adb_railway_03

Technical Assistance Consultants Report

Project Number: 36330-02 (Technical Assistance No. 4998) March 2009

INDIA: Railway Sector Investment Program(Financed by the Japan's Special Fund)

Prepared by Scott Wilson Railways Ltd, United Kingdom During the period of engagement from 27 March 2008 to 7 November 2008 For Ministry of Railways Rail Vikas Nigam LtdThis consultants report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents. (For project preparatory technical assistance: All the views expressed herein may not be incorporated into the proposed projects design.

Asian Development Bank

Railway Investment ProgrammePune to Guntakal ElectrificationTA 36330-02, INDIA

Project Reports October 2008 Draft Final 01 SW Job Number A012931

Railway Investment programme Pune - Guntakal Electrification For Asian Development Bank 4 San Martin Marg Chanakyapuri New Delhi - 110021

Report VerificationName Prepared by: Checked by: Approved by: David Dennis Jim Hunter Derek Holden Position Principal Engineer Principal Engineer International Director Signature Date

Register of Document HoldersName Mr Tzadashi Kondo Mr Ranjan Kumar Jain Mr N Madhusudana Rao Location Asian Development Bank, New Delhi Rail Vikas Nigam Limited, New Delhi Ministry of Railways, New Delhi 5 10 10 No. of Copies

Revision ScheduleRevision Date Details of Revision Issued by

Derek Holden International Director Scott Wilson Railways Tricentre-3 Newbridge-Square Swindon SY11BY-UK Tel: Fax: +44 (0) 1793 508610 +44 (0) 1793 508511

Email: [email protected]

This document has been prepared in accordance with the scope of Scott Wilson's appointment with its client and is subject to the terms of that appointment. It is addressed to and for the sole use and reliance of Scott Wilson's client. Scott Wilson accepts no liability for any use of this document other than by its client and only for the purposes, stated in the document, for which it was prepared and provided. No person other than the client may copy (in whole or in part) use or rely on the contents of this document, without the prior written permission of the Company Secretary of Scott Wilson Ltd. Any advice, opinions, or recommendations within this document should be read and relied upon only in the context of the document as a whole. The contents of this document are not to be construed as providing legal, business or tax advice or opinion. Scott Wilson Group PLC 2008

Asian Development Bank Railway Investment Program

Table of ContentsSUMMARY TABLE ........................................................................................................................ 8 1. 1.1 2. 2.1 2.2 2.3 2.4 3. 3.1 c. d. 3.2 4. 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 INTRODUCTION............................................................................................................... 9 General ............................................................................................................................. 9 OPERATIONS AND TRAFFIC........................................................................................ 11 Operations ...................................................................................................................... 11 Traffic.............................................................................................................................. 12 Goods Traffic .................................................................................................................. 13 Constraints...................................................................................................................... 16 ENGINEERING ............................................................................................................... 18 Electrical Engineering...................................................................................................... 18 Level of Illumination ........................................................................................................ 23 Modification of Power Line Crossings.............................................................................. 23 Signalling ........................................................................................................................ 27 FINANCIAL..................................................................................................................... 30 Introduction ..................................................................................................................... 30 Operating Costs Pune Guntakal Electrification ............................................................. 30 Traffic Forecasts ............................................................................................................. 31 Cost of Construction........................................................................................................ 32 Working Expenses .......................................................................................................... 34 Project Benefits ............................................................................................................... 38 Financial Rate of Return.................................................................................................. 39 Sensitivity Analysis.......................................................................................................... 39 Combined Scheme.......................................................................................................... 39 Operating Costs .............................................................................................................. 39 Traffic Forecasts ............................................................................................................. 40 Cost of Construction........................................................................................................ 42 Rolling Stock Requirement & Costs................................................................................. 43

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Asian Development Bank Railway Investment Program

4.14 4.15 4.16 5. 5.1 5.2 5.3 6. 6.1 6.2 6.3 6.4 6.5 6.6 7. 7.1 7.2 7.3 7.4 8. 8.1 8.2

Working Expenses .......................................................................................................... 44 Project Benefits - Combined Scheme.............................................................................. 45 Financial Rate of Return.................................................................................................. 46 ECONOMICS.................................................................................................................. 48 Background..................................................................................................................... 48 Parameters for the Economic Analysis............................................................................ 48 Project Economic Evaluation........................................................................................... 51 SOCIAL IMPACT............................................................................................................ 54 Background..................................................................................................................... 54 Poverty Profile of Project Areas....................................................................................... 55 Gender Analysis.............................................................................................................. 60 Indigenous People Analysis: ........................................................................................... 63 Child Labour.................................................................................................................... 66 HIV/AIDS......................................................................................................................... 68 IMPLIMENTATION ......................................................................................................... 71 General ........................................................................................................................... 71 Risks ............................................................................................................................... 71 Contract Packages.......................................................................................................... 71 Pune Guntakal Electrification/Track Doubling Combined.............................................. 73 CONCLUSIONS AND RECOMMENDATIONS ............................................................... 75 General ........................................................................................................................... 75 Recommendations .......................................................................................................... 75

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Asian Development Bank Railway Investment program

AcronymsAADT ACP ADB ANM AIDS B/C BG CAGR CDI DRUCC DWCRA EIRR EGS FDI FIRR GDP GTKM GDI HDM4 HDI HDR HIV HPI IR ICDS INR IPDP IRDP JFM LT LSG MACL MFF MOR NG NH NPVA012931

Annual Average Daily traffic Average Commodity Price Asian Development Bank Auxiliary Nurse Midwife Acquired Immunodeficiency Syndrome Benefit / Cost ratio Broad Gauge Compound Annual Growth rate Child Development Index Divisional Railway Users Consultative Committee Development Women and Children in Rural Areas Economic Internal Rate of Return Employment Guarantee Scheme Foreign Direct Investment Financial Internal Rate of Return Gross Domestic product Gross Tonne Kilometres Gender Disparity Index Highway Development Model 4 Human Development Index Human Development Report Human Immunodeficiency Virus Human Poverty Index Indian Railways Integrated Child Development Scheme Indian National Rupee Indigenous People Development Plan Integrated Rural Development Project Joint Forest Management Low tension Local Self-Government Multi Aspect Colour Light Multi Tranche Financing Facility Ministry of Railways Narrow Gauge National Highway Net Present ValuePage 6 October 2008


NTKM NACO NCLP NFP NGO NTFP O/D OHE PWay PCE PPP PWC PCNDDP PDF PESA PFR PRIs PRS RIP Rs RTKM RVNL SOR SPV SC SERP SHG SSA ST STD TA TEU ToR TRYSEM USD UEE VOC VSS

Net tonne Kilometres National AIDS Control Organisation National Child Labour Programme National Forest Policy Non-Government Organisation Non-Timber Forest Produce Origin / Destination Over Head Equipment Permanent Way Passenger Carrying Equivalent Public Private Partnership Price Waterhouse Cooper Per Capita Net District Domestic Product Public Distribution System Panchayats (Extension to the Scheduled Areas) Act Property for Rent Panchayati Raj Institutions Passenger Reservation System Railways Investment Programme Rupees Revenue Tonne Kilometres Rail Vikas Nigam Ltd. Schedule of Rates Special Purpose Vehicle Scheduled Castes Society for Elimination of Rural Poverty Self-Help Group Sarva Siksha Abhiyan (Education for All) Scheduled Tribes Sexually Transmitted Disease Technical Assistance Tonne Equivalent Unit Terms of Reference Training of Rural Youth for Self-Employment United States Dollars Universal Elementary Education Vehicle Operating Cost Vana Surakhya Samiti

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SUMMARY TABLE

Pune To Guntakal Electrification 641 Km Single Line Electrification Cost Estimate (2007/08 Prices) Total Cost Civil Engineering Signalling & Telecommunication Electrification FIRR EIRR 7483288000 37554000 352800000 6754948000 20.27% 13.22%

Pune To Guntakal Electrification & Daund Gulbarga Track Doubling Combined 641 Km Double Track Electrification + 225 Km Track Doubling Cost Estimate (2007/08 Prices) Total Cost Civil Engineering Signalling & Telecommunication Electrification FIRR EIRR 15553800000 6997200000 1123800000 7432800000 12.30% 14.06%

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1.1.1

INTRODUCTIONGeneral The base scheme proposal is for the electrification of the Pune to Guntakal section of the Golden Quadrilateral. Whilst electrification will offer significant operational benefits and cost savings it can be expected to produce only a marginal increase in route capacity. As an alternative, the project in combination with the Daund to Gulbarga track doubling has been analysed. This is to establish whether there is a viable option offering the operational benefits of electrification with the route capacity improvements from track doubling. This section forms part of the Golden Quadrilateral connecting four major metropolitan cities of India, Mumbai, Chennai, Delhi and Kolkata on which the maximum traffic of Indian Railways flows. Except for this section (Pune Guntakal) all other sections in the Golden Quadrilateral are electrified. This section is partly double line with the remainder single line. The status of electrification on the adjoining sections is as under : Mumbai Pune Originally electrified on 1500V DC Traction, getting converted to 25kV AC Traction system. The work is anticipated to be completed progressively in 18 months to two years. In this section, one line is already electrified. The second line is being electrified along with track doubling. The work is anticipated to be completed in approximately one year. This section is being electrified along with track doubling. The work is anticipated to be completed in six to 12 months.

