The government cleared an Indian Railways plan to expand and modernize the railway station on a ‘fast-track’ basis in time for the Commonwealth Games
The Union government approved state-funded expansion of railway stations, including New Delhi’s main station, as well as upgrading of the Chennai airport, at a total cost of at least Rs7,400 crore.
The Union government approved state-funded expansion of railway stations, including New Delhi’s main station, as well as upgrading of the Chennai airport, at a total cost of at least Rs7,400 crore.
The committee decided the Airports Authority of India, or AAI, will modernize the Chennai airport. The overhaul will cost around Rs2,350 crore, nearly half of which will be used for constructing a runway and taxiways.
Addressing reporters after a meeting of the Prime Minister’s Committee on Infrastructure, railway minister Lalu Prasad said the ministry had received bids from six consultants, including Terry Farrell & Partners, Hong Kong, RITES, an Indian Railways subsidiary, and GMP International GmbH of Germany, for the New Delhi project, which is structured into multiple phases, the first of which ends in 2010.
“The modern railway stations will look like an airport. There will be separate arrival and departure terminals, and instead of overbridges, movement will be through underground,” the minister said.
Some 20 other stations will also be developed, including Agra, Ahmedabad, Bangalore, Patna, Pune, Secunderabad and Thiruvananthapuram. The cost of these expansion was not immediately available.
The plan is to hand over around 80 hectares of land to the consortium that wins the tender on a long-term lease. Private players will be allowed to develop peripheral land and earn revenue, part of which can be used to fund the project.
This airport development decision makes Chennai the second metro airport to be expanded by AAI; Kolkata being the other one. New Delhi and Mumbai airports are being modernized by private consortia.
Monday, February 25, 2008
Railway unions get ready for first, critical elections in 154 years
This is the first election in the Indian Railways 154 years history and the railway ministry is treating it on a par with the general elections in the country
The general secretary of the largest trade union in Central Railways—the National Railway Mazdoor Union—P.R. Menon, has been working 14 hours a day, addressing workers, holding gatemeetings and at times dropping in at railway men’s residential colonies.
But Menon is not complaining. For him and other leaders of registered trade unions with the Indian Railways, the stakes are high as the largest workforce in India and the largest railway system in the world in terms of number of employees, goes to the polls on 26-28 November. The secret ballot will decide which of the contesting unions will be accorded recognition to negotiate on their behalfwith the largest employer in the country.
Results of the polls will be announced on 3 December. Former Railway Board chairman C.L. Kaw has been appointed the chairman of the secret ballot committee that will oversee the elections. Currently, in addition to the two recognized unions, each zone has a few more unions attached to political parties.
This is the first election in the Indian Railways’ 154 years history and the railway ministry is treating it on a par with the general elections in the country. Some 2,000 polling booths are coming up across the railway network and some 5,000 railway protection force personnel will try to maintain law and order during the three-day electoral process.
The elections will bring about a significant change in the way trade unions have functioned in the railways. While traditionally two unions—the National Federation of Indian Railwaymen’s, affiliated to the Indian National Trade Union Congress, and the All Indian Railwaymen’s Federation, affiliated to the Hind Mazdoor Sabha—have been recognized unions, the Supreme Court has recently ordered the railways to hold a secret ballot.
Under the court’s guidelines, only those unions that get 35% of the votes polled or 30% of the total electorate will be recognized by the management. If a union gets over 50% of votes, it will be the only recognized union. “Our demand has always been that there should be only one union for every industry since multiple unions lead to loss of bargaining power,” Menon said.
As India’s rail system struggles with the challenges posed by an ageing infrastructure and increasing load of passenger and freight traffic, there has been a concerted effort to outsource non-core activities including catering and parcel services. Also, vast tracts of land owned by the railways are now being handed over to the private sector in an attempt to garner additional income.
All this is posing a challenge to trade unions. Says R.P. Bhatnagar, president of the Central Railway Mazdoor Sangh, another recognized railwaymen’s union, “Vacancies to various posts are not being filled and the management has been cutting down on existing jobs. As a result of this the existing staff are over loaded. In the long run, this is sure to affect the quality of service they put in.”
The railways employed some 1.8 million workers in 1974 and the number is now down to 1.4 million while the number of trains has gone up significantly, notes Menon.
