Indian Railways Thread (Dec 2015)

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Re: Indian Railways Thread (Dec 2015)

Postby Suraj » 17 Dec 2015 22:43

What's wrong with that ? It's in the forum's interest that the thread discuss technical details on topic, rather than leech politics into every thread. But the moderators themselves are not the arbiter of what is a correct calculation and what is wrong calculation. So I can't tell you that disha is wrong and you are right, or vice versa. It's for either of you to disprove one another. We're all better off when you guys dig into details and elaborate on your calculation framework to further prove your points.

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Re: Indian Railways Thread (Dec 2015)

Postby Picklu » 17 Dec 2015 22:47

Not asking you as a moderator boss; asking you as the resident economic guru. To check the back of the envelop calculation and point out any obvious mistake.

So asking again,

Picklu wrote:Assuming a paying customer capacity of 1250 (still higher side as not all the seates will be full, not everyone will go end to end paying the full amount) would need more than 60 trains each way per day for 365 days a year.

And that is assuming there is no cost escalation.


and of course disha, hanumadu and/or anybody else can jump in as well.

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Re: Indian Railways Thread (Dec 2015)

Postby hanumadu » 18 Dec 2015 00:06

Picklu wrote: Rs 2625 will reach Rs 7150 at the end of 65 years


A 2000 Rs ticket at 2% inflation will be ~7250 at the end of 65 years.

At 3% inflation it will be 13659. At 4% it will be 25597.

I don't know what inflation rate you assumed to arrive at your figure.

As disha pointed, ridership probably will not be a problem. The profiles of the cities are similar. Ahmd has a larger population than Osaka. Mum can be compared to Tokyo. Add to it two intermediate large cities, Surat and Vadodara.

Also, don't forget station revenues. By the end of the loan term, real estate lease revenues alone will take care of a large chunk of the debt.

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Re: Indian Railways Thread (Dec 2015)

Postby Suraj » 18 Dec 2015 00:12

Picklu wrote:Not asking you as a moderator boss; asking you as the resident economic guru. To check the back of the envelop calculation and point out any obvious mistake.

It's not that your calculations are wrong. Within the specific constraints and assumptions you set, you and disha are both capable of computing right, but that just means you have more items to trade off into your respective calculations. You have to keep adding to your computation to account for additional factors you consider, either from what someone else is doing, or from information you glean online of the operation of other HSRs.

Ideally the 'most correct' answer is that of the person who took most pains to account for the largest number of factors into the calculation.

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Re: Indian Railways Thread (Dec 2015)

Postby Picklu » 18 Dec 2015 01:25

Thanks guys.

I could not find one information about this loan anywhere, is this rupee denominated or dollar? Any info available so far?

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Re: Indian Railways Thread (Dec 2015)

Postby Gyan » 18 Dec 2015 02:50

SSridhar wrote:Japan hands out sweet deal for bullet train; beats expectations on soft loan terms - Mamuni Das, The Hindu

Longest loan tenor, longest moratorium on repayment and lowest interest rate — these three terms define the finance extended by Japan to India for the Mumbai-Ahmedabad high speed rail in project, in context of Japan’s earlier loans to India in the rail-based sector.

The Japanese loan component of $12 billion has been worked out on one of the most attractive repayment terms at almost zero per cent – 0.1 per cent to be precise -- after pretty strong negotiations for the financing, with a 15-year moratorium on a 50-year repayment period.

The Delhi Metro and Chennai Metro projects had 30-year repayment tenor with interest rate of 1.2 and 1.4 per cent respectively, with 10-year moratorium period on repayment. Funds for freight corridor have been extended with 0.2 per cent interest rate and 40 years, with a year moratorium.

“The deal requires supply of eight-ten Japanese technology items such as rolling stock (train set), signalling and telecommunication systems. But this works out to be about 20-22 per cent, much lower than the extent of tied-component of 30 per cent in case of dedicated freight corridor,” explained a top railway official in the know.

According to an official statement, Japan has offered an assistance of over Rs79,000 crore. The loan is for a period of 50 years with 15 years moratorium with an interest rate of 0.1 per cent. The project is a 508 km line costing a total of Rs. 97,636 crore. Then the project is to be implemented in a period of seven years. It has been agreed that for the Mumbai – Ahmedabad HSR Project, Shinkansen Technology (Japanese high speed technology will be adopted. The cooperation of Japan on this project will also be fixed on transfer of technology and “Make in India”. Japan will assist India in training of personnel for high speed rail (HSR).

“The funding terms are very attractive. The long tenor will ensure that by the time the repayment starts, there is enough ridership between Ahmedabad and Mumbai,” Ajay Shankar, former DIPP secretary, who also heads a committee on public private partnership set up by the Indian Railways.

PROJECT STRUCTURING

The project structuring and administrative details will have to be worked out in the future. This was one of the fastest deals to be signed after JICA submitted the feasibility report in July.

“The project’s advantages can be captured better in a separate special purpose vehicle,” said Shankar. The project structure has to be made such that the benefits of increase in real estate costs can be ploughed back into the project, said another official source.

Along with the financing deal, there also other agreements related to the transfer of knowhow. For instance, Ministry of Railways and Japan’s Ministry of Land, Infrastructure and Transport on Technological Cooperation in Rail Sector have signed agreement that establishes areas for technological cooperation including sharing of information and best practices; exchanges of officials and technicians; facilitating the participation of other institutions, organisations and ministries and conducting joint research and studies.