Renigunta Nandlur

Nandlur Guntakal

The Pune Guntakal section is the only nonelectrified section in the Golden Quadrilateral. This section is 641km long with 78 stations. 56 Stations are electrified. The entire section passes through the Deccan Plateau with black cotton soil. The entire section is mostly plain with a ruling gradient of 1 in 100. The temperature varies from four degrees to 45 degrees centigrade. The soil consists of ordinary clay occasionally mixed with sandy clay. The important stations on this route are Daund, Kurduwadi, Hotgi, Solapur, Mohol, Wadi, Raichur and Guntakal. The current status of doubling is as under: Double line or Single line (DL/SL) DL SL DL Status of sanctioned works Under study

Sl. No. 1 2 3

Section Pune Bhigwan Bhigwan Mohol Mohol Solapur- Hotgi

RKM/TKM 103 127 48

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Sl. No. 4 5 6 7 8 9 10 11 12

Section Hotgi - Gulbarga Gulbarga - Wadi Wadi Krishna Krisna Yermaras Yermaras - Matmari Matmari Kosgi Kosgi Kupgal Kupgal Nacherla Nacherla Guntakal Total

Double line or Single line (DL/SL) SL DL DL SL DL SL DL SL DL DL SL Total

RKM/TKM 98 37 82 16 26 24 14 57 9 347 294 294

Status of sanctioned works Under study

Doubling Works in progress Doubling Works in progress Doubling Works in progress

Studies carried out previously for this project Previously, the following studies were carried out: i. ii. Cost-cum feasibility study (CCFS) 1997 by CORE Allahabad which was updated in 2003. Bankability study by Price Waterhouse Coopers Aug. 2005

The study done by Price Waterhouse Coopers (PWC) is for Pune Guntakal Electrification Project and Daund Gulbarga Doubling Project combined, as well as individual projects. The estimates have therefore been reviewed accordingly. The current project requirements are to review, update and recommend improvements to the project proposal in preparation for funding by the Asian Development Bank in accordance with its policies and guidelines. The engineering proposals have been examined and preliminary design reviews completed to establish materials quantities required. Using the latest available pricing data updated cost estimates for the works have been produced. An initial procurement schedule has been prepared including proposed contract packages. Data gathered from the field and information from Indian Railways records has been used to analyse the current traffic on the line. Commodity wise growth rates have been used to form projections for future traffic. Using this information and the updated cost estimates financial and economic analysis has been completed to establish the financial and economic viability of the project through the FIRR and EIRR for the project.

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2.

OPERATIONS AND TRAFFICPune Guntakal is a 641Km long segment of the Mumbai - Chennai leg of Indian Railways Golden Quadrilateral. This segment accounts for 50% of the Mumbai Chennai south-western leg of the Golden Quadrilateral of Indian Railways. Adjacent sections Pune Lonavala - Mumbai CST at Pune end already have electric traction and the Guntakal - Renigunta section is being electrified. There are 78 stations between Pune and Guntakal and twelve feeder sections which bring and take away traffic. At the Guntakal end, we have four feeder sections, namely; Guntakal - Bellary, Guntakal Renigunta, Guntakal Dharmavaram/Bangalore and Guntakal Nandyal and at Pune end there are two feeder sections Mumbai/Lonavala Ghorpuri/Pune and Pune - Miraj. Six feeder sections namely Wadi - Secunderabad, Hotgi - Bijapur/Gadag, Kurduwadi-Pandharpur (PVR)/Miraj, Kurduwadi - Latur, Daund Baramati and Daund Ankia/Manmad join the project route at intermediate junction stations Wadi, Hotgi, Kurduwadi and Daund. Except Mumbai/Lonavala Ghorpuri and Guntakal - Renigunta, trains on all other sections are on diesel traction. Work of electrification of Wadi Secunderabad, an important feeder section is already sanctioned. Another important feeder section Daund - Ankia/Manmad is also under active consideration for electrification. Important goods terminals on the project route Pune - Guntakal are, Pune, Loni, Daund (DD), Bhigavan (BGVN), Kurduwadi (KWU), Solapur (SUR), Hotgi (HG), Gulbarga (GR), Raichur, Adoni and Wadi. The project route Pune - Guntakal section lays in three states, Maharashtra, Karnataka and Andhra Pradesh. Pune to Kulali (40Km) is in Maharashtra, Kulali to Martur in Karnataka and the balance is in Andhra Pradesh. Of the total 641km long project section, Wadi - Guntakal (228km) is being doubled. Already two-thirds of its length (148 route km) out of 228 km has been doubled. The remaining third is likely to be doubled before commencement of the electrification work. Between Pune and Wadi (413km), there are two single line stretches i) Bhigavan Mohol (127km.) and Hotgi Gulbarga (98km), the remaining portion (188km) is already double line.

2.1

Operations For the purpose of train operation and control, Pune - Guntakal section is distributed among three rail divisions and two Zonal Railways. Pune to Daund (76km) is in the jurisdiction of the Pune Division, Daund Solapur - Wadi (337km) falls in the jurisdiction of the Solapur Division (both on Central Railway) and Wadi - Guntakal (228km) is in the jurisdiction of the Guntakal Division of South Central Railway. Terrain traversed by the Pune Guntakal section is undulated. The section between Daund and Solapur has a ruling gradient of 1:145 and the Solapur Wadi Guntakal portion has a ruling gradient of 1:100. All loaded goods trains are hauled by two WDG 3/WDM 2 Diesel locomotives. Passenger carrying trains are hauled by a single Diesel locomotive. Train crews are based at Guntakal, Wadi, Solapur, Daund and Pune. There are four Diesel fuelling points for goods trains running across the Pune Guntakal project section, at Ghorpuri/Pune, Daund, Wadi and Guntakal.

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At present traction changes between Diesel and Electric take place at Pune/Ghorpuri and Nandalur/Renigunta. 2.2 Traffic The line capacity of various sub-sections on the Daund - Gulbarga/Wadi section and trains that run across these during 2006-07 are as under:

Section S/L or D/L Pune Daund -D/L Daund Bhigwan - D/L Bhigwan Solapur - S/L Solapur/Hotgi - D/L Hotgi GR S/L GR Wadi D/L Wadi Raichur D-S/L Raichur Guntakal DS/L@

Length (km)

With Maintenance Block 52 50 26 51 26 53 32 32

Trains Run during 2006 - 07 Passenger 32 19 20 25 19 20 14 13 Goods 8.81 9.6 9.5 10.9 12 12.5 12.5 7.9 Deptt. 2.0 1.3 1.6 1.5 1.3 1.2 2.6 2.4 Total 42.81 29.9 31.1 37.4 32.3 33.7 29.1 23.3

%age Utilisation

Pass. Gds. Ratio 3.6 2.0 2.1 2.4 1.6 1.6 1.12 1.6

76 27.68 160 15.78 98 37 107 121

82.33 59.80 119.6 73.3 124.2 63.6 90.9 72.8

Source: Line Capacity statement prepared by Central & South Central Railways. * Solapur-Mohol has recently been provided with second track. @ Partially Double track.

