Board of Directors
 Mr. V. Madhu
IAS
Principal Secretary to GoK – IDD
Chairman
 Mr. V. P. Baligar
IAS
Principal Secretary to GoK –
Commerce & Industries
Director
Mr. G. Baderiya
IAS
Special Secretary to GoK – IDD
Director & CEO
 Mr. N. K. Shukla
IRTS Executive Director
Director
Perspective Planning Railway Board
 Mr. N. C. Sinha
IRTS Chief Operations Manager, S W Rly Director
 Mr. B. B. Verma
IRAS Divisional Rly Manager, Mysore
Director
 Mr. A. B. Shenoy
CFO & Company Secretary,
Director
Infrastructure Deve Karnataka, Ltd .
Mr. Ashwin Paul
Head Commercial, MEL
Director
 Mr. Tamilvanan
Chairman, New Mangalore Port
Director
1
The Beginning
Hassan Mangalore Rail Development Company Limited
was incorporated in July 2003 under the Companies Act of
1956 as a joint venture of the Government of Karnataka &
the Ministry of Railways.
Objective: HMRDC to take over the gauge conversion of
the Hassan Mangalore railway line and ensure its early
completion through appropriate and timely funding.
The company was to raise the required resources through
debt and equity.
2
Project Implementation
The gauge conversion of the line has been completed under a
set of agreements signed by the Company with the Ministry of
Railways and the South Western Railway.
• Concession Agreement
• Construction Agreement
• Operations and Maintenance Agreement
The line was commissioned for goods traffic on 5th May 2006 and
for passenger services on 8th December 2007.
Company is enjoying Tax Holiday for 10 years from COD & Company
is paying MAT at 15% as against 33% IT.
Company’s Credit rating is LA (Adequate credit quality) given by ICRA
3
Framework of operation
of SPV
Key features of the framework are:
• Cost of construction financed by HMRDC
• Line capacity to be used primarily for goods services
• Assured passenger services to the extent operated on
the meter gauge.
• Running and operating costs of passenger services to
be borne by Indian Railways
• Cost of freight operations and maintenance of the line to
be met by HMRDC.
• Revenues to Company to accrue from freight only
• Revenues from passenger trains to accrue to IR
4
Concession Agreement
Under the Concession Agreement, the Ministry of Railways
has granted HMRDC a concession for 32 years during which
the company would convert the MG line between Hassan and
Mangalore into a BG line and thereafter undertake its
operation and maintenance during the concession period.
To enable construction of the new line, the existing assets
including land, station buildings, formation, bridges etc.
(assets forming part of the rail network and necessary for
gauge conversion) have been leased to the company.
5
Construction Agreement
Under the Construction Agreement signed between HMRDC
and South Western Railway (SWR) the later has been
appointed as the Engineering, Procurement and Construction
(EPC) Agency for the line and entrusted with the construction
work.
O & M Agreement
Under the Operations and Maintenance Agreement
HMRDC has contracted with SWR for operation of goods
train services on the line and its maintenance till the
termination of the concession period.
6
Project Financing
Initial Project Cost
Construction Cost
RMV Equipment
Pre-operative exp & IDC
Rs. 293 cr
Rs. 275 cr
Rs. 4 cr
Rs. 14 cr
Funding through
Subordinate debt from IR
Equity
Term loans from banks
Rs. 141 cr
Rs. 112 cr
Rs. 90 cr
7
Construction of the line
Detailed estimate sanctioned by Rly Board in Dec 2002 forms the
basis of the construction agreement.
The 183 Km long MG line from Hassan to Kankanadi (both stations
excluded) has been converted to BG.
Four new crossing stations were planned of which three have been
commissioned so far. Arebetta station is yet to be opened.
The cost of construction as per the Construction Agreement is Rs
274.71 Cr. In addition, HMRDC has also paid for rail mounted
vehicles to be used for inspection & maintenance of the line.
The completion cost of the project is presently being worked out. It
is expected to be around Rs. 340 cr.
8
Operations & Maintenance of the line
The Operations and Maintenance of the line from Commercial
Operations Date (COD) i.e. 5thMay 2006 is being done by SWR
under the terms of the O & M agreement.
Freight due to HMRDC from traffic carried on the line is calculated
as per the inter-railway rules of apportionment.
