Focus on Growth & Opportunities for Indian · PDF fileIndian Railways An Assessment of Major...

Focus on Growth & Opportunities for Indian Railways

An Assessment of Major Transportation Modes

Submitted by :

Ankit Rastogi Research Associate, IRITM, Lucknow

Facilitated by :

Sri Ravij Seth FA & Sr. Prof. (Fin. & PPP), IRITM, Lucknow

Sometimes feels, it’s too much now..... Struggling with same challenge daily while travelling from

home to office and from office to home. It similar to the winning a war, really trust me!! First you

have to check the local conveyance to reach bus stop, railway station or metro station, airport. Then

you have to clear the hurdle of getting ticket at right price. Then finally you get chance to sit on your

seat, don’t remember to share/adjust your seat with other passengers. So do I really got that , for

what I struggle an paid appropriate fare charges. Somehow if you manage to adjust with

environment, then most of the time that particular mode of transportation is going to be delayed by

new reasons. So if you have to travel 10-15 km, then you have to keep 02 hours apart from your

scheduled work. But we irritate at that moment and after some time forget about it. I think we are

very adjustable by nature so we manage each and every time and it becomes a habit of us.

We are 2nd

largest country by population and next big economic power in the world. These all big

achievements just give few minutes’ satisfaction but not the permanent solution of this particular

issue. Every time when people think to travel from one destination to another, they become

horrified by just thinking of that. Either they wish to travel in the vicinity or to travel far away they

have to consider lots of factors. The primaryfactors considered by every travellersuch as getting a

confirm ticket according to their plan, getting a conveyance to reach the appropriate starting point

and on time. They also have additional concerns about their journey like Safety, Timely, Economical,

Efficient, Safe, Reliable, environment friendly and regionally balanced transport system and so

on.This paper features analysis on the key developments and opportunities across various modes of

transportation — including road, rail, air, ports and water— which could rightly be termed as Focus

on Growth & Opportunities for Indian Railways. In this context, I have researched the potential

projects and trends imperative to realize an efficient, effective, lean and reliable Indian

transportation network.

In present days it becomes very veryhard to take care all of these factors under consideration and

we all are compromising with the present situation. All these issues are present with all major

transportation modes whether it’s a Railway...the heart line of the country, Roads....connecting the

dots or Aviation.... lets fly efficiently. We all have encountered these problems at least once in our

life time... I know lots of you will agree with me.

It's surprising me that, when we have great policies, better technology and huge man power, so why

we are lacking in the transportation area. The Transportationcomes under the Infrastructure sub -

sectorof Service sector. And agree with you that it requires enormous investments. Since

governments is lacking on this front so they embraced the PPP model for fast development of

infrastructure. Under PPP mode there is a lot of projects are done many are under progress. The PPP

mode gives win - win situation to both of the parties ie. for government and private players.

But except PPP still there is a lot

far behind in this sector in comparison

we are the fastest growing country in terms of population and economy

worry in India, as international funding is limited. The inefficient infrastructure hinders

growth. Infrastructure is also being affected by global forces. The

are having an impact on the infrastructure sector in India. They directly affect the general economy

and also specific sectors such as railway freig

slowdowns in larger and more developed economies affect its exports and imports and growth rate.

There is great need of better transportation mode because of several reasons such as very fast

growing population, urbanization, Job opportunities,

Any up/down movement in the infrastructure sector directly impact the growth of the economy of

the nation. Infrastructure development acts

prosperity. The development of cities mainly depends upon their physical, social and institutional

culture. Hence, the importance of transportation is paramount.

diverse; it serves the need of billions of people. We can see this sector’s contribution to the nation’s

GDP in the figure (1).

The vision of the twelfth five year plan (2012

Sustainable, Economical, Efficient, Safe, Reliable, enviro

transport system.Major transport investments may have significant impacts that are not well

captured through conventional cost

transport infrastructure investments tend to focus on the

travel, including time savings for travellers, cost savings for operators, and reductions in aspects like

a lot of scope for the improvement in the transportation sector. We are

far behind in this sector in comparison to the rest of world or other developing countries. In present,

we are the fastest growing country in terms of population and economy. Finance is a major source of

worry in India, as international funding is limited. The inefficient infrastructure hinders

growth. Infrastructure is also being affected by global forces. The Euro zone and the U.S. economy


and also specific sectors such as railway freight. India is an integrated and globalized country



tion, urbanization, Job opportunities, increasing income level, access to basic utilities.


development acts as catalyst for nation’s economic development

The development of cities mainly depends upon their physical, social and institutional

culture. Hence, the importance of transportation is paramount. India’s transport sector is large and

illions of people. We can see this sector’s contribution to the nation’s

The vision of the twelfth five year plan (2012-17) is motivated by a modal mix which will lead to a

Sustainable, Economical, Efficient, Safe, Reliable, environment friendly and regionally balanced

Major transport investments may have significant impacts that are not well

captured through conventional cost-benefit analysis. Conventional economic evaluations of major

stments tend to focus on the direct costs and benefits arising from


improvement in the transportation sector. We are

to the rest of world or other developing countries. In present,

Finance is a major source of

worry in India, as international funding is limited. The inefficient infrastructure hinders economic

and the U.S. economy


ht. India is an integrated and globalized country—



level, access to basic utilities.


conomic development and

The development of cities mainly depends upon their physical, social and institutional

India’s transport sector is large and

illions of people. We can see this sector’s contribution to the nation’s

17) is motivated by a modal mix which will lead to a

nment friendly and regionally balanced

Major transport investments may have significant impacts that are not well

benefit analysis. Conventional economic evaluations of major

direct costs and benefits arising from


air pollution, noise, and accidents.The impact in terms of economic exchanges, accessibility, and

productivity gains are expected to be significant, and extend beyond traditional transport savings.

Now you are excited to know the reasons behind these kind inefficient transportation modes. We

will analyze the all major transportation modes with special focus on their passenger and freight

operations, and the current sub sector trends. So before going in details, just have a overview of all

four major transportation modes performance.

FDI Flows to infrastructure (US $ million)

Sector 2009-10 2010-11 2010-11 Apr-Nov

2011 2012

Air Transport 22.6 136.00 31.22 27.50 13.72

Sea Transport

284.9 300.51 129.36 99.42 36.23

Ports 65.4 10.92 0.00 0.00 0.00

Railway Related Components

34.2 70.66 42.77 35.16 17.79

Share and Growth of India’s Services Sector (at factor cost) (%)

Transport 2000-

01

2005-

06

2006-

07

2007-

08

2008-

09

2009-

10

2010-

11

2011-

12

Railways 1.1 0.9 0.9 1.0 0.9 0.9 0.8 0.7

4.1 7.5 11.1 9.8 7.7 8.8 5.9 7.5

Transport

by other

means

5.0 5.7 5.7 5.6 5.5 5.3 5.3 5.4

7.7 9.3 9.0 8.7 5.3 7.3 8.2 8.6

Indicators: Performance of India’s service sector

Sector Indicators Unit Period

2008-09 2009-10 2010-11 2011-12 2012-13

Aviation

Airline

passengers

(domestic and

international)