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Passenger trains consume the bulk of capacity, as the ratio between passenger and goods trains ranges between 1.12:1 and 3.6:1. Predominance of passenger trains on the route is clear as given in the Chart below:Passenger and Goods Trains Run across PUNE-GUNTAKAL--2007-0835

30

25

No. of Trains

20

15

10

5

0

PuneDaund

DaundBigwan

BigwanSolapur

SolapurHotgi

Hotgi-GR

GR-Wadi

WadiRaichur

RaichurGuntakal

SectionsPassenger Goods

During 2007-08, the project section is estimated to have an output of 3528 Passenger Train kms as against 8778 Goods Train kms. Goods train kms account for less than 40% of output in terms of Train kms. The maximum permissible speed for passenger carrying trains is 105km per hour (KMPH) and 75KMPH for goods trains. For the purpose of this study Pune towards Guntakal is designated as the Down direction and Guntakal to Pune is designated as the Up direction. The bulk of goods traffic moving across the section is through traffic. 2.3 Goods Traffic The following commodities were transported across the Pune-Guntakal in the two directions during 2007-08:

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Up Direction

(Trains/Day and Tonnes/Day) Guntakal towards Pune Up Direction

CMDT_GRP

Goods Trains and Payload-Per DayTrains (Nos) Pay Load 13125.49 3725.47 1659.79 757.62 161.90 1701.11 1345.18 1896.33 38.69 1261.33 25672.91

Cement Coal Sugar FG Fertiliser IORE I & Steel POL Containers Misc. Grand Total

5.54 1.12 0.69 0.34 0.07 0.61 0.83 0.68 0.02 0.64 10.54

Down DirectionCMDT_GRP Cement Coal Sugar FG Fertiliser IORE I & Steel POL Containers Misc. Grand Total

(Trains/Day and Tonnes/Day) Guntakal towards Pune UP Direction Goods Trains and Payload-Per Day Trains (Nos) 5.66 4.86 0.63 0.97 0.88 0.00 0.00 0.44 0.02 1.41 14.86 Pay Load 12748.90 16765.74 1477.19 2318.61 2064.47 0.00 0.00 977.73 11.19 3156.47 29520.31

It would be seen that loaded traffic in the Down direction is more (in Tonnes) than that moving in the Up direction. The commodity wise distribution of trains run per day in the two directions is depicted below:

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Commodity-wise No. of trains per day run across PA-GTL-UP Direction - 2007-08 (in Trains/Day)Containers, 0.02, 0%

Misc, 0.64, 6%

POL, 0.68, 6% I & Steel, 0.83, 8% IORE, 0.61, 6%

Fertiliser, 0.07, 1% Cement, 5.54, 52% FG, 0.34, 3% Coal, 1.12, 11%

Sugar, 0.69, 7% Cement Coal Sugar

FG

Fertiliser

IORE

I & Steel

POL

Containers

Misc

Commodity-Wise number of trains run per day on PA-GTL 'Down' Direction--2007-08Containers, 0.02, 0%

IORE, 0.00, 0%

POL, 0.44, 3%

Misc, 1.41, 9%

I & Steel, 0.00, 0% Fertiliser, 0.88, 6% Cement, 5.66, 39%

FG, 0.97, 6% Sugar, 0.63, 4%

Coal, 4.86, 33%

Cement

Coal

Sugar

FG

Fertiliser

IORE

I & Steel

POL

Containers

Misc

About 72 % of goods trains run in the Down direction, comprise Cement and Coal trains, whereas in the Up direction, these account for 63% of the total trains. Other commodities moving in the Down direction are Food grains, Fertilisers, Sugar and POL.A012931 Page 15 October 2008


In the Up direction Sugar, Iron & steel, Iron Ore, POL and Fertilisers account for 30% of the total trains per day. A commodity-wise Origin-Destination matrix (in terms of route/section from route/section to) of traffic moving across the Pune - Guntakal section during 2007-08 has been produced and it can be observed that the bulk of the goods traffic across the project section Pune-Guntakal is of a through nature. Passenger Carrying Trains Notwithstanding the number of trains shown in line capacity statement, the following number and type of Passenger and Mail/Express trains were being run each way on the Daund Gulbarga/Wadi section during 2007-08:

Train Type Passenger Trains (Stopping at all Stations) Mail/Express Trains (Stopping at limited number of stations) Daily Mail Express Trains (Stopping at limited number of Stations) Non-Daily

Daund Solapur 5 17

Solapur Gulbarga/Wadi 9 11

Wadi - Guntakal 2 9

3 (5/7)*

9 (23/7)*

10 (2/7)*

Source: Working Time TableJuly 2007 *Number of train paths used per day by non-daily trains.

Keeping in view the fact that all trains do not run across the complete section, for the purpose of preparing passenger train projections, an average number of trains calculated on the basis of distance travelled on the section (No. of trains x distance travelled on the section length of the section) are used. Such data is obtained from the Railways annual report. For the Daund Wadi section during 2006-07 these trains are 16 trains each way on Daund-Solapur and 22 trains on Solapur Wadi. 2.4 Constraints Based on train running data during 2006-07 given in the Line capacity statement of Central and South Central Railways, constraints in capacity imposed by the two single line stretches between Daund and Wadi are indicated in the graph below:

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Charted Line Capacity vis a vis Trains Run and Capacity Utilisation Pune - Guntakal in 2007-0860 123.08 50 126.92 120.00 140.00

100.00 40 87.50 No. of Trains 82.69 74.51 30 58.00 20 40.00 10 60.38 68.75 60.00 80.00 % Utilisation

20.00

0 Pune-Daund Daund-Bigwan Bigwan-Solapur Solapur-Hotgi Hotgi-GR GR-Wadi Wadi-Raichur RaichurGuntakal

0.00

Sections Charted Cap. %-Utilisation Trains Run

The line capacity utilisation on double line stretches ranges from 58 to88 %, but on the two single line stretches it is above 120%. However these single line stretches are being doubled. Besides the constraint of line capacity on single line stretches, there are terminal constraints at Pune Junction, with an insufficient number and capacity of platforms for handling longer passenger trains. Railways have initiated an action to remodel the station for the removal of these constraints so that the number of coaches on existing passenger trains can be increased for augmenting passenger carrying capacity per train.

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3.3.1

ENGINEERINGElectrical Engineering Technical Review The technical review of the project reports was carried out with the following objectives in mind: i. ii. iii. iv. Review of preliminary designs to ensure that these are in line with current instructions of Railway Ministry/RDSO. Address any changes due to developments since preparation of the report. Update the Quantity and Cost estimates based upon current prices. Prepare phasing the works with a view to expedite construction and maximise disbursement of ADB loan.

Methodology adopted Site visits: The team inspected the complete project site along with Railway officials and deliberated various issues with Railway officers at various levels including the General Manager, South Central Railway, Divisional Railway Managers, Divisional officers of concerned divisions. The following main points emerged out of these deliberations: i. ii. There is a very heavy passenger demand for running suburban trains in the Pune - Daund section. The volume of traffic on the entire route is increasing rapidly. Doubling along with Electrification on the Daund Gulbarga section is considered most appropriate by Railway officials. Khidki Traction substation being set up 7km from Pune will not be able to share much load on the Pune Daund section as the Pune Miraj section is also likely to be electrified in the near future.

iii.

Project Planning The electrification of the Pune Guntakal section has been reviewed with the following alternatives: i. ii. Electrification of the existing section with the Bhigwan Mohol and Hotgi Gulbarga sections being single line. Electrification of the Bhigwan Mohol and Hotgi Gulbarga sections along with track doubling between Daund and Gulbarga.

Review of Preliminary Designs and Specifications The review has concluded that there are no major changes in the design and specifications required except for rationalisation of locations of Traction Substations and TRD Maintenance Depots.

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Power Supply Arrangements - Spacing of Traction substations (TSS) This section falls in the States of Maharashtra, Andhra Pradesh and Karnataka, which are served by MSEB, APTRANSCO and KSEB respectively. The spacing of TSSs proposed in the project report varies from 42 to 75km. While in the Pune Daund section, it will be desirable to keep the TSS spacing comparatively low (40-50km) due to heavy suburban traffic, the spacing in the remainder of the route should be 60-65km. Some rationalisation of the spacing and location of TSSs is therefore required. The proposed locations along with the proposed power supply point are tabulated in Annexure 3.EE.5. In the Pune Daund section it is proposed to provide one Traction Sub-station at Urli and another at Daund, which will later share some of the Daund Manmad section load. It is recommended that 11 substations are provided as indicated in Annexure 3.EE.5. The spacing of these has also been adjusted and made more uniform within acceptable limits. These TSS will be fed from the nearest Grid Sub-station of MSEB, APTRANSCO and KSEB. The tentative length of transmission line has however increased from 63km estimated in the PWC report to 135km due to the rationalisation of locations of TSSs. The cost estimates for provision of transmission lines/bays and other infrastructure are based upon the recent quote received by RVNL from APTRANSCO for providing power in the adjoining section (Nandlur Guntakal). The average cost of 132kV Double Circuit transmission line has been taken as Rs. 43 lakhs per km and that of bays, metering, switching station, development and station supply etc. as Rs. 470 lakhs per substation. Alternative Proposal: Availing Power from National Thermal Power Corporation (NTPC) In this section, there is no Generating Station of NTPC. Only one grid Sub-station is available at Solapur. In the past attempts have been made by Indian Railways to obtain power from grid substations at NTPC rates plus wheeling charges. However, power supply authorities have always been unwilling to undertake such an arrangement due to loss in their revenue. Additionally, the length of transmission lines required to connect to the NTPC are to be provided by Indian Railways which makes this option prohibitively expensive. Raichur thermal power house is managed by Karnataka State. It does not appear possible to obtain power at concession rates for Indian Railways (IR). In view of this the possibility of availing power from NTPC appears remote and it has not been considered in the estimate. Alternative Proposal: Electrification on 2 x 25kV Systems The payment to be made to Power Supply Authorities is substantial, representing between 15 to 18% of the project cost. In order to reduce this cost, it is necessary to reduce the number of power supply in-take points. Indian Railways completed two pilot projects for electrification on the 2 x 25kV system in 199495 since when the system has been working satisfactorily. With this system the number of substations is reduced by almost half and it also has the advantage that voltage drop is much less and the average power factor very high. Consequently specific energy consumption is less.

