Trivandrum-Kasargod High-Speed Rail Corridor| Proposed

[chekuthan]

Originally Posted by Ajaypp

And to get started on that presentation, here's an interesting bite.

The fare for Business class = 1.5 X Shatabdi Executive Class = Rs 4.5/Km
The fare for First class = 2 X Shatabdi Executive Class = Rs 6/Km

So it would cost Rs 270 from Trivandrum till Kollam, Rs 900 till Ernakulam and Rs 1500 till Kozhikode. Economy air fare from Ernakulam to Trivandrum is about Rs 1000, and still we do not have any significant traffic in between the 3 airports in Kerala.

All the best for finding people to use this white elephant!

Moreover, even if we run 36 trains a day (more or less 1 every 40 minutes in each direction between 8 AM and 8 PM), at 75% capacity and at an average fare of Rs 1500 per ticket, the line would earn about Rs 1200 Crores a year. The maintenance cost for a system of this nature is about 5% of capital cost, which works out to about Rs 6000 Crores a year. This means that an operating subsidy of Rs 4800 Crores will be needed every year IN ADDITION to running costs and interest costs.

Still any takers?

If the feasibility study done by Sreedharan and team said that it is feasible, they would have considered financial feasibility as well. He suggested a viability gap funding route. According to you this viability gap is around 300% of the total revenue generated by the project. Do you think Sridharan would have suggested this project as viable if the gap was that much.

Now lets see some numbers.

There are around 30 trains running between Ernakulam and Thiruvananthapuram as of now (ie 60 trips daily). There are 5 flights between Kochi and Tvm out of which three are daily flights. Apart from this there are hundreds of buses running between these cities. If this is the kind of traffic between the cities in 2012. We can safely assume that this is going to grow heavily considering the growth of the state in population, per capita and especially the growth of industries in both the cities. Also when the bangalore Kochi connection comes in this adds to the traffic. This puts to rest all apprehensions about the lack of traffic between the towns.


Now how much money does it make? This is the quote from the article you put here

How much money will it make? The current proposal talks about trains every 30 minutes in either direction during 7 peak hours (6 - 10 AM and 5 - 8 PM) and every hour during the rest of the day. A total of 31 X 2 = 62 trains a day. The proposal also says that each train will have slightly over 800 seats. That means the total carrying capacity would be around 50,000 passengers a day, and assuming 90% occupancy (!!), the HSR would carry about 45,000 passengers each day. Let's assume everyone pays the end-to-end fare of Rs 1000/trip, leading to a daily revenue of Rs 4.5 Crores and an annual revenue of Rs 1642 Crores.

Now lets change the ticket fare from 1000/trip to 1500/trip. The revenue works out to be around 2500 crores an year.

Now what will be the cost

Total cost - 45000 crore
JICA funding - 70% of total comes to 31500 crore. If GOI and GOK takes remaining, GOK spenting for project comes to 6500 crores over 10 years. Yearly investment approx 650 crores. This should be easily achieved.

What are the costs?
Interest cost 1.5% per year of JICA loan comes to 472 crores.
Operating and maintainance cost - Lets assume 5% of the capital employed (which is an overestimate of operating and maintainance costs) as maintainance and operating cost. It will come to around 2250 crores.

So total cost per year is 2725 crores and revenue is 2500 crore per year.

So Kerala govt need to subsidise this by 225 crores an year.

I am sure that Kerala can spent this much for a project like this, when the positive externalities comes along with the project is going to be huge, considering it is going to reduce the time of travel to just 45 minutes.

[Ajaypp]

Originally Posted by chekuthan

If the feasibility study done by Sreedharan and team said that it is feasible, they would have considered financial feasibility as well. He suggested a viability gap funding route. According to you this viability gap is around 300% of the total revenue generated by the project. Do you think Sridharan would have suggested this project as viable if the gap was that much.

Now lets see some numbers.