The general secretary of the largest trade union in Central Railways—the National Railway Mazdoor Union—P.R. Menon, has been working 14 hours a day, addressing workers, holding gatemeetings and at times dropping in at railway men’s residential colonies.
But Menon is not complaining. For him and other leaders of registered trade unions with the Indian Railways, the stakes are high as the largest workforce in India and the largest railway system in the world in terms of number of employees, goes to the polls on 26-28 November. The secret ballot will decide which of the contesting unions will be accorded recognition to negotiate on their behalfwith the largest employer in the country.
Results of the polls will be announced on 3 December. Former Railway Board chairman C.L. Kaw has been appointed the chairman of the secret ballot committee that will oversee the elections. Currently, in addition to the two recognized unions, each zone has a few more unions attached to political parties.
This is the first election in the Indian Railways’ 154 years history and the railway ministry is treating it on a par with the general elections in the country. Some 2,000 polling booths are coming up across the railway network and some 5,000 railway protection force personnel will try to maintain law and order during the three-day electoral process.
The elections will bring about a significant change in the way trade unions have functioned in the railways. While traditionally two unions—the National Federation of Indian Railwaymen’s, affiliated to the Indian National Trade Union Congress, and the All Indian Railwaymen’s Federation, affiliated to the Hind Mazdoor Sabha—have been recognized unions, the Supreme Court has recently ordered the railways to hold a secret ballot.
Under the court’s guidelines, only those unions that get 35% of the votes polled or 30% of the total electorate will be recognized by the management. If a union gets over 50% of votes, it will be the only recognized union. “Our demand has always been that there should be only one union for every industry since multiple unions lead to loss of bargaining power,” Menon said.
As India’s rail system struggles with the challenges posed by an ageing infrastructure and increasing load of passenger and freight traffic, there has been a concerted effort to outsource non-core activities including catering and parcel services. Also, vast tracts of land owned by the railways are now being handed over to the private sector in an attempt to garner additional income.
All this is posing a challenge to trade unions. Says R.P. Bhatnagar, president of the Central Railway Mazdoor Sangh, another recognized railwaymen’s union, “Vacancies to various posts are not being filled and the management has been cutting down on existing jobs. As a result of this the existing staff are over loaded. In the long run, this is sure to affect the quality of service they put in.”
The railways employed some 1.8 million workers in 1974 and the number is now down to 1.4 million while the number of trains has gone up significantly, notes Menon.
Tatas, Ambanis, DLF interested in modernizing railway stations
Railways has identified 22 stations across India to be modernized into world class facilities; foreign firms keen, too
Astring of Indian corporations, including the Tata group, companies of the Ambani brothers, Larsen and Toubro, DLF, GVK Group and GMR Group are rushing for a slice of Indian Railways’ project of making world-class railway stations through public-private participation.
Apart from domestic players, a few leading international firms, too, have shown interest in this project. The railways has started inviting interested firms for modernizing 22 railway stations across India.
Tata Realty and Infrastructure Ltd (a 100% subsidiary of Tata Sons), the Mukesh Ambani-controlled Reliance Industries Ltd, Anil Ambani’s Reliance-ADA Group, engineering and construction major Larsen and Toubro Ltd, India’s largest listed developer DLF Ltd, GVK Group (which runs the airport in Mumbai), GMR Group (operates the Hyderabad and New Delhi airports), infrastructure developer DS Constructions Ltd and Maytas Infra Pvt. Ltd are planning to participate in the project.
Domestic players are considering the railway station projects as an extension to their existing transport, infrastructure, real estate, ports and airports businesses.
“The railway station plans are similar to airport modernization plans, though it is currently in the process of finalization. Several domestic and international companies have shown interest in this project,” said a senior Indian Railways executive, who did not want to be named.
“According to initial plans, each station will have two different terminals for passenger and cargo. To tap other income sources, these stations will have shopping malls, banks and hotels—both budget and luxury,” the executive added.
The new structure will decongest the stations, which may have three floors and a basement for parking buses and private vehicles.
“The principles of airport modernization can be applied to railway station modernization, too. There is huge potential for non-ticket-based revenues in railway stations like the concept of non-aeronautical revenues in the privately-run airports,” said G. Raghuraman, a professor at the Indian Institute of Management, Ahmedabad, who is an expert on transportation and logistics.
