Naveen,

BIAL expects to close year 1 with about 8.3 million passenger vs the 11 million that was anticipated.  I can tell you how empty the airport looks now even at 6:30 a.m.

http://www.thehindubusinessline.com/2009/01/24/stories/2009012450561700.htm

Let's assume that we stay flat in 09-10 vs 08-09(optimistic!) and then growth returns. Lets say air traffic growth averages 15-16% per year then on.  That means doubling every 5 years.  so we will be at about 16 million passengers by 2014-15 (I hope praja is around till then so that I can validate my forecast!).  AT 50% usage we will have 8 million annual passengers or about 25000/day.  Do you really think this is viable at those volumes?  Will private parties really come forward unless some other goodies are offered?  Risks increase with projects that are so far into the future.  The elevated expressway is now 1 YEAR behind schedule and this for a 9 km stretch. 

There are many ways to get a rail link.  A surface line can be added at 1/5-1/8 of the cost and cheaper rolling stock can be put in place.  A journey time of 45 mins vs 23 mins on the HSRL is not make or break.   My issue is that HSRL seems to be the only viable option in the eyes of Mr.Sreedharan.

Srivathsa

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Srivathsa,

Surface rail, as mentioned by you would need land acquisition. The rail link will probably be aligned along the median of Bellary road. So, though construction costs with surface rail will be lower, land costs would make it even higher than going elevated over the land already publicly owned along the road median/s.

I guess these are the reasons why Dr.Sreedharan insists on HSRL :

1) Since airport rail is a must, why not hi-speed ? The additional costs are anyway being met by private parties, in whose opinion, HSRL would probably be far more viable due to increased patronization levels as it would be the best possible service for airport connectivity as opposed to slower rail or road services.

2) Financial risks would be out from the govt /public domain. Project execution becomes easier since funding, one of the main constraints is out of the govt's hands & the risks would be squarely in the lap of the private consortium.

3) Responsibility for construction & operations for a pre-determined period, say 30-35 years will also be out of govt /public domain. The private consortium will have to redress all greviances from the public & the govt, if any.

4) Guaranteed market with well-heeled commuters, willing to pay higher ticket prices - this is a growth sector & profits will escalate, though as analysed by you, it might take a while (the construction phase ?) due to the prevailing economic downturn.

5) Flexible capacity variation based on the targeted market (unlike Metro, which, till Yelahanka will see full 6-coach train loads, but with much fewer volumes beyond till airport).

6) Takes care of all future needs since the dedicated service will be almost a life-time installation, if not for even further period/s. So, no ifs /buts /doubts will be encountered through the planning & execution phases as it is appropriate for the target market over any length of time. If a Metro line is built out of public finances, there will always be questions regarding it's appropriateness, based on patronization levels, which are bound to be poor beyond Yelahanka as also due to it's slowness for air travellers.

What does the govt & public lose ?

1) Rights over operation upto the agreed period (30-35 years).

2) Lesser control over ticket pricing.

3) Concessions & exclusive rights, such as "No operation of Vaayu Vajras", "No Public buses beyond Trumpet Inter-change", etc. to ensure people use this service. Taxis & private cars cannot obviously be restrained into the airport premises.

4) Exclusive rights for advertisement space at stations & within coaches, as also on tickets & other such item/s.

Thus, the advantages outweigh the negatives.

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I think the BIAL rail will not run at 300km/hr. The time for travel of some 30-odd km (with a couple of stops inbetween) has been quoted as 23 minutes. So, in all likelihood, the maximum speed may not exceed 150-170km/hr.

As you rightly mentioned, when such very large investments are made, they must always take the long term requirements into account, & must never be based on the next 10 years alone. Further, it's wise to think well ahead of time, too - could'nt agree with you more.

Capital investments as also operation of the rail will be by the private sector for some agreed period. So, there would be better control over wastage as also minimal use of public funds.

The HSRL, with very few stations, built on stilts along existing road/s will certainly cost lesser than Metro with many stations along the route involving land issues at very high acquisition costs.

HSRL, unlike Metro, will not be suitable for daily commuters as the train will not be able to stop & start within short distances. Thus, it will have to be between city & airport, with typically two stops inbetween.

