Fast rail track MG Road to BIAL - confused

Vijayan,

You have all the facts right. We have had a few blogs and comments on Praja on this and most will agree with your suggestions. This project I am sure has its genesis in all that noise about connectivity from your friends down south :). We cannot be investing Rs.4000 crores on a link that will serve just 50000-100000 per day.

This will be the biggest white elephant (and before that elephant is born the most chaotic gestation period) ever conceived, if in the present form. (My benchmark for good planning is Singapore and it does not have a dedicated train to the airport. It is an extension of the MRT there).

Let us assume that BIAL does reach a 30 million passenger/year (in and out) in about 8 years time (by which time this fast tracked project might actually get done!). That is about 100,000 passengers/day in and out. 50000 each way. let us say 60% take this train - 30000. Add 1 companion - 60000 one way.

This train is supposed to run every 10 mins (need to confirm). 144 trains each way. That means a train on an average will have about 350 people. So about Rs.70,000 REVENUE/train. In a good year - Rs.600 crores. A net margin of 5% - means Rs.30 crores as profit. Max 45 crores PAT. Not good enough on an investment of Rs.4000 crores. At 10 million each train will have 100 people on an average

In these projects, the elevated tracks take up a lot of the investment. They need to be utilized by rakes that can take 1000 people at a time and not 300.

All this assumes that BIAL will hit the 30 million mark sometime. They need to relook this projected number in the context of $130 crude and its impact on the airline industry.

Srivathsa

When we are all done, the cost of connectivity to the airport will be in excess of Rs. 7000. Which translates to almost 3x the cost of the airport Rs 2500.

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Regards

Devesh R. Agarwal

Visit my aviation blog at http://aviation.deveshagarwal.com

The whole project economics is a mystery (maybe Devesh has a better idea).

a. What are the projected number of passengers for BIAL - low, medium and high? What are the assumptions behind these numbers.  Merely projecting past growth rates is not good enough.  There will be both macro-economic factors as well as industry specific factors.  Will we really see numbers like 50 million given that he airline industry world over and in India is living on borrowed time (IMO) and all the rosy growth stories seem to have cooled off. 

b. What are the project costs?  What escalations have been built into this?  Steel prices have shot up in the last 6 months by 50%!  Rolling stock and construction costs will escalate over the years.  What is the break even number of passengers for this?

c. What % of passengers will use this train given that it starts from MG Road.  What is the research behind this?  Has any survey been done? (If I working in E-City or ITPL - what would compel me to stop at MG Road and take the train given that I have endured most of the pain reaching here). 

d. How will MG Road manage the extra traffic due to this?

e. How will this interact with other projects?

As much I respect Mr. Sreedharan for executing the Delhi Metro as well as he did it, on this one I have to differ with him.  This seems to be a classic case of a problem being fit to the solution at hand rather than the other way round.  Executing a losing project efficiently does not make it a winning project. 

A lot of 'statements' about the project establish 1) airport exclusivity of the rail link, and 2) that this will not be networked with Metro.

My fundamental questions, sort of similar to Mr Menon's above

• Why would you limit your target customer set? 4000 air travelers per day (at Rs 200 each) vs (40000 per day at Rs 80-100 or so each)
• How would people reach MG Road? What makes anyone think that this train shouldn't start from silk board junction or Sirsi circle or Sarjapura ORR junction?
• Why would NHAI's NH7 elevated expressway not eat into the revenues of this project?
• The threat of HAL always looming large, why would a potential investor not worry about loss of traffic (upto 40%) to this airport (which will re-open sooner or later)
• If this project can be sold off as PPP, why not Metro itself - is it because Metro involves land acquisition, and the government thinks it does a better job of acquiring land?
• For airport exclusivity part - why does anyone think that air travelers need better "amenities" than that of Namma Metro? Are Metro amenity standards not good enough? Or is BMRC not confident about controlling crowd levels on Metro coaches (via investing in higher frequencies of trains)

Most of above becomes redundant if this is designed to be an extension of Metro itself. Why not think PPP extension of Namma Metro? Let Govt do Phase 1/2/3, and let interested parties propose and build PP extensions for it anywhere they like and they can?

NH7 has space for dedicated bus lanes, or can be made into an expressway today. I dont think many have complained about the speed beyond Hebbal (besides those speed breakers). What Bangalore wants is a way to get from anywhere in the city to Hebbal at an avg speed of 35-40 kmph. Rs 3000 Crore spent towards that will solve Bangalore's connectivity problems, air traveler, or regular commuter. Please don't divert your good energy and enthusiasm into relatively lower priority problems.

Sreedharan mentioned the following about PPP

 “PPP won’t be a success with Bangalore Metro. The project iss highly capital intensive and the returns are too little. It is a social project, not a business venture. Private parties will not be interested. The government alone has to do it. It’s well that the Centre and states are co-operating on such projects.”

