Frequently Asked Questions
Q1. Who can participate in railway projects?
R1. Following can participate,
- Design, build, finance, own and transfer concession (BOT)
- Net present value of future periodic Access Charges during the concession period to be the only bid parameter
- To give sufficient comfort to lenders, the access Charges will go in an Escrow Account through a tripartite agreement between the railways, the project sponsors and the lenders.
- Incentive to the developer for early completion to advance receipt of Access Charges
- Operation and maintenance of the assets after commissioning to be done by Indian Railways.
- All the tax advantages of lease can be availed of in BOT concession
- Transfer is not an issue in concession as in lease
Q3. What are the details of Joint Venture SPV model of private investment in railway projects?
R3. The features of JV SPV are as under:
- It envisages participation of the stakeholders and beneficiaries besides national level infrastructure funding institutions in the development and creation of rail infrastructure through appropriate concessions
- Financial participation can be through equity participation in the SPV. An SPV can be a joint venture with Railways ad majority/minority partner or a pure private company.
- Revenue from operations are generated by SPV through revenue apportionment.
- Concession period will normally be for 33 years extendable with mutual agreement.
- Railway land, as available, required for the project will be made available on lease/license.
- Tariff freedom as per provision of Railways’ Act, 1989
- Commercial utilization of railway land, commercial publicity rights as permissible under the law and public policy will be permitted with profit sharing.
- Initial project development will be done by Indian railways to establish project cost, land acquisition, other project component requirements, and project viability.
- Land acquisition will be done by the Indian railways for partnership projects
- Project construction will be decided by the SPV (done by RVNL as per the model shareholders agreement)
- In case of gauge conversion and doubling projects, maintenance of the project line will be done by IR
- Maintenance of a green field project can be decided by the SPV
- Operations will normally be done by IR with its own rolling stock. Use of dedicated non-IR rolling stock permitted
Q4. What are the projects implemented by Railways as JV SPV?
R4. Following are the projects:
- Pipavav Rail Corporation Limited (PRCL) has implemented Surendra Nagar – Pipavav gauge Conversion Project (264 Km) for providing BG rail connectivity to the port of Pipavav at a cost of Rs.350 Cr. The equity of Rs.198 Cr is shared equally by the Ministry of Railways and Gujarat Pipavav Port Limited.
- Hassan Mangalore Rail Development Company (HMRDC) has implemented Hassan-Mangalore gauge Conversion Project (193 Km) for providing BG rail connectivity to the port of Mangalore at a cost of Rs. 150 Cr. The equity of Rs. 110 Cr. Is shared equally by the Ministry of Railways and Government of Karnataka, Rs. 45 Cr. Each, and by New Mangalore Port Trust and Mineral Enterprise Private Limited Rs. 10 Cr. Each.
- Kutch Railway Company Limited (KRC) is implementing Gandhidham-Palanpur Gauge Conversion Project (301 Km) for providing BG rail connectivity to the port of Kandla and Mundra by a shorter route to hinterland at a cost of Rs.453 Cr. The equity of Rs. 200 Cr. Is shared by Rail Vikas Nigam Limited Rs. 100 Cr., Kandla Port Trust Rs. 52 Cr., Gujarat Adani Port Limited Rs. 40 Cr. And Government of Gujarat Rs. 8 Cr.
- Haridaspur Paradip Railway Company Limited is implementing the Haridaspur-Paradip new railway line project (82 kms.) on East Coat Railway at a cost of Rs. 735 crores. The equity of Rs. 275 crore is shared by the following partners in this project:
- Partners Name
IDCO(Government of Orissa)
Paradip Port Trust
Essel Mining & Industries Ltd.
Rungta Mines Limited
Jindal Steel & Power Ltd.
Steel Authority of India Ltd.
POSCO India Pvt. Ltd.
- MSPL Ltd.
- Krishnapatnam Railway Company Limited is implementing the new railway line project (111 kms.) from Obulavaripalle to Krishnapatnam on South Central Railway for providing port connectivity to the iron ore belt at Hospet/Bellary. The project cost is Rs. 733 crores. The equity of Rs. 270 crore is shared by the following partners in this project:
Government of Andhra Pradesh/p>
Krishnapatnam Port Company Ltd.
Bramhani Industries Limited
- Bharuch Dahej Railway Company Limited is implementing the project for gauge conversion of the existing narrow gauge line to broad gauge from Bharuch to Dahej via Samni on Western Railway (62 kms.) at a project cost of Rs. 201 crores. The equity of Rs. 95 crore is shared by the following partners in this project
- Partners Name
Rail Vikas Nigam Limited
Gujarat Maritime Board
Adani Petronet (Dahej) Port Pvt.Ltd.
Dahez SEZ Limited
Hindalco Industries Limited (Unit: Birla Copper)
Jindal Rail Infrastruture Limited