There are around 30 trains running between Ernakulam and Thiruvananthapuram as of now (ie 60 trips daily). There are 5 flights between Kochi and Tvm out of which three are daily flights. Apart from this there are hundreds of buses running between these cities. If this is the kind of traffic between the cities in 2012. We can safely assume that this is going to grow heavily considering the growth of the state in population, per capita and especially the growth of industries in both the cities. Also when the bangalore Kochi connection comes in this adds to the traffic. This puts to rest all apprehensions about the lack of traffic between the towns.

Now how much money does it make? This is the quote from the article you put here

Now lets change the ticket fare from 1000/trip to 1500/trip. The revenue works out to be around 2500 crores an year.

Now what will be the cost

Total cost - 45000 crore
JICA funding - 70% of total comes to 31500 crore. If GOI and GOK takes remaining, GOK spenting for project comes to 6500 crores over 10 years. Yearly investment approx 650 crores. This should be easily achieved.

What are the costs?
Interest cost 1.5% per year of JICA loan comes to 472 crores.
Operating and maintainance cost - Lets assume 5% of the capital employed (which is an overestimate of operating and maintainance costs) as maintainance and operating cost. It will come to around 2250 crores.

So total cost per year is 2725 crores and revenue is 2500 crore per year.

So Kerala govt need to subsidise this by 225 crores an year.

I am sure that Kerala can spent this much for a project like this, when the positive externalities comes along with the project is going to be huge, considering it is going to reduce the time of travel to just 45 minutes.

First of all, thanks for giving my blog a comprehensive read.

A) You assume that there are 45,000 people willing to pay Rs 1000 per ticket to travel between Trivandrum and Ernakulam.

B) The only current comparable segment is air travel and AC 2T. That would be a few hundred people at most. Remember that most of the train passengers are in SL. KSRTC buses which charge less than Rs 100 are not the best comparison. You didn't quote this caveat that was also in the same article of mine.

(Of course, this assumes that there are 45,000 people out there who would be willing to pay a thousand bucks to travel from Trivandrum to Ernakulam and vice versa. To put that into perspective, that is probably an order of magnitude more than the number of travelers between the two cities using air travel or air-conditioned train cars.)

C) You also forget or conveniently overlooked the small detail that a loan has to be repaid. Over 20 years this works out to about Rs 1500 Crores a year.

D) The 5% O&M figure is quite standard, if not an underestimation, estimate for complex transportation systems.

E) In short, your revenue figures are grossly overstated and your expenses grossly under stated. The rest is obvious.

F) I don't know what study Sreedharan & Co have done, if any, since they never release such inconvenient details to the us common folk. I am sure the several hundred Crore consultancy contract for this project, to be awarded without a tender (of course!) would be a significant incentive.

Anything else?

Since we are discussing my articles, I also hope that folks will go through this suggestion for a far more pragmatic to the same basic need. Thanks in advance.

[chekuthan]

A) You assume that there are 45,000 people willing to pay Rs 1000 per ticket to travel between Trivandrum and Ernakulam.

This is the figure from 2020 to 2050. Don't think this is an overestimate considering the high per capita growth of the state and especially the districts of Thiruvananthapuram and Ernakulam. More over the traffic from Bangalore, Coimbatore adds in when that path comes in. There are 100s of AC volvo buses travelling in this route with fares around 1000.

B) The only current comparable segment is air travel and AC 2T. That would be a few hundred people at most. Remember that most of the train passengers are in SL. KSRTC buses which charge less than Rs 100 are not the best comparison.

Cannot say this. Demand patterns change when comforts and time savings are provided at less than one thirds of the flight cost. Currently the flights in this region charges 2.5K to 3.5K in this region. Just imagine getting this facility at around Rs 1000 without any hassles of airport procedures. A large number of SL will shift to this route as travel time reduces to 45 minutes. Moreover we are talking about 2020 to 2050.

C) You also forget or conveniently overlooked the small detail that a loan has to be repaid. Over 20 years this works out to about Rs 1500 Crores a year.

Repayment period is 30 years which brings it to nearly 1000 crores an year from 2020 to 2050. And note that you said a gap of 4500 crores an year and now it has been reduced to 1250 crores an year.