Another agreement is related to the memorandum of understanding on technological cooperation between Research Designs and Standards Organization (RDSO) and Japan Railway Technical Research Institute (JRTRI). The memorandum proposes to cooperate in the areas of safety in train operation; advanced techniques of maintenance; use of environment friendly technologies, said an official statement.



There does not seem to be any reference to transfer of technology for Rolling stock ie trainset, engines, or rail lines or signaling equipment etc??

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Re: Indian Railways Thread (Dec 2015)

Postby disha » 18 Dec 2015 03:07

Picklu san., why put me in pickle? I can only do thumb-rule calculations and have tendencies to add zeroes or eat up zeroes., but yes the reason I did was to point out that the cost on paper looks big but in reality it is *peanuts* for the infrastructure you are getting.

And it was to score the point that this infrastructure was needed day-before-yesterday and not day-after-tomorrow. I have been on that sector and have banged my head several times. If at all somebody asks me that was a dropped as a baby to behave the way I sometimes do - my answer is no. I am what I am because of my commute on that sector. :(( *IT IS DEFINITELY NOT FOR THE FAINT OF THE HEART* - the overcrowding is daily and the roads are not safe (seen several blood curdling accidents).

Anyway, coming to the numbers., let us go with your numbers (I will pull your numbers below):

1. If we run at peak capacity 24 hours a day and load 1500 passengers in each train, we get ~ 950k passengers per day

Total number of passengers per day - 950000 (1500 * 13 trains per hour * 24 hours * 2)

Let me cut it down - since the passengers will not pay for return ticket., ticket is one way. Also let the average be 10 trains per hour and operating only 20 hours and the total number of passengers per train is 1500.

So (my new calc)., 1500 * 10 * 20 = 300000 (or 300 k). (1/3rd reduction).

2. Let us say ticket price per today's rate will be Rs. 2625.

So revenue per day = 2625 * 3000 = 787500000 = 7875 lakhs or 78.75 crore Rs. (daily)

3. In one year revenue (just by train tickets) = 78.75 x 30 x 12 (30 days in a month, 12 months in a year) = 28,350 crores

-------
Let us round it off to 28000 crore per year revenue from ticket sales alone.
-------

Assuming 98% Operating expenses (that is debt servicing* + salaries + electricity + everything else) (NOTE: Indian railways currently has operating expense of 98%., so it is doable for HSR as well)., then the total remaining after expenses will be

28000 * 0.02 = 567 crores.

-----------
*Debt Servicing: The total cost of the project is 89k crores., let me inflate it to 100k crores (12k crores for interest at 0.1% p.a and any cost inflation)., then average amortization is 2k crore per year for 50 years.

That is once the foundation is laid., one has to pay 2k crore for 50 years.

You see the 0.1% interest is the real kicker. Per my calculation over *50 year* term is 3200 crore.

Hence the "debt servicing of interest" here is 3200 crore over 50 years or 64 crore per year.

The principal+interest payment is 2k crore per year.
-------

How much is interest of 64 crore on a revenue of 28000 crore? 0.0025%

^^ You must realize that 0.0025% is a rounding error! In effect you are paying off the principal only. Agreed that your principal component is @8%., so if your operating expense is 90% (very much doable)., then you are free and clear with a decent profit.

Now coming to your statement:

Again, assuming 5% available for debt service makes it 4500 crore per year hence the project budget better not to overshoot beyond 225k crore (230%, not unheard off in Indian Infra projects) because then even the crush load will not be able to recover the debt burden even at 0.1% rate and 50 years term.

What you are pointing out is that if the project budget over shoots., then the rosiest of the calculation goes awry. Of course., it is like me building a home to rent out and I overshoot my budget by 200%. Of course all my calculations will go for a toss.

In effect, what I hear is that the only way we come out on top is to keep within budget.

And that is what Suraj san is saying., that project delays cause overshoot of budget. In this case instead of fighting against the project, we must quickly implement the project. The faster it reaches the peak load, the better it is for all of us.

Now we are not talking about just the Mumbai-Ahmedabad sector. If I were to dream., I would extend this HSR as follows:

1. Mumbai-Surat-Baroda-Ahmedabad-Jaipur
2. Baroda-Ratlam-Kota-Mathura-Delhi
3. Jaipur-Delhi-Agra
4. Agra-Kanpur-Lucknow-Varanasi

And that too in the next 15 years. A person sitting in Mumbai, reaches Baroda in 1 hr, Delhi in 5 hrs and to Varanasi in 7 hrs. So take the last train to Varanasi and arrive in the morning next day :)

How much will the ridership will be? 4-5 million a year on the above sectors.
Last edited by disha on 18 Dec 2015 03:25, edited 1 time in total.

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Re: Indian Railways Thread (Dec 2015)

Postby disha » 18 Dec 2015 03:14

Gyan wrote:
There does not seem to be any reference to transfer of technology for Rolling stock ie trainset, engines, or rail lines or signaling equipment etc??


From what I read., there is no transfer of technology., only product licensing which is baked in as part of the loan. The licensing and its use is guaranteed in perpetuity.