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The current international practice is to use the 2 x 25kV system for heavy freight traffic routes. IR may also consider the use of this system where justified, particularly in electrified sections where another line is being laid and the number of substations required is to be increased. However in the Bina Katni section, the cost of 2 x 25kV system was 32% higher compared to a conventional 25kV system. This was mainly due to the design of the system which was to cater for running 9000 tonne trains. The equipment ratings used were very high. Also much of the equipment was imported. In case the system is designed for present day traffic, it is possible to reduce the equipment rating permitting use of standard components in use on the 25kV system. Some of the equipment such as automatic fault locators can be eliminated. With the simplified system the cost of the 2 x 25kV system can be brought down substantially. Considering the heavy cost to be paid to power supply authorities, the use of the 2 x 25kV system may be financially beneficial particularly in long sections with a large number of power supply in-take points. Spacing of Switching Stations (SWS) The proposed spacing of SWSs listed in the project report varies from 5km to 24km. However, IR Standards recommend that the maximum spacing should not exceed 1516km. This is in order to minimise the length of section to be isolated in the event of an occurrence of an OHE break down. The number of SWS has been rationalised and the proposed locations are shown at Annexure 3.EE.6. It is proposed to provide 11 SP and 30 SSPs. OHE Designs and Specifications The route to be electrified is 641km. However, the assessment of Track km to be wired as made in the PWC report is 1426 Km. This has since been updated by RVNL as 1626km considering the entire section as double line. We have adopted the above figures for the relevant estimates. The proposed preliminary design for OHE works is in line with standard practice. However, latest instructions of Railway Board with regard to implantation of masts and provision of Auxiliary transformers on independent masts have to be taken into account while developing detailed designs. The section is in the yellow zone of wind pressure, requiring the OHE to be designed with a corresponding wind pressure of 112.5kg per metre square for the purpose of estimation. Adoption of simple polygonal overhead equipment with a maximum span of 72m and a corresponding pre-sag of 100mm is proposed. Regulated polygonal OHE is proposed on main line and primary loops, and tramway type equipment on secondary lines and yards. The use of 9.5m long OHE structures and Booster Transformers (BT)/Return conductors (RC) requirement on the basis of 10-15% of the Route km as per guidelines issued by Railway Board in their letter No.92/RE/161/9 dated 25/3/94 is proposed. Supervisory Remote Control Arrangement A new Divisional Supervisory Remote Control Centre (RCC) is to be commissioned at Guntakal for controlling power supply of Renigunta - Nandalur - Guntakal (incl.) section

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falling in the Guntakal Division of the South Central Railway. This shall be augmented to cater for the requirement of the Wadi - Guntakal section. For control of Pune (excl.) Daund section falling in Pune Division, a new RCC at Pune will be required (presently Switching Stations between Karjat - Pune are manned and not controlled from the RCC). Additionally a new RCC will be required at Solapur for controlling power supply installations in Daund (excl.) - Wadi section of Solapur division. Provision has been made in the estimate accordingly. Auxiliary Transformers 25kV/230V single phase 5kVA/10kVA auxiliary transformers connected to the OHE are proposed for giving L.T. Power supply to colour light signals, repeater stations, switching stations and mid section L-C gates. Two auxiliary transformers are proposed at each station for colour light signalling in double line sections, whereas only one auxiliary transformer is proposed at each station for colour light signalling in single line sections. Maintenance Depots The proposed locations of Traction Distribution (TRD) Maintenance Depots have been reviewed, one depot is required in Pune Division to attend OHE up to Daund (75km), and four depots will be required in Solapur Division for attending OHE between Daund and Wadi (338km). An Additional three depots are required in Guntakal Division for attending OHE between Wadi and Guntakal (228km). The maintenance depots have to be located at larger towns spaced 80 to 100km from each other preferably where TSS or other maintenance infrastructure is also being located. The proposed locations of OFHE/PSI Depots are as under: Distance from Pune (km) 28 103 184 263 376 452 545 641 8 Wheeler / 4 Wheeler Tower wagon 8 wheeler 4 wheeler 8 wheeler 4 wheeler 8 wheeler 4 wheeler 8 wheeler 4 wheeler

Sl. No. 1 2 3 4 5 6 7 8

Division Pune Solapur -do-do-doGuntakal -do-do-

Location Urli Bhigwan Kurduwadi Solapur Gulbarga Yadgir Mantralaya Guntakal

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The tower wagon sheds are proposed to be designed for accommodating eight-wheeler tower cars to avoid the necessity for modifications at a later date. It will also provide flexibility for the Division to relocate 8 wheeler tower wagons when required. Locomotive Shed About 100 locomotives will be required for the section. The PWC Report made a provision for only 25% of the cost of a Locomotive shed. Since 100 locomotives will require a fully fledged maintenance shed, it is considered that full provision is required in the estimate. The location will, however, depend upon the global view to be taken by the Ministry of Railways. The cost (Rs 36.7 crores) has been added in the estimate based upon the estimated cost of Khanalampura (Northern Railway) electric locomotive shed for stabling 100 locomotives included in Works, Machinery and Rolling Stock Programme for 200809 of Ministry of Railways. This cost is however charged to plan head Workshops and Sheds and not accounted for while working out financial returns. Electrical General Services works The following procedure has been followed (updating quantities and cost): i. ii. iii. iv. v. vi. Updating details of existing electrical installations after site visits and discussions with concerned officials. Estimation of additional electrical augmentation/modifications needed. Updating unit estimates. Estimation of quantities and updating of cost. Details of Existing Electrical Installations. installations required or

Estimation of augmentation of electrical power requirements.

The details of existing electrical installations at various stations are summarised at Annexure 3.EE.9. Scope of Electrical works The Electrical works comprise the following; a. Electrification of new platforms. b. Extension of existing platforms. c. Electrification of new/modified service buildings. d. Electrification of new quarters. e. Augmentation of pumping arrangements. f. Enhancement of load. g. Provision of substation where required. h. Electrification/modification of manned Level Crossings. i. Modification of Power Line Crossings.

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Additional Electrical Installations A summary of additional installations proposed to be provided station wise is given in Annexure 3.EE.10. The proposed augmentation of Electrical Power Supply installations is also shown in the same Annexure. Design Standards a. Preliminary Engineering Designs i. The Designs adopted have to take into account all the guidelines and instructions issued by Ministry of Railways and Research Designs and Standards Organisation (RDSO). The design should comply with Indian Electricity Act 2003, I.E. Rules & relevant Codes of Practice. The designs have to be based upon RVNLs standard Technical Specifications for General Electrical Works. National Building Code, I.E. Rules and Indian Standards prescribed for various items. A list of relevant instructions on the subject along with copies of letters is placed in Annexure 3.EE.81.

ii.

iii.

b. Scale of Fittings The scale of fittings to be provided in residential quarters are based upon Railway Boards letter No. 99/ Elec (G)/136/1 dated 17.3.2005. In service buildings the scale of fittings has been fixed based upon work requirement. c. Level of Illumination The level of illumination will be in accordance with Rly. Boards Letter No. 2004/Elect (G)/109/1 of 14th May 2007. L.T. Modification The LT distribution line at the 56 electrified stations needs modification to provide necessary safety and induction protection from 25kV AC traction lines. The modification generally involves replacement of overhead lines by underground cables. The cost of these works has been included in the estimate. d. Modification of Power Line Crossings The available data is not adequate to identify the number of crossings requiring modification. The revised estimate is therefore based upon 30 crossings as provided in the estimates of PWC report. e. Electrification of Station Buildings, other Service Buildings and Residential Buildings The cost of electrification of station buildings, other service buildings and residential buildings has been included in the estimate.

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Estimation and Updating of Quantities and Cost Estimates for Traction Works i. RVNL has circulated unit estimates for traction works in their letter No. 2005 / Elec / Policy / 39 Dated 16th August 2007. It has been learnt from RVNL that the latest rates obtained for OHE works in Nandlur Guntakal section are 16% above Schedule of Rates (SOR). For TSS Works the latest accepted rates are from M/S Cobra for Venkatachalam Road Krishnapatnam section. These rates are 20% above SOR. The revised electrical cost based upon above rates is Rs. 717 crores for electric traction works to electrify the entire section as double line. This includes full provision of an Electric locomotive shed for stabling 100 locomotives. The revised estimates for traction works are placed in Annexure 3.EE.2 to 3.EE.4. The unit costs are given in Annexures 3.EE.11 to 3.EE.28. It may be noted that for the electrification of a single line section, the cost of power supply arrangements, SCADA, infrastructural facilities etc remain more or less same as for electrification of a double line section. In fact, from voltage drop considerations spacings between traction substations have had to be reduced resulting in an increase of one traction substation. Some modifications in OHE arrangements will become necessary if a second track is electrified later.

ii.

iii.

iv.

