Gride Presentation - JV Workshop - IRICEN - 23!01!2018 - EY

GUJARAT RAIL INFRASTRUCTURE
DEVELOPMENT CORPORATION LIMITED (G-RIDE)

(A JV Company of Ministry of Railways &
Government of Gujarat)
Status Update & Way Forward
1
Agenda
About G-RIDE
Implementation Structure
Projects
oProcess of identification
oIdentified Projects
oFuture projects’ identification
Projects Status & Way Forward
2
About G-RIDE
Announcement in Railway Budget : 26th of February, 2015

Date of Signing of JV Agreement b/t GoG : 17th of August, 2016
& Ministry of Railways
Agenda
 Incorporation of Company : 6th of January, 2017
Key Management:
 Chairman – Sh. M. K. Das, IAS , Principle Secretary

(Industries & Mines),GOG.
 Managing Director (MD) – Sh. Ashwini Kumar, IAS , Sect. to CM,GOG
 Director (BDev. & Finance) – Sh. Z A Khan, IRAS/OSD-GIDB (State
Nominee)
 Director (Project & Planning) – Sh. Santosh Kumar, IRSE (Railway
Nominee)
 Part Time Directors:
 State Nominee- 3 Nos.

3
 Railway Nominee- 3 Nos.
Implementation Structure
 G-RIDE – 51% Government of Gujarat and 49% Ministry of Railways

• Initial equity infusion of INR 100 Cr.
• Specific project SPVs to be created with min. 26% equity infusion by G-RIDE
• Further debt raising in project SPVs to finance individual projects
Ministry of Government of Debt raising through

Railways Gujarat Multilateral
49% equity 51% equity Agencies, Infra
Bonds etc.
Other Equity
Gujarat Infrastructure
Participants
Development Corporation
(Private/
Limited (G-RIDE)
Government)
Debt raising through
Min. 26% equity by
banks, Financial
G-RIDE
Institutions etc.
Project SPVs
4
Projects: Process of identification
 A Task Force Committee comprising 5- GOG Members & 4 MOR

Members was formed to identify and prioritize the projects in G-RIDE.
 Identification of projects was based on the following two principles:
1. Project should be financially viable;
OR
2. Project should be economically viable provided Viability Gap

Funding (VGF)/ Subsidy for such project is available as per the
present guidelines.
 Task Force Committee identified 12 rail projects in State of Gujarat.
5
Projects: Identified Projects
 Out of total 12(twelve) projects as identified by the Joint Task Force, 6 (six) projects were
shortlisted by G-RIDE’s BOD for priority implementation as below:
Sr. Project Length (in Project Cost (in
No Km) Rs. Crore)
1. Katosan-Becharaji-Chanasma-Ranuj line MG to Phase-I:25 Km Total (Phase 1+
BG Gauge Conversion Project: Phase-II:40 Phase 2): 584 Cr.
Katosan-Becharaji Line (Phase-I), Km
Becharaji-Chanasma-Ranuj Line (Phase-II) Total:65 Km
2. Vayor to Koteshwar New Line Connectivity 43 Km 450 Cr.
Project: District-Kutch
3. Bedi Port Last Mile Connectivity Project: Windmill Phase-I: 3.03 Phase-I: 44 Cr.
Station to old Bedi Port (Phase-1), Km Phase-II: - 150 Cr
Rail Connectivity to New Bedi and Rozi Port Phase-II:11.32
(Phase-II) Km
4. Chhara Port Last Mile Connectivity Project Kodinar- 200 Cr.
Chhara 19 Km
Line
5. Nargol Port Last Mile Connectivity Project 14 Km 140 Cr
6. Surat-Kudsad-New Sanjali Line 44 Km 500 Cr
6
Projects: Future Projects’ Identification
 Railway Master Plan for the State of Gujarat
- Review the current railway capacity, and establish the gap between this
capacity and the requisite railway infrastructure;
- Assess the demand/requirement of Railway Infrastructure (both

passenger and freight) in State in totality for next 30 years;
- Propose a railway development strategy and comprehensive integrated

Master Plan;
- Prepare a suitable organizational, regulatory, legal and financial

structure to implement the Master Plan;
- Assist State Government in implementation of the Master Plan.

