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I. Need of High Speed Rail in India II. Key Issues and Challenges III. Implementation Options 2

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As per UIC definition, trains running at speed of 200 kmph on upgraded track and 250 kmph or faster on new track are called High Speed Trains. These services may require separate, dedicated tracks and "sealed" corridors in which grade crossings are eliminated through the construction of highway underpasses or overpasses. 3

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High Speed saves Energy Costs and reduces Greenhouse Gases 0102030405060 Fuel equivalent grams per passenger-kilometer High Speed Railway Bus Plane 51.1 29.9 18.3 17.6 12.1 Classic Train Private Car

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A HSR-line allows more passengers than an six lane highway per hour Elevated rail corridors reduce the hassle of Land Acquisition. Land requirements are Smaller 35 m

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Reduction in commuting time between cities and added capacity gives an excellent opportunity for decongestion of the mega urban centers and growth of smaller towns and other cities.

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The major challenges faced are: Major Urban centers are severely congested: Dramatic growth in vehicle ownership in the past decade. Accessing jobs, education - becoming increasingly time- consuming. Billions of man-hours are lost with people stuck in traffic.

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Explosion in Inter City Travel Indias urban population - 285 million reported in the 2001 census and 377 million in 2011 census. McKinsey Global Institute (MGI) projects - 590 million by 2030 (40% of Indias total projected population). The rapid urbanization in the country has triggered a growing demand for inter city traffic between metropolitan cities and 2nd and 3rd tier cities. In absence of HSR, passenger traffic of Airlines/ Car users is growing at 15- 20%

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DECONGESTION of Metropolitan cities Tier I City Without HSR With HSR Tier II Tier I City Small towns and Tier II & III Cities Tier I City Tier II city

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TRAVEL TIME ( Trigger for modal shift) Delhi (city centre) Delhi Airport Chandigarh Airport.75 hr30 min1.25 hrs at Terminal + 1 hr Flying time Total time: 3.5 hrs Plane Delhi (city centre) Chandigarh (city centre) Total time: 1 hr High Speed Railway Journey time for air travel involves travel to airport, away from city centers and waiting time at Airports. Distance between DELHI to CHANDIGARH is 245 Km.

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HSR is energy efficient and is less polluting than Road/Air travel. Economically as well environmentally, Rail based Transport system is ideally suited for India. Indian imports about 80% of its oil requirement. HSR will use indigenous energy resources like thermal/hydel/nuclear based energy

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13 India became a decidedly road-dominant economy in the beginning of the eighties with the railways losing out in respect of both freight traffic and passenger traffic.

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14 Introduction of TGV service in 1981-83 Evolution of first Class rail traffic in France Before and after opening of the first HSR line Existing long distance rail services have difficulties in competing with road and air modes of transport, The new HSR lines can stop the decline of the railways share on the long distance transport segment along those corridor. It provides an attractive transport offer in terms of reduced travel times and comfortable journey. Despite the high investment cost it is economically sustainable and need of the hour.

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16 System Integration (1) Political Will (4) Financing HSR Project(s) (5) Land Acquisition (3) Economic & Financial Viability (7) Selection of Technology High Speed Rail Development (2) Selection of Project Corridor(s) (6) Policy Framework

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17 Each HSR corridor will have a long gestation period and will be highly capital intensive, so, strategic thinking is required at the Apex level for implementing in a programmed manner Coordination among Central Government Ministries, State Governments and Government Agencies Success stories- National Highways, Airport up-gradation, Yamuna express-way

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18 Vast country Many potential corridors - Selection of pilot Project; Economically/financially viable projects to be given priority; Willingness of local governments to participate in the project by way of land and funding support.

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19 High capital cost will impact viability HSR will be a dedicated line; High demand risk due to higher tariffs as compared to conventional rail. Emphasis on other alternative revenue sources like Real estate revenues, carbon credits, cross-subsidy from road/air travelers.

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20 The high capital costs of HSR makes it a financing challenge. GOI may not fully fund the corridors. Most state governments will have to raise finances by extra levies, real estate etc. even for part funding Private sector may not have adequate financing capability to fund the large HSR projects. Proper project structuring by unbundling the projects into smaller packages may be essential. Funding by multilateral and bilateral funding agencies

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21 Critical due to stringent alignment requirements HSR corridors pass through conurbations or sensitive land; Strong public protests adversely affecting large number of projects. Mix of alignment choice- grade/ elevated/ tunnels

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22 Robust policy framework for: Seamless implementation of projects Assurance for attracting International investors Creation of National High Speed Rail Authority

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23 Choice of Technology: A) Fixed Infrastructure: Mix of Embankment/Elevated/ Underground Structures and their dimensional control; Construction Gauge; Fencing of the complete track/elevated track; Electrical Installations. B) Fast Upgrading Technology Rolling Stock Signaling and Communication Train Control Fare Collection