Electrical General Services i. For cost estimation, different Zonal Railways follow their own practice. Northern Railway has standardised unit rates which are updated from regularly. These are however used for preparation of abstract estimates. Detailed estimation of quantities and costing is done while preparing the Detailed Design and BoQ. For updating the cost, Northern Railway unit estimates duly updated based upon last accepted/current market rates have been adopted. The updated unit estimates are placed at Annexure 3.EE.29 to 3.EE.80. These rates are equally applicable in this section. The revised cost for General Electrical Works is Rs. 121742739 as per details given at Annexures 3.EE.7. The cost of Electrical works for various alternatives is summarised at Annexure 3.EE.1. The total cost is as under:

ii.

iii. iv.

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Sl. No. 1 2 3 4

Item Traction Works General Services Works Electric Locomotive Shed Total

Existing Section and Doubling of balance sections 680.33 26.25 36.70 743.28

Existing Section 626.62 12.17 36.70 675.49

Doubling of Existing Single line sections 68.19 14.84 83.03

Variation in Traction Estimate compared to RVNL revised estimates The variation in cost of major items as under: RVNL Variation revised Variation due to estimate Escalation 356.36 65.94 24.25 446.55 54 53.56 36.7 53.56 36.7 60.82 8.91 4.05 57 13.19 3.88 Variation due to Quantity Variation 3.82 -4.28

Item OHE + SWS TSS M&P/T&P Total 1+2+3 Payment to SEB Electric Loco Shed

Revised cost 417.18 74.55 28.13 519.86 107.55 36.7

Quantity Variation has been due to: i) ii) iii) iv) ATS considered for all stations against 56. No. of SSP increased by seven. Return conductor 111km against 100km. Length of Transmission line 135km against 60km. For Yadgir TSS, SC Railway advised the length of transmission line as 25km against 2km provided in the PWC Report. There is an increase in the length of transmission line due to the relocation of some substations which became necessary on voltage drop considerations. v) No. of TSS reduced by one.

Cost Variation other than increase in quantity has been due to: i) Payment to State Electricity Authority is about Rs. 4.50 crores per substation based upon recent quote obtained by RVNL in the same area as against Rs. 2 crores considered by RVNL in their estimate.

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ii)

Since requirement of Electric locomotives for this section will be about 100, it is considered that full provision should be made for an Electric Locomotive Shed in the estimate. Average escalation in cost of OHE items has been 16% and TSS items 20% based upon latest accepted rates of RVNL.

iii)

General Charges The provision of General charges made in the project report is not in line with current instructions of Railway Board (Boards letter No. 2000 / ER / 4002 dt. 26.6.00 and 12.10.2006. According to which D&G Charges applicable to Electrical projects not requiring Traffic/Power block are 10.18%). These have been suitably incorporated in the unit estimates. Labour charges @ 8%, Freight charges @ 2% on stores are provided in unit estimates in addition to contingency @ 1%. Variation in Cost of General Electrical works The reasons for variation in cost are as under: i. During the past few years, there have been significant increases in the prices of Copper and Steel. The rates of major items such as transformers, cables and conductors and other electrical appliances have almost doubled. The cost of the following items was not considered in earlier estimates: a) b) c) d) e) f) g) h) Augmentation of substation capacity. Cost of pole mounted transformers to avail 11kV supply due to increase in load. Cost of electrification/shifting of Level Crossings. Augmentation of stand-by power supply arrangements at important stations. Augmentation of pumping arrangements. Augmentation/modification of LT Distribution to cater for additional station/service/residential buildings. Augmentation of yard lighting and passenger amenities like water coolers etc. Cost of temporary lighting arrangements required to be made during noninterlocking period.

ii.

The details of unit estimates are not available in the PWC report for verification. Issues Affecting Accuracy of Quantities and Cost Although great care has been taken in estimating quantities as accurately as possible it is pointed out that the estimates are only approximate. The exact quantities can only be specified after the Final location survey and detailed design engineering are completed. We expect a level of accuracy of +/-10 to 15%. For the present review, preliminary designs and specifications have been reviewed based upon which quantities and cost have also been updated.

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RVNL has now invited tenders for Final Location Survey and Detailed Design Engineering as detailed below: i. Detailed Design Engineering, Preparation of specifications/BoQ, estimation of quantity and costs for Pune Gulbarga and Gulbarga Guntakal sections for which tenders have already been opened. FLS (Final location survey) for the Daund Gulbarga doubling project for which tenders have been already opened.

ii.

The exact estimation of quantities can be made only when above works are completed which may take up to one year. For the present review, preliminary designs and specifications have been reviewed based upon which quantities and costs have also been updated. The study team circulated a Proforma in advance of the site visit for obtaining necessary information for updating the estimates. The Railway authorities provided most of the details. However, certain details like clearance of power lines over rail and distance of EHT substations of State Electricity Distribution authorities could not be made available. In such cases; we have assumed similar quantities as given in PWC Report. 3.2 Signalling Currently this entire section is provided with Colour light signals operated either from End cabins or from Central panel/Route Relay Interlocking. Except for the doubling works which have been recently commissioned (four stations in Mohol Sholapur and two stations Krishna and Yadalapur) the signalling system requires modifications to suit railway electrification at all stations. Items which require modification for electrification are:Track Circuits for berthing tracks, as the permitted length for track circuit in RE area is 350m. Additional track circuits are provided for berthing tracks. All DC track circuits are required to be provided with Chokes. All relays, including track relays which are connected with outside circuits to be AC immunised. Point Relays to be AC immunised. Since details of point operation methods are not known for all stations it has been assumed that separate cables would be required for each cross over to make them AC immunised. Cut in Relays have been provided for each OFF aspect of signal. Located more than 240m from the place of operation. Signalling cables as necessary to meet with above requirements. Block filters have been provided for block instruments. Immunisation of operation of siding.

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Immunisation of operation of Level crossing gates. Earthing of all apparatus cases and signals. Estimates i. Standard estimates have been prepared for three-line stations and four-line stations on single line sections, and multiple line stations on double line sections. The estimates are attached as Annexures 3.ST2 to 3.ST7. The total estimate for signalling is at Annexure 3.STI. Each station estimate allows for one LC Gate and one siding. Cost of glued joints has been taken in these estimates although it forms part of Civil Engineering works. RRIs are already provided/under installation at Daund and Sholapur stations. The Modifications to suit RE have been prepared based on yard size after consulting the Railway division. IR are currently electrifying Wadi station in connection with the Secundrabad Wadi electrification. This item has been excluded form this estimate. The doubling works being done by RVNL from Mohol to Sholapur and between Krishna and Yadalapur are not included in the estimate as these works have been executed to suit RE.

ii. iii. iv. v.

vi. vii.

Risk Factors The costs have been taken based on the RVNLs tender prices of 2007. A price escalation of 15% has been added to update costs to first quarter 2008 rates. One LC gate and one siding has been catered for in the estimate for each station. There may be variation for individual stations where there may be no LC gate or more than one LC gate and there may be no siding or more than one siding. These costs will have to be suitably adjusted based on the unit rates available. The modification estimates are prepared based on metal to Carbon relays. However there may be some stations provided with metal to metal relays which will require modification. The costs may undergo minor changes as a result. Telecommunications The entire section from Pune to Guntakal is provided with Optical Fibre Cable and 4 Quad telecommunication cables. Add Drop MUX is also provided at all stations to derive 30 voice channels. As per the railways requirement one station has been catered for Channel dropping station being new. Communication has been catered for new circuits required for RE. They are :Traction Power Control (TPC) four; one for Pune and Guntakal divisions and two for Sholapur division.

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Traction Loco Control (TLC) - three; one for each division. One Telephone exchange of 1000 Lines expandable to 2000 lines has been catered for Solapur division. It is assumed that there is no requirement for any additional exchange at other locations. A new technology of Wi-Fi is included as a part of the telephone exchange. From the base station of the telephone exchange the exchange number can be extended to the subscriber on wireless. It will provide connectivity to the subscriber from the exchange within the range of covering of Wi-Fi, which is within 5-6 Kms from the base station. Two base stations have been provided and 50 Wi-Fi telephones are proposed. For new Traction Sub Stations (TSS) and Sub Station Posts (SSP) 52 Nos.; provision has been made for TPC control at all locations. Way station control equipment to cater for TPC & TLC has been provided for 160 locations (TPC-77, TSS/SSP-52, TLC-29, Spares - two). From the way station equipment, the circuits can be extended to subscribers with ordinary two wire telephone which has been provided for 250 locations (159 at field locations; 15, 30 and 20 respectively in Pune, Sholapur and Guntakal divisional offices; 27 spares). For extension of these services from existing 4 quad cables, provision has been made for 6 Quad cables, which has been standardised now in lieu of 4 quad cables. Emergency control already exists. 60 new connections (52 at TSS/SSP and 8 spares) have been catered for in the estimate. Modifications for Public Address and Platform Indication Boards by providing shielded wire have been catered for 40km (Daund, Sholapur, Kurduwadi, Gulburga and Loni stations). No modifications are required between Wadi Guntakal stations as it is already fit for RE. There is no Talk Back arrangement existing at any of the stations in this section. Estimates Based on the above requirement, the estimate has been prepared and is attached at Annexure 3.ST.8.

