Review: Rail Vikas Nigam Ltd – a Journey of 10 years

Rail Vikas Nigam Limited is an organisation associated with Indian Railways whose task is to build engineering works required by Indian Railways.

Background

Rail Vikas Nigam Ltd. (RVNL), a Public Sector Undertaking (PSU) under Ministry of Railways, was created with the twin objectives of raising extra budgetary resources and implementation of projects relating to creation and augmentation of capacity of rail infrastructure on a fast track basis. The Company was incorporated on 24th January 2003 and became fully functional with the appointment of all Directors of Board by March 2005.   RVNL has grown into a Company with a turnover of over Rs. 2100 crore and a major provider of rail infrastructure in the country. This has been achieved with a lean organization of 375 employees, indicating a high level of productivity, which needs to be emulated. RVNL provides a paradigm of an ideal PPP route for executing railway projects.  RVNL has been managing its resources and finances very efficiently to achieve targets, which is remarkable. RVNL has successfully undertaken several capacity augmentation works of newline construction, doubling and third line, gauge conversion, electrification, port-connectivity and of workshops across the country.

Indian Railway network particularly High Density Network, which connects the four Metro Cities of Delhi, Kolkata, Chennai & Mumbai including the diagonals is over saturated. Challenges of higher economic growth require leap forward capacity development strategy on Indian Railways. Paradigms of such a strategy required a shift from dependence on purely budgetary sources and internal surplus of Railways to mobilization of non-budgetary financial resources from private sector, banks, financial institutions, multilateral and bilateral agencies through a mix of equity and debt. The financial resources available from the traditional sources were found to be grossly inadequate to meet the requirement. The Ministry of Railways, therefore, had been considering various innovative methods of project distribution and creation of assets. Another paradigm shift required was to change from project mode of planning to programme mode to be implemented in a time bound manner. It was felt that the Railways instead of becoming the bottleneck in economic growth of the country should spur economic growth by development of capacity ahead of demand. It required fast track implementation of projects adopting established practice of financial closure and use of modern project management techniques. For this, adequate and uninterrupted flow of funds is a prime requirement. It also required mechanization of construction involving large number of construction machines and equipments of varied nature and skill sets of altogether different kind. Creation of Rail Vikas Nigam Limited is an outcome of the above thought process and policy initiative.

Due to significant railway infrastructure constraints, the share of traffic being moved by roads has been steadily increasing at the cost of the Railways. The Railways share has come down from 86% level to present 36% level. However Railways will have to focus on creation of additional line capacity and railway infrastructure and RVNL can play a significant role in this. RVNL has established project specific five SPVs which have generated substantial revenues with only a limited contribution of equity by Indian Railways. The Company will now have to explore possibilities of further investment from critical stakeholders as well as private funding. There is need to develop innovative strategies to enhance revenue schemes and tap extra budgetary resources to augment capacity of the network and the need to transfer more works for execution to RVNL for their fast track implementation.

Projects were executed flawlessly and commissioned in a smooth and professional manner with meticulous planning. The completion of the infrastructure works by RVNL, since its inception have improved the throughput of the system and contributed substantially to the additional loading and revenue earning capacity of the railways.  RVNL also venturing shortly in building partnerships with organizations such as SAIL, Coal India, Ports etc. who are developing plans for creating additional rail linkages. As mandated by the Government to adopt the PPP route for railway projects has established five SPVs upto the end of 2012-13, the total earning accrued to Indian Railways from two fully and one partly operational SPVs is about Rs.16,260 crore with an investment of only Rs.224 crore by Indian Railways.

On the physical front, upto 31st March 2013, RVNL has completed a total of 4635 km of project length. This includes 194 km of New Lines, 1123 km of Doubling, 1590 km of gauge conversion, 1728 km of Railway Electrification works. Two workshops have also been completed. Some of the important projects that have been completed include the longest rail bridge in the country at Kochy, linking the main land with the newly developed International Container Terminal at Vallarpadam, six important bridges in Orissa (including three over the mighty Mahanadi), Aligarh-Ghaziabad third line, Tiruvallur-Arakonam third line, gauge conversion projects such as Bhildi-Samdhari, Delhi-Rewari-Phulera-Ajmer, Thanjavur-Villupuram gauge conversion etc. RVNL has been able to realize these achievements with only a limited manpower and the main reason is the adoption of systems and procedures to improve productivity, innovative tendering processes, such as floating of composite tenders covering all civil, electrical and Signalling &Telecom works with multi packaging. Department of Public Enterprises has rated RVNL as “Excellent” for the second consecutive year in 2011-12.  RVNL is implementing projects by awarding composite contracts on turn key basis as per international practices and standards. RVNL is conscious of its Corporate Social Responsibility (CSR) also and is playing a significant role to the communities in which its projects are located in backward districts of the country. The CSR projects include provision of hostel facilities for tribal boys in Narayanpur, Bastar, education and development of under privileged differently-abled children in Kolkata, provision of ambulances in various backward districts and supporting delivery of health care services.

