Document of

The World Bank

FOR OFFICIAL USE ONLY

/,&9 2V/' y X

Report No. 4940-IN

INDIA

RAILWAY ELECTRIFICATION AND WORKSHOP MODERNIZATION PROJECT-

STAFF APPRAISAL REPORT

APRIL 26, 1984

Power and Transportation DivisionSouth Asia Projects Department

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

Currency Unit = Rupee (Rs)US$1.00 = Rs 10.80US$0.092592 = Rs 1.00US$92,592 = Rs 1,000,000

WEIGHTS AND MEASURES: METRIC

Metric British/US System

1 meter (m) = 3.281 feetI square meter (m ) = 10.760 square feet1 kilometer (km) = 0.621 mile1 ton-km = 0.621 ton-mile

1 passenger-km (pass-km) = 0.621 pass-mile

FOX OMCIAL USE ONLY

ACRONYMS AND ABBREVIATIONS

AC - Alternating CurrentADB - Asian Development BankBG - Broad Gauge (1.676 m)cif - Cost, Insurance, Freight

CLW - Chittaranjan Locomotive WorksC.&A.G. - Comptroller & Auditor GeneralDC - Direct CurrentDCW - Diesel Component WorksDF - Development Fund

DLV - Diesel Locomotive Works

DRF - Depreciation Reserve FundEMU - Electric Multiple UnitER - Economic Rate of ReturnGOI - Government of IndiaGTKM - Gross Ton KilometersGTT - Gross Trailing Tonshp - HorsepowerHSD - High Speed Diesel Fuel

hz - Hertz or Cycles per SecondICB - International Competitive BiddingICF - Integral Coach FactoryIR - Indian RailwaysIRVA - Indian Railways Wheel and Axle PlantKmlh - Kilometers per Hour

KV - Kilovoltkwh - Kilowatt per HourLRMC - Long Run Marginal Cost

MG - Metre GaugeMW - MegawattNG - Narrow Gauge (0.762 m and 0.610 m)NTPC - National Trausport Policy CommitteeOEIE - Overhead EquipmentoIS - Operating Information SystemPF - Pension Fund

POH - Periodical OverhaulRDSO - Research, Designs and Standards Organization

Indian RailwaysREPCMG - Railway Electrification Planning, Coordination

and Monitoring GrooupRITES - Rail India Technical and Economic ServicesRKM - Route KilometersRRC - Railway Reform Committee

RTC - Road Transport CorporationRTEC - Rail Tariff Enquiry CommitteeSEB - State Electricity BoardsSFYP - Sixth Five-Year Plan

UNDP - United Nations Development Programv - Volt

GOVERNMENT OF INDIA FISCAL YEAR

April 1 - Harch 31

Tha document has a restricted distribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

INDIA

RAILWAY ELECTRIFTIATION AND WORKSHOP MODERNIZATION PROJECT

STAFF APPRAISAL REPORT

Table of ContentsPage No.

I. BACKGROUND ........................................... I

A. Economic Setting and Transport Sector. .1B. Transport Planning and Coordination ............. 2C. Transport Policy and Investment Allocations ..... 4

II. INDIAN RAILWAYS .. 5

A. Organization, Management, Staff and Training.... 5

B. Infrastructure ........................... . 6C. Motive Power .. 7

D. Rolling Stock .. 7E. Workshops ....................................... 8

F. Manufacturing Units ........................... ; 8G. Operating Performance .. 9

H. Traffic ......................................... 10I. Railway Investment Plan ......................... 10J. Railway Planning .......................-. ,.,., . 12K. Modernization Efforts .. 12

L. Performance Under Previous Bank Group Projects.. 15

III. THE PROJECT ... 16

A. Background ... 16B. Objectives ... 16C. Description ... 17D. Cost Estimates ... 24E. Financing ... 26F. Implementation . . . 26G. Environment ... 27H. Procurement ... 28

I. Disbursements . .. ................ ; 29

This report was prepared by Messrs. M. Alikhan (Financial Analyst),R. Auzmendi (Economist), M. Melrose (Railway Engineer), A. Sabeti (RailwaySpecialist) and T. Shima (Railway Engineer).

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IV. ECONOMIC EVALUATION ................................ . 30

A. General .......... . ..................* * * * 30

B. Electrification of Main Lines .................. . 32C. Workshop Modernization .. ... 37

D. Overall Evaluation . . . . .. . 37

E. Risks ....... 38

V. FINANCE AND EARNINGS ......... . 38

A. Introduction ......... . 38

B. Recent Changes in Financial Policies . . 39C. Rates and Fares ... ....... 41

D. Past Performance . ....... .. 41E. Future Prospects . . ...... 43

F. Financing Plan ..... ........ . 46

VI. AGREEMENTS REACHED AND RECOMMENDATIONS ............... 48

ANNEXES

Annex A - Selected Documents Available in the Project File.. 49

Annex B - Notes on IR's Motive Power and Rolling Stock ...... 51Annex C - Summary Terms of Reference - Workshop Master Plan. 54

Aunex D - Railway Traffic Forecasts ................... ..... 56

Annex E - Description of Main Line Sections to beElectrified and Other Components ................ 70

Annex F - Details of the Six Workshops and ICF andMaintenance Depots Selected for Modernization ... 78

TABLES

Table 1 - Age Inventory of Rolling Stock, March 31, 1983 84

Table 2 - Summary of Operating Statistics 1973/74-1982/83 85Table 3 - Freight and Passenger Traffic 1950/51-1981/82 87Table 4 - Freight Traffic by Major Commodities

1969170-198 1/82..... 88

Table 5 - Freight Traffic Forecasts by MajorCommodities 1984/85-19 90/91.89

Table 6 - IR-s Investment Program 1980/81-1984/85 .......... 90Table 7 - Electrification Program 1956-1985 ................ 91

Table 8- Project Cost Summary ............................. 92Table 9 - Detailed Cost Estimates - 1984/85-1988/89 ........ 93

Table 10 - Summary Cost Estimates - Material and Labor1964185-1988/89 . .......... .. . a .. . 94

Table 11 - Estimated Schedule of Disburseme ntts .............. 95

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Table 12 - Actual Annual Freight and Passenger Traffic inEach Section Proposed to be Electrified -1976/77 and 1981/82 ........ .... ........ ... 96

Table 13 - Forecast Annual Freight and Passenger Trafficin Each Section Proposed to be Electrified -1986/87, 1990/91 and 2010111 ......... .......... 97

Table 14 - Economic Evaluation of Electrification ofJhansi-Itarsi Line (381 RKM; Double Track)..... 98

Table 15 - Sensitivity Analysis of RailwayElectrification Component .............. ... ...... 99

Table 16 - Economic Evaluation of Workshop Modernization .... 101Table 17 - IR Revenue and Expenditure Accounts

1977/78 to 1982/83 ................ ........ . 102Table 18 - IR Balance Sheet March 31, 1983 ............. ..... 103

Table 19 - IR - Distribution of Key Revenue ExpenditureItems as Percentage of Total Revenues .......... 106

Table 20 - Changes in Average Fare and Freight Rates inRelation to Prices of Major Inputs of IR-sCosts 1970/71 to 1981/82 ................. ...... 107

Table 21 - IR Revenue and Expenditure 1983/84 to 1989/90.... 108Table 22 - IR Forecast Balance Sheet as of

March 31, 1984 to 1990 ........... .............. 111Table 23 - IR Forecast Source and Application of Funds

1983/84 to 1989/90 .............. 112

CHARTS

No. 18812 - Indian Railways Organization .................. 113

No. 25838 - Railway Electrification Planning, Coordinationand Monitoring Group ....................... 114

No. 25798 - Variations of ER with Changes in ElectricLocomotive - km per day for Transportof Goods 0.09 . .................... 115

No. 25799 - Implementation Schedule ....................... 116

MAPS

No. 17454 - Electrification Scheme

No. 17456 - Proposed Modernization of Workshops

This report is based on information provided by the Government of India, andon the findings of various preparatory and appraisal missions in 1979, 1980,1981, 1982 and 1983 consisting of Messrs. H. Alikhan (Financial Analyst),R. Auzmendi (Economist), N.E. Krogh-Poulsen (Economist), M. Helrose (RailwayEngineer), E. Pogson (Financial Analyst), A. Sabeti (Railway Specialist),T. Shima (Railway Engineer), A. Soto (Economist) and consultants D. Burns(Mechanical Engineer), G. Fisher (Electrical/Traction Specialist), D. Rowe(Manufacturing Management Specialist) and P. Voss (Electrical/OverheadEquipment Specialist). Mr. J. Griffith (Loan Officer) assisted in theappraisal. Reports and data related to the project available in theAssociation are listed in Annex A.

INDIA

RAILWAY ELECTRIFICATION AND WORKSHOP MODERNIZATION PROJECT

STAFF APPRAISAL REPORT

I. BACKGROUND

A. Economic Setting and Transport Sector

1.01 For a country with the size and diversified economic structureof India, transport plays a vital role. It must provide efficient andreliable transport services, and, given the scarcity of financialresources in the economy, it must accomplish these objectives at a minimumcost. It is of paramount importance, therefore, to ensure that the vitalproduction activities of the economy are not hindered by lack oftransportation.

1.02 Traditionally transport kept pace with economic development in

the country. During the late seventies, however, the discipline andmorale of labor in transport agencies and their freight users alikemarkedly decreased, while investments in transport infrastructure andfacilities were given lower priority than those for sectors such as

agriculture, energy and industry. Other factors such as substantialchanges in the volume as well as in origin and destination of trafficflows, further compounded the problem. 1/ As a result, ports (particularlyBombay) and railways, the backbone of the country-s transport system, were

unable to adequately meet traffic demand, and the road transport system,never designed to carry such traffic, had difficulty covering the railwaytransport shortfall and did so only at high cost to the economy. All thisresulted in supply shortages of vital commodities such as coal, cement and

fertilizer, which brought about stoppages and dislocations to criticaleconomic sectors. However, in 1980-82, the general situation in thesector, and specifically in railways and ports, has substantially improvedmainly as a result of better railway and port management.

1.03 The railways have traditionally been the main mode of mechanizedtransport in India and retained their relative position more or less

unchanged up to the beginning of the 1950-s, when the railway share of

1/ One of the most important changes was the cessation of foodgrain

imports into the country. Before this occurred, the foodgrainrequirements in the North were met mostly from imports through the

southern ports. Now, all the deficit areas, including the south, aresupplied from surplus northern states, reversing therefore the direc-tion and changing the volume of this type of traffic.

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mechanized land transport was estimated at 90% of total ton-km and 75Z oftotal pass-km. Over the following two decades, those railways' sharesdeclined to 65% and 40% respectively, with a corresponding increase in theshare of road transport, values which have remained practically constantduring the 1970s. With respect to freight the increase of highways' sharewas due to the increasing market for high-value goods moving by road overshort and medium distances, where highway transport has inherentadvantages over railway transport. With respect to passenger traffic, themain reason for the reduced railway share is that long-distance passengertraffic has tended to increase at a slower rate than short-distancecommuter traffic, which can generally be carried more economically by roadexcept for large and dense population centers such as Bombay, Calcutta andMadras.

1.04 Compared with railways and highway transport, the other modesof tra_sport are at present of minor importance as general goods andpassenger carriers: coastal shipping and pipelines each carry about 3X ofthe total freight traffic in terms of ton-km; air transport carries about1% of total pass-km. These modes are, however, important within theirspecialized areas, and there is scope for considerable expansion withineach mode because of the size of the country and its geographicalfeatures. Consequently, projects for expansion of coastal shipping ofcoal and pipelines for transport of crude oil, gas and petroleum productsare currently being undertaken by the Government.

B. Transport Planning and Coordination

1.05 The Indian transport sector is under the jurisdiction of variousministries: ports, shipping and roads are under the Ministry of Shippingand Transport; railways are under the Ministry of Railways; civil aviationunder the Ministry of Tourism and Civil Aviation; and pipelines under theMinistry of Petroleum. Planning and coordination is undertaken within thecontext of overall national and regional plans.

1.06 The present institutional arrangements for transport andcoordination at the Central Government level consist of: (a) a CabinetCommittee on Transport and Tourism; (b) a Secretaries' Committee onTransport, Tourism and Aviation; (c) a Transport Development Council andan Inland Water Transport Board, which coordinates policies between theCentre and the States; and (d) an Interstate Transport Committee whichregulates interstate road transport. The committees described under (a)and (b) are not concerned with the day-to-day process of planning. Theyprovide a forum for discussion and their recommendations are not binding.While railways are exclusively under the Central Government, highways androad transport, minor ports and inland water transport are under thejurisdiction of both Central and State Governments.

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1.07 This organizational set up, which has resulted in insufficientcoordination within the transport sector, was a matter of concern and offrequent exchange of views between Government of India (GOI) and the BankGroup for several years. In view of the increasing importance ofaddressing on a sectoral basis this problem together with issues such asthe high share (63% in 1979/80) of the transport sector's oil consumptionin the country's oil bill, and of formulating investment, pricing andoperating policies aimed at minimizing the resource cost to the economy ofthe transport sector's services, a special study group, the NationalTransport Policy Committee (NTPC), was created in April 1978. The NTPC,with the assistance of experts provided by UNDP, carried out a study whichwas presented to GOI in 1980. A review by the Bank indicates that thestudy-s suggestions and recommendations are basically sound and that theywill provide a framework for better development of the country's transportsector. GOI approved most of NTPC recommendations in a cabinet resolutionof March 1982. The Bank is now focussing its transport sector work inIndia in defining, together with GOI, an adequate implementation programand monitoring system, for the main NTPC's recommendations.

1.08 For national transport investments, the Planning Commissionassesses and approves for inclusion in the national plan, the investmentproposals emanating from the transport sector. The national plan thusformulated by the Planning Commission must subsequently be approved by theGovernment and the National Development Council.

1.09 For transport pricing, the overall responsibility lies with theCentral Government, except in the case of road transport where theresponsibility is shared by the Central, State and local authorities. Asa result, the type, level and structure of taxes and road user chargesvary considerably from one state to another. A number of studies 1/ haverecommended improvements to make the system more efficient, less costly interms of time and requirements and development of a tariff structure whichis cost based. These issues are going to be addressed by the Bank in thecontext of the sector dialogue with GOI indicated in para 1.07. In thecase of railways, as mentioned in paras 5.04 to 5.06, a committee convenedby Government has studied the rail transport's rates and fares structureand has recommended a number of measures to improve, inter alia, thetariff structure.

1/ Motor Vehicle Taxation Enquiry Committee (1950), Wankhede Study Group(1971), National Transport Policy Committee (1980).

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C. 1Tansport Policy and Investment Allocations

1.10 The GoverDmenefs economic objectives were stated In the SixthFive-Year Plan (SFYP) 1980-85. The Plan represents an attempt atrealizing high average growth in the economy by increased emphasis onirrigation, rural development and power. The transport sector policywould be implemented through increased support to the highway sector wlthparticular emphasis on facilitating transport in rural areas;encouragement of increased efficiency of railway transport operatlons; anddiscouragement of growth in and decongestion of the central businsesdistrLets of large metropolitan regions. Of the total public investmentin the Sixth Five-Year Plan, Rs 101.6 billion or about 10% would beallocated to transportation. Transport investment outlays are shown below(1951-78 representing outlays in current prices and 1980-85 plannedoutlays in 1979-80 prices):

Rs Million

Plan Period Total Plan Transport Percent Transport

1951-56 (First) 19,600 4,340 221956-61 (Second) 46,720 11,040 241961-66 (Third) 85,770 19,810 231966-69 (Inter) 66,250 10,320 161969-74 (Fourth) 150,020 25,180 161974-78 a/(Fifth) 289,910 41,370 141980-85 TSixth) 975,000 101,620 10

a/ The 1974-1979 Five-Year Plan was cut short by change inthe Government in 1978.

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1.11 The relative allocation of public transport investment fundsbetween the various modes of transport is shown below, 1951-78representing actual allocations and 1980-85 planned allocations (inpercent):

Rail Roads RTCs a/ Ports Ships Aviation

1951-56 50 34 0 7 4 51956-61 65 20 2 3 5 51961-66 67 22 1 5 2 31966-69 50 30 5 6 3 61969-74 37 34 5 Ll 6 71974-78 38 28 9 11 9 51980-85 42 28 10 6 6 8

Average 50 28 4 7 5 6

a/ Public Sector Road Transport Corporations, mainlyfor passenger transport.

1.12 The relative share of railways and road transport hassubstantially changed along the years, in line with the rapidly expandingrole of road transport. The large port investment allocations during theperiod 1969-78 reflect an expansion program on the east coast which issubstantially completed. The Sixth Plan port allocation includes only anominal amount for the construction of a new port at Nhava Sheva, whichwas approved by GOI in early 1982. The inclusion of full allocation offunds for this project would substantially change the indicatedpercentages.

II. INDIAN RAILWAYS

A. Organization, Management, Staff and Training

2.01 The network of IR is owned and managed by GOI. Its operationsare controlled and directed by a Board of five members headed by aChairman who is ex-officio a Principal Secretary to the Government ofIndia reporting to the Minister of Railways. One board member, theFinancial Commissioner, has discretionary powers to report directly to theMinister of Finance on financial matters. The Board, therefore, performsthe dual functions of a Secretariat to the Ministry of Railways and of anexecutive body responsible for railway operations. In financial matters

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the Government of India, through Parliament, oversees implementation ofrecommendations made by the Railway Conveution Committee and otherparliamentary committees.

2.02 IR is the nationes largest single undertaking, with a capitalinvestment of some Rs 75 billion and a total staff strength of about 1.7million. There are nine Zonal Railways, each of which is under thecontrol of a General Manager, and each zone is a large system on its ownaccount. IR also has three factories engaged in the manufacture oflocomotives and rolling stock and two new factorles are underconstruction, one for production of wheels and axles (para 2.22) and theother for remanufacture of critical diesel locomotives components(para 2.24). IR's organization chart is illustrated in Chart 18812. Thequality of senior staff at Central and Zonal Headquarters is high andtheir knowledge of modern railway technology is good. Training of staffis given high priority and is considered crucial by IR Management inmaintaining a high standard of operations. Various forums inside andoutside the country are utilized for training, including IR's own trainingschools.

B. Infrastructure

2.03 IR operates over 60,000 route kilometers (RKM), of which about13,000 RKM have multiple track. IR's trackage is shown below by gauge andcategory (in km):

Running Sidings Of whichGauge Track Yards Total Electrified

Broad 45,896 20,398 66,294 13,381Meter 25,822 7,815 33,637 329Narrow 4,246 534 4,780 0

Total 75,964 28,747 104,711 13,710

Source: IR Year Book 1982/83

About 63X of total track is broad gauge (BC), 33% is meter gauge (MG), andthe remaining 4% is narrow gauge (NG). About 20% of BG and 1% of MG trackare electrified. Of total BG running track, 24,000 km or 15,000 RKMconstitute the heavy density lines over which average traffic densityexceeds 20 million GTKM per RKM per year.

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C. Motive Power

2.04 As of March 1983, there were 2,638 diesel electric and diesel

hydraulic locomotives, 1,137 electric locomotives and 6,292 steamlocomotives on IR (details of type and age group of IR:s traction areshown in Table '). Re-examination of IR-s traction policy confirms theneed to hasten the pace of steam traction replacement. In order to obtainmaximum benefits from diesel and electric traction, however, it isessential to accelerata; the electrification program in the main trunklines where traffic volumes have reached levels which justify theconversion, to improve the performance and availability of locomotives, toreduce their operating and maintenance costs and to provide greaterflexibility in train operations (further notes provided in Annex B).

2.05 In the 1960-s, IR began manufacturing diesel electric, dieselhydraulic, AC and DC electric locomotives in order to reduce dependence on

steam traction and reduce foreign exchange requirements for motive powermodernization. At the Diesel Locomotive Works (DLW), manufacture ofdiesel electric loccmotives was set up in collaboration with ALCO, UnitedStates; at the Chittaranjan Locomotive Works (CLW), the diesel hydrauliclocomotive manufacture was set up in collaboration with MAK, FederalRepublic of Germany, and the AC electric locomotive manufacture was alsoset up in collaboration with the 50 Hz Group (France, Germany, Switzerlandand Belgium). At CLW, IR also manufactures a limited number of DCelectric locomotives for replacement of DC traction around Bombay, whichhas the oldest electrified section of the Railways and the only DC sectionin India.

D. Rolling Stock

2.06 The current passenger stock includes 52 diesel rail cars, about2,600 electric multiple units (EMU); and some 25,000 coaches. The presentfleet of freight wagons is about 390,000 units, equivalent to about540,000 four-wheeler wagons, IR's standard measure of freight capacity.Details of IR-s rolling stock fleet by type and age group are also givenin Table 1 and Annex B.

Coaches

2.07 To cater to the requirements of the increasing passengertraffic, IR has augmented the number of passenger carriages and theiraggregate seating capacity over the years. Additions to the fleet have,however, not been commensurate with the growing needs of traffic. Whilepassenger traffic has gone up by about 180% since 1950 the increase inpassenger coaches has only been in the order of about 120%. This hasresulted in an acute shortage of coaches and the occupation ratio exceeds100% on many trains. These factors have resulted in considerableover-crowding at the expense of travel safety, loss of revenues, andhigher operational costs.

Wagons

2.08 During 1950-s practicaLly all freight was being carried ingeneral purpose wagons - covered, open high sided and open low sidedwagons. To be able to cope with the pattern of traffic, the proportion ofthe special type of stock has been increasing over the years. Now anumber of new bogie wagons, with emphasis on higher payload andspecialized facilities for Loading and unloading, have been put intoservice and the number of such wagons is increasing.

E. Workshops

2.09 IR-s maintenance workshops were set up and equipped in thelatter half of the nineteenth and early twentieth century by the thenState and Company Railways. At the time of integration of the Railways in1952, there were 41 workshops dealing with the overhaul of rolling stockand motive power. The size of these workshops varied from 150 to 15,000

employees. The workload and product mix in these units were governed bythe need for self-sufficiency of each individual State/Company Railway,resultirg in a proliferation of diverse activities for different types ofrolling stock in individual workshops, which continues today.

2.10 Workshops mainly undertake periodical (programmed) overhauls andmanufacture and remanufacture of parts and components. Inspection andservicing (renew brake blocks, change engine lube oil, add water, refuel,etc.) and running repairs are performed in a Large number of Locomotivesheds and carriage and wagon depots dispersed throughout the country.These smaLl repair units are generally referred to as maintenance depots(para 3.23) and so far have been provided with limited machinery andplant, mainly through transfer of old machines from workshops.

F. Hanufacturing Units

2.11 IR-s main manufacturing units are the Chittaranjan Locomotive

Works (CLW) at Chittaranjan, the Diesel Locomotive Works (DL1) at Varanasiand the Integral Coach Factory (ICF) at Madras. The CLW was set up in1948 for the manufacture of steam Locomotives. Production in this shopwas diversified in the mid-1960-s, and by 1972 this unit had switchedentirely to the manufacture of electric locomotives, diesel hydraulicshunters and a variety of components for diesel electric locomotives andother equipment. The ICF commenced production of coaches in 1955 andlater added electric multiple units to its product line. The productionof coaches at ICF needs to be increased (para 3,23). The DLW beganproduction of diesel electric locomotives in 1964. A large proportion ofthe original equipment installed in the three production units has alreadyserved its useful economic life. Also, WRs manufacturing,remanufacturing ant maintenance activities are growing and rapidlybecoming more complex. A need to upgrade manufacturing units and

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strengthen IR-s organization and management to adequately cover theseexpanding activities has become evident and has been the subject ofextensive discussions between IR and the Bank (para 2.23).

G. Operating Performance

2.12 IR-s operating performance for the period 1973174 to 1982/83is given in Table 2. The best performance level for the most significantoperating indicators during the ten-year period has been underlined inTable 2 for easy reference. The overall performance of IR compared toother railway systems in developing countries remains generallysatisfactory. While the last years results show definite upswings in manyof these indicators, a number of them, especially in motive power androlling stock equipment, need further attention and improvement.

2.13 The reasons for the fluctuating level of IR-s performance can beclassified into three general categories: (i) factors external to IR andover which the railways have little, if any, control; (ii) events externalto IR but to which the railways should be able to adapt smoothly and withreasonable promptness; aud (iii) problems largely within the realm of IR-smanagement to resolve. The first category includes a deterioration of lawand order in the country which resulted in damage and theft of railwayproperty affecting operations adversely, a reduction in efficiency ofmajor railway users in loading and unloading wagons thus increasing illetime of wagons, congestion at major ports which lead to diversion oftraffic to minor ports where handling facilities and railway capacity waslimited, and an insufficient level of investment in maintenance andrenewals in recent years, resulting from reduced priority for railwayfunds in India-s recext five-year plans. The second category compriseschanges in traffic-flow patterns of major commodities. For example, asIndia-s foodgrain production increased, imports were reducedsignificantly. For this and other commodities (e.g., fertilizer, cement)the haul distances increased sharply and the commodity flow patternschanged drasticaLly. Given the size and complexity of the system, IR'smanagement could not respond to the changes in a timely manner. The thirdcategory includes a drop in productivity of railway staff; insufficientattention to the potential for reducing costs; and the need to increaseoperating efficiency, improve railway technology, and adopt modernmanagement tools (paras 2.25 to 2.28) which would considerably enhanceIR-s ability to cope with these problems. A detailed discussion of thesematters was outlined in the Second Railway Modernization and MaintenanceProject, SAR Report No. 3431-IN dated October 26, 1982, Section H, paras2.24 to 2.37.

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H. Traffic

2.14 IR's freight and passenger traffic statistics from 1950/51 to1981/82 are shown in Table 3. In the last 31 years, railway freighttraffic has increased at an average annual rate of 3.1% in terms of totaltonnage and 4.5% in terms of ton-kilometers. The corresponding growthratios for inter-city passenger traffic are 2.3% and 3.7%. Theselong-term trends do not reflect, however, gradually changing patterns ofgrowth. While the annual rate of growth of inter-city passenger traffichas increased from 0.5% (for passengers) and 1.0% (forpassenger-kilometers) in the decade of the 1950s, to 3.3% and 6.1% in thelast decade, the rate for freight traffic in the same decades hasdecreased from 5.3% (tons) and 7.1% (ton-kilometers) to 2.0% (tons) and2.9% (ton-kilometers), respectively. Meanwhile, during the last fouryears, total tonnage moderately increased from 237 to 245 million tons orabout 0.8% per annum and ton kilometers increased by 1.7% per annum (from163 to 174 billion) due to a continuing rise in average haul of freight.Suburban traffic, meanwhile, has grown at a sustained rate of 5.4% forpassengers and 6.3% for passenger-kilometers during the last 31 years.Growth has levelled off in the last four years however, suppressed byshortages of rail equipment and terminal facilities. Traditionally, sevengroups of commodities have made up the bulk of railway transport in India.In 1981/82 these seven commodities (coal, inputs and production of steelplants, iron ore for export, foodgrains, petroleum products, cement andfertilizers) comprised about 80% of revenue earning traffic in terms oftons moved and 75% in terms of ton-kilometers (see Table 4).

2.15 Details of freight traffic forecasts are provided in Table 5and in Annex D. Three different alternatives have been analyzed andcommodity-wise projections show that a total rail traffic ranging from 186to 198 billion ton-kilometers, with a medium forecast of 191 billionton-kilometers can be expected by the end of the Sixth Plan in 1984/85.In addition, by 1990/91, total traffic would range between 212 and 258billion ton-kilometers. Passenger traffic, moreover, is expected to reachbetween 246 and 292 billion passenger-kilometers by 1984/85 and from 307to 444 billion passenger kilometers in 1990/91. The freight trafficforecasts are less than the Sixth Plan estimate of 220 billionton-kilometers of total freight traffic in 1984/85. However as indicated(para 2.16), the limitations of the Sixth Five-Year Plan are such thateven assuming an efficiency similar to the 1981/82 level, the Planallocations would be generally insufficient to cover the needs of therailways.

I. Railway Investment Plan

2.16 To support projected traffic growth and finance assetreplacement, IR-s approved investment for the Sixth Five-Year Plan (SFYP)period 1980/81 to 1984/85 totals Rs 51,000 million, including Rs 3,050

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million for metropolitau transport projects and investment in roadservices. The broad features of the Plan are responsive to the country-sneeds although improvements are possible. The plan allocations areparticularly short in telecommunications and in replacement of motivepower and rolling stock. The amount allocated for telecommunicationsexcludes the investment needed to implement an operating informationsystem, for which only a nominal sum has been provided in the 1983/84budget. Similarly the replacement of motive power and rolling stock isnot adequately covered, especially when considering the importance ofphasing out steam traction to improve IR-s maintenance and operations andto optimize the use of coal and the age and condition of a sizeableportion of the freight wagons and coaches. Even if IR-s efficiency ismaintained --as expected-- at the 1981/82 best historical levels, therewould be little safety margin when compared with the conservativeestimates of future traffic growth presented in para 2.15, not to mentionthe need to reduce operating expenses by phasing out obsolete motive powerand rolling stock. The detailed investment program is presented inTable 6 and is summarized below:

Sixth Plan Outlay for Railways, 1980/81-1984/85

Rs Million

Rolling Stock 21,000 41Track Renewal 5,000 10Traffic Facilities 4,800 10Electrification 4,500 9Workshops and Sheds 2,950 5Machinery and Plant 2,150 4Bridge Works 900 2Signalization and Telecommunication 900 2Metropolitan Projects, New Lines, Others 8,800 17

Total 51,000 100

Source: Sixth Five-Year Plan

IR has proceeded at a fast pace in the implementation of the Plan and itsinvestments in the first four years (1980/81 - 1983/84) are expected to beof the order Rs 48,560 million. The feasibility of enhancement of thetotal plan outlay during the current Sixth Five-Year Plan is at presentunder examination but it has already been decided that the IR outlay willbe substantially increased. IR is now in the process of preparation ofits detailed investment plan for the Seventh Five-Year Plan period 1985186- 1989/90. Its preliminary estimates indicated that funds needed for the

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the Seventh Plan Period would be tn the order of Rs 110 billion. Thiswo%..Ld take Into account the urgent need for early replacement of overagedassets and modernization of its operations. IR's Seventh Five-Year Plan'sfocus would be largely on investments for replacements of motive power androlling stock; electrification and modernization of workshops and aids tooperational management, which, as in the past, would be continuouslydiscussed with the Bank during the plan period. At negotiations, it wasconfirmed by GOI that this project is an integral part of the IR capitalinvestment plan and as such, has the Planning Commission's approval.

J. Railway Planning

2.17 Under Credit 280-IN (Eleventh Railway Project), a corporateplanning exercise was initiated by IR with the objective of ensuringadequate provision of rail transport services for both passenger andfreight in areas in which railways could confer optimum benefit to theeconomy. The exercise was completed in 1976 and resulted in a 15-yearCorporate Plan for the total railway system, consolidating the corporateplans of the individual zonal railways on which IR is based. The Planoutlines a proposed development strategy for IR for the period 1977/78 to

1988/89 and covers passenger and freight traffic, traction and rollingstock, line capacity, yards and terminals, shops, production units,research and development, management and manpower and financial aspects.

2.18 The Corporate Plan exercise provided the first comprehensivelook at shortfalls and choices in the post-investment level. The Planalso provided GOI with an indicative statement of the impact on thenational economy. The Plan stated the need and the framework for modern-ization which was subsquently further elaborated by the Rail TariffEnquiry Committee (RTEC) and the National Transport Policy Committee(NTPC). Both committees concluded their comprehensive studies andpresented their recommendations to GOI in 1980.