Million 49.5 54.5 64.5 70.2 67.5

Ports Port traffic Million

Tonnes 744.02 850.03 885.45 911.68 455.77

Railways

Freight traffic by

railways

Million

Tonnes 833.31 887.99 832.75 969.78 735.32

Net tonne km of

railways million 538226 584760 444515 639768 470956

Comparison between Major transportation modes

Mode Growing Demand Opportunities Policy Support

Railways

• Greater connectivity

between different cities,

towns and villages has led

to increased road traffic

over the years

• There has been increasing

movement of goods within

the country as well

• Freight traffic is set to

increase manifold, thanks

to investments and

private sector

participation

• Metro rail projects are

being envisaged across

many cities over the next

ten years

• Government has increased

the scope of PPP, to beyond

providing maintenance and

other such supporting roles

• Government is providing new

lines, increasing the rolling

stock to build up capacity

Roads

• Greater connectivity

between different cities,

towns and villages has led

to increased road traffic

over the years

• There has been increasing

movement of goods within

the country as well

• Roads and bridge

infrastructure industry to

be worth USD21 billion by

FY17

• Approximately 9,500

kilometres of projects are

expected to be awarded

by NHAI during 2012-13

• Road infrastructure is a key

government priority; the

sector has received strong

budgetary support over the

years

• Encouragement to private

sector participation;

relaxation of foreign

investment norms

Aviation

• Growth in passenger traffic

likely to go up as incomes

rise and more tourists flow

in

• Freight traffic also likely to

go up as trade with the rest

of the world increases

• Growth in aviation

accentuating demand for

MRO facilities

• Bright prospects due to

location advantage; there

is no MRO facility within

a five - hour fly zone of

the country

• By 2020, MRO industry is

likely to touch USD1.5

billion

• The government has been

encouraging private sector

participation

• Tax incentives for developers;

liberalisation of the aviation

sector - Open Sky Policy

• Government has allowed 49

per cent FDI in aviation for

foreign carriers

Evolution of major Transportation Sectors:

1. Railways

• India has the world’s fourth largest rail network and also second largest under single

management,

• It has a total route network of about 64,500 km spread across 8,241 stations,

• Operates more than 19,000 trains every day,

• It has 229,381 wagons, 59,713 coaches and 8,417 locomotives,

• IR’s total assets at the end of FY11 amounted to USD55.5 billion,

Parameters Unit FY1951 FY 2011

Net Revenues INR billion 0.5 63.5

Passenger Traffic Billion 1.3 7.8

Freight Traffic Million metric

tonnes

73.2 926.4

No of Stations -- 5,976 8,241

Running Track Km 59,315 87,114

2. Roads

• India has the second largest road network in the world (4.1 million kilometres)

• Roads bear about 90 per cent of the country’s passenger traffic and 65 per cent of freight

traffic

Parameters Unit FY03 FY 2011

Length of National

highways Km

58,112 71,772

Passenger vehicle

sales

707,000 2,63,787

NHDP toll collection USD

million

64.5 435

Highway projects

awarded by NHAI Km

677 6491

Share of infrastructure

in total bank funding %

2.3 14

3. Aviation

• 9th largest civil aviation market in the world

• India is ranked 4th in domestic passenger volumes (45.3 million*)

• India’s civil aviation market is set to become the world’s 3rd largest by 2020

• India has 136 airports, 128 of which are owned by AAI

Parameters Unit FY 2000 FY 2011

Scheduled airlines:

distance flown mn km

199 762

Non-scheduled airlines

in operation --

39 136

Number of aircraft -- 225 1188 (2012)

Passenger handling

capacity at airports million

66 233 million (2012)

Number of operational

airports --

50 125 (2012)

Aircraft movement Freight Traffic Passenger Traffic

International airports 79 % 96% 84%

Others 21% 4% 16%

Significant Government Spending On Infrastructure

The Indian government has earmarked about INR 50,000 billion according to the XII Five

Year plan (2012-17) against INR 25,000 billion in the XI Five year Plan (2007-12) for

infrastructure investment. Around one-fourth of this investment is expected to be in roads,

rail, and aviation and port projects representing a sharper focus on transportation

infrastructure. For example, INR 281 billion has been allocated for the 2700km-long

Dedicated Rail Freight Corridor project.

Source: Planning Commission of India, KPMG Analysis

Comparison on Key parameter

Source: Cygnus Business Consulting & Research, KPMG Analysis

Disaster Risk Shadow on PPP Projects

Few weeks back there was climatic disaster in Uttarakhand and there is debate going on

Development V/s Disaster management. So I am including this topic of “Disaster Risk

Shadow on PPP Projects” which gives essences over the debate topic. As all

infrastructure projects are now executing through PPP mode, so it is very important to

minimize the disaster results. As we all know that in PPP projects the government has

very low control over the executing private partners and latter has little interest in long

term safety issues of the projects. According to the Global Assessment Report (GAR) on

disaster risk reduction for Asia pacific, an UN study notified India that its vast

infrastructure assets exposed to disaster risk. These partnership projects transfer their

shared costs to the public sector as they do not necessarily lead to improved disaster risk

assessment and management. As per report projection during 12th Five Year Plan, an

investment in infrastructure development is worth about $1 trillion property facing

disaster risk from unsafe public assets. The report puts the estimated exposure of

economic assets in Mumbai alone was increased from $46 billion in 2005 to $1598 billion

in 2070.

In the middle and low income countries the exposure such as urban growth, natural and

artificial subsidence, sea level rise and climate change are likely to rise significantly. Its

advised by the Un to the government to integrate disaster risk information into

investment decisions; building public private risk governance and disclosing disaster risks

and costs on balance sheets of companies. The GAR concerns specifically in areas of

SEZs, Globalised Supply Chains which enhance the vulnerability of disaster.

Railways

Spanning 64,456 km with more than 7,133 railway stations, India’s rail network is the largest

in Asia and the second largest in the world (behind the US).26 The Indian Railways operates

19,000 trains daily, transporting 2.65 MMT of freight and 23 million passengers across the

country. However India’s rail infrastructure suffers from chronic under-investment, due to

which its potential for freight movement remains largely untapped. Rail freight has grown at

around 7 % over the past five years. It is expected touch the 1 billion ton mark in 2013, with a

31% share of total freight movement across all modes of transport. This is in stark contrast to

its share of 89% in 1951.Considering the requirements of the economy and size of the

country, the expansion of the railway network has been inadequate. Indian Railways have

added 11,864 km of new lines since independence.It has not been able to cover major areas

in many states and has very little presence in the North-East States and the Himalayan

region.The network needs extensive modernisation, increase of speeds, improvement in

safety and modernisation of rolling stock to meet the needs of a rapidly growing economy.

Indian Railway’s Financial Position Overview

Source: 12th

Five year Plan Report

The Indian railways (IR) have consistently lost out to road, as the preferred mode for goods

movement across the country. While traffic on rail has grown more than tenfold between

1951 and 2007, rail track length has only grown 1.4 times during the same period. Moreover,

trunk routes constitute merely 16% of the network and transport morethan 50% of total

traffic, resulting in major congestion and a low average speed of 25 km/hr for freight trains.27

As compared to global standards, India’s track length per sq. km. is unfavourable at 44 km of

track per 1,000 sq. km. of arable land, as against 137 km in the US and 417 km in Germany.

Traffic

Passenger Traffic went up because of rising income, urbanisation driving passenger traffic

growth. Urban population in India increased from 17.3 per cent of the total population in

1951 to 31.2 per cent in 2011; this has led to increase in traffic between urban and rural areas

in the country. Improvement of urban-rural connectivity by rail has been another major

contributor to passenger growth. Further, passenger traffic continues to enjoy significant

priority over rail freight. In addition to first right of movement, passenger rates are highly

subsidized by freight

operations utilizing up to

72.3% of network capacity

but contributing only 30% to

revenue, while passenger

segment accounts only for

27.7%.