Raghuraman, who also authored a study on Indian Railways and its turnaround, said the public-private partnership that is mandated to run railway stations can target people visiting railway stations for receiving and sending off passenger as a potential market by offering value-added services, such as restaurants, shopping malls, and so on.
“Under the private-public partnership, the railway terminal should be a separate entity which could collect landing charges from trains like passenger service fees collected from airlines by airports. The separate entity can also impose differential landing charges on the basis of peak and non-peak hours,” Raghuraman added.
The ministry of railways has decided to develop 22 railway stations, located in metropolitan cities and major tourist centres, as world-class stations.
The ministry has already come out with a global advertisement on this project. To begin with, the ministry has appointed a consortium of business and design consultants—Hong Kong’s Terry Ferrell & Partners Ltd, the London-headquartered Ove Arup & Partners and SMEC International Pvt. Ltd of Gurgaon—to finalize the business plans for New Delhi railway station.
The consortium would submit a master plan and feasibility report by February.
Later, the mandate to develop New Delhi railway station would be given to a public-private partner consortium through competitive selection.
This player can run New Delhi station for 35 years on a design, build, finance, operate and transfer, or DBFOT, basis.
Besides New Delhi, the other 21 stations identified for development are Pune, Chhatrapati Shivaji Terminus (Mumbai), Howrah (Kolkata), Anand Vihar (Delhi), Bijwasan (Delhi), Lucknow, Amritsar, Chandigarh, Varanasi, Chennai, Thiruvananthapuram, Secunderabad, Ahmedabad, Patna, Gaya, Bhubaneswar, Mathura, Agra, Bangalore, Bhopal and Jaipur.
“We are certainly evaluating the prospects of railways station projects at metros. Getting into railway station projects is a natural extension for those who are already in businesses such as real estate development, airports and other related infrastructure,” said a Tata group executive, who did not want to be identified.
“We may be bidding only select railway stations, including New Delhi. Having a property at a place like New Delhi would not only mean making money for the company but also participating in nation building,” said Madhu Terdal, chief financial officer, corporate strategic finance, of GMR Group.
Terdal pointed out that there are similarities in executing projects such as road, airports and railway stations. “The skill set required for railways is more or less similar to other projects. We are not just looking at construction side of the business but adding value to such projects. For instance, we developed a concept of airport cities in Delhi and Hyderabad instead of just constructing terminals,” Terdal added.
That most railway stations are located in city side makes the project attractive, points out Rafi Qadar Khan, general manager, DS Constructions. “We are keen on participating in the bid for upgrading railway stations in metros and select non-metros. It gives tremendous scope as most of the railway stations are located in city side,” he said.
The Indian Railways official quoted earlier in the story said the consultant would soon come out with the feasibility and cost for developing the 22 railway stations as world-class facilities.
Astring of Indian corporations, including the Tata group, companies of the Ambani brothers, Larsen and Toubro, DLF, GVK Group and GMR Group are rushing for a slice of Indian Railways’ project of making world-class railway stations through public-private participation.
Apart from domestic players, a few leading international firms, too, have shown interest in this project. The railways has started inviting interested firms for modernizing 22 railway stations across India.
Tata Realty and Infrastructure Ltd (a 100% subsidiary of Tata Sons), the Mukesh Ambani-controlled Reliance Industries Ltd, Anil Ambani’s Reliance-ADA Group, engineering and construction major Larsen and Toubro Ltd, India’s largest listed developer DLF Ltd, GVK Group (which runs the airport in Mumbai), GMR Group (operates the Hyderabad and New Delhi airports), infrastructure developer DS Constructions Ltd and Maytas Infra Pvt. Ltd are planning to participate in the project.
Domestic players are considering the railway station projects as an extension to their existing transport, infrastructure, real estate, ports and airports businesses.
“The railway station plans are similar to airport modernization plans, though it is currently in the process of finalization. Several domestic and international companies have shown interest in this project,” said a senior Indian Railways executive, who did not want to be named.
“According to initial plans, each station will have two different terminals for passenger and cargo. To tap other income sources, these stations will have shopping malls, banks and hotels—both budget and luxury,” the executive added.