Again talking in simplistic terms, there are three components to the HSR:

1. Rail infrastructure. Basically the railroads that need to be installed to a particular standard.
2. Locos that run on it (Engines and locomotives)
3. Process of managing the train schedules (signal infrastructure etc).

50 years from now., nothing stops India from launching RailuGaddi v.3.1415 designed and built within India (item #2 above) that meets the standards of the HSR. The processes are all of our own (of course Japanese will teach us just as we teach them how to conduct anti-terrorist ops).

The rail infrastructure is what it is (item #1). It is perfectly fine if Japan produces for the first decade locos in Japan and later shifts manufacturing to India.

So to get the maximum out of this., India should start building and extending the HSR. In fact by 2019., India must dedicate atleast $100 Billion to build the HSR infrastructure all across India. This alone will add $1T to India's GDP.

And 15-20 years from now., India should start extending the line from Kolkatta to Bangkok or Vietnam

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Re: Indian Railways Thread (Dec 2015)

Postby Kashi » 18 Dec 2015 04:50

Gyan wrote:There does not seem to be any reference to transfer of technology for Rolling stock ie trainset, engines, or rail lines or signaling equipment etc??


It's there in some of the other news items in the older dhaaga.

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Re: Indian Railways Thread (Dec 2015)

Postby Picklu » 18 Dec 2015 14:52

disha wrote:Picklu san., why put me in pickle? I can only do thumb-rule calculations and have tendencies to add zeroes or eat up zeroes.


Sharminda maat karo sir :oops:

disha wrote:
So (my new calc)., 1500 * 10 * 20 = 300000

......

Agreed that your principal component is @8%., so if your operating expense is 90% (very much doable).

......



I am ok with this new calculation. The reason why I went into your old calculation was it appeared too good to be true that 50k daily ridership and 5% of the revenue will take care of the debt.

The new calculation that even in best case scenario, it will take around 8% of the total revenue with 3 lakh daily ridership at least, not taking into consideration the following

a. ticket price inflation
b. revenue generated from real estate
c. foreign currency risk
d. asset depreciation

and most importantly

e. project cost and schedule over run

Here is one IIM study showing that Railways projects are having 164% cost overrun and when taking into consideration the delay and price increase, 385% of capital waste.

Here is another KPMG report published in 2013 showing 141% of cost over run for Railways in recent times and 90% of the projects having schedule overrun.

So I am very much doubtful that it will be within budget and timeline and hence even 3 lakh daily ridership will cut it financially.

disha wrote:And that is what Suraj san is saying., that project delays cause overshoot of budget. In this case instead of fighting against the project, we must quickly implement the project. The faster it reaches the peak load, the better it is for all of us.


You and me, having a discussion in an obsecure corner of world wide web, does not have the power to cause any delay. :mrgreen: Our 'so called' 'fight against the project' is purely academic and born out of 'Satyameva Jayate' khujli :P even though both of us want the same thing.

The things that cause delay and overruns are unfortunately not going to go away very soon though Suresh Prabhu, Nitin Gadkari, Jet Li and NaMo have made impressive progress.

disha wrote:How much will the ridership will be? 4-5 million a year on the above sectors.


We calculated that 3 lakh per day is required for break-even so for a year that goes to 11 crore passengers straight away. 4-5 mil a year will not cut it.
Last edited by Picklu on 18 Dec 2015 18:29, edited 3 times in total.

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Re: Indian Railways Thread (Dec 2015)

Postby Picklu » 18 Dec 2015 16:19

Btw, Disha and hanumadu, this below link claims

a. 15 k current daily ridership in 25 trains
b. 12 coaches per train and 800 avg ridership per train

Not sure how accurate these 2 data points are

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Re: Indian Railways Thread (Dec 2015)

Postby Picklu » 18 Dec 2015 17:24

Couple of info gold mines

the IIMA study - gives financial details and shows need for viability gap funding

the RITES survey - the original study done by rites - the mother of it all - contains pricing details (Rs 7/km for 25% and Rs 4.5/km for 75% traffic volume), ticket price inflation (4%/y + 5% over and above every 5 y), station lease income and ridership estimate

Both of them gives estimate more than 3 lakh daily passengers (12 million per year in 2021 in iima study vs 26 mil in rites study)

However, this Rail min Study - done in Nov 2013 states existing air traffic in this route is 7k and upper class air traffic 8k in this route daily - this somewhat tallies to 15k daily traffic volume in the ndtv article. I have not got any other info on net about the existing traffic volume to corroborate dishaji's claim of 0.5 mil daily as of now.

If really the current volume is 15k/day, it is going to be a huge stretch to 300k/day notwithstanding the tokyo-osaka example and we are looking at a white elephant of rafale proportion.

After my novice attempt of analysis, I find the rites study having hugely positive biase with large ridership estimate and ticket price inflation as well as lease income.
But does not mention asset depreciation over 65 years, no mention of foreign currency risk and no estimate on financial impact due to delays in project implementation.

More importantly, I could not find a single mention (other than the railway min study) of current passenger volumes. If anyone can dig any info on that would be great.

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Re: Indian Railways Thread (Dec 2015)

Postby Dipanker » 18 Dec 2015 18:48

My problem is simple, a Bullet train will save about 4 hours from the existing train travel time between the two cities, but with better maintenance of existing tracks and increasing the speed of existing trains, this 4 hours difference can be reduced to 2 hours or so.