In this numbers we have not quantified the positive externalities due to this project.

Some examples are the real estate projects that can take place in the stations of this project. For example consider having shopping malls in each of these stoops.
Other example is Each of these ares become satellite towns for IT centres Kochi and Trivandrum.( Our IT sector is one of the fastest growing in the country. IT plan also suggest developing satellite centres)

D) The 5% O&M figure is quite standard, if not an underestimation, estimate for complex transportation systems.

We have already considered this number of 5%. When Sreedhran suggests that using Manglev brings down O&M costs in metro. I am sure that latest technologies can guarantee decrease in these numbers in High Speed rail as well.

Moreover I am sure that a big part of the cost in the project will be land acquisition which if considered in O&M estimates will result in overestimation.

E) In short, your revenue figures are grossly overstated and your expenses grossly under stated. The rest is obvious.

From above points.. this is not true...

F) I don't know what study Sreedharan & Co have done, if any, since they never release such inconvenient details to the us common folk. I am sure the several hundred Crore consultancy contract for this project, to be awarded without a tender (of course!) would be a significant incentive.

Being a person who has an excellent track record of executing the biggest successful rail projects in the country it will be best to believe him than anyone else. And corruption allegations against Sreedharan would be the last strategy anyone would try to derail this project. I am disgarding it assuming that you are putting in for argument sake. Seriously... you don't have anything else to support your argument of 300% gap in operating income against feasibility by Sreedharan and Co?

Also another important thing you are missing is that, central govt is pushing infrastructure investments in the tune of trillion of dollar in the next decades to fuel the economic growth we have. This can also become part of it. Cannot ignore the fact that railways have already showed interest in becoming part of the project

[Ajaypp]

Originally Posted by chekuthan

This is the figure from 2020 to 2050.

So why exactly are we building it in 2013 if you believe it becomes feasible in 2030? For all we know, HSR could be as obsolete by then as the steam loco is now.

More over the traffic from Bangalore, Coimbatore adds in when that path comes in. There are 100s of AC volvo buses travelling in this route with fares around 1000.

Ahem, I thought we were discussing Trivandrum-Mangalore? And there are a few dozen Volvo buses travelling to Bangalore, not several 100s.

Cannot say this. Demand patterns change when comforts and time savings are provided at less than one thirds of the flight cost. Currently the flights in this region charges 2.5K to 3.5K in this region. Just imagine getting this facility at around Rs 1000 without any hassles of airport procedures.

Are you sure that air fare remains the same when volume goes up? If you look at the US or Europe (I have not been to Japan or China), HSR ticket rates and air fare achieve equilibrium as soon as the market for both exists. Which it doesn't in India.

A large number of SL will shift to this route as travel time reduces to 45 minutes. Moreover we are talking about 2020 to 2050.

Okay, so folks paying Rs 100 now in SL will pay Rs 1500 for the sake of saving 3 hours of travel time. What else? And here's 2050 again!

Repayment period is 30 years which brings it to nearly 1000 crores an year from 2020 to 2050. And note that you said a gap of 4500 crores an year and now it has been reduced to 1250 crores an year.

Now you are speculating what will happen 30-40 years from now. Have you heard of such things as exchange rate fluctuations for example and we are talking about foreign currency denominated debt here?

Some examples are the real estate projects that can take place in the stations of this project. For example consider having shopping malls in each of these stoops.

Awesome, you are confusing Tranist Oriented Development (TOD) associated with mass transit and this. And how exactly will a few shopping malls off-set the Rs 1,20,000 Crore price-tag? Buddy, shopping malls ARE not the only form of real estate out there even though there are some folks who often equate malls with development, lol! Also, why exactly wouldn't TOD or tax increment financing options not work for a 200-250 Km/Hr option as opposed to bullet trains?

Other example is Each of these ares become satellite towns for IT centres Kochi and Trivandrum.( Our IT sector is one of the fastest growing in the country. IT plan also suggest developing satellite centres)

So now you are suggesting Kollam, Kottayam and Thrissur become satellite cities of Trivandrum and Ernakulam??! I am not sure the forumers from those cities will like the sound of that.