7
Projects’ Status & Way Forward
1. Katosan-Becharaji- Chanasma- Ranuj (65 Km) line MG to BG Gauge Conversion Project
 In-principle assignment of the project by Railway Board

Via letter dtd.13/09/2017to G-RIDE:
 Due diligence and Detailed Project Report (DPR) with proper financing tie-up;
 Incorporate project specific SPV for implementation of the project.
 The equity investment of MOR capped to Rs.65 Cr.
8
PALNP
UR
MEHSA
NA
MUND KAN
RA DLA
AHMEDA
OK VIRAMG BAD
JAMNA
HA AM
GAR
PORBAN
DAR
Railway Division
Route
PIPA
VA
GIDC & SIR Proposed Rail RA
Connectivity
NUJ
CHANAS
MA
VAGOS
Katosan –Becharaji (Gauge Conversion)
AN
MEHSA
KARANSA NA
GAR
Becharaji- Chanasma- Ranuj (Gauge

MAR Conversion)
UTI
BECHR KATOS
AJI AN
JAPANESE PARK
MANDAL
KA CHATT
BHAGAPURA DI RAL
I & II KAL
OL
MEGA IT
PARK
VIRAM
GAM
AHMEDA
KHO BAD
RAJ SANA
ND
Projects’ Status & Way Forward Cont’d

 Project Status
 G-RIDE has awarded following project works,
S Sr. Study Title Consultancy Firm Cost of Study Contract Award

No Date
Study Title
Cos1. Financial Feasibility M/s. Ernst & Young Rs. 1,33,00,000 23/10/2017
Study
2. Technical Detailed M/s. Geo Designs & Rs. 2,31,84,640 23/10/2017

Project Report Research Private
Limited
3. PMC For Technical M/s. Sarvada Rs.7,47.500 04/11/2018

DPR Contract Engineering & Project
Management Pvt. ltd
Revised in-principle approval of equity participation

o Gujarat Industrial Development Corporation (GIDC) :- 26%,
o Maruti Suzuki India Ltd (MSIL):- 33%
o G-RIDE: remaining 41%.
SPV formation: Government Resolution for the same is awaited.

11
Brief Scope of Work

Financial Feasibility Study Technical Detailed Project Report
Traffic Estimation & Forecasting (including Stage 1: Inception Report
regression analysis, scenario analysis, goal seek,
transport modeling, survey analysis etc. to arrive at Stage 2: Technical Feasibility Report
suitable and projected logistic and freight Topography Survey
movement for the future period of assessment) Geo Technical Survey & Soil Exploration
Preparation of LS & CS
Financial Analysis and Economic impact analysis Preliminary Design & Strip Plan
(including assessment of tariff policy & fixation for Cost estimate & specifications
intended period) & fund raising Summarized Bill of Quantities
Drafting of SHA and Contract Agreement Stage 3: Detailed Project Report

GADs of Bridges & other structures
 Project Management & Quality Assurance Plan GADs of Station Yard & signal system
All other drawings
 Stakeholder identification & co-ordination Clearance report from other departments
12
Technical DPR Study: Summary of Total Estimate for Katosan-Becharaji :Phase-I (25 Km)
SI. Description Cash Store Freight Total

No
1. Civil Engineering 1316911659 482592531 24129680 1823633870
2. Electrical 132581122 40017123 -- 172598245

3. Signaling & 103066465 62250092 -- 165316557
Telecommunication
Net Cost of Work 1552559246 584859746 24129680 2161548672
4. Management Charges 216154867 0 0 216154867
10%
5. Contingency @3% 71331106 0 0 71331106
6. Environmental Charges 23777035 0 0 23777035
@1%
Total cost of work requiring 1863822254 584859746 24129680 2472811680
Sanction
13
Technical DPR Study: Summary of Total Estimate for Katosan-Chanasma-Ranuj :(65 Km)
SI. Description Cash Store Freight Total