Source: KPMG in India

Analysis

Despite these apparent limitations, rail continues to be among the fastest and most

economical modes of transport for freight in India. Two-thirds of freight in India is transported

over medium and long distances, for which rail transportation offers significant time and cost

savings.

Percentage Share of Rail - Road in Freight Traffic Movement

Source:World

Bank.www.databank.worl

dbank.org

The capital cost of setting up rail capa

modes such as expressways, w

transportation, specifically on high

other modes. Additionally, rail of

The originating passenger traffic achieved in

millionwhich is,3.2% lower than the original Eleventh

cent higher than the revised target of the Eleventh Plan.

Railways are making large revenue

suburban segments. Non-revisionof

IR.

Infrastructure Capacity Creation

The Eleventh Plan attempted a paradigm shift from the earlier incremental approaches to one of

significant infrastructure capacity addition to handle the quantum increase in traffic levels and to

sustain mobility on the network by setting ambitious targets as compared to the performance during

the Tenth Plan. The targets in respect of new lines and electrification have be

The expanding requirements of the economy will need much faster expansion of the freight network

along with its ability to carry larger freight per wagon, improve efficiency of the Rail system to deliver

it faster and expand the network. There will also be need to improve the share of the Railways in the

overall national freight market. With increasing incomes, passenger traffic will increase but plan for

expansion must factor in the fact that demand will

will be willing to pay.

The rail network has to develop a strategy to be part of an effective multi

ensure environmental-friendly and economically efficient transport movement.

be prioritised in the important areas, vi

stock, last mile rail linkages and port connectivity

The capital cost of setting up rail capacity is around 40% lower than that of comparable

modes such as expressways, when measured on a ton-kilometer basis. Further, costs of rail

transportation, specifically on high-traffic density corridors, are considerably lower than for

other modes. Additionally, rail offers speed and capacity-related benefits.

g passenger traffic achieved in the terminal year of the Eleventh Plan is 8,139

than the original Eleventh Plan target of 8,400 m

than the revised target of the Eleventh Plan.

ilways are making large revenue losses in passenger traffic both in suburban as well as

revisionof tariff for several years has led to poor financial

Source: 12th

Five year plan Report

Infrastructure Capacity Creation


ure capacity addition to handle the quantum increase in traffic levels and to


the Tenth Plan. The targets in respect of new lines and electrification have been exceeded.

Source: 12th






expansion must factor in the fact that demand will be for better quality services for which passengers

The rail network has to develop a strategy to be part of an effective multi-modal transport system to

friendly and economically efficient transport movement.Investment

important areas, viz. Dedicated Freight Corridors, high capacity rolling

and port connectivity.

than that of comparable

basis. Further, costs of rail

considerably lower than for

the terminal year of the Eleventh Plan is 8,139

Plan target of 8,400 million but 0.75 per

fic both in suburban as well as non-

years has led to poor financial health of



ure capacity addition to handle the quantum increase in traffic levels and to


en exceeded.






be for better quality services for which passengers

modal transport system to

nvestment needs to

high capacity rolling

India has a well-developed Rail network in dire need of modernization and is struggling to

increase its highway and expressways.

Rationalization of Railway freight and passenger fare:

Between 2004-05 and 2010-11 the IR’s input costs increased by 10.6% per annum. But

passenger fares remained unchanged / reduced in lower classes. This causes constraining

internal resource generation, essential for replacement / renewal of assets, operation and

maintenance activities and critical safety and passenger amenity works. Also the cross-

subsidy through the freight business was no longer feasible because of fast evolving

competition from other modes of transport. Keeping these factors in mind, an increase in

passenger fares was announced on 9 January 2013, effective from the January 2013.

Up gradation of Passenger Amenities

To provide the basic facilities like drinking water, functioning toilets, catering services, waiting rooms,

dormitories especially for lady passengers and better signage, In 2009 the Adarsh station scheme was

introduced. Out of identified 976

stations 616 stations have been

developed as Adarsh stations.

The other initiatives are, the UTS

was made available at 10,172

counters (nov ‘12), the total

installed AVTMs was around 808

(12-13), the FOIS (Freight Operation

information System) and its module

RMS (Rake Management System)

was installed at more stations.

High-Speed Passenger Trains

Indian Railways is adopting a multi-

pronged strategy to provide safer,

faster, cleaner, and more

comfortable passenger trains. Seven

corridors have been identified for

conducting pre-feasibility studies for

Source: http://www.uic.org/IMG/jpg/carte_inde.jpg

running high-speed trains (popularly referred to as bullet trains) at speeds above 350 kmph.These

corridors will be set up through PPP route. Initially, the Mumbai-Ahmedabad corridor has been taken

up for which the pre-feasibility study has been completed. Work is in progress in respect of the

remaining corridors. A study is also being done on the Delhi-Mumbai route for raising the speed of

passenger trains from 160 kmph to 200 kmph, i.e. for running semi-high speed trains.

Major trends in Indian Railways

1. There is a rapid increase in demand for urban mass transportation systems in the country.

Several metro rail projects are in progress to improve connectivity within cities; the Delhi

Metro has emerged as an internationally acclaimed venture.

2. Indian Railways (IR) launched mobile ticketing services in August 2011 to make the ticket

issuing process more efficient. Users can directly buy a ticket from their mobiles that would be

delivered to them through a non-transferable SMS.

3. IR has attracted increasing investments from overseas through strategic alliances with various

countries over the last few years. Subsidiaries of foreign companies are being set up to cater

to the huge demand offered by IR.

4. IR is planning to build seven high-speed rail corridors to provide faster rail connectivity across

the country. The trains will be capable of running at speeds up to 300 kilometres per hour.

Modernisation of Indian Railways

To modernize Indian Railways, the focus is on two fundamental drivers - Safety and Growth and along

a five-pronged strategy

1. Modernise core assets - They are key

revenue generating assets

2. Explore new revenue models - To meet the

funding needs for modernisation and growth

3. Review projects - To ensure financial

viability, social benefits, and timely

implementation

4. Focus on enablers - For a holistic and long

term approach to modernisation and

execution

5. Mobilize resources - To capitalise on an

opportunity

Benefits of High Speed Rail...more Sustainable Transportation

• Improve the economic development of the regions served, increase their competitiveness and

reduce their peripherally;

• Contribute to the country’s longer-term environmental goals by attracting passengers from air

and car, whilst also taking the pressure off runway capacity and

• Through the release of rail capacity, unlock the development of improved commuter and

regional services whilst permitting improvement in both the capacity and transit times of

freight services. The latter would make a significant contribution to the development of the

strategic freight network that the rail industry has been developing.

• There is need for capacity as well as speed. New infrastructure should be capable of delivering

Greater Capacity, Improved Journey Times & Support High Speed Services.

• Other benefits would be in terms of a reducing the carbon footprint of passengers attracted

from air and car, contributing to potentially reduced demand for runway capacity and

encouraging a significant shift from car, with a reduction in congestion. More work is required

to understand and quantify such benefits.

• High speed lines based on advanced rail technology have the advantage of being compatible

with the conventional rail network, so that trains can use existing city centre stations, or run

through to destinations where a new high speed line could not be justified.

• Whilst energy consumption increases as speed rises, this can be offset through effective system

and rolling stock design, and the higher capacity of trains mean that emissions per passenger

kilometre remain low compared with other modes. Eurostar, for example, offers passengers a

carbon neutral journey.

