
• Over 30 million passengers travel by trains on a daily basis in
India

India has the world's fourth largest rail network, which is also the second largest under single management
Net revenues
(INR billion)
Passenger traffic
(billion)
Freight traffic
(million metric tonnes)
Number of stations
Running track
(kilometres) 59,315
5,976
73.2
1.3
0.5
89,801
7,146
975.2
8.2
67.8
FY1951
FY12

Gross revenues trends over the years
(USD billion)
* In Indian Rupee Terms
Notes: CAGR – Compound Annual Growth Rate, E – Estimates,
B – Budgeted, FY – Indian Financial Year (April–March)
Indian Railways revenues grew the fastest in three years to
USD21.7 billion in FY12, a 10.1 per cent y/y growth. The
Railway Ministry estimates revenues to grow 20.7 per cent*
in 2013
Overall, revenues are expected to expand at a CAGR of
12.1 per cent* during FY07–14
Revenue growth has, in fact, been strong over the
years; during FY07–12, revenues expanded at a
CAGR of 9.9 per cent*
For FY14, the government has estimated revenues
to expand at a CAGR of 17.5 per cent* over FY12
14.3
18.3 17.8 18.8
20.8
21.7 23.1
26.5
FY07 FY08 FY09 FY10 FY11 FY12 FY13E FY14B
CAGR: 12.1%

Passenger Earnings (in USD billion)
* In Indian Rupee Terms
Notes: CAGR – Compound Annual Growth Rate, FY – Indian Financial Year (April–March)
In the last six years, revenues from the passenger segment has expanded at a CAGR of 10.5 per cent*. The FY14 Budget
provides for a CAGR of 22.2 per cent* in revenues over FY12
Freight segment’s revenues have been on the rise; in FY12, revenues were up 11.6 per cent* over last year, the highest
growth rate in the last four years
Earnings from Freight (in USD billion)
3.8
4.9 4.8 4.9
5.6 5.9
FY07 FY08 FY09 FY10 FY11 FY12
9.1
11.5 11.3
12.0
13.3 14.1

Revenue breakup, by segment (FY12)
Freight remains the major revenue earning segment for the
railways, accounting for 70.6 per cent of total revenues in
FY12
Profits from this segment are used to cross-subsidise the
passenger segment
70.6%
29.4%
Freight
Passenger

Trends in passenger volumes (in millions)
Source: Ministry of Railways, Planning Commission, Aranca Research
Notes: CAGR – Compound Annual Growth Rate, F – Forecast
FY – Indian Financial Year (April–March)
Train travel remains the preferred means of communication
for a large majority of Indians, a fact easily reflected by
volume and growth of passengers over the years
Passenger volumes are expected to expand at a CAGR of
6.6 per cent to 11.7 million by FY17 from 6.2 million in FY07
The number of passengers travelling by train
reached 8.2 billion in FY12, up 7.2 per cent over the
previous fiscal year
Annual passenger volumes expanded at a CAGR of
5.8 per cent during FY07–12. According to the 12th
Five-Year Plan, passenger volumes are expected to
increase at a CAGR of 7.4 per cent during FY12–17
6.2 6.5 6.9
7.2
7.7
8.2 8.9
9.5
10.2 10.9
11.7
FY07
FY08
FY09
FY10
FY11
FY12
FY13F
FY14F
FY15F
FY16F
FY17F
CAGR: 6.6%

Number of Suburban passengers originating
(in millions)
Source: Ministry of Railways, Planning Commission, Aranca Research
Suburban passenger volumes have witnessed a constant increase in growth rates. The segment posted a growth of 7.8
per cent in FY12 compared with 4.8 per cent in FY11 and 1.9 per cent in FY10
Meanwhile, non-suburban passenger volumes have grown consistently, averaging 7.3 per cent over the last three years
The 12th Five-Year Plan forecasts suburban and non-suburban passenger volumes to increase to 5.9 billion and 5.8 billion,
respectively, by FY17
Number of non-suburban passengers originating
(in millions)
3,802 3,876 4,061 4,377
4,545
4,855
5,186
5,540 5,917
FY09 FY10 FY11 FY12 FY13F FY14F FY15F FY16F FY17F
3,118 3,370
3,590 3,847
4,323 4,651 5,005
5,385
5,793
FY09 FY10 FY11 FY12 FY13F FY14F FY15F FY16F FY17F