physical-plan

Completed Projects:

1   ABU ROAD – SAROTRA ROAD PATCH – DOUBLING
2   ALIGARH – GHAZIABAD 3RD LINE DOUBLING
3   ARASIKERE-HASSAN-MANGALORE GAUGE
4   BARAUNI – TILRATH BYPASS DOUBLING
5   BHARUCH – SAMNI – DAHEJ GAUGE CONVERSION
6   BHILDI – SAMDARI GAUGE CONVERSION
7   BHUBANESWAR – KOTTAVALASA ELECT
8   CUDDALORE – SALEM GAUGE CONVERSION
9   DAITARI – BANSPANI NEW LINE
10  DELHI – REWARI GAUGE CONVERSION
11  DIVA – KALYAN 5TH & 6TH LINE
12  GANDHIDHAM – PALANPUR GAUGE CONVERSION
13  GOOTY – RENIGUNTA PATCH DOUBLING
14  GURUP – SAKTIGARH EXTN OF 3RD LINE
15  HOSPET – GUNTAKAL DOUBLING
16  KHARAGPUR (NIMPURA) – BHUBANESWAR
17  PAKNI – MOHOL DOUBLING
18  PAKNI – SOLAPUR DOUBLING
19  PANSKURA – HALDIA PH 1 DOUBLING
20  PANVEL – JASAI JNPT DOUBLING
21  PATTABIRAM – TRIUVALLUR 4TH LINE &
22  PULLAMPET – BALAPALLE PH I OF GOOTY –
23  TALCHAR-CUTTACK-PARADEEP DOUBLING WITH 2ND BRIDGE ON RIVERS BIRUPA AND MAHANADI
24  THANJAVUR – VILLUPURAM GAUGE CONVERSION
25  TOMKA -BANASPANI – RE
26  VALLAPARPADM – IDAPALLY NEW LINE