O & M ( Fixed & Variable) costs payable by HMRDC are calculated
on the basis of the formula prescribed in the O & M agreement.
Fixed costs covering cost of manpower, cost of consumables etc.
are payable irrespective of the traffic moved.
Variable costs including fuel, cost of crew, loco and wagon usage
etc. vary according to the tonnage carried on the line.
Apportioned freight minus the O&M costs constitutes HMRDC’s
share of revenue.
9
Traffic Forecast
The Hassan Mangalore line is expected to carry up to six
million tonnes of freight per annum that includes
Towards Mangalore Area:
Export iron ore to Port from Chitradurga – Tumkur and Hospet –
Bellary sectors
Iron ore for KIOCL pellet plant at Mangalore
Cement, foodgrain and other general goods to Mangalore goods shed
From Mangalore Area:
Coal
Fertilizer imports
Limestone, Iron Ore Pellet
Fertilizer from MCF, Mangalore.
POL and LPG from Mangalore Refinery, Thokur.
10
Capital Structure
Authorized share capital
Rs. 125 Cr.
(Equity share of Rs.10/- each)
Paid up capital
Rs. 112 Cr.
The shareholding pattern is as follows

Government of Karnataka
Rs.28 Cr

Mysore Sales International Ltd.
Rs. 7 Cr

Vishveshwarya Trade Center
Rs. 10 Cr

Ministry of Railways
Rs. 45 Cr
40%

New Mangalore Port Trust
Rs. 10 Cr
9%

Mineral Enterprises Limited
Rs. 10 Cr
9%

K-RIDE
Rs. 2 Cr
2%
40%
11
Salient Physical Features of Hassan - Mangalore Section
Sl.No.
1
2
1. Physical features
3
Section Elevation (MSL)
Gradient
Hassan – 900m
42 kms.
1 in 100 plateau
55 kms.
1 in 50 Ghat
86 kms.
1 in 100 plain
Sakleshpur – 967m
Sakleshpur – 967m
4
Subramanya Rd. – 113m
5
Subramanya Rd. – 113m
6
Distance
Mangalore – 9.5m
12
2. Track
A. Rails
Hassan to Mangalore – 183
Kms
Main line track
class I - 52 Kg rails
Loop line
class II - 52 Kg rails
B. Sleepers
Hassan to Sakleshpur
60 Kg PSC sleepers - M+ 4 density
Sakleshpur to Mangalore
60 Kg PSC sleepers - M+ 7 density
Loop lines
52 Kg PSC sleepers - M+ 4 density
C. Fittings
Class - I fittings - ERC Clips, GR pads, metal liners in mid section and GFN liners in yards
D. Ballast - 250 mm cushion.
13
3. Bridges - Total - 670
Major Bridges – 91
Minor Bridges – 549
Road over bridges – 16
Road under bridges – 12
FOB –2
6. Curves - Total – 110
80 - 85 Nos.30 to 50 - 25 Nos
4. Tunnels - Total Nos. 57
Total length
- 10.98 kms.
Longest tunnel - 578 mts
No.11
7. Catch Sidings
Donigal station –
Shrivagilu
5. Level Crossings - Total - 65
Manned – 31
Unmanned - 34
8. Slip Sidings
Donigal,
Yedakumeri,
Shrivagulu
14
Details of Block Stations and Halts in Hassan-Mangalore
S.No
Name of Station
1
Hassan (HAS)
2
Jurisdiction
SWR
Location at (kms)
Inter Dist
00.00
0.00
Alur (ALUR)
13.38
13.38
3
Balupete (BLLT)
27.53
14.15
4
Sakleshpur (SKLR)
42.06
14.53
5
Donigal (DOGL)
49.64
7.58
6
Kadagaravalli (KVGL)
59.30
9.66
7
Yedakumeri (YDK)
67.23
7.93
8
Arrebetta (TO BE COMMISSIONED)
75.00
7.77
9
Shrivagulu (SVGL)
85.35
10.35
10
Ssubramanya Road (SBHR)
97.32
11.97
11
Bajakare (BAJE) – Halt
103.36
6.04
12
Kodimbala (KDBA) – Halt
106.61
3.25
13
Yedamangala (YDM)
111.85
5.24
14
Kaniuri (KNYR) – Halt
120.44
8.59
15
Narimogaru (NRJ)
129.74
9.30
16
Kabakaputtur (KBPR)
139.61
9.87
17
Neralekatte (NEHL)
150.10
10.49
18
Kalladaka (KLKD) – Halt
158.93
8.83
19
Bantwal (BNTL)
164.19
5.26
20
Faringapeta (FRG) – Halt
173.65
9.46
21
Padil (PDL)
180.20
6.55
22
Mangalore Jn.