745
804
837 892
926 975 1,038
1,119
1,206 1,300
1,405
FY07
FY08
FY09
FY10
FY11
FY12
FY13F
FY14F
FY15F
FY16F
FY17F
Freight traffic (million tonnes)
Source: Ministry of Railways, Planning Commission,
Aranca Research
As of FY12, railways accounted for 31 per cent of India’s
freight traffic
Freight traffic is expected to expand at a CAGR of 6.6 per
cent to 1.4 billion tonnes by FY17 from 745 million tonnes in
FY07
Freight traffic reached 975 million tonnes in FY12, a
5.3 per cent rise over the previous fiscal year
The figure has grown at a CAGR of 5.5 per cent over
FY07–12 and is expected to grow at a CAGR of 7.6
per cent during FY12–17
CAGR: 6.6%

Source: Relevant company annual reports and websites, Aranca Research
Notes: PSU – Public Sector Undertaking, DFC – Dedicated Freight Corridor, SPV – Special Purpose Vehicle
Company Business description
• Navratna PSU under the Indian Ministry of Railways
• It is a carrier, terminal operator and warehouse operator
• SPV set up under the Ministry of Railways
• Undertakes planning and development, mobilisation of financial resources and construction,
maintenance and operation of the Dedicated Freight Corridor (DFC)
• SPV created by the Government of India
• It builds engineering works required by Indian Railways
• Mini Ratna PSU with one of the largest neutral telecom infrastructure providers in the country
• It strives to modernise train control operation and safety system of Indian Railways

Source: Relevant company annual reports and websites, Aranca Research
Notes: NTPC – National Thermal Power Corporation, km – Kilometres; * - Exchange rate as of 2008
Rail projects in India have typically been in the public sector domain
Private players were involved in allied activities such as track laying and maintenance, maintenance of coaches and
wagons, construction of bridges, stations, signalling, and telecommunications works
Company Project details
• Construction of 8 metro stations in Bengaluru
• Construction of two elevated Metro stations at MG Road and Trinity Circle in Reach-1
(inaugurated in September, 2011)
• Gauge conversion of VilluPuram-Mayiladuthurai section
• Installation and commissioning of signaling and telecommunications facilities at NTPC
• Bagged an order of US$ 535.8* million in 2008 in consortium with Scomi Engineering to execute
the country’s first monorail system in Mumbai
• Executing an order for development of railway siding; this involves engineering, procurement, and
construction work for a dedicated railway line of 38 km

Notes: PPP – Public Private Partnership
In December 2012, the Cabinet approved the new policy of “participative models for rail-connectivity and capacity augmented
projects”. The policy addressed private investors’ concerns, which included ownership of the railway line and repayment of
investment
This has led to renewed investor interest in the rail sector. Since then, railway authorities have received various proposals from
private investors and have already given approval (can now acquire land and begin construction) for four port connectivity
projects, which would ease congestion
This is in line with the government’s 12th Five-Year Plan. It intends to raise investments worth USD18.4 billion through PPP
route
Areas proposed for private investment during this period are likely to include elevated rail corridor in Mumbai, some parts of
dedicated freight corridor, freight terminals, redevelopment of stations, and power generation/energy saving projects
Other measures taken/proposed include:
Setting up of a modern signalling equipment facility at Chandigarh through the PPP route
Construction of new lines – Bhupdeopur-Raigarh (Mand Colliery), Gevra Road-Pendara Road – and doubling of
Palanpur-Samakhiali section through the PPP route
The Railways Ministry has already proposed for the development of 50 world-class stations in the PPP mode to improve and
enhance rail infrastructure in the country