No
1. Civil Engineering 308,01,03,071 106,07,00,029 5,30,35,104 419,38,38,204
2. Electrical 472610318 143588051 -- 616198369

3. Signaling & 187843389 114122895 -- 301966284
Telecommunication
Net Cost of Work 374,05,56,778 131,84,10,975 5,30,35,104 511,20,02,857
4. Management Charges 51,12,00,286 0 0 51,12,00,286
10%
5. Contingency @3% 16,86,96,094 0 0 16,86,96,094
6. Environmental Charges 5,62,32,031 0 0 5,62,32,031
@1%
Total cost of work requiring 447,66,85,189 131,84,10,975 5,30,35,104 584,81,31,268
Sanction
14
Financial feasibility Study: Summary of Traffic Estimate for Katosan-Becharaji- Chanasma- Ranuj
Category of Rake Type/Wagon

S. No Sector Units FY 23 FY 24 FY 25 FY 30 FY 35 FY 40 FY 45 FY 50
traffic Type
Auto BCACBM Rake (27 rakes per
1
Products Wagons per rake) day 2.94 2.94 3.91 4.65 4.65 4.65 4.65 4.65
Captive BOST
rakes per
2 Steel Coil Rake/Uncovered (43
day 0.12 0.12 0.12 0.16 0.16 0.16 0.16 0.16
wagons per rake)
Containerised
Rake/Covered rakes per
3 Fertilizer
Wagons (60 wagons day 0.05 0.05 0.05 0.06 0.07 0.07 0.08 0.09
per rake)
Containerised
Agro Rake/Covered rakes per
4 Induced
Products Wagons (39 wagons day - - - 0.27 0.27 0.27 0.27 0.27
per rake)
Containerised
Upcoming Rake/Covered rakes per
5
industries Wagons (45 wagons day - - 0.01 0.06 0.09 0.09 0.09 0.09
per rake)
rakes per
7 Total 3.10 3.10 4.09 5.19 5.24 5.24 5.25 5.26
day
15
Technical DPR Study: Summary of Total Estimate for Katosan-Chanasma-Ranuj :(65 Km)
Cost, Rs Additional Expenses to be Cost, Rs.

Base EPC Cost
Crores Capitalized Crores
Civil Engineering 409.36 Preliminary Expense 10.6
S & T Engineering 30.19 Contingencies 17.9
Electrical Portion of the work 25.48 D & G Charges 0.0
Elctrical Portion of the work for GRIDE Charges 54.2
36.13 Environmental charges 6.0
TRD
Maruti Siding 30.00 IDC 57.0
Gross cost 531.16 Total 146.0
Total Project Costs - Hard, Soft and Financing: Rs 677 Crores
Phasing of work (% of total annual capex )

Cost head 1-Apr-19 1-Apr-20 1-Apr-21 1-Apr-22
Civil Engineering 25% 40% 35% 0%
S & T Engineering 25% 40% 35% 0%
Electrical Portion of the work 25% 40% 35% 0%
Electrical Portion of the work for
0% 0% 0% 100%
TRD
Maruti Siding of 3 km @ INR 30
25% 40% 35% 0%
Cr
16
Technical DPR Study: Summary of Means of finance for Katosan-Chanasma-Ranuj
Means of finance % Rs. Crores
Project Debt 57% 360
Rupee term loan 48% 173
Soft loans* 52% 187
Project Equity 43% 317
GRIDE 41% 130
MSIL 33% 105
GIDC 26% 82
Total Project Cost 100% 677
*soft loans are envisaged to be arranged from project stakeholders having favourable repayment structure
17
Financial Feasibility Study: Project implementation scenarios
Project implementation
S. No. Parameter Value
scenario
Project IRR 0.9%
1 Standalone 25 kms Equity IRR 4.0%
Cumulative cash shortfall INR 109 Crore
Project IRR -2.8%
Equity IRR -1.2%