183.19
2.99
H
M
R
D
C
SR
Line Capacity
 The Maximum number of Trains that can be operated in a Day in a section is known as Line
Capacity, which is decided by the running time of the Critical Block Section by a slowest moving
train.
 The Critical Block Section of HMRDC Line is DOGL-SVGL in the ghat section of SKLR-SBHR
section, 95 minutes is the running time of the critical block section and line capacity is 15 trains per
day including Passenger Trains.
 Some amount of time to be provided for the track and signal maintenance works, which again
reduces the Line Capacity to that extent which is equivalent to 3 Hrs/ 2 trains.
 To increase the line capacity the running time of critical block section has to be reduced for which
the provision of CATCH Sidings (safety device) to be under taken at all the stations on the ghat
section.
 To improve the line capacity maximum permissible speed to be increased to 45 KMPH in the UP
direction without compromising the safety since the track strength has been upgraded over the
period.
16
Operational & Financial
Performance
Rs. - Crores
Particulars
Carried Tonnage (MT)
2006-07
(05/06-03/07)
2007-08
2008-09
2009-10
1.60
4.60
4.51
5.01
Earnings
36.71
133.54
188.19
163.63
O&M costs
17.68
55.26
60.88
73.77
Income from
Operations
19.03
78.28
127.31
89.87
Deferred OH
4.14
11.37
11.39
12.36
3/23/2016
17
Commodity wise Earnings
Rs. - Crores
Commodity
2006-07
Carr
Tonn
(MT)
Reve
2007-08
% to
tot
Rev
Carr
Tonn
(MT)
Reve
2008-09
% to
tot
Rev
Carr
Tonn
(MT)
Reve
2009-10
%
to
tot
Rev
Carr
Tonn
(MT)
Reve
%
to
tot
Rev
Iron Ore –
Export
Domestic
Pellets
0.81
0.02
0.00
21.68
0.55
0.00
59.27
1.50
0.00
2.81
0.21
0.00
95.01
6.64
0.00
70.04
4.89
0.00
2.45
0.05
0.00
146.76
.12
0.00
77.99
0.07
0.00
1.86
0.08
0.06
96.99
1.95
1.47
59.27
1.19
0.90
Limestone
0.14
3.26
9.00
0.61
14.25
10.00
0.34
8.08
4.29
0.74
16.82
10.28
Cement
0.01
0.24
1.00
0.14
2.82
2.00
0.35
7.48
3.98
0.31
6.48
3.96
Coal
0.15
2.55
7.00
0.09
1.60
1.00
0.35
6.85
3.63
0.87
17.59
10.75
Food Grains/
Fertilizers
0.35
5.35
14.00
0.49
8.28
7.00
0.76
12.78
6.79
0.81
13.81
8.44
LPG/POL
0.12
2.94
8.00
0.26
7.05
5.00
0.21
6.08
3.23
0.29
8.48
5.18
3/23/2016
18
Commodity wise Earnings/Train Load
2009-10
Train/
Commodity
3/23/2016
Total No of
Trains
Total Load
(Million T)
Total
Revenue
(Cr)
Load per
Train
(Tonnes)
Revenue
per Train
(In Lakhs)
BOXN –
Iron Ore
I O Pellets
Limestone
Coal
521
15
199
224
1.94
0.06
0.74
0.87
98.94
1.47
16.82
17.58
3723.61
4000.00
3718.59
3883.93
18.99
9.80
8.45
7.85
BCN –
Cement
* F/ FG
119
311
0.31
0.81
6.48
13.81
2605.04
2604.50
5.44
4.44
BTPG LPG
136
0.15
4.29
1102.94
3.15
BTPN POL
60
0.14
4.19
2333.33
6.98
19
Fuel consumption and costs for
Commodities - 2009-10
Cost for Fuel – Rs. 39.10 per lit
Commodity
BOXN –
Iron Ore
I O Pellets
Limestone
Coal
*SFC in
(Liters)
Carried
Tonnage (MT)
Cost of
Fuel (Cr)
Cost of Fuel
/ Train (Rs)
2.25
6.84
7.11
6.84
1.47
0.06
0.60
0.49
0.85
0.10
1.30
0.87
21519.00
66667.00
80247.00
69048.00
3.25
8.06
0.21
0.63
0.19
1.44
22892.00
59259.00
BTPG LPG
7.93
0.12
0.69
69000.00
BTPN POL
6.89
0.10
0.29
67442.00
BCN – Cement
Fert/ FG
* SFC – Fuel consumption for 1000 GTKM
3/23/2016
20
Components of Fixed & Variable Costs
Fixed Costs
Variable Costs
Man Power
Cost of Fuel
Other than Man power
Cost of Crew
Direct Supervision Charges
Cost of Loco & Wagon Usage
Indirect Over Heads
Cost of Running Repairs of Wagons
Misc.