Now for those passengers for whom saving 2 hour is critical, they will be flying instead of taking the trains. If in future demand is this sector goes up, the supply will also rise to meet the demand, that is fair assumption.

So why exactly bullet train are needed when there are so many other important priorities where an investment of such magnitude can make a discernible difference in average Indian life, such as supply of clean drinking water, healthcare, education, food security, rural electrification, etc. etc.

At present upgrading and better maintenance of existing tracks which would allow trains to run faster is a better option, something the railways will be doing anyway.

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Re: Indian Railways Thread (Dec 2015)

Postby hanumadu » 18 Dec 2015 18:50

Picklu wrote:Both of them gives estimate more than 3 lakh daily passengers (12 million per year in 2021 in iima study vs 26 mil in rites study)


12 million /year = 32876/day
21 million/year = 57534/day

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Re: Indian Railways Thread (Dec 2015)

Postby Supratik » 18 Dec 2015 19:05

@Dipanker,

You vomit the same pessimistic rants on every thread. That statement reads totally out of BBC. Why send orbiter to Mars when people are dying of hunger in India. We need to do several things simultaneously in order to become an advanced country. Otherwise you will always be catching up. Without increasing speed to HSR level how can time be reduced by 4 hrs. You will do us all a favor if you join the calculations being done by Picklu and Disha.

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Re: Indian Railways Thread (Dec 2015)

Postby hanumadu » 18 Dec 2015 19:16

Dipanker wrote:My problem is simple, a Bullet train will save about 4 hours from the existing train travel time between the two cities, but with better maintenance of existing tracks and increasing the speed of existing trains, this 4 hours difference can be reduced to 2 hours or so.

Now for those passengers for whom saving 2 hour is critical, they will be flying instead of taking the trains. If in future demand is this sector goes up, the supply will also rise to meet the demand, that is fair assumption.

So why exactly bullet train are needed when there are so many other important priorities where an investment of such magnitude can make a discernible difference in average Indian life, such as supply of clean drinking water, healthcare, education, food security, rural electrification, etc. etc.

At present upgrading and better maintenance of existing tracks which would allow trains to run faster is a better option, something the railways will be doing anyway.


It has been pointed a 1000 times on this thread that the money is not coming out of the Indian budget. If you can't get that simple fact into your head, you are trolling only. You sensed the opportunity that some others on this forum are expressing their doubts on this project and jumped on to hitch a ride.

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Re: Indian Railways Thread (Dec 2015)

Postby A_Gupta » 18 Dec 2015 19:16

http://www.newindianexpress.com/nation/ ... 826304.ece

One in Every Two People to Take Bullet Train by 2035, Says Research

By Richa Sharma | ENS

Published: 21st May 2015 09:18 PM

Last Updated: 22nd May 2015 09:07 AM
Email
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NEW DELHI: Even as skeptics doubt success of Prime Minister Narendra Modi’s pet bullet train project in India, a study by IIMA doctorate Ramakrishnan TS, who Thursday made presentation before the Railway Board, has said that not only it will be a successful project but by 2035 from one in every two person travelling between Mumbai-Ahmadabad would travel by the bullet train. This is proposed to be the first sector to get High Speed Rail (HSR) in India.

>>Related: Study Gives Thumbs up to Bullet Train

The study said bullet train, if operationalised by 2025, would attract 4.8 crore end to end passengers (from Ahmedabad to Mumbai and vice versa) in the first year of operation itself. It said that 4.8 crore passengers would be equivalent to about 24 percent of the total passenger traffic in the Ahmedabad-Mumbai corridor.

The study, ‘Modal shift estimation and financial viability of High Speed Rail (HSR) in India: the case study of Ahmedabad – Mumbai corridor’ was done by Ramakrishnan TS of IIMA.

“The passengers for HSR would grow further to 9.7 crore and 17 crore in 2030 and 2035 respectively, which would be about 37 percent and 48 percent of the total passenger traffic in Ahmedabad-Mumbai corridor in 2030 and 2035 respectively. By 2035, for every two persons travelling on the Ahmedabad-Mumbai corridor, one would be travelling by HSR,” the study revealed.

The study also said that for the estimated ridership, the breakeven would be achieved within a decade of first year of operation making it an attractive proposition for private sector participation in the development of bullet train.

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Re: Indian Railways Thread (Dec 2015)

Postby A_Gupta » 18 Dec 2015 19:18

http://vslir.iimahd.ernet.in:8080/xmlui ... 6789/14286

Modal Shift Estimation and Financial Viability of High Speed Rail in India: The Case Study of Ahmedabad – Mumbai Corridor
Ramakrishnan, T.S.