• The lead time for development and construction of HSR is very high such as 20 years, and this is

why it is right to plan now for lines that will be required in near future. It is also why it is

essential that Government continues to invest in upgrading capacity and capability of existing

routes to meet the growth in demand of future.

• Impact the course of future development within the region.

• At the regional scale, the increased accessibility afforded by high speed rail can serve to

concentrate development in and around communities

• Sustainability speaks to decision making that considers the impacts of our actions now on

future generations. When developing major infrastructure, such as high-speed rail in India,

program designers should develop a program that safeguards the capacity of future

generations to enjoy a quality life. This is achieved by balancing a variety of factors, including

environmental, economic, political and cultural factors to develop a high-speed rail system that

will benefit the India for decades to come.

Strategy

High speed rail is a very complex system, comprised by state of the art of a lot of elements (Track

Layout, Civil Works, Bridges, Tunnels, Track, Switches, Stations Situation and Type, Rolling Stock from

Technical Point Of View, Rolling Stock from Customer Point Of View, Traffic Forecasting, Marketing,

Financing, Juridical Aspects, Environment, Communication Programme, Etc.). High speed rail is a highly

beneficial transport system for customers and Society, not applicable in the same conditions in every

case. The conception of one of such system is not unique and it must be adapted to each case and

each country. High Speed is a key element for interurban passengers transport in the future due to

capacity, respect to environment and safety.

Background

The expected development of high speed railways at the global level in the coming years is extremely

spectacular: in the next 15 years the number of kilometres of new dedicated high speed lines will

multiply by four the existing ones (built during the last 43 years). Also the industrial development (for

example, more than 5.000 trains sets expected in the next 20 years) and the financial requirements

calls for a particular attention to high speed railways.

Global High Speed Passenger Rail Development (As Of July 2012)

Source: Data obtained from the International Railway Union’s high-speed rail website, accessed on 6 January

2013:http://www.uic.org/IMG/pdf/20120701_a1_high_speed_lines_in_the_world.pdf

Dedicated Freight Corridor (DFC)

Dedicated Freight Corridor can be justifiably called an innovation in rail transport in India because of a

number of reasons. The average speed of freight trains will go up from 25 kmph to 70 kmph which will

reduce the transit time by less than half from the present leves.To drive a fundamental shift in the

modal mix from less efficient, usually uneconomic and environmentally unfriendly road-based

transportation to rail, projects similar to the envisioned DFC would play an important role in the

future.

However, it is expected to mark a paradigm shift in the transportation scenario, resulting from the

segregation of freight on trunk routes, improving service delivery and generating additional freight-

carrying capacity. The project envisages the construction of two corridors, one each on the west and

east routes, spanning a total length of about 3,300 km. The Eastern Corridor, starting from Ludhiana in

Punjab, will pass through the states of Haryana, Uttar Pradesh and Bihar and terminate at Dankuni in

West Bengal. The Western Corridor will run from Dadri to Mumbai, passing through the states of

Delhi, Haryana, Rajasthan, Gujarat and Maharashtra.

Objectives ofDedicated Freight Corridor (DFC)

1. Reduction in unit cost of tranportation by spreading up freight train operations and increasing

productivity.

2. Increase of rail freight share in modal mix through customized logistic services.

3. Segregation of frieght and passenger lines for focused approach

4. Creation of additional rail frieght capacity to cater to high levels of transport demand

5. Introduction of time tabled freight services for guaranted transit time and improved service

quality

6. Adoption of high end technlogy to track freight and real time data analysis

Proposed timelines for DFC construction

AviationAviation

Aviation is the fastest means of transportand has expanded rapidly with the opening up of domestic

skies to the private carriers in the second half of the 10th

plan via public private partnership

investment in the airport infrastructure. The air transport on long distance routes handles

substantial traffic. This sector also enhances the productivity and efficiency in the movement of

goods and services. It also has an important role to play on routes which involve difficult territory.

Aviation sector contributes significantly in development by generating employment opportunities.

As per estimation, the total manpower requirement (including numbers of pilots, cabin crew, aircraft

engineers and technicians, ground handling staff, cargo handling staff, administrative and sales staff)

of airlines will rise from 62000 in 2011 to 117000 by 2017. Aviation to India becomes strategically

important in the absence of widespread water ways network and the delayed development of

infrastructure projects related to other modes of transportation.

India’s Major Airports with Passenger Traffic

Source: AAI

Air cargo works as a vital link between domestic and international markets.The total volume of air

cargo traffic presently constitutes about 1 per cent of total trade, it accounts for close to 29 per cent

of total trade value. This present status is only been possible when in 2009 GoI adopted Open Sky

policy for the air cargo sector. This sector has seen the significant growth from 0.7 MMT in 1995-96

to 2.7 MMT in 2011-12. As Indian in-house demand increases in equivalent with

enhancedintegration with the global economy, it is foreseen that air freight traffic would grow five

times over the next two decades.

Growth projection for the 12

Passenger/Freight Passenger (millions)

Domestic

International

Cargo (MMTPA)

Domestic

International

Performance of Major Operators

Source: All statistics are for the month of September 2012 as published

India has become the ninth largest

civil aviation market in the world.

According to an estimate, airlines in

India are expected to add around

370 aircrafts worth Rs. 150000 Cr to

their fleet by 2017. There are

several major drivers behind the

growth of aviation sector in India

such as increased FDI inflows

higher house hold incomes, the

Entry of low cost carriers increased

23.8

27.2

129.6

69

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Jet (Airways +lite)

Indigo

Pe

rce

nta

ge

Market Share (%)

12th Five Year Plan

2011 2016-17 Average annual Rate of Growth

106 209

38 60

0.9 1.7

1.5 2.7

Source: 12

Performance of Major Operators

Source: All statistics are for the month of September 2012 as published by Directorate General of Civil

India has become the ninth largest

civil aviation market in the world.

According to an estimate, airlines in

India are expected to add around

370 aircrafts worth Rs. 150000 Cr to

There are

several major drivers behind the

growth of aviation sector in India

ows,

, the

Entry of low cost carriers increased

Source: India Brand Equity Foundation

27.219.3 18.5

7.6

6965.2 64.4

67.7

Indigo Air India Spicejet Go Air

Operators

Market Share (%) Flight Occupancy Rate (%)

Average annual Rate of Growth

12%

8%

12%

10%

Source: 12th

Five Year Plan

by Directorate General of Civil

Aviation

: India Brand Equity Foundation

3.5

58.4

Kingfisher

cargo movement,strong economic growth, surging tourist inflow sustained business growth and

supporting government policies are the major drivers for the growth of aviationsector in India.

According to the Forecasts made by AAI, for the next 5 years, it has projected a sustainable growth

rate of 16% for international and 20% for domestic aviation sector.

There are total 136 airports are in India, in which 128 are managed by AAI and rest of them are by

non-AAI. There are also some achievements of the Indian aviation sector which they achieved during

2000-2012. The no of operational airports are increased from 50 in the year 2000 to 125 in the year

2012. There is also increase in the aircraft from 225 in the year 2000 to 1188 in the year 2012. And

result of these two causes the expansion of passenger handling capacity at airports from 66 million

to 233 million in between 2000-2012.

The growth in total passenger traffic has been robust recent years with a passenger traffic record of

162.6 million in 2012 along with growth rate of 13.4%. During the 2012 domestic passenger traffic

grew 15.7 per cent while international passenger traffic expanded 7.2 per cent.