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4.4.1

FINANCIALIntroduction Two alternative schemes have been analysed as follows: Base Scheme Financial Internal Rate of return (FIRR) for ELECTRIFICATION of the existing Pune Wadi Guntakal project Section. Combined Scheme Financial Internal Rate of return (FIRR) for ELECTRIFICATION of the existing Pune Wadi Guntakal project Section in combination with the DOUBLING of the Daund Gulbarga section. The projects have been evaluated to establish their viability in terms of their anticipated Financial Internal Rate of Return [FIRR] using the Discounted Cash Flow (DCF) technique. In order to adjudge the financial soundness as well as the down side risk of the project investment, a sensitivity analysis has been carried out by recalculating the FIRR with changes in the values of the critical parameters.

4.2

Operating Costs

Pune Guntakal Electrification

The direct costs and earnings attributable to the Project Section have been based on computation of the incremental traffic. The assumption made is that the traffic of the base year (2007-08) is already moving on the Project Section for which it is incurring costs and deriving corresponding benefits in terms of freight and passenger earnings. After the implementation of the proposed electrification, the base year traffic and any of the incremental traffic (barring some short lead traffic) will move on to the route taking advantage of any additional operational capacity. The working expenses have been arrived at by adopting the Passenger and Freight Services Unit Costs 2005-06 as applicable to all Indian Railways for electric/non-electric traction, duly escalated to the year 2008-09. Similarly, the freight and passenger revenues have been calculated in accordance with IR notified tariff rates applicable from 01.04.2008. Due to the higher average operating speed resulting from electric traction there will be a consequent savings in the rolling stock requirement and in the cost of Repair and Maintenance (R&M) resulting from this stock reduction. These benefits have been included in the cash flow analysis. All Cost and Revenue figures are based on 2008-09 price levels. The project appraisal period has been taken as 30 years, excluding a construction period of two years. The cost-benefit analysis for the electrification project is based on the savings as benefit, i.e. the benefit due to difference in uncommon cost, fuel/electricity, cost of R&M of locomotives/OHE and locomotive and Locomotive Shed cost compared to the same traffic moved by diesel traction. Traffic earnings are assumed to be the same in either case.

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Some assumptions have been made in the course of the analysis, which are listed below: a. Earnings and working expenses have been increased every fifth year. Thereafter these components have kept constant for the rest of the life of the project; b. The traffic growth has been made on CAGR basis; c. The passenger traffic growth rate has been assumed at 1.30% per annum on the project section; d. Passenger numbers per train have been taken as 970, which assumes an occupancy rate of 80%; e. All the physical parameters are adopted from the published documents of the Ministry of Railways, 2006 07; f. 4.3 Capital cost phasing for electrification of the existing route (Base Scheme) is 1st Year 40 %, 2nd Year 60 %.

Traffic Forecasts The traffic projected for movement on the proposed PUNE WADI - GUNTAKAL section constitutes mostly of transit traffic whose origins and destinations fall outside the Project Section. The traffic is however envisaged to be exclusively rail-borne from origin to destination. Beyond the project section it would move on the existing network of the Indian Railways. For the purpose of the appraisal, a basic assumption has been made to the effect that the base year traffic will move over the Project Section in the existing rolling stock. However, a one-time credit has been taken for the additional benefit of reduced turn around time of the stock due to the elimination of the requirement to change traction units at either end of the section and higher average operating speeds. Accordingly, in arriving at the financial viability of the Project Section, this benefit has been accounted for in addition to the direct earnings that accrue due to movement of any incremental traffic. Commodity wise as well as year wise assumed growth rates (CAGR) are furnished in the table below. Commodity wise Year wise Growth Rate of Traffic Year wise Growth rate of Traffic (%) Commodity Coal Fertilisers Cement Iron & Steel Containers Food Grains Iron Ore Sugar Others 1 To 5th Year 8 4 10 8 10 4 8 4 4st

6th To 10th Year 6 3 8 6 10 3 6 3 4Page 31

11th To1 5th Year 4 2 6 4 8 2 4 2 4

16th Year Onwards Constant Constant Constant Constant Constant Constant Constant Constant ConstantOctober 2008

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4.4

Cost of Construction The costs to be incurred on the project mainly comprise the cost of construction, electrification, associated Civil, and S&T components, rolling stock costs and the O&M costs. The different cost components are detailed below. The overall cost of electrification of the Pune Wadi Guntakal has been estimated at Rs.7483.29m. A summary is shown below. Cost of Construction (Electrification)

ITEMS Civil Electrical Signalling & Telecommunication Mechanical Electric Locomotive Shed TOTAL

COST (Rs. In Million) 375.54 6387.95 352.80 000.00 367.00 7483.29

The actual construction period for electrification has been estimated at two years starting from 2009-10. The phasing of investment expenditure over the construction period is given in the table below; Investment Phasing During Construction Period Base Scheme Year 2009-10 2010-11 Total Civil 187.77 187.77 375.54 Electrical 2555.18 3832.77 6387.95 S&T 176.40 176.40 352.80 (Rs. Million) Locomotive Shed 146.80 220.20 367.00

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Rolling Stock Requirement & Costs The norms adopted for estimating the wagon and locomotive requirements are shown below:Wagons CharacteristicsTrainload No. of Gross (tonne) Payload Tare Type Wagons per Weight (ton) (ton) Train (ton) Powerhouse Coal BOXN 59 68 25 93 5487 Iron Ore 59 68 25 93 5487 BOXN POL 49 57 27 84 4116 BTN Steel 40 68 23 91 3640 BRN Fertiliser 41 64 27 91 3731 BCN Food Grains 41 64 27 91 3731 BCN Cement 41 64 27 91 3731 BCN Sugar 41 64 27 91 3731 BCN Container 45 25 19 44 1980 BLC Others 41 64 27 91 3731 BCN

Locomotives Characteristics Type WAG 7 WAG 7 WAG 7 WAG 7 WAG 7 WAG 7 WAG 7 WAG 7 WAG 7 WAG 7 No. per train 2 2 2 2 2 2 2 2 2 2

Commodity

In addition to the above indicated costs to be incurred on procurement of wagons and locomotives, an amount of Rs. 367.00 Million has also been provided for provision of an electric loco shed in the year 2009-10. Residual and Replacement Costs In the terminal year of the project, residual values of different assets have been considered by applying the straight-line depreciation method. In the case of assets having an economic life of less than the appraisal period a replacement cost has been included and accounted for in the cash flow analysis. At the end of the analysis period a salvage value of 10% in respect of construction costs and 30% in case of rolling stock cost has been assumed. The anticipated life of the different assets are shown below: Economic Life of Assets Assets Civil Works other than Rail Fastenings Rail Fastenings S & T Works Electrification Wagons Locomotives Life (Years) 40 25 30 30 35 35

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4.5

Working Expenses Costs likely to be incurred on operation and maintenance for the Pune Wadi Guntakal Section both for Goods and Passenger traffic have been calculated on the basis of freight services Unit Costs incurred on Central and South Central Railways (Weighted Average of BG) as detailed in the Summary of the End Results: Freight & Coaching Services Unit Costs 2005-06, published by the Ministry of Railways (Railway Board). The same are shown in the tables below: Unit Cost Norms (Goods) (2005-06) Sl. N 1 2 3 4 5 6 7 8 9 10 11 12 ITEMS Cost of documentation per Wagon (1invoice = 10 wagons) Cost of other terminal services per wagon Cost of marshalling per wagon per yard handled Provision and Maintenance of wagons per wagon day Cost of Traction per 1000 GTKMs (Diesel) Cost of Traction per 1000 GTKMs (Electric) Cost of Track per 1000 GTKMs Cost of Signalling per 1000 GTKMs Cost of Other Transportation Services per 1000 GTKMs General Overheads Central Charges Escalation Factor (for 2008-09 over 2005-06) (Rs) 64.91 171.25 36.91 113.41 154.07 86.73 25.71 5.11 20.33 24.46% 0.59% 13.85%

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Unit Cost Norms (Passenger) (2005-06) Sl. N 1 2 3 4 5 6 7 8 10 11 ITEMS Cost of Terminal Services Per Passenger Carried Cost of Traction per 1000 GTKMs (Diesel) Cost of Traction per 1000 GTKMs (Electric) Provision and Maintenance of Carrying Units per Vehicle day Cost of Track per 1000 GTKMs Cost of Signalling per Eng. KMs Cost of Other Transportation Services per VKMs General Overheads Central Charges Escalation Factor (for 2008-09 over 2005-06) (Rs) 8.81 185.46 127.33 1407.49 32.54 5.15 1.37 24.16% 0.62% 16.78%

The terminal costs have been calculated separately for both the Alternatives. Similarly, the GTKMs and wagon days used for calculating the line haul and wagon maintenance costs have been calculated, separately for the Project Section as per Annexures 4.FA.1. and 4.FA.2.