Demand for urban
transport
• There is a rapid increase in demand for urban mass transportation systems in the country
• Several metro rail projects are in progress to improve connectivity within cities; the Delhi
Metro has emerged as an internationally acclaimed venture
M-ticketing and
E-ticketing
• Indian Railways (IR) launched mobile ticketing services in August 2011. Users can now
use mobiles to directly buy tickets, which would be delivered to them through a non-
transferable SMS
• The government plans to upgrade the e-ticketing system by year-end to support 7,200
tickets per minute from 2,000 currently
International investment
• IR has attracted increasing investments from overseas through strategic alliances with
various countries over the last few years
• Subsidiaries of foreign companies are being set up to cater to the huge demand offered by
IR
Source: Ministry of Railways; Aranca Research
High speed rails
• IR is planning to build seven high-speed rail corridors to provide faster rail connectivity
across the country
• The trains will be capable of running at speeds up to 300 kilometre per hour

Government
focus on
infrastructure
building
Growth of freight
traffic due to
industrialisation
Rising demand
for urban mass
transportation
Increasing
private sector
participation
Improved safety
and
modernisation

Passenger traffic went up by more than 15 times over FY1951–2012
Increasing incomes, both urban and rural, has made rail travel affordable to a large number of Indians
Urban population in India increased from 17.3 per cent of the total population in 1951 to 31.2 per cent in 2011; this has led to
increase in traffic between urban and rural areas in the country
Improvement of urban-rural connectivity by rail has been another major contributor to passenger growth

Passenger traffic growth index
(1950–51 taken as the base year)
India’s per capita income at current prices (USD)
Source: Ministry of Railways, IMF, Aranca Research
Notes: F – Forecast
100
279
394
614
728
1,084
1,189
1,288
1,403
1,505
1950-51
1980-81
1990-91
2000-01
2003-04
2007-08
2008-09
2009-10
2010-11
2011-12
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
0
500
1,000
1,500
2,000
2,500
2000
2002
2004
2006
2008
2010
2012
2014F
2016F
2018F
Per Capita Income, USD, LHS Annual Growth Rate

Train Description
Duronto Express
• Non-stop point-to-point rail services
• Connects metros and major state capitals of India
Rajdhani Express
• Air-conditioned trains linking major cities to New Delhi
• One of the fastest trains in India with very few station stops
Shatabdi, Jan
Shatabdi Express
• Intercity seater-type trains for travel during day
Garib Rath
• Fully air-conditioned trains, designed for those who cannot afford to travel in
expensive trains such as Rajdhani and Shatabdi
Superfast Mail/ Express
• Trains that have an average speed greater than 55 kilometers per hour
• Have an additional super-fast surcharge
Mail/ Express
• More stops than their super-fast counterparts
• Stops only at relatively important intermediate stations
Passenger, Fast
Passenger
• Slow trains that stop at most stations along the route
• Low-cost alternative
Suburban trains
• Operate in urban areas
• Usually stops at all stations and have unreserved seating accommodation

Freight traffic went up by more than 15 times over FY1951–2012
This traffic is due to the increasing levels of industrialisation across the country as is evident from the growth in the Index of
Industrial Production (IIP) over the last decade
Increasing freight traffic is generated from these industries year-on-year which are spread out across the country

Passenger traffic growth index
(1950–51 taken as the base year)
Growth (YoY) in the Index of Industrial Production
(IIP)
Source: Ministry of Railways, Ministry of Statistics and
Programme Implementation, Aranca Research
100
359
550
715
871
1,185
1,251
1,363
1,420
1,516
1950-51
1980-81
1990-91
2000-01
2003-04
2007-08
2008-09
2009-10
2010-11
2011-12
-8%
-4%
0%
4%
8%
12%
16%
20%
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13

Notes: DFC – Dedicated Freight Corridor, DFCCIL – Dedicated Freight
Corridor Corporation of India Limited, JV – Joint Venture
• DFCCIL, a special purpose vehicle, was set up for implementing the DFC project under the administrative
control of the Ministry of Railways
• The plan is to construct dedicated freight lines along the Eastern and Western parts of India
• Total length: 3,300 kilometres; total estimated cost: USD16.7 billion; project scheduled for completion in
FY17
Punjab - > Haryana - > Uttar
Pradesh - > Bihar - > West
Bengal
Uttar Pradesh - > Delhi - >
Haryana - > Rajasthan - >
Gujarat - > Maharashtra
Western Corridor Eastern Corridor