2.19 GOI's acceptance of the need for IR's modernization has beenreflected in efforts to increase the resource allocation under thedevelopment plans (para 2.16) and implementation of various measures aimedat improving WRs maintenance and railway technology (para 2.22), opera-tions (paras 2.20 and 2.21) and finances (paras 5.04-5.06). The Bank hasbeen closely involved and has supported GOI/R-s efforts and the proposedproject is a continuation of these efforts.

K. Modernization Efforts

2.20 There are multiple reasons behind the problems noted in previousparagraphs, for the periodical deteriorating capacity and shortcomings in.the performance of the railways. With a rapidly growing number of dieseland electric locomotives nearing their mid-lives and in need of major

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overhaul, IR has taken up the immediate need for a change in investmentpriorities in favor of modernization of maintenance facilities and motivepower and rolling stock design. In support of IR-s move in these newdirections, the Bank Group approved the First Railway Modernization andMaintenance Project, Credit 844-IN in July 1978, for an amount of US$190million equivalent and the Second Railway Modernization and MaintenanceProject, Loan 2210-IN/Credit 1299-IN in December 1982 for an amount ofUS$400 million equivalent.

2.21 The major modernization issues addressed in the recent pastyears on which the Bank Group has assisted GOI/IR efforts are as follows:(a) a master plan study for modernization and rationalization ofworkshops; (b) relative economics of diesel and electric motive power;(c) accelerated electrification; (d) railways motive power plan, mediumand long range; (e) railways passenger vehicle technology andrequirements; (f) unit exchange spares and maintenance system for dieseland electric locomotives; (g) modernization of 1,500 DC Bankinglocomotives; (h) railways real time information need for freight operationand passenger reservation; (i) the revision of the Corporate Plan based onchanges in IR-s operating and traffic environment; and (j) resourcemobilization and tariff rationalization.

Maintenance and Technology Improvements

2.22 Under the ongoing Credit 844-IN, which is almost complete, themain items dealt with were modernization of IR-s manufacturing unit CLWand four major repair workshops, introduction in some workshops of amodern unit exchange concept of maintenance program and the establishmentat Yelanhanka in Karnataka State of a wheel and axle plant (IRWA). Thisplant will be in operation shortly which would help save scarce foreignexchange. The measures taken under the project have enhanced IR'smaintenance capability and has resulted in reducing cost of maintenance aswell as improving performance and availability of IR's diesel and electriclocomotives.

2.23 While under the Credit 844-IN some key maintenance problemsrelated to IR-s diesel and electric locomotives were tackled, furthermeasures were needed (identified under the Master Plan Study) to upgradethis activity, which the Bank Group supperted under Loan 2210-IN/Credit1299-IN. Under this ongoing project, the physical thrust of the projectaimed at: (a) further modernization and improvement of locomotivemaintenance and reliability; (b) improvement of technology and performanceof the AC mainline electric locomotives; and (c) improvement oftechnology, design and operation of heavy bulk movements. In addition,among other areas, examination of IR organization and management,operations and finances continues.

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2.24 Major components of the ongoing Railway Modernization andMaintenance II Project, which have a bearing and complement the proposedproject, are: (a) the construction of Diesel Components Works (DCW) plantto be constructed and equipped at Patiala, in Punjab State toremanufacture/manufacture diesel electric locomotives criticalcomponents/assemblies which IR will utilize to operate a unit exchangemaintenance system at DCW and its other workshops; (b) the acquisitionand testing of about 20 prototype high-power modern high adhesion ACelectric locomotives, which will serve present and future needs for heavyfreight trains capable of hauling up to 4,500 GTT on all IR 25 KVelectrified lines; (c) the acquisition of components and materials forconstruction of corrosion resistant high capacity wagons; and(d) acquisition of test equipment for training to improve IR's trainoperations and fuel efficiency.

Modern Management Tools

2.25 While IR's management continues to take measures to resolve someof the key problems, it is constrained in the extent of actions it couldinitiate, because of lack of modern management tools, which are criticallyneeded and other large railways have successfully employed. Experiencehas proven in other complex railways, that adoption of a real-timeoperating information system and of a modern communication capabilitywould, inter alia, immensely help reduce traffic congestion, considerablyimprove rolling stock and motive power utilization and facilitatemaintenance of motive power and rolling stock, and enable IR to quicklyadjust to changing traffic patterns all of which will reduce operatingand capital costs of the railways.

2.26 Adoption of a real-time Operating Information System (OIS) whichwould help resolve most of the problems described above has been underdiscussion between GOI|IR and the Bank Group for several years. The BankGroup's audit of the Eleventh and Twelfth Railway projects alsorecommended the use of modern technologies to provide real-time up-to-dateinformation on freight carrying capacity and its optimum utilization.

2.27 GOI has endorsed the need for and approved introduction of anonline/real-time computer-based OIS for freight operations and managementof IR and the related telecommunication and data transmission network.The basic configuration of the integrated computer based freight OIS wouldbe a combination of centralized and decentralized functions. The corefunctions, like control of wagons, locomotives, train movements, routingof traffic and empty wagon distribution will be performed centrally and toperform this central function IR has decided that a system operating onCanadian National Railways System or British Railways System will beadapted and implemented to suit the needs and conditions of the IR.

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2.28 Satisfactory progress by GOI/IR in selection and implementationof a computerized Operating Information System (OIS) and relatedtelecommunication was a pre-requisite to processing the Second RailwaysModernization Project, and during its negotiations an understanding wasreached on a plan of action for implementation of the OIS and relatedtelecommunication. Progress in implementing the plan of action to datehas been somewhat slower than was agreed. Delays were unavoidable giventhe substantial change in the railways Board personnel, which occurred inFebruary/March 1983. However, the development of a well-integratedTelecommunication/OIS network remains a top priority for IR and sinceJanuary 1984 steps have been taken towards implementation ofTelecommunication/OlS system. To expedite progress towards implementationof the telecommunication portion of the integrated telecommunication/OISand data transmission network system, GOI/IR indicated during negotiationsthat a consultant will be selected by August 31, 1984 and thetelecommunication project will be sanctioned (approved) by the IR-s Boardby March 31, 1985. It was also agreed during negotiations that selectionof collaborators/consultants to assist GOI/IR in adaptation andimplementation of the OIS will be a condition of effectiveness of theloan.

L. Performance Under Previous Bank Group Projects

2.29 Through seven loans and nine credits approved between 1949 and1982, the Bank assistance to IR totalled over US$1.4 billion dollarsequivalent. Prior to 1978, Bank Group loans and credits were based on oneto three-year slices of IR investmeut programs and covered foreignexchange for acquisition of: (a) materials, parts and components formanufacture of motive power and rolling stock; (b) machinery and plant forIR manufacturing units; and (c) materials and equipment for lineimprovement works and telecommunications.

2.30 Previous projects, audits have been carried out for Credits280-IN and 448-IN (Eleventh and Twelfth Railway Projects) and the findingsare contained in the Project Performance Audit Report No. 1658 of June 30,1977. A Project Completion Report and draft Project Performance AuditReport have also been prepared on the Thirteenth Railway Project,Credit 582-IN.

2.31 The Project Performance Audit Report concluded that the Bank'scontribution to the country's development through its involvement inrailway projects has been substantial. Bank assistance provided theforeign exchange resources without which IR-s replacement and expansionprograms would have been very difficult to carry out. The report alsopo'nted out the need to: (a) improve the planning, both at the sectorallevel and within the railways; (b) introduce a better reporting systemof the results of Bank-financed projects; and (c) use computers to provideimmediate information to optimize the utilization of its carrying

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capacity. Additionally, the report mentions IR-s difficulties in payingthe fu_l dividend on Capital-at-Charge which IR is obliged to pay GOIannually.

2.32 The issue listed under (a) in para 2.31 has already beenaddressed by GOI as mentioned in paras 2.17 to 2.19. Additionally, start-ing with Credit 844-IN, a thorough and adequate reporting and monitoringsystem (issue b) was introduced and has been functioning satisfactorily.A first step towards resolving issue (c) has been addressed by GOI/IR asdescribed in paras 2.25 to 2.28. Regarding the dividend problem, although (IR has met the full dividend payment to GOI between 1976/77 and 1978/79,it has run into difficulties in meeting this financial requirement(paras 5.03-5.06 and 5.09-5.11).

III. THE PROJECT

A. Background

3.01 The basic objectives underlying the Bank Group's past assistanceto IR have been to assist in rehabilitating and subsequently modernizingrailway infrastructure, motive power, rolling stock and in improvingrailway operating efficiency, maintenance, administration and planning.The Bank Group has had a continued involvement in development, preparationand review of the work mentioned above and for the proposed project. BankGroup missions to IR have been supplemented by consultants in such fieldsas heavy engineering, manufacturing, electric and diesel traction technol-ogy, maintenance including upgrading of repair workshops, signalling andtelecommunication, organization and operating information systems andintermodal transport. Also, arrangements were made at various times forIR officers and those of other Government agencies to visit transport andindustrial organizations outside India. Findings and preparation of thevarious subjects have been extensively discussed with IR and GOI, espe-cially the Ministries of Finance and the Planning Commission. Thesefindings and discussions form the basis for the formulation of a number ofprojects by IR, including the proposed project.

B. Objectives

3.02 The main objectives of the proposed project are to:(i) increase capacity to meet growing traffic demand; (ii) improveutilization of motive power, rolling stock and roadway; (iii) improve costeffectiveness; (iv) utilize energy-efficient traction; (v) improvetechnology of locally-manufactured components used in electrification oflines; and (vi) strengthen the organization in selected operational areas.

3.03 As a means to achieve these objectives the proposed projectcomprises two major components, namely, electrification and workshop

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modernization. The electrification component will contribute, inter alia,by completing energization of the heavy density main trunk lines whichhave enough traffic to economically justify the conversion (seeChapter IV). The operation of the completed electric network will allowthrough-train operation of higher tonnage at greater average speeds andincreased motive power and rolling stock kilometers per day. The workshopmodernization component will contribute by increasing availability andreliability of rolling stock at lower costs. In addition, it will provideneeded capacity to the presently inadequate coaching stock production andmaintenance system. Further, it will streamline workshop operation andmanagement practices.

C. Description

3.04 The proposed loan would support the electrification of about3000 RKM of IR-s accelerated Electrification Plan; and modernization of

six workshops, one manufacturing unit and selected maintenance depotslargely through replacement of old obsolete machines with modern andefficient ones. The proposed project is estimated to cost aboutUS$1,212.7 million of which US$280.7 million equivalent is proposed forBank financing.

3.05 The project consists of:

(a) electrification:

(i) electrification of the already partially electrified maintrunk routes (paras 3.06 to 3.13);

(ii) acquisition of OHE Recording/Testing Car (para 3.14);

(iii) acquisition of OHE maintenance vehicles for electrifiedlines (paras 3.15 and 3.16);

(iv) improvements in technology for domestic manufacture ofcomponents used in electrification of lines (para 3.17);

(v) improvement of Ghat Operations (paras 3.18 and 3.19); and

(b) workshop modernization: consisting of modernization of sixmajor shops, the Integral Coach Factory (ICF) and selectedmaintenance depots (paras 3.20 to 3.26);

(c) staff training (paras 3.27 and 3.28).

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(a) Electrification

(i) Completion of Electrified Network

3.06 While most of the world's railways have been in the process of,or have completed, the conversion from steam to diesel or electrictraction over the last 25 years, IR is, because of its very large sizeand lack of funds, only about halfway through this conversion. In 1983,on broad gauge, IR locomotive fleet was comprised of 3,523 (52%) steam,2,061 (30%) diesel and 1,137 (17%) electric units. Obvious priority toimprove the operational and financial position and service capability ofthe railway is to accelerate the conversion from the costly andinefficient steam traction to diesel and to electric traction on heavydensity lines, where it is economically feasible to do so.

3.07 IR's policy (Annex A and B) towards conversion of traction hasbeen to: (a) phase out inefficient steam traction; (b) convert fromdiesel and steam to electric traction where traffic densities make thiseconomically viable; (c) improve through electrification the performanceon high density lines by a combination of higher sustained average speeds,higher trailing tonnage per locomotive and greater number of locomotiveand rolling stock kilometers per day of utilization; (d) reducecongestion, operating and maintenance costs through elimination of steamand diesel on main lines; (e) build up a suitable and modern motive powerfleet and infrastructure to meet the demands of increasing freight trainloads to 4,500t and increasing passenger train size to twenty two coaches;and (f) modernize signalliug and telecommunication system as a consequenceof necessary changes made during the conversion to electrification.

3.08 The high cost of imported fuel (HSD) is of concern in thecountry because of the adverse foreign exchange implications. In theimmediate future, the railway is one of the few areas where the countrycould significantly substitute electric power for HSD. At present Indiaimports about 10% of its HSD needs which is equivalent to about the amountthat is used by the railways. Moreover, the railways needs are on therise, which would mean higher imports of HSD.

3.09 While all these reasons suggest a strong case forelectrification, because of acute resource constraints, IR was only ableto allocate about 3% to 5% of its annual investment outlay for this tasksince 1958, when it commenced electrification works. By May 1983 onlyabout 5,800 RKM were electrified, which constitutes about 10% of the totalnetwork. The 10% electrified route services corresponds to 28% of GTKMcarried by IR. Table 7 shows the pace of electrification on IR since1956.

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3.10 The slow pace of electrification has constrained the developmentof an integrated operational network. As a result, the partially completeelectrified system is a detriment to efficient operations since incompleteelectrified lines mean change of operations and equipment at points wheretraction changes, resulting in costly constraints in operations andcapacity.

3.11 As part of the national program for the oil conservationprogram, IR is to accelerate electrification of about 7,500 RKM of itsmain trunk lines under the Sixth and Seventh Five-Year Plan period 1980 to1990. This program calls for increasing the pace of electrification fromthe present 300 RKM to 1,000 RKM annually. With completion of theelectrification program by 1989/90, IR expects to haul 65% of the totalGTKMs (goods and passenger) by electric traction. In order for IR to beable to handle this volume, GOI/IR indicated during negotiations thatsufficient motive power to meet requirements of the newly electrifiedlines will be supplied.

3.12 The plans relating to the electrification program and theproposed Bank assistance to it, have been extensively discussed withGOI/IR. The proposed loan would support part (3,U0O RKM) of theaccelerated electrification program which requires importation of materialand equipment to augment the domestic manufacturing capacity. This willcomplete electrification of the main trunk routes connecting thequadrilateral formed by the four metropolitan cities of Calcutta, Delhi,Bombay and Madras and its diagonals (Map 17454) and the heavy density coaltraffic routes of Bilaspur-Annupur-Katni-Bina. The project would assistin the electrification of the following lines:

1. Jhansi-Itarsi (381 km)2. Itarsi-Bhusaval (301 km)3. Bhusaval-Nagpur (393 km)4. Wardha-Balharshah (133 km)5. Balharshah-Vijayawada (454 km)6. Bhopal-Nagda (239 km)7. Itarsi-Nagpur (298 km)8. Nagpur-Durg (265 kn)9. Bina-Katni-Anuppur (429 km)10. Anuppur-Bilaspur (151 km)

TOTAL (3,044 km)

Details of each of the above lines are described in Annex E. Atnegotiations, GOI/IR confirmed that electric power supply for IR-selectrified system will be available on a priority basis and that hightension power transmission lines connecting railway substations with State

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Electricity Boards (SEBs) will be provided sufficiently in advance of theplanned line energization date so that the commissioning is not delayed.

3.13 This proposed project component is estimated to cost Rs 6,821.7million (US$631.6 million equivalent) with a foreign exchange component ofsome Rs 1,143.0 million (US$105.8 million equivalent). In addition,training for this project component is provided as described in para 3.28.

(ii) OHE Recording/Testing Car

3.14 At present there is no overhead equipment rccording/testing carwith IR and thus manual and time consuming methods are employed resultingin a low standard of maintenance. For efficient operatiou of electrifiedlines, it is considered essential to have an OHE recording/testing carto measure and record the various parameters of OHE and pantograph under

dynamic conditions in monitoring current collection for laying down arational maintenance and overhaul schedule for OHE (Annex E). This carwill be imported and is estimated to cost about Rs 21.1 million (US$2.0million equivalent) with a foreign exchange component of Rs 14.5 million(US$1.3 million equivalent).

(iii) OHE Maintenance Vehicles

3.15 IR now operates a large number of indigenously manufactured OHE

inspection/maintenance tower vehicles, which are used to attend to OHEbreakdowns on the electrified tracks. Due to the obsolete design and lowspeed, these vehicles are inadequate to perform the necessary maintenanceefficiently. Since the heavy maintenance/repair of OHE is done duringcommon power/traffic blocks, it is extremely important to complete thework expeditiously to minimize traffic disruptions. Therefore, IR needsto develop high-speed vehicles, namely, road-rail vehicles, 4-wheelerself-propelled tower wagons and bogie-type 8-wheeler self-propelled towerwagons to attend to minor, normal and heavy breakdowns respectively.

3.16 Based on IR's current and future needs (Annex E), the Bank wouldhelp finance the import of some 20 vehicles with the delivery of 1irst tenby 1984/85 and the balance in 1985/86. The proposed project component isestimated to cost about Rs 59.0 million (US$5.5 million equivalent) with aforeign exchange component of Rs 39.0 million (US$3.6 million equivalent).

(iv) Improvements in Technology for Manufacture of Components

3.17 IR uses predominantly locall.' manufactured components such ashigh-tension circuit breakers, interruptors and power transformers inelectrifying its lines. These and other items could be upgraded to tech-nological standards existing elsewhere outside India. To assist i1 bring-ing about technological improvements in local manufacture of criticalcomponents, the project will also finance all such Items. Inclusion ef

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these items in Bank financing will enable the local manufacturer to enternew or update existiEg collaboration agreements and manufacturingfacilities. The Bank and IR will ensure that the technology improvementswill materialize through tender specification and resulting evaluation ofbids. The value of these components, included in the overallelectrification cost (para 3.13), is estimated to be about US$30 millionequivalent.

(v) Improvement of the North-East Ghat Operations

3.18 The main line DC electrified routes Bombay-Kalyan-Igatpuri andBombay-Kalyan-Pune sections run over steep ghat sections (Annex B,para 4). Both sections are serious bottlenecks in train operations andthe conversion of these DC sections to AC to achieve compatability withthe rest of IR-s electrified system have been the subject of discussionfor some time between IR and the Bank. Because of the complextechno-economic issues involved in the conversion from DC co AC, a studywould be needed to evolve an appropriate long-term strategy. Atnegotiations, IR explained that a multi-disciplinary committee is in thefinal stages of preparing a report and indicated to the Bank that adecision on the report will be taken by June 30, 1985.

3.19 As an immediate short-term measure to improve operatingefficiency in these difficult sections, it is essential that voicecommunication between the drivers of leading locomotives and the driversof banking locomotives and signal cabins be provided to improve lineoperations and reduce delays. The proposed project would provide fornecessary radio communication equipment and is estimated to cost Rs 7.3million (US$0.7 million equivalent) with a foreign exchange component ofKs 5.4 million (US$0.5 million equivalent). At negotiations, IR indicatedthat it will procure and place into operation a communication system forthe Ghat sections by December 31, 1985.

(b) Workshop Modernization

3.20 Over the last 25 years, the need and pressure to acquireadditional carrying capacity have resulted in a widening of the gapbetween maintenance requirements and investment allocations. Investmentin workshops has averaged only 3.5% of the investment made in rollingstock and motive power, instead of the normal 7% to 117. for railways indeveloped countries. Moreover, about 45% of this investment in workshopmachinery and plant has been exclusively for the manufacturing units:DLW, CLW and Integral Coach Factory (ICF). A 1977 detailed survey showedthat of a total of 24,546 machines, 77% of those in mechanical workshops,53% in production units and 46% in diesel and electric locomotivemaintenance depot lines were over 15 years old. At the same time, thelevel of parts and components available for maintenance has beensubstantially lower than required by the Railways.

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3.21 During this period of low investment in maintenance facilities,extensive changes in the mode of traction from steam to diesel andelectric aud consequent diversity of product mix introduced newcomplexities in repair practices and technology, which further strainedthe maintenance system. In addition, an increased proportion of olderstocks of locomotives, coaches and wagons has measurably added to thequantum of attention needed in POH and rehabilitation. Increased demandsfor periodic repairs to rolling stock were met by piece-meal expansion ofexisting facilities. Maintenance capability was further underminrd by aheavy backlog in replacement of overaged machinery and plant item3resulting from investment constraints.

3.22 Under Credit 844-IN, GOIIIR had agreed to develop a workshop"Master Plan" and this has been prepared as outlined in the Summary Termsof Reference (Annex C). The plan was reviewed and evaluated by the Bankand found to be well-conceived and meets the requirements asked of IRunder Credit 844-IN. The proposed workshop modernization component isbased on this plan and aims for the most part, at improvement ofcarriage-wagon maintenance. In view of the physical and finencialconstraints, a selection process was devised for choosing the workshopsand maintenance depots for the proposed project for modernization. Theselection has been governed by the following factors: (a) economic rateof return on proposed investments; (b) change in the product mix;(c) sophistication of product, present and new; (d) priority forimprovement in product performaace and reliability; (e) arrears andbacklog in workload; (f) changes in future workload; and (g) size, age andantiquity of unit. Using the above criteria, the six major workshops andICF and maintenance depots were selected.

.3.23 In summary, the project component consists of rationalizationand modernization of six selected workshops (Map 17456), namely, Parel,Liluah, Jagadhri, Golden Rock, Kharagpur, Ajmer and the Integral CoachFactory (ICF), and replacement of old obsolete machines and equipment inseveral maintenance depots (Annex F). In both cases, the selected shopsand the maintenance depots, the approach is directed towards:(a) rationalization of periodic overhaul workload; (b) rationalization ofproduction activities; (c) provision of improved material handlingequipment and suitable workshop layout changes; (d) provision of unitexchange spares; (e) replacement of machinery and plant including testingequipment for better quality control, communication equipment for betterinplant management, and cleaning equipment and technology;(f) modification and extension of existing workshop structures to cater toincreased periodic overhaul (POH) load and in the case of ICF, to increaseproduction and better work flow; and (g) development of adequate personnelsupport through organized training.

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3.24 Under the proposed project, the bulk of the investment is for:(a) machinery and equipment to achieve precision, proper testing andquality control required for maintenance of modern motive power and roll-ing stock; (b) material-handling equipment and unit exchange components toreduce frequent interruptions in work flow and to reduce damage tomaterial in transport, both having impact on output, quality and cost ofrepairs; and (c) management information systems (HIS). For this, a com-puter-based MIS, similar to the one developed at ICF, will be installed atthe six selected workshops by March 31, 1987. This was confirmed byGOI/IR at negotiations.

3.25 The final objective of IR is to eventually develop an integratedmaintenance and repair network on a national basis. The proposed projectwill cover workshop modernization for the 1984/85 - 1989/90 and isestimated to cost Rs 3,298.8 million (US$305.5 million equivalent) witha foreign component of Rs 1,591.9 (US$147.5 million equivalent). Theproposed project would finance 100% of the foreign requirement for themajor workshops and ICF, and would cover about 48% of the foreign exchangerequirements of the maintenance depot component.

3.26 In the twenty years or so since IR began dieselizing its locomo-

tive fleet and adopted improved steel coach and wagon stock designs, anumber of technological advances that have been made in materials andcomponents for railway equipment. IR has incorporated a number of theseadvances in its fleet and no doubt will continue to do so on acase-by-case basis. Many of the advances coupled with the operatingexperience of other railways have produced opportunities to improveutilization of equipment, safety and reliability, and reduce cost ofoperations and maintenance. IR has found that it may be able to use someof these maintenance concepts and has discussed with the Bank its need toconduct a comprehensive review of its equipment specifications and main-tenance standards and procedures in light of present-day circumstances.Lhis review should provide a foundation upon which the operating andmaintenance practices could be revised to take full advantage of IR-spresent equipment fleet and to provide an outline for research needs ofthe future. At negotiations, GOI/IR provided acceptable terms ofreference for a study and indicated that the study will commence byJuly 1, 1984 and the final report would be available by October 31, 1985.

(c) Staff Training

3.27 Training under the proposed workshop modernization component

would be i.rovided for process engineering, cleaning processes, paintingprocess and management information system for workshops. Under theproposed project, an amount totalling Rs 26.3 million (US$2.7 millionequivalent) has been provided for procurement of train simulators toextend the driver training program which was started under the ongoing

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Second Railway Modernization and Maintenance Project, Loan 2210-IN/Credit1299-IN. In total, this project component would amount to Rs 39.0 million(US$3.6 million equivalent) with a foreign exchange component of Rs 25.4million (US$2.3 million equivalent). At negotiations, an outline of thetraining program wasprovided (para 3.28).

3.28 Training for the proposed electrification component would beprovided in different areas of operations including, inter alia,(a) re-training of steam/diesel locomotive drivers and helpers for elec-tric traction; (b) design, installation and maintenance of OHE;(c) installation and maintenance of power supply; (d) design, installation

and maintenance of signaLling and telecommunication; and (e) training ofsupervisors for remote control centers. About 1,200 personnel would getthis training for about 2 to 8 weeks. In addition, in order to obtainexposure to more advanced and specialized technologies, senior-levelofficers would be trained abroad for inspection/study of electrifiedrailway systems in foreign countries. A total of 1,500 man months oftraining would be provided under the proposed project; of these, anestimated 200 man months would be overseas. This proposed training programis estimated to cost about Rs 29.2 million (US$2.7 million equivalent)with a foreign exchange component of Rs 9.7 million (US$0.9 million equiv-alent). At negotiations, GOI agreed that budget allocations will beprovided to IR to carry out the training programs (paras 3.27). An out-line of the training programs was provided by IR at negotiations, and IRindicated that a detailed training program will be furnished to the Bankby July 31, 1984.

D. Cost Estimates

3.29 The proposed project items are included in IR-s investment plan(to be approved by the Planning Commission) 1985/86 - 1989/90 whichamounts to about Rs 110 billion (US$10.0 billion equivalent). GOIprovides the foreign exchange needs of IR-s investment plan from thefollowing sources: GOI's own reserves; international financial institu-tions such as the World Bank and bilateral loan arrangements. Principalitems included in the proposed project are detailed in Annex E and F andconstitute an integral part of IR-s investment plan. The project isestimated to cost about Rs 13,099 million (US$1,213 million equivalent)with a foreign exchange component of some Rs 3,629 million (US$336 millionequivalent). However, local manufacturers of machinery and components tobe procured through ICB under the project could win up to US$20 millionequivalent, thus reducing the most likely foreign exchange component toUS$316 million equivalent.

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3.30 The cost estimates are based on January 1984 prices. They arebased on ex-factory prices for similar items manufactured in India and onrecent prices of imported equipment. The provision for contingenciesallows for (a) physical variation of 7.5% in material and equipment and10% in labor; (b) annual price escalation in foreign costs of 7.5% in1984/85; 7% in 1985/86; and 6% thereafter; and annual price escalation inlocal costs of 7% in 1984/85 and 1985/86 and 6% thereafter. The foreignexchange rate was assumed to be US$1 = Rs 10.80. During negotiations,the cost estimates were discussed and confirmed. The cost estimates aredetailed in tables 8, 9 and 10, and summarized below:

(IRs Million)L/ (US$ Million)L/ ProposedLocaLZ/ Foreign Total LocaLZ/ Foreign Total Loan

A. Electrification

1. Electrification ofMainlines 5,679 1,L43 6,822 526 L06 632 106

2. Recording/Testing Car 7 15 21 1 1 2 13. OHE Haintenance Vehicles 20 39 59 2 4 6 44. Improvement of Ghat

Operation 2 5 7 0 1 1 L5.Training 20 10 30 2 1 3 3

Sub-Total ELECTRIFICATION 5,727 1,221 6,938 530 112 642 114

B. Workshop Modernization

1. Workshops and ICF 787 652 1,440 73 60 133 602. Malaintenance Depots 920 940 1,859 85 87 172 423. Training 14 25 39 1 2 4 4

Sub-total WORKSHOPMODERNIZATION 1,721 1,617 3,338 159 150 309 106

Total BASELINE COSTS 7,447 2,829 10,276 690 262 952 220Physical Contingencies 626 213 839 58 20 78 17Price Contingencies 1,397 579 1,977 L29 54 183 44

Total PROJECT COSTS 9,471 3,62 13,092 877 335 1,212 280

Front End Fee - 7 7 - 0.7 0.7 0.7

Total FINANCING REQUIRED 9,471 3,628 13,099 877 335.7 1,212.7 280.7

Lt Figures nay not add up due to rounding off; for detailed cost, see Tables 8, 9 and 10.Z1 Taxes and duties of about Rs 2,273 million (US5211 million) are included in local costs.

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E. Financing

3.31 The total foreign exchange component of the project amounts toabout US$336 million equivalent. The Bank will finance the foreignexchange component of all items except the maintenance depots of whichonly a portion is included in the proposed loan. Thus the proposed loanof US$280.7 million equivalent represents about 28% of the project costs,not including taxes and duties. During negotiations, GOI agreed tofinance the remaining US$932 million equivalent including US$55 millionequivalent in foreign exchange, and release funds in a timely manner andin accordance with the implementation schedule.

F. Implementation

3.32 To execute the electrification program, IR has set up a CentralOrganization for Railway Electrification (CORE) otherwise known as theRailway Electrification Planning Coordination and Monitoring Group(REPCMG) at Nagpur in central India (Chart 25838). Six field units havealso been created directly under the central organization and anadditional field unit under the Southern Railways. In addition IRutilizes outside contractors for construction works and installation ofOHE.

3.33 The present strength of the organization is 227 officers and1,574 staff of various categories and disciplines including 294 trainees.A central training school has also been organized at Nagpur, which offersan eight-week condensed course to familiarize participants with design andinstallation of overhead equipment and power supply installations.Experienced specialized skill personnel are drawn from elsewhere in therailways to fill specific needs. The organization to carry outelectrification program is adequate and competently staffed. Duringnegotiations agreement was reached that trained personnel as ueeded willbe maintained to meet the needs of electrification.

3.34 Under the ongoing Credit 844-IN, IR established the CentralOrganization for Modernization of Workshops (COFMOW), a specialistorganization wholly devoted to the task of managing the workshopmodernization program planned for the twelve-year period beginning in1978. It is also assisting the implementation of the workshopmodernization component under the ongoing Loan 2210-IN/Credit 1299-IN.COFMOW was required to plan and coordinate implementation of:(a) replacement of overaged and obsolete machinery and plant;(b) introduction of modern workshop technology and methods;(c) improvement of workshop layouts to facilitate production and eliminateneedless cross movements; (d) rationalization of work functions; and(e) provision of necessary personnel support by way of staff, supervisorsand officers. COFMOW has performed well in its role of rationalizing themaintenance activity, acting as a procurement coordinator for the projects

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and has provided leadership in some of the other areas originallyassigned. It was proposed that it continue in this vital functionalrelationship for the workshop modernization component of the proposedproject and that it be strengthened especially in the areas of training,preparation of specifications for machines and equipment and theirprocurement, process engineering (facility layout, etc.) and monitoringproject implementation. During negotiations, GOI/IR confirmed this.Also, IR agreed to maintain COFMOW with adequate staff for implementationof the workshop modernization component of the project.

3.35 IR will be responsible for the implementation of the project as

part of its ongoing works and manufacturing program. It has the necessarycapability and competence to carry out the project. A detailedimplementation program showing the phasing of the eLectrification work andtrained manpower to complete this work and workshop modernization is shownin Chart 25799. This schedule, as well as progress reportingarrangements, including GOI preparation of a final report upon completionof the project, were discussed and agreed to during negotiations.

G. Environment

3.36 The project has been designed with due regard to environmentaland worker safety aspects. State laws for environmental and pollutioncontrol stipulates that all industrial enterprises must conform toenvironmental standards specified in the legislation relevant to theindustry concerned. The proposed project meets these standards, and nosignificant adverse environmental impact is expected from the project.