We have already considered this number of 5%. When Sreedhran suggests that using Manglev brings down O&M costs in metro. I am sure that latest technologies can guarantee decrease in these numbers in High Speed rail as well.

Buddy, O&M costs are part and parcel of any complex mechanical system. Forget Sreedharan, not even Newton himself can prevent wear and tear. Even non-contact technologies such as magnetic levitation has associated costs, such as the cost of energizing and maintaining the track magnets and so on.

Moreover I am sure that a big part of the cost in the project will be land acquisition which if considered in O&M estimates will result in overestimation.

If you read my articles carefully, the land acquisition is not considered in the O&M. LA is part of the capital expenditure not the operating expense bucket.

From above points.. this is not true...

Oh yes, it is!

Being a person who has an excellent track record of executing the biggest successful rail projects in the country it will be best to believe him than anyone else.

I had the honor of having Fred Salvucci as a teacher at MIT. He was the man behind many a massive transportation and urban infrastructure project, including the mother of them all, the Big Dig. Yet even he doesn't claim to be infallible.

And corruption allegations against Sreedharan would be the last strategy anyone would try to derail this project. I am disgarding it assuming that you are putting in for argument sake.

I didn't raise any allegations did I? There is the small matter of that CAG report which went missing but I am sure he is an honorable man. Of course, not that we are handing contracts out without a tender, things are getting interesting.

Seriously... you don't have anything else to support your argument of 300% gap in operating income against feasibility by Sreedharan and Co?

I had very commonsensical and simple numbers to substantiate the claim that the HSR project is a white pachyderm. You tried your best to cut into that argument but there is still a massive hole in the budget, isn't there even without considering the cost of the Ernakulam-Mangalore stretch. The best evidence of this is the fact that Sreedharan and INKEL didn't even mention PeePeePee as an option!

Also another important thing you are missing is that, central govt is pushing infrastructure investments in the tune of trillion of dollar in the next decades to fuel the economic growth we have. This can also become part of it. Cannot ignore the fact that railways have already showed interest in becoming part of the project

Is this the same Indian Railways which have run into the red now and is now cash-strapped for even basic upgradation projects far less for a $ 300 Billion splurge on HSR? Sure, let's go ahead and bankrupt the country on bullet trains when even basic social infrastructure continues to remain woefully inadequate. HSR will solve hunger, infant mortality and school drop-outs too!

While it's on the job, will it also deliver a piping hot plate of parathas and chilli chicken??!

[Damukannappan]

[IMG] Uploaded with ImageShack.us[/IMG]


Thiruvananthapuram: An all-party meeting here today gave approval in principle for the proposed High Speed Rail Corridor project between Thiruvananthapuram and Kasargod, estimated to cost more than Rs One lakh crore.

A meeting chaired by Kerala Chief Minister Oommen Chandy entrusted the Delhi Metro Rail Corporation (DMRC) to prepare a detailed project report for the project.

"Initial feasibility study conducted by DMRC has showed that the project is viable both in financial and technical terms," Chandy told reporters after the meeting.

The project envisages to have rail link on elevated platform to a distance of 560 KM. About 552 hectares of land was required for the project, Chandy said.

According to sources, CPM veteran and leader of Opposition in Kerala assembly, V S Achuthanandan, said during the all-party meeting that the government should have a "clear idea" on the terms and conditions for loans to be taken from financial institutions for the project and also on land acquisition.

It was also decided to have another round of discussion on rehabilitation packages for the persons who would be displaced and other issues connected with the project.

[chekuthan]

Originally Posted by Ajaypp

So why exactly are we building it in 2013 if you believe it becomes feasible in 2030? For all we know, HSR could be as obsolete by then as the steam loco is now.

It is feasible now. Just that you need to consider the cashflow for 30 years. Have you heard about the valuation of projects with cashflows predicted for the lifetime. So if the cashflows become positive after few years that justifies the initial gap. If not heard you can get a 101 from here

Originally Posted by Ajaypp

Are you sure that air fare remains the same when volume goes up? If you look at the US or Europe (I have not been to Japan or China), HSR ticket rates and air fare achieve equilibrium as soon as the market for both exists. Which it doesn't in India.