Source: India Brand Equity Foundation

The above figures stats reflects from 11th

plan period to 12th

plan period, that there is significant and

continuous growth in both passenger and Freight traffic in domestic and international segments.

Total freight traffic increased from 1.40 MT in the year to the 2.26 MT in the year 2012. And it is

expected that the freight traffic will be 5 times the current level by the end of the two decades. In

2012, domestic freight traffic was 0.804 MT whereas international freight traffic was 1.494 MT.

Major Trends of the Airport Sector

During this growth period the, this industry has been witness of several changes and trends, such as

policy initiatives taken by government to increase private sector participation. At present movement

there are 6 major private sector player linked with it. There is rise in per capita income, more

disposable income and growing middle in comparison to previous years, hence more and more

people are travelling by air. There is also hike in user development fees by airport developers and

operators. The another important trend is the focus on non-aeronautical revenue like increase the

beverages and food retail segment at airports due to absence of complementary meals in low – cost

airlines. And all the above mentioned reasons aid higher aircraft movement.

Investment in Airport sector

Through the PPP mode the private sector investments in airport has raised up. There are five most

remarkable examples of international airports via PPP mode. The investment in airport

infrastructure has grown substantially over the last three Five-Year plans with Rs. 361.4 billion of

investment set aside in the 11th

plan. According to 12th

Five Year plan, there is a provision for

investments of Rs. 675 billion. Apart from those private investments has multiplied 2.2 times, from

34.4 % during the 10th

plan to 74.1% during the 12th

plan.

Air Passenger & Cargo Traffic:

Traffic 2011 2012

Domestic passenger 108 million 106 million

International passenger 36.20 million 37.8 million

Domestic cargo Almost same as in the

corresponding period of the next

year

0.73 MMT

International cargo 1.37 MMT 1.30 MMT

During year 2012, AI’s passenger load factor was 70.9 % and yield at Rs. 4.31 per revenue passenger

kilometre and it’s expected that company will achieve positive EBIDTA (earnings before income,

taxes, depreciation and Amortization) in the results for the Financial Year 2012-13.

The aim of 11th plan was to provide world class infrastructure for safe, reliable and affordable air

services, hence increase the passenger growth and cargo traffic and air connectivity to remote and

inaccessible areas. Now as per 12th

plan, GoI aims to propel India among the top five civil aviation

markets in the world with the base of the 11th

plan.

Airport Infrastructure

The Twelfth Five Year Plan (2012-17) envisages an investment of Rs. 65,000 crore at Indian airports,

of which a contribution of about Rs. 50,000 crore is expected from the private sector.

As per the investment plans of the operators, the passenger terminal capacity is expected to be 230-

240 million by 2012 and by 2017 it would be about 370 million. According to an independent

estimate there will be an additional requirement of 30 functional airports by the end of 2017 and

about 180 functional airports in the next 10 years. Because of this substantial traffic growth in

passenger and cargo requires ample amount of investment for construction of new airports,

expansion and modernisation of existing airports, improvement in connecting infrastructure (road,

metro, sea link, and so on) and better airspace management. Special attention is required for

developing airports in remote areas.

Price Structure

The cost of Aviation Turbine Fuel (ATF) constitutes almost 40-50 % of the total operating cost. The

high cost of ATF is aggravated by taxes, which badly affects the financial health of airlines.it is around

60 % costlier than competing hubs like Dubai, Singapore and hurts India’s competitiveness.

According to latest five year plan report, it should be either included in in the unified Goods and

Service tax or accorded the status of Declared Good that carries lower and uniform tax rate.

Multi Modal Connectivity

Whoever travelled by air, can easily understand the pain of the reaching airport, whether you are

talking about New Delhi or Bangalore traveller facing the same issue. As the, major airports in India

are mostly located in the outskirts of the city. This issue adversely affects the comparative advantage

in terms of saving times and also causing inconvenience to the passengers. The airports should be

connected by metros, expressways to the cities to get the full advantage of air transportation by

reducing the total travel time, take example of New Delhi metro airport express.

Safety

In the aviation domain safety is of utmost importance. With the advancement and increasing no

of operations it is become difficult to keep the rate of accident and incident in check. The

increasing number of movements affects runway safety, ramp safety, incursions and excursions,

ramp congestion and other serious situations affecting safety.

Road Transport is vital to the economic development and social integration of the country. Easy

accessibility, flexibility of operations, door-to-door service and reliability have earned road transport an

increasingly higher share of both passenger and freight traffic vis-à-vis other transport modes.India has

second largest road networks in the world (4.1 million kilometres), which can be sub-divided into

following four categories:

Categories India’s Total Road Network Details

National Highways (NHs) 17% Total Length: 71,772km and carry

40% of the country’s road traffic

State Highways (SHs) 3.6% Total Length: 154,522km

Major District Roads (MDRs) 6.5% Total Length: 266,058 km

Other District and Rural Roads 88% Total Length: 36,17,240km

Source: 12th

Five Year Plan Report

In India the transportation sector is still ruled by the road network. The most important mode of

transportation in India is road, and this dominance arises from decades of poor supporting infrastructure

development on the rail, coastal, pipeline and air transportationside. The road transportation has share

of 4.7% in India’s GDP in

comparison to railways

that has a mere 1% share.

The most expensive

mode of transportation is

road transportation

however majority of

freight operations are

done through it .In the

overall road network, the

National Highways

constitute only 2% and

they carry around 40% of

the total road freight. Source: NHAI website

Roads in India bear about 90% of the country’s passenger traffic and 65% of freight traffic.in 2009-

10.According to a report by KPMG,“India’s logistics sector is currently not only constrained by lack of

infrastructure; it is perhaps even more restricted by the misuse of transportation modes for certain types

of commodity , as well as limits on the free use of transportation modes for others.” Despite this growth,

the road transportation sector faces many challenges. The industry is highly fragmented, and with low

entry barriers, it has seen significant commoditization leading to intense competition among truckers

who find their realizations and margins continuing to be squeezed progressively. Despite the recent

privatization of the container rail industry, road transportation continues to grow and gain share from rail

— albeit at a slower pace.

Consequently, road networks continue to lag behind world averages, with road density at 2.83 km per

1,000 people and 770 km of road length per 1,000 sq. km as compared to 6.7 km a

respectively, globally. India’s low average trucking speed of 30

global average of 60–80 kmph can, thus, be attributed to the constrained and poor quality of the

country’s road network.

Threats Faced by Road Transportation

High

A study shows that a goods carrying truck, due to long traffic jams on national/state highways, on average

covers a distance of around 250-300 Km per day in contrast to international norm of 700

Km!However, the completion of the National Highways Development Programme (NHDP), which is ai

at developing 50,000 km of National Highways by 2015 in seven phases with an investment of INR 3,000

billion39 and modernization of the road cargo transport community, will be game changers for the road

transport sector.