The new structure will decongest the stations, which may have three floors and a basement for parking buses and private vehicles.
“The principles of airport modernization can be applied to railway station modernization, too. There is huge potential for non-ticket-based revenues in railway stations like the concept of non-aeronautical revenues in the privately-run airports,” said G. Raghuraman, a professor at the Indian Institute of Management, Ahmedabad, who is an expert on transportation and logistics.
Raghuraman, who also authored a study on Indian Railways and its turnaround, said the public-private partnership that is mandated to run railway stations can target people visiting railway stations for receiving and sending off passenger as a potential market by offering value-added services, such as restaurants, shopping malls, and so on.
“Under the private-public partnership, the railway terminal should be a separate entity which could collect landing charges from trains like passenger service fees collected from airlines by airports. The separate entity can also impose differential landing charges on the basis of peak and non-peak hours,” Raghuraman added.
The ministry of railways has decided to develop 22 railway stations, located in metropolitan cities and major tourist centres, as world-class stations.
The ministry has already come out with a global advertisement on this project. To begin with, the ministry has appointed a consortium of business and design consultants—Hong Kong’s Terry Ferrell & Partners Ltd, the London-headquartered Ove Arup & Partners and SMEC International Pvt. Ltd of Gurgaon—to finalize the business plans for New Delhi railway station.
The consortium would submit a master plan and feasibility report by February.
Later, the mandate to develop New Delhi railway station would be given to a public-private partner consortium through competitive selection.
This player can run New Delhi station for 35 years on a design, build, finance, operate and transfer, or DBFOT, basis.
Besides New Delhi, the other 21 stations identified for development are Pune, Chhatrapati Shivaji Terminus (Mumbai), Howrah (Kolkata), Anand Vihar (Delhi), Bijwasan (Delhi), Lucknow, Amritsar, Chandigarh, Varanasi, Chennai, Thiruvananthapuram, Secunderabad, Ahmedabad, Patna, Gaya, Bhubaneswar, Mathura, Agra, Bangalore, Bhopal and Jaipur.
“We are certainly evaluating the prospects of railways station projects at metros. Getting into railway station projects is a natural extension for those who are already in businesses such as real estate development, airports and other related infrastructure,” said a Tata group executive, who did not want to be identified.
“We may be bidding only select railway stations, including New Delhi. Having a property at a place like New Delhi would not only mean making money for the company but also participating in nation building,” said Madhu Terdal, chief financial officer, corporate strategic finance, of GMR Group.
Terdal pointed out that there are similarities in executing projects such as road, airports and railway stations. “The skill set required for railways is more or less similar to other projects. We are not just looking at construction side of the business but adding value to such projects. For instance, we developed a concept of airport cities in Delhi and Hyderabad instead of just constructing terminals,” Terdal added.
That most railway stations are located in city side makes the project attractive, points out Rafi Qadar Khan, general manager, DS Constructions. “We are keen on participating in the bid for upgrading railway stations in metros and select non-metros. It gives tremendous scope as most of the railway stations are located in city side,” he said.
The Indian Railways official quoted earlier in the story said the consultant would soon come out with the feasibility and cost for developing the 22 railway stations as world-class facilities.
Saturday, February 23, 2008
Cable breakdown hits rail, air ticket sites
The government said it expected the cables to be repaired within 10 days
India’s electronic ticketing and movie booking sites such as those run by Indian Railway Catering and Tourism Corp. Ltd, or IRCTC, Yatra Online Pvt. Ltd, and PVR Ltd saw a slump in ticket sales a day after two undersea cables carrying telecom traffic were severed in the Mediterranean Sea, disrupting half the Internet and communication capacity serving India.
India’s electronic ticketing and movie booking sites such as those run by Indian Railway Catering and Tourism Corp. Ltd, or IRCTC, Yatra Online Pvt. Ltd, and PVR Ltd saw a slump in ticket sales a day after two undersea cables carrying telecom traffic were severed in the Mediterranean Sea, disrupting half the Internet and communication capacity serving India.
The government said it expected the cables to be repaired within 10 days. Traffic on the affected routes were being shifted to “other cables such as SMW-3 cable and Pacific route cables etc. to restore the telecommunication links,” it said in a statement. SMW-3 is the name of a cable connecting South-East Asia, West Asia and Europe.