Western countries is another scenario, where normal public transport itself is much costlier than India.

Originally Posted by Ajaypp

Awesome, you are confusing Tranist Oriented Development (TOD) associated with mass transit and this. And how exactly will shopping malls off-set the Rs 1,20,000 Crore price-tag. Also, why exactly wouldn't TOD or tax increment financing options not work for a 200-250 Km/Hr option as opposed to bullet trains?



So now you are suggesting Kollam, Kottayam and Thrissur become satellite cities of Trivandrum and Ernakulam??!

You missed the whole point here. Have you heard about the positive externalities in economics. For a start you can read up from here

Originally Posted by Ajaypp

Buddy, O&M costs are part and parcel of any complex mechanical system. Forget Sreedharan, not even Newton himself can prevent wear and tear. Even non-contact technologies such as magnetic levitation has associated costs, such as the cost of energizing and maintaining the track magnets and so on.

If you read my articles carefully, the land acquisition is not considered in the O&M. LA is part of the capital expenditure not the operating expense bucket.

Again you didn't understood the point. Let me explain. When you estimate O&M costs as 5% of Capex (Btw 5% you created from air) It should be the Capex which is depreciable. Or In other words Land is not a depreciable asset and hence reduce Land costs from Capex and then estimate O&M Costs from there

Originally Posted by Ajaypp

I had very commonsensical and simple numbers to substantiate the claim that the HSR project is a white pachyderm. You tried your best to cut into that argument but there is still a massive hole in the budget, isn't there even without considering the cost of the Ernakulam-Mangalore stretch. The best evidence of this is the fact that Sreedharan and INKEL didn't even mention PeePeePee as an option!

The point here is clear. Even Sreedharan suggested Viability gap funding method, which means that there is a small gap in the Capex less present value of the cashflows. This needs to be funded. And with the restrictions of the Viability Gap funding this GAP cannot be 300% which you have suggested.

Or in short. This is a project very much feasible project.

[Ajaypp]

Originally Posted by chekuthan

It is feasible now. Just that you need to consider the cashflow for 30 years. Have you heard about the valuation of projects with cashflows predicted for the lifetime. So if the cashflows become positive after few years that justifies the initial gap. If not heard you can get a 101 from here

Thanks for the primer but I started doing DCFs quite a few years ago. You should definitely refer to your primer and check out what discounting is and how the distribution of the cash flows affects the NPV. A project which incurs all its capex up front and then achieves operational break-even 15 or 20 years later is doomed to a horrendous NPV.

Western countries is another scenario, where normal public transport itself is much costlier than India.

And the point is?

You missed the whole point here. Have you heard about the positive externalities in economics. For a start you can read up from here

Yes, I first heard of them a long, long time back from a bunch of very nice Econ professors back at a couple of nice schools. They did a very good job of making sure I don't mistake pipe-dreams for "externalities".

Mass transit has externalities as do freight corridors. HSR lines which cater to 5-10% of the population, not so much. Perhaps you should try and understand why even the liberal economists in the US were not able to save Obama's HSR proposals?

Again you didn't understood the point. Let me explain. When you estimate O&M costs as 5% of Capex (Btw 5% you created from air) It should be the Capex which is depreciable. Or In other words Land is not a depreciable asset and hence reduce Land costs from Capex and then estimate O&M Costs from there

Yes, I do understand what O&M costs are based on. Btw, the 5% is not created from thin air. I can quote any number of mechanical engineering and transportation journals but I am sure you will just continue to ignore the inconvenient facts. And I assume when the system is computed to cost Rs 1,20,000 Crores that speaks about the non-land Capex. Even if you want to factor in some land cost, that would be 5-10% of the total at the most. It doesn't change the inconvenient truth that this thing is a colossal cash sink.

The point here is clear. Even Sreedharan suggested Viability gap funding method, which means that there is a small gap in the Capex less present value of the cashflows.