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H. Procurement

3.37 Procurement arrangements are summarized below:

Procurement Arrangements(Estimated Coat in US$ Million)

Pro ect Elements Procurement MethodICB LCB Other N.A. Total

(Departmental (Borrower'asIForces, Train- Other Donore'ing. etc.) Procedure)

Civil Works - 67.1 57.0 1/ - 7.1 2/ 131.2Signalling & Telecom Works 45.. 93.0 - 10.0 6/ 55.5 2/ 203.6

(45.1) 3/ (10.0) 3/Electrical Works 74.1 267.5 - - 86,2 2/ 427.8

(74.1) 3/ (4.0) 3/ _Recording/Testing Car 1.7 - 0.1 - 0.7 21 2.4

(1.7) 31OHE Maintenance VehicLeas 4.3 - 0.4 - 1.7 2/ 6.4

(4.3) 3_Radio for Banking Locos 0.6 - - - 0.2 2/ 0.8

(0.6) 3/Plant and Machinery 74.7 21.4 6.1 1/ - 23.7 2/ 125.9

(74.7) 3/ (3.0) 31Maintenance Depota 5L.6 71.1 7.7 1J 59.3 35.5 2/ 225.2

(51.6) 31 (3.0) 3/Training 7.9 4/ - - 7.9

(7.9)3/General/Miscellaneous - - - 81.0 5/ 81.0

TOTAL 252.1. 520.1 79.2 69.3 291.6 1,212.2(252.1) 3/ (10.0) 3/ (7.9)3/ (10.0) 3/ (280.0) 3/

1/ Railways forces will be used.2/ Taxes and dutisa.3/ Figures In parentheses indicate proposed financing by the Bank.4/ According to Bank Guidelines.

G Ceneral charges (Administration & Supervision)/Miscellaneous Works, viz.compensation to P & T, modification to power line crossings, replacement works, etc.

6/ Minor items to be procured by the installation contractor.

3.38 Items financed by the Bank will be procured by IR throughinternational competitive bidding in accordance with Bank/IDA guidelines,

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3.38 Items financed by the Bank will be procured by IR throughinternational competitive bidding in accordance with Bank/IDA guidelines,except for contracts of US100,000 equivalent or less, where theadvantages of ICB would be clearly outweighed by the administrative burdenthereof. This is estimated to represent a small portion (less than US$10million equivalent) of the project. Such contracts will be placed usinglocal competitive bidding procedures for procurement which aresatisfactory. Also, minor items of material and equipment associated withcontracts for installation/erection of signalling and telecommunicationmay be procured in accordance with the usual business practice of theRailways. This is estimated to amount to less than US$10 millionequivalent. These procurement contracts will be reviewed duringsupervision.

3.39 Local manufacturers are expected to bid for items under theproject and a domestic preference of 15% or the import duty, whichever isless, would be applied in bid evaluation. During negotiations, GOIclarified existing import procedures for procurement of goods which werefound to be satisfactory.

I. Disbursements

3.40 Subject to review and agreement with the Bank, savings in anycategory of the proceeds will be available to cover increases in any othercategory except proprietary items. Disbursements are expected to becompleted by March 31, 1990 but to allow time for possible late payments,the closing date will be September 30, 1990. Disbursements under theproject will be made against:

(a) 100% of the cif cost of imported items;

(b) 100% of the ex-factory cost of items procured from domesticsuppliers; and

(c) 100% of the cost of training, and installation and inspection ofequipment requiring foreign expertise.

A schedule of disbursements is shown in Table 11. The estimateddisbursements are about one year ahead of disbursement profiles for BankGroup loans/credits in India. This divergence is a result of taking intoaccount the experience of previous IR projects and the nature of goodsto be financed under the proposed credit. During negotiations thedisbursement schedule was discussed and agreed to with IR.

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IV. ECONOMIC EVALUATION

A. General

4.01 Indian Railways has a well-developed network which transportsmost of the bulk commodities and the majority of long distance passengersin the country. But a sustained growth in the economy and in thepopulation poses a heavy challenge to the ability of IR to cope with thetraffic demand, a task which has not always been successfully fulfilled.For example, in 1978-79 more than three million tons of coal was moved onthe highways over a distance of 250 kms with an average lead of 585 km,and likewise about three million tons of foodgrain and 1.'. million tons ofcement moved by road beyond 250 kms. 1978-79 was a low performance year(see Table 2) for IR, but these anomalies still exist and cause anincrease in transport cost. Another example is the inability of IR toprovide sufficient long-distance passenger transport, a situation whichcreates continuous criticism of IR by the public media. Therefore, one ofthe most pressing matters for IR to solve in the immediate futt:re is theincrease in its capacity to adequately satisfy the ever-increasing trafficvolumes. Since the early sixties, IR has concentrated on improvingrailway infrastructure and expanding the motive power and rolling stockfleet. At the same time, IR has moved from steam to diesel and electrictraction (para 3.06). To increase its capacity, IR realized that itcannot continue relying only on increasing the size of the physical assetsof the organization (network, motive power, rolling stock), and IR is nowconcentrating its efforts on improving its operational efficiency througha modernization program which, with the assistance of the Bank Group, waslaunched in the late seventies (para 2.20).

4.02 The proposed project fits well within the present strategy ofIR, aiming to (a) increase track throughput by completing theelectrification of the main lines; and (b) increase availability andreliability of rolling stock through a Workshop Modernization Program.Further, the railway electrification component represents a logical followup of the research program, financed by the on-going Loan 2210/Credit1299-IN of testing, under Indian operating conditions, up to 20 importedprototype AC electric locomotives of up to five different types forintroduction of modern and efficient electric traction.

4.03 The railway electrification component will permit the completionof the electrification of the main trunk routes on IR, the quadrilateralformed by Delhi, Calcutta, Madras and Bombay and its diagonals. Thesemain trunk routes together with a few other important lines likeMughalsarai-Lucknow-Amritsar, Delhi-Bhatinda, Delhi-Ambala andKazipet-Secunderabad, carry about 75% of the freight traffic and 55% ofthe passenger traffic in the country. The total NTKNs moved on the

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quadrilateral and diagonals as compared with the total NTKMs moved by thewhole IR has been as follows:

Quadrilateral Share of IR NTKMand Diagonals IR Network by Quadrilateral

Year NTKM4 Increment NTKM Increment and Diaaonals(billion) illion)(

1966-67 64.27 116.61 55.11970-71 75.19 10.9 127.36 10.8 59.01976-77 104.21 29.0 156.76 29.4 66.41979-80 92.82 -11.4 155.99 - 0.8 59.51980-81 101.72* 8.9 158.44* 2.4 64.1

* Provisional

It is interesting to notice that with the exception of the period 1979-81,the increment of traffic in the whole IR occurred mainly in thequadrilateral and diagonals. Currently, 5,345 route kms on IR areelectrified but with the exception of Delhi-Calcutta, the sections areless than 800 route km long (see Map 17454), which requires frequentchanges in motive power, and impedes the use of electric traction for longdistance traffic where the benefit is larger (para 3.10). Another problemis that due to rather short electrified sections scattered all over thecountry, the maintenance facilities are either not fully utilized, orinadequate for electric traction. The completion of the electrificationof the main system (quadrilateral and diagonals) will permit run throughtrains and reduce the difference of speeds between goods and passengertrains, with the subsequent increase in throughputs.

4.04 The strategy of the proposed project is to increase IR capacitythrough electrification, accelerated workshop modernization, together withimprovements in IR organization and improvements in Indian industrialtechnology in selected key areas where current, locally manufacturedequipment is outmoded and inhibiting the modernization effort. This isparticularly evident in the electrical equipment industry. Moreover, theprovision of an OHE recording/testing car, OHE maintenance vehicles,improvement of locomotive radio communication in the Ghat operation,modernization of workshop equipment, and general technical advisoryservices and training, will contribute ro technological improvements inIR. Alternative ways of increasing railway capacity such as constructionof third track adjacent to existing double track lines, or construction ofa new double-track line, were discarded on the basis of high estimatedcosts, operational difficulties and the lack of readily available land andconstruction resources (high quality rails and sleepers).

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4.05 The economic case for the proposed project rests, therefore, ona balanced package of components with the overall main objective ofincreasing the capacity of IR to efficiently cope with traffic demands.With the project, IR will be able to uake better use of its assets and toaccelerate its improvement in performance in order to allow it to meet theincreasing demands of the Seventh and subsequent Five-Year Plans, whileavoiding a larger share of long haul goods being diverted to the morecostly road transport system.

4.06 All the major physical components of the project have beenevaluated individually: (a) the electrification of ten main line sections(accounting for 66% of total project financial costs); and (b) themodernization of six shops, ICF and maintenance depots (32%). No separateeconomic analysis has been carried out for the acquisition of OHErecording/testing car, OHE maintenance vehicles, locomotive radiocommunication for Chat operation, and technical advisory service andtraining, all of which amount to only 2% of total project costs.However, these costs were included without quantifying their benefits, inthe calculation of the overall economic return of the project.

B. Electrification of Main Lines

(a) Traffic

4.07 The part of the quadrilateral (Delhi-Bombay-Madras-Calcutta) andits diagonals to be electrified has been divided in ten homogenoussections based on type of terrain, expected construction cost perroute-kl, existing geometric characteristics, current and future trafficvolume, traffic mix, etc. Table 12 shows the ten sections, their lengthin RKM, traffic in GTKM for passenger and goods in 1976/77 and 1981/82,and the resulting traffic density in GTKM/RICM per year. All sections areat present double track except Section 7: Itarsi-Nagpur and Section 10:Annuppur-Bilaspur. Doubling of Itarsi-Nagpur is now under construction,and it is assumed it will be completed by 1986-87. 1/

(b) Traffic Forecasts ,

4.08 The expected development of railway freight and passengertraffic in the sections to be electrified for 1986/87, 1990/91 and2010/2011 is outlined in Table 13. The forecast of freight traffic isbased on the present traffic composition in each section by commodities,and in the railway traffic growth estimates of the main commodity groups

1/ Table 13 was developed under the assumption that Itarsi-Nagpur willbe double track.

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made in Annex C of the Staff Appraisal Report for the RailwayModernization and Maintenance II Project, dated October 26, 1982 (Loan2210-IN/Credit 1299-IN), which is included in this SAR for informationpurposes. No significant changes have occurred in the economy of thecountry in the last year to justify the preparation of a new forecaut.For illustration purposes, the assumed commodity-wise forecast was theso-called Scenario 2 (intermediate case) in that report, and resulted inthe following annual percentage growths:

1981/82 1985/86until until

Commodity 1984/85 1990/91

Coal 6.0 6.0Foodgrain 2.3 2.2Iron and Steel 3.6 2.4Cement 1.1 1.3Fertilizers 3.9 4.2Petroleum Products 2.6 1.5Others -2.0 -2.0

For the period 1991192 until 2010/2011, section traffic forecast estimateswere made consistent with the forecasts for the decade of the eighties.The resulting annual traffic growth rates by sections during the period1986/90 result in estimates as high as 5% for Section 9:Bina-Katni-Anuppur, with about 75Z of coal traffic, and as lcw as 2.1% forSection 1: Jhansi-Itarsi, where about three-quarters of the traffic iscomposed of foodgrains, cement and others. Given some fluctuations ofcoal traffic in recent years (see Table 4) and with the purpose of usingthem in sensitivity analysis, traffic growth rates by sections were alsocalculated assuming 3% growth rate for coal instead of the 6% mentionedpreviously.

4.09 The commodity-based railway traffic growths of Scenario 2 areconsidered to be realistic, possibly somewhat on the conservative side.These are slightly less than the forecast made in the same report usinganother methodology based on macroeconomic considerations, and areconsistent with the revised IR traffic projections.l/

1/ Scenario 2, Commodity-based forecasts: total all traffic 190.8 billionton-km for 1984/85 and 231.8 billion ton-km for 1990/91, while theScenario 1 (conservative) based on macroeconomic considerations,forecasts 192 and 239 billion ton-km, respectively, and IR forecasts186.2 and 227.6 billion ton-km respectively.

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4.10 Based on the inter-urban projections made in Annex C of theabove-mentioned SAR for Railways Modernization and Maintenance II Project,the passenger-km annual traffic growth for 1986-1990 was assumed to be aconservative 3.2% for all sections, and 2% thereafter.

(c) Economic Evaluation

4.11 All the sectlons to be electrified have high traffic density, 2/and, therefore, all alternative motive power without the project isdiesel. Thus, the economic analysis should compare the total incrementalcost of electrifying the present liues (civil engineering, signaLling andtelecommuuication, and electrical engineering) with the incrementalbenefits of electric traction as compared with diesel traction performingthe same function. These benefits include higher locomotive-km per dayper locomotive in use, a substitution ratio of electric vs. diesel locomo-tives of less than one, lower locomotive maintenance costs, higher locomo-tive availability and reliability, higher average speed, higher initialcost but longer life, and energy savings.

4.12 The economic cost of electrifying each section has been obtainedby deducting from the financial cost all relevant taxes, duties and pricecontingencies. Moreover, certain materials and labor component have beenshadow-priced. This results in economic costs for each section which areabout 80% of the corresponding financial costs. An economic life of 25years has been assumed for the project, and no salvage value has beenconsidered either for the infrastructure or for the motive power.

4.13 Under these circumstances, the electrifLcation of the proposedsections is well justified, with the following economic rate of returns(ER) for each section in the base case:

Section ER X (Base case)

1. Jhansi-Itarsi 23.52. Itarsi-Bhusaval 23.53. Bhusaval-Nagpur 22.54. Wardha-Balharshah 26.05. Balharshah-Vijayawada 40.56. Bhopal-Nagda 27.07. Itarsi-Nagpur 16.08. Nagpur-Durg 14.59. Bina-Katni-Anuppur 38.510. Anuppur-Bilaspur 11.0

2/ As it can be calculated from the information presented in Table 13,all double line sections will have a density of more than 20 millionGTKM per RKM per year by 1988-89, which is assumed to be the firstyear of energization of project lines.

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Table 14 for Jhansi-Itarsi shows an example of the economic evaluationanalysis made for each section. Similar Tables for the remaining sectionscan be found in the Project File. The opportunity cost of capital inIndia is estimated to be 12%, and all sections have higher ER, with theexception of section 10: Anuppur-Bilaspur, where ER is only marginallyless by about 1%.

4.14 Given the small length of the Annupur-Bilaspur section (151 km),its location in the proposed electrified network (Map 17454), and the factthat electrification of other sections is well justified, the generalassumptions made in the economic analysis for this section need modifica-tions. The values adopted in the general case for the without-projectsituation (diesel) reflect average conditions in the country, and in thecase of this section, some of the values should be adjusted to reflectinefficiencies of operating a small section with diesel traction whiLealmost all adjacent sections are electrified. It is conservativelyassumed that this situation would result in a reduction of 10% in thenumber of diesel locomotive-km per day, a reduction of 5% in the dieseLlocomotive availability and an increase of 5X in diesel locomotive main-tenance cost. The resulting ER is an acceptable 14%. Therefore, it isconcluded that the electrification component is clearly justified.

4.15 Cost and input prices included in the base case reflect theprevailing ones in India, shadow-priced to represent the real economicvalue to the economy. In any event, it was found that some of themdiffer with respect to average international prices, and for that reasonanother economic analysis was carried out for each section adjusting somecost and prices to reflect international values. 11 Under these circum-stances, the new economic rates of return resulted to be:

Section ER Z (international prices)

1. Jhansi-Itarsi 24.52. Itarsi-Bhusaval 22.53. Bhusaval-Nagpur 18.54. Wardha-Balharshah 22.55. Balharshah-Vyayawada 33.06. Bhopal-Nagda 20.07. Itarsi-nagpur 16.08. Nagpur-Durg 16.09. Bina-Katni-Anuppur 32.010. Anuppur-Bilaspur 17.5 2/

With these international valuations, all projects remain economicallyfeasible.

1/ International values were taken from TWD memorandum of June 14, 1983,on the subject: "Railways and Energy".

2/ This value was derived applying the methodology described in para4.14.

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(d) Sensitivity analysis

4.16 Table 15 presents the economic rates of return for severalsensitivity cases analyzed for each of the ten sections to be electrified.As a general comment, and with the sole exception of the number of km perday run by electric locomotives on goods services (Run 1) which isanalyzed in the following paragraph, the ER is only moderately sensitivewith respect to the different cases. All sections remain above or veryclose to the opportunity cost of capital of 12%.

4.17 The ERs of the sections are very sensitive to changes in theassumed locomotive-km per day per locomotive in use for electric locomo-tives on goods services. Chart 25798 shows the variation of ERs withrespect to values from 500 km/day (the value assumed for diesel traction)up to 700 km/day. Chart 25798 shows that, as an average, an increase ofonly 10 km/day for electric locomotives for goods, increases the ER byabout 1%, which is a clear indication of the importance of this variablein the economic return of the project, and therefore it constitutes anelement which has to be very carefully monitored by IR to ensure the bestpossible return. With the exception of 7, 8 and 10, Chart 25798 showsthat all sections have ER higher than 12% even under the assumption thatelectric traction achieves no higher daily kilometrage than diesel. ForSection 7, the break-even point is at about 540 km/day (8% increase overdiesel) and for Sections 8 aud 10 at about 550 km/day (10% increase overdiesel), which should be easy to achieve based on the relative advantagesof electric traction (fuelLing, sanding, inspections, acceleration, adhe-sion, etc.) over diesel.

4.18 The sensitivity of ER with respect to traffic growth rates forgoods by sections is analyzed in Run 3, Table 15, and the rates are moreconservative than the rates based on a 3% growth rate for coal (seepdra 4.08). Several other sensitivity analysis were carried out to testthe effects of changes in the values of different variables on theeconomic rate of return. Even under unfavorable assumptions (Table 15),the ERs remained within the range of about 10-45%, which is acceptable.

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C. Workshop Modernization

4.19 The main objective of the Workshop Master Plan (para 3.22) is todevelop an integrated maintenance and repair network on a national basis.The plan envisages rationalization of existing POH activities in order toderive the advantages of specialization and economies of scale, which areexpected co result in higher productivity and improved quality of work.This component of the proposed project is a major step in this direction.Jagadhri workshop would expand wagon POH capacity. At Ajmer, coaching POHcapacity would be substantially increased. Kharagpur workshop would bemodified to take up the periodic overhauls of electric locomotives. Pareland Golden Rock workshops would be modified for the increased requirementof diesel POH. The proposed project also includes provision of machineryand equipment for maintenance depots to arrest further deterioration intheir maintenance and manufacturing capability. The number of workshops*.n the IR system would be reduced from 47 to 37 by the year 2C3O. Out ofthe 37 remaining, 28 would deal with a single POH activity. The proposedproject would also address the crucial problem of augmenting the capacityof coach production by modernizing the Integral Coach Factory (ICF).

4.20 The total economic cost of this element of the project wouldamount to about Rs 3,055 million (Table 16), after deducting import dutiesand price contingencies and assuming shadow prices for certain inputs suchas labor, steel and cement. A residual value of 50% for civil works and10% for mechanical and electrical components have been assumed after aneconomic life of 15 years. It has been estimated that the proposedproject will (a) reduce the idle time of locomotives and rolling stockduring POH and increase their reliability, which altogether will result insavings in the number of locomotives, coaches and wagons needed to carrythe ever-increasing traffic and to replace existing fleet; (b) reduce thecost of POR through a more efficient maintenance operation; (c) increasethe POH annual capacity thus preventing the accelerated deterioration ofpart of the fleet (15% of coaches, 24% of wagons, 15% of locomotives)which are currently overdue for POH; and (d) increase the annualproduction of coaches avoiding the likely need to import them. Underthese circumstances, the proposed modernization of each sub-component iswell justified (Table 16) with economic rates of return between 18% and50%. Moreover, a sensitivity analysis indicates that under differentsituations (a cost increase of 20%, a benefit decrease of 20%, or atwo-year lag in benefits) all projects remain above or very close to theopportunity cost of capital of 12%.

D. Overall Evaluation

4.21 The project~s overall economic return is 25.0%, including thecost of components not separateLy evaluated. A sensitivity analysisindicates that a decrease in benefits of 20% would reduce the overall rateof return to 19.5%, while a 2U% increase in costs would reduce it to20.5%; a combination of the two variations would yield a rate of return of15.5%.

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4.22 The main beneficiaries of the project are the power, industrialand agricultural sectors, particularly the main public and privateindustrial enterprises, and inter-city passengers. Through the power andagricultural sectors, a large portion of small industries and ruralpopulation will also benefit from the proposed investment.

E. Risks

4.23 All project components involve proven technology and thereforetechnical risks connected with the project are small. Additionally, inthe past.IR has successfully implemented similar projects in a timelymanner, and has built up competent managerial and technical expertise.Risks from inadequate project implementation are therefore negligible.

V. FINANCE AND EARNINGS

A. Introduction

5.01 GOI's financial policy towards IR is designed to allow it toearn net revenues sufficient to cover all expenses including depreciationand a dividend to GOI. Funds for capital expenditure,. which do no:pertain to replacement of assets, are provided by GOI and are added to aCapital-at-Charge account, which is a liability of IR in perpetuity and onwhich IR is expected to pay a dividend at a rate recommended by aParliamentary Committee from time to time. The present rate of dividendon current investments is about 6.5X per annum. The dividend, in reality,is more like an interest payment as IR is expected to meet this obligationwhether or not it generates sufficient net revenues. IR finances capitalexpenditure for asset replacement by a charge against revenues through theDepreciation aeserve Fund (DRF). IR proposes rates and fares increases atthe beginning of a fiscal year based on its expected resources andforecast of traffic to be carried by it in the ensuing year. Theassumption is that the rates and fares set at the traffic level forecastedwould result in revenues sufficient to meet the financial policy. As IRis a departmental undertaking of GOI, the commercial freedom allowed IR isconstrained by Government policy.

5.02 Financial arrangements with the Government and audit proceduresare, with some improvements noted later, the same as when the first IRModernization Project was appraised in 1978. The accounting function isefficient, well organized and well staffed with satisfactory budgetcontrol and operating systems. A formal traffic costing function has beenestablished recently and IR is continually making improvements to this

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important activity. In addition to a large and efficient internal audit,an exhaustive statutory audit is conducted under the direction of theComptroller and Auditor General of India (C.&A.G), who reports to theParliament through the Public Accounts Committee. Audit arrangements arethorough and satisfactory. Audit financial statements are finalizedwithin eight months of year end and presented to Parliament within tenmonths. At the same time, IR-s revised estimaten for the current year andbudget estimates for the following year are presented to Parliament forapproval. IR has under previous credits consistently provided IDA withinterim and completed (audited) accounts. IR also provides reports ofproject expenditure in a timely manner and to the satisfaction of IDA.During negotiations GOI confirmed that, in accordance with soundaccounting and auditing principles and procedures approved by C.&A.G.,it will ensure that IR maintains records and accounts to reflect theirresources, expenditures and operations related to the project and haveIR-s accounts for each fiscal year audited.

B. Recent Changes in Financial Policies

5.03 Some beneficial changes in financial practices have been made inrecent years and GOI is now considering measures which would give IRgreater commercial freedom and set performance targets. The mostimportant recent change relates to IRs obligation to pay a dividend toGOI in years when its earnings are insufficient to generate a net surplus.Prior to 1979 IR was required to take interest bearing loans from GOI topay dividend, but at present, amount of dividend unpaid is carried forwardas a deferred dividend liability without interest. This change isreasonable and removes an unnecessary financial burden placed on IR. Thedividend liability as at March 31, 1983 amounts to Rs 4,163 million.

5.04 In 1977, the Government convened a high level independentcommittee - The Rail Tariff Enquiry Committee (RTEC) to review lR'sfreight rates, passenger fares and IRs operational efficiency. TheCommittee issued its reports in June 1980, and as part of its overallreview, also covered areas of Government policy and practices, madecomparisons of IR-s operations with both Western Railways and those of theUSSR and China. The report is of an excellent standard and reflects agood professional examination of IR-s operations. It contains 386recommendations and suggestions.

5.05 Key recommendations of RTEC include: (a) IR be allowed to earna 10% rate of return on investment and the excess over 6% due GOI asdividend be used by IR for development purposes; (b) provision for repairsand maintenance in the past has been inadequate and IR should be allowedto catch up on arrears and more funds from now on should be provided forthis critical activity; (c) funds for the Depreciation Reserve Fund (DRF)have been under-provided in recent years and should be substantiallyincreased based on IR-s needs and an expert group be appointed to

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recommend the appropriate methodology for calculation of depreciation;(d) tariff increases, rather than being assessed on "cost plus" basis,should be related to efficiency. A formula is suggested which uses1976177, being the most efficient year of railways operations, as ayard-stick. Tariff fares would be increased annually by indexing theincrease to the change in prices of the major inputs of IR-s costs,including labor, fuel and steel; (e) tariff rates should be set to coverthe total costs attributable to that stream of traffic; crosssubsidization, from freight to passenger, should not be allowed; (f) costof social burdens such as lines built for strategic purposes, should beeliminated and IR be fully compensated when a decision is made for IR toprovide a service which it would not normally do on commercial grounds;(g) other recommended reforms in operational, personnel, costing andmarketing activities; and (h) IR's management structure and promotionpractices should be reviewed and changed to support a greater degree ofcommercial freedom. The recommendations envisage financial reforms whichprovide a framework within which IR would be able to operate more like acommercial entity.

5.06 The most significant of the (RTEC) recommendations have beenimplemented with profound implications on IRCs finances. Consecutivelyfor the four years 1980/81 - 1983/84, rates and fares have been adjustedupwards by GOI/IR exceeding percentage targets recommended by RTEC. Theseincreases have meant total additional revenues to IR of Rs 1,500 millionwith some 67% accruing from freight and 33% from passenger, respectively,over the four-year period. In April 1983, IR introduced a revisedrationalized tariff structure which is based on the principle ofrecovering the fully distributed cost of the commodity/class of travel.Consequently, no commodity is carried below its avoidable cost, losses onpassenger operations are declining in percentage terms over previousyears= losses and in percentage terms to total revenue. Season tickets interms of single journey tickets have been adjusted to levels recommendedin the RTEC report. Details of tariff adjustments are on project file.Appropriations to DRF have been significantly stepped up to a moreadequate level (see para 5.16) and more intensive use of costingtechniques are being made by IR. The thrust has been to enhance theability of IR to generate internally financial resources for capital andmaintenance requirements and to enable it to earn more than adequate rateof return on its average net fixed assets. RTEC recommendations onorganizational changes have wider implications and GOI appointed a RailwayReforms Committee (RRC) in May 1981 to examine them in depth and torecommend appropriate action to be taken by the Government. ThisCommittee will also examine IR's depreciation policy and is expected toissue its report in 1984. RTEC recommendations are complex and many areunder constant review and updating. Progress to-date on implementation ofthe recommendations has been satisfactory and further action is beingtaken (para 5.10).

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C. Rates and Fares

5.07 In the past, a tariff policy has been followed which has tended

to subsidize large segments of freight (essential basic commodities) andpassenger traffic (second class ordinary). Traffic costing is an integralpart of tariff formulation and continual refinements to the trafficcosting techniques are being made. No direct subsidies are involved, butGOI exempts IR from payment of dividend in respect of the capital investedin strategic lines, uuremunerative brauch lines and on construction ofcertain new lines. Subsidies on surburban traffic which does not coverits avoidable cost continues by other services. At negotiations, it wasexplained by GOI/IR that passenger fare increases granted in the recentpast years have been significantly more than those recommended by RTEC,and further action will be taken to reduce losses on passenger traffic andin particular, on suburban traffic.

D. Past Performance

5.08 IREs actual revenue and expenditure accounts for the period FY77to FY83 are summarized below and detailed in Table 17. The balance sheetas of March 31, 1983 is shown in Table 18.

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Account Head ----------------------Actual--------------------L977/78 1978/79 1979/80 1980/81 1981/82 1982/83

(in Current Rs Million)

Total Revenues 21,234 21,510 23,378 26,240 35,382 43,762Total Working Expenses L5,706 16,540 18,607 22,162 27,191 31,793Appropriation to DRF a/ 1,400 1,450 2,000 2,200 3,500 5,560Appropriation to PF a/ 393 678 817 1,003 1,129 1,480Total Operating Expenses 17,499 18,668 21,424 25,365 31,820 38,833Net Revenue from Operations 3,735 2,842 1,954 875 3,562 4,929Net Miscellaneous Expenditure 207 234 241 399* 469* 614*Net Revenues 3,528 2,608 1,713 1,274 4,031 5,543Divideud on Capital-at-Charge b/ 2,266 2,241 2,375 3,252 3,565 4,360Net Surplus (Deficit) 1,262 367 (662) (1,978) 466 1,183Operating Ratio 82.4% 86.7% 91.6% 96.6% 89.4% 88.3%Ratio of Net Operating Revenueto Capital-at-Charge 7.4% 5.2% 4.1% 2.1% 6.0% 7.6%

a/ Depreciation Reserve Fund (DRF); Pension Fund (PF).bl See Note 2 on Table 17.

>Credit figure.

5.09 IR has earned revenues which are greater than its totaloperating expenses, which include depreciation. However, IR has notalways been able to meet its full dividend liability. IR had its bestresults in FY78, generating a large surplus. The increase in revenuessubsequent to FY78 was mainly attributable to tariff increases. The totalworking expense as a percentage of total revenues decreased from 74.0% inFY78 to only 72.8% in FY83. Fuel as a percentage of total workingexpenses increased from 19.0% in FY78 to 23.9% in FY83. While staff costscame down from 55.2% in FY78 to 49.1% in FY83 (Table 19), substantialincreases in appropriation to DRF in FY83 were made over FY78; Rs 5,560million, compared to Rs 1,400 million respectively (an increase of about400%). Despite this increase, IR generated a surplus in FY83 coveringfully its dividend payment.

5.10 For the reasons stated above and because the traffic carriedfell short of the forecast, IR was not able to pay the full dividend inYY80 and FY81 as required by GOI policy and in agreement with Credit844-IN. For FY82 and FY83, IR has met the financial covenant requirementsof Credit 844-IN and Loan 2210-IN/Credit 1299-IN. The basic handicap inIR-s financial arrangement is dependence on an annual decision by GOInotably on the level of tariff (limitation of administrative prices) andcapital investments. GOI has recognized that IR should be financiallyviable and generate sufficient financial resources to substantially meet

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its development programs. Accordingly, in line with RTEC recommendations,GOI has and continues to take action as pointed out previously. Furtheraction by GOI is contemplated when the findings of the Railway ReformsCommittee are issued (para 5.06).

5.11 Historically, GOI has kept tariffs at levels much below theincreases in the cost of IR's inputs or changes in general price levels(Table 20). In addition, IR has to absorb losses on such services assuburban and short distance travel, uuremunerative lines, etc. These aretermed as "social burden" costs by IR and during FY80 and FY81 wereestimated at Rs 2,400 million and Rs 4,200 million, respectively (about10% and 16% of revenues, respectively). Had IR been compensated for thesecosts, it would have generated a large profit to cover the dividendpayment for FY80 and FY81 and had a surplus about Rs 1,700 million andRs 2,200 million, respectively.

E. Future Prospects

5.12 Revenue and expenditure account forecasts of IR have been madeusing the conservative traffic forecast of "Scenario II" (see paras 2.14and 2.15). Budget estimate of IR for FY84 has been used as a base yearfor developing forecast for FY86 to FY90. These are summarized below andshown in detail in Table 21. Balance sheets are shown in Table 22.