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Savings in the Consumption of Fuel (Diesel vs. Electricity) The price of fuel oil consumed by diesel locomotives has increased substantially in the past few years adding to the cost of operating diesel traction. At the same time improvements in technology and commencement of new power stations have resulted in a reduction in the per unit electricity costs. The basis for estimating the savings in the consumption of fuel is shown in the table below: Cost Norms of Consumption of Fuel (Diesel vs. Electricity) No. A. I. Item Cost Norms Price of a) HSD Oil b) Electricity Tariff B. I. Consumption Norms Fuel/Energy Consumption (includes 2% for Signalling for CLS Rptr etc.) a) Goods - Central Railway South Central Railway b) Passenger - Central Railway South Central Railway c) Wt. Average Freight Passenger 8.85 Kwh 19.70 Kwh 3.05 litres 4.64 litres Per thousand GTKm. Per thousand GTKm. 9.36 Kwh 7.93 Kwh 18.80 Kwh 18.90 Kwh 3.05 litres 3.04 litres 4.50 litres 4.66 litres ASS 2006-07 ASS 2006-07 K lit. kWh -4.31 34650.00 -Annexure 1.8 Unit Rate in Rs. Electric Diesel Remarks

The net savings in the consumption of fuel are calculated as Rs.1285.285 Million in FY 2011-12 the first year of commercial operations. Saving in the Consumption of Lubricants: The savings in the consumption of lubricants are calculated on the following basis:

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Norms for Consumption of Lubricants No. A. Item Cost norms Lubricant Per litre Unit Rate in Rs. Diesel Rs. 85.15Electric

Remarks RS (POL) DEC P.O. No. RS (POL)/58/0504/2004/00300 dt. 06.11.07

Rs. 85.15

B.

Consumption Norms a) Goods b) Passenger Litres/000 GTKm. Litres/000 GTKm. 0.0221 0.0356 0.0022 0.0045 Adopted as per standard norms specified by Railway Board and used in all reports of Railway Board (2007-08).

The net savings in the consumption of lubricants is estimated to be Rs.34.398 Million in Financial Year 2011-12, the first year of commercial operations. Savings in the R&M Cost of Locomotives (Passenger and Goods) The savings in the R&M cost of running electric locomotives over diesel locomotives are shown below: Norms for R&M Cost of Locomotives (Passenger and Goods) No. A. Item Cost Norms Repair and Maintenance of Locomotives Diesel Electric ASS 2006-07 Electric : C 511-518; C 521-528; C 530550 Rs.16.62 Rs. 8.86 Diesel : C 311-314; C 321-324; C 330-350; C 360 Average escalation % per annum Elec (9.09% & Diesel 7.73 %) Unit Rate in Rs. Remarks

All Indian Railways

Per 1000 GTKM

R&M Loco Escalated to 2008-09 on the basis of Last FOUR Years Average Increase/Decrease

Per 1000 GTKM

Rs.19.28

Rs.10.54

In Financial Year 2011-12, the reduction in R&M costs results in net savings of Rs. 149.818 Million.

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Savings in the Cost of Locomotives The requirement of Diesel and Electrical locomotives for goods and passenger traffic would be 115.46 nos. in 2011-12. The Unit Cost figures used for estimating the savings in the cost of locomotives are as follows below; Cost of Locomotives S.No. Item A. Cost Norms 1. Cost of Locomotive 2.Cost of Power Pack/Re-cabling The Power Packs for diesel engines are assumed to require replacement in the 18th year of operation. In Financial Year 2011-12, the cost incurred for Diesel locos would be Rs. 8601.77 Million as compared to Rs. 7181.322 Million for Loco and Re-cabling cost of Electric locos, thus resulting in savings of Rs. 1420.45 Million. 4.6 Project Benefits Pune has been a traction changing point for several decades. An analysis made by Pune division covering the period August 2003 to July 2004 indicates that the average detention to freight locomotives at Pune is approximately six hours each for Electric and Diesel locomotives. Some growth in freight traffic has been assumed but electrification in itself will offer little enhancement to operational capacity. The benefits accruing to the project after electrification primarily result from a reduction in the operation costs. i. ii. iii. iv. v. vi. Savings in the consumption of fuel (Diesel vs. Electricity); Savings in the consumption of lubricants; Savings in the cost of locomotives; Savings in the R&M cost of locomotives (passenger and goods); Savings in the residual cost of locomotives; Savings on account of elimination of change in traction and savings in detention to Rolling Stock. Each Each Unit Rate Rs. Million. (unless otherwise indicated) Diesel 49.50 25.00 Electric 53.70 00.85 Pink Book 2008-09 Cost Remarks

The aggregate of the project benefits outlined above are treated as a benefit source for the project. The maintenance cost of OHE is a cost element for the project and is calculated by multiplying the estimated OHE maintenance cost per km with the overall track kilometres (643km) of the project.

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4.7

Financial Rate of Return The Project Costs, Earnings and Expenses have been placed in the form of a cash-flow statement and FIRR has been calculated as 20.27%. This relatively high figure is due to the benefits which accrue from reduced operating costs. Only a nominal increase in route capacity can be expected. The cash flow statements have been placed at Annexure 4.FA.3.

4.8

Sensitivity Analysis A sensitivity analysis has been carried out to ascertain the down side risk as well measuring the impact of certain crucial factors influencing the project FIRR. The values of FIRR as a result of changes in these parameters are summarised in the table below: Sensitivity of Financial Rate of Return (In %age) Sl.No. 1 2 3 4 5 6 7 8 9 Base case Increase in Capital Cost by 10% Decrease in Benefit by 10% Combination of (2) & (3) Increase in Capital cost by 15% Decrease in Benefit by 15% Combined effect of (5) & (6) Increase in Capital cost by 10% and Benefit decreased by 15% Increase in Capital cost by 15% and Decrease in Benefit by 10% Sensitivity Case FIRR Alternative I 20.27 18.76 18.60 17.20 18.08 17.75 15.81 16.41 16.58

As can be seen even in the worst case scenario, when both the costs increase and the benefits decrease by 15%, the Electrification of Pune Wadi - Guntakal proposal retains its financial viability at 15.81%. 4.9 Combined Scheme The alternative option of combining the Daund to Gulbarga track doubling project with the Pune to Guntakal electrification project is intended to capture the operational benefits of electrification and with the capacity improvements to be gained from track doubling. The construction costs for track doubling will be as estimated for the Daund to Gulbarga scheme. Electrification costs will increase reflecting the additional track kilometres to be covered. As previously stated the rolling stock cost, operating expenses and the earnings have been apportioned to the Project Section on the basis of transit turn round time and lead. 4.10 Operating Costs The direct costs and earnings have been based on computation of the incremental traffic. The assumptions about the existing traffic are as for electrification. However track doubling will offer significant enhancement to operational capacity and after the

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implementation base year traffic and most of the incremental traffic (barring some short lead traffic) will move on the route taking advantage of the augmented line capacity. Working expenses are calculated in the same way as for electrification. The proposed scheme is expected to result in a higher average operating speed which will offer additional savings in rolling stock to the electrification project on its own. The project cost and revenue figures have been accounted in the same way as for the base scheme. Assumptions made in the analysis remain the same, however a five year construction period has been estimated for the combined works with operations commencing in the fifth year. Capital investment phasing is apportioned as follows; Civil Works: 1st Year 10%, 2nd Year 35%, 3rd Year 35% and 4th Year 20%. General Electrical and S &T Works: 1st Year 33%, 2nd Year 33%, 3rd Year 34%. Electrification: 1st year - 0%, 2nd Year - 0%, 3rd Year - 40%, 4th Year - 50%, 5th Year 10%. 4.11 Traffic Forecasts Traffic projections remain as previously assumed for electrification and for the Daund Gulbarga projects. It has been assumed that while the base year traffic will continue to move in the existing wagons, the project will accrue additional benefits from reduced turn around time due to higher average operating speed with consequent savings in rolling stock. The project viability has been calculated for incremental traffic taking 2007-08 as the base year. Commodity wise as well as year wise assumed growth rates (CAGR) are tabulated below:

Commodity wise Projected Traffic (Combined Scheme)Total Projected Traffic Direction/Commodity 2007-08 2013-14 2018-19 2023-24 UP DIRECTION Coal Fertilisers Cement Iron & Steel Containers Clinker Food Grains 1.15 0.20 4.77 0.49 0.08 0.02 0.28 1.83 0.25 8.45 0.78 0.14 0.03 0.35 2.64 0.30 13.36 1.12 0.23 0.06 0.42 3.46 0.35 19.37 1.48 0.36 0.09 0.48 0.68 0.05 3.68 0.29 0.06 0.01 0.07 0.81 0.05 4.95 0.34 0.09 0.03 0.07 0.82 0.05 6.01 0.36 0.13 0.03 0.06 2013-14 2018-19 2023-24 Incremental Traffic

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Iron Ore POL Sugar Others/Miscellaneous.

