Lessons for Colombia from Indian and Sri Lankan Railways and PPPs

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Lessons for Colombia from Indian and Sri Lankan
Railways and PPPs
ANDI Conference September 21st 2007
Peter D. Cook Project Manager Nathan
Associates Inc.
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Main Objectives

• Present background on Indian Railways and its
  Long-Range Decision Support Systems
• Show the impact of future freight growth on
  Indian Railways
• Describe Indian and Sri Lankan Railways concepts
  of public private partnerships
• Suggest potential lessons for Colombia

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Agenda
1. Indian Railways Background 2. Indian Railways
Information Systems 3. Indian Railways and Public
Private Partnerships 4. Sri Lankan Railways and
Public Private Partnerships 5. Colombian
Railways 6. Potential Lessons for Colombian
Railways
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Topic 1
Indian Railways Background
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Indian Railways Network

• 62,000 route-km
• 75 Broad Gauge
• 24 Meter Gauge
• More than 5,000 active freight stations

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Indian Railways Traffic 2005-6

• 643 million tonnes
• 430 billion tonne-km
• Freight tonnage growing at 3.5-6 per year
• 5.4 billion passenger trips
• 576 billion passenger-km
• Passenger trips growing at 6-8 per year

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Indian Railways Freight Composition
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IR Freight Demand Growth Forecast
Competing with pipelines
Local plants increasing with road transport
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Topic 2
Indian Railways Information Systems
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New IR Operating and Planning Systems

• Freight Operating Information System
• Long Range Decision Support System (capacity and
  investment planning)
• Multi-modal Corridor Analysis Model
• Terminal Simulation Model
• Line Capacity Model

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Long Range Decision Support Functions-1

• Identification of operating policies to improve
  rail operations for similar types of rail lines
• Estimation of future traffic demand by major
  commodity, origin and destination
• Identification of the location and timing of
  bottlenecks for future rail operations
• Prioritization of actions to get more out of
  existing rail line capacity
• Economic and financial return of packages of
  improvements to the IR network

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Long Range Decision Support Functions-2

• Prioritization of actions (investments and/or
  operating policies) for capacity expansion for a
  given rail line or for the IR system as a whole
• Identification of markets for potential rail
  traffic
• Identification of the major influences on the
  financial viability of IR by service type

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Indian Railway Bottlenecks in 2005-6
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Indian Railway Bottlenecks in 2011-12
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Topic 3
Indian Railways and Public Private Partnerships
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IR Approach to Public-Private Partnerships

• Container Corporation of India
• Indian Railways Catering and Tourism Corporation
• PPP for urban rail stations and services
  (planned)
• Dedicated freight corridors (planned)

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Container Corporation of India (CONCOR)

• Formed in 1991 with World Bank assistance as a
  corporatized subsidiary of IR for container
  transport
• Highly successful and profitable (20)
• Expanded service for door-to-door transport with
  road transport contracting
• CONCOR owns the container wagons and pays haulage
  fees
• Container haulage now opened to other licensed
  competitors

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CONCOR Container Growth
Average 15 growth per year since 1991
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IR Catering and Tourism Corporation

• Recently corporatized as a subsidiary of IR
• Contracting/concessions for services with IR
  supervision (e.g. food service on trains and in
  stations)
• Successful in improving services such as charter
  trains with cultural activities
• Pioneered on-line and wireless ticket booking for
  tourists (see Rail India Tourism website)
• Call center being inaugurated

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Rail Tourism India Website
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PPPs for Urban Rail Services

• International bidding for higher value AC urban
  and suburban services
• Initial bids offered for Mumbai region
• Private owners will own and operate trains, set
  fare structure and market the services
• IR will provide engineers for trains and
  maintenance services for fees
• Private partners will invest in trains and pay IR
  annual maintenance fees and a one time license fee

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Dedicated Freight Corridor Concept

• Concessioning to international groups for
  investment, marketing and traffic operations
  should also speed up construction schedule
• IR will run the trains for safety reasons
• DFCs will run in corridors parallel to existing
  lines entirely diesel traction
• Operators will build terminals with multi-modal
  capability and link to existing IR lines
• Separation of freight and passengers will allow
  better service for both
• International lenders have shown interest in
  financing DFCs

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Indian Railway Bottlenecks in 2011-12
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Topic 4
Sri Lankan Railways and Public Private
Partnerships
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Railways of the World
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Sri Lankan Railways Background

• Railway has declined over last 20 years
• Operations are limited due to locomotive and
  wagon shortages
• Passenger fares are lower than operating costs
• Railway is losing money and cannot buy spares or
  replace rolling stock or track

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Sri Lankan Government PPP Approach

• Government created Strategic Enterprise
  Management Agency (SEMA) reporting to Prime
  Minister
• SL Railways are part of its portfolio
• SEMA is relying on PPPs to create new ways of
  financing rail operations
• Two types of PPPs currently proposed
• Dry port rail service for freight
• Rail station and service PPPs for passengers

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Sri Lankan Dry Port and Rail PPP

• International bids will be solicited for PPP to
  invest and manage operations
• SEMA will manage PPP process
• SL Railways will own rail right-of-way and will
  renovate track
• Private partner will own and maintain wagons
• SL Railways will own and operate locomotives
• Private partner will pay an annual fee for the
  right to manage operations
• Private partner will collect lease payments from
  dry port tenants and charge fees for container
  services

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Sri Lankan Suburban Rail PPP

• International bids will be solicited for PPP to
  invest and manage stations and real estate
• SEMA will manage PPP process
• Private partner will build new stations with
  multi-story commercial and residential space on
  top
• SL Railways will own rail right-of-way and will
  renovate track and signaling system (with
  international lender support)
• Private partner will pay an annual fee for the
  concession and invest in new modern rolling stock
• Private partner will collect lease payments from
  all tenants and manage real estate operations

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Topic 4
Colombian Railways
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Colombian Railways
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Colombian Railways

• Now primarily a freight railway
• Atlantic Railways concessioned (FENOCO)- under
  reorganization
• Pacific Railways concessioned (Tren de
  Occidente)- track renovation and operating
  problems
• El Cerrejon railway privately owned
• Trenturist Private passenger service

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Colombian Concessions

• Colombia is a leader in concessions
• Colombia may already have a dedicated freight
  railway system, but arrived there differently
  than India, by eliminating rail passenger traffic
• Separation of passenger traffic by pushing it to
  road buses and concessioning rail for freight
  traffic

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Topic 5
Potential Lessons for Colombian Railways
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Potential Lessons - Freight

• Railways PPP can play a dynamic role in
  development of freight traffic
• Container services and intermodal terminals can
  be a dynamic area for growth with a PPP approach
  (Relates to logistics hubs and dry ports). This
  may be private-private in Colombia.
• Planning information systems are most useful when
  freight operations expand and relate to
  multi-modal transport
• Plan for new freight movements such as methanol
  and expanding containers
• ANDI could propose strategic rail operations as
  part of a corridor action plan, (if it makes
  sense)

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Potential Lessons - Passengers

• Niche passenger rail service could be part of a
  private-private concession
• Rail tourism services could be a growth industry
  with a PPP of private-private approach
• Urban or suburban services can benefit from a PPP
  approach, for rail station development and for
  train ownership and operation
• Intercity passenger concession?
• Maybe Sri Lanka approach would apply to
  Transmillenio or MIO development

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• Need a high-level organization to propose and
  manage PPPs could be ANDI or joint
  ANDI-government
• International lenders can support the PPP process
• Private-private developments can be best in some
  cases where concessions already exist

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Thank you for your attention.