Lack of differentation in services leads to commoitization and price erosion,

Large players offering value added services are able to influence terms and condition

High bargainig power of bulk goods consigners due to presence of small operators,

Commitments of large consignment volumes often force transporters to undercut prices

Threat of New Entrants

Bargaining Power of

Consumers


1,000 people and 770 km of road length per 1,000 sq. km as compared to 6.7 km a

India’s low average trucking speed of 30–40 km per hour (kmph) as against the

80 kmph can, thus, be attributed to the constrained and poor quality of the

Transportation

Neutral

Source: KPMG Analysis

truck, due to long traffic jams on national/state highways, on average

300 Km per day in contrast to international norm of 700

However, the completion of the National Highways Development Programme (NHDP), which is ai



Forces

Impacting

Road

Transportation

Low capital requirement, easy available loan,

Low entry barrier with basic basic skills requirements

Its highly customer oriented with multiple vendor options available to customers

Its easy for customers to switch loyalties as there is lack ofdifferenti on among vehicles

Very few people offering value added and

Governmentprices makesplayers topass troughcustomers

Rivalry among

Competitors

Bargaining Power of

Supplier

Threat of

Substitutes


1,000 people and 770 km of road length per 1,000 sq. km as compared to 6.7 km and 840 km,

40 km per hour (kmph) as against the

80 kmph can, thus, be attributed to the constrained and poor quality of the

Source: KPMG Analysis

truck, due to long traffic jams on national/state highways, on average

300 Km per day in contrast to international norm of 700-800

However, the completion of the National Highways Development Programme (NHDP), which is aimed



Its highly customer oriented with multiple vendor options available to customers

Its easy for customers to switch loyalties as there is lack ofdifferenti on among vehicles

Very few people offering value added and

Government influence on fuelmakes it difficult forto predict , control and

trough fuel costs tocustomers

Bargaining Power of

Supplier

Threat of

Substitutes

Despite the progress in NHs, only 23% of their total length is wider than two lanes, leading to heavy

congestion. Shortfall in construction of bypasses, inadequate capacity, insufficient pavement thickness

and weak, narrow and distressed bridges/culverts are some of the other deficien

built a huge cost needs to be maintained properly to prevent disintegration and deterioration, ensuring

its continuous utilization in an optimum manner and road safety of its users.

In India the maintenance of roads is

treated as a non-plan activity and

has, therefore, tended to be

neglected because of financial

resources constraints. Apart from

inadequacy of resources,

management of roads are

unsystematic and inspections are

irregular.

The villages which are connected by PradhanMantri Gram SadakYojana (PMGSY) have several socio

economic impacts on villages which indicate multiple benefits generated through it.

listed below:

• Improved connection to the markets

• Reducing the time spent in travelling

• Improving villagers access to timely treatment, especially in emergency

• Improvement in the accessibility to education

• Aster access to health facilities

• Decline in infant and child mortality

• Improvement in agricultural production, income, employment generation

This kind of initiative can also be exercised at country level to maximize the benefit for all, similarly like

villages.

Trends in the Road Sector

1. Government policy to increase private sector participation has proved to be a advantage to the

infrastructure industry with a large number of private players entering the business through the

PPP model. The type of PPP models used in road projects are BOT

only 23% of their total length is wider than two lanes, leading to heavy


and weak, narrow and distressed bridges/culverts are some of the other deficiencies. The road network


its continuous utilization in an optimum manner and road safety of its users.

Lane composition of National Highways (

India the maintenance of roads is

plan activity and

has, therefore, tended to be

neglected because of financial

Apart from

inadequacy of resources,

management of roads are

unsystematic and inspections are

Source: 12th


The villages which are connected by PradhanMantri Gram SadakYojana (PMGSY) have several socio

economic impacts on villages which indicate multiple benefits generated through it.

ection to the markets

Reducing the time spent in travelling

Improving villagers access to timely treatment, especially in emergency

Improvement in the accessibility to education

Aster access to health facilities

Decline in infant and child mortality which

Improvement in agricultural production, income, employment generation


Government policy to increase private sector participation has proved to be a advantage to the


The type of PPP models used in road projects are BOT toll and BOT annuity

23%

54%

23% Single/Intermediate

Lane

Double Lane

Four/Six/Eight Lane

only 23% of their total length is wider than two lanes, leading to heavy


cies. The road network


Lane composition of National Highways (2012)


The villages which are connected by PradhanMantri Gram SadakYojana (PMGSY) have several socio-

economic impacts on villages which indicate multiple benefits generated through it. Few of them are


Government policy to increase private sector participation has proved to be a advantage to the


toll and BOT annuity.

Single/Intermediate

Lane

Double Lane

Four/Six/Eight Lane

2. Through 100 per cent FDI in the roads sector, most foreign companies have formed partnerships

with Indian players to participate in the sector.

3. Infrastructure is the key to supporting double-digit GDP growth in India during the medium- to

long-term; hence the government has made infrastructure development a key policy issue and

plans to spend USD1.04 trillion during FY13-17 on the sector.

4. Through Five-Year Plans, India has increased the length of national highways from 21,378

kilometres during the late 1940s to 71,772 kilometres by the end of the 11th Five Year Plan (FY08-

12). The 9th Five Year Plan (FY1997-FY02) recorded the largest addition to the highway network

(23,814 kilometres).

National Highways to be constructed under various Five-Year plans

Source: Logistics game changers – Transforming India’s logistics industry-KPMG

Until 2005, the road construction market was dominated by public sector companies. The government

has been eager to involve private sector funding for infrastructure projects and thereby reduce strains on

the budget. The PPP model has emerged as the favoured one for private sector participation in roads

projects. From the investment perspective, a comparison of estimated investments in the road sector in

the Eleventh Plan (2007–12) vis-à-vis projected investments for the Twelfth Plan (2012–17) indicates a

significant jump, approximately 2.2-fold.

To encourage private players, the

Government has announced several

incentives such as declaring the road

sector as an industry, providing 100 % tax

exemptions in any consecutive 10 years

out of 20 years, duty free imports of

certain identified construction plants and

Source: Crisil report ‘Private participation in National

Highways to drive investment in roads, 22 May 2012

equipment, FDI of up to 100 %, and increased concession periods (up to 30 years). Given these incentives,

the private sector is expected to fund 33 % of the total investment in the Twelfth Five-Year Plan.

Roads are a major user of construction material especially bitumen and asphalt which are known to

release emission gases into atmosphere. There is need for maximizing the investment in R&D, green

technology and design for better and safer roads.

The major reasons behind the higher road traffic are, growth in small and medium enterprises in India,

rising incomes leading to increasing number of vehicle owners, Growing movement of goods within the

country due to economic integration, Better quality roads makes road travel cheaper and safer and

Increasing roadways leading to greater accessibility between different cities/towns/villages. The number

of vehicles has been growing at an average of 10.16% per annum over the last five years. This strains the

road infrastructure.Road’s traffic share of the total traffic in India has grown from 13.8 % to 65% in freight

traffic and from 15.4% to 90% in passenger traffic from 1951 to 2011.

The main hurdle in the development of highways at a faster pace is the delay in land acquisition and

statutory clearances. In the absence of stronger land laws, land acquisition becomes a contentious issue

in a country like India with a large population. Effective legal framework and proper execution with

respect to land acquisition is needed for a faster development of roads. Government must ensure faster

procurement of all statutory clearances.

Future prospects remain bright for the roads sector.In future national and state highway projects are

estimated to create an opportunity of USD41.2 billion and USD 9.9 billion respectively, over next five

years. The Road projects contribute around 60% of PPP projects in the country. To promote this sector,

the government has allowed 100 % FDI under the automatic route for all road development projects and

100% income tax exemption is granted for a period of 10 years.

WaterwaysWaterways

India’s 95% by volume and 70%

the sea route. India has a coast line of

has 13 major ports (Fig. 1);

the eastern coast and 7 on the

western coast. It also has about

200 non –major ports, in which

1/3 are operational.The Inland

Water Transport (IWT) form

interface between maritime and

rail and road transport. During

2011-12, 60% and 40% of the

maritime cargo were handled by

major and non- major ports

respectively.