Lol, a few thousand Crores a year is a "small" gap for you. What are you comparing it to? The US GDP???! Why Sreedharan or INKEL doesn't suggest PPP is because no private sector player would be caught dead even buying the RFQ for this white whale. If the proponents are so confident about the viability of the project let them put it up for BOT mode development, with a VGF limited to 20% of capex.

Or in short. This is a project very much feasible project.

How again?

[mohammedirshad06]

K-HSR DPR to be ready by Sept 30th 2012; Works to commence on April 2013

The Kerala CM Ommen Chandy informed All Party Meeting Delegates, that Detailed Project Report for K-HSR would be ready by Sept 30th 2012, under the leadership of E.Sreedharan and DMRC. He expressed hope that the ground breaking and actual works can commence by April 2013.

The Govt promises to circulate Primary Project report and information about the project to all Political parties for internal discussions with 10 days. Once DPR gets ready, a similar All Party delegation will be called to jointly approve for Kerala's biggest Infrastructure project.

Though the IR Sponsored HSR was planned as Chennai-Blore-Coimbatore-Kochi-Trivandrum, the central govt has given nod for Kerala HSR to move ahead. The state now has asked Central Govt to limit the project to Thrissur, so as to make it as Interchange Hub from Kerala HSR to Southern HSR, for those proceeding to Bangalore or Chennai.

The State Govt will construct the 560 Km stretch of Trivandrum-Kasargod part of Kerala HSR at a cost of 1.8 Lakh Crore, out of which Japan will finance the viability funding. The loan tenure will be for 40 years, while there will be a 10 year long moratorium for the project.

The construction will commence together for entire Trivandrum-Kasargod stretch at a single time, while the first part of the line upto Kochi will be opened in 5th year, upto Kozhikode in 6th year and final terminus by 7th year. The entire project is visionzed for Kerala's development for next 100 years.

While the project will run thro' elevated corridors in rural areas, in thick urban centers, it will move via underground.

The first part of line (COK-TVM) requires an area of 242 Hectares of land with a displacement of 1806 people, while second phase (COK-Kasargod) requires an area of 552 hectares of land with displacement of 4500 people.

The All party meeting also discussed multiple ways for a hassle free Land Acquisition.

The rail corridor will use Standard Gauge, while will have 8 coaches, out of which 6 shall be for passengers at a width of 3.4m with a carrying capacity of 817 in two class configuration.

[chekuthan]

Originally Posted by Ajaypp

Thanks for the primer but I started doing DCFs quite a few years ago. You should definitely refer to your primer and check out what discounting is and how the distribution of the cash flows affects the NPV. A project which incurs all its capex up front and then achieves operational break-even 15 or 20 years later is doomed to a horrendous NPV.

Good that you understood the project valuation part. Now according to your analysis all the numbers are based on 2012, while the project is gonna start operation from 2020. That is why you are gettign 300% gap in funding, while due to growth in IT in these cities (Hope you know that Kerala's IT exports is one of the fastest growing in the country). With our current growth the per capita income is gonna triple in the next 10 years (Do I need to explain you how increase in percapita income is gonna result in more spending or increse in spending power?) The point with increase in spending power and incresed demand for intercity travel due to economic growth there is going to be huge traffic between this cities. And hence with in 4-5 years of operation it will achieve operational breakeven. And since you understand Valuation you will be able to comprehend from here that a few years of negative cashflow and then a long period of positive cashflow this is going to be viable.

Originally Posted by Ajaypp

Mass transit has externalities as do freight corridors. HSR lines which cater to 5-10% of the population, not so much.

Atleast you are convinced about the existance of externalities. Great!!. Now to try to understand from your MIT prof about what all externalities this project creates.

