GAUGE CONVERSION

FINANCIAL JUSTIFICATION

DINDIGUL – POLLACHI – PALGHAT

AND

POLLACHI – COIMBATORE

FOR GAUGE CONVERSION

Introduction:

The project line runs as a single MG line from Dindigul upto Pollachi. From there, it splits into Coimbatore and Palakkad sides. The jurisdiction over the area is by the Madurai Division. The beneficiary districts are Dindigul and Coimbatore of TN state and Palakkad District of Kerala State.

Need:

The existing MG section is a passenger oriented section. The present MG network links the north Kerala and the business/industrial towns of Coimbatore, Salem, Erode and other towns in the south Tamil Nadu. The project section will be a shorter and faster route. Due to non-availability of through BG network, through passengers from north Malabar area are to be transshipped at Palghat, Coimbatore and Dindigul.

On conversion it would provide a direct rail link from south Tamil Nadu to west coast, Goa , Mumbai, Gujarat via KRCL.

Side by side the existing MG line would continue to cater to the needs of the local area.

Length of the project:

The project section of Dindigul-Pollachi-Palghat is for a distance of 224.88 KMs. (Dindigul-Pollachi = 121.20 KMs + Pollachi- Coimbatore = 45.81 KMs + Pollachi-Palghat -Palghat = 57.87 KMs) Railway Board ordered for a survey in the year 1997 and report was submitted in the year 2000.

Gauge:

The proposed line is BG

Permanent Way:

52 KG Class I rail on PSC sleepers with M+7 density on Ballast cushion of 250 mm 

Signaling:

The signaling arrangements will be Standard III MACL Panel Interlocking and mode of traction is Diesel.

Curvature:

The existing degree of curvature in the MG shall be adopted.

Bridges:

There are 195 LCs (155 + 40) proposed.

Earnings:

Coachng:                                     1555.236 Lakhs

Coaching working expenses       1907.037 Lakhs

Net earnings                                (-) 351.801 Lakhs

Operational savings                    3375.367 Lakhs

Investment on Rolling Stock      6135.550 Lakhs

Civil engineering                        29763.105 Lakhs        

Signal and Telecommunication  3859.260 Lakhs

Electrical (General)                    1767.000 Lakhs

Capital cost of construction is  35389.365 Lakhs +  6135.550 Lakhs Rolling Stock

Credit for released material  6345.450 Lakhs

The internal rate of return works out to 6.788 %

Alternative 1: Earnings arising out of additional accommodation on BG system plus earning on account of introduction of new express train between Madurai and Mangalore and operational savings between MG and BG systems for both coaching and freight traffic at IRR of 9.21 %

Alternative 2: Crediting only the operational savings between MG and BG systems for both coaching and freight traffic at IRR of 10.037 %

Revised construction cost  229.842 Crores

The period of construction envisaged was 7 years

The internal rate of return for the Madurai-Dindigul-Pollachi-Coimbatore worked out to 16.261% for an estimated cost of   304.803 Crores.

Another financial appraisal for part conversion of Madurai-Dindigul MG line alone into BG was prepared with an IRR of 20.718 % on an estimated cost of construction of  96.14 Crores

Consideration:

1. Pilgrimage traffic: The famous Lord Murugam temple is located atop the Palani hills.
2. The hitherto neglected peace-meal consignments can be brought to rail roads as the ever increasing prices of fuel oils such as diesel and petrol, the road traffic is likely to lose heavy traffic.
3. The coir manufacturing industries in the sections, soya extraction units, cotton mills and other agriculture oriented industrial units are likely to be benefited as the inconvenience of transshipment is to be eliminated.
4. inward traffic includes cement, coal-Lieco, soya, fertilizers, iron and steel, food grains, cotton etc are already benefiting by the MG
5. Outward traffic coconut, soya products, coconut products, coir and coir products, tea and coffee, textile yarns from Pollachi to Northern destinations have been projected by the chamber of commerce and industries.
6. Important inward freight traffic to the project is the Food Grain Traffic from the delta regions of Thanjavur District to Pollachi region.

Accounts observation:

“The project is NOT financially viable at the IRR of (+) 6.788 %. However, the project section would become isolated MG section since the MG section between Dindigul and Madurai section being converted as BG (doubling) and also at PGT and CBE end terminated with BG. Hence to avail the benefit of contiguous section and availability of alternate route the project is considered”