2 Standalone 65 kms
Project IRR -4.4%

Phase-wise development
3 (initial development of 25 km Equity IRR -1.0%
and defer development of 40
kms by ten years)
18
Financial Feasibility Study: Innovative financing schemes
 For a rail line project to be financially viable, it is necessary to have coal or port traffic
passing through it
 In the absence of any such traffic, this rail line project shall require innovative
financing schemes to enhance its feasibility
 Some of the innovative financing means that have been identified are as follows
 Construction of a 3km long Maruti Siding, enabling collection of terminal access
charges for automobile traffic @ INR 40,500 per rake
 Reduction in revenue share of Indian Railways to 30% from 50%
 Inflated kms on the lines of Konkan Railway Corporation that inflates distance by
50% incase of freight traffic and 40% in case of passenger traffic to compensate
for the high capital investment in the project
19
Financial Feasibility Study: Innovative financing for Standalone 25 kms
S. No. Scenario Parameter Value

Project IRR 2.8%
1 Reduction in revenue share to 30% from 50% Equity IRR 6.5%
Cumulative cash shortfall INR 71 Cr
Project IRR 2.9%
2 Maruti Siding Equity IRR 7.2%
Project IRR 5.5%
3 Inflated kms Equity IRR 10.20%
Project IRR 4.9%
Reduction in revenue share to 30% from 50% and Equity IRR 10.1%
1+2
construction of Maruti siding
Project IRR 6.4%
2+3 Maruti siding and inflated km Equity IRR 12.2%
Project IRR 8.7%
1+2+3 All of the three above Equity IRR 15.7%
20
Financial Feasibility Study: Innovative financing for Standalone 65 kms

Project IRR -1.07%
Reduction in revenue share to 30% from Equity IRR -1.10%
1
50%
Project IRR -0.97%
Project IRR 0.41%
Project IRR 0.8%
Reduction in revenue share to 30% from Equity IRR 3.8%
1+2
50% and maruti siding
Project IRR 1.5%
Project IRR 3.4%
1+2+3 All of the above Equity IRR 7.1%
21
Financial Feasibility Study: Innovative financing for phase wise development (25+40 kms)
Project IRR -1.89%
Reduction in revenue share to Equity IRR 2.10%
1
30% from 50%
Project IRR -1.66%
Project IRR 0.43%
Reduction in revenue share to Project IRR 0.9%

1+2 30% from 50% and maruti Equity IRR 6.0%
siding Cumulative cash shortfall INR 93 Cr
Project IRR 2.0%
Project IRR 4.8%
1+2+3 All of the above Equity IRR 11.7%
22
Financial Feasibility Study: Additional revenue to Indian Railways
Revenue apportioned to Indian Railways on account of movement of

BCACBM rakes 2,103
1,620
1,169
INR Cr
791
571
228
23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50
FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY
 The net present value of the revenues gained by Indian Railways is about Rs
4650 Cr
 Owing to substantial financial gains, Indian Railways may support the project
through grant/revenue support
23
Revenue apportioned to Indian Railways on account of movement of

BCACBM rakes – Annual trend from FY23 to FY50
Year In Rs Crores
FY23 228
2,103
FY24 244
1,620
FY25 347
1,169 FY30 571
INR Cr
791 FY35 791

571
FY40 1,096
228
FY45 1,518
FY50 2,103
 The net present value of the revenues gained by Indian Railways is about Rs
4650 Cr
 Owing to substantial financial gains, Indian Railways may support the project
through grant/revenue support
24
Financial Feasibility Study: Scenario 1 – Debt equity ratio of 53/47
Rs. Phasing of work (% of total annual capex )

Means of finance %
Crores
1-Apr- 1-Apr- 1-Apr-
Project Debt 57% 360 Cost head 1-Apr-19
20 21 22
Rupee term loan 48% 173
Soft loans* 52% 187 Civil Engineering 25% 40% 35% 0%
Project Equity 43% 317 S & T Engineering 25% 40% 35% 0%
GRIDE 41% 130
Electrical Portion of
MSIL 33% 105 25% 40% 35% 0%
the work
GIDC 26% 82
Total Project Cost 100% 677 Electrical Portion of
0% 0% 0% 100%
the work for TRD
*soft loans are envisaged to be arranged
Maruti Siding @ RS
from project stakeholders 25% 40% 35% 0%
30 Cr
 Project IRR of -1.0%, Equity IRR of 1.0%

