Rail Technology Enterprises in India:

Transcription

1 Rail Technology Enterprises in India: Creating a 100x Return on Investment Presentation by Vishal Dixit Vice President Zephyr Peacock India Zephyr Management, L.P. global investment opportunities Zephyr Management, L.P. ( Zephyr ), an emerging-markets focused asset management firm, was founded in 1994 by Thomas C. Barry, former CEO of Rockefeller & Co., with over 60 professionals globally and approximately US$1.7 Bn in committed capital.* New York ZEPHYR GLOBAL OFFICES** Portland London Mexico City Miami Accra Bangalore Johannesburg Since its inception, Zephyr has identified specialized market niches around the globe which have the potential to generate attractive returns over a five to ten year investment horizon. * As of September 30, AUM calculation includes assets attributable to Zephyr s joint venture funds. ** Offices include affiliate locations. 1

2 About Indian Railways $ 1 trillion of assets at replacement value Route length of 64,000 km 9,000 locomotives; 57,000 coaches; 220,000 wagons 7.2 billion of passengers originating per year 903 billion passenger kms per year 1 billion tonnes originating per year 600 billion tonne kms per year 1.4 million employees 16 Zones, 68 divisions, 7500 stations, 20 subsidiaries and factories Indian Railways US $280 Billion opportunity Major opportunity for global funds and companies to invest in assets planned for High Speed Rail, Passenger facilities and rolling stock Major opportunity for suppliers of technology systems, equipment and technical services Innovative solutions that address Indian Railways unique requirements in a cost effective manner will get best returns IR Capex Plan upto 2020 in US$ billions High Speed, 40 Infrastructure Upgrade, 25.2 Passenger Facilties, Other, 21.8 Rolling Stock, 78.2 Infras tr uc ture