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83/84 84/85 85/86 86/87 87/88 88/89 89/90

IR's IR'sRevised Budget ------ Bank Group Forecast-Estimate Estimate (in Current Rs Million)

Total Revenues 49,980 54,570 57,461 60,380 63,326 66,300 69,305

Total Working Expenses 36,760 40,110 41,777 43,449 45,188 46,930 48,874

Appropriation to DRF a/ 8,500 8,500 9,200 10,000 10,800 12,000 13,000

Appropriation to PF a/ 1,825 2,210 2,250 2,500 2,750 3,000 3,250

Total Operating Expenses 47,085 50,820 53,227 55,949 58,738 61,930 65,124

'Net Revenues from Operations 2,895 3,750 4,234 4,431 4,588 4,370 4,181

Net Miscellaneous Credits 490 450 500 540 590 650 710

Net Revenues 3,385 4,200 4,734 4,971 5,178 5,020 4,891

Dividend onCapital-at-charge b/ 4,500 4,900 5,485 6,102 6,751 7,435 8,150

Net Surplus (Deficit) (1,115) (700) (751) (1,131) (1,573) (2,415) (3,259)

Operating Ratio 94.2% 93.1% 92.6% 92.7% 92.8% 93.4% 94.0%

Ratios of Net OperatingRevenue to Capital-at-Charge 4.4% 5.0% 5.1% 4.8% 4.6% 4.1% 3.6%

a/ Depreciation Reserve Fund (DRF); Pension Fund (PF).b/ See Note 1 on Table 17.

Note: Forecast does not reflect tariff increases needed to enable fulldividend coverage. The tariff increases required, in real terms,about 2% each year for the period FY86 to FY90.

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5.13 Revenue and expenditure account estimates for the period FY86 toFY90 have been projected using prices, rates, fares and expenses at April1983 levels. Conservative assumptions on improvements in operatingefficiency resulting from the proposed and ongoing projects have beenincluded. The forecasts include provision for significant increases inDRF and PF, but do not include any provision for increase in tariffs,changes in the financial policies of GOI, or allowances for inflation. Onthese assumptions and using "Scenario II" traffic level, the above tableindicates that tariffs would need to be raised from FY86 and onwards togenerate revenues high enough to meet full dividend payment--and meet thecovenant of the existing and proposed Bank Group projects. Also, IR wasunable to cover full dividend payment required under Credit 844-IN andLoan 2210-IN/Credit 1299-IN for FY84 and is not expected to meet it inFY85 by a small amount. This situation, however, is considered to betemporary and has occurred because of economic recession in India andworldwide. Consequently, expected traffic levels did not materialize,resulting in IR not meeting the revenue covenant. GOI is committed to thefinancial viability of IR and during negotiations, it was agreed that GOIwill maintain passenger fares and freight rates and take all other actionsas may be necessary or appropriate, so as to provide to the Railways netrevenue sufficient to enable the Railways to meet out of inter-nally-generated resources all operating expenses (including depreciation)and dividend payments on Capital-at-Charge.

5.14 By FY90 revenues are projected to increase by about 27% overFY85 as a result of tariff increases granted April 1, 1983 and trafficincreases. Total working expenses are expected to increase by about 22%because of the high proportion of variable costs. Total operating expen-ses on the other hand are expected to register a much higher increase(about 28%) mainly because of increased allocations to depreciation (DRF).The likely levels of annual tariff revenue increases needed to pay fulldividend with traffic at Scenario II levels for the period FY86 to FY90have been estimated as follows:

'Y86 FY87 FY88 FY89 FY90

In real terms 2% 2% 2% 2% 27.

5.15 The DRF in IR is in effect a renewal and replacement fund andnot a depreciation provision in the normal accounting sense. In the past,contribution of funds to DRF has proved to be insufficient to take care ofneed-based replacements as it has been determined on an annual basis,influenced by availability of financial resources and physical constraintsin the form of productive capacity in the country (e.g., how many wagonscan be manufactured) and the complexities in ascertaining the exact timing

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of replacements. This has led to a situation where IR is burdened with ahigh percentage of overaged and obsolete assets which are a restraint oncapacity and produce high costs. Increased allocation would permit morerapid replacement of old and obsolete assets, which would in turn improveoperational efficiency (increase revenue) and would result in reduction ofmaintenance costs, which now constitute about 40Z of working expenses.Recognizing this and the need to catch up on arrears and in a sharpdeparture from the previous practice, IR has appropriated a sum of Rs8,500 million to the DRF during FY84. It is expected that this trend willnot only be continued but may be improved upon as IR has given highpriority to "rehabilitation" of its assets. If the trend is maintained,IR should be making a substantial contribution to the DRF to cater to thelarge requirement for rehabilitation of its assets. Since the SeventhFive-Year Plan is in formulating stages, it was agreed during negotiationsthat appropriation to DRF for FY85 to FY89 will be at least equal to thatof FY84 (Rs 8,500 million).

5.16 A sensitivity analysis using the alternative traffic forecastsScenario I and III and at current tariff Levels indicates that IR would beable to cover all of its operating expenses, but would not be able tofully meet its dividend obLigation in years FY86 to FY90 (para 5.14).

F. Financing Plan

5.17 Table 23 shows the Source and AppLication of Funds for thesix-year period FY85 to FY90, during which the proposed project will beimplemented, the funds required by IR and the anticipated source of suchfunds are summarized as follows:

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Rs Million US$ Million Z

Required FundsA. For Investment Program:

Capital Expenditure 128,250 11,875 99Inventories 1,351 125 1

129,601 12,000 100

B. For Other PurposesDividend 38,825 3,595 95Interest on Temporary Loans 1 921 178 5

40,4 3,-773 10o

Required Funds - Total 170,347 15,773

Sources of Funds:

A. For Investment Program:IR Internal Cash Generation 66,734 6,179 51Government Funds a/ 57,600 5,333 45Government Temporary Loans b/ 5,267 488 4

129,601 12,000 100

B. For Other Purposes:For Dividend 38,825 3,595 95IR Internal Cash Generation for other 1,921 178 5

40,746 ;3,773 100

Sources of Funds - Total 170,347 15,773

a/ Of which the BDank would finance about Rs 3,032 million(US$280.7 million equivalent for this proposed project).

bI To finance Development Fund (UJF) requirements.

5.18 It is estimated that IR would be able to finance about 51% ofits total investment requirements out of internally-generated funds. Thebalance (49%) to be provided by the Government results in an increase inthe Capital-at-Charge and temporary loans. This would be in sharpcontrast to previous years when GOI financed 60% or more of developmentfunds required by IR. Forecast financial statements have been prepared onthe basis of IR-s preliminary estimates of planned investment for theperiod FY86 to FY90.

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VI. AGREEMENTS REACHED AND RECOMMENDATIONS

6.01 During negotiations, agreements were reached with GOI on thefollowing principal matters:

(a) IR will be provided budget allocations sufficient to carry outan agreed training program (paras 3.27 and 3.28);

(b) IR will ensure that at all times the electrificationimplementation unit and COFMOW will be adequately staffed forthe implementation of the respective project components (paras3.33 and 3.35);

(c) GOI will maintain passenger fares and freight rates and shalltake all other actions, as may be necessary or appropriate, soas to provide to the Railways net revenue sufficient to enablethe Railways to meet out of internally-generated resources alloperating expenses and dividend on Capltal-at-Charge(para 5.13); and

(d) GOI will ensure that appropriation to DRF for FY85 to FY89 wouldat least be equal to that of FY84 (para 5.15).

6.02 It is recommended that condition of effectiveness for theproposed loan should be the selection of consultants who will becollaborating with GOI/IR in implementing the OIS (para 2.28).

6.03 Based on the agreements reached on the foregoing, the proposedproject constitutes a suitable basis for a Bank loan of US$280.7 millionequivalent.

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Annex APage 1 of 2

INDIA

RAILWAY ELECTRIFICATION AND WORKSHOP MODERNIZATION PROJECT

Selected Documents Available in the Project File 1/

Transport and Railways

1. Report of the National Transport Policy Cormitte, Planning Commission.GOI, May 1980

2. The Main Report of the Rail Tariff Enquiry Committee (Five Volumes).GOI, June 1980

Motive Power

3. Study of the Relative Economics of Diesel and Electric Traction onIndian Railways. IR, June 1978

4. Report of the Committee on Motive Power. IR, December 1978

5. Modernization Project for 1500V DC Banking Locomotive. IR, June 1979

6. Accelerated Electrification. IR, January 1981

Rolling Stock

7. Report of the Committee on Capacity Augmentation for Coach Production.IR, January 1979

8. Interim Report on Techno Economic Study of New Coach Building Factory.IR (ICF), October 1979

9. Project Report of Box "N" Wagon. IR, January 1981

Workshops and Maintenance

10. Master Plan Study for Workshops. Inception Report. RITES, April 1980

1/ Additional documents pertaining to most components of this project areavailable in the Project File for Credit 844-IN and are listed inAnnex A of Report No. 2020-IN (SAR dated July 24, '-980).

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Annex APage 2 of 2

11. Master Plan Study for Workshops: Volume I, POll System; Volume II, MRUEand Related Systems; Volume III, Inventory of Facilities and Activities.RITES, November 1980

12. Workshop Modernization Project, Phase I. IR, December 1977

13. Workshop Modernization Project, Phase II. IR, August 1982

Management Information System

14. Real-Time Computer System for Freight Operations Control and PassengerReservations. IR, August 1979

15. Installing Operating Information and Telecommunicatior System on IndianRailwa'-.. Robert McAfee and John Albertson (Consultants), May 1980

16. Freight Operations Management System. IR, March 1982

Rail Taxiff Enquiry Committee

17. Estimates of Financial Impact Arising from Implementation of RTECRecommendations.

18. 3chedule Showing Adjustment of Freight Effected Compared to RecommendedFreight in RTEC Report.

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Annex BPage 1 of 3

INDIA

RAILWAY ELECTRIFICATION AND WORKSHOP MODERNIZATION PROJECT

Notes on IR-s Motive Power and Rolling Stock

Traction Policy

1. IR-s traction policy has been under continuous review in thelast two decades. The two most important studies on traction policy werea "Study of Electrification and Dieselization on Indian Railways" in 1963(known as the Sahai Committee Report), and the National Council of AppliedEconomic Research Study of 1970. These studies set the 1970s policy for amoderate pace of electrification of railway lines in the country coupledwith an effort for rapid replacement of steam traction by diesel andelectric. Various other studies on traction have been recently carriedout by GOI/IR, these are listed in Annex A and included in the ProjectFile.

Diesel Electric Locomotives

2. The standard main line diesel electric locomotive manufacturedby IR is WDM2, which is a L6-cylinder, 6-axle BG mixed traffic locomotiverated at 2600 grossI2400 net hp. 1/ WDNIZ manufacture began in India in1964 iu collaboration with ALCO, United States, and the design is about32 years old. WDM2 has an adequate operating and maintenance performanceand is the prime mover of IR-s rapidly growing freight traffic. However,IR will benefit substantially from introducing into the present and futureWDM2 fleet technology developed since the present designs were acquired.Also the continued increase in IR's need for imported diesel fuel andrising costs have made it even more important for the railways to improvethe efficiency of its motive power in general and diesel locomotives inparticular. There is significant potential for improved fuel efficiencyof the existing fleet of DLW-built diesel engines. In addition, IRrequires a medium range horsepower main line diesel electric locomotivefor work train, branch line operation and other light duties in order toeliminate steam traction completely from trunk routes.

1/ There are two other versions of this locomotive built for main line NGservice and heavy duty BG shunting: YDM4 and WDM6.

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Annex BPage 2 of 3

Electric Locomotives

3. The present AC electric locomotive manufactured in India,designated the WAM4, was derived by IR-s own Research, Design andStandards Organization (RDSO) from an Alsthom design of the 50 Hz Groupand is approximately 27 years old. The only major change made to thedesign was the replacement of the original mono-motor bogie by axle-hungmotors and the three-axle bogie of the WDM2 diesel electric locomotivemanufactured by IR. When the WAM4 locomotive was first introduced, therewere numerous performance problems. Although problems of the tractionmotors have been gradually eliminated, the electrical controls andtransformer are still unable to provide adequate power for the motors.Obsolescence of WAM4 design and features has resulted in loweravailability and higher operating and maintenance costs.

4. A geographically specific problem of electric traction occurs atthe major industrial center and port of Bombay which are connected to therest of the IR network by two 1,500 V DC electrified lines. These twolines are Bombay-Igatpuri on the northeast section and Bombay-Pune on thesoutheast section. The northeast approach to Bombay includes aheavy-graded 14 km section, known in India as the ghat section, with agradient of 1 in 33 (compensated) and a 67 km hilly section with agradient of I in 37.5 (compensated). The southeast approach has a 28 kmghat section with a gradient of 1 in 37 (compensated). The presentclasses of locomotives manufactured by IR and used on the ghat sectionshave proved unsatisfactory for the specific requirements of bankingduties, causing frequent wheel slips, stalls and partings of trains. Inaddition, due to inadequate capability of the existing locomotives, thetrain load limits on the graded DC sections are lower than load limits onadjacent AC electrified sections. Thus, the train loads have to bereduced prior to entering the DC ghat sections. As a result, operatingcosts and line-capacity utilization are adversely affected, indicating aneed for special duty DC electric banking locomotives or partialconversion to AC traction for these sections.

Wagons

5. During 1950-s practically all freight was being carried ingeneral purpose wagons - the covered, open high sided and open low sidedwagons. To be able to cope with the pattern of traffic, the proportion ofthe special type of stock has been increasing over the years. Now anumber of new bogie wagons, with emphasis on higher payload andspecialized facilities for loading and unloading, have been put intoservice and the number of such wagons is increasing.

6. The present high capacity open-wagon design used by IR is aneight-wheeler wagon (box) with a plate-fabricated bogie, an over-buffers

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Annex BPage 3 of 3

length of 13.73 meters and a net capacity of 56 tons. With the existingloop length on IR, this wagon design limits the maximum gross tonnage ofthe freight trains to about 3,500 tons and a net of 2,400 tons on theBroad Gauge. Tests have shown that with a cast bogie, presentlymanufactured in India in limited numbers, and equipped with cartridge-typetapered roller bearings, the capacity of the open top wagon can beincreased to 58 net tons with an over-buffers length of 10.71 meters.This new higher-capacity design has been labeled by IR, Box N wagon and isin the process of being introduced on IR. The introduction of type Nwagon in IR would increase the gross train loads to about 4,500 tons with3,200 net tons within the existing loop length. In addition, since suchwagons will be put into dedicated unit train operation for major users,they will be equipped with air brakes. This will enable an increase inthe allowable speed of Box N wagons to 100 km/h without increasing thebraking distance, as compared to IR-s present vacuum brake fleet, creatinga potential for increased line capacity and service improvements to theusers.

7. In conclusion, since the acquisition of designs and start up ofmanufacture of locomotives in India, considerable improvements andinnovations have taken place elsewhere in diesel and electric tractiontechnology which have resulted in reduced manufacturing, operational andmaintenance costs and improved operating performance. These improvementshave yet to be incorporated into locomotives manufactured by IR. At thesame time, major design changes in rolling stock area are urgently neededto tap a very large potential source for improving asset utilization andreduced transport costs. Alas, these potentials might go unexploitedbecause of the painstakingly slow and uncoordinated technicaldecision-making process in IR and GOI's policies which discouragedintroduction of new technologies which will increase the country-sdependence on imports of parts and components.

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Annex CPage 1 of 2

INDIA

RAILWAY ELECTRIFICATION AND WORKSHOP MODERNIZATION PROJECT

Extract from Workahop Modernization & Maintenance Project I(Credit 844-IN)

Summary Terms of Reference - Workshop Master Plan

The objectives of the Workshop Master Plan Study will includebut not necessarily be limited to:

(a) carrying out a complete inventory of maintenance, manufacturingand other activities of all workshops,sheds and manufacturing units, with a view to arrivingat the optimum assignment of activities and workloadto each unit in order to minimize duplication offacilities and efforts;

(b) developing a plan for location, organization, capacity,layout and equipment required to establish facility(s) neededfor remanufacturing of parts and components required to effect a unitexchange maintenance and periodic overhaul program for motivepower, coaches and electric multiple unit fleet;

Cc) developing the required level of parts and components, newand remanufactured, to implement unit exchange maintenance andimproved periodic overhaul practice for rolling stock andmotive power;

(d) developing the required plant and machinery forPhase II and Phase III of the workshop modernizationprogram;

(e) developing the additional facilities and equipmentrequired by the manufacturing units to supply thenew parts and components needed for maintenance;

(f) developing an optimum and integrated materialsmanagement system for the unit exchange maintenance andperiodic overhaul program;

(g) recommending the organizational changes, staffing,accounting and management information system needed toinstitute and control integrated maintenance and periodic

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Annex CPage 2 of 2

overhaul of motive power and rolling stock including anintegrated materials management system; and

(h) developing the timetable and technical and economicanalysis of Phase II and Phase III of the workshoprationalization and modernization program.

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Annex DPage 1 of 14

INDIA

RAILWAY ELECTRIFICATION AND WORl;SHOP MODERNIZATION PROJECT

Railway Traffic Forecasts

I. Macroeconomic Considerations

1.01 The growth of the country's economy during the Fourth-Year Plan(1968/69-1973/74) was slower than predicted. Instead of the targetted5.5%, GDP grew at a real rate of about 3.4% per annum. The end of thePlan period was marked by a number of adverse events, internal (the1972/73 drought) as well as external (the Bangladesh conflict and thesteep rise in world grain and petroleum prices of 1973). After a periodof difficult adjustment, however, the GDP (at factor cost) grew at anannual average rate of 5.3% between 1975/76 and 1978/79. This performancewas slightly below the Fifth Year Plan's target of 5.5% p.a., 1/ but itcompares very favorably with a long-term trend of growth rate of GDP at3.7% p.a. from 1950/51 to 1978/79.

1.02 1979/80 was a year of serious economic decline, underscored bya severe drought which produced a fall of about 16% in agriculturalproduction, and by a deterioration of industrial production, whichregistered a decline of 1.4% after four years with an average rate ofgrowth of about 7%. The decline in industrial production was largely dueto shortfalls in the production of major inputs such as coal, steel andcement, as well as constraints in the provision of infrastructure, notablypower and transportation. GDP declined by about 5%. As a consequence ofthese developmerts, the remarkable price stability that characterized theIndian et aomy after 1975 gave way to a sudden rise in the level of pricesafter 1979/80.

1.03 During 1980/81, the economy started to recover. Weather wasnormal, which allowed a recovery in agricultural production, which rose bymore than 15%. Close attention to the performance of infrastr ':...uralservices and the availability of basic goods improved their supp?.ybeginning in the middle of the year, resulting in a growth in industrialproduction by 4%; GDP rose by 7.5%.

1/ The Fifth Plan was originally envisaged to cover the period1974/75-1979/80, but it was cut short by the defeat of the Congressparty during the elections of 1978.

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Annex DPage 2 of 14

1.04 During 1981/82, the economy largely completed the recoveryphase, resulting in a year of soLid growth on top of the rebound of1980/81. Even though the 1981 monsoon withdrew early and foodgrainproduction was only 2X-3% higher than in 1980/81, production of othercrops was better. The total agricultural output grew by about 4%.Industrial output continued to recover from the supply problems whichearlier had constrained the economy and grew by over 8%. GDP grew byaround 5.5%. Inflation is cLearly decelerating as wholesale prices roseby about 10% on average annual basis, compared to 17% in 1979/80, and 18Zin 1980/81.

1.05 In the 1980-s, the country's economy is shifting from asituation of resource surplus which characterized the last half of the1970-s, to one of resource scarcity. The economy is facing basicinfrastructural and supply constraints whose relaxation requiressubstantial domestic investments and an unprecedented mobilization offoreign resources. In the current Sixth Five-Year Plan (1980-85), GOIgives high priority to expansion of irrigation and rural development andto investments in the energy sector. The share of investment in thetransport sector dropped from 14% of the total in the Fifth Plan to 12.7%in the Sixth. The financing of this ambitious Plan relies heavily onraising the domestic savings rate from its already high level and inreducing a rapidly rising import bill while boosting the traditionallyweak export sector. To attain these targets, India must avoid importsthat can be produced economically at home, must accelerate exports,mobilize and then utilize aid at a faster rate than hitherto and borrowmore on non-concessional terms.

1.06 The final size of the public sector outlay under the Plan hasbeen fixed at Rs 975 billion (US$90.3 billion equivalent) at 1979/80prices but this figure could be raised duriug the mid-term Plan review).This is, in real terms, 80% higher than the outlay in the Five-Year Plan.The mobilization of the large volume of domestic and foreign resourcesrequired to finance this plan will no doubt take some time to materialize.The Plan advocates an average annual growth rate in GDP of 5.3% between1980/81 and 1984/85. The Bank Group-s Economic Report 1/ projects a realgrowth rate of 6% in 1981/82, followed by a 5% per year for the period1982/83 to 1984/85.

1/ Economic Situation and Prospects of India, Report No. 3872-IN. April7, 1982; Table 2.4. For brevity, this report will be referred to asWB-s Economic Report in the rest of this Annex.

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Annuxx DPage 3 of 14

II. Traffic Forecasts

(a) Freight

2.01 Railways and road transport account for about 96% of India"sfreight traffic. Traffic carried by these modes increased from 50 to 269billion ton-km8 between 1950/51 and 1979/80, or by 5.4 times during thisperiod. The change in the ahare of each of the two main transport modesin the total and the comparison of their growth with that of GDP at factorcost (at 1970/71 prices) is shown below:

Land Freight Traffic (Billion TKms) GDP in TKms perYear Rail Z Road % Total billion Rs UTnit GDP (f-g)

aTY (b) (c) (d) (e) (f) (g) (h)

1950/51 44.1 89 5.5 11 49.6 175.36 0.281955/56 59.6 87 8.9 13 68.5 208.70 0.331960/61 87.7 71 35.0 29 122.7 255.34 0.481965/66 116.9 68 55.0 32 171.9 290.23 0.591970/71 127.4 66 66.9 34 193.4 367.36 0.531975/76 148.2 67 73.0 33 221.3 426.33 0.521976/77 156.8 67 76.0 33 232.8 432.48 0.541977/78 162.7 68 77.0 32 239.7 469.73 0.511978/79 154.8 62 93.6 38 248.4 497.23 0.501979/80 156.0 61 101.0 39 257.0 469.48 0.541980/81 158.5 64 88 36 246.5 504.80 0.491981/82 174.0 65 92 35 266 533.26 0.50

Sources: 1950/51-1977/78 traffic figures: Report of the National TransportPolicy Committee, Planning Commission, May 1980. Table 2.2.L978/79-1979/80 traffic figures: Indian Railways and PlanningCommission. GDP figures: WB's Economic Report, Table 2.1(b).

2.02 As has long been established, there is a close correlationbetween growth of ton-km and GDP for most countries. In the case ofIntia, the ratio of ton-km to GDP shows considerable stability over time,par.icularly after 1965/66. This indicator of the link between economicdevelopment and the transport sector has been used as a criterion toestablish a boundary to expected future growth in railway traffic. Thiscriterion is used in this analysis as one of the guidelines inestablishing expected rail traffic.

2.03 Given the uncertainty which traffic forecasts entail, andparticularly bearing in mind the state of transition of the country-s

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economy, three scenarios have been tested to obtain estimates for theeighties. The first one assumes an economic rate of growth of 3.7% p.a.in line with the historical trend. The second scenario assumes an annualrate of growth of GDP of 4.5%, as expected in WB-s Economic Report (seepara 1.06 above), but extended to cover the period 1980/81 to 1990/91.The third alternative contemplates an annual growth of GDP in accordancewith the Sixth Plan (5.2% p.a.), also used as an average for the entiredecade. Basic assumptions used to establish an upper boundary in trafficvolumes are that: (i) the share of rail traffic in the transport sectorwould be around 60%, prevalent value for the last few years (energyconservation policy and latest improvements in operations support theassumption of no further decline of railway share); and (ii) the ratio ofton-km to GDP (at 1970/71 prices) would remain at 0.53, the average forthe period 1965/66-1981182. Given these assumptions, the forecast oftotal overland and railway traffic would vary as follows:

Estimated GDP in Total Overland Rail Traffic Sharebillion 1970/71 Rs Transport (BTKMs) /a % BTKMs /a

Tear Si S2 S3 Si S2 S3 S1 S2 S3

1981182 533.26 533.26 533.26 282.6 282.6 282.6 61.0 173 173 173/b1982/83 553.0 557.3 561.0 293.1 295.4 297.3 61.0 179 180 1811983/84 573.5 582.3 590.2 304.0 308.6 312.8 61.0 185 188 1911984/85 594.7 608.5 620.9 315.2 322.5 329.7 61.0 192 197 2011990/91 739.5 792.5 841.6 391.9 420.0 445.7 61.0 239 256 272

Notes: Si = Scenario 1; S2 = Scenario 2; S3 = Scenario 3.

/a BTKms = Billion ton-kms. In this Annex the analysis has been focused on thisparameter as the relevant unit of traffic rather than originating tons, orequivalent four-wheeler wagons or other similar units used by IR.

/b Provisional value given by IR for 1981/82.

2.04 Since 1965/66 until 1977/78, the railway share of traffic hasbeen almost invariably around 67%. After that, (see Section H of ChapterII) IR has had several problems that severely affected its production witha consequent drop in its traffic share at the level of about 60%, but inthe last two years the recovery has been significant. The NTPC reportforecasted a possible share of railways in the order of 70%, but thisfigure seems to be optimistic. The assumed 617. seems to be realistic,possibly on the conservative side.

2.05 A more accurate forecast, of course, entails a detailedexamination of growth estimates for the main commodity groups moved by the

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railways. As indicated by Table 4, in 1981/82 seven groups of commoditiesmade up 80.4% of revenue tonnage and 75.0% of revenue ton-kms. Thesecommodities are coal, steel inputs and products, foodgrains, POL, iron orefor export, cement and fertilizers. A detailed forecast per commoditygroup follows.

(i) Coal

2.06 Coal constitutes the main domestic source of commercial energyin India. The country's potential for hydroelectriLcity is estimated to be100,000 MW of which 70,000 MW is economically exploitable. Only aboutL1,000 MW is currently developed. Production of coal kept pace withplanned targets and was well ahead of demand between 1973/74 and 1975/76.However, output increases could not be sustained after 1976/77 and coalproduction stagnated around 100 million tons for the next three years,falling behind the reduced demand for these years. During 1979/80 coalproduction increased by 2% to 104 million tons and in 1980/81 the totalproduction was 114 million, a significant 10% annual growth. In 1981/82the production is estimated to be about 124 million.

2.07 WB-s Economic Report finds GOI coal demand estimates generallysound, although the assumed production targets, especially for steel andcement, appear optimistic. GOI's estimates indicate an average annualgrowth of demand of 10.1% for the period 1980/81-1985/86 and of 7.9% forthe whole period 1980/81-1989/90. On the supply side, GOI-s coalproduction targets assume a 12.5% avera&, annual growth during the1980/81-1984/85 period (from 112.71 to 179.19 million tons) and 9.7%between 1984/85-1989/90 (up to 260.45 million tons). These productiontargets are also deemed to be ambitious, particularly for the1980/81-1984/85 period. IDAs Economic Report forecasts that for the coalsector as a whole, output in 1984/85 should be in the region of 160-165million tons 1/ which represents an annual growth of 8.8X as compared with1980/81 production. Accordingly, it has been conservatively assumed thatcoal availability would yearly grow by about 4.1%, 6.0% and 8.8% until1984/85 and 7.5% thereafter during the period 1981/82 to 1990/91, and thatthe railway share would remain fairly constant, taking into considerationIR plans to increase the number of high capacity wagons (historicaL growthfrom 1970/71 to 1979/80).

2.08 Average haul distances are expected to increase during the SixthPlan period due to the location of some new mines which are expected tocome into operation in the next few years, and the location and tonnage ofadditional users, particularly the new cement and power plants in western

1/ See para. 5.90 of WB-s Economic Report.

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India, several of which are expected to be operating by 1984/85. However,towards the end of the decade, the new high-power thermal stations areexpected to be in operation. Since they will be located closer to thecoal fields than previous ones, the average lead for coal will decrease.Future traffic has been estimated to range between 49.4 and 56.4 billionton-kms in 1984/85 and between 62.9 and 87.0 billion ton-kms by the year1990/91 (see Table 5).

(ii) Steel Plant Traffic

2.09 From 1970/71 to 1979/80 the average increase in output of bothingot and saleable steel was over 3% per annum. However, the variationsin production throughout the decade were erratic with a very low increasebetween 1970/71 and 1974/75 (1.17 for ingot and 2.1% for saleable steel)followed by an upsurge in 1974/75-1976/77 of 16.0% and 19.27. annual ratesof growth for ingot and saleable steel, respectively, which gave way to adecline of 5.1% p.a. for ingot and 13.5% p.a. for saleable steeL between1977/78 and 1979/80. Production tonnages of pig iron, ingot and saleablesteel stood at 1.1 million, 8.0 million and 6.0 million, respectively,during 1979/80. Current indications are that overall output for 1980/81remained at about the 1979/80 level but a significant annual growth ofabout 14% is expected for 1981/82. Consumption of finished steel duringthe seventies grew faster than production, at a rate of about 5.5% p.a.,the deficit being compensated by curtailing exports (India has been a netexporter on and off for a number of years) and stepping up imports.

2.10 Total ingot steel capacity in integrated plants (the publicsector accounts for about 82% of large plant capacity in India) isexpected to be raised from 11.4 million tons in 1979/80 to 14.6 milliontons in 1984/85 and 22.6 million tons in 1989/90. The growth during theSixth Plan period would be from expansion, modernization andrehabilitation of existing plants, while growth in the second half of thedecade would stem mostly from the addition of two new plants of 3.5million tons and 3.0 million tonLs at Vishakapatnam and Paradip,respectively. WB's Economic Report (paras 3.39-3.40), however, considersthese production targets difficult to achieve in view of the constraintsof power shortages and decline in the quality of coking coal in India,combined with a number of technical difficulties relating to the qualityof raw materials and the choice of production processes, all of whichaffect productivity. As a result, it is likely that net imports of steelwill be required through the end of the Eighties.

2.11 The transport requirements for steel plants comprise rawmaterials and finished products. Coal used for steel production processhas already been analyzed in paras. 2.06-2.08 of this Annex. Iron ore forsteel production is included in the present analysis, while iron ore forexport is discussed in para 2.18 below. The average haul for raw

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materials has remained fairly constant, while that for finished productshas Increased gradually 1.n the last two decades. Until the new plantsbegin operations towards the end of the elghties, however, no majorvarLations are expected in average haul. The transportation requlrementof the import/export trade of fLnished steel has also been taken intoaccount; assuming, however, that a major pnrtion of the imported steelwould be destined for the urban centers and industrial areas around themain ports (Bombay, Calcutta and Madras), which would be transported byroad. Further, it has been assumed that modal shares for steel plantswould remain fairly atable. Based on these assumptions, the trafficestimates for 1984/85 range between 16.5 and 17.5 billion ton-kms, and for1990/91 between 18.5 and 20.5 blllion ton-kms, respectively.

(iiI) Foodgrains

2.12 Agriculture is the mainstay of India'a economy, employing overtwo-thirds of the labor force. Foodgrains, in turn, dominate thecountry's agriculture. The supply/demand balance of foodgrains in recentyears suggests a reduced and possibly eliminated need to import largequantities of foodgrains, and if present trends continue, India couldbecome a significant foodgrain exporter. These developments have alreadyhad a profound effect on the country's transport sector, mainly bylengthening the average haul distances.