A small pointer to you. According to your own estimates there is approx 45K people using this a day. This comes to around 17 million travellers in an year. Does this ring a bell about the commercial value that can be created in the HSR stations?? Some other dimensions can be fuel savings, lesser pollution, better economic development due to accessibility for remote districts etc

Originally Posted by Ajaypp

Yes, I do understand what O&M costs are based on. Btw, the 5% is not created from thin air. I can quote any number of mechanical engineering and transportation journals but I am sure you will just continue to ignore the inconvenient facts. And I assume when the system is computed to cost Rs 1,20,000 Crores that speaks about the non-land Capex. Even if you want to factor in some land cost, that would be 5-10% of the total at the most. It doesn't change the inconvenient truth that this thing is a colossal cash sink.

Wow, you understood the difference. Even with your estimates of land costs, it just shaved of a few hundreds of crores from O&M costs.. Great!!

Originally Posted by Ajaypp

Why Sreedharan or INKEL doesn't suggest PPP is because no private sector player would be caught dead even buying the RFQ for this white whale. If the proponents are so confident about the viability of the project let them put it up for BOT mode development, with a VGF limited to 20% of capex.

By PPP you guarantee the private player a profit and hence it will add up to the cost to the user. Especially for this kind of mass transport where you are expecting 17 million people to use it around the year, you dont want the private player to bring up the costs. Its also a political decision as it is going to affect large number of people.

[mohammedirshad06]

del

[raghussc]

I guess HSR tracks needs kinda daily maintenance/checks on some portions ?24 x 7 operation may not be possible?

[Ajaypp]

Originally Posted by chekuthan

Good that you understood the project valuation part.

Thank you kindly!

Now according to your analysis all the numbers are based on 2012, while the project is gonna start operation from 2020. That is why you are gettign 300% gap in funding, while due to growth in IT in these cities (Hope you know that Kerala's IT exports is one of the fastest growing in the country).

Oh so, now we are starting only in 2020, whatever happened to 2013? Buddy, you should really try to understand the fundamentals of DCF analysis and IRR based financial feasibility tests. In simple terms, unless the HSR system is able to achieve positive operational cash flows, it will never pay for its debt and will thus never ever turn a positive Net Present Value. Moreover, due to the way discounting tends to distort the relative contributions of cash flows distributed over time, even it does achieve break-even in the distant future, the negative cash flows of the initial 10-15 years will ensure that the NPV is deep in the red.

In simple terms, heap big dead loss!

Btw, what has the growth of IT have to do with anything? I assume you expect all the techies working in the State's IT hub, Trivandrum, to jump on a bullet train daily? Lol, don't give the poor compensation managers heart attacks thinking of the transportation allowances!

With our current growth the per capita income is gonna triple in the next 10 years (Do I need to explain you how increase in percapita income is gonna result in more spending or increse in spending power?)

Hmmm, the current rate of GDP growth is about 7.5% p.a. Even if we don't assume that it doesn't flatten out over the next decade, this means that PCI will at most double if the population holds steady. However, you seem to have forsaken your Econ 1.01, because there is something called inflation, which means that real purchasing power will probably hold more or less steady.

The point with increase in spending power and incresed demand for intercity travel due to economic growth there is going to be huge traffic between this cities. And hence with in 4-5 years of operation it will achieve operational breakeven.

Do you have any figures at all to justify this claim? I assume not, other some private crystal ball that you don't care to share with us?

Atleast you are convinced about the existance of externalities. Great!!. Now to try to understand from your MIT prof about what all externalities this project creates.

I was convinced about the existence of a science called economics a long time back but thanks for the reminder. That said, neither Fred nor I are of the opinion that externalities = shopping malls, as you seem to believe. That tells me that you have neither seen TOD nor any real HSR project.

A small pointer to you. According to your own estimates there is approx 45K people using this a day.

A small clarification for you. I never said that 45,000 people would ride the HSR. Read the article a bit more carefully, and you will see (as I pointed out before) that 45,000 riders is the best case scenario and my caveat was that I thought this number was a wild fantasy.

Even with your estimates of land costs, it just shaved of a few hundreds of crores from O&M costs.. Great!!

No it didn't. I believe that the project cost as of now is exclusive of LA cost. It doesn't make any significant difference even if you would like to insist otherwise.

By PPP you guarantee the private player a profit and hence it will add up to the cost to the user.