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KSIIDC has called for RFQ (Request for Qualification). Salient features are as follows :

The train is to have 6 coaches, speed upto 160 km/hr, transit time (city to BIAL) <25 mins,

Current (2009) cost: 3894 crs (4313 crores if designed underground at BIAL)

Completion (2012) cost: 5190 crs (5767crs if designed underground at BIAL)

Fares envisaged :

From City Air Terminal (CAT) at Police grounds to International Airport = Rs.200/-
From Hebbal to International Airport = Rs.150/-
From Yelahanka to International Airport = Rs.100/-

Monthly or quarterly season tickets will be priced on the basis of Rs.50/- per journey & forty journeys per month i.e. Rs.2000/- p.m.

Some extracts :

City Airport Terminal

The High Speed Rail link to the new International Airport starts from the Police Grounds situated between M.G Road and Cubbon Road. Police Grounds represents practically the city center, well connected on all sides to the entire city and its outskirts. The ramp of the Bangalore Metro is also located in this area. The structure of the City Airport Terminal (CAT) is being planned in such a way that the needs of Bangalore Metro are fully met while at the same time the remaining area is utilized for the CAT. The proposed Bangalore
Metro Rail crosses Police Grounds diagonally as a ramp from the underground station of Minsk Square to the elevated station on the M. G. Road. It is possible to accommodate in the Police Grounds the requirements of both the Bangalore Metro and CAT of the High Speed Rail Link. The CAT structure will be put up around the Bangalore Metro Ramp. In other words the Metro ramp structure will go through the CAT Building, the two systems totally isolated, at the same time integrated together.

The CAT structure will be multi storied with separate departure and arrival areas. Initially, it will have 60 check–in counters for international passengers and another 60 for domestic passengers with provision to increase their numbers to cater to future demand. Provision is also being made for facilities such as Airline Ticketing Offices, CAT and Rail Line Offices, Shopping Arcade, Restaurants,
Coffee Shops, Rest Rooms, etc. There will be adequate parking facilities for private cars, taxis, autos etc. The Complex will have about 1800 parking capacity for “park and fly” passengers. "

Willingness to Travel by the Proposed High Speed Rail Link

Opinion survey conducted shows that a large number of passengers and workers (80%) are willing to use the proposed High Speed Rail Link. About 71% staff surveyed also expressed their willingness to shift to the ‘proposed Rail Link. About 81% of the surveyed passengers expressed their preference for a City Check-in facility.

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Development of the proposed Devanahalli Business Park (DBP), a subconcession of BIA will be critical for the success of HSRL as well. If monthly passes are indeed at Rs. 2000 a month, it would be economical for people to use the Metro and HSRL to get to work at DBP.

The HSRL then has a good chance of being economical. If one considers the AirTrain of NYC, which combines both passengers to JFK and other routes, then yes, HSRL has a good chance of succeeding.

In about 4 years from now, air passenger traffic should be up as well. 

Nevertheless, development of DBP and inauguration of DBP within months of HSRL coming up is critical for HSRL.

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My skepticism still continues - is there anyone who has actually expressed interest.  I saw an ad in the Bombay TOI extending the date for EOIs.  Will this actually get done in 3 years.  More than 2 years on Reach 1 of NM is still not even halfway there.  What happens if our private partner turns out to be like a General Motors and goes bankrupt in the middle of the project?  Will the air traffic numbers really justify this?  We are facing a massive deleveraging globally and my own thinking is that economic activity is going to get reset to a much lower level from which growth will then start.  Our politicians are in denial about how bad the situation actually is and live in cuckoo-land.

Setting aside my skepticism

a. If there is no govt money involved then that's one negative less.  I cannot digest govt money being spent on elitist transport

b. This is a good time (economic downturn) to start this work and plan for future needs. 

c. Will BIAL put in money for the CAT?  How much?  If I can be guaranteed a 23 minute ride to the airport and a maximum wait of 10 mins for the train and 10 mins for security check, I will not go to the airport 1 hr before.  I will take a train that puts me 30 mins before my flight.  That means BIAL can serve twice as many passengers in today's terminal with marginal investment in security booths and aerobridges.

d. CAT becomes the virtual departure lounge and people can sit here till about 45-50 mins before their flight.

e. Volvos start from MG Road and fan out to the city.

f. If the Rs.2000 promise is kept then the economics change a fair bit.  Maybe some of our friends from South Bangalroe set up parks in North Bangalore.