Projects in Progress

1  ANGUL – SUKINDA NEW LINE
2  ATTIPATTU – KORUKKUPET 3RD LINE DOUBLING
3  BARANAGAR – BARRACKPORE & DAKSHINESWAR – CONSTRUCTION OF METRO RAILWAY LINE
4  BARAUNI – NEW LOCO SHED TO HOME 100 ELECTRIC LOCOS
5  BARKHERA- BUDNI 3RD LINE
6  BHAGAT KI KOTHI – LUNI – DOUBLING
7  BHOPAL – BINA 3RD LINE DOUBLING
8  BILASPUR – URKURA 3RD LINE DOUBLING
9  BINA – KOTA DOUBLING WITH RE
10  BUDNI – ITARSI 3RD LINE
11  BURAMARA – CHAKULIA – NEW LINE WITH UPGRADING OF RUPSA – BURAMARA
12  CONSTRUCTION OF MULTI-FUNCTIONAL COMPLEXS(MFCS)
13  CUDDAPAH – BANGALORE NEW LINE
14  CUTTACK – BARANG DOUBLING
15  DALLI – RAJHARA – RAOGHAT
16  DANKUNI – FURFURA NEW LINE
17  DANKUNI – SETTING UP OF ELECTRIC LOCO ASSEMBLY AND ANCILLARY UNIT OF CLW
18  DAUND – GULBARGA DOUBLING
19  DIGHI PORT – NEW LINE
20  DIMAPUR – KOHIMA – NEW LINE
21  DUM DUM AIRPORT – NEW GARIA VIA RAERHAT
22  GOELKERA – MANOHARPUR 3RD LINE DOUBLING
23  GUNTUR – TENALI DOUBLING WITH ELECTRIFICATION
24  HABIBGANJ – BARKHERA 3RD LINE
25  HARIDASPUR – PARADEEP NEW LINE
26  HOSPET – TINAIGHAT – VASCO-DA-GAMA – DOUBLING
27  IOCL SIDING AT SALAWAS (DEPOSIT WORK)
28  JAKHPURA- HARIDASPUR 3RD LINE DOUBLING
29  JAROLI (BANASPANI) – JAKHPURA – DOUBLING
30  JOKA – BINOY BADAL DINESH BAGH VIA MAJERHAT
31  JOKA – BINOY BADAL DINESH BAGH VIA MAJERHAT
32  KHARAGPUR WORKSHOP – SETTING UP OF CENTRE OF EXCELLENCE FOR WAGON PROTOTYPING
33  KHURDA ROAD – BARANG 3RD LINE DOUBLING
34  LUCKNOW- PILIBHIT VIA SITAPUR, LAKHIMPUR GC
35  NABADWIPGHAT – NABADWIPDHAM – NEW LINE
36  NAUPARA(EX.) – BARANAGAR
37  NEORA – DANIWAN & BARBIGHA – SHEKHPUR – NEW LINE
38  NEW DELHI – TILAK BRIDGE 5TH & 6TH LINE
39  OBULAVARIPALLE – KRISHNAPATTNAM NEW LINE
40  PALWAL – BHUTESWAR 3RD LINE DOUBLING
41  PANSKURA – HALDIA PH II DOUBLING
42  PANSKURA – KHARAGPUR 3RD LINE DOUBLING
43  PUNE – GUNTAKAL RLY ELECT.
44  RAICHUR – GUNTAKAL DOUBLING
45  RAIL CONNECTIVITY TO VIZHINJAM INTL. SEAPORT LTD.(VISL)
46  RAIPUR – TITLAGARH – DOUBLING
47  RAJATGARH – BARANG DOUBLING
48  RAJGODA – TAMLUK (JN. CABIN) DOUBLING
49  RENIGUNTA – GUNTAKAL ELECT
50  REWAS PORT – NEW LINE
51  RISHIKESH – KARNAPRAYAG NEW LINE
52  Road Over Bridge at BARDHMAN(YARD) – 4 LANES
53  SALKA ROAD – ANNUPPUR DOUBLING
54  SAMBALPUR – TITLAGARH – DOUBLING
55  SAROTRA ROAD – KARJODA PATCH – DOUBLING
56  SURAT – HAJIRA NEW LINE
57  SURENDERANAGAR – VIRAMGAM – DOUBLING
58  TAMLUK JN. CABIN – BASULYA SUTAHATA DOUBLING
59  TIKIAPARA – SANTRAGACHI DOUBLING
60  TIRUVALLUR – ARAKKONAM 4TH LINE
61  TITLAGARH (Excl.) – RAIPUR – RE
62  VIJAYWADA – GUDIVADA – BHIMAVARAM – NARASAPUR, GUDIVA DA – MACHILIPATNAM & BHIMAVARAM – NIDADAVOLU DOUBLING WITH RE
63  VILLUPURAM – DINDIGUL DOUBLING
64  YELAHANKA – DHARMAVARAM – GOOTY – RE

Financial Progress

financial-plan (1)

Models of Project Implementation

  1. Models of Project Implementation 
    RVNL is implementing rail projects primarily through following models:

    1. Formation of Project Specific SPVs having equity and debt financing.
    2. Build Own Transfer (BOT) route, wherein the entire financing is arranged by the private developer through equity and debt route.
    3. Private Railway, wherein the project is funded as part of the port project.
    4. Projects are implemented either through the construction units of Zonal Railways or by award of EPC contract by RVNL and funds are raised by RVNL directly
  2. Projects to be implemented through SPVs 
    The following projects are being planned for implementation through creation of Project specific Special Purpose Vehicle (SPVs) having equity participation by both strategic and financial investors.

    1. Haridaspur – Paradeep New Line & RE (Orissa)
    2. Bharuch – Samni – Dahej Gauge Conversion (Gujarat)
    3. Surat – Hazira New Line (Gujarat)
    4. Obuvallirapalle – Krishnapatnam New Line (Andhra Pradesh)
    5. Arsikeri Hassan – Mangalore Gauge Conversion (Karnataka)
    6. Gandhidham – Palanpur Gauge Conversion (Gujarat)
    7. Angul – Sukinda New Line & RE(Orissa)
  3. Projects to be implemented through BOT/EPC Contracts 
    The project implementation through BOT Model requires financing and construction of the project by the private developer. RVNL will pay Access Charge to the developer for a fixed period of time. In case of EPC contracts, the financial resources will be raised by RVNL and the private firms will undertake construction. The following projects are identified:

    1. Delhi – Rewari Gauge Conversion of 2nd Line
    2. Rewari – Phulera – Ajmer Gauge Conversion
    3. Junction Cabin – Palwal 4th Line
    4. Thanjavur – Villupuram Gauge Conversion
    5. Daund – Gulbarga Doubling
    6. Punskura – Kharagpur 3rd Line
    7. Bhildi – Samdari Gauge Conversion
    8. Panvel – JNPT Doubling
    9. Bhopal – Bina 3rd Line
    10. Daitari – Banaspani New Line and Banaspani-Jakhpura RE
    11. Pakni – Solapur Doubling
    12. Pakni – Mahol Doubling
    13. Palwal – Bhuteshwar 3rd Line
    14. Cuddalore – Salem Gauge Conversion (Tamil Nadu)
    15. Diva – Kaylan doubling of 5&6 Line
    16. Gurup – Shaktigath:3rd Line
    17. New Delhi -Tilak Bridge:5th & 6th Line
    18. Attipattu-Korukkupettai 3rd Line
    19. Balapalle-Pullampet:Phase-1 of Gooty-Renigunta Doubling.
    20. Kharagpur/Nipmura-Bhubaneshwar including branch line of Talcher-Cuttack-Paradip
    21. Bhubaneshwar-Kottavalasa
    22. Jakhpura-Haridaspur 3rd Line Doubling
    23. Tikiapara-Santragachi
    24. Panskura-Haldia Phase-I
    25. Barauni-Tilrath Bypass Doubling
    26. Hospet-Guntakal
    27. Salka Road-Annuppur Doubling
    28. Panskura-Haldia Phase-II 
  4. Projects being developed as Private Railways
    1. Vallarpadiam – Idapalli New Line (Kerala)
  5. Projects being implemented through ADB Funding
    1. Talcher-Cuttak-Paradeep Doubling with Second Bridge over river Mahanadi at Birupa.
    2. Gooty – Renigunta Patch Doubling
    3. Bilaspur – Urkura 3rd Line
    4. Rajatgarh – Barang
    5. Cuttack – Barang Doubling
    6. Khurda – Barang 3rd Line
    7. Aligarh – Ghaziabad 3rd Line
    8. Raichur – Guntakal Doubling
    9. Renigunta – Guntakal Railway Electrification
    10. Pune – Guntakal Railway Electrification
    11. Pattabiram-Tiruvallur 4th Line & Tiruvallur-Arakkonam 3rd Line Doubling
 1 ABU ROAD – SAROTRA ROAD PATCH – DOUBLING
 2    ALIGARH – GHAZIABAD 3RD LINE DOUBLING
 3    ARASIKERE-HASSAN-MANGALORE GAUGE
 4    BARAUNI – TILRATH BYPASS DOUBLING
 5    BHARUCH – SAMNI – DAHEJ GAUGE CONVERSION
 6    BHILDI – SAMDARI GAUGE CONVERSION
 7    BHUBANESWAR – KOTTAVALASA ELECT
 8    CUDDALORE – SALEM GAUGE CONVERSION
 9    DAITARI – BANSPANI NEW LINE
 10    DELHI – REWARI GAUGE CONVERSION
 11    DIVA – KALYAN 5TH & 6TH LINE
 12    GANDHIDHAM – PALANPUR GAUGE CONVERSION
 13    GOOTY – RENIGUNTA PATCH DOUBLING
 14    GURUP – SAKTIGARH EXTN OF 3RD LINE
 15    HOSPET – GUNTAKAL DOUBLING
 16    KHARAGPUR (NIMPURA) – BHUBANESWAR
 17    PAKNI – MOHOL DOUBLING
 18    PAKNI – SOLAPUR DOUBLING
 19    PANSKURA – HALDIA PH 1 DOUBLING
 20    PANVEL – JASAI JNPT DOUBLING
 21    PATTABIRAM – TRIUVALLUR 4TH LINE &
 22    PULLAMPET – BALAPALLE PH I OF GOOTY -
 23    TALCHAR-CUTTACK-PARADEEP DOUBLING WITH 2ND BRIDGE ON RIVERS BIRUPA AND MAHANADI
 24    THANJAVUR – VILLUPURAM GAUGE CONVERSION
 25    TOMKA -BANASPANI – RE
 26    VALLAPARPADM – IDAPALLY NEW LINE
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