Undersea optic fibre circuits, leased or owned by service providers such as Reliance Communications Ltd, or RCom, Bharti Airtel Ltd or the state-run Mahanagar Telephone Nigam Ltd (MTNL) were affected. Trade body Internet Service Providers Association of India estimated a 40-50% reduction in telecom bandwidth. The broken cables, owned by the RCom-controlled Flag Telecom Group, off the Egypt coast also affected services in that country and West Asia.
IRCTC, the online ticketing site for the Indian Railways that uses Net connectivity from MTNL, has seen a slowdown in the speed. “Since 3pm today, we have seen some fluctuation in connectivity but we are in touch with our service provider,” said a senior executive, who does not wanted to be identified. On average, the portal sells around 6,000 tickets an hour, but “that has dropped to between 1,400 and 2,400 tickets.”
MTNL leases around three-fourths of its bandwidth from Videsh Sanchar Nigam Ltd, or VSNL and the rest from RCom. While RCom has not restored services, VSNL has restored connectivity.
“Since this morning, 90% of our bandwidth is available for customers, which we have increased from VSNL,” said A. K. Arora, executive director at MTNL. He said RCom’s services are likely to be restored by 9pm Thursday, failing which “we will switch over completely to VSNL.”
Air ticketing portal Yatra.com has seen a 10-15% impact on volumes in the last 24 hours. It sells around 6,500 tickets a day, which, since last afternoon, has dropped to about 5,700. It is now routing traffic through Singapore. “We hope that with the alternative route, tomorrow morning our site should be back to normal,” said co-founder Dhruv Shringi.
Railways may lose top staff to new JVs
The Railway Board is currently bound by its own decision to not release officers on deputation to other projects
Existing production units of the Indian Railways such as locomotive and coach factories could soon see an exodus with their best engineers and managers leaving for better jobs. And ironically, most of these employees could end up in new joint ventures being floated by the railways with private sector firms.
The move to set up these joint ventures in which the railways will have a minority stake has already come in for some flak from the chairman of the Railway Parliamentary Standing Committee, Basudeb Acharia, who says that they are unnecessary because existing units have the capability to deliver all the coaches and wagons required.
“This move (to set up new units) will render existing units sick,” he adds.
A recent report submitted to the Railway Board, Indian Railways’ top decision making body, by PricewaterhouseCoopers, a consultant for the proposed production units, says the joint ventures could increase efficiencies by paying Group A and Group B officers 200% and 100% more than they currently earn. Group A and Group B are categories of employees in Indian Railways.
Two officials of Indian Railways, who did not wish to be identified, independently said this proposal was part of the consultant’s report. However, the PricewaterhouseCoopers consultant in charge of the project denied that the firm had made any such recommendation in its report.
The recommendation is significant because it suggests that the new joint venture companies being set up hire people from the railways and pay them more.
According to senior railways officials, production units such as the Diesel Locomotive Works (Varanasi, Uttar Pradesh), Chittaranjan Locomotive Works (Chittaranjan, West Bengal) and Integral Coach Factory (Chennai, Tamil Nadu) will have to compete with the new outfits to retain their best talent.
“The new units will bring in competition. All the (existing) production units will have a competitor each and the railways will have to fight to keep their staff,” says former railway board chairman J.P. Batra.
The Railway Board is currently bound by its own decision to not release officers on deputation to other projects after it lost hundreds of engineers and officers to the Delhi Metro Rail Corp.
The railways is already facing a shortage of engineers and managers. It has around 6,000 Group A officers, of whom around 600 are on deputation with public sector firms that fall under the railways, such as IRCON International Ltd, RITES and Indian Railways Catering and Tourism Corp. Indian Railways actually needs at least double the number, says a senior official.
Overall, the railways employs around 1.4 million people, carried over six billion passengers last year and operates around 9,000 passenger trains and 5,000 freight trains. Given its size of operations, it also employs the largest pool of engineers in the country.
To meet a surging demand for more coaches and wagons, the railways decided in this years Railway Budget to set up new production units in which the ministry will hold a 26% stake with the likely majority partners being large companies such as GE Transportation, Bombardier Transportation and Siemens AG.
“Without staffing support from the railways, these private players will not be able to run the new units,” says an Indian Railways officer, who did not wish to be identified.