This explains why they want exclusive route and dedicated train with PPP..everything in place to lure the private guys..so that the govt need not worry about the money or the project! It remains to be seen which private consortium would be interested in such a venture as the investments are high and returns are low!

Instead BSY govt should take this on and get a metro in place instead of the exclusive train..I was checking the klia express train passenger growth..its been about 20% year on year..and is still in few thousands..

I am sure its a risky proposition for exclusive train..instead get a metro on standard gauge and make a mark!

I believe BRV should just be fine..anyways they are planning a pedestrain concouse connecting the metro phI with the airport metro..also having at BRV allows eventual connectivity to people from other parts of bangalore by namma metro!

Dreaming of a day when there is a match at chinnaswamy and fans from hebbal take the train to watch the match..instead of worrying about driving and parking..probably even a news paper report of a scuffle btwn fans and airport travellers!

Let us not get alarmed by a blip. It is a globally accepted rule that aviation traffic grows at 2X the rate of GDP growth. Bangalore will continue to see 5%~10% GDP growth for the next 10 years.

If we estimate a very conservative average 10% Y-o-Y growth starting from a base of 10 million, we are adding about 1 million passengers a year from now, and accelerating. 15 million by 2013/14. 20 Million by 2016. 30 million by 2019/20. After that I am not sure, BIAL can handle. I am very doubtful they will ever reach 50 million. They simply will not have the infrastructure, and they are relying very heavily on airport SEZ, and other real estate revenue.

Regards

Devesh R. Agarwal

Visit my aviation blog at http://aviation.deveshagarwal.com

 Guys, NH-7 is not a long term option. It will become just another NH-4. As industry begins to move towards the airport, the road will become choked. There has to be a long term solution.

Rail is the best solution, but costs will kill. Elevated road, possible, but looking at BETL, I shudder at the disruption.

What are other options ?

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Regards

Devesh R. Agarwal

Visit my aviation blog at http://aviation.deveshagarwal.com

Devesh,

The current rail option - high speed, elevated completely could be the reason for high costs.  Is this the only option?  Has a 50% surface stretch been considered (with fencing?).  Even HK's AE is not elevated - not for its entire run.

NICE Road can be extended to NH7 from the West giving quick access to E-City, part of South Bangalore and West Bangalore.  This can take load of NH7 upto Yelahanka.

I personally don't see a 10% growth in the airline industry - and certainly not on a base of 10million.  That 10 million will go down before growth starts.  Discretionary travel will go down with rising air fares and a soft economy.  Businesses will look hard and remove non-essential travel.  24 airlines have gone bust in the USA in the last 6 months.  My bet is that the airline industry will look very different in 5 years time.  No industry can bleed forever. 

That 2X thumb rule has not been around forever.  Transportation and warehousing grow in line with GDP (I have seen solid historical data on this).

IMHO Crude oil prices will go down only after some serious structural damage is done to oil intensive industries reducing the need for oil.  The airline industry will be  one of the first ones to see some serious structural changes.

Time will tell which of us is right.  I hope you are, but I am afraid that I will be :).  I think a rail link is on - but not a fancy white elephant. 

Srivathsa

The localities near Intl Airport is severely getting congested and their travel times are getting increased. While planning for Airport Link, they should plan with 4 tracks with 2 for Namma Metro upto Yelahanka and 2 for Airport Link.

While acquiring land, they have to acquire little more than for just 2 lanes. Stations will serve dual purpose. This is one time investment.

How about a Hybrid solution that uses BRT in the initial stages and gives us time to integrate Phase 1 and parts of Phase-2 Metro infrastructure with the Airport rail link ?

Instead of using the same coaches as Metro, special coaches and special schedule will help to alleviate problems that could potentially occur by using the Metro schedule and coaches. However, no one is being stopped from using the Airport link as a fast alternative to areas like Yelahanka from say, Byappanahalli, so it is a broad-based solution from that front.

1. BRT as Phase 1 of Airport link - Run BRT based Volvo buses from all corners of the city to provide efficient and fast access to BIAL. Let the idea sink-in that an Airport link doesnt necessarily mean fast rail access and it will help the planners and implementers buy time, maybe till 2011.

2. "Metro Airport express" as part of Metro Phase 2 - Work with Namma Metro to create a semi-dedicated route to the Airport by building parts of Phase-2 infrastructure ahead of schedule, so that the rail link to the Airport is not exclusive to the Airport and Metro Phase-2 will use parts of the Airport link when ready.

In the picture above, the route from Cantt. to Yelahanka can be re-used by Namma Metro as part of Phase-2 EC to Yelehanka alignment.