Abstract:
The share of rail in passenger transport in India has declined rapidly, primarily due to severe capacity constraints and inability of railways to increase the speed of travel. Other countries facing similar problems have found High Speed Rail to be the solution. The Indian Government has identified the Ahmedabad – Mumbai corridor with stops at Vadodara and Surat as being best suited for High Speed Rail. Accordingly, in this thesis, the modal shift and financial viability of High Speed Rail in passenger transport in the Ahmedabad – Mumbai corridor has been estimated to evaluate its potential in catering to the increasing passenger travel demand in this corridor. The modal shift towards High Speed Rail has been estimated using discrete choice models from actual data of common carrier modes considering travel cost by income, production hours and non-production hours of travel time and end to end travel penalty (a comprehensive variable which included access-egress, terminal penalty, in-vehicle discomfort, crowding penalties) as the explanatory variables assuming 2025-26 to be the first year of operation. Based on the estimated modal shift, the financial viability has been estimated for various internal rates of return. The results show that the HSR project would recover the investment within ten years of operation from the tariffs alone for a reasonable financial internal rate of return. It was also estimated that HSR would get at least 48 million end to end passengers in 2025-26, the first year of commercial operation. With an annual passenger growth rate of 15.32% between 2025-26 and 2030-31, the end to end ridership would be at least 97 million in 2030-31 and with 11.63% between 2030-31 and 2035-36, the end to end passengers for HSR would reach at least 170 million in 2035-36. This kind of expected mammoth ridership would facilitate the recovery of the entire investment cost of the project making this as the most successful HSR project in the world. Some policy measures have also been recommended to ensure the successful implementation of the High Speed Rail project and increases its ridership further. This thesis contributes to literature by way of evolving a methodology for the estimation of modal shift using actual data of the common carrier modes, inclusion of variables of production hours and non-production hours of travel and total travel penalty that have not been considered by the previous modal shift studies. This methodology provides a comprehensive, robust and new framework for modal shift estimation and financial viability of High Speed Rail projects in developing countries similar to India.

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Re: Indian Railways Thread (Dec 2015)

Postby Dipanker » 18 Dec 2015 19:25

@supratik,

Big difference, we do the orbiter in house, it is largely indigenous, we are not buying them from Japan.

If by better track maintenance and increasing the speed of existing trains we can cut down the travel time by 2 hours instead of 4 hours by HSR, then do we really need HSR? Is saving that extra 2 hours our priority right now? Think about it.

Yes calculations are needed to get some idea about the financial viability of such projects given that with a few exception HSR largely run under loss. Caveat here would be that cash flow projections so are into the future are always wrong.
Last edited by Dipanker on 18 Dec 2015 19:33, edited 1 time in total.

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Re: Indian Railways Thread (Dec 2015)

Postby hanumadu » 18 Dec 2015 19:30

The study said bullet train, if operationalised by 2025, would attract 4.8 crore end to end passengers (from Ahmedabad to Mumbai and vice versa) in the first year of operation itself. It said that 4.8 crore passengers would be equivalent to about 24 percent of the total passenger traffic in the Ahmedabad-Mumbai corridor.


4.8 crore would be 130000/day end to end and it only represents 24%. So the total traffic in the corridor is 520000/day which is in line with disha's earlier estimate. if you include intermediate traffic, it would probably be touching 200000/day in the first year itself.

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Re: Indian Railways Thread (Dec 2015)

Postby Dipanker » 18 Dec 2015 19:31

hanumadu wrote:
Dipanker wrote:My problem is simple, a Bullet train will save about 4 hours from the existing train travel time between the two cities, but with better maintenance of existing tracks and increasing the speed of existing trains, this 4 hours difference can be reduced to 2 hours or so.

Now for those passengers for whom saving 2 hour is critical, they will be flying instead of taking the trains. If in future demand is this sector goes up, the supply will also rise to meet the demand, that is fair assumption.

So why exactly bullet train are needed when there are so many other important priorities where an investment of such magnitude can make a discernible difference in average Indian life, such as supply of clean drinking water, healthcare, education, food security, rural electrification, etc. etc.

At present upgrading and better maintenance of existing tracks which would allow trains to run faster is a better option, something the railways will be doing anyway.


It has been pointed a 1000 times on this thread that the money is not coming out of the Indian budget. If you can't get that simple fact into your head, you are trolling only. You sensed the opportunity that some others on this forum are expressing their doubts on this project and jumped on to hitch a ride.


My understanding is that this is loan at ~ 1%, so effectively we are borrowing this money, correct me if I am wrong.

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Re: Indian Railways Thread (Dec 2015)

Postby A_Gupta » 18 Dec 2015 19:32

I have a question about HSR -- is there a difference to the viability of HSR if the Indian economy grows at an average of 6% per annum for the next 10 years, or at an average of 8%?

IMO, depending on the growth rate, the number of people who are willing and able to pay more for HSR will be rather different.

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Re: Indian Railways Thread (Dec 2015)

Postby hanumadu » 18 Dec 2015 19:39

Dipanker wrote:My understanding is that this is loan at ~ 1%, so effectively we are borrowing this money, correct me if I am wrong.


0.1% not 1%. Its a loan which can be repayed from profits. Your argument that it is taking money from other development posts does not hold water. So don't shift the goal posts now. If you want to argue, then argue about the viability of the project as others are doing.

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Re: Indian Railways Thread (Dec 2015)

Postby A_Gupta » 18 Dec 2015 19:59

It would be good if somehow we can get hold of the JICA (Japan International Cooperation Agency) "Joint Feasibility Study for Mumbai-Ahmedabad High Speed Railway Corridor".

In the meantime:
http://www.business-standard.com/articl ... 157_1.html

Ramakrishnan TS answers 5 questions:
* Why should we develop HSR when air travel exists for faster travel between cities?
* Why can't we upgrade railway lines to provide semi-HSR, such as the one proposed for the Delhi-Agra link, with a maximum speed of 160 km per hour?
* Is India at the state of economic development where it could build HSR?
* Why should the government splurge on HSR when there are other pressing needs, including developing conventional rail infrastructure and social infrastructure such as schools and hospitals?
* How do we handle land requirement and fencing of HSR lines?