Documentation
Compensation Claim
Indirect Over Heads
21
Review of O&M Costs
Particulars
2006-07
2007-08
2008-09
2009-10
Carried
Tonnage (MT)
1.60
4.60
4.50
5.01
Fixed Costs
(FC –Rs.- Cr)
9.96
10.89
13.60
17.53
62.30
23.67
30.23
34.99
FC/Tonne/Km
(Rs.)
0.34
0.13
0.17
0.19
Variable Cost
(VC –Rs. - Cr)
7.72
44.37
49.91
56.23
48.30
96.46
110.91
112.23
0.26
0.53
0.61
0.61
FC/Tonne
(Rs.)
VC/Tonne
(Rs.)
VC/Tonne/Km
(Rs.)
3/23/2016
22
Income and Expenditure Rs. - Crores
Particulars
From Railways
Income:
Others
Total
2006-07
2007-08
2008-09
2009-10
36.68
133.76
190.32
156.20
0.11
2.61
9.80
11.46
36.79
136.37
200.12
167.66
Expenses:
O&M
Railway
Fixed Costs
Variable Costs
Indirect OH – FC
Indirect OH – VC
Maintenance Exp
9.13
7.69
2.18
1.96
10.89
44.46
2.61
8.76
10.97
52.12
2.63
8.76
17.53
56.23
2.63
9.73
4.89
Expenses:
Administration
0.32
0.61
1.02
1.27
Office
Financial Expenses
4.14
6.14
7.10
1.74
Depreciation
25.65
28.78
29.74
30.23
Total
51.07
102.24
112.34
124.35
(14.28)
34.13
87.79
43.31
---
3.89
9.76
7.36
(14.28)
30.24
78.03
35.89
PBIT
Tax Paid
PAT
3/23/2016
23
Earnings
Particulars
2006-07
Tonnage (Million
Tonne)
2007-08
2008-09
2009-10
1.60
4.60
4.51
5.01
36.71
133.54
188.19
163.63
Gross Earnings/T KM
(Rs.)
1.25
1.58
2.28
1.78
O&M Cost (Rs. – Cr)
17.68
55.26
60.88
73.76
O&M Cost/T Km- (Rs.)
0.60
0.66
0.74
0.80
Net Earnings (Rs. –Cr)
19.03
78.28
127.31
89.87
0.65
0.93
1.54
0.98
Profit/ Loss (Rs. – Cr)
(Inc. of all Expenses)
(14.28)
30.24
78.03
35.89
Profit/Loss/ T Km (Rs.)
(0.49)
0.36
0.94
0.39
Gross Earnings
Cr)
(Rs.-
Net Earnings/ T Km
(Rs.)
24
Performance of the Company
Rs. - Crores
Particulars 2006-07
2007-08
2008-09
2009-10
Total Income
36.79
136.37
200.13
167.66
Total
Expenses
51.07
102.24
112.34
124.35
PBIT
(14.28)
34.13
87.79
43.31
PAT
(14.28)
30.24
77.64
35.89
(1.28)
2.70
6.93
3.20
E P S (Rs.)