 Cash shortfall of INR 293 Cr to service debt obligations
 In order to attain 5.0% Project IRR, INR 90 Crs annual shadow revenue support
required
25
Financial Feasibility Study: Scenario 2 – Project funded only via equity
Phasing of work (% of total annual capex )

Rs.
Means of finance % 1-Apr- 1-Apr- 1-Apr-
Crores Cost head 1-Apr-19
20 21 22
Civil Engineering 25% 40% 35% 0%

GRIDE 41% 254
S & T Engineering 25% 40% 35% 0%
MSIL 33% 205 Electrical Portion of

25% 40% 35% 0%
the work
GIDC 26% 161 Electrical Portion of

0% 0% 0% 100%
the work for TRD
Total Project Cost 100% 620
Maruti Siding 25% 40% 35% 0%
 Project IRR of 3.2%, Equity IRR of 3.2%

 No cash shortfall owing to zero debt service obligations
 In order to attain 5.0% Project IRR, shadow revenue support of Rs 16 Crs required
annually
26
Returns from revenue apportioned to Indian Railways on account of

movement of BCACBM rakes
Particulars FY20 FY25 FY30 FY35 FY40 FY45 FY50
Revenue gain from movement of

347.0 570.9 790.8 1,095.5 1,517.7 2,102.5
auto rakes
Revenue expenditure (% of revenue) 40% 40% 40% 40% 40% 40% 40%
Net revenue for IR 208.2 342.5 474.5 657.3 910.6 1,261.5
Post tax revenue for IR 137.4 226.1 313.2 433.9 601.1 832.7
Free cash flow to IR -127 137.4 226.1 313.2 433.9 601.1 832.7
IRR 86.15%
 The IRR of initial investment of Rs 127 Crs for Indian Railways is about 86%
 Further, in case IR gives shadow revenue support of Rs 100 Crs, the IRR for
Indian Railways will still be 33.65%
27
 Issues to be discussed
 As per Technical DPR , detailed estimate project cost: 584 Cr with IRR of 2%,
How to go ahead about the project?
 A mechanism may be developed to annually revise the freight rates of the BCACBM
rakes
 The project is economically feasible (EIRR of about 10.0%), and hence may be
undertaken for development
 CRRM for the release material in GC Projects
 Policy regarding private sidings.
28
Sr. Project Stakeholders Length (in Cost (In Status

No Km) Rs.
Crores)
2. Vayor –Koteshwar G-RIDE, 43 Km 430 Cr Consultant selection
last mile GIDC, M/s. process for conducting
Connectivity Project Shapoorji Techno-economic pre-
Pallonji Pvt feasibility study is under
Ltd., progress.
Federation of
Kutch
Industries
Associations
(FOKIA)
3. Bedi Port Last Mile G-RIDE, GMB, Phase I- Phase Case details along with
Connectivity Project M/s. Shapoorji 3.03 Km I:40.35 SPV formation etc is
Phase I- Windmill Phase II- Phase
Pallonji Pvt 11.32 Km II:70 awaited from GMB.
Station to old Bedi Ltd.
Port Total:110
Phase II- Rail .35
Connectivity to New
Bedi and Rozi Port
29

No Km) Rs.
Crores)
4. Chhara Port Last G-RIDE,GMB, Kodinar- 326.40 Techno-Economical
Mile Connectivity M/s. Simar Ports Chhara :19 Feasibility Report is
Project Pvt.Ltd (Port Km prepared by Simar
Developers), Port Limited
Other possible (subsidiary of
Stakeholders i.e Shapoorji Pallonji Co
Sanghi Cements, Limited – developer of
Ambuja Cements Chhara / Simar Port) .
present available IRR
is non bankable, GMB
instructed to take
steps to improve the
feasibility. Based on
that, decision to take
up financial feasibility
study, DPR/FLS
studies by G-RIDE
shall be taken.
Co-ordination
meeting with other
possible stakeholders
at GMB level is
proposed shortly.
30