In the comments,

Ramakrishnan T S

On every day, there will about 1 lakh people would be travelling in 2025-26, the expected first year of operation with about 150 trips each day in the both direction. Trips at a frequency of 6 minutes in the morning and evening time slots and every 30 minutes during day time. The yearly cash inflow would be 2500*100000*365 = 9125 crore. Is the cash inflow too low to compensate the operating and interest payment?
Last edited by A_Gupta on 18 Dec 2015 20:01, edited 1 time in total.

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Re: Indian Railways Thread (Dec 2015)

Postby Picklu » 18 Dec 2015 20:01

hanumadu wrote:
Picklu wrote:Both of them gives estimate more than 3 lakh daily passengers (12 million per year in 2021 in iima study vs 26 mil in rites study)


12 million /year = 32876/day
21 million/year = 57534/day



Oops .. I added a zero in my calc :oops: :oops: thanks for correction.

However, this incorrect calc is about interpretation of the estimated ridership values in those 2 case studies and not on the back of the envelop financial viability calc. So, that stands. :P

Sorry for the late clarification.
Last edited by Picklu on 18 Dec 2015 21:25, edited 3 times in total.

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Re: Indian Railways Thread (Dec 2015)

Postby A_Gupta » 18 Dec 2015 20:04

http://www.business-standard.com/articl ... 114_1.html
(from November). Railways related, but there is a key statement:

The Indian economy has a GDP-transport elasticity of 1.25 (For every one per cent growth in GDP, transport sector has to grow by 1.25 per cent).

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Re: Indian Railways Thread (Dec 2015)

Postby A_Gupta » 18 Dec 2015 20:26

http://cta.ornl.gov/TRBenergy/trb_docum ... %20118.pdf
The intensity of a trainset is expressed in kWh/seat-km. Thompson compiled a number of values of energy intensity of Shinkansen from Japan Rail publications (16). The first Shinkansen (zero series) required 0.072 kWh/seat-km with a top speed of 220 km/hr, while
the most recent Nozomi 700N requires 0.037 kWh/seat-km at that speed and 0.049 kWh/seat-km at 270 km/hr (17). Thus the energy intensity of the Shinkansen has been
falling, to a point where the recent Nozomi 700N uses about 50% as much energy at a higher speed than the original Shinkansen, and 32% less energy at 22% higher speed.

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Re: Indian Railways Thread (Dec 2015)

Postby Suraj » 18 Dec 2015 20:44

Dipanker: we have a perfectly good discussion on the technicalities of the subject going on here. Bringing in your politics of "why are we building bullet trains instead of XYZ other things" is trolling. Persist and you'll earn your second ban in as many months. You'll only get one informal note like this.

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Re: Indian Railways Thread (Dec 2015)

Postby A_Gupta » 18 Dec 2015 20:52

IMO, there at least one other strategic reason to go in for HSR.
Here's a 2013 Indian Planning Commission report on transport trends in India:
http://planningcommission.nic.in/sector ... _v2_p1.pdf

If the road & rail transport mix continues on the curves in that document, India will be in a world of hurt regarding CO2 emissions and air pollution. However, HSR and CO2 discussion is probably best conducted on the Climate Change thread. I've posted some numbers there that show that HSR is very CO2 efficient compared to cars and air transport. (No more CO2 or energy efficiency stuff from me o this thread.)

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Re: Indian Railways Thread (Dec 2015)

Postby Picklu » 18 Dec 2015 21:22

hanumadu wrote:
The study said bullet train, if operationalised by 2025, would attract 4.8 crore end to end passengers (from Ahmedabad to Mumbai and vice versa) in the first year of operation itself. It said that 4.8 crore passengers would be equivalent to about 24 percent of the total passenger traffic in the Ahmedabad-Mumbai corridor.


4.8 crore would be 130000/day end to end and it only represents 24%. So the total traffic in the corridor is 520000/day which is in line with disha's earlier estimate. if you include intermediate traffic, it would probably be touching 200000/day in the first year itself.


While I am not completely discounting this, I do have a doubt on this and let me explain why.

We can access only the abstruct of the original case study and hence we are depending on the other article below

A_Gupta wrote:http://www.newindianexpress.com/nation/One-in-Every-Two-People-to-Take-Bullet-Train-by-2035-Says-Research/2015/05/21/article2826304.ece

One in Every Two People to Take Bullet Train by 2035, Says Research

By Richa Sharma | ENS

......

The study said bullet train, if operationalised by 2025, would attract 4.8 crore end to end passengers (from Ahmedabad to Mumbai and vice versa) in the first year of operation itself. It said that 4.8 crore passengers would be equivalent to about 24 percent of the total passenger traffic in the Ahmedabad-Mumbai corridor.

......

“The passengers for HSR would grow further to 9.7 crore and 17 crore in 2030 and 2035 respectively, which would be about 37 percent and 48 percent of the total passenger traffic in Ahmedabad-Mumbai corridor in 2030 and 2035 respectively. By 2035, for every two persons travelling on the Ahmedabad-Mumbai corridor, one would be travelling by HSR,” the study revealed.

........