2.13 Production of foodgrains between 1967/68, a year of high yields,and 1977/78, an unusually good year, grew at 2.37% per year. A longerterm trend (1960/61-1978/79) indicates an annual growth of 2.74%. TheSixth Plan targets imply a substantial acceleration of the growth rate toabout 3.8% per annum. Assuming that the export/import element in thefoodgraiu global picture continues shrinking gradually, average hauldistances are expected to continue growlng faster than total tonnages dueto a combination of long hauls from the production centers in the North toall deficit areas including the South, and to a larger proportion of shortto medium loads being captured by road transport. If, as it is alsoassumed here, the policy of self-sufficiency for the various regionscontinues to meet with success, a reversing trend would occur towards thesecond half of the decade--average travel distances would tend to decreasedue to self-sufficLency at regional and national levels, while export offoodgrains in significant volumes of diversification of agriculturalproduction, or both, may take place. As a consequence, total trafficvolumes are expected to stagnate. Accordingly, assuming a growth infoodgrain production ranging from 2.5% to 3.0% p.a., traffic projections(assuming a decrease in railway share of about 0.5 percentage points peryear) lead to estimated traffic volumes varying from 29.8 to 30.2 billionton-kms in 1984/85 and from 33.5 to 35.1 billion ton-kms in 1990/91.

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(iv) Petroleum Products (POL)

2.14 Demand for petroleum products rose quite rapidly in India (8.9%p.a.) between 1950 and 1973, the time of the oil price hike. Asubstantial increase in the real domestic price of POL after 1973 hasmoderated the growth in demand to an average annual rate of 5.1%, between1973/74 and 1979/80. In 1980/81, consumption was constrained by the laborpetroleum in Assam, which resulted in a loss of production of about 3.5milLion tons of crude. During 1981/82 demand grew by about 7%.Estimating future demand, however, is uncertain because, as individualsand firms adjust their habits of POL consumption, historical relationshipsno longer apply. On the other hand, it is difficult to sharply reducedemand in the near future because most PGL products are used asintermediate products. World Bank estimates a growth of about 7.6% p.a.between 1979180 and 1984/85.

2.15 The transport picture is also going to be affected by thestructure and regional pattern of production and supply and by theavailability of alternative transport modes. India is largely unexploredregarding hydrocarbons. The exploration activity undertaken during theSeventies, however, paid off in the discovery of one giant oil and gasoffshore field (Bombay High) and several smaller commercial fields, bothoffshore and onshore. The number of good prospective areas exceeds thenumber that the state-owned organizations can reasonably explore duringthe next five years; therefore, the Government has recently decided toopen selective prospective areas to foreign exploration firms underproduction-sharing contracts. These arrangements will considerablyaccelerate exploration of hydrocarbons, although exploitation of anycommercial reserves is not likely to happen until the second half of theeighties at the earliest.

2.16 Crude production in 1981/82 was about 16.4 million tons whichrepresents a little less than one-half of Indian POL demand. India-srefining capacity, on the other hand, was of 31.8 million tons ofthroughput capacity (mttc) in 1980. This is enough to process about 29million tons of crude into 27 million tons of petroleum at 90% capacityutilization and 93% outturn of products from crude. There is a newrefinery under construction at Mathura, which should being operating in1981, adding 6 mttc. Moreover, the Government plans to meet the growingdemand both by expanding existing refineries and by building new ones.The new refineries would be located at Mangalore (6 mttc) and Karnal (3mttc). Altogether, India is expected to have 13 mttc more than at presentby 1984/85.

2.17 Concerning transport facilities, in addition to road transportand existing pipelines, a new pipeline is expected to be commissioned inthe near future, from Bombay High to Mathura, and more pipelines are

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planned to be built during the sixties. The share of POL by rail willthus be reduced, and fairly moderate increases in transport volumes areestimated, except in the third alternative, where, in addition to anannual rate of growth of demand of about 7.6% p.a., a smaller reduction inthe share of the railways is assumed. Traffic forecasts range between11.5 and 12.6 billion ton-kms in 1984/85 and between 12.4 and 19.4 billionton-kms by 1990/91.

(v) Iron Ore for Export

2.18 Despite occasional surges in export volumes in a few years inresponse to world market conditions, iron ore has presented a stablepattern of traffic with relatively minor fluctuations from one year to thenext. After experiencing a world-wide slump in demand of iron ore, themarket is beginning to recover. On the supply side, a switch ofproduction has been completed from lumps to fines to better suit the worldmarket. Accordingly, a moderate traffic increase has been estimated,ranging from 7.5 to 7.6 billion ton-kms in 1984/85 and from 7.7 to 7.9billion ton-kms in 1990/91.

(vi) Cement

2.19 During the past 20 years, India has suffered an almost chronicshortage of cement. As a result, cement is rationed administratively.The annual rate of growth of installed capacity averaged about 8.9% during1950/51-1971/72 and declined to about 2.1% between 1971/72-1978179 due torestrictive Government pricing and licensing policies. Production growth,meanwhile, averaged about 3.7% per year as a result of increases in.capac-ity utilization between 1971/72 and 1977/78. Thenceforth, capacityutilization declined, however, from 88% in 1977/78 to less than 75% in1979/80 and 1980/81. The most critical constraints on the operation ofcement plants were coal and power shortages. In 1981/82 the totalproduction was 21.5 million tons an increase of 15% over the previousyear.

2.20 India is planning a major expansion of its cement industry from32.7 million tons of installed capacity in 1981/82 to about 42.5 milliontons in 1984/85. About 80% of the additional capacity will be in newproduction units and the remaining 20% will result from expansion ofexisting plants. If the investment targets are met, the planned expansionwould roughly meet the projected demand for cement in the next four years,although shortages are likely to continue for some time.

2.21 These shortages, combined with the necessity to supplement thedomestic production through imports, the concentration of consumption inthe country-s northern region, and an increasingly rapid erosion oftraffic in the shorter distances, are expected to continue aiding to the

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average haul of cement by the railways. Of the three alternatives tested,the first two (with growth/rates of 3.0% p.a. and 4.0% p.a.) straddle theaverage growth in production of cement during the 1971/72-1977178 period.The third alternative assumes a jump in production of 7% p.a. between1980/81-1984/85, followed by 5.5% p.a. through the end of the decade.Assuming a decrease in railway share of tonnages of about 3% per year, thetotal traffic moved by the railways is expected to range from 8.8 billionton-kms to 9.9 billion ton-kms in 1984/85 and from 10.5 to 13.7 billionton-kms in 1990/91.

(vii) Fertilizer

2.22 The consumption of nitrogenous fertilizers in India increased atan average annual rate of 22% in the decade 1962-72. In the next threeyears, consumption declined. However, as a result of improvedagricultural conditions and a reduction in the price of nitrogen,consumption picked up again, resulting in a growth of about 15% p.a.between 1975 and 1980. Phosphatic and potassic fertilizers followed aconsumption pattern similar to nitrogenous fertilizers, but did not beginto recover until 1976/77. By 1981/82, India-s total fertilizerconsumption was 5.9 million nutrient tons, of which 67% was nitrogen, 22Zphopshates and 11% potash.

2.23 1 ndia produces nitrogenous and phosphatic fertilizers. Installedcapacity has grown from 0.15 million nutrient tons per year in 1952 toabout 6.8 mill ion in 1981/82. The utilization of available capacity hasbeen relatively low, however. Although it showed substantial improvementsbetween 1974175 and 1978/79, it has declined sharply in 1979/80 and1980/81, largely as the result of shortages of power, fuel oil andnaphtha, coupled with equipment and operating problems, particularly inseveral of the older public sector plants. In 1981/82 the utilizationimproved but the level is still low about 60% of installed capacity. In1981/82, India produced 3.1 million tons of nitrogenous fertilizers and0.9 million tons of phosphatic fertilizers.

2.24 The high rates of growth in consumption of fertilizers of recentyears are not sustainable in the long run. Consumption in 1980/81increased at a more moderate rate of about 6% as a result of priceincreases. The installed capacity is expected to increase from 6.9million tons in 1981/82 to 8.5 million tons in 1984/85. Additionally, theGovernment is placing considerable emphasis on measures to increasecapacity utilization of existing plants. Even after taking intoconsideration the large projects underway at Thal and Hazira and thosefirmly planned, fertilizer consumption is expected to exceed domesticoutput significantly. To estimate future transport demand, fertilizerconsumption has been estimated to grow at annual rates of 8.5%, 10.1% and

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12.5% in line with the analysis provided in connection with the HaziraFertilizer Project. 1/

2.25 Bearing in mind the location of existing and projected plants,and assuming that the railways' share would continue decreasing by about3% annually as the main inter-regional flows are concentrated along theprincipal railway corridors, while road transport handles intra-regionaldistribution flows, in line with the modal-point transport strategy beingdeveloped by GOI/IR, 2/ railway traffic volumes are projected to reachbetween 10.7 and 11.37billion ton-kms in 1984/85 and from 12.5 to 16.0billion ton-kms by 1990/91.

(viii) Other Commodities

2.26 In line with a historical pattern of concentration of railwaytraffic in the main seven commodities discussed above, the remainingtraffic is estimated to continue decreasing in tonnage. As road transportcontinues capturing the shorter distance traffic in these othercommodities, however, the average haul will increase, leading to astagnation or even a small decrease in ton-kms from 41.1 billion in1980/81 to a range between 38.0 and 38.3 billion in 1984/85 and theirgrowth between 39.6 and 43.4 billion by 1990/91.

(b) Passengers

(i) Suburban

2.27 The following table summarizes the gTowth in population and insuburban railway passenger traffic for the three largest urban centers inIndia. 3/

1/ Staff Appraisal Report, March 6, 1981. Para 4.08.

2/ Under the Fertilizer Industry Credit, financed partly by IDA, RailIndia Technical and Economic Services Ltd. has carried out a study tooptimize rail fertilizer movements.

3/ These statistics, regarding passenger traffic, must be viewed withsome caution since ticketless passengers are not included and theirproportion varies from one city to another and through time, as lawand order deteriorated, particularly in Calcutta.

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Population Passengers Pass-Km(Million) (Billion) (Billion)

Year B C M T B C M T B C M T

1951/1952 3.11 3.30 1.82 8.23 0.28 0.09 0.04 0.41 3.96 2.42 0.45 6.83

1960/1961 4.15 4.83 2.32 11.30 0.42 0.20 0.06 0.68 6.36 4.61 0.80 11.77

197011971 5.97 7.03 3.17 16.17 0.85 0.27 0.10 1.22 15.12 6.44 1.42 22.98

1977/1978 7.87 8.19 3.92 19.98 1.32 0.45 0.16 1.93 25.77 11.29 2.37 39.43

Note: B = Bombay; C = Calcutta; M = Madras; and T = Total.

Source: Rail Tariff Enquiry Committee, Ministry of Railways. April, 1980.Main Report, Volume IV. Statement (Appendix) 6.1.

2.28 As shown above, while the population of Bombay, Calcutta andMadras grew by 3.5% annually between 1951/52 and 1977/78, the totalsuburban traffic moved by the railways in the three cities increased by6.1% per year in terms of number of passengers and by 7.0% annually interms of passenger-kms. When analyzed decade by decade, the traffic inpassengers and passenger-kmas grew by 5.8% p.a. and by 6.2% p.a. iu thefifties, by 6.0% p.a and 6.9% p.a. in the Sixties and by 3.1% p.a. and8.0% p.a. between 197U171 and 1977/78. In 1979/80 the traffic decreasedby 10% (passengers) and 11% (passenger-kms) in the face of fare increases,which took place in July 1980. The fare increases included a raise of 5Xon passenger traffic up to 100 kms and of 15% on quarterly and monthlyseason tickets. Preliminary estimates for 1980/81 indicate a recovery oftraffic growth of about 5% in number of passengers and of 4.8% inpassenger-kms (see Table 3 for total traffic statistics after 1977/78).

2.29 As a result of the spread of urban centers, average lead forthe three cities has increased from 17.3 kms in 1960/61 to 17.8 kms in1970171 and then to 20.4 kms in 1977/78. A careful study of the variousparameters having a bearing on suburban passenger traffic (urbanpopulation, service sectors, land use pattern, per capita income andprices for railway services) was carried out by the Rail Traffic EnquiryCommittee and they concluded--based principally on urban populationgrowth--with a projected rate of growth of about 5.8% annually between1977/78 and 1999/2000, which would increase to around 6.7% annually if thepopulation increase in the three cities continues growing at the averagerate of the Seventies. Assuming a gradual increase in average lead from20.4 kms in 1977/78 to 25.1 kms in 1999/2000, the study concludes that thegrowth in traffic demand in terms of pass-kms would range from 6.8%annually to 7.9% annually throughout this period.

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2.30 A closer look at the price elasticity of suburban passengertravel, based on the 1980 experience, suggests that the high growth indemand could be uampened, by implementing a gradual increase in fares.Alternatively, it would be necessary to limit the available capacity onthe main suburban corridors, to avoid excessively large investments.Assuming either of the two solutions, growth in suburban passenger traffichas been estimated at about 4.5% per year in terms of passengers or 5.1%per year in terms of passenger-kms, during the period 1980/81-1990/91.This would generate a total number of around 2,380 million passengers in1984/85 and 3,100 million passengers in 1990/91 and of 49.5 billionpass-kms in 1984/85 and 66.8 billion pass-kms in 1990/91.

(ii) Inter-urban

2.31 Inter-urban passenger traffic has grown at an average of about2.0% per year (in terms of number of passengers) and at 3.3% per year (inpassenger-kms) during the last three decades. The rate, however, hasincreased gradually, decade after decade. Thus, in the Fifties totalnumber of passengers and passenger-kms increased by 0.5% p.a. and 1.0%p.a., respectively; in the sixties they went up by 2.8% p.a. and 3.7%p.a.; and in the seventies by 2.5% p.a. and 5.3% p.a., respectively.Hence, only the growth in the total number of passengers decreasedsomewhat from the sixties (2.8% p.a.) to che Seventies (2.5% p.a.). Thisincreasing trend reflects mainly the 'ncrease in the country's populationthroughout the period (the popvulation roughly doubled from about 360million to some 644 million in these 30 years), the increased economicactivity of the various regions and of the country in general (growth inGNP) and the ratio of increases in income per capita to increases inpassenger fares. Of all these variables, the Rail Tariff EnquiryCommittee (RTEC) found the best correlation in the case of population andthe service sector.

2.32 Using the population projections for India presented in TableA.9 of previous WB Economic Report, which assume a net reproduction rateof one in the year 2000, and using the growth rate relationshipsestablished by the RTEC (Appendix 6.7 to Volume IV), the followingestimates of population and inter-urban traffic levels are obtained:

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Inter-Urban Passenger Traffic Volumes

Population Million Passengers Billion Pass-KmsYear (millions) Si S2 S3 Si S2 S3

1980/81 672 1,550* 1,550* 1,550* 159* 159* L59*

1984/85 739 1,720 1,833 1,946 187 202 2241990/91 803 1,884 2,124 2,377 215 249 303

S1 = Scenario 1; assumes a growth rate relationship based on 1950/51 to1977/78 long term trends.

S2 = Scenario 2; assumes a growth rate relationship based on 1970/71 to1977/78 trends.

53 = Scenario 3; assumes a growth rate relationship based on actual increasein the relation between 1960/61-1970/71 and 1970171-1977/78.

* Provisional figures.

2.33 The figures in the preceding table represent an annual rate ofgrowth which ranges from 2.6% to 5.9% for total number of passengers andfrom 4.2% to 8.9% for passenger kilometers between 1980/81 and 1984/85.For the entire decade (1980/81-1990/91) these annual rates would vary from2.0% to 4.4% for passengers and from 3.1% to 6.6% for passengerkilometers.

III. Summary and Conclusions

3.01 Different studies carried out in India in recent years havearrived at various railway traffic forecasts. As shown in Table B-1,concerning freight, the 1984/85 World Bank estimates are lower thanprevious ones, although not significantly lower than IR's own estimates.The railway traffic forecast based on macroeconomic considerations (paras.2.01 to 2.04) is somewhat higher, but as indicated before, the results ofapplying that methodology are not so accurate. In any case they representa small increase in the order of 1-3%.

3.02 Comparing with the upper boundaries suggested by expected GDPgrowth (see table in para. 2.03 of this Annex C), the Bazk-s estimatesvary within reasonable limits. The resulting annual rates of growth interms of ton-kus range from 2.3 for the low, to 3.1 for the medium and to4.4 for the high alternative, between 1981/82 and 1984/85. Between1981/82 and 1990/91, the corresponding annual rates of growth are 2.2%,3.3% and 4.4%.

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INDIA

RAILWAY ELECTRIFICATION AND WORKSHOP MODERNIZATION PROJECT

Description of Main Line Sections to be Electrified

and Other Components

ke) Main Line Sections to be Electrified

(i) Jhansi-Itarsi

1. This section (381 RKM) lies on the main north-south trunk routeconnecting Delhi with the Metropolitan cities of Bombay and Madras. Thisis almost a double line section except for small patches of single trackover some major rivers. There are 50 railway stations, including twoimportant stations, i.e., Bina aud Bhopal.

2. The section being on the north-south main trunk route, caters tovery heavy passenger and freight traffic. The main commodities movingover this section comprise food grains from north to south and towardsBombay in the up direction and in the Oown direction fertilizers and coalfrom Central India coal fields for thermal power plants in the north,i.e., Bhatinda, Panipat, Faridabad, etc. There is a separate stream ofcoal traffic from Pench Valley fields from Itarsi to Bhopal enroute tostations on the Western Railway. Some major deveLopments like expansionof thermal power plants at Bhatinda, Faridabad, as well as setting up ofgiant fertilizer plant based on Bombay High and numerous cement plantsaround Manickgarh on S.C. Railway, will contribute to increases in thevolume of freight traffic. The traffic density on the section is 29.0million GTKM/RKM/Annum at present and estimated to increase to 35.8GTKH/RKM/Annum by 1990/91.

(ii) Itarsi-Bhusaval

3. This section (301 RKM) lies on the Delhi/Lucknow-Bombay andHowrah/Allahad-Bombay trunk routes and is a double line section. Thereare 37 stations on this section, including an important junction station.

4. The section carries very heavy passenger and goods traffic.There is also a preponderance in coal movement from Pench Valley to thestations reached via Itarsi, Bhusaval and for power stations and othercoal-based industries in Western Railway and Bombay. A sizablenorth-south bound traffic, which normally seeks movement over

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Itar3i-Amla-Nagpur section, moves over this section due to difficulties inthe capacity on that section. Main traffic in the up direction comprisesof coal and general goods, while in down direction the traf_ic streamincludes POL, fertilizers, etc. The increase in the projected level oftraffic includes coal for power houses and coal-based industries fordestinations reached via Jalgaon and south of Jalgaon from C.I.C.fields/Singrauli and Pench valley coalfields. The increase in the tran-sport of other general goods, food grains, etc. in the up direction andthat of POL, fertilizers traffic in down direction are anticipated. Thepresent day traffic is 28.3 million GTKMIRKMIAnnum and projectedanticipated traffic by 1990/91 is 31.6 GTKH/RKM/Annum.

(iii) Bhusaval-Nagpur

5. This section (393 RKM) lies on Bombay-Howrah trunk route. Thisis a double line section and there are 35 stations on this section.

6. This section, being on the main trunk route, carries very heavypassengers as well as goods traffic. A number of important commercialcenters are located on this section. A big power house is located atPuras and coal for this power house is mostly moved from Mahesol coalfields over this section. This section passes through a region rich incotton and coal. North-south traffic also transverses over a part of thissection between Wardha and Nagpur. Due to passage difficulties overnorth-south route, i.e., Itarsi-Amla-Nagpur, a few of the north-southtraffic is diverted via Itarsi/Bhusaval-Wardha which accounts for two tothree loads per day. The traffic density on the section is at present20.2 GTKM/RKM/Annum and estimated to 23.9 GTKM/RKM/Annum by 1990/91.

(iv) Wardha-Balharshah(v) Balharshah-Vijayawada

7. These two contiguous sections (133 RKM, 454 RKM) are part of themain north-south trunk route connecting Delhi with Madras. Most of thesections are double-lined, except for a short stretch of a single lineportion north of Bellampalli, where doubling is in progress. There are 14stations in Wardha-Balharshah and 53 stations in Balharshah-Vijayawada.

8. The traffic over these sections consists of through traffic ofindustrial as well as agricultural products from both northern andsouthern sides. These sections traverse through the coal belt of AndhraPradesh which is also enriched with other minerals like dolomite, lime-stone, etc. Coal from Singareni collieries, Bellampalli, Mandamari andothers, moves through these sections for feeding thermal power stations inthe southern states, i.e., Tamiluadu, Andhra Pradesh, Karnataka andsouthern part of Maharastra. Likewise, there is a heavy movement ofcement traffic over these sections. With the emphasis of the super ther-mal stations being located at Ramagundam, as well as Kothagudam

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in Andhra Pradesh, the production of coal in Singareni collieries isexpected to be increased considerably. The present traffic densities onthese sections are 19.5 million GTKM/RKM/Annum for Wardha-Balharshah and30.1 million GTKM/RKM/Aunum for Balharshah-Vijayawada. By 1990/91, theyare expected to increase to 28.4 million GTKM/RKM/Annum forWardha-Balharshah and 44.0 million GTKM/RKM/Annum forBalharshah-Vijayawada.

(vi) Bhopal-Nagda

9. This section (239 RKM) is mostly of a single line aud connectstwo important trunk routes, i.e., Delhi-Madras and Delhi-Bombay. Thereare 28 stations on this section.

10. This section carries heavy freight traffic. The coal loads from

coal belts of Central India feeding thermal power plants and otherindustries on the Western India move over this section. A good deal ofsteel and iron, as well as fertilizer traffic, moves over this section.The traffic density on the section is 19.7 million GTKM/RKM/Annum atpresent and estimated to increase to 26.2 million GTKM/RKM/Annum by1990/91.

(vii) Itarsi-Nagpur

11. This section (298 RKM) at present is predominantly of a single

line and doubling of the section is being progressively under way. Thereare 35 stations on this section. Since this line traverses over ghatsection with heavy gradients and lies on the main north-south trunk routefrom Delhi to Madras, it certainly requires elimination of theiufrastructural weaknesses, e.g., steam traction, stretches of single lineand locomotives with medium power. The electrification of the sectionwill also provide a short distance chord line to the routeItarsi-Bhusaval-Nagpur, which is presently being utilized for a large partof goods traffic in view of the constraints on this route.

12. Besides through traffic, this section also caters to aconsiderable originating traffic in coal, charcoal, forest products, etc.Coal traffic, to the exteut of two to three loads daily, are worked to

Koradi power house and Bhilai Steel Plant via Godhani and Nagpur,respectively. This section, being the principal north-south trafficroute, there is a heavy demand for introduction of passenger services. Oflate, a number of fast and super-fast passenger services have beenintroduced. With the opening of new lines in Nandani fields in PenchValley area, substantial increase in freight movement over this section isalso anticipated. Additional cement traffic from new plants proposed nearManikgarh requires to be moved over this section. The traffic density onthe section is 14.4 million GTKM/RKM/Annum at present and is estimated toincrease to 22.0 million GTKM/RKM/Annum by 1990/91.

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(viii) Nagpur-Durg

13. This section (265 RKM) is part of the important trunk routeconnecting Calcutta with Bombay. This is a double line section having 33stations.

14. This section, being on the trunk route, serves mainly throughpassenger traffic between East and West. The originating goods trafficare mostly bamboos, forest products, manganese, foodgrains, finishedproducts of steel plants and textile goods. Wlth the setting up of asuper thermal plant, a fertilizer plant (under construction) and a newcoal mine being opened out, movement of freight traffic over this sectionis anticipated to increase substantially. The traffic density on thesection is at present 16.8 million GTKM/RKM/Annum and estimated toincrease to 22.6 million GTKM/RKM/Annum by 1990/91.

(ix) Bina-Katni-Anuppur

(x) Anuppur-Bilaspur

15. Bina-Anuppur (429 RKM) is a double line section, whereasAnuppur-Bilaspur (151 RKM) is mostly a single line section, except for ashort length of double track portion in-between. In these sections are 59stations.

16. Bina-Anuppur section connects the rich coal belts of C.I.C.fields/Singrauli located in Eastern region to the industrialized areas inthe Western part of the country around Ahmedabad. There is a heavy coalmovement over this section. A sizable stream of steel traffic also seeksmovement via New Katni from steel plants located in Eastern section todestinations on Western and Northern Railways. There have been proposalsto set up several new cement plants and to expand a steel plant alongsidethe section. With these developments, goods traffic on this section islikely to increase considerably. The present traffic densities on thesesections are 26.2 million GTKM/RKM/Annum for Bina-Katni-Anuppur and 9.1million GTKM/RKM/Annum for Anuppur-Bilaspur. By 1990/91, they areexpected to increase to 40.2 million GTKM/RKM/Annum for Bina-Katni-Anuppurand 11.9 million GTKM/RKM/Annum for Anuppur-Bilaspur.

(b) OHE Recording and Testing Car

17. At present there is no overhead equipment recording/testing scarwith IR. With an increase in traffic on the electrified route, it isbecoming more and more difficult to give long power blocks for maintenanceand overhauling of OHE. However, various parameters like height, stagger,wear of the contact wire, condition of OHE at the crossovers are manuallychecked in a time-consuming manner. Current collection is observed by

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noticing the sparks at night. These methods naturally suffer from errorsin measurement and individual judgement resultlng in a low standard ofmaintenance.

18. In view of the above, it is considered essential to have an OHErecording/testing car to measure and record the various parameters of OHEand pantograph under dynamic conditions ln monitoring current collectionfor laying down a rational maintenance and overhaul schedule.

19. Such a car could also be used for the research purpose. Thebehaviour of the different types of OHE against different types ofpantographs at different speeds could be evaluated both qualitatively andquantitavely under dynamic conditions. The speed potential of theexisting OHE has to be ascertained and if necessary, improvement in thedesign of the OHE and/or the pantograph should be done.

20. The OHE recording/testing car should be designed to be hauledby a locomotive or a regular train, and to cater for future needs, itshould be capabLe of operation at speeds up to 160 km/h. The car shouldbe provided with an observation dome, closed circuit television and visualdisplay units to study the behavior of OHE/pantograph. It should beprovided with various measuring devices and appropriate dLgital computerequipment for on-board preparation of defect and alignment repots. Theprovision of Ludigenous development of such a car for this purpose wasonce approved by the Railway Board in 1979. However, since domesticdevelopment of such a car would be remote, it is now proposed to import acomplete OHE recording/testing car wlth all the necessarymeasuring/monitoring equipment.

(c) OHE Maintenance Vehicles

21. IR now owns a large number of indigenously-manufactured OHEinspectlon/maintenance tower wagons which are used for carrying outinspection and breakdown attention of OHE on the electrified tracks. Thetower wagon is a 4-wheeler rail vehicle, self-propelled by a diesel enginehaving a horsepower of 83 and an axle load of 6.8 t. The total carryingcapacity for the tower wagon is 3.1 t and the maximum speed is 45 kmph.However, due to the obsolete design and the inadequate horsepower of theengine with the consequent low speed, these tower wagons presently usedhave a lot of disadvantages, including: (a) it takes an unduly long timeto reach the site of an accident in case of OHE breakdown and the sectioncontrollers find difficulty in permitting path to these vehicles; (b) itis impossible to couple to the tower wagon an additional vehicle carryingspare components of ORE; (c) availability is very low owing to, amongother problems, weak transmission system leading to frequent failure ofgear boxes and other parts; and (d) it is not suitable to operate thetower wagons on the heavy gradient sections, since the brake power isinsufficient and the vacuum brakes equipped are not fail safe.

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22. It is, therefore, suggested to develop high speed OHEmaintenance vehicles to overcome the above defects. The following threetypes of modern OHE maintenance vehicles are proposed:

a) Road-rail vehicles for attending minor breakdowns:

In order not to block the line for a long period, these vehiclesshould be capable of travelling to the scene of a fault byroad at the speed of 80-100 Km/h and mounting on the rails forrepairing the fault using a lift "bucket" or platform.

b) 4-wheeler self-propelled tower wagons for attending normal scheduledinspections and maintenance:

These cars should be capable of running at 75-80 Km/h andcarrying load up to 5 t.

c) Bogie-type 8-wheeler self-propelled tower wagons for attendingmedium/major breakdowns and heavy maintenance work:

Since the heavy maintenance/repair of OHE is done during commonpower/traffic blocks, it is extremely important to complete the workexpeditiously to minimize traffic repercussions. Therefore, thesewagons should be capable of carrying at 100 Km/h approximately20 t of heavy repairing materials and large manpower in order toincrease productivity to maximum possible level by using a number ofgangs simultaneously.

23. It is proposed that each OHE depot, spaced at every 50/60 kms,be provided with one road-rail vehicle and a 4-wheeler tower wagon or a8-wheeler tower wagon for scheduled maintenace and heavy repairs. Withthe increased pace of energization as much as 1,000 route km annually,it is expected that about 40 maintenance vehicles will be required peryear.

24. The first ten vehicles comprising five road-rail vehicles, three4-wheelers and two 8-wheelers are to be imported completely in assembledconditions so that they are available in time to keep pace with theproposed energization program. Next ten vehicles (five road-railvehicles, three 4-wheelers, two 8-wheelers) are proposed to be imported incompletely knocked-down condition. The assembly and testing will be donein India. By this time, it is expected that most of the components willbe indigenousLy developed and only a few components will need to beimported. The import contents will come progressively down.

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(iii) Improvement of the North-East Ghats Operation

25. The main line DC electrified routes, Bombay-Kalyau-Igatpuri andBombay-Kalyan-Pune sections run over steep Ghat sections having rulinggradients up to 1 in 33 on the Ncrth-East section and 1 in 37 on theSouth-East section. Both sections are serious bottlenecks in trainoperations.

26. Freight trains on these sections are worked by WCG-2 locomotiveswhich are also used for banking service. There are severe problems bothin the ascending and descendiug directions and WCG-2 locomotLves have notproved satisfactory for banking operations on these Chats due to thefollowing deficiencies in their operational capabilitLes: (a) Forascending load, there is a tendency to slip due to unreliable adhesioncausLng excessive stalling and parting of load; (b) As the regenerativebraking is not effective at speeds less than 28 Km/h, regeneratLon is notavailable at the maximum permissible descending speed of 19 Km/h on theNorth-East Ghat section. Thus, the locomotives depend on rheostaticdynamic braking causing tremendous heat; and (c) There are severaldesign/manufacturing deficiencies in the equipment.

27. The severe gradients on the section impose serious loadlimitations on the Ghat sections. The permissible load of goods trains inthe ascending direction is 1,250 tons with a single banker And 1,600 toniwith double bankers. These loads have to be further reduced duringmonsoons. In view of the likely traffic growth in the future and theexisting capacity constraints, it was proposed, in April 1979 by themulti-disciplinary Directors" level committee appointed by the RailwayBoard, to urgently import from abroad improved type of DC bankinglocomotives adopting latest technology in this field. However, forseveral different reasons, this proposition has never been realized untiltoday and there are no prospects of getting heavy duty DC bankers in thenear future.

28. In order to increase the line capacity, the third railway lineon North-East Ghats between Kasara and Igatpuri has been completed andcommissioned Lately. In the past, before and when work on the third Ghatline was to be commenced in 1977, three different committees had gone intoquestions of changing over DC traction to AC traction on the North-EastGhat section. While distinct advantages were seen in converting theNorth-East Ghat line into AC traction, the decisions were always tocontinue DC traction over the Ghats mainly due to the following argument:

(a) Bulk of the DC locomotives and EHU fleeta would require prematurereplacement;

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(b) Najor modifications to the OHE and subs.ations at heavy costs wouldbe involved;

(c) Conversion to AC of the OHE in built-up areas would be extremelydifficult;

(d) A number of tunnels in the Ghat section would call for modification;

(e) Kasara yard, as an actual point of DC/AC change-over, was ruled outas space-bound;

(f) A suitable design of AC/DC locomotive was noc available for workingon the Ghats; and

(g) All the signalling and telecommunication works would have to suitthe AC traction.