3/23/2016
25
250
200
150
Income
100
Expenses
Profit
50
0
-50
'06-07
'07-08
'08-09
'09-10
26
Fixed Assets
Rs - Crores
Particulars
2006-07
2007-08
GAV
NAV
Bridges
26.91
26.53
Formation
69.99
GAV
2008-09
2009-10
NAV
GAV
NAV
GAV
NAV
31.03
30.19
32.94
31.58
33.45
31.54
63.41
69.47
55.70
74.22
52.78
74.79
45.58
188.70
171.09
189.51
152.51
192.23
135.54
193.04
116.44
Station &
Building
9.66
8.80
10.10
9.07
10.38
9.19
10.67
9.21
Plant &
Machinery
15.96
15.73
14.98
13.22
17.24
13.82
18.62
13.37
Total
311.20
285.56
315.08
260.69
327.02
242.91
330.47
216.14
Office
0.23
0.21
0.23
0.19
0.25
0.19
0.26
0.21
311.42
285.77
315.32
260.88
327.27
243.10
330.73
216.35
Railways
P Way
G Total
GAV – Gross Asset Value
3/23/2016
NAV – Net Asset Value
27
Capital Structure
Rs. - Crores
Particulars
Share Capital
Paid Up
2006-07
2007-08
2008-09
2009-10
112.00
112.00
112.00
112.00
---
15.95
93.60
121.89
Canara Bank
45.00
45.00
48.90
1.77
SBH
25.00
25.00
31.12
1.51
140.79
140.79
140.79
140.79
4.14
15.51
26.90
36.01
Reserve & Surplus
(Cumulative)
Secured Loans
Unsecured Loans
Sub debt from S W R
Deferred Indirect
Over Heads of SWR
3/23/2016
28
Section Staff Position in HMRDC
S.
No
Department
No of Staff
as per Agree
No. of Staff
on Roll
1
Mechanical (SKLR-SBHR)
68
59
2
Electrical (TLD)
23
9
3
Traffic (SKLR-BNTL)
91
84
4
S&T (SKLR-BNTL)
59
33
5
SE/P-Way (HAS-SKLR) at HAS
6
SE/P-Way (SKLR-SBHR) at SKLR
7
ADEN (SKLR)
8
BRI (SKLR)
9
SE/Works (SKLR) at SKLR
66
117
390
5
9
22
10 SE/P-Way (KBPR)
11 Accounts
Total
117
3
3
634
524
29
Works carried out by Mysore
Division & CAO/CN/BNC
Rs. -Crores
Sl.
No.
Name of work
No. of
Agreements
1
Safety Works /
Protective Works
8
14.88
2
Operational
Works / Traffic
Facility Works
2
23.12
3
Maintenance
Works
11
8.65
4
Works proposed
by Mysore
Division & Under
Scrutiny
8
60.70
3/23/2016
Total
Agreement
Value (Rs.)
Expenditure Percentage
till date (Rs.)
of work
completed
13.46
-
-
2.85
-
90%
30%
-
30
THIS ‘TERMS OF REFERENCE’ (TOR) OUTLINES THE OBJECTIVES, METHODOLOGY AND COSTS ASSOCIATED
WITH OPERATIONAL IMPROVEMENTS ASSESSMENT (OIA).
OBJECTIVES :
A) TO DOCUMENT THE MARKET POTENTIAL (BOTH MEDIUM TERM & LONG TERM) OF TRAFFIC.
B) TO CONDUCT A SWOT ANALYSIS AND SUGGEST WAYS AND MEANS OF RETENTION/ENHANCEMENT OF
EXISTING TRAFFIC WITH SPECIFIC STRESS ON CAPTURING ROAD TRAFFIC.
C) THE LIKELY IMPACT OF THE FUTURE PROJECTS PROPOSED BY GOK SUCH AS HUBLI-ANKOLA NEW
BROAD GAUGE LINE, TALAGUPPA-HONNAVAR BROAD GAUGE LINE, HOSPET-VASCO DOUBLING BEING
EXECUTED BY RVNL TO BE QUANTIFIED ON REALISTIC TERMS.