0.79 0.74 0.61 0.24 9.37

1.08 0.84 0.77 .030 14.82

1.53 0.91 0.92 0.37 21.86

1.99 1.02 1.06 0.45 30.01

0.29 0.10 0.16 0.06 5.45

0.45 0.07 0.15 0.07 7.04

0.46 0.11 0.14 0.08 8.15

Sub-Total DOWN DIRECTION Fertilisers Coal Food Grain Cement POL Sugar Containers Auto Clinker Others/Miscellaneous. Sub-Total Grand Total

0.98 6.12 0.85 4.51 0.36 0.54 0.004 0.04 0.15 0.88 14.43 23.80

1.23 9.71 1.07 7.99 0.40 0.68 0.007 0.06 0.26 1.11 22.51 37.33

1.49 14.00 1.29 12.63 0.45 0.82 0.012 0.07 0.40 1.36 32.52 54.38

1.70 18.39 1.48 18.21 0.50 0.94 0.02 0.08 0.58 1.65 43.55 73.56

0.25 2.53 0.22 3.48 0.04 0.14 0.003 0.02 0.11 0.23 8.08 13.53

0.26 4.29 0.22 4.64 0.05 0.14 0.005 0.01 0.14 0.25 10.01 17.05

0.21 4.39 0.19 5.58 0.05 0.12 0.008 0.01 0.18 0.29 11.03 19.18

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4.12

Cost of Construction The Capital cost of the combined scheme for electrification with track doubling, would be Rs. 15553.80 Million. A summary is shown below Cost of Construction (Combined Scheme) ITEMS Civil Electrical Signalling & Telecommunication Mechanical Electric Loco Shed TOTAL COST (Rs. In Million) 6997.20 7065.80 1123.80 000.00 367.00 15553.80

However, the combined project is estimated to take five years to complete and is therefore expected to be fully operational from 2014-15. The phasing of investment expenditure over the construction period is estimated as follows: Investment Phasing During Construction Period Combined ProjectYear 2009-10 2010-11 2011-12 2012-13 2013-14 Total Civil Electrical S&T

(Rs. Million)Loco Shed

699.72 2449.02 2449.02 1399.44 -6997.20

--2826.32 3532.90 706.58 7065.80

-370.86 370.85 382.09 -1123.80

--146.80 220.20 -367.00

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4.13

Rolling Stock Requirement & Costs The norms adopted for estimating the wagon and locomotive requirements are as previously listed. Rolling stock costs are estimated as follows: Rolling Stock Costs (For Combined Project) Cost per Unit (Rs. Million) Total cost (Rs. Million) 2012-13 2017-18 Incremental 2022-23 Incremental

ITEM

Wagons BRN BOXN BLC NMG BTPN BCN 2.75 2.97 2.508 2.06 2.45 2.805 Total Locomotives WAG 7 Re-Cabling cost Total Total Rolling Stock Cost Cost Requirement over project period 53.70 6200.202 1579.85 35.21 1615.06 7274.41 For 2018-19 2351.52 249.7275 4029.1911 118.2526 41.9622 412.3105 7648.674 12500.1179 112.06 1708.58 75.57 9.00 41.94 3712.19 5659.35 115.25 1116.96 111.68 10.48 48.90 4405.08 5808.36

0.85

98.141 6298.343 18798.46 For 2013-14

37.22 2388.74 8197.11 For 2023-24

Residual and Replacement Costs Replacement costs have been accounted for in the same way as for the electrification and track doubling projects.

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4.14

Working Expenses Again the costs likely to be incurred on operation and maintenance have been calculated using the Central Railway unit costs 2005-06. Based on the costing norms listed previously (Para 4.5) and the GTKMs, the working expenses for moving the projected traffic over the Project line is shown in table 1.8: Working Expenses (Combined Scheme) (Rs. Million)INDICES Unit Cost (2005-06) In Rs. PROJECT LINE2013-14 2018-19 2023-24

GTKM (in Million) Wagon days Cost of documentation (per invoice of 10 wagons) Cost of other terminal services per tonne Cost of marshalling per wagon per yard handled Provision and Maintenance of wagons Traction Electric Track Signalling Other Transportation Service Total Operating Cost Add General Overheads Add Central Charges Add Cost Escalation For 2008-09 Grand Total of Working Expenses (in Million) 24.46% 0.59% 13.85% 64.91

11912.4103 180688.25 0.06101554

17384.6297 2339693.80 0.08856312

22398.31269 3087582.45 0.11703686

171.25

1.60975369

2.33653282

3.08774635

36.91

0.39879862

0.57885008

0.7649549

113.41 86.73 25.71 5.11 20.33

447.2535667

650.0944509

857.8986778

1033.1633453 1507.7689339 2029.33565963 153.13403441 223.47941479 300.78530963 30.43620832 44.41772888 59.78268892

205.85240619 300.41509353 404.33454244 1871.9091289 2729.1795681 3656.10661655 2333.5219200 3402.1952496 4557.70250819 2347.2896994 3422.2682015 4584.59295299 2672.3893227 3896.2523474 5219.55907697 2672.39 3896.25 5219.56

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4.15

Project Benefits - Combined Scheme The financial benefit that accrues to this scheme will be through a combination of freight earnings from hauling the incremental traffic and operational savings from electrification. An average detention time for goods trains of four hours has been adopted both for Up and Down trains in case of the combined Doubling and Electrification scheme in respect of wagons and locomotives. In 2013-14, the savings is Rs.2917.29 Million, thereafter recurring savings of Rs.106.42 Million towards Repair & Maintenance cost of wagons, for rest of the project life. The freight earnings have been arrived at by adopting the Freight rate per tonne applicable on Indian Railways from April 2008 as per rates published in Goods Tariff No. 44 (Part II). In respect of container traffic, the distance slab wise TEU rates on wagons owned by the respective parties have been applied. The earnings are calculated by taking the total lead from origin to destination has been apportioned in respect of the Project Section. A summary of Freight earnings is shown in the table below: Gross Freight Earnings (Rs Million)Commodity2013-14

Combined Project2018-19 2023-24

Coal Iron Ore Iron & Steel Containers ClinkerCement Fertilisers

63.70 484.00 393.00 29.50 12.50 2108.3 41.80 52.90 72.70 221.30 20.10 3499.80 1372.50 288.60 149.9 1598.90 158.40Page 45

91.80 694.20 566.70 47.50 20.00 3333.70 50.30 63.70 87.60 244.80 24.40 5224.7 1979.30 347.80 180.60 2528.20 175.00

120.60 909.2 744.10 75.10 28.70 4807.50 57.80 73.20 100.60 270.90 29.70 7217.40 2598.80 399.20 207.40 3646.00 193.10October 2008

Food Grains Sugar POL Others/ Miscellaneous Sub - Total Coal Fertiliser Food Grains Cement POL

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Sugar Auto Clinker Containers Others/ Miscellaneous. Sub - Total Grand Total (UP & Down)

42.60 20.00 50.80 0.90 105.80 3788.40 7288.23

51.30 24.30 80.40 1.50 128.70 5497.10 10721.85

58.90 29.50 115.90 2.40 156.70 7407.90 14625.31

4.16

Financial Rate of Return The combined scheme for Doubling of Daund Gulbarga Section as well as Electrification of Pune-Wadi-Guntakal offers a FIRR of 12.30%. A sensitivity analysis has been carried out on the combined scheme to ascertain the down side risk as well measuring the impact of certain crucial factors influencing the project FIRR. The values of FIRR as a result of changes in these parameters are summarised in the table below: Sensitivity of Financial Rate of Return Sl.No. 1 2 3 4 5 6 7 8 9 Increase in Capital cost by 15 % and Decrease in Benefit by 10 % The combined scheme offers a FIRR $10 million >$1 million $1m to $10 million $0.5m to $1 million

Procurement Thresholds, Consultants ServicesProcurement Method Quality Cost Based Selection (QCBS) with FTP Quality Cost Based Selection (QCBS) with STP Quality Cost Based Selection (QCBS) with BTP Exceptional Methods Independent Resettlement Monitor (fully funded by government) To be used for Contract value > $1 million $600,000 to $1 million

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