29. However, the situation changed considerably since then and theTRANSMARK team, which visited India in 1979, recommended conversion ofNorth-East Ghats into 25iV AC with suitable change-over facilities atKasara. The Bank mission, together with consultants looking into theadoption of high horsepower AC locomotives for hauling 4,500 ton trains onIR (para 2.23), also visited the North-East Ghat section in February 1981,with a view to determining the utility of the AC locomotives as bankersfor the Ghats instead of heavy duty DC bankers. The Bank mission conveyedthe view at that time that it would be advantageous even at that stage togo in for conversion of the Ghats into AC rather than importing heavy dutyDC banking locomotives to improve throughput.

30. With the completion of the third track between Kasara andIgatpuri, the time is appropriate to commence a new study based on acost-benefit anilysis for conversion of this electrified line from the old1500 volt DC to a modern AC system for a major and long term operationalimprovement. The study should cover: (a) the method of carrying out theconversion (i.e., changing insulators to 25 kV types but retaining theexisting contact wire and catenary); and (b) must include some alternativesolutions to operations of the ENU passenger commuter trains up to or overthe converted section. If, as a result of the study, conversion of thesystem from DC to AC is found viable, it would be desirable to carry itout at this stage, i,e., before the third track reaches its saturationpoint ln :'!e 1990s.

31. An immediate priority is the introduction of communicationsbetween the leading locomotives and the banking locomotives to provide forvoice communications between the drivers at the front and the rear of thetrain to improve line operations and reduce delays. The communicationssystem would include special purpose 25 watt locomotive radios, a "leakv"coaxiaL cable transmission system for radio reception on the tunnels andthe radio transmitter/receiver base stations ct Kasara, Igatpuri and theintermediate signal cabins.

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INDIA

RAILWAY ELECTRIFICATION AND WORKSHOP MODERNIZATION PROJECT

Details of the Six Workshops and ICF and Maintenance Depots

Selected for Modernization

1. Parel Workshop. Parel Workshop which is over 100 years old, isthe only locomotive workshop on the Central Railway system. The workshopwas initially pLanned for POH of steam locomotives. While the shop layoutand equipment provided were suited to the maintenance of steamlocomotives, the workshop has, in the course of time, undergone drasticchanges consequent to diversification of POH activities. Due toprogressive repLacement of steam traction by Diesel and Electric traction,the need for setting up maintenance facilities for diesel and electriclocos was felt and Parel shops had to gradually cater to the maintenancedemands of these new locomotives. Presently, the workshops have astrength of 6,300 personnel and is required to undertake POH of steam,diesel and electric locomotives. Capacity demands for diesel locos-ontinue to grow and have to be met by Parel shops. IR-s rationalizationplan provides for expansion of diesel POH capacity in Parel shops to 12locos per month by 1990 at tue same time tapering off the capacity forsteam locos from 8 to 5 in the same period with the ultimate am ofeliminating steam loco POH from this shop completely by the turn of thiscentury.

2. Liluah Workshop. Liluah Workshop was originally set up in 1863near Howrah Station for overhaul of coaches and wagons. The shop wasshifted to its present location at Liluah, about 5 km from Howrah in 1900.The facilities provided in the shop were designed to cater to conventionaltechnology relevant to wooden-bodied coaches and 4-wheeled plain bearingwagons.

;. Employing about 11,000 men, Liluah is amongst the largest C&Eworkshops of Indian Railways. Apart from coping with growth in work oadover the years, the shop has been, in recent years, called upon to taceradical changes in product mix with the advent of steel-bodied coachesand roller-bearing and CBC-fitted freight cars. Workshop infrastructurehas remained more or less unchanged since its inception. The shop is,however, called upcz to tackle more sophisticated rolling stock in largervolume. The infrastructure is outmodpd and bulk of machinery and plant iscveraged and obsolete. There is urgent need to revamp and modernize thisworkshop.

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4. Since the shop is located on the outskirts of the metropolis ofCalcutta, which is a major industrial center of the country, it willcontinue to play an important role in the maintenance of coaches andwagons. Situated in a congested area, the shop does not lend itself tophysical expansion and, therefore, any modernization plan has to basicallyaim at optimising inputs within the existing physical confines.

5. A detailed project study has been conducted to identify thelimitations of the shop, the inputs required to eliminate them and toadapt the shop to the changed product mix and the present technologicalneeds. The major thrust of this modernization program is to equip Liluahshops with means to tackle present day coaches and wagons and to achievereduced down time and reduced unit POH cost, at the same time achievingimproved quality of product for higher service reliability. Towards thisend, the facilities envisaged pertain to replacement of overaged machineryby modern high precision, high productivity machines, rationalization ofwork place layouts and processes, improvement in material handling,technological inputs to improve quality of product, provision ofrotational spares to reduce down times, provision of better roads and shopflooring for smoother flow of materials etc.

6. Jagadhri Workshop. Jagadhri Workshop was set up thirty yearsago in 1952. Necessity for this workshop was felt after the partition ofthe country in 1947 when East Punjab Railway, a portion of the erstwhileNorth Western Railway was left with no workshop maintenance facility forbroad gauge rolling stock. Jagadhri Shop, employing 4,500 men is locatednear Khanalampura, a major marshalling yard and is ideally suited forperiodical overhaul of goods stock. This workshop is now a part of theNorthern Railway System of Indian RaiLways.

7. The workshop was originally planned to undertake periodicaloverhaul of coaches and wagons for a monthly out-turn of 75 coaching unitsand 225 wagon units. From time to time, the capacity has been i._rc^sedwith marginal inputs to cater to the growing maintenance needs. In 1963,the capacity was increased to 200 coaching units 220 units per month in1980. Keeping in view the increased needs, it is already programmed toincrease the coaching capacity to 300 units per month by 1984/85.

8. In the interest of rationalization of workload between two majorcarriage and wagon workshops on the Northern Railway System, namely,Ja,adhri and Alambagh, it is proposed to increase the wagon POH capacityof Jagadhri Shc- from the existing 1,200 to 1,500 units per month and toeliminate wagon POt! from Alambagh altogether thereby converting Alambaghinto a single activity shop. Simultaneously, there is need to reducecoaching POH repair cycle time and update repair technology to imprivet.e quality of repairs which will result in increased reliability andavailability of stock.

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9. Golden Rock Workshop. This workshop was set up in L926 as acentral unit for repairs to both BG and MG steam locomotives, coaches andwagcns on the South Indian Railway system. As a result of rationalizationof workload, following integration of Indian Railways, the BG POH activitywas shifted to Perabur and the workshop continued to POH only MGlocowotives and C&W stock. Subsequently, in 1961, wagon POH was shiftedto Mysore Workshop.

10. With progressive dieselization on the Southern Railway System,diesel POH activity was introduced in Golden Rock Workshop in 1969 withonly marginal investments due to resource constraints. The basicstructure and equipment remained the same which was engineered for steamloco POH. Infrastructure for diesel loco POH was, therefore, not optimal.Over the passage of time, diesel POH activity gradually increased callingfor augmentation of supporting facilities. Consequently, traction motorrewinding facility was set up in 1976, coil manufacturing unit was startedin 1979 and reclamation of cylinder liners by hard chrome plating in 1977.

11. While there has been diversification of various activities fromtime to time, matching infrastructural support has not been provided. Forthe pattern of activities required to be handled, the shop layouts aresub-optimal. To make things worse, 70% of the machinery and equipment isoveraged having frequent breakdowns resulting in low productivity and poorwork quality. Material handling facilities are also insufficient. POHarisings of diesel locomotives are rapidly increasing and this workshopwill be required to POH 12 diesel locomotives every month as against theexisting capacity of 6. This workshop also undertakes corrosion repairsto coaches with an annual capacity of 360 units. Due to heavy incidenceof corrosion on coaches, this capacity needs to be augmented to 600.Besides, there is need to streamline the coaching POH activity to reducethe POH cycle time and to improve the quality of repairs. Need to expandthe capacity and the imperative of improvement in the quality of repairs,makes it necessary to modernized this workshop.

12. Kharagpur Workshop. It was establised in the year 1898. It isthe largest integrated maintenance set up on the Indian Railways employing15,600 personnel. It was planned for maintenance of steam locomotives,timber-bodied passengers coaches and 4-wheeler freight wagons. On accountof change in the mode of traction and the type of the rolling stock, thisworkshop was modified from time to time to take on the additional workloadof diesel electric locomotives, electric locomotive bogies, rewinding oftraction generators and traction motors and periodic overhauls/corrosionrepair of all steel integral design pssenger coaches. The development ofthese diverse activities on a patch work basis at different times over thelast two decades has seriously affected the productivity of the workshop.

13. Kharagpur Workshop was selected for modernization in Phase Iof the modernization program wiLn the objective of reducing POH cycle time

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for diesel locomotives and wagons. The project proposal for Phase II isto develop capacity for overhaul of electric locomotives to the rune of40 locomotives per year which, for want of capacity have to be sent allthe way to Bhusaval on Central Railway. In addition, the shop will caterfor special repairs to 8 electric locomotives annually. It is expectedthat 3 days would be saved in overall repair cycle for each loco.Investments are proposed in machinery and plant, material handlingequipment, unit exhcnage spares, layout changes and for rehabilitationof inhouse power plant. Simultaneously, the locomotive shops at Kharagpurwill be totally evacuated of steam locomotive workload.

14. Ajmer Workshop. The Ajmer Workshop complex was set up over acentury ago, in 1876 by the erstwhile Rajputana Mewar Railways. Thecomplex comprises two workshops, namely, Loco Workshop and Carriage andWagon Workshop with attached stores depot and a standby power house. Bothworkshops deal with meter gauge stock. Since the integration of therailways in 1952, this complex forms part of the Western Railway System ofIndian Railways and now employs 5,200 men.

15. The Carriage and Wagon Workshop does not have adequate capacityto handle the present PtH needs of coaching stock. Besides, over theyears, there have been radical changes in the design of the rolling stockrequired to be handled by this shop. Instead of 7 ft. wide coaches forwhich the facilities were originally created, the shop is now required tohandle 9 ft. wide coaches, thereby leaving very little space for movementand for efficiently carrying out repairs in the existing bays. Therefore,the existing carriage shop layout is not conducive to proper maintenanceof coaching stock. Majority of machinery, plant and equipment are alsooveraged and obsolete, and are not compatible with present day needs.

16. According to the future projections of traffic, POH arisings of

coaching stock will increase substantially. It is therefore necessary tostep up the coaching POH activity in Ajmer Workshop from existing 210units in terms of four wheelers per month to 360. Changes in the existingstructures are also resuired to handle the present day coaches withsimultaneous increase in berthing facilities for the additional loadrequired to be handled. Streamlining of POH activity in various sub-shopsis equally necessary to eliminate criss-cross movemeuts and idle time atvarious stages. It has, therefore, become necessary to modernize theexisting carriage and wagon workshop at Ajmer.

17. Although the two workshops, namely, Carriage and Wagon and LocoShops are independent entities in respect of POH repairs, in the sphere ofmanufacturing activity, which supplements the PO repair activity theyare interdependent. For example, Grey Iron and Nou-Ferrous Foundrysituated in Loco works caters to the need of both the shops. Similarly,the Wheel shop of loco shop supplements the requirements of the Carriage

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and Wagon Works. Keeping this interdependence in view, the modernizationof C&W workshops has to esseutially include modernization of certainelements like Foundry, Machine Shop, Spring Repair Shop and Forge Shopsituated in Loco works.

18. Integral Coach Factory (ICF) was established in late 1955 tomanufacture all-steel light-weight passenger coaches. It was set up inMadras in collaboration with Swiss Car & Elevator ManufacturingCorporation of Switzerland for design technology. The coaches wereproduced as unfinished shells at a rate of 350 per year and were shippedto zonal railway workshops for outfitting of interiors. In 1962, aFurnishing Division was added. By 1973/74, production reached 750 uuitsand 775 in 1982/83.

19. The factory meets the varied requirements of the IndianRailways. Besides the conventional coaches for BG and MG, special stocklike BG AC composite, AC 2-tier sleepers, EMUs, track recording cars,double-deckers, dining cars, pantry cars, cushioned 3-tier sleepers, etc.,are also manufactured. In addition, ICF has executed orders for coachesfrom other countries in a limited way.

20. The Railway Reforms Committee, in their Report on Productionand Maintenance of Rolling Stock (December 1982), has made specificreference to "the present crisis in passenger movement convoluted in avicious circle whose identifiable starting point is shortage ofpassenger-carrying capacity, accentuated by poor ways and means position".On an assessment of the estimates of stock requirements, the Committeeunderlined the need for creation of additional capacity of a magnitudewhich would be at least equivalent to the present available annualcapacity of 1,500 coaches per annum. In the view of the Committee, thesituation called for a 'quantum jump-.

21. In the context of the need for enlarged production capacityunderlined by successive committees, a proposal for: (a) stepping up theoutturn of ICF from the existing level of 750 coaches per year to 850 hasbeen submitted by ICF and approved by the Board, and is underimplementation; and (b) modernization of ICF workshops and stepping upits capacity up to 1,000 coaches per year has been submitted by ICF inthe preliminary Works Program for 1984.

22. Maintenance Depots perform day-to-day inspection and servicing(renew brake bLocks, add engine lube oil, add water, refuel, etc.) and donecessary running repairs. These depots also perform weekly, monthly, andannnal inspections and maintenance. Maintenance depots play a major rolein the availbility, performance and operational safety of the railways.This is due to the fact that aside from periodical overhaul (completestripping down of equipment, replacing and/or remanufacturing parts and

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components, and reassembling), all other maintenance works are undertakenin such facilities. Therefore, it is imperative that particular attentionbe given to these facilities. Consequently, a selective process wasestablished, along the lines of that for major workshops, for supportingunits needing immediate attention. As a result, 37 major facilities wereselected for modernization. The bulk of the investment is for machinery.However, the emphasis will be on: (i) machinery and equipment to achieveprecision, proper testing and quality control required for maintenance ofmodern motive power and rolling stock, which has been lacking, resultingin unsatisfactory quality of work performed, abnormally high frequency ofbreakdowns in operation and lower-than-normal life of parts andcomponents; and (ii) material-handling equipment to reduce frequentinterruptions in work flow and reduce damage to material in transport,both having a major impact on output, quality and cost of repairs.

INDIA

RAILVAT ELECTIIFICATIOI AND UOBSWP MODERNIZATION PROJECT

A&e Inventory et rollima Stock - Mareb 31, L983 1/(Units)

I to 5 yr. 6 to lO yr.. 11 to 15 yr.. 16 to 20 yr.21 to 25 7r. 26 to 3U yra. 31 to 35 yrn Above 35 Its. TOTAL

Diesel Locomotlve(II^In .Lue)

Broad Gauge 445 375 335 399 134 - - - 1,68e

Ntet. Cauge 71 143 97 156 - - - 447Narrow Gauge 23 5 13 28 11 - - - 80

Olease Shuntere

Broad Gauge 122 139 t 7 - 29 2 10 373Moter Gauge - 2 - - 7 13 7 1 30Narrow Gauge - - - - - - -

Elaetric Locomotive.

Broad Gauge 328 279 177 219 86 - - - 1,11IMeter Gauge - - 2 IS - - - - 20Narrow Gauge - - - -

Rail Cars

DredGeuge - - - - 21 - 1 - 22Meter Gauge - 5 4 S e 6 2 3 30Narrow Gauge - - 4 - - - 4 10 l1

EIIU (oteOL COeChea)

Broad Gauge 213 225 143 L4 84 43 - - 657Meter Gauge - - 20 25 - - - - 45

ENV (Trailer.)

broad Gauge 238 428 450 359 105 135 1 - 1,11Ibter Gauge 30 36 30 27 14 10 - - 147

Coaches

Broad Gauge 2,893 3,291 2,927 3,007 3,139 779 34 693 1S,950Meter CGage 899 1,392 1,867 1,776 1,694 1,124 154 703 9,708Narrow Gauge 86 98 70 2S la8l LOS 9 703 1,280

Stae LocoeotliVa

Broad Gaens *26 6 322 790 542 551 583 404 3,523Meter Gauge *20 1 21 41 287 326 766 339 357 293 2.435Narrow Gauge - - - - 1s 93 14 I9S 334

Freight Vageua

Broad Gauge 42,981 39,300 56,611 8E,306 49,848 11,613 5,739 7,031 293,742

eteur Gauge e,022 4,027 18,123 14,946 18,794 13,510 1,343 1,261 60,028Marrow Gauge 868 228 - 1,356 949 8"4 2 4,325 4,777

I/~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~I1/ 1rowleiee.al

Sources lndiae lilwaeyApril 1984

-85-

' Table 2PaRe 1 of2

IAILVAT KLECTfIVCATION AND WORUSHOP HODERNIZATION PROJICT

S_orv of Opoeating Statiatice LI

---------------------------- B---Brod Cogu - ------------------- _ _1973)74 1974/75 1975/76 1976/77 1977/78 1978/79 1979150 1950181 1981/82 1985283 2/

1. Percentage of serviceablelocootlves (Z) 3/

- Ste_m 4.91 54.39 55.63 56.61 85.58 84.77 84.52 83.6 83.5 53.4- Diease 54.44 82.24 82.93 82.92 53.15 85.52 85.51 85.8 53.3 53.4- Electric - Total 41 80.78 78.77 79.95 79.40 N.A. V.A. 54.18 83.8 79.1 76.4

- AC 4j/ N.A. N.A. N.A. N.A. 82.78 83.853 85.20 85.0 50.6 77.2. DC TI N.A. N.A. N.A. N.A. 73.55 74.5b 77.60 75.9 71.9 69.5

2. Percentage of 6erviceablopassenger vehicles (Z) 86.55 b4.02 84.29 87.26 5-.59 86.56 86.111 85.5 85.5 54.9

3. Percentago of servicablewagons 95.44 95.52 95.59 96.01 96.02 95.66 95.57 94.4 93.3 92.5

4. Engine - Ke per day pere%ine In use (Ka)

-Passenuger

- Stems 2358 13 238 233 228 228 215 210 209 201- Diesel 694 452 641 721 735 628 630 610 683 6b4- Electric 405 408 450 697 fzl 459 452 453 504 457

- FreLght- Steao 105 112 114 I14 111 too 94 89 a5 53- Diesel 307 306 321 37S 353 317 307 300 370 3e4- Electric - Total 372 296 331 11; N.A. N.A. 289 274 339 350

- AC N.A. N.A. N.A. T.A. 410 322 300 253 370 393- DC N.A. N.A. N.A. N.A. 337 171 175 160 169 183

5. Grone trailing load perfreight train (ton) 1,525 1,563 1,577 1.607 1638 1.648 1,694 1.721 1,795 1,766

b. Net Tonnage per freighttrain (ton) 745 778 752 7f 618 826 863 854 932 598

7. Wagon - km per day perwagon In use (kh) 67.2 70.3 76.5 51.1 51.9 75.9 73.3 73.4 83.0 84.4

S. Net ton km per wagon per day 537 907 952 1,019 1.045 976 972 596 1.130 1,1239. GCmas ton km per freight-traln

hour 260.1 26,754 27.663 30,222 30,238 30.366 351168 31,550 34.849 35,88510. Net ton ka per freight-train

hour 13,96b 14.599 15,015 16,292 14,444 16.541 17,171 17.677 19.6b4 19,60111. Percentage of pacee4ter traist

arriving on the (2) 79.47 52.1 8b.5 93.1 91.3 53.3 56.U 44.3 55.4 85.5

12. Average wagon load (ton) 17.9 18.5 18.9 18.9 19.0 15.9 19.1 19.5 19.3 19.3LJ. Locomotive utilization (Z) 51

- Steam 47.9 46.7 48.3 48.3 47.9 45.8 45.0 47.1 43.3 41.5- Dicel 75.0 76.7 80.0 80.0 79.2 76.7 76.7 73.3 75.0 80.0- Electric - Total 67.5 72.1 7f 7T 50.4 76.3 72.9 70.0 50.4 a4- All TractLon 53.1 54.2 56.7 55.4 57.9 56.3 55.8 57.1 56.7 Not

14. Average aped of all freight PubLishedtrains (kaph)

- Stem 11.8 12.0 11.8 11.9 11.5 11.2 10.8 10.2 9.59 9.6- Diesel 22.2 22. 22.1 23.1 22.5 21.3 21.3 21.3 22.4 22.6- Electric Total 2Z.5 22.4 23.5 25.2 N.A. N.A. 23.5 22.8 Z3.1 33.7

- AC N.A. N.A. N.A. N.A. 25.0 24.2 23.4 23.0 23.4 N.A.- DC W.A. N.A. N.A. H.A. 2615 19.5 18.7 18.0 17.4 17.9

- All Traction 18.3 18.4 18.5 20.1 19.7 19.6 19.5 19.37 20.8 21.415. Average epeed of through

freight trains (kaph)- Stem 15.6 15.5 15.9 16.5 16.3 15.8 15.2 15.0 14.9 14.6- Diesel 22.4 22.3 22.3 23.3 23.3 21.9 21.4 21.5 22.7 23.0- Electric Total 22.6 22.5 23.7 m37C N.A. N.A. 23.6 23.0 23.4 23.9

- AC N.A. N.A. N.A. N.A. 25.1 24.3 23.9 23.2 23.7 -- DC N.A. N.A. N.A. N.A. 21.0 19.6 18.9 15.6 17.2 15.2

- All Traction 21.1 21.0 21.6 2'.2 22.5 22.1 21.7 21.7 22.7 23.116. Average lead of a ton of

freight (km) o30 651 636 626 659 663 691 695 687 47217. Wagon turnaround (days) 15.0 14.6 13.5 13.0 13.3 14.3 15.1 15.4 13.3 12.5

Notes: Underscored figures represent the teat perforacle dirLn g the nsie year perlod.

Waons ..re beed on standard 4-wbhel eqoivalent. 22 tes for NC and 14-4 tone for eC.

2/ Proveidonal figures.

2/ Baginning In 1978179 the matbd of calculatieg avaitability baa hoes ch-agd, thue the atatieticaarm nOt comparable to the poet. Note Importantly. percent availability does _ot reflect actualreliability and effectivenese of the IocinLtvoa.

4/ UntiL 1976177 eleCtriC loCative PerformaCe statietic were compiled fOr the entire locomotvefleet. Beglnnig Lin 1977/75, teby bhe bean separated Into AC end DC typo of locetivee toabDw tbher amparative mrito.

3/ Numbere of bhurs esnine avallable ad woretd p4r day.

Source: Indian ailnayApril 1984

-8e-

Table 2

Pam. 2 of 2

. t

luwoar,t oflCT11 OeAtiD StetieticsW A101/ IIJC

rw t 9t-Meta tre Ga/ g

197374 i lt7/VS 1975/75 1916/77 till/fl 1975/li 1979/5 1950/81 Lilt/az 1952/53 }/

1. Perntags of aevioeble

- Steam 53.25 85.25 1.45 56.37 55.42 85.88 53.53 83.5 53.2 54.3- DLesel 7.71 56.35 65.33 88.35 87.12 87.23 55.57 67.9 54.3 63.1- lectric 5.43 37.90 83.00 53.00 80.00 80.00 54.30 53.1 U4.5 85.0

2. Percentae of serevieablspasseeger veshiale (2) 55.41 57.13 88.43 59.39 *i.50 59.5I 85.45 87.2 55.3 59.1

3. Percatage of servfosblausenm 94.96 94.51 13.65 96.00 96.o9 93.56 95.27 94.1 i2.9 91.3

4. Ensue * 10K per day parengine in use (Ka)

-Passenger

- Sten 214 205 215 23 213 206 200 200 160 US- Diestl 361 556 533 575 561 374 350 541 565 553- Zlecttri 375 361 401 431 419 411 403 400 421

- Freight- Broew 115 117 120 125 123 113 113 107 109 110- Diesal 239 272 285 344 305 285 277 277 334 333- Elect1U 248 232 223 II 211 211 207 206 213 214

5. Gross trailing Load perfreight train (ton) 753 800 500 785 SoD 535 e41 871 591 905

6. Iet Tonnage per freighttrais (ten) 405 422 413 413 423 451 467 457 304 520

7. Vage - per day perago. to use (ha) 50.9 53.7 36.4 36.1 37.5 52.7 49.7 47.3 47.5 50.4

5. Net ton ha psr wasg per day 482 28 545 370 570 343 534 322 334 576

9. Cross ton km per freight-trinhour 1I,336 11,300 11.109 11.097 11,164 11,495 11,780 12,233 13,493 1U.233

10. neot ton h per freight-trainhour 5,516 65669 6423 6,3356 6,615 6,915 7,113 7,362 6.413 8,987

XI. Prcentag of paseenger trainoarriving on tie (1) 54.44 83.61 58.7 94.1 92.3 91.7 83.3 85.9 58.3 59.6

12. Average waon load (ton) 12.7 13.2 13.3 13.6 13.7 13.8 14.1 15.1 15.3 13.4

13. Locomotive utilUecton (C) 4/- Stem 35.6 33.5 41.7 41.3 40.8 35.0 36.9 26.3 34.7 36.2- Dledse 66.3 68.8 74.2 74.5 72.9 72.1 70.5 72.1 76.3 50.4- zlectric 47.5 43.0 33.3 38.3 61.7 39.2 53.5 54.3 33.3 3171- All Traction 41.6 39.4 45.4 45.4 W4E0 42.5 41.5 41.5 41.2 l.A.

14. Avrage apeed of all freighttraiue (kph)

- *Sea_ 12.9 12.5 12.1 12.2 11.9 11.4 11.2 10.5 10.9 11.5- Diesel 19.0 11.7 15.3 19.1 18.5 18.4 18.3 15.4 15.7 18.7- Zlectric 21.3 22.5 20.0 19.4 16.5 1.1 15.0 16.8 17.8 U8.1- All Tractlon 13.5 13.2 14.9 13.2 15.0 14.5 14.8 15.1 16.1 16.5

13. Average speed of throughfreight trati (Ckmpb)

- Stem 15.5 14.4 14.1 14.1 13.7 12.7 12.1 11.3 11.3 11.7- Diesel 19.3 19.0 18.8 19.2 19.0 18.6 18.3 19.5 19.1 19.2- Electric 7 22.5 20.0 19.4 16.8 17.1 1U.0 16.a 17.5 18.1- ALI Traction 15.1 17.4 17.3 17.4 17.4 16.9 14.7 16.2 17.9 15.2

16. Average lead of a ten offreight (ha) 462 512 499 4538 473 507 521 536 - 535

17. vagon turaround (days) 12.3 12.0 11.6 11.1 11.5 12.8 14.1 15.2 14.1 13.8

Nonets Underscore! figurs repre-et the beat perforance during the ne year period.

1/ Yoe ae base on standard 4-wheat equivalent, 22 tos for mg and 14-6 tons for NC.

2/ Proeioemal fianre.

Ž/ BeinInt Is 1978/79 the method of calculat:i avallabillty has been changed, thus the statsticse are not comparable tothe past. Nor importatly, porcent avllability dos not reflect aetual reliability and effectiveness of the lecoetlva.

4/ Uember of bhwors eie allable and wored per day.

Soerces 1idUi wILysApril 1954

INDIA

RAILWAY El.ECTRIFICATION AND WoRXSHOP MODERNIZA11ON PROJECT

Freight and Paisenger Traffic

Frelght Traffic _ Passenger TrafficI Non-Suburban Traffic Suburban Traffic a/

Originating Total Ton- Average Pasaengera Passenger- Average Passengers Passenger AverageTonnage Kilonetres Lead Originating Kilometres Lead Originating Kilometres Lead

Year million tons million Kilometres million million Kilometres million million Kilonetres

1950/51 93.0 44,117 474 867 59,914 69.1 417 6,603 15.81955/56 115.9 59,576 514 776 54,235 69.9 499 8,165 16.41960/61 156.2 87,680 561 909 65,847 72.4 685 11,818 17.31965/66 203.0 116,936 576 1,057 79,059 74.8 1,025 17,235 16.61966/67 201.6 116,607 578 1.111 83,676 75.3 1,081 18,469 17.11967/68 196.6 118,860 605 1,153 88,188 76.5 1,104 18,975 17.21968/69 204.0 125,140 615 1,129 87,425 77.4 1,084 19,515 18.01969/70 207.9 127,248 617 1,180 91,219 77.3 1.158 22.163 19.11970/71 196.5 127,358 648 1,204 95,068 79.0 1,227 23,052 18.81971/72 197.8 133,265 674 1,261 101 079 80.2 1,275 24,250 19.01972/73 201.3 136,531 678 1,268 106,931 84.3 1,385 26,596 19.Z1973/74 184.9 122,354 662 1,217 107,627 88.5 1,437 28,037 19.51974/75 196.7 134,304 683 1,056 99,097 93.8 1,373 27,157 19.81975/76 223.3 148,219 664 1,306 115,899 88.7 1,639 32,862 20.11976/77 239.1 156,756 656 1,498 126,754 84.6 1,802 37,082 20.b1977/78 237.3 162,687 686 1,575 137,201 87.1 1,928 39,433 20.41978/79 223.4 154,824 693 1,606 149,506 93.1 2,113 43,439 20.b1979/80 217.8 155,995 717 1,602 159,913 99.8 1,903 38,730 20.41980/81 220.0 158,474 720 1,612 167,472 103.9 2,000 41,086 20.51981/82 244.7 173,918 711 1,720 183,352 106.6 2,100 43,890 20.9

Average Annual Growth Rates (2)

1960/61 over1950/51 5.3 7.1 1.7 0.5 1.0 0.5 5.1 6.0 0.91970/71 over1960/61 2.3 3.8 1.5 2.8 3.7 0.9 6.0 6.9 0.91980/81 over1950/51 2.9 4.3 1.4 2,0 3.3 1.3 5.4 6.2 0.81980/81 over1970/71 1.1 2.1 1.1 2.5 5.3 2.6 5.0 5.8 0.81980/81 over1977/78 -2.7 -1.1 1.6 -0.5 5.1 3.3 1.2 1.0 -U.21981/82 over1950/51 3.1 4.5 1.1 2.1 3.7 1.4 5.4 6.3 0.91981/82 over1970/71 Z.U 2.9 0.8 3.3 6.1 2.8 5.0 6.0 1.01981/82 over1917/78 0.8 1.7 0.9 2.3 7.5 5.1 2.2 2.7 0.6

al Passengers booked between stations within the metropolitanareas of Bombay, Calcutta, Madras and Secunderabad up to1970-71. From 1971-72 onwards, these figures exclude Secunderabad.

Source: Hiniatry of Railways

April 1984

INDIA

RAILWAY ELECTRIFICATION AND WORKSHOP MODERNIZATION PROJECT

FreiRht Traffic by Kajor Coomoditles

1969/70 - 1981/82

rraffic Category 1969170 1975/76 1976/77 1977/78 1978/79 1979/80 1980/81 1981/82

T TK T T T T TK T TK T TK T TK T TK T TXSteel Plants 23.6 8,707 27.7 11,746 33.0 14,521 31.72 14,074 29.8 13,525 27.9 12,5.5 27.7 12.910 32.64 15,167

Cnal 53.0 31,026 64.3 37,654 67.4 38,756 69.1 40.552 64.1 36.318 62.0 35,340 64.1 36,373 75.80 43,761

Iron Ore For Export 8.8 5.276 11.3 7,171 10.0 6.408 10.6 7,057 10.3 6,871 9.3 6,188 11.1 7,293 11.18 6,517

Cement 10.7 6,265 11.6 8.627 13.7 9,170 13.6 9,200 12.3 8.911 10.0 7,442 9.6 7.189 10.79 8,072

Foodgrains 1'.1 13.400 16.2 15,479 20.0 18,757 19.5 22,962 16.7 20.522 18.4 23.474 18.3 24.308 21.51 2S,111

Fertilizers 4.6 3,760 7.2 6,155 7.B 7.225 8.2 8,135 S.6 S,901 8.2 9.240 8.1 8,922 9.56 9,665

Petroleum Product. 8.S 4,958 11.7 7.051 12.4 7.552 13.1 8.238 14.3 9,988 14.3 10,397 14.9 11.660 16.55 11,888 1

Cther rouds 49.2 37,443 46.8 _40,_988 48.3 41,641 45.5 40,032 43.5 38.834 43.0 39,933 42.1 39,097 43.16 41,052

Total Revenue Traffic 173.8 110.826 196.8 134,874 212.6 144,030 210.P 150,250 199.6 143,870 193.1 144,559 195.9 147,652 221.19 164,233

Ntin-Revenue Traffic 34.1 16,422 26.5 13,345 26.5 12,726 26.5 12,437 23.8 10,954 24.7 11,436 24.1 10,822 23.62 9,685

Total ALL Traffic jO7.9 127,248 223.3 148.219 239.1 156,756 237.3 l62,687 223.4 154,824 217.8 155,995 220.0 158,474 244.81 173,918

Nntee: T * Metric tons (millions): TK - Metric Ton Kiloeterm (millIons).

joqrcg t.. _jd qRa&ivaym Year Books and IR estimates.