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26 French Govt. SNCF - French national rail operator Rseau Ferr de France (RFF) State owned Access Charges (for use of rail infrastructure) Access Charges (for use of rail infrastructure) Infrastructure Manager Operator The first opened in 1981 between Paris and Lyon (480 Km) and now total network 1887 km. French govt. plan to have new 2000 km HSR lines by 2020. Borrowing from the international markets to enable it to undertake major projects but not on a particular project basis. This funding is supported by government guarantee but is restricted to the amount that RFF can repay from the access fees The rolling stock for the TGV lines is procured by SNCF and is funded through lease commitments

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27 In addition to borrowings, the TGV lines have also been developed with grant funding from local sources. Funding pattern for three TGV lines are: Funding by SourceTGV EstEast Rhine RhoneBrittany loire French StateFrench State39%31%32% Regional funding24%29%35% RFFRFF22%26%33% SNCF2%4%n/an/a EU10%8%n/an/a Luxembourg4%n/an/an/an/a SwitzerlandSwitzerlandn/an/a3%n/an/a Concession modelPartnership contract Rail operators pay an access charge based on their actual use of the infrastructure Demand risk lies with the concessionaire RFF pays a rental or availability fee based on the performance of the private sector partner Demand risk remains with RFF Forms of PPP models followed by RFF to create Infrastructure

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Infraspeed Consortium: Fluor Daniel BV, Koninklijke BAM/NBM Amstelland NV, Siemens Nederland NV, Siemens Transportation Systems, Innisfree Limited and Charterhouse Project Equity Investment Limited 30 years Concession on DBFM (PPP) basis 28 HSA Dutch govt 6 D&C contractors One D&C contractor Rail Systems Network Connectio ns Substructur e Passenger Transport 125 km line between the Netherlands (Amsterdam) and Belgium border (Schiphol). This lines provides connectivity of Amsterdam to Brussels and Paris

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29 The PPP did not include the transfer of any demand risk. Infraspeed is remunerated on an availability basis, subject to deductions for unavailability of the infrastructure. The Dutch government finances: The substructure of the HSL The PPP infrastructure payments to Infraspeed These are partly financed by revenue from HSA Total costs: 7.2bn. The value of the PPP element of the project was approximately 1bn. The 1bn project financing for the PPP includes: 605m syndicated term loan (comprised of two Senior loans with a term of approximately 27 years) 119m subordinated debt bridge facility 15m working capital facility.

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30 Consortium led by Kawasaki Heavy Industries A concession to finance, construct, and operate the High Speed Rail System for a period of 35 years and a concession for HSR station area development for a period of 50 years. Demand risk transferred to the private sector operator A concession to finance, construct, and operate the High Speed Rail System for a period of 35 years and a concession for HSR station area development for a period of 50 years. Demand risk transferred to the private sector operator Taiwan High Speed Rail Corporation: Alstom Transport SA of France and Siemens AG of Germany The link Taipei to Kaohsiung - total length of 345km. The project had a construction value of approximately US$18bn. Infrastructure Manager Procurement of Rolling Stock Taiwan Govt. 10 % of yearly earnings to government for further HSR development during the HSR operating concession period regardless of the performance of the concession company. The accumulated amount could not be less than US$3.4bn. 10 % of yearly earnings to government for further HSR development during the HSR operating concession period regardless of the performance of the concession company. The accumulated amount could not be less than US$3.4bn.

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31 Considering the case studies, following could be the implementation options Non PPP Option: The project are implemented by the Government on EPC basis PPP Options Option 1: Design, Build, Finance, Operate and Transfer (DBFOT) of the entire project by a single Private Developer Option 2: Unbundling the project into different components, so as to make the project components attractive to private players from the perspective of affordability in terms of size and risk allocation: B&T (Fixed infrastructure) DFOT (Train operations)

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32 Whether project is implemented through PPP or partial Government funding route, pre-construction activities should be started in a programmed manner Government guidelines MOR has already created a company named High Speed Rail Corporation of India as a subsidiary of RVNL.

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33 Project Development Activities A separate fund may be created To be recovered from viable projects along with additional fee Rolling fund for further project development activities Funding Support for PPP projects: Viability Gap Funding Multilateral/Bilateral loans by providing Centre government guarantees Centre government guarantee for Long term Bonds of Project SPVs

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34 Funding Support for Non-PPP Projects Directly funded by Centre/State Governments Other Sources of Funds Revenue share from Concessionaires (train operators) Contribution from State Governments Real Estate Development

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35 Project CorridorsStatus of Prefeasibility Studies Pune Mumbai - AhmedabadFinal Report submitted. Delhi Agra-Lucknow-Varanasi- Patna Final Report submitted. Howrah HaldiaFinal Report submitted. Hyderabad-Dornakal-Vijaywada- Chennai Draft Final Report submitted. Chennai-Bangalore-Coimbatore- Thirvanantpuram Draft Final Report submitted. Delhi Chandigarh - AmritsarConsultant yet to be engaged Delhi-Jaipur-Ajmer-JodhpurConsultant yet to be engaged

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