Railways officers have asked the Department of Personnel and Training to allow them to participate in projects outside the ministry. Meanwhile, the Indian Railway Promotee Officers’ Federation has also suggested to the ministry that they be allowed to spend up to five years in the private sector.
Lalu Prasad puts railways’ budget hotels project on hold
Winners of the bid process yet to be allotted any land; Officer handling the project sent on leave
Indian Railways has put on hold a project to develop 100 budget hotels on railway land. The estimated cost for 20 such hotels—tenders for which were awarded earlier this year—is around Rs4,000 crore. But the Railway Board, the top management body of the railways, is yet to allot the winning developers any land.
The hotels were to be developed through the public-private partnership model: the railways was to provide the land and the developers were to build and operate the hotels and pay the railways a share of revenues.
The decision to build hotels appeared like a good use of surplus railway land (Indian Railways has considerable surplus land across the country). An economy that is growing at more than 9% has resulted in an increase in the number of domestic and international travellers. This has increased demand for hotel rooms, especially in the budget (or affordable) category.
Sudhir Kumar, officer on special duty to railway minister Lalu Prasad, had previously said that the department planned to “leverage surplus land and use the revenue earned to run better trains and provide modern amenities for the passengers.”
Early this year, the ministry awarded 20 tenders for construction of hotels; now, it has decided to put these on hold.
Companies that were awarded tenders include consortia of GL Hotels Ltd and Pan India Paryatan Ltd; Zoom Royal Orchid; and Signet Hotels.
“I just have no clue as to what we are supposed to do. We have letters of approval from the ministry but are not being allotted land. How long can we wait?” asked one of the successful bidders who did not wish to be identified.
In a related development, the managing director of Indian Railways Catering and Tourism Corporation P.K. Goel, who was coordinating these projects, was asked to proceed on leave by railway minister Lalu Prasad Yadav. Goel said he was “not in the loop” regarding the fate of these hotel projects. IRCTC acting managing director Nalin Shinghal said he was not willing to discuss the budget hotels project.
Meanwhile, the Rail Land Development Authority, a newly set up entity mandated to develop surplus land owned by the railways, has claimed that it should be allowed to handle the hospitality projects.
“How can that be allowed? IRCTC has a mandate from the cabinet to implement these projects,” said a railway official who did not wish to be identified.
Kumar said the ministry was aware of the problems pertaining to the budget hotels and they were being resolved.
A person familiar with the development said the minister was concerned that his political opponents may point out flaws in the tendering process, even if these were perceived ones, and tarnish his and his party’s image before the elections which, according to some political analysts, could happen as early as next year. This person did not wish to be identified. The minister was unavailable for comment.
Railway Board chairman K.C. Jena refused to take calls to discuss the issue.
“It is quite likely (Indian) Railways may not go ahead with the project at all if the minister is not convinced,” said a member of the Railway Board who did not wish to be identified.
Friday, February 22, 2008
Railway Budget at a glance
Lalu Prasad’s fourth railway budget carries forward the great turnover trend and woos the common Indian
Freight rates
Freight target
In the pipeline
Checking the Indian Railways coffer
Passenger fares
1. Sleeper class fares class cut by 4%
2. First class AC fare cut by 3% in peak season and 6% in lean season
Freight rates
1. Diesel, petrol freight rates cut by 5%
2. Freight rate on iron ore cut by 6%
Freight target
1. Freight loading target for FY08 raised to 785mt
In the pipeline
1. 32 new trains to be introduced
2. Railways to invest in container operations in a big way in the next five years
3. Big investment for 20,000 km high density network
4. Plans to start three-storey container trains
5. Lalu Prasad plans rail electrification expansion in the 11th Plan, in addition to increased IT spending
6. Plans new wagons to replace old ones
7. Plans toImprove amenities at railway stations
8. Railway tickets to be made available at petrol pumps and ATMs
9. Investment for freight corridor at Rs30,000 cr
10. About Rs5,000 cr investment for Mumbai local trains
Checking the Indian Railways coffer
1. Railways expected to make a profit of Rs20,000 cr in FY 07against Rs.14,700 cr a year before
2. Freight earnings up 17% in nine months
3. Fund balance at Rs16,000 cr
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