April 1984

INDIA

RAILWAY ELECTR.IFICATION AtND WORKSHIOP HzODERNIzATIO: PROJECT

Freight Traffic Forecasts by Majar Commodities

1984/85 - 1990/91

1981/82 1984/85 1990/91Scenario I Scenario It Scenarlo III Scenario I Scenario II Scenario III

!Tra 5c_CategoS T TK T TK T TK T TK T TK T TR T TK

Steel Plants 32.6 15.2 35.8 16.5 36.1 16.8 37.7 17.5 40.4 18.5 41.8 19.6 45.2 20.5

Coal 75.8 43.8 85.5 49.4 90.3 52.1 97.6 56.4 108.8 62.9 128.1 74.0 150.6 87.0

Iron Ore for Export 11.2 6.5 11.5 7.5 11.6 7.6 11.7 7.6 11.8 7.7 11.9 7.8 12.1 7.9

Cement 10.8 8.1 10.7 8.8 11.1 9.1 12.1 9.9 10.6 10.5 11.7 11.6 13.9 13.7

Foodgrains 21.5 28.1 22.8 29.8 23.0 30.0 23.1 30.2 25.7 33.5 26.2 34.3 26.8 35.1

Fertilizers 9.6 9.7 9.6 10.7 9.7 10.9 10.0 11.3 11.1 12.5 12.4 14.0 14.2 16.0

Petroleum Produrts 16.5 11.9 17.1 11.5 17.8 12.1 18.7 12.6 la.3 12.4 19.4 14.3 26.3 19.4

Other Goods 43.2 41.1 40.3 40.4 40.5 40.7 40.6 40.8 34.6 42.2 35.7 44.2 35.7 46.2

Total RevenueTraffic 221.2 164.4 233.3 174.7 240.1 179.3 251.5 186.3 261.3 200.2 287.2 219.8 324.8 245.8

Non-RevenueTraffic 23.5 9.7 24.0 11.5 24.0 11.5 24.0 11.5 25.0 12.0 25.0 12.0 25.0 12.0

Total All Traffic 244.7 174.1 257.3 186.2 264.1 190.8 275.5 197.8 286.3 212.2 312.2 231.8 349.8 257.8

Notes: T - Metric Tons (millions); TK - Metric Ton Kilometers (billions)The assumptions on which each scenario is based are explained in Annex C

Source: IR estimates, nodified by the Bank Group MissionApril 1984

INDIA

RAILWAY ELECTRIFICATION AND WORKSHOP MODERNIZATION PROJECT

IR's Investment ProgLam 1980/81 - 1984/85 1/(As Million)

Category 1980/81 1981/82 1982/83 1983/84 1984/85 Total

1. Rolling Stock 3,400 3,500 4,700 4,700 4,700 21,0002. TraffLc Facllities 1,150 1,650 680 600 660 4,8003. Track Renewals 700 1,200 1,050 1,030 1,020 5,0004. Electrlflcation 220 400 1,300 1,290 1,290 4,5005. Hachlnery and Plant 170 250 580 580 570 2,1506. Workbops and Sheds 380 850 580 570 570 2,9507. Spare Parts 80 200 40 40 40 4008. Slgnalling and Telecommunications: 200 250 150 150 150 900Q. New Lines 410 450 980 980 980 3,80010. Other Civil and Electrical Works 200 210 230 230 230 1,10011. Other Investment 220 260 300 300 270 19350

Subtotal 7,130 9,220 10,590 10,530 10,480 47,95012. Metropolitan Transport Projects 250 500 600 600 600 2,55013. Investment in Road Services 220 80 70 70 60 500

Subtotal: 470 580 670 670 660 3,050

GRAND TOTAL: 7,600 9,800 11,260 11,200 11,140 51,000

1/ The Investment Program was prepared on the basisof January 1981 ptices.

Sourcet IR and Mission EstimatesApril 1984

-91-

Table 7

INDIA

RAILWAY ELECTRIFICATION AND WORKSHOP MODERNIZATION PROJECT

Electrification Program - 1956 to 1985

New Sections EnergizedElectrification

Total Total Annual Program % ofPlan and Period Rs Million RKX RKM IR Investment Remarks

lInd 1956-61 529.0 216 54 4.5 Work commenced1957-58

IIIrd 1961-66 807.1 1,746 349 4.8

IlIrdAnnuals 1966-69 361.4 17 306 4.7 3 years only

IVt,; 1969-74 700.4 953 191 4.9

Vth 1974-78 780.0 28 132 5.1 4 years only

Interplan 1978-80 416.5 195 98 3.5 2 years only

VTth 1980-85 2,895.7 1,236 309 2.7 As of 1983/84

For the last year (1984/85) of the VIth Plan and the five-year period(1985/86 - 1989/90) of the VIIth Plan, IR expects to electrify about3,500 km or/about 600 km annually.

Source: IR

April 1984

-92-

Table 8

INDIARAILWAY ELECTRIFICATION AND IIIIOP MIMIZATION

MRJECT COSY suY

(IRs Million) (USS Million) (US$ Killion)-Z Forvih 2 Total Proposed

Local4 orevin Total Local Freign Total Exchban Be Cast LOan

A. ELECTRIFICATION

1. ELECTRIFICATION OF MAINLINES

JIANSI-ITARSI 816.6 150.5 967.1 75.6 13.9 89.5 15.6 9.4 13.9ITARSI-BHUSAUAL 596.2 115.0 711.2 55.2 10.7 65.9 16.2 6.9 10.7BHUSAUAL-NAGPMR 660.2 139.1 79Y.3 61.1 12.9 74.0 U.4 7.8 12.9MARDHA-BALHARSHAH 250.6 47.4 299.0 23.2 4.4 27.6 15.9 2.9 4.4BALARSHAH-VIJAYAVADA 806.5 183.0 M.4 74.7 .16.9 91.6 18.5 9.6 16.9

AL-Na6DA 390.3 75S9 416.2 35.2 7.0 42.2 16.6 4.4 7.0ITARSI-NAlPUR 556.9 119.6 676.5 516 111 62.6 17.7 - 6.6 1.lNAGPUR-DiRG 537.7 101.4 639.1 49.9 9.4 59.2 15.9 6.2 9.4BINFAAIIPPUR 844.8 166.7 14011.4 78.2 15.4 93.7 16.5 9.8 15.4ANLPPUR-BILASPUR 229.1 44.4 273.4 21.2 4.1 25.3 16.2 2.7 4.1

Sub-Total ELECTRIFICATION OF MAINLINES 5,678.7 e1143,0 6,821.7 525. 105.8 631.6 16.8 664 105*82. RECORDIN6/TESTIN9 CAR 6.5 14.5 21.1 0.6 1.3 2.0 69.0 0*2 1.33. OHE MAINTENANCE UEHICLES 20.0 39.0 59.0 1.9 3.6 5.5 66.1 0.6 3.64. IMPRJUEENT OF OHAT OPERATION 2.0 5.4 7.3 0.2 0.5 0.7 73.2 0.1 0.55. TRAININS 19.5 9.7 29.2 1.8 0:9 2.7 33.3 0.3 2.7

Sub-Total ELECTRIFICATION 5,726.7 1211. 6hY38.4 530.3 112.2 642.4 17.5 67.5 114.0D. VORKSHOP MODERNIZATION

1. WOR1SHOPS AND ICF

PAREL 59.3 64.6 123.9 5.5 6.0 11.5 52.1 1.2 6.0LILUAH 37.3 73.l 110.6 3.5 6.8 10.2 66.2 1.1 6.8.GADlIRI 68.9 69.6 138.6 6.4 6.4 12.8 50.3 1.3 6.4GLDEN ROCK 102.2 114.2 216.5 9.5 10.6 20.0 Y2.8 2.1 10.6;HARA8APUR 131.9 105.4 237.3 12.2 9.8 22.0 44.4 2.3 9.8AJNE 92.2 90.1 182.3 8.5 8*3 16.9 49.4 1.8 8.3INTE6RAL CDACH FACTORY 295.4 1351 430.5 27.3 12.5 39.9 31.4 42 12.5

Sub-Total VIORKSHOPS AND ICF 787.2 652.3 1,439.6 72.9 60.4 133.3 45.3 14.0 Ui42. MAINTENANCE DEPOTS 919.6 939.6 1,959.2 85.1 97.0 172.1 50.5 18.1 41483. TRAININ6 13.7 25.4 39.0 1.3 2.3 3.6 65.0 0.4 3.6

Sub-Total VORKSNOP MODERNIZATION 1,720.5 1,617.3 30337.8 159.3 149.9 309.1 48.5 32.5 105.8

Total BASELINE COSTS 7,447.2 2,829.0 10276.1 689.6 261.9 951.5 27.5 100.0 219.8Physical Contingencies 626.1 213.1 83Y.2 58.0 197 77.7 25.4 8.2 16.6Price Contingencies 1,397.4 579.4 1,976.9 129.4 53,7 183.0 29.3 19.2 43.6

Total PROJECT COSTS 9,470.7 3,621.5 13,092.2 876.9 335.3 1,212.2 27.7 1.4 290.0== = = = - guss E _ s = zu s==

Front End Fee - 7.6 7.6 - 0.7 0.7 100.0 0.1 0.7

Total FINANCING REIIJIRED 9,470.7 3,629.0 13,099.7 876.9 336.0 1212.9 27.7 127.5 290.7c~~____ == z== =zz= __c=z_= _ ==

1/ Taxes and duties of Rs 2,272.9 million (US$210.5 million) are included in local costs.

April 1984

-93-

Table 9

INDIA

RAILWAY ELECTRIFICATION AND WORKSHOP MODERNIZATION

Detailed Cost Estimates

Project Component by Time(IRs Million)

TotalTotals Ineludiau Cotinnmcies

(5S84185 85186 86/87 87/88 88/89 IRs Million)

A. aEL IFICATION

1. ELECTRIFICATION OF NADLDES

JHANSI-ITARSI 54.2 464.6 371.0 262.2 6V.5 1,221.5 113.1ITARSI-BHUSAAL 3?.9 341.8 272.9 192.Y 51.1 899.6 83.2DAJSAUAL-NAGPIR 44.8 384.1 306.8 216.8 57.4 1,009.9 93.5UDHA-BALHARSHA 16.7 143.1 114.3 80.9 21.4 3/6.3 34.8BALHARSHAH-VIJAYAUADA 55.5 475.5 379.8 268.4 71.1 1r250.3 115.8BHOPAL-NMA 25.6 219.1 175.0 123.7 32.8 5)6.1 53.3ITARSI-AGPR 37.9 325.0 259.6 183.4 48.6 854.5 79.1NAMPIR-mG 35.9 307.1 245.2 173.3 45.9 907.3 74.8DINA-ANUPPM 56.7 485.9 388.1 274.2 72.7 1P277.7 118.3AN"PR-BILASPUR 15.3 131.4 104.9 74.1 19.6 345.4 32.0

Sub-Total ELECTRIFICATION OF MIILINES 382.7 39277.6 2,617.6 1,84?.7 490.2 8v617.8 m.92. RECORDING/TESTING CAR 0.2 12.4 13*4 - - 26.0 2.43. ONE MAINTENANCE VEHICLES 32.9 24.7 7.5 4.0 - 69.1 6.44. IMPROVEMENT OF GHAT OPERATION 4.1 4.4 - - - 8.5 0.8

- . TRAINING 13.3 3.6 3.8 16.1 - 36.8 3.4

Sib-Total ELECTRIFICATION 433.2 39322.6 2,642.3 1,869.8 490.2 8,758.1 810.9B. WORKSHOP MODERNIZATION

1. WRSHOPS AN ICF

PAREL - 26.0 55.4 79.7 - 161.1 14.9LILUAH - 22.4 70.5 49.3 - 142.3 13.2JAGADHRI - 28.3 58.4 93.9 - 180.6 16.7GOLDEN ROCK - 42.3 112.8 125.8 - 280.9 26.0KNARALAPUR - 48.5 60.7 202.7 - 311.9 28.9AJER - 38.5 109.5 87.4 - 235.4 21.8INTEGRAL COACH FACTORY - 240.5 183.5 116.5 - 540.6 50.1

Sub-Total VORKSHOPS AND ICF - 446.6 651.0 755.3 - 1852.9 171.62. MAINTENANCE DEPOTS - 242.1 726.2 1,464.3 - 2r432*6 225.23. TRAINING 4.4 23.8 20.3 - - 48.6 4.5

Sub-Total WORKSHOP MODERNIZATION 4.4 712.6 1,397.4 2,219.6 - 4,334.1 401.3

Total PROJECT COSTS 437.7 49035.2 4,039.7 44089.4 490.2 13z092.2 1,212.2

April 1984

-9'-

T&ble 10

7ND1A

RArLIAY ELECT1RIfIC&'TIC AND IWORICSHOP MODERYIZATICN

SaMarv Cost Estimates

Suanry Account bv Time

Tauls ardis CoUmwcan(Ust million)

Pm ams S? via sam TOUR

1. DWOI £L01

0. ElECrRlZTIS

L. CIVIL

SYTIL 1 EfIPIO 29.1 240.0 193.7 140.4 37.2 a54.1LAW 12.0 102.3 In.7 JI.7 15.3 269.0

Sut-Total CIIL VS 41.0 331.1 200.4 In.1 32.b s.12. SISILIG IfBE ICITJS MM

STBIWL I EM019 0.2 6a7.3 se.? 7.Y 102. 1.807.1WC 17.4 IU.0 112.0 14.1 2L2 391.9

Sat-Total ShGLIM 1 7EDIEiMICtP S 97.d 1A.4 a7.Y 472.0 13.1 2.17t.03. ELECIRICL NOS

5rAT11! 1E cuoE 143.01.224.8 973.2 N1.2 111.2 3.220J3UNR 62.2 M.5 425.3 300.5 79.0 1.490.0

Se-Total ELTRICI V 2S 05.2 1I7.7.3 1403.4 31.1 26.9 4.020.34. IDOL Osu 34.9 2".0 291.0 168.7 44.7 710.2S. IlSCLElAjlS 4.0 33.i 27.0 19.1 3.1 5.0

sat-Total aECTIIFIUTION 3R2.7 3,277.4 2617.6 1U049.7 490.2 8417.i9. 11E mnES co 0.2 12.4 13.4 - - 21.0C. INVT 1141117 LElIOES 32.9 21.7 7.5 4.0 - 6M.1

9. ADI STIlE IS 31KIN LOOM

N_7tl!L I EWPI 3.9 4.2 - - - 0.1LANS 0.2 0.2 - - - 0.4

St;-Tod mIIo SISI FDI WM10 i05 4.1 4.4 - - - 0.5C. TOCifL 4Al* E NS1 IP T1 715131 13.3 3.6 3.0 16.1 - 36.0r. 4I Una7 OF manes IuF

1. CIVIL Om

miTs. - 21.2 27.3 29.4 - 77.9LaKII 49.7 63.9 9.7 - 107.2

S*-Total CIVIL U1 - 70.9 1.1 3.1 - 200.12. 1IITIEUIIMISCILLA

ATEERL - 13.9 21.6 34.2 - 69.015003 - 32.5 50.7 U.5 - 163.7

as-Ttal OTILITIBI1LNMO - 46.4 72.3 U4.0 - 233.33. PT I MOIS

MTEEL - 27m.0 40.4 49.2 1,124.6LfotR - 11.0 10.6 4.3 - 30.7

Sb-Total PLI I b - 206.0 411.0 457.5 - 13.34. mInsL RIuLM.

STEOUL - 36.0 63.2 0.4 - 1U.51LAN - 6.5 13.4 1.5 - 33.5

7o-Totl m7* 2II.S - 42.5 70.0 14.9 - 204.0

-Totl IOU L WiW OF W 41D IO F - 446.6 45.0 735.3 - 22.?

E 7OII - 233.3 702.2 1.414.0 - 2.349.1U1 - 1.3 24.1 30.3 - 63.5

liTta rUDu IE7DTS - 242.1 720.2 1.44.3 - 2,432.4H. TEUICAI ASSS TM TNAlI26 4.4 23.8 20.3 - - 4S.6

Total IIUSTHENT MTIS 437.7 4,03.2 4,403.1 4009.4 4".2 130M2.2

Totl C7T CDST 437.7 4.0n.2 409.7 4,009.4 49.2 13,092.2

April 198&

-95-

Table 11

INDIA

RAILWAY ELECTRIFICATION AND WORKSHOP MODERNIZATION PROJECT

Estimated Schedule of Disbursements

IBRD Fiscal Year Cumulative Disbursementand Quarter at End of Quarter Percentage

1984-85 March 31, 1985 6.0 2June 30, 1985 12.0 4

1985-86 September 30, 1985 25.0 9December 31, 1985 35.0 13March 31, 1986 60.0 21June 30, 1986 75.0 27

1986-87 September 30, 1986 100.0 36December 31, 1986 130.0 46March 31, 1987 155.0 55Junae 30, 1987 175.0 63

1987-88 September 30, 1987 195.0 70December 31, 1987 210.0 75March 31, 1988 225.0 80June 30, 1988 240.0 86

1988-89 September 30, 1988 250.0 89December 31, 1988 255.0 91March 31, 1989 264.0 94June 30, 1989 270.0 96

1989-90 September 30, 1989 274.0 98December 31, 1989 279.0 99March 31, 1990 280.7 100

Closing Date: September 30, 1990

Source: IR and Mission Estimates.April 1984

-96- Table 12

INDIA

RAILWAY ELECTRIFICATION AND WORKSHOP NODERNIZA'flN PROJE*T

A.tual Annual lFruIght and Pantenper Traffic In Each Sc tlin Pronosed te be ElectrIfied

1976-77 und 1981-82

UFtgures In Killions)

11- 977 1981- - IM8 Traffic DensitySectlon RKa0 PGoodns - G oodsan5er -___L7_ 198 -6 -& Dr 15 _

GTCI CIIO NT1fI GTD4 Cll NMitn GC1/RR CTDIRICI

1. JRAN5SI-ITARSI

Jhanst-Bina 152 1,238.90 2,745.12 1,516.53 1,226.90 2,991.91 1,783.67 10,110.24 11,035-18Bhopal-Dina 17 1,034.86 3,064.70 1,5864.37 1,209.31 3,540.1i 2,002.93 381 - 26.53 381 - 28.96Bopal-Itarei 92 639.40 1,387.17 791.01 698.64 1,368.31 832.75

IOTAL 381 2,913.25 7,186.90 3,891.97 3.134.85 7.90D.33 4,619.38

2. ITARSI-BHUSAVAL

Itarsi-Khundus 175 933.32 3,293.43 1.589.28 982.35 4,037.37 2134 35 7 173.5 8 512132Khandwa-Bhusaval 123 649.68 2,298.13 1,113.39 683.63 2,809.07 1485:01 311 23.83 - 28.25

TOTAL 301 1,583.00 5,591.56 2,702.67 1,665.98 6,846.44 3.619.36

3. BHUSAVAL-XACPUR

Shusaval-BSdnera 219 834.82 3,734.16 1,962.02 922.20 3,333.62 2,265.11 8,068.68 7,931.55Badnern-llardha 95 360.05 1,16L.13 889.10 396.43 1,328.35 974.03 393 - 20.53 93 - 20.18Wardha-Ajnt 76 367.26 1,310.01 710.37 622.28 1,279.00 781.12AlnL-lNagpur 3 29.67 51.71 28.04 25.03 24.56 4.54

TOTAL 393 1,591.80 6,277.01 3,589.53 1,965.95 5,965.60 4,024.81

4. WARDHA-8AL8ARSHAH

Wards-Balhershah 133 626.42 1,493.85 846.01 593.31 2,004.70 1,248.33 2 120.27 2 598.01133 15.94. 1L33 ~* -19.53

TOTAL 133 626.42 1,493.85 846.01 593.31 2,004.70 1.248.33

5. R&LEARSKA-VIJAYAWAVA

Belbarshah-Vijayawada 454 2,246.68 S,720.60 3,203.43 2,707.47 10,940.98 5,796.38 7,967.28 13t645 65454 17.54 -5 30.06

TOTAL 454 2.246.68 5,720.60 3,203.43 2.707.47 10,940.98 5,796.38

6. BKOPAL-NACGDA

Bhopal-Ujjain 185 265.72 2,832.56 1,431.48 365.21 3,159.55 1,694.96 3,704.52 4,711.39Ujjtin-Nagda 54 77.16 871.46 439.83 76.67 1,109.46 605.99 239 15.50 - 19.71

TOTAL 239 342.88 3,704.3Z 1,871.31 441.88 4,269.51 2,300.95

7. ITARSI-NACPUR

Itarati-Aala 130 642.46 1,263.08 639.34 600.21 1,529.58 871.91 3,973.23 4,274.99Amla-Naglpur 168 858.95 1,208.76 684.93 806.40 1,338.80 800.68 §195 - 13.33 '29 - 14.35

TOTAL 298 1,501.44 2,471.81 1,324.27 1,406.61 2,868.38 1,672.59

8. NACPUR-DURC

Durg-Duagargarh 61 193.19 689.13 375.16 200.57 668.98 380.12 3,862.29 4 455.52Dutsergarh-Condla 72 203.88 844.97 421.15 236.15 838.33 403.61 Z65 - 14.57 265 - 16.81Gondia-Tumnar Road SO 143.00 568.05 312.90 174.90 630.80 311.35Tummar Road-Kanha2 60 13.12 696.95 38.06 228.68 1,139.42 383.14lanhan-Ajnl 22 91.03 248.93 134.22 104.12 223.57 132.66

TOTAL 265 814.23 3,048.06 1,281.84 944.42 3,511.11 1,610.88

9. BINA-KATNA-ANUPPUR

Bina-Katnt 263 508.54 3,998.64 3,593.75 590.28 5,661.55 2,980 .77 8.651.25 11 258.75latni-Sahdol 125 180.62 2,949.37 1,769.62 222.00 3,563.62 2,725.12 429 - 20.16 - 26.24Sa1dol-Annupur 41 59.24 954.84 U86.95 77.57 1,143.73 574.00

TOTAL 429 748.40 7.902.85 5,850.32 889.85 10,368.90 6,279.89

10. ANllPPUR-BILASPUR

Anuppur-Bilaspur 151 219.25 1,265.98 707.73 242.65 1,128-52 623.63 1 485.23 1 371 1711 9.9 9.1

TOTAL 151 219.25 1,265.98 707.73 242.65 1.128.52 623.63

Source: XR and Itissian Estimates.April 1984

-97-

Y ble 13

I NDIA

RAILVAY ELECTRIFICATION AND WORUSO? MODEUIIZATION PROJECT

F..r.cant Annual Freight and Pansenger Trriffic In Rach

Section Propo,ed to be Clactrifitd1986-R7. 1990-91 and 2010-2011

(Fiures in Nililonn)

1986 - 1987 1990 - 199S ZO1O - ZollSection Route P ener Cood- ps a Goods Pagsen r Goods

CTIOI CTRlt NMt CTIW CTIDt r NllQ MANe om RITb

1. JHANSI-ITARSI

Jhan&L-Bina 152 1430 3200 1900 1610 3320 1980 2400 4330 2590slna-Bhopal 137 1400 4100 2330 1600 4700 2660 2370 8350 4770Bhopnl-ttarsi 92 810 1450 880 920 1490 910 1360 1570 1140

TOTAL 381 3640 8750 5110 4130 9510 5550 6130 14550 8500

2. ITARSI-BHUSAVAL

Itarn1-Khandwa 178 1150 3960 2100 1300 4380 2320 1900 7150 3790Khandun-Bhuseval 123 760 Z750 1450 858 3050 1610 1270 4970 2630

TOTAL 301 1910 6710 3550 2158 7340 3930 3170 12120 6420

3. BHIUSAVAL-NACPUR

Bhusnw al-Badnera 219 1080 3240 2170 1220 3800 2550 1800 6550 4390Badn.,ra-Wardha 95 460 1260 850 .520 1480 990 780 2550 1700Wardha-AJnl 76 730 1270 850 820 1500 1000 1220 2570 1720Ajnl-Nsgpur 3 30 30 20 30 30 20 50 60 40

TOTAL 393 2300 5800 3890 2590 6810 4560 3550 11730 7850

4. WARDHA-8ALHARSNAH

Warda-Balharmhnh 133 700 2500 1560 780 3000 1870 1160 5400 3370

TrorAL 133 700 2500 1560 780 3000 1670 1160 5400 3370

5. BALHARSHAH-VIJAYAWZ DA

Ba1hnrmhah-VIJjmyw.ada 454 3170 13680 7520 3570 16400 9020 5300 29550 16250

TOTAL 454 3170 13680 7520 3570 16400 9020 5300 29550 16250

6. BHOPAL-NAGDA

Bhopal-Ujjain 185 430 3670 1980 480 4200 2270 720 7450 4020Ujjain-Nagds 54 90 1290 700 100 140 800 ISO 2620 1420

TOTAL 239 520 4960 2680 580 5680 3070 870 10070 5440

7. ITARS I-NACPUR

ItarsL-Am1a 130 700 2170 1260 800 2400 1400 1380 3920 2270Amla-Nagpur 168 940 2080 1200 1060 2300 1330 1580 3750 2170

TOTAL 298 1640 4250 2460 1860 4700 2730 2760 7670 4440

8. NACUR-DURC

Durg-DunRargarh 61 230 800 370 260 900 410 390 1640 750Dungargarh-Coandia 72 280 1000 460 310 1140 520 460 2050 950Condia-Tuesr Road 50 200 750 350 230 860 *00 343 1550 710Tuosar Road-ianban 60 270 1350 620 200 1550 710 450 2800 1300Kanhan-Ajnl 22 120 270 120 140 300 140 200 550 250

TOTAL 265 1100 4170 1920 1240 4750 2180 1840 8590 3960

9. BINA-KATSI-ANUPPUR

Bina-Xatnt 263 690 7190 4390 780 8770 5350 1160 17400 10600Katnl-Sahdol 125 260 4530 2760 290 5520 3370 430 10970 6700Sahdol-Annupur 41 90 1330 810 100 1770 1080 150 3520 2150

TOTAL 429 1040 13050 7960 1170 16060 9800 1740 31890 19450

10. ANUPPUR-IIASPUR 151 285 1310 720 320 1470 800 480 2650 1460

TOTAL 151 285 1310 720 320 1470 800 480 2650 1460

Source: IR and inslton Estimtes.

April 1984

IaM DwlaTrci

WILLtom ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ £l oflrtt vf tl:,tGfUWtl LTL3AT10(IL

ItLt&LOSCMl WmEl IOU uon -AtnNULiCE nMc. coST Tzs oWATsO TrI nMrON A

Tim film DIIsTrU sJ ymsz xvr WTMCIL CLZ fUZAIO t rnU2ttTL 15 PA" axs IOOS PASS COOOS PASS CowsD PASS5 a t lgrLL IA5UAI.. 1 -5A. UD. TInCC. Law0 II=. 14C1 SATZ= WAiSC 5471Y STIYC t

(1) 2) (1) (4) M5 (6) CS ^) () (10) (1lW (12) (1)) (14) (15) (1*} (11) (11) (LO) (ml

I9114/0 _ 14.3 411. 3

1914161 3640 lSM SillO I 7. 1 20 -231&. 2Z*-I94U111 316 *834 S217 22 33 11 a I -ISX.6 -1Sf.619411189 3011 l121 S]XW 22 33 Is 22 -10.6 40.5 -271 5 74.2 18.4 2.0 Us.1 OS.3ISOS/S091 4001 S115 5412 12 74 Ls 21 -IO.S 10.1 - 7 1 1S.0 15.9 2.e 16.5 104.0l2OWN *129 gum SSSI J4 IS IS is * 3 -10.6 10.6 S2.2 -102.4 17.9 22.3 2.2 14.4 64.4I91 lS2 *211 9113 M2 a4 3S 11 133 * U0 -0. 0-t SO.S _ §- 1 U0.S 2S.3 2.S 1S-4 21-0114S219 42" 0922 374 it Y 7 9 is 51 -10. 6 I *l 48 -00 2 26. I. IS.3 75-l1993194 *,51 IO13S 5919 35 31 4 4 It 1 -10.* 9-1 *7 1 -1100 2 lt.29 3X.: z 9 I i t.1994/9S 4469 103SZ S046 2* is 21 13-10.S 9.5 44.9 1IOQ.S 84.6 35.4 1.2 IN.4 .. ,1915/96 *ISS 10S2* 6176 26 9 21 14 -10.6 1.I 10.* *4 944 36 3.2 16.9 111.31.99611 4&SO 10801 630 1I St 22 14 -10.6 9.9 -10.6 88.2 3S. 9 3.3 17.2 134.31997t98 4143 1103S S445 2? *0 22 14 *10.6 10.1 -10.8 90.1 31.7 3.4 It.1 131.419911" US03 11312 *S4 n a 1 23 IS -10.6 IOU2 - I.0 U2.0 3 .} US ua5 1U90.61SS9/20Zo AT3S IISIS GM tO 42 23 /5 -10.S la. S -11.2 *1.9 3U.3 I.S la.] UU0 a200012001 50)1 11762 *11*8 tb * ] 24 I S -10.6 LO.F a 11.S 9S.9 *0.1 3.6 11.7 147.O 200lit002 Sl}4 ItrOI 1017 30 4U 2 1 6 -10.6 11.0 -11. 97.9 40 .9O. 3. 19.1 I S0.3tC02{200 323S 12214 7168 So AS 2S5 16 -10. IIJ 2 12.0 100. 41.1 1.4 19.3 M2.200312t04 5341 12S31 MIl IL At aS is -10.6 11.4 -12.2 102.1 42.7 3.8 20.0 157.52ZW4/20035 448 12507 7479 31 47 as 1Z -10.6 11.1 12.5 lOt4.2 *].S 3.9 20.1 1 O. Z

200512005 55371 ,O:22 13 1336 7U0 12 U9 217 II. i2. 12.7 lo 4. 41 120 IU -2

*00t12005 SMA 13651 7912 3$ So at I -10.6 12.* 13.2 111.0 **-3 *.2 21.7 172.1200812009 S491 11944 6144 34 Sl 28 I a -10. A 72. -1. 1.*.I.2.1 IZS.6tOgZS8Z01 0015 to 11 5 S22 1 -10.4 U.0 *1 -' G:StSIa. . a.suu201012011 fills Sl l4§ § 19 -10.* 13.Z - t.I 118.1 49. 4. -5 2).2I 12§.12011/2012 62"I 14963 am 36 SX it 19 -10.6 11 . 14.4 120. 50 X 4.6 23.6 LIM.20U/1201U *u5 ISIs] 880 31 iSS 30 20 -10.6 11. S1- U 1231 SIU4 4*U U.l 191.6

DITUSKAL RAf Or REIttX .................. 23.SZSource: It 4.d MI1ss1 rtJi"tX.