I am partially converted (not that it matters!)

Srivathsa

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Srivathsa,

As per newsreports, some 27 parties had shown interest in the initial round, but had many queries. Therefore the bid guidelines have now been revised & the questions that were raised have all been answered in these revised guidelines. This is probably why the EOI dates have also been extended.

I dont think BIAL is also party to this. They have sought underground HSRL stations for terminal-1 & the future terminal-2, but costing goes up for this.

I am also one of those that has been 'converted', after the interest shown by private parties & the logic that any type of train that cannot beat road transport in terms of time savings & travel cost might fail !

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Naveen,

Any news on HSRL?  Came to my mind when in a taxi on the way to the airport this morning.

My suspicion is that the economics don't work.  Else Reliance  e.g. would be on it.  Investing Rs3000 or 5000 crores is really not a big deal for them if this can be a flagship project - first of its kind, etc    They are doing the Bombay Metro and at a speed that will put BMRCL to shame

Srivathsa

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Saw this in expressbuzz

http://www.expressbuzz.com/edition/story.aspx?Title=Brakes+on+the+high-

Looks like KSIIDC is struggling to find capable people to build and has been revising criteria - downwards.

"KSIIDC has reduced the required Threshold Technical Capability (revenues collected and appropriated from eligible projects) of the bidder from Rs 6,000 crore in the last five years to Rs 3,000 crore in the last 10 years. Capital cost of project has been reduced from Rs 600 crore to Rs 150 crore."

"Earlier, KSIIDC wanted a firm with complete experience in developing a total rail system.

As not many qualified bidders were fitting the bill, they have become more flexible by amending the definition of eligible project by including experience in the fields of rolling stock, Signalling and Telecommunication equipment systems, overhead track equipment for the Railways and Rail Track system.

Also, earlier KSIIDC had stated that it would consider only the last five year’s experience of the bidder, but now it will consider the bidder’s experience over the last 10 years. Also, it had said that each eligible member should have at least 26 per cent equity share in the eligible project. Now the corporation has reduced the required equity share of each eligible member to 10 per cent."

All the makings of an interesting long term construction project.  Reducing equity and experience requirements is a bad idea.   It is just asking for trouble.

Srivathsa

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Srivathsa,

I feel these are only birth pangs in the process. When they had a long list of interested parties, they went overboard with selection criteria & made the qualification terms stiffer - few could qualify, as a result.

The truth is that there are no parties that have the know-how of building & operating such a system in the country yet, & I feel there will be some initial hang-ups. The economic downturn may have also been contributed to this.

I am curious about what you said :

Reliance  e.g. would be on it.  Investing Rs3000 or 5000 crores is really not a big deal for them if this can be a flagship project - first of its kind, etc    They are doing the Bombay Metro and at a speed that will put BMRCL to shame.

I had read reports that Mumbai metro is progressing too slowly & your statement seems to suggest otherwise. Any reports that suggest this ?

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This patient refuses to die :).  Something from the TOI.

http://timesofindia.indiatimes.com/Bangalore/New-lease-of-life-for-High-Speed-Rail-Link-/articleshow/4460988.cms

So now there is a need for some funding from the Centre to the tune of Rs.1040 crores. 

"The Rs 5,700-crore project is coming up for the Viability Gap Funding (VGF) review by the central government"

The  very fact that it needs a viability gap funding says something about its viability!  I could be mistaken though.

I checked the KSIIDC website and they have extended the EOI invitation date to June 10th.  They have asked for global invitations for Expression of Interest.  I assume this means that global players can participate.  

Srivathsa

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These are extracts from an article by Secon :

http://www.projectsmonitor.com/detailnews.asp?newsid=8931

28 March 2005

....The government's efforts to rope in the private sector in the country's infrastructure building have met with limited success. A long gestation and payback periods are the main reasons behind the private sector's lukewarm response. Keeping this fact in mind, one has to welcome the concept of 'viability gap funding' that seeks to bridge the gap between economic and financial rates of return.

....The government should initiate measures towards improving governance, like reducing the regulation and make the process of entry easier, for both domestic private investors and foreign investors. Success stories elsewhere in the world were written through such measures, and not through mere oratory skills.

Also see :

www.pppinindia.com/pdf/GuidelinesPPPapp250106.pdf

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