Objectives
Increase rail
freight share
through
customised
logistic
services Segregate
freight and
passenger
lines for
focused
approach
Create
additional
freight
capacity to
meet demand
Introduce
time-tabled
freight
services to
ensure better
services
Adopt high-
end
technology
for real-time
data analysis
Reduce unit
cost of
transportation
and increase
productivity

76
91
64
91
2016-17 2017-22
EDFC WDFC
Freight traffic projections on DFC (in MMT)
Source: KPMG
Notes: CAGR – Compound Annual Growth Rate,DFC – Dedicated
Freight Corridor, EDFC – Eastern Dedicated Freight Corridor,
WDFC – Western Dedicated Freight Corridor,
MMT – Million Metric Tonnes
Freight traffic via DFC would increase at a CAGR of 5.4 per
cent to 182 MMT in 2021–22 from 140 MMT in 2016–17
Container traffic is likely to be an important constituent of
the WDFC and is expected to grow to 5.3 million TEUs in
2021–22 from 3.8 million TEUs in 2016–17
CAGR: 5.4%

DFC Model Mix (2016-17)
Source: KPMG
In the DFC scenario, added capacity and efficiency of the new infrastructure would result in an increased share of railway
network to 87 per cent in 2021–22 from 84 per cent projected in 2016–17
DFC Model Mix (2017-22)
16%
84%
Road Share
Rail Share
13%
87%
Road Share
Rail Share

12th Five-Year Plan
• An outlay of USD95.6 billion has been approved by the Planning Commission for railways.
The railway ministry had proposed an outlay of USD100.9 billion
• Details of the outlay are as under:
(i) Gross Budgetary Support USD35.8 billion
(ii) Internal Generation USD19.3 billion
(iii) Extra Budgetary Resources USD40.5 billion
Participative models
for rail connectivity and
capacity augmented
projects
• This policy supersedes the R3i and R2CI policies notified earlier
• The policy provides for supplementing government’s investment in rail infrastructure
projects by private capital flows
• The policy contains the following models: non-government railway; joint venture with
equity participation by railways; capacity augmentation through funding by customers;
capacity augmentation – annuity model applicability; and BOT
Notes: R3i – Railways' Infrastructure for Industry Initiative, R2CI is Railways Policy for
Connectivity to Coal and Iron Ore Mines, BOT – Build Operate and Transfer

Automobile Freight
Train Operator Scheme
2013
• To increase its share in automobiles transportation, Indian Railways notified a new
scheme in March 2013 – Automobile Freight Train Operator (AFTO). The scheme
provides logistic service providers and road transporters an opportunity to introduce their
own special wagons to run on the railways' network and avail of freight rebates in return.
The requirements for the scheme are laid down as under:
• Companies with minimum net worth of USD3.7 million or annual turnover of USD5.5
million are eligible to participate in this scheme
• A registration fee of USD0.9 million is required to be paid to the railway ministry on
approval as AFTOs
• Companies are required to introduce at least three rakes and make them operational
within six months from the commissioning of the first rake
• The freight rates would be notified from time to time for specific stock to be moved by
AFTOs
• The freight rebate would be incorporated in the freight rates specified for transportations of
automobiles
• Special wagons to be designed and developed by Research, Design and Standards
Organisation (RDSO) for induction by third-party logistics providers and road transporters
• Each rake is to have a capacity to carry 318 small cars. The rake should be tested by
RDSO