April 17AI

INDLA

RAILWAY ELECTRIFICATION AND WORKSHOP MODERNIZATION PROJECT

Sensitivity Analysis of RaLlway Electrification Component

---------------------- SECTIONS TO BE ELECTRIFIED - ER (2) ------------------

Run Variable (a) SENSITIVITY CASE: 1 2 3 4 5 6 7 8 9 10

us----....ls. .Stz. . ................... ..................=........ = .... ========.===-

- - Base 23.5 23.5 22.5 26.0 40.5 27.0 16.0 14.5 38.5 14.0

I RANGE of elect. a. Range - 500 km 13.0 13.5 12.0 14.0 22.0 15.0 9.5 9.0 19.0 9.0

loco tor goods (same as diesel)(600 kms) b. Range = 700 km 33.5 33.0 32.0 37.0 55.0 38.0 22.0 19.5 54.0 19.0

2 CONSTRUCTION a. 10t increase 21.0 21.0 20.0 23.5 37.0 24.0 14.0 12.5 35.0 12.5

COST (b) b. 20X increase 19.0 19.0 18.0 21.0 33.5 21.5 12.5 11.0 32.0 11.0

3 TRAFFIC GROWTH a. Rate 1986-90(2.3X; 23.0 22.5 20.0 23.0 37.0 24.5 15.0 12.0 34.0 12.0

rate for goods (b) 1991-2012-1.52b. Rate 1986-90=2.9X; 24.0 23.5 21.0 24.0 38.0 25.5 16.0 13.0 35.0 13.0

1991-2012-22

4 RANGES a. Range pass. (diesel 26.5 26.0 25.0 30.0 45.5 31.0 18.0 15.5 43.5 12.5

(700 km) & elect.)-500 km

Range goods (diesel(500 km) - 400 km

Range goods (elect)

(600 km) - 500 km

5 LOCO MAINTENANCE a. Maint. diesel - 24.0 24.0 23.0 27.0 41.5 27.5 16.5 15.0 39.0 15.0

(3.3 Rs/km) 4.5 Rs/km

(2.2 Rs/km) Maint. elec=3.2 Rs/kmMaLnt. new elect. -

(1.1 Rs/km) 2 Rs/km

(a) Base value is indicated in parenthesis. !-

(b) It varies for each sectton. -l

Note: 1. Locomotive indicated (i) "Elect." means the current electric locomotive WAM4 or both new and current

electric locomotive if "New elect." is not mentioned, (ii) "New elect." means the about 6000 HP N

electric locomotive to be procured in the near future.

2. The values of ER computed for Section 10 were derived applying the methodology described in para 4.14.

Source: IR and Mlission Estimates

April 1984

Run Varlable (a) SENSITIVITY CASE: 1 2 3 4 5 6 7 8 9 it.. ,. ............. ..... =.4 ......... .t._.......... .*...... X .==............ .==....... ww._............ X== ..... ==s......... ._,,.............. ==. .......

- - Base 23.5 23.5 22.5 26.0 40.5 27.0 16.0 14.5 38.5 14.0

6 LOCO EC. PRICE(7.3 m Rs) a. Diesel - 13 m Rs 26.5 26.5 25.0 29.5 45.0 30.0 18.0 16.0 42.0 16.0(6.9 m Rs) Elect. - 12.3 m Rs

New elect. -(14.7 m Rs) 20 m Rs

7 CR TRAILING (1800) a. DieseL-1800 Ton/train 22.5 22.5 21.5 25.0 39.0 25.5 15.5 13.5 37.0 13.5Load per train (2400) Elect-2000 Ton/train6 IISD/Th. CTKM (3780) New electn3000 Ton/train

(3.6) HISD-3.6 It/Th. GTKHb. Diesel-2000 Ton/train 20.5 20.5 20.0 23.5 37.0 23.5 13.5 12.0 35.0 12.0

Elect=2500 Ton/trainNew elect.-35DWTon/Train

HSD-3 It/Th. GTKHc. oiesel=2000 Ton/Train 20.0 l9.5 19.0 22.5 36.0 22.5 13.0 11.0 34.0 11.5

Elect-2500 Ton/TrainNew elect-3800Ton/Train

HSD-=2.7 lt/Th. GTKH

8 LOCO AVAILABILITY(.833) a. Diesel * .85 23.5 23.5 22.5 26.0 41.0 27.0 16.0 14.0 38.5 14.0(.806) Elect. * .88(.935) New elect. - .935

9 SPEED of goods a. Speed =30 ka/hr 21.5 21.5 20.5 23.5 37.0 24.5 14.5 13.0 35.0 13.0diesel engine b. Speed - 36 km/hr 20.0 20.0 19.0 22.0 35.0 23.0 14.0 12.5 32.5 12.0(24 ko/hr) (sea as electric

engine)

10 ECONOMIC PRICE of Kwh .8Rs and 1-1/2Z 17.0 17.5 17.0 21.0 34.5 22.5 11.0 10.0 34.0 11.0HSD (2.8 Rs/At) and annual Increase, inkWh (.4 Rs) real terms, in the

price of HSD _ _P

11 a. Only current electric 24.5 24.5 23.5 26.5 41.5 27.0 16.5 15.0 39.0 14.5 slocomotives would be a L

used

(a) Base value is indicated in parenthesis.

Source: IR and Mission EstimatesApril 1984

-101-

Table 16

INDIA

RAILWAY ELECTRIFICATION AND WORKSHOP MODERNIZATION PROJECT

Economic Evaluation of Workshop Modernization

Economic Economic ReturnSub-Component Cost Base Case 1/ 2/ 3/

(m Rs) (X) (X) (X) (Z)

Parel 119.6 47 40 39 30Liluah 124.5 30 22 18 17Jagadhri 125.5 43 37 35 27Golden Rock 204.9 27 22 21 19

Kharagpur 225.8 21 17 16 15Ajmher L77.8 24 19 19 17

ICF 377.0 20 16 16 15Maintenance Depots 1,700.0 18 11 10 11

TOTAL: 3,055.1

1/ Cost increases by 20%.

2/ Benefit decreases by 20%.31 Benefit lags by three years.

Source: IR and Misslon EstimatesApril 1984

-102-

Table 17

INDIA

RAILWAY ELECTRIFICATION, WORKSHOP AND MODERNIZATION PROJECT

IR Revenue and Expenditure Accounts 1977/78 to 1982/83(Figure. in Cujrrnt Rupees Million)

1977/78 1978/79 1979/80 1980/81 1981/82 1982/83Actual Actual Actuul Actual Actual Actual

Passenger 6,217 6,728 7,388 8,274 9,686 11,617Other Coaching 901 915 987 1,158 1,288 1,600Goods 13,484 13,054 14,404 16,175 23,571 29,721Sundries 632 813 599 633 637 824

Total Ravenues 21,234 21,510 23,378 26,240 35,382 43,762

Working Expenseas I

AdbiiniustratLon 1,536 - -

Repairs and Maintenance 6,087Operating Staff 3,163 - - - - -

Fuel 2,992 - - - - -Operating Othar than Staff and Fuel 88UMiacellaneous Expenses 497Staff Welfare 551 - - - - -

General Superintendence and Services - 1,139 1,242 1,415 1,580 1,827Repairs and Maintenance of

Permanent Way and Works - 1,788 2,069 2,390 2,894 3,552Repairs and Maintenance of Motive Power - 1,637 1,769 2,046 2,448 2,890Repairs and Maintenance of Carriageand Wagons - 2,014 2,221 2,590 3,360 4,135

Repairs and Maintenance of Plantand Equipment - 96b 1,111 1,312 1,561 1,839

Operating Expenses Rolling Stockand Equipment - 2,092 2,194 2,469 2,936 3,261

Operating Expenses Traffic - 2,233 2,475 2,833 3,180 3,667Operating Expenses Fuel - 3,090 3,741 4,917 6,734 7,636Staff Welfare and Amenities - 697 798 942 1,092 1,280Hiacellaneous Expenses - 884 987 1,248 1,406 1,577Provident Fund, Pensionand Other Benefits - - - - - 129

Total Working Expenses 15,706 16,540 18,607 22,162 27,191 31,793

Appropriation tu Depreciatiou Reserve Fund 1,400 1,450 2,000 2,200 3,500 5,560Appropriation to Pension Fund 393 678 817 1 003 1,129 1,480Total Operating Expenses TTW YF8,6 21,424 31,820 38,833

Net Revenue from Operations 3,735 2,842 1,954 875 3,562 4,929

Charges to Revenues of Capital Nature

Open Line Works 76 78 77 97 896 ',071Miscellaneous Transaction 131 156 164 302 - 427 - 457Net Revenues 3,528 2,608 1,713 1,274 4,031 5,543

Dividend of Capital-at-Charge 2/ 2,266 2,241 2,375 3,252 3,565 4,360Net Surplus (Deficit) 1,262 367 (662) (1,978) 406 1,183

Operating Ratio 82.4Z 86.7Z 91.6Z 96.bZ 89.4% 88.3%Ratio of Net Revenues to Capital-at-Charge 7.4Z 5.2Z 4.1X 2.1Z 6.OZ 7.67Freight Traffic (tons origlinating) -

million tons 237 223 217 220 246 229

1/ Accounts classification waa changed ln 1978/79 and expenses were bookedby functlon, resulting ln a refinement from previous classification.

2/ Rate of Dividend on Capital-at-Charge. On capital provided by Government5.5% to March 31, 1964; and 6.5Z after March 31, 1964.

Source: Indian RailwaysApril 1984

-103-Table 18Page 1 of 3

INDIA

RAILWAY ELECTRIFICATION AND WORKSHOP MODERNIZATION PROJECT

IR Balance Sheet - March 31, 1983(In Current Rupees Million)

ASSETS

Fixed Assets 84,518luventories 4,304

Sub-total 88,822Receivables 7,315

Cash and Deposits with GovernneutCash 2,034Deposits 4,803 6,837

102,974

CAPITAL AND RESERVE FUNDS

Investment Finance from:

Government Capital-at-Charge 72,511Government Temporary Loans - DF 2,242

- DRF -74,753

Railway Sources:

Depreciation Reserve Fund 6,660Development Fund 6,376Revenue 2,708Accidents Compensation and

Passenger Amenities Fund 56716,311

Less Portion Financed byTemporary Loans fromGoverunext 2,242 14,069

Sub-total 88,822

Railway Funds:

Depreciation Reserve Fund 468Revenue Reserve Fund 5Development FundPension Fund 3,943Accidents Compensation and

Passenger Amenities Fund 387 4,803CURRENT LIABILITIES 9,349

TOTAL CAPITAL AND REVENUES 102,974

Source: IR and Mission EstimatesApril 1984

-104-

Table 18Page 2 of 3

IR - Notes to Balance Sheet, March 31, 1983

1. Fixed Assets

The value of fixed assets shown in the balance sheet is based ontheir original costs. Additional cost of like-for-like replacements overtheir cost (the inflationary element) is charged against DRF, and has notbeen included in the figures in the balance sheet. Improvement elementat the time of replacement has been included in the Fixed Asset Accountin the balance sheet.

2. Depreciation Reserve Fund

This balance in the fund repreuents cumulative contributionsincluding interest earned to date less:

(a) value of assets withdrawn from services, and

(b) full cost of replacement.

3. Inventories

These are financed from Capital-at-Charge.

4. Investment financed from Railway Sources

These are the published figures representing amounts the Railwaysprovided from their own sources over the years towards the capitalinvestment program.

Development Fund

Development Fund is created out of IR's net revenue surplusesafter meeting dividend liability to GOI. In the last few years, IRrevenues have not been sufficient to clear dividend liabilities in fulland temporary loans were drawn to meet the expenditure chargeable toDevelopment Fund. As of March 31, 1983, IR has an outstanding loan ofRs 2,242 million under the Development Fund. Because of the acceptanceby the Government of the recommendations of the Committee on IR'sFinances, there is no outstanding loan under the Revenue Reserve Fund,but there is undischarged dividend liability of Rs 3,793 million whichhas not been taken into account in the balance sheet. The year-to-yearposition of the outstanding loan under the Development Fund is as under:

-105-

Table 18Page 3 of 3

Year Loan Drawn Repayments Outstanding Loan

1967/68 112 - 1121968/69 141 - 2531969/70 181 - 4341970/71 216 - 6501971/72 216 - 8661972/73 157 167* 8561973/74 227 - 1,0831974/75 219 - 1,3021975/76 223 - 1,5251976/77 - - 1,5251977/78 - - 1,5251978/79 54 - 1,5791979/80 316 - 1,8951980/81 347 - 2,2421981/82 - - 2,2421982/83 - 2,242

* Repaid by application of dividend relief.

5. Development Fund: Finances expenditure of a capital nature for:

(a) Operating improvements costing over Rs 300,000 each.(b) Users' amenities irrespective of their cost.(c) Staff amenities costing more than Rs 25,000 each.

6. Items Financed from Revenue are:

(a) Operating improvements costing up to Rs 300,000 each.(b) Staff amenities costing up to Rs 25,000 each.

7. Provident Fund and Staff Benefit Fund

The balances as of March 31, 1983, Rs 10,277 million are not shownin the above balance sheet since these funds are held in speciaL depositaccounts, specifically for paying benefits to employees. Contributions tothe Fund are charged to operating expenses.

Source: IR and Mission Estimates.April 1984

-106-

Table 19

INDIA

RAILWAY ELECTRIFICATION AND WORKSHOP MODERNIZATION PROJECT

IR - Distribution of Key Revenue Expenditure Items

as Percentage of Total Revenues

1977/78 1978/79 1979/80 1980/81 1981/82 1982/83(a) Total Working

Expenses 74.0 76.9 76.9 85.0 76.6 72.8

DepreciationReserve Fund 6.6 6.7 8.5 8.4 9.8 7.6

Pension Fund 1.8 2.3 2.7 3.2 2.7 2.4

Dividend Paid 10.3 10.4 7.3 4.9 10.5 6.1

Net Surplus(Deficient) 5.9 1.9 (2.8) (7.5) 1.5 1.6

Distribution of Key Cost Items as Percentage ofTotal Working Expenses

(b) Total WorkingExpenses 100.0 100.0 100.0 100.0 100.0 100.0

Staff 55.2 55.1 54.6 53.0 53.0 49.11

Fuel 19.0 18.4 19.9 21.5 21.5 23.90

Material, Suppliesand Stores 25.8 26.5 25.5 25.5 25.5 26.99

Source: IR and Mission EstimatesApril 1984

IIDIA

RAILWAY ELECTRIFICATION AND WORKSHOP MODERNIZATION PROJECT

Changes in Average Fare and Freight Rates in Relation to Prices of Hajor Inputs of IR'a Costs

1970/71 to 1981/82

1970/71 1971/72 1972/73 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 1979/80 1980/81 1981/82

Average rate per passenger km 100 102.0 102.8 108.4 130.8 138.4 138.8 140.8 139.6 146.8 158.8 173.6

Average rate per ton km 100 103.3 105.7 108.5 131.9 149.5 163.2 159.1 162.1 177.5 193.4 254.0

Average annual cost per employee 100 105.7 109.2 118.7 152.3 178.9 185.9 190.1 201.2 223.3 248.2 270.3

Index Number of wholesale pricesbased on 1970/71

Coal 100 102.2 110.8 121.7 143.0 184.2 197.6 198.8 212.2 293.6 340.6 424.4

High speed Diesel 100 104.9 105.9 119.5 194.3 206.4 213.9 214.1 216.7 243.8 279.6 385.9

Electricity 100 102.5 105.7 111.3 137.2 158.1 171.6 182.5 209.1 225/6 239.7 277.0

Iron, Steel and Ferrous alloys 100 105.8 117.6 142.6 171.3 184.5 186.9 188.2 212.5 258/2 272.4 318.1

Cement, Lime and Plaster 100 105.4 109.5 112.3 147.8 170.7 173.5 176.6 196.2 229.1 232.6 261.7

Machinery and Transport equipment 100 105.3 112.1 122.7 156.4 172.6 170,1 172.6 183.9 215.9 238.8 257.6A

Foodgrains 100 103.4 119.5 141.9 195.8 174.1 152.7 170.4 172.6 185/4 216.6 237.4 .

All commoditles 100 105.6 116.2 139.7 174.9 173.0 176.6 185.8 185.8 217/6 256.9 280.5

Cost of living Index number(working class) 100 103.2 111.3 134.4 170.4 168.3 161.8 174.2 178.0 193.6 215.6 242.5

Source: IR

April 1984

INDIA

RAILWAY ELECTRIFICATION AND WORKSHOP MODERNIZATION PROJECT

IR Revenue and Expenditure 1983/84 to 1989/90(Figures ln current million Rupees)

IR s IR'sRevised Budget -------- B ank Group Forecast --------------Estimate Estimate (ln Current Rs Million)1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90

Revenues

Passenger 13,610.0 15,080.0 15,683.0 16,310.0 16,962.0 17,640.0 18,345.0Other Coaching 1,630.0 1,710.0 1,778.0 1,849.0 1,922.0 1,998.0 2,077.0Goods 33,900.0 36,890.0 39,085.0 41,281.0 43,477.0 45,672.0 47,868.0Sundries 840.0 890.0 915.0 940.0 965.0 990.0 1,015.0Total Revenue 49,980.0 54,570.0 57,461.0 60,380.0 63,326.0 66,300.0 69,305.0

Working Expenses 0

Personnel 19,202.0 20,928.0 21,765.0 22,635.0 23,540.0 24,418.0 25,460.0Fuel 8,243.7 9,132.7 9,528.0 9,909.5 10,306.9 10,718.0 11,147.5Stores 9,314.3 10,049.3 10,484.0 10,904.0 11,341.1 11,794.0 12,266.5Total Working Expenses 36,760.0 40,110.0 41,777.0 43,448.5 45,188.0 46,930.0 48,874.0

ApproprLation to DRF 8,500.0 8,500.0 9,200.0 10,000.0 10,800.0 12,000.0 13,000.0Approprlation to PF 1,825.0 2,210.0 2,250.0 2,500.0 2,750.0 3,000.0 3,250.0Total Operating Expenses 47,085.0 50,820.0 53,227.0 55,948.5 58,738.0 61,930.0 65,124.0Net Revenue from Operations 29895.0 3,750.0 4,234.0 4,431.5 4,588.0 4,370.0 4,181.0Net Mlscellaneous Credits 490.0 450.0 500.0 540.0 590.0 650.0 710.0Net Revenue 3,385.0 4,200.0 4,734.0 4,971.5 5,178.0 5,020.0 4,891.0Dividend at Capital-at-Charge 4,500.0 4,900.0 5,485.0 6,102.5 6,751.5 7,435.0 8,150.0

Net Surplus/Deficit (1,115.0) (700.0) (751.0) (1,131.0) (1,573.5) (2,415.0) (3,259.0)Operating Ratio 94.2% 93.1% 92.6% 92.7% 92.8% 93.4% 94.0%Ratlo of Net Rev. toCapital-at-Charge 4.4% 5.0% 5.1% 4.8% 4.6% 4.1% 3.6% m i

Capital-at-Charge 77,537.6 84,257.6 93,257.0 102,757.0 112,757.0 123,257.0 134,257.0 m

Source: 1983/84 and 1984/85 - IR's Estimates; 1985/86-1989/90 IR and Mission Estimates.April 1984

-109-

Table 21Page 2 of 3

INDIA

RAILWAY ELECTRIFICATION AND WORKSHOP MODERNIZATION PROJECT

IR and Revenue and Expenditure Forecasts - Assumptions

1984/85 to 1989/90

1. The FY84 figures represent IR-s budget estimates. Subsequentyears FY85 to FY90 are Bank Group estimates based on the higher freightrazes as proposed in the Railway Budget for FY85, presented to Parliamenton February 24, 1984, and on traffic Levels forecasted (by the Bank Group)in para 2.38 -Scenario II-. Correspondingly, it is assumed that smallimprovements in operational efficiency as a result of the proposed projectwould be achieved and is reflected in the total working expenses. Furtherbreakdown and assumptions used in forecasting revenues and expendituresare discussed in subsequent paragraphs.

2. The estimates, therefore, take account of the three majorinfluences which have occurred since the appraisal of the FirstModernization Project in 1978 that is over the past five years:

(a) the revision of tariffs which resulted in increases In bothfreight rates and passenger fares during the period 1979/82, andthe increase allowed from April 1, 1983;

(b) increased costs of fuel and coal, repairs and maintenance, andconsumable stores; and

(c) the wage awards and dearness allowances sanctioned by GOI, thelatest being effective from April 1982, and theproductivity-linked bonus allowed to the railway staff for theyear 1979/80 onwards.

3. Revenue forecasts for 1984/85 onward reflect the increase intraffic anticipated during the period (para 2.35, Scenario II), but donot take into account any further adjustment in tariff and fare levels,though further upward adjustments are expected to take place in view ofthe recommendations of the Rail Tariff Enquiry Committee.

4. The total working expenses are based on the detailed analysisof the current costs, related to freight and passenger traffic forecasts.The ratios between the three main elements of the costs are as under:

-110-

Table 21Page 3 of 3

.Personnel - 49.1%Fuel - 23.9%

Other Costs and Stores - 26.9%

5. Provision for Appropriation to Depreciation Reserve Fund (DRF)for the year 1984 is based on the provision made by IR in its BudgetEscimate, and provision for subsequent years are those anticipated to bemade by IR in the light of its need for rehabilitation and are missionestimates. After 1984/85 appropriation to DRF has been increased at arate of 8% per annum for subsequent years. Thus the mission estimatestake into account inflation and provide slight increase in appropriationto DRF.

6. Appropriation for the Pension Fund are based on estimatedexpenditure on this account.

7. Total revenues are projected to increase by about 27% duringthe period 1984/85 to 1989/90, increasing from Rs 54,750 million toRs 69,305 million, respectively. Total working expenses are expected toincrease from Rs 40,110 million in 1984/85 to Rs 48,874 million in1989/90, which in percentage terms is about 22%. This points to the highlevel of variable costs and the need to further adjust the freight ratesand passenger fares. Total operating expenses are anticipated to increasefrom Rs 50,820 million in 1984/85 to Rs 65,124 million in 1989/90registering an increase of about 28%. The higher rate of increase inexpenditure is due to the steep step up in appropriation for depreciation.

8. For the year 1982/83, average receipt per ton km of freight wasanticipated to be paise 17.7 and average receipt per passenger km waspaise 5.11.

9. The revenue and expenditure forecast is based on IR-s assessmentof likely investment plan for the period 1985/86 to 1989/90.

Source: IR and Mission Estimates.April 1984

-}11-

Table 22

INDIA

RAILWAY ELECTRIFICATION AND WORKSHOP MODERNIZATION PROJECT

IR Forecast Balance Sheet as of March 31, 1984 to 1990(Figures in Current Millions of Rupees)

Revised BudgetEstimate EstLmate ----------Bank Group Forecast------------

1984 1985 1986 1987 1988 1989 1990

Assets

Flxed Assets 90,429 98,613 108,624 118,874 129,669 141,414 153,513Floating Assets 4,605 4,881 5,125 5,330 5,490 5,600 5,656Subtotal: 95,034 103,494 113,749 124,204 135,159 147,014 159,169

Receivables 7,827 8,296 8,710 9,058 9,330 9,516 9,611

Cash and Deposits vith Government

Cash 1,231 1,231 1,231 1,231 1,231 1,231 1,231Deposits 5,201 5,576 6,022 6,329 6,636 6,943 7,250

Total Assets 109,293 118,597 129,712 140,822 152,356 164,704 177,261

Capital and Reserve Fund

Investment financed fromGovernment Capital-at-Charge 76,659 84,257 93,257 102,757 112,757 123,257 134,257

Temporary Loan Government - DF - - - - - - -

2,735 3,321 4,147 5,025 5,958 6,949 8,002

Railway Sources

Depreciation Reserve Fund 8,040 8,100 9,200 10,000 10,800 12,U00 13,000Development Fund 6,721 7,121 7,211 7,301 7,391 7,481 7,571Open Line Works 2,823 2,973 3,023 3,073 3,123 3,173 3,223Accident Compensation Fund 793 1,043 1,058 1,073 1,088 1,103 1,118Less Financed from TemporaryLoan from Government 2,737 3,321 4,147 5,025 5,958 6,949 8,002

Subtotal 95,034 103,494 113,749 124,204 135,159 147,014 159,169

Railway Funds

Depreciation Reserve Fund 1,012 1,531 1,681 1,811 1,941 2,071 2,201Development Fund - - - - - -Revenue Reserve Fund 5 5 5 5 5 5 5Pension Fund 3,948 3,987 3,858 3,831 3,813 3,801 3,799Accident Compensation Fund 236 53 136 143 150 157 164

Subtotal 5,201 5,576 5,680 5,790 5,909 6,034 6,169

Current Liabilities 9,058 9,527 10,283 10,828 11,288 11,656 11,923

Total Capital and Reserves 109,293 118,597 129,712 140,822 152,356 164,704 177,261

Source: IR and Mission EstimatesApril 1984

-112- Table 23

INDIA

RAILWAY ELECTRIFICATION, WORKSHOP AND MODERNIZATION PROJECT

IR Forecast Source and Application of Funds 1983-64 to 1989-90(Figuras 1i Current Millions of Rupee.)

------------------- Forecast ------------------------

Revised Budget TotalEnLi ts Estimate 19841851983/84 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90 tu 1989/90

Source of Funds

Net Revenue 3,385 4,200 4,734 4,971 5,178 5,020 4,891 28,994Less Dividend on Capital-at-Charge 4,500 4,900 5,485 6,102 6,753 7,435 8,150 38,825Surplua/Shortfall (1,115) (700) (751) (1,131) (1,575) (2,415) (3,259) (9,831)Contribution to DRF 8,500 8,500 9,200 10,000 10,800 12,000 13,000 63,500Capital Works Charged to Revenue 115 150 300 300 300 300 300 1,650Increase (Decrease) in Pension FundExcluding Interest (90) 102 227 240 354 331 374 1,628

Accident Compensation, Safety and PassengerAmenities Fund 55 57 450 450 450 450 350 2,207

Interest on Fund Balances 324 345 128 83 35 16 (31) 638Railway Cash Generation 8,904 9,154 10,305 11,073 11,939 13,097 14,055 69,623Capital Funds Received froe Government

(including MTP) 5,700 7,600 9,000 9,500 10,000 10,500 11,000 57,600Temporary Loans from Government - DRF - - - - - - - -

- DF 496 586 826 878 933 991 1.053 5,267

Total Sources of Funds 15,100 17,340 20,131 21,451 22,872 24,588 26,108 132,490

Applicativw uJ Funds

Capital Works Charged to Revenue 115 150 300 300 300 300 300 1,650Replacement Work DRF 8,040 8,100 9,200 10,000 10,800 12,000 13,000 63,100Works Charged to DF 315 400 600 600 600 600 600 3,400Works Charged to ACSPF 226 250 450 450 450 450 450 2,500Additions Charged to Capital 5.700 7,600 9,000 9,500 10.000 la.S00 11.000 57.600

Total Capital Expenditure 14,396 16,500 19,550 20,850 22,150 23,850 Z5,350 128,250

Increase (Decrease) in Inventories 301 276 244 205 260 210 156 1,351Repayment of Temporary Loans - DRF - - - - - - - -

-OF - - - - - - - -

Intereat on Temporary Loans - DRF - - - - - - - -

- DF 156 189 233 286 343 403 467 1,921

Increase (Decrease) in Fund Balance 247 375 104 110 119 125 135 968

Total Application of Funds 15,100 17,340 20,131 21,451 22,872 24,588 26,106 132,490

Funds Flow

Opening Balance 4,954 5,201 5,576 5,680 5,790 5,909 6,034Closing Balance 5,201 5,576 5,680 5,790 5,909 6,034 6,169Increase (Decrease) in Fund Balance - DRF 543 519 99 106 113 120 129

- Penlsion (145) 40 1 1 1 1 2- DF - - - - - - -

-RR - - - - - - -

- ACSPF (151) (184) 4 3 5 4 4

Temporary Loan

Temporary Loans BalancesOutstanding - RRF - - - - - - -

- DF 2,737 3,321 4,147 5,025 5,958 6,949 8,002

Dividend Liability

Balance Outstanding DividendLiability at Beginning of Year 3,048 4,163 4,863 5,614 6,745 8,320 10,737 40,440

Deffered Dividend due for the Year 1,115 700 751 1,131 1,575 2,415 3,259 9,831Deferred Dividend paid during the Year - - - - - - - -

Balance Outstanding Dividend - - - - - - - -

Liability at End of the Year 4,163 4,863 5,614 6,745 8,320 10,735 13,994 50,271

Source: IR and Mission EstimatesApril 1984

INDIAN RAILWAYS ORGANIZATION CHART

MINISTRY OF RAILWAYS

MINISTER FOR RAILWAYSMINISTER OF STATE FOR RAILWAYS

RAILWAY BOARDCHAI RMANFINANCIAL COMM:lSSIONER

. . _ ~~~~~~~~EM BER M EC H AN ICA L _

ADVISERS/DIRECTOR GENERAL/OFFICERS MEMBER TRAFFICON SPECIAL DUTYA13VISERS1. FINANCE2. MECHANICAL3. ELECTRICAL4. INDUSTRIAL RELATIONSDIRECTOR GENERAL1. HEALTHOFFICERS ON SPECIAL DUTY1. PROJECTS AND PRODUCTION UNITS2. COMMERCIAL

DIRECTORS ZONAL RAILWAYS MANUFACTURING UNITE PROJECTS RESEARCH. OESIONS ANDI. ACCOUNTS GENERAL MANAGERS GENERAL MANAGERS GENERAL MANAGERS STANDARDS ORGANIZATION.2. CIVIL ENGINEERING LUCKNOW3. EFFICIENCY BUREAU 1. CENTRAL RAILWAY. BOMBAY I. CHITTARANJAN- I. CONSTRUCTION.4. ESTABLISHMENT 2. EASTERN RAILWAY. CALCUTTA LOCOMOTIVEWORKS SOUTHERN RAmW.AY. 1. DIRECTOR GENERAL5. FINANCE IBUDGET) 3. NORTHERN RAILWAY. NEW DELHI CHITTARANJAN BANGALOREB. MECH. ENGINEERING 4. NORTHEASTERN RLY.,GORAKHPUR 2. DIESEL LOCOMOTIVE WORKS, 2. METROPOLITAN TRANSPORT7. MECH. ENGG. (WORKSHOP) S. NORTHEAST FRONTIER RLY. VARANASI PROJECT (RAILWAYS)B. METROPOLITANTRANSPORT MALIGAON(GAUHATII 3. INTEGRALCOACH FACTORY, CALCUTTA9. RAILMOVEMENT 6. SOUTHERN RAILWAY, MADRAS MADRAS 3. WHEEL AND AXLE PLANT

10. RAILWAYPLANNING 7. SOUTH CENTRAL RAILWAY. SECUNDERABAD IIRWAI11. RAILWAY STORES B. SOUTHEASTERN RAILWAY, CALCUrTA BANGALORE12. SAFETY AND COACHING B. WESTERN RAILWAY. BOMBAY 4. WORKSHOP MODERNIZATION13. SECURITY (COFMOWI14. SIGNAL AND TELE. COMMUNICATIONS DELHI15, STATISTICS AND ECONOMICS S. DIESEL COMPONENT WORKS16. TRAFFIC COMMERCIAL IDCWI17. TRAFFIC TRANSPORTATION PATIALAlB. VIGILANCE

OTHERS1. ECONOMIC ADVISER2. LEGAL ADVISER

Worlid Bank - 18812

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-115-

INDIARAILWAY ELECTRIFICATION AND WORKSHOP MODERNIZATION PROJECT

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