Through PPP, you make the users pay most of the expenses involved in the benefit (time savings/comfort) that they derive with the public sector funding some of the cost to account for economic development benefits and so on. However, a BOT project has to be fundamentally viable. HSR is not. This is why no HSR project has ever broken even once capital cost is considered. Rich developed countries that are looking to deploy cheap and abundant public funds into infrastructure can afford to splurge. That said, even the US which enjoys the lowest borrowing costs in the world is now balking at funding HSR projects, most notably in California.

Cheku - I would suggest that you come back with factual rebuttals instead of the vague arguments that you have been trying to make, talking about 30-40 year time lines, grossly incorrect arithematic and questionable assertions about economic growth.

Looking forward to an animated and factual debate. Thanks.

[engineer.akash]

Originally Posted by mohammedirshad06

In such cases, can a High Speed Freighters can be considered at this slot, allowing freight transport in short period of time and bringing in freight revenue, using same track and line, with a different rolling stock, by the same company.

lol plz don't get me wrong.....What freight will you transport between trivandrum and kasargod?? Any heavy industries?

[Viveks]

Originally Posted by engineer.akash

lol plz don't get me wrong.....What freight will you transport between trivandrum and kasargod?? Any heavy industries?

We cant say it like that Akash.. With the commission of Vizhinjam ICTT, we can expect something, dont we?

[engineer.akash]

Originally Posted by Viveks

We cant say it like that Akash.. With the commission of Vizhinjam ICTT, we can expect something, dont we?

To transport goods via ICTT we need good connectivity to industrial hubs,which in my opinion do not exist between kasargod and trivandrum.May be a HSR link with Bangalore-Chennai might boost economy in kerala.

[Ajaypp]

Originally Posted by mohammedirshad06

Well, I am not sure, whether there is any concept called High Speed Freight Rail.... Its just a query!!!!!

There are high speed trains running on the Channel Tunnel and high speed container trains have been proposed in many cases. However they cannot operate at HSR speeds, probably at up to 150 Km/Hr. This makes a mixed use rail corridor all the more attractive, with BG tracks for interoperability with the rest of the IR system.

Glad to see that you are coming around to a more pragmatic idea!

[Ajaypp]

Originally Posted by Viveks

We cant say it like that Akash.. With the commission of Vizhinjam ICTT, we can expect something, dont we?

Absolutely, Vivek.

Akash, the Vizhinjam deep water port and container transshipment terminal will have a capacity of 4.1 to 6.4 Million TEUs, and while it will primarily handle ship-to-ship transshipment with its draft of 18 m, there is a lot of scope for rail-borne container movement to ports like Ernakulam and Mangalore, as well as to ICDs like Coimbatore and Bangalore, which would prefer to send their containers directly for loading on to large main-line vessels at Vizhinjam.

[Malayaali]

Originally Posted by Ajaypp

there is a lot of scope for rail-borne container movement to ports like Ernakulam and Mangalore

Its Cochin Port FYI!

[Ajaypp]

Originally Posted by engineer.akash

To transport goods via ICTT we need good connectivity to industrial hubs,which in my opinion do not exist between kasargod and trivandrum.May be a HSR link with Bangalore-Chennai might boost economy in kerala.

A mixed use rail corridor between Trivandrum, Ernakulam and Mangalore ports will allow for container movement. A similar corridor, not an HSR line, will allow container movement to Coimbatore, Bangalore and Chennai.

This is precisely why we need a mixed use rail corridor that uses BG tracks instead of an HSR corridor which uses SG tracks and is not suitable for goods movement. Pendolino trains can operate at 250 Km/Hr on the mixed-use corridor and serve all the functions of HSR at roughly 1/8 the cost.

[Viveks]

And Moreover, Kerala big cities such as Trivandrum and Kochi are going to be well connected with other South Indian biggies like Coimbatore, Mangalore, Bangalore and Chennai once this Kerala HSR and IR-HSR implemented. So we can meet the demands for the cargo movement for another pretty decades even if the demand is high.

The main advantage of these two HSRs are all South Indian major cities will be well connected with two Metros.