The aviation sector is struggling

for survival, while roadways and

railways are bleeding the treasury

dry. Inland navigation is

economical and environment-

The Three waterways that have been declared as National Waterways are:

(a) Allahabad-Haldia stretch

declared National Waterway-

(b) Sadiya-Dhubri stretch (891 kms) of the Brahmaputra river was declared Na

Waterways- II in September, 1988.

(c) Kottapuram-Kollam stretch

canal (14 kms) and Udyogmandal canal (23 kms) was declared National W

February, 1993.

As we seen the aviation sec

transportation are bleeding the capital dry. But due to lack of long term vision and

support from government, hinders the growth of inland waterways. It is ironical that in

70% by value global merchandise trade is carried out through

the sea route. India has a coast line of 7,517 km with two basic categories of ports

; 6 on

on the

western coast. It also has about

major ports, in which

The Inland

Water Transport (IWT) form

interface between maritime and

During

% of the

cargo were handled by

major ports

The aviation sector is struggling

for survival, while roadways and

railways are bleeding the treasury

dry. Inland navigation is

-friendly.

ave been declared as National Waterways are:

Haldia stretch (1620 kms) of Ganga-Bhagirathi-Hooghly river system was

I in October, 1986.

(891 kms) of the Brahmaputra river was declared Na

II in September, 1988.

Kollam stretch (168 kms) of the West Coast Canal along with Champakara

canal (14 kms) and Udyogmandal canal (23 kms) was declared National W

As we seen the aviation sector is struggling for endurance, whereas railways and road



by value global merchandise trade is carried out through

two basic categories of ports. India

ave been declared as National Waterways are:

Hooghly river system was

(891 kms) of the Brahmaputra river was declared National

(168 kms) of the West Coast Canal along with Champakara

canal (14 kms) and Udyogmandal canal (23 kms) was declared National Waterways-III in

tor is struggling for endurance, whereas railways and road



spite of being economical, efficient and environment friendly, the inland water transport

sector remains underutilised.

Traffic and Capacity at Ports

The capacity creation for major ports during year

only 689.83 MT was achieved.

36.67%.The capacity of minor ports and private ports was envisaged to increase from

228.31MT to 557MT.

The traffic handled by major ports in financial year

lower than the projection by

07 with the growth of 29.48

186.11MT in the year 2006

growth of 98.81% and also higher than the projection of

Cargo Traffic

According to the 12th Five year plan, the capacity and Traffic is needed to

meet the projected traffic of

815.20 MT) by the end of 12

sector is predicted to be 2289.04

MT).

0

100

200

300

400

500

600

Major Ports

Car

go

Tra

ffic

(M

MT

)

FY 07

al, efficient and environment friendly, the inland water transport

sector remains underutilised.

at Ports

creation for major ports during year 2011-12 was projected

MT was achieved. This shows the increase in the capacity of major ports by

%.The capacity of minor ports and private ports was envisaged to increase from

The traffic handled by major ports in financial year 2011-12 was 560.12

by26.55% but increased from 463.78MT of financial year

29.48%. At the minor ports traffic handled was increased from

2006-07 to 37.00 MT in the year 2011-12, thus registering a

% and also higher than the projection of 23.26%.

Source: Ministry of Shipping, India Brand Equity Foundation

ive year plan, the capacity and Traffic is needed to

he projected traffic of 1758.26 MT (major ports- 943.06 MT and minor ports

12th five year plan (2016-17), the total capacity of the port

2289.04 MT (major ports- 1229.24 MT and minor ports

FY 07

FY 08

FY 09

Major Ports

Non Major Ports

FY 08 FY 09 FY 10 FY 11 FY 12

al, efficient and environment friendly, the inland water transport

was projected 1001.80 MT but

This shows the increase in the capacity of major ports by

%.The capacity of minor ports and private ports was envisaged to increase from

560.12MT which was

MT of financial year 2006-

the minor ports traffic handled was increased from

, thus registering a

Source: Ministry of Shipping, India Brand Equity Foundation

ive year plan, the capacity and Traffic is needed to expand. To

MT and minor ports-

), the total capacity of the port

MT and minor ports- 1059.80

FY 09

FY 10

FY 11

FY 12

Capacity Addition

At Major

Ports Existing(2011-

Total 560.15

Capacity by the end of 12th

Major Ports

Existing (2011-12)

Total

Commodity 689.83

Major Trend in the Waterways Transportation

0

10

20

30

40

50

60

FY06

58.7C

apac

ity

Ad

dit

ion

(M

T)

Source: Ministry of Shipping,

Traffic (MT) Capacity

Existing 12)

Forecast (2016-17)

Existing (2011-12)

560.15 943.06 689.93

th plan

Ports Minor Ports

Forecast (2016-17)

Existing (2011-12)

Forecast (2016-17)

Existing(2011

1229.24 544.65 1059.80 1234.48

in the Waterways Transportation

FY07FY08

FY09FY10

48.6

27.3

42.7 42

Source: Ministry of Shipping,

Capacity (MT)

Forecast (2016-17)

1229.24

Total

Existing (2011-12)

Forecast (2016-17)

1234.48 2289.04

As shown in above graph, that there is

average turnaround time is influenced by

entrance path.There is an improvement of average output per ship berth day from

MT in year 2006-07 to 10,967

Indian ports around 57% of turna

Detention trendis only one that continuous shows the

The other important trends seen in this sector is Setting up of port based SEZs,

Increasing Private Participation

Model. Because of favourable

encourages both the investor, i.e. Private and Foreign. The private player aggressively

investing in port logistics services.

government has shifting from the “

services) to a “Landlord Port

while port operations are done by the private companies).

Chennai, Visakhapatnam and Tuticorn

Benefits of Waterways Transport

Efficient and Economic:

The cost of infrastructure development for

roadways. As per Mr. S Sriraman of Walchand Hirachand Professor of Transport

Economics, University of Mumbai. S Dandapat, chief engineer, IWAI

than that of roadways. Land

building a road or a railway line

The fuel used in waterways transportation

would carry about 105tonnes over a kilometre through waterways,

2006-07 2007-08

9745 10071

3.623.93

10.05 11.4

Average Pre-berthing Detention Time

Average Output per ship berth days

Source: 12

that there is improvement in turnaround time in

average turnaround time is influenced by feature such as size of parcel, cargo type, and

There is an improvement of average output per ship berth day from

10,967 MT in year 2011-12. Due to port associated inefficiency at

% of turnaround time of ships is delayed.

one that continuous shows the increasing style.


Participation, Specialist Terminal Based Ports and Landlord

. Because of favourable investment condition and strong growth potential,


investing in port logistics services. Further, to attract private investments

shifting from the “Service Port” model (port authority provide all

Landlord Port” model (port authority acts as a regulator and landlord

while port operations are done by the private companies).The major ports such as JNPT,

Chennai, Visakhapatnam and Tuticorn are example of this reformed.

Benefits of Waterways Transport

The cost of infrastructure development for IWT sector is also very low as compared to

S Sriraman of Walchand Hirachand Professor of Transport

Economics, University of Mumbai. S Dandapat, chief engineer, IWAI. It is

Land acquition cost accounts for 60 per cent of the total cost of

building a road or a railway line.