R3i policy
• Aimed at attracting private sector participation in rail connectivity projects in order to create
additional rail transport capacity
• The policy allows for four models – (a) Cost Sharing-Freight Rebate, (b) Full Contribution-
Apportioned Earnings, (c) Special Purpose Vehicle (SPV), and (d) Private Line
R2CI
• New policy initiated to improve rail connectivity to coal and iron ore mines
• It offers the developer involved in the construction of the line to levy a surcharge on the
freight over a period of 10–25 years
• The policy has two models – Capital Cost Model, and the SPV Model. While the Capital
Cost Model is relevant when there are two players, the SPV Model is intended for a
situation where there are a large number of players
Notes: R3i – Railways' Infrastructure for Industry Initiative, SPV – Special Purpose
Vehicle, R2CI is Railways Policy for Connectivity to Coal and Iron Ore Mines

Railway Budget FY14
• For FY14, the budget earmarks an outlay of USD11.7 billion, of which 40.9 per cent would
be funded through gross budgetary support and internal resources, while 23.8 per cent
would be funded through borrowings. Moreover, USD1.1 billion would be mobilised
through the PPP route
• The ministry expects a 9 per cent increase in freight earnings to USD17.2 billion in FY14
Passenger earnings are expected to increase to USD7.8 billion during the same period.
• Operating ratio is also expected to improve to 87.8 per cent in FY14
Wagon Investment
Scheme
• Indian Railways launched the Wagon Investment Scheme in 2005 to offer freight rebates
and supply a guaranteed number of rakes for a period of 7 – 15 years for different types of
wagons
• The Ministry of Railways has proposed to set up five wagon factories in Secunderabad,
Bardhaman, Bhubaneswar/ Kalahandi, Guwahati and Haldia under the JV/ PPP model
• It plans to procure 18,000 wagons during FY12
Notes: VSAT - Very Small Aperture Terminal

Key modernisation
initiatives
• Rolling out a more user-friendly system, with internet ticketing timings increased to 23
hours a day from 0030 hrs to 2330 hrs
• A new e-ticketing system, which would support 120,000 users simultaneously at any point
in time compared with the existing 40,000 capacity, will be put in place by year end. The
system would be able to support the booking of 7,200 tickets per minute as against the
current capacity of 2,000
• Launched mobile ticketing services in August 2011 and SMS in case if e-ticket not
accepted as valid proof of reservation
• With the successful completion of initial testing, the Train Collision Avoidance System
(TCAS) will be put to rigorous trials to validate its safety under complex operational
conditions
• Introduction of Self-Propelled Accident Relief Trains (SPART) on trial basis with a view to
establish a fast and reliable disaster management system
• A modern signalling system, a train-protection warning system, and a special railway
safety fund have been initiated to ensure passengers’ security
• Railway Budget FY14 focuses on improving passenger amenities such as free Wi-Fi
access, pilot projects to help passengers contact onboard staff regarding coach
cleanliness, etc.

Investments during the 11th Plan (USD billion)
Approved
Outlay
2007–08 2008-09 2009-10 2010-11 2011-12*
Total 11th
Plan
Excess/
Shortfall
2012-13**
Gross
Budgetary
Support
15.8 2.2 2.2 3.7 4.3 4.4 17.0 3.0 4.4
Internal
Generation
22.4 3.7 4.1 2.6 2.5 1.9 14.7 (5.1) 3.5
Extra
Budgetary
Resources
19.8 1.3 1.6 2.1 2.1 3.4 10.7 (6.9) 3.0
Total 58.0 7.2 7.9 8.4 8.9 9.7 42.3 9.1 11.1
Source: Planning Commission, Aranca Research
* - Revised Expenditure, ** - Budgetary Expenditure

Cumulative FDI inflows from April 2000
(USD million)
Source: Department of Industrial Policy & Promotion, Aranca Research
Notes: FDI – Foreign Direct Investment; Cumulative from April 2000 to
March 2008 and so on
Since FY08, cumulative FDI inflows into the sector has
increased fivefold
In FY13, the figure stood at USD270.3 million
57.3
75.3
109.6
132.8
240.3
270.3