D) TO SUGGEST WAYS TO OVERCOME SHORT TERM CONSTRAINTS FACED BY CLIENTS LIKE SHORTAGE OF
BOX-N WAGONS AND LOCOS SO AS TO APPROACH RAILWAY BOARD FOR REDRESSAL OF GRIEVANCES.
E) TO EXPLORE WAYS FOR REDUCING RUNNING TIME IN THE CRITICAL SECTION LIKE INCREASING
PERMISSIBLE SPEED, AUGMENTATION OF LINE CAPACITY WITH FINANCIAL IMPLICATIONS.
F)TO ACHIEVE PROFIT OPTIMIZATION.
G) TO IDENTITY APPROPRIATE MEASURES TO AVOID, REMEDY OR MITIGATE, WHERE PRACTICAL, ANY
ADVERSE EFFECTS OF THE PROPOSED ACTIVITY ON ENVIRONMENTAL/CULTURAL VALUES.
H) TO REVIEW RAILWAY BOARD’S POLICY ON R3I AND SUGGEST FOR IMPROVEMENTS.
I) TO EVALUATE THE NEED BASED REQUIREMENT OF CONDUCTING A TECHNO ECONOMIC FEASIBILITY
THROUGH A PROFESSIONAL AGENCY LIKE RITES FOR DOUBLING OF LINE. THE SECOND LINE WILL BE AN
INDEPENDENT LINE REQUIRING ENVIRONMENTAL & MOEF CLEARANCE.
3/23/2016
31
Pending Issues with Railways
S.
No
Particulars
Target
Date
Action Required
At
1
Finalization of Project cost by CN/BNC
31.03.10 CAO/CN/BNC
2
Finalization of Project cost by DRM/MYS for
pending works as per MoU
31.03.10 DRM/MYS
3
Acceptance of Survey Committee
Recommendations
30.04.10 CCM/UBL
4
Methodology of Finalization of O&M costs for
2007-08 & 2008-09
31.05.10 CCM/UBL
FA& CAO/UBL
5
Settlement of Residual Claim for
2006-07
2007-08
2008-09
HY 2009-10
28.02.10
31.03.10
30.06.10
30.06.10
Sr.AFA/T/SBC
Sr.DFM/MYS
32
INSURANCE
PROJECT LENGTH COVERED : 97 Kms out of 183 Kms from (SKLR to KBPR)
ASSETS INSURED
: Permanent way, Station Buildings, Signaling, and Telecom,
Mechanical & Electrical Equipments
RISKS COVERED
: Force Majeure occurrence such as fire, root, flood, breaches,
lightning, earthquake and other natural disaster – mainly on
account of landslides/ rockslides during monsoon.
LOSSES COVERED
: I) Restoration cost of tracks and assets damaged
ii) Loss of Profit/ Revenue on account of stoppage of operation
on account of Force majeure events.
POLICY PERIOD
: 4th January 2010 to 3rd January 2011
PREMIUM PAID
: 2008 Rs. 33.60 Lakhs
2009 Rs. 40.08 Lakhs
2010 Rs. 69.53 Lakhs
CLAIMS SETTELED
: 2008 :
Restoration Cost : Rs. 61 Lakhs
Loss of Profit
: Rs. 1.83 Crores (Under Process)
2009 :
Restoration Cost : Rs. 97 Lakhs
Loss of profit
: Rs. 4.33 Crores
Under Process
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Income Tax Holiday and Payment of MAT
 INCOME TAX HOLIDAY :
Nature of exemption : Eligibility U/s 80IA being Infrastructure facility
Quantum of Exemption : 100% of Profit/ Income of the Company
Period of Exemption
: For 10 Consecutive years from the Initial year
Exemption Availed
: From FY 2007-08
Exemption Available upto : FY 2016 – 17
 PAYMENT OF MAT :
The Company is required to Pay minimum Alternative Tax (MAN) on Book Profits
U/s 115JB of Income Tax Act.
The Book Profit and MAT paid are :
FIN YEAR
Book Profit
Rate% including Surcharge
and Education Cess
Rs. In Crores Amt
of MAT Paid
2007-08
34.12
11.33 (10%+10%+3%)
3.88
2008-09
87.79
11.33
9.95
2009-10(Prov)
52.96
16.95 (15%+10%+3%)
9.00
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