The fuel used in waterways transportation is diesel. As per the study, one litre of diesel

tonnes over a kilometre through waterways, 85

2008-09 2009-10 2010-11

1007110473

10482 10735

3.87

4.42 4.67

9.5511.75 11.76

berthing Detention Time Average Turnaround Time

Average Output per ship berth days Source: 12

th Five Year Plan,

in turnaround time in 2011-12. The

feature such as size of parcel, cargo type, and

There is an improvement of average output per ship berth day from 9,745

associated inefficiency at

round time of ships is delayed. The Pre-berthing


and Landlord Port

investment condition and strong growth potential,


Further, to attract private investments, the

” model (port authority provide all

model (port authority acts as a regulator and landlord

The major ports such as JNPT,

is also very low as compared to

S Sriraman of Walchand Hirachand Professor of Transport

It is 5 to 10per cent

cost accounts for 60 per cent of the total cost of

is diesel. As per the study, one litre of diesel

85 tonnes through

2011-12

10967

4.44

11.14

Average Turnaround Time

railways and24tonnes through roadways. Hence there is an opportunity to convert these

comparisons into monetary savings.

Affordable:

There was a2012report, by a

under the National Transport Policy Development Committee (NT

Commission. It highlighted the

through waterways would cost Rs.

0.50 and Rs. 0.96 respectively.

As per NTPDC, one horsepower can move 4 tonnes by waterways,

and 0.15 tonnes by roadways.

waterways is Rs 0.53 as against Rs

Safe and Environment Friendly

According to the National Council of Applied Economic Research

avoidance of accidents as a result of cargo movement on national waterways saved Rs

36crore in 2004-05. While i

congestions amount to Rs

with the growth of inland water transport (IWT),” says S S Mishra, member of Inland

Waterways Authority of India (IWAI).

In the waterways sector, fuel consumption is also less, which means low levels of carbon

emissions.The 2012report by a sub group of the Working

under NTDPCstates that, the

truck emits.

The Indian Network on Climate Change Assessment (INCCA) estimates that in

transport sector emitted 142

transportation modes,

At present, no study has been conducted in the country to estimate the emission level of

IWT, although it is negligible. Between

increase six fold, estimates INCCA

Source: Indian Network on Climate Change Assessment, 2007

tonnes through roadways. Hence there is an opportunity to convert these

comparisons into monetary savings.

by a subgroup of the Working Group on Ports and Shipping

under the National Transport Policy Development Committee (NTPDC) of the Planning

Commission. It highlighted the issue that, for moving a tonne of cargo over a kilometr

through waterways would cost Rs. 0.37, while via railways and roadways it would be Rs.

respectively.

horsepower can move 4 tonnes by waterways, 0.5 tonnes by

tonnes by roadways. Hence the operating cost per tonne kilometre in

as against Rs 1.32in railways and Rs 2.75 in roadways.

and Environment Friendly:

National Council of Applied Economic Research (NCAER’s


While in the road sector, yearly losses due to accidents and

amount to Rs 150,000 crore. “These losses will come down considerably

growth of inland water transport (IWT),” says S S Mishra, member of Inland

Waterways Authority of India (IWAI).

sector, fuel consumption is also less, which means low levels of carbon

by a sub group of the Working Group on Ports and Shipping

states that, the waterways vessel emits less than 50per cent of carbon a

The Indian Network on Climate Change Assessment (INCCA) estimates that in

142 million tonnes of greenhouse gases. Share of different


IWT, although it is negligible. Between 2005 and 2035, emissions from the roadways will

increase six fold, estimates INCCA.

Source: Indian Network on Climate Change Assessment, 2007

87%

7%5%

1%

Road

Aviation

Railways

Navigation

tonnes through roadways. Hence there is an opportunity to convert these

of the Working Group on Ports and Shipping

PDC) of the Planning

issue that, for moving a tonne of cargo over a kilometre

, while via railways and roadways it would be Rs.

tonnes by railways

operating cost per tonne kilometre in

in roadways.

NCAER’s)report, the


due to accidents and

crore. “These losses will come down considerably

growth of inland water transport (IWT),” says S S Mishra, member of Inland

sector, fuel consumption is also less, which means low levels of carbon

Group on Ports and Shipping

per cent of carbon a

The Indian Network on Climate Change Assessment (INCCA) estimates that in 2007 the

Share of different


emissions from the roadways will

Conclusion

Efficient mobility of people is one of the key factors for the progress and prosperity of a society and

a nation. Public Transport services play a major role in reducing the poverty and keeping deprivation

at check in rural areas. Apart from offering the rural population a viable and convenient way to

market their agricultural produce, it also enables them to access other sources of income such as

engagement in informal services in nearby urban nodes and formal employment in manufacturing,

food processing, transport and other industries, etc. Certain inherent characteristics of the Bus

transport system make it the ideal mode for meeting the huge and increasing demand for passenger

transport services. Bus transport makes the most optimum use of the available road space and fossil

fuel by transporting the maximum number of people per unit of road space. On an average, a car

consumes nearly 6 times more energy than an average bus, while two wheelers consume about 2.5

times and three-wheelers consume 4.7 times more energy in terms of per passenger km.

The transport sector of India is facing several challenges which can be taken as opportunities to

overcome from them and make India leader of this sector in the group of developing countries. The

challenges are,

• Congested and inefficient ports,

• Severe capacity constraints facing by Railways,

• Airport infrastructure is strained,

• Hinterland connectivity by different modes of transport

• Roads are congested and poor in quality

From the below given table we can see that government of India heavily in all major transportation

modes.

Ministry /Department wise 12th

Five Year Plan Outlays for Transport Sectors

Source: 12th

Five Year Plan

Way forward

• Expanding construction capacity- construction industry capacity already overstretched-

quality, price affected

• Improving Contract Management- on average publicly financed road construction contracts

suffering 35% cost over runs

Ministry GBS Outlay IEBR

Ministry of Road Transport &

Highways

144769 64834

Ministry of Civil Aviation 16983 16215

Ministry of Railways 194221 225000

Ministry of Shipping 6960 21990

• Poor quality of designs and site investigations

• Land acquisition

• Tariff /pricing policy

• Multi modal connectivity

transportation modes. It reduces total journey time, reduce congestions.

• Focus on high-growth potential of India’s waterways segment remains largely untapped and

underutilized

• In my opinion at present time, we have to shift the passeng

airways, because they have the vacant capacity and railways have the extra passengers. So it

balance the traffic and win

we can see the losses every year railways ma

Poor quality of designs and site investigations

Multi modal connectivity- it’s very important, as it work as back bone


growth potential of India’s waterways segment remains largely untapped and

In my opinion at present time, we have to shift the passenger traffic from railways to


balance the traffic and win –win for both transportation modes. From the below given table

we can see the losses every year railways made.

Source: 12th


it’s very important, as it work as back bone for the all major


growth potential of India’s waterways segment remains largely untapped and

er traffic from railways to


win for both transportation modes. From the below given table


Bibliography

1. Twelfth Five Year Plan(2012–2017)-Economic Sectors, Vol II, by GoI

2. India Brand Equity Foundation (March 2013),

3. A Report on Logistics gamechangers - Transforming India’slogistics industry by KPMG,

4. Adding Wheels- Investing in the Indian transportation & Logistics Industry by KPMG,

5. DGCA website

6. Natural highways published in Down to Earth

7. Indian Railways website

8. The Road Ahead highways PPP in India

9. Ministry of Road Transport & Highways, GoI

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