1. It talks about 'total passenger traffic in the Ahmedabad-Mumbai corridor' so that means it already includes the intermediates and not just end to end

2. The way the second statement has been given in the above quote, it is more likely that 4.8 crore is 24% of the total traffic on 2025 and not today.
4.8 crore is 24% of 20 crore, 9.7 crore is 37% of 26 crore(2030) and 17 crore is 48% of 35 crore(2035). So if I believe the above data, the passenger volume increases 9 crore in 5 years(2030 to 2035) but only 6 crore in preceding 15 years(2015 to 2030).
Hence my read on this is that 20 crore is the projected traffic on 2025 and not exact traffic on 2015.

so, lets park this figures based on this via media article for the time being and look for a more direct alternate source for current traffic.

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Re: Indian Railways Thread (Dec 2015)

Postby Suraj » 18 Dec 2015 22:07

A_Gupta wrote:I have a question about HSR -- is there a difference to the viability of HSR if the Indian economy grows at an average of 6% per annum for the next 10 years, or at an average of 8%?

IMO, depending on the growth rate, the number of people who are willing and able to pay more for HSR will be rather different.

That's only one variable. Another is the unlocking of latent demand. When you have an economic system where access to transportation ranges between a tiresome hassle and a massive hassle, a lot of potential journeys are forsaken.

Take Del-Bom . By train is infeasible for a spur of the moment trip. It takes ~16hrs on the Rajdhani. Air travel has its own complexities, ranging from travel to/from airport, the available seat constraint (despite it being #5 on the list of the most busiest routes in the world by passenger seats), and more. I'm sure there are things like buses, at least for Bom-Ahm, but disha will probably go on a long rant about just how hard that is.

Now put a high speed line in there. Del-Bom is a few tens of kms longer than Beijing-Shanghai. The fastest train on that route does it in 4:45 . The slower trains in 5:25. From central Mumbai to central Delhi.

When you have an extremely supply constrained economy, general calculations of demand indexed to income go out of the window as latent demand is unlocked due to the convenience. Each bullet train has ~10x the seats of a flight, substantially greater comfort, comparable or lower cost and convenience of point to point city center access.

This phenomenon has also been seen in Delhi Metro, where demand initially lagged projections as the first few corridors were not optimal to unlock the potential for more traffic, but as the latter parts of Phase 3 came online, suddenly they find that live demand exceeds their earlier projections, and now they're rushing to get Phase 4 done to mitigate the crush density demand. New Delhi therefore goes from having 0km metro in 2002, to having the world's third longest network in 2023 - longer even than NYC, London etc. It's the same for intra-city car population in India or worse, major Chinese cities. As well as the Chinese HSRs that run quite packed.

That is why I will always discount passenger projections. I really worry only about the cost and time overruns in building the thing. They should hurry up and build it as quickly as possible. That's really all that matters. The traffic numbers are more than capable of taking care of them. My eyes glaze over the discussions on potential traffic. I'm more interested in seeing information that validates the ability to build this quickly, because that's the only thing that'll break the numbers, as far as I'm concerned.

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Re: Indian Railways Thread (Dec 2015)

Postby Picklu » 18 Dec 2015 22:18

As per this
a. 3% of the total non suburban passengers travel in upper class across IR as found in 2011-12.
b. upper class traffic between M and A is 7k daily

This makes the total volume 2.3 lakh daily. That is less than 50% of what dishaji has claimed.

Moreover, 97% of that travels in 2nd class sleeper or below and may not move to HSR on VFM reasons.

On the other hand, on income basis, it may very well be more than 3% in the upper class config in this particular sector in which case the total volume will go down further. and that sounds more realistic based on the below calculation.

There seems to be 25 trains between M and A daily based on railway passenger enquery.

Each train contains at the most 24 coaches and each coach can carry max 108 passengers in seater configuration (I am not including crush load of general class). The number of passengers would actually be less for many higher and non seater classes.
Add 20% more to include standing passengers.

So total no of passenger capacity would be 1.5 lakh per day including both ways. Even if we assume the same seat can be reused multiple times in a single journey by intermediate passengers, that is still way less than the claimed 5 lakh per day figure, let alone the 20 lakh per day including intermediatories.

So gurus, please help. Need more ref on current passenger volume.

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Re: Indian Railways Thread (Dec 2015)

Postby hanumadu » 18 Dec 2015 22:27

Picklu,
Both the summary and the article A_Gupta posted said 4.8 crore is the end to end passengers in 2025-26 that would take the HSR.

The study said bullet train, if operationalised by 2025, would attract 4.8 crore end to end passengers (from Ahmedabad to Mumbai and vice versa) in the first year of operation itself.


It was also estimated that HSR would get at least 48 million end to end passengers in 2025-26, the first year of commercial operation.


Picklu wrote:1. It talks about 'total passenger traffic in the Ahmedabad-Mumbai corridor' so that means it already includes the intermediates and not just end to end


It specifically mentions 4.8 cr is the end to end traffic which is equal to 24% of total traffic. The other 76% may be end to end traffic which do not take HSR, or intermediate traffic that may or may not take HSR. I don't see any reason to be so hung up on whether the traffic is end to end or not. It is more profitable if the same seat is shared to by two people over the distance than by a single person through the entire journey. If some one gets off at a way station, it is likely it will be taken up by some one else for the rest of the journey. It will more or less even out or may be result in a slightly lesser revenue but I don't see it making that big of a difference that we have to give such undue importance to it.