Run 2 or more Airport coaches coaches at any given time from Byappanahalli, Mysore Road Terminal, R.V. Road Terminal and Yeshwantpur, all converging at BRV Grounds. Then at BRV Grounds they all join to form a single Metro Airport express and run on the Airport link corridor to BIAL via Yelahanka.

This avoids cost of redundant infrastructure and also adds convenience of connectivity from any part of the city.

NHAI has this idea of elevated road from Hebbal to BIAL, aka the current mess at Hosur Road. Which is why the train has been shoved off to one side.

Compared to regular trains, monorails should be far lighter.  I wonder if anyone has considered putting a mono rail on top of the elevated road ? I am sure the pilings can be designed to handle both weights.

Or am I just pipe dreaming ?

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Regards

Devesh R. Agarwal

Visit my aviation blog at http://aviation.deveshagarwal.com

For the Airport Link, I was thinking of 4 tracks, 2 for Metro and 2 for Airport Link. Airport Rail Link may not be patronized as much as the hype it has got since people want near to Home to Devanahalli solution which can be served by BMTC volvos.

Seeing this, a monorail should be sufficient to carry the airport passengers. Why can't we have Namma Metro from BRV to Yelahanka over which Mono for airport link. A civil/structural engineer would be the best person to answer. Is there any Civil engineer who is praja member who can comment on this?

we can just have monorail after yelahanka..but we need to keep in mind about the non-flying airport workers who need to make the trip everyday..once the airport city comes up and the different sez's around devanahalli comes up..mono will not be good enough..nor the express train!

Standard guage Namma Metro is the only good answer!

My thoughts are as follows:

The existing rail links around bangalore should be used to form a suburban service to BIAL and also to the city itself. With enough political backing SWR will do it and should be made to do it. Crude prices at USD 147 / barrel is reason enough for us not to ignore this facility staring us in the face. The daily toture on the roads is another. The best part is, if done properly, it should not take more than 500 -750 crores and should be completed in 1 to 1.5 years. Imagine, our lives better in just 1 - 1.5 years! 

All phases of the Metro should connect to the suburban service.

If there are problems with availibility of platforms, let us have the outlying stations like Yeshwanthpur, Kengeri, KR Puram, etc as the last stops for the inter city trains. People can take the suburban / Metro trains from there. We will reach home earlier than what we are used to today.

Many NRI intensive forums like Skyscraper City, feel that Mr. E. Sreedharan's plans for the HSRL are the best, and we should proceed without any delay and proper examination of the financial viability.

While I have tremendous regards for Mr. Sreedharan, and his achievements on the Konkan railway, the DMRC is not quite the financial success as many have made it out to be.

I came across this article in today's Business Standard. http://www.business-standard.com/india/storypage.php?autono=336473. Sunil Jain writes his opinions under the column Rational Expectations. It is kind of long, but well worth the read.

Sunil Jain: Give us a break, Mr Sreedharan
RATIONAL EXPECTATIONS
Sunil Jain / New Delhi October 6, 2008, 0:04 IST

In a fairly well-publicised letter to Planning Commission Deputy Chairman Montek Singh Ahluwalia, Delhi Metro Rail Corporation (DMRC) chief E Sreedharan has lambasted the Hyderabad public-private partnership (PPP) model, arguing that his state-owned model is the best one, that the Hyderabad model can “lead to a big political scandal”, that the idea’s to reap a windfall profit from the land allocated, and so on. He points out that while the Maytas consortium has agreed to pay the government Rs 30,300 crore over the project’s life (in terms of net present value, that’s Rs 1,240 crore), much of this is due to the fact that the government gave the metro 296 acres of land it can use for development — had this not been so, Sreedharan says Rs 10,000 crore more would have been required in terms of viability gap funding. Most who read the letter, the contents of which were liberally leaked to the press, would assume none of this applied to the DMRC — indeed, the finance ministry’s so impressed by the argument, it is actively examining the merits of this vis-a-vis the PPP model being pushed by the Planning Commission.

A closer look at the Delhi Metro annual report  makes it clear that most of these arguments are self-serving, apart from of course the fact that the DMRC model, where the Union and Delhi governments own just 50 per cent each of the equity, means that no one’s really in charge of the project — this has its own implications in terms of accountability and vigilance, but that’s the subject of another column. Let’s look at the sops the DMRC’s getting and compare them with the Hyderabad ones that have so shocked the DMRC chief.

In 2006-07, DMRC had a total loan base of Rs 6,648 crore, on which the average interest rate was 1.44 per cent and equity of Rs 3,702 crore, which had earned no dividend so far and looks unlikely to ever earn one. If you assume a market interest rate of even 12 per cent and the same return for equity (though equity returns are usually much higher), this means DMRC is getting an annual subsidy of more than Rs 1,000 crore. Nearly 90 per cent of the loan is a concessional one from the JBIC of Japan, but the exchange rate risk (which is significant in a project of such a long gestation) is borne by the Government of India.