Notes: ICT – Information and Communication Technology,
PPP – Public Private Partnership
To modernise Indian Railways, the focus is on two
fundamental drivers – Safety and Growth and along
a five-pronged strategy
• Modernise core assets – They are key revenue
generating assets
• Explore new revenue models – To meet the
funding needs for modernisation and growth
• Review projects – To ensure financial viability,
social benefits, and timely implementation
• Focus on enablers – For a holistic and long term
approach to modernisation and execution
• Mobilize resources – To capitalise on an
opportunity
Key focus areas
Core
Assets
Track and
bridges
Signalling
Rolling
stock
Stations and
terminals
Revenue
Models
PPPs Land
Dedicated
freight
corridors
High
speed trains
Projects Review of existing and proposed projects
Enablers ICT
Indigenous
development
Safety
Resources Funding
Human
resource
Organisation

Notes: Km – Kilometres, IR – Indian Railways, UTS – Ultimate Tensile Strength,
CST9 – Central Standard Trial-9, PSC – Pre Stressed Concrete
• Sleepers have been upgraded from
wooden, steel, and CST-9 to PSC sleepers
• Heavier section and high tensile strength
rails are being used (52kg/60kg 90 UTS
rails are being used in place of 90R/52kg
72UTS rails)
• As of FY12, total length of welded track on
main lines of IR was 79,113 km, of which
65,500 km was with long-welded rails and
the rest with short-welded rails
• There is a progressive shift to flash butt
welding which is superior in quality to
Alumino Thermic (AT) welding
• Adequate capacity for production of
concrete sleepers to meet the present
requirement of IR has been developed
• During FY12, 6.9 million broad-gauge
mono-block concrete sleepers and 10,359
sets of PSC turnout sleepers were
produced
• In FY12, 924 bridges, including 12
distressed bridges, were rehabilitated
• Modern bridge inspection and management
system has been adopted, which include
non-destructive testing techniques, under
water inspections, fibre composite
wrapping, integrity testing etc.
Track upgradation and welded rails Sleepers and bridges

Notes: WDG5 (W – Wide/broad gauge, D – Diesel-powered,
G – Made for hauling goods, 5 – above 5000hp)
• Design and development of
5500 HP WDG5 diesel
locomotive for faster, longer
and heavier trains
• Development of high-
sensitivity thermal imaging
camera with online scanning
facility to improve the
reliability of electric traction
system
• Development of 25 KV HV
connector for multiple
operation of WAP5
locomotives with one
pantograph in raised
condition
Unreserved ticketing services
(UTS)
• UTS has been made
functional at 5,690 locations
with 10,508 terminals as of
April 2013
• More than 90 per cent of
unreserved tickets are now
generated through UTS
• A total of 6.65 billion
passengers were served
(total earnings of USD2.26
billion) in FY11 as compared
to 5.88 billion passengers
(total earnings of USD199.86
million) in FY10
Terminal Management
System (TMS)
• TMS generates online
railway receipts and has
been deployed at 631 field
locations during FY11
• During FY11, USD6.95 billion
of freight payment was
realised through e-payment
mode, which accounts for 58
per cent of total freight
collected
Increasing Operational
efficiency

Source: Press information Bureau, GOI and News websites
Notes: SPV – Special Purpose Vehicle
PSU – Public Sector Undertaking
Salient features
• It has been created with the view of making the Indian
Railway stations world class as a public–private
partnership venture (PPP)
• A memorandum of understanding (MoU) for the SPV
was signed between two railway PSUs – the Ircon
international Limited (IRCON) and the Rail Land
Development Authority (RLDA)
• The SPV will have an initial corpus of USD20.8 billion
with 51:49 equity between Ircon and RLDA
Need and importance
• To meet with the aspirations of rail users and to
facilitate them with better facilities
• To augment and improve passenger related amenities
at stations to high standards
• To have modern stations which would be functional,
customer-oriented and well equipped with proper
circulation area and railway operation facilities
• It will be designed to provide well designed
concourses, high quality waiting spaces, easy access
to the platforms, congestion-free platforms, modern
catering facilities, hotels and other facilities