2. The way the second statement has been given in the above quote, it is more likely that 4.8 crore is 24% of the total traffic on 2025 and not today. 4.8 crore is 24% of 20 crore, 9.7 crore is 37% of 26 crore(2030) and 17 crore is 48% of 35 crore(2035). So if I believe the above data, the passenger volume increases 9 crore in 5 years(2030 to 2035) but only 6 crore in preceding 15 years(2015 to 2030).
Hence my read on this is that 20 crore is the projected traffic on 2025 and not exact traffic on 2015.

How does it matter? HSR will start its operations only during that time no?

The articles posted by A_Gupta have convinced me even more that HSR is viable and necessary even if there is a slight shortfall in the initial years of its operations.

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Re: Indian Railways Thread (Dec 2015)

Postby Picklu » 18 Dec 2015 22:29

Suraj wrote: I'm more interested in seeing information that validates the ability to build this quickly, because that's the only thing that'll break the numbers, as far as I'm concerned.


You may want to take a look at this part. Btw, the projected timeline to build this and start operation in the case study is 7 years.

Picklu wrote:
e. project cost and schedule over run

Here is one IIM study showing that Railways projects are having 164% cost overrun and when taking into consideration the delay and price increase, 385% of capital waste.

Here is another KPMG report published in 2013 showing 141% of cost over run for Railways in recent times and 90% of the projects having schedule overrun.

So I am very much doubtful that it will be within budget and timeline and hence even 3 lakh daily ridership will cut it financially.

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Re: Indian Railways Thread (Dec 2015)

Postby member_29172 » 18 Dec 2015 22:33

Heh, I remember similar skeptical "do we really need this car? we can make do with bullock cart wonlee" arguments since a long long time. When volvo buses were introduced 20 years ago to metro trains in most cities about 6 years ago and so on. The feasibility study is done repeatedly to find just that. HSR is the natural evolution of railways in this country. And eventually it will be affordable. It's always better to move on the next best technology and make the society more efficient in the process.

Yes it will be costly initially, but it's well worth it.

I'll post a few more facts in a while in this very post.

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Re: Indian Railways Thread (Dec 2015)

Postby chetak » 18 Dec 2015 22:43

Image

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Re: Indian Railways Thread (Dec 2015)

Postby Picklu » 18 Dec 2015 22:51

hanumadu wrote:The articles posted by A_Gupta have convinced me even more that HSR is viable and necessary even if there is a slight shortfall in the initial years of its operations.


The article and the summary of the case study gives figures based on projections only.

All this back of the envelop calculation is to validate those projections based on current known data, no?

Else we could have stopped the moment the deal was announced during Abe's visit, nothing more to discuss.

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Re: Indian Railways Thread (Dec 2015)

Postby hanumadu » 18 Dec 2015 22:56

^^^See Suraj's point about unlocking demand.

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Re: Indian Railways Thread (Dec 2015)

Postby Suraj » 18 Dec 2015 23:01

Picklu wrote:
Suraj wrote: I'm more interested in seeing information that validates the ability to build this quickly, because that's the only thing that'll break the numbers, as far as I'm concerned.


You may want to take a look at this part. Btw, the projected timeline to build this and start operation in the case study is 7 years.

Picklu wrote:
e. project cost and schedule over run

Here is one IIM study showing that Railways projects are having 164% cost overrun and when taking into consideration the delay and price increase, 385% of capital waste.

Here is another KPMG report published in 2013 showing 141% of cost over run for Railways in recent times and 90% of the projects having schedule overrun.

So I am very much doubtful that it will be within budget and timeline and hence even 3 lakh daily ridership will cut it financially.

Yes, that's the sort of thing that makes me concerned about the viability of this project. Building this means our steel and cement production has to ramp up beforehand, since I'm guessing this will be mostly ballast-less track like the Beijing-Shanghai HSR. There are thousands of piers and slipformed sections to be made and placed, and that's assuming land acquisition is done expeditiously.

I think discussing minutae of whether theres sectional or through traffic is nor commensurate with its relative importance. Studying the viability of on time and on budget implementation is a far more crucial matter. You can't begin to start projecting traffic-based viability numbers without establishing confidence in implementation costs.

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Re: Indian Railways Thread (Dec 2015)

Postby Picklu » 18 Dec 2015 23:35

Suraj wrote:Yes, that's the sort of thing that makes me concerned about the viability of this project. Building this means our steel and cement production has to ramp up beforehand, since I'm guessing this will be mostly ballast-less track like the Beijing-Shanghai HSR. There are thousands of piers and slipformed sections to be made and placed, and that's assuming land acquisition is done expeditiously.


And fly-ash. Don't forget the fly ash :)

However I think a large part of steel, cement etc would be imported as well and govt will provide tax break for such.

Suraj wrote:I think discussing minutae of whether theres sectional or through traffic is nor commensurate with its relative importance. Studying the viability of on time and on budget implementation is a far more crucial matter. You can't begin to start projecting traffic-based viability numbers without establishing confidence in implementation costs.


That was the part of the calculation, trying to see how much leeway we have in terms of overrun.

Because honestly speaking, I have serious doubt that we will make it on time, within budget not compromising on quality with the aggressive timeline of 7 years. So, some sort of overrun is given. The question is how much over run will break the camel's back.


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