No Km) Rs.
Crores)
5. Nargol Port Last G-RIDE,GMB, 14 Km G-RIDE has been in
Mile Connectivity Shapoorji Pallonji --- continuous co-
Project Pvt Ltd. ordination with GMB
for this project. It has
been decided by G-
Projects’ Status & Way Forward RIDE Board that once
Cont’d the port construction
starts in full swing,
project providing last
mile connectivity may
then be initiated.
6. Surat-Kudsad-New G-RIDE, GMB, 44 Km --- Financial Feasibility
Sanjali Line Project GIDC, Adani Study & DPR/FLS
Ports Ltd. Study shall be taken
up shortly.
31
Thank You!
32

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GUJARAT RAIL INFRASTRUCTURE

DEVELOPMENT CORPORATION LIMITED (G-RIDE)

Status Update & Way Forward

Projects Status & Way Forward

Announcement in Railway Budget : 26th of February, 2015

 Chairman – Sh. M. K. Das, IAS , Principle Secretary

 Director (BDev. & Finance) – Sh. Z A Khan, IRAS/OSD-GIDB (State

 State Nominee- 3 Nos.

 G-RIDE – 51% Government of Gujarat and 49% Ministry of Railways

Ministry of Government of Debt raising through

 A Task Force Committee comprising 5- GOG Members & 4 MOR

 Identification of projects was based on the following two principles:

1. Project should be financially viable;

2. Project should be economically viable provided Viability Gap

 Task Force Committee identified 12 rail projects in State of Gujarat.

6. Surat-Kudsad-New Sanjali Line 44 Km 500 Cr

 Railway Master Plan for the State of Gujarat

- Assess the demand/requirement of Railway Infrastructure (both

- Propose a railway development strategy and comprehensive integrated

- Prepare a suitable organizational, regulatory, legal and financial

- Assist State Government in implementation of the Master Plan.

1. Katosan-Becharaji- Chanasma- Ranuj (65 Km) line MG to BG Gauge Conversion Project

 In-principle assignment of the project by Railway Board

 Incorporate project specific SPV for implementation of the project.

 The equity investment of MOR capped to Rs.65 Cr.

Becharaji- Chanasma- Ranuj (Gauge

1. Katosan-Becharaji- Chanasma- Ranuj (65 Km) line MG to BG Gauge Conversion Project

S Sr. Study Title Consultancy Firm Cost of Study Contract Award

2. Technical Detailed M/s. Geo Designs & Rs. 2,31,84,640 23/10/2017

3. PMC For Technical M/s. Sarvada Rs.7,47.500 04/11/2018

Revised in-principle approval of equity participation

SPV formation: Government Resolution for the same is awaited.

Brief Scope of Work

Drafting of SHA and Contract Agreement Stage 3: Detailed Project Report

SI. Description Cash Store Freight Total

2. Electrical 132581122 40017123 -- 172598245

SI. Description Cash Store Freight Total

2. Electrical 472610318 143588051 -- 616198369

Category of Rake Type/Wagon

Cost, Rs Additional Expenses to be Cost, Rs.

Total Project Costs - Hard, Soft and Financing: Rs 677 Crores

Phasing of work (% of total annual capex )

Means of finance % Rs. Crores

Project Debt 57% 360

Rupee term loan 48% 173

Soft loans* 52% 187

Project Equity 43% 317

GRIDE 41% 130

MSIL 33% 105

Total Project Cost 100% 677

Financial Feasibility Study: Project implementation scenarios

Project IRR 0.9%

1 Standalone 25 kms Equity IRR 4.0%

Cumulative cash shortfall INR 109 Crore

Project IRR -2.8%

Equity IRR -1.2%

Cumulative cash shortfall INR 435 Crore

Project IRR -4.4%

Financial Feasibility Study: Innovative financing schemes

Financial Feasibility Study: Innovative financing for Standalone 25 kms

S. No. Scenario Parameter Value

Financial Feasibility Study: Innovative financing for Standalone 65 kms