Business Daily from THE HINDU group of publications
Saturday, Apr 07, 2007
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Railways Logistics - Infrastructure Rlys mulls financing options for high-speed passenger corridor Mamuni Das
Available Alternatives The Railways feels that it can raise up to Rs 7,000 cr (upfront). It will develop multipurpose commercial hubs around stations on a PPP mode.
New Delhi April 6 With each 500 km high-speed rail (HSR) passenger corridor expected to cost about Rs 30,000 crore, the Indian Railways is studying various financing options that include imposing a cess on beneficiaries (property development along the corridors) to service the debt. It is evaluating options for four HSRs. Overall, it is aiming for a financing proposal with zero net cost to the Government, with the Railways and the State Governments contributing spare land on lease as equity. "For servicing the capital cost debt, a small part of the consequential appreciation in property prices can be ploughed back by using options such as charging a small cess on all new constructions in beneficiary cities after the Government approves the HSR project, amongst others," the Indian Railways Financial Commissioner, Mr R. Sivadasan, told Business Line. The Railways recently shared these details with the Planning Commission.
Commercial hubs
The Railways also feels that it can raise up to Rs 7,000 crore (upfront) by developing multipurpose commercial hubs around station terminals on a public private partnership mode. "These hubs would have facilities like shopping malls, luxury hotels, space for high value parcel handling, office complexes (IT parks)," Mr Sivadasan said. Setting up of an autonomous high-speed authority that would oversee the project has also been suggested by the Railways. Each train set, comprising eight cars, can move about 800 people and cost in the range of euro 25 million. But with bulk orders and competition between manufacturers like Alstom, Bombardier, Mitsubishi-Toshiba-Hitachi-Nippon, Rotem and Seimens in the sector, the costs may be lowered. These high-speed trains would move at speeds of 300-350 km per hour (kmph) and cover 500-600 km length trips in 2-2.5 hours. Rolling stock would be used on a lease basis by the operator. In the backdrop of increasing pressure on India to take on green house gas (GHG) emission reduction targets, the Government can take a conscious decision to promote this mode, which emits 7.7 times lower emissions than aircraft and 4.5 times lower emissions than green cars. "In terms of fuel consumption, one fully loaded trip of high speed train is equivalent to 0.2 flight, 27 cars and 16 buses. But it would carry passengers that can be accommodated in 4.5 flights, 180 cars and 24 buses," said the official.
TARGET GROUP
The HSR would be a high-end rail transport offering, with which the Railways aims to woo the passengers of low-cost airlines, lost upper class passengers, long distance cars and luxury buses. These passengers — who are the new economy, high-income crowd — prefer speed, comfort and daytime journeys. The current network will not be able to serve these passengers as the system would be a low-cost surface carrier (even after the dedicated freight corridor comes up), unable to meet the cost of operations from charged fares. "Even after lowering passenger fares in high-end segment, the overall passenger growth in the Railways is in the range of 12 per cent unlike the domestic airlines which are growing at 25-35 per cent annually," Mr Sivadasan said. The Railways proposes to price the product at just below the low-cost airline rates.
POSSIBLE ROUTES
The routes under consideration include Mumbai-Surat-Vadodara-Ahmedabad; Jaipur-Delhi-Sonepat-
The Railways had written to several State Governments asking for their support in the form of land and equity.
"States that have evinced interest include West Bengal, Kerala, Tamil Nadu, Maharashtra, Gujarat and Haryana," said sources.
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