Country
Network
length (km)
Number of
employees
(000s)
Passengers
carried
(million)
Passenger
distances
(billion km)
Freight
carried
(million
tonnes)
Freight
distance
(billion km)
Number of
locomotives
Number of
coaches
Number of
wagons
(000s)
USA 226,706 187 26 9 1,775 2,820 23,990 1,186 475
Russia 84,158 1,128 1,280 173 1,344 2,090 12,063 33,955 567
China 63,637 2,067 1,287 690 2,624 2,211 17,222 42,471 571
India 63,327 1,406 6,219 695 728 4,810 8,110 43,124 208
Canada 57,042 34 4 1 313 353 2,947 595 98
Germany 33,897 231 1,835 75 273 91 4,128 17,537 96
France 29,488 166 1,097 84 106 42 4,289 15,973 33
South Africa 24,487 36 533 15 181 109 3,301 1,723 112
Japan 20,050 132 8,907 253 36 23 1,170 25,244 9
Australia 9,639 13 54 1 177 46 509 663 11
Note: Figures are as of Dec ‘09

Average rate per passenger km. (in rupees)
Freight revenue accounts for major share of total railway revenues in India (71 per cent share in in FY12)
Major freight railways such as the US, China and Russia have one-fourth the freight rate compared to India
Indian Railways charges higher freight tariff in order to cross-subsidise the passenger fares and make them affordable to
the public. This is why the passenger fares were not increased in tandem with the rising costs over the years; in fact, fares
have gone down in a few cases
Average rate per tonne km. (in rupees)
0.25
0.26
0.26
0.26
0.26
0.27
FY 07 FY 08 FY 09 FY 10 FY 11 FY 12
0.85
0.89
0.94
0.95
0.97
1.01
FY 07 FY 08 FY 09 FY 10 FY 11 FY 12

Average freight revenue per tonne kilometre
(2009)
Ratio of average passenger fare to average freight
rates (2009)
Source: World Bank, Aranca Research
100
112
122
185
207
218
273
281
327
395
751
USA
Canada
Russia
China
Japan
France
Italy
South Africa
Spain
India
Germany
0.3
0.3
0.3
0.4
0.7
0.9
0.9
1.1
1.2
1.3
1.4
India
Pakistan
Vietnam
Greece
Thailand
Indonesia
Malaysia
Austria
China
France
Korea

Revenues from traffic operations (USD million)
Source: Delhi Metro website, Annual Reports,
Aranca Research
Revenues from traffic operations increased at a CAGR of
37.5 per cent during FY08–12 to USD236.0 million
Average ridership increased to 1.9 million in June 2012 from
0.9 million in FY10, marking an increase of more than 100
per cent
Phase III of the project was approved in August, 2011 and
covers a route length of 103.1kms and 67 stations
Finalized Phase IV of the project which would cover area of
more than 115kms
Total operational network across Phase I and Phase
II spans 190 kilometres and covers 143 stations
66.0
91.8
109.8
195.6
236.0
FY 08 FY 09 FY 10 FY 11 FY 12
CAGR: 37.5%

Source: Press Information Bureau, GOI and News Websites
Notes: SPV – Special Purpose Vehicle
PSU – Public Sector Undertaking
Key success factors
• Coordinated and well collaborated effort from various
government agencies for timely completion of the
project
• Availed overseas financing to cover 60 per cent of the
costs to ensure expedition of the project’s execution
• Involvement of consultants from across the world with
extensive experience – both technological and
managerial – in the field
Salient features
• The capital cost of completion of Phase I has been
estimated at USD2.2 billion, saving about USD125.0
million from the budgeted expenditure
• The phase was completed three years ahead of
schedule
• Average duration of major tenders was nineteen days,
compared with the three to nine months that is the
norm

Freight traffic (million tonnes)
• The government is investing heavily in building rail
infrastructure in the country. The government
plans to invest USD153 billion during the 12th Five-
Year Plan
• With increasing participation expected from private
players – both domestic and foreign – due to
favourable policy measures, freight traffic is
expected to grow rapidly over the medium to long
term
• Railways has set a target of having a freight
market share of 50 per cent by 2030 from 30 per
cent in 2010
745 804 837 892
926 975 1,038 1,119
1,206
1,300
1,405
FY07
FY08
FY09
FY10
FY11
FY12
FY13E
FY14E
FY15E
FY16E
FY17E
• With rapid economic growth and increasing
industrialisation, freight traffic is expected to touch
1,405 million metric tonnes by FY17
• This indicates a CAGR of 7.6 per cent over FY12–17
CAGR: 6.6%

Source: Ministry of Urban Development, Concor, Aranca Research
• Investments expected in metro rail networks in India: USD42 billion by 2020
• Amount invested so far: USD16.7 billion
Name of project
Estimated cost (USD
billion)
Length of project
(kilometres)
(Estimated) Date of
completion
Delhi Mass Rapid Transit System
Phase I
2.2 65.1 November 2006
Delhi Mass Rapid Transit System
Phase II
1.1 124.6 August 2011
Kolkata Metro Rail Project 1.1 14.7 2014–15
Bengaluru Metro Rail Project 2.4 42.3 September 2012
Hyderabad Metro Project 2.5 71.2 2013
Mumbai Metro Project Phase-II 1.7 31.9 2016
Chennai Metro Rail Project 2.3 45.1 2014–15

Manufacturers Association for Information Technology (MAIT)
4th Floor, PHD House, Opp. Asian Games Village,
New Delhi 110 016, India
Tel: 91 11 26855487
Fax: 91 11 26851321
E-mail: contact@mait.com
Website: www.mait.com
Consumer Electronics and Appliances Manufacturers
Association (CEAMA)
5th Floor, PHD House
4/2, Siri Institutional Area, August Kranti Marg
New Delhi –110 016
Telefax: 91-11-46070335, 46070336
E-mail: ceama@airtelmail.in
Website: www.ceama.in

CAGR: Compound Annual Growth Rate
FDI: Foreign Direct Investment
FY: Indian financial year (April to March)
So FY12 implies April 2011 to March 2012
DFC: Dedicated Freight Corridor
DFCCIL: Dedicated Freight Corridor Corporation of India Limited
PPP: Public-private partnership
IIP: Index of industrial production
R2CI: Railways Policy for Connectivity to Coal and Iron Ore Mines
R3i: Railways' Infrastructure for Industry Initiative
CST – 9: Central Standard Trial-9,
SPV: Special Purpose Vehicle

USD: US Dollar
Wherever applicable, numbers have been rounded off to the nearest whole number

Year INR equivalent of one USD
2004-05 44.95
2005-06 44.28
2006-07 45.28
2007-08 40.24
2008-09 45.91
2009-10 47.41
2010-11 45.57
2011-12 47.94
2012-13 54.31
Exchange Rates (Fiscal Year)
Year INR equivalent of one USD
2005 45.55
2006 44.34
2007 39.45
2008 49.21
2009 46.76
2010 45.32
2011 45.64
2012 54.69
2013 54.45
Exchange Rates (Calendar Year)
Average for the year

India Brand Equity Foundation (IBEF) engaged Aranca to prepare this presentation and the same has been prepared by
Aranca in consultation with IBEF.
All rights reserved. All copyright in this presentation and related works is solely and exclusively owned by IBEF. The
same may not be reproduced, wholly or in part in any material form (including photocopying or storing it in any medium
by electronic means and whether or not transiently or incidentally to some other use of this presentation), modified or in
any manner communicated to any third party except with the written approval of IBEF.
This presentation is for information purposes only. While due care has been taken during the compilation of this
presentation to ensure that the information is accurate to the best of Aranca and IBEF’s knowledge and belief, the
content is not to be construed in any manner whatsoever as a substitute for professional advice.
Aranca and IBEF neither recommend nor endorse any specific products or services that may have been mentioned in
this presentation and nor do they assume any liability or responsibility for the outcome of decisions taken as a result of
any reliance placed on this presentation.
Neither Aranca nor IBEF shall be liable for any direct or indirect damages that may arise due to any act or omission on
the part of the user due to any reliance placed or guidance taken from any portion of this presentation.

India : Railways Sector Report_August 2013

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