DMRC never paid any excise/customs/sales taxes on capital equipment either — assume this to be a conservative 20 per cent and that’s a one-time saving of another Rs 2,000 crore, or another Rs 240 crore per year subsidy assuming the same 12 per cent interest rate. It also gets electricity at half the commercial rate, a saving of another Rs 25 crore per year. All this, by the way, when DMRC’s annual revenues are just Rs 543 crore, of which Rs 252 crore is from real estate transactions!

Contrast this with the Hyderabad case, where Maytas will raise all funds at commercial rates, has the same tariffs as the DMRC and will still pay the government a net present value of Rs 1,240 crore. So, the savings from the PPP route are obvious.

But if you’ve been following Sreedharan’s arguments, you’ll have noticed the fatal gap in my argument — there’s no mention of the 269 acres of real estate the Hyderabad metro’s got, what Sreedharan calls the selling of family silver. According to the DMRC chief, had this land not been given, Maytas would have asked for Rs 10,000 crore instead of offering to pay the government.

What’s important to keep in mind here is that the Delhi Metro itself got a huge amount of land — the 2006-07 annual report talks of 960 acres of land in just one place! In other words, whatever the Hyderabad metro got, Delhi Metro got many times that. And while the Hyderabad metro didn’t get any land to lease/sell (it can develop/lease only the space above the metro stations/depots), the Delhi Metro’s also transferring the leases of chunks of land for as many as 90 years — this is tantamount to selling government land. While DMRC’s auditors have said that this amounts to selling property and violates the law, the CAG says it is okay — the short point, however, is that DMRC’s land deal is a lot sweeter than Hyderabad could ever imagine. Not surprisingly then that the Municipal Corporation of Delhi has levied a Rs 452 crore property tax on DMRC, which the latter has contested, citing the chief secretary’s decision that this would not be levied — the New Delhi Municipal Corporation has followed with a Rs 33 crore demand. Not paying taxes on the land, in turn, boosts Delhi Metro’s profits even more, and it’s unlikely the Hyderabad one will ever get any tax breaks like this. Interestingly, real estate income in 2006-07 accounted for 53 per cent of DMRC’s total revenues, nearly 70 per cent of EBDIT profits — in terms of pre-tax profits, real estate profits were 11.6 times the overall profits.

What’s most galling is that while the DMRC chief is so fulsome in his praise for his model, he doesn’t care to mention that even as he’s getting these hundreds of crores of annual sops, the metro’s struggling to meet even its physical targets. While the original target for Phase I was to carry 2.18 million passengers by 2005, this was lowered to 1.5 million in 2005 — the 2006-07 report says the ridership was 610,000! So, as the criticism of PPP projects builds up, you’ll do well to keep these facts in mind.

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Regards

Devesh R. Agarwal

Visit my aviation blog at http://aviation.deveshagarwal.com

Nice to see so many interesting and thoughtful comments on this issue.

My personal opinion is that this project should go through at the moment.It has taken a lot of hue and cry to clear this project to this current state and the report made by Sreedharan has almost reached the final levels of clearance( Pls. excuse my ignorance if it has been cleared already).

The infrastructure created by the high speed rail can be reused by many other modes of transport in the future.

Example:

1. Many stations could be created enroute so as to cater to transport between city/airport and those stations.

2. The Airport could have direct connectivity of Indian Rail services.

3. Bangalore badly needs a CBD to be created(which is also highly recommended in the Master Plan 2015). It really helps the economy if airport commute is about 30 minutes from CBD.

Sadly, there are more than 2 or 3 CBD in Bangalore today. Electronic City is a Business District, Whitefield is another while the MG Road area is still the core part and needs to be developed as a proper CBD with a network of public transport options to reduce the surface/road chaos.

The high speed rail option is successful in many cities. London has a similar option called Heathrow Connect which also shares the inrastructure with Network Rail and connects the city of London with Airport in 30 mns.

Rome has a similar rail connect with the airport and the centre of the city.However, the airport train in Rome is slow with lots of intermittent stops and takes about  40 mns for a 30km ride !

HSRL DPR proposed this fare structure:

15.0 THE PROPOSED FARE STRUCTURE

15.1 Fare structure proposed to be adopted at the time of opening of the Airport Rail

Link will be as under:

From CAT at Police grounds to International Airport = Rs. 200/-

From Hebbal to International Airport = Rs. 150/-

From Yelahanka to International Airport = Rs. 100/-

15.2 Monthly or quarterly season tickets will be priced on the basis of Rs.50/- per

journey and forty journeys per month i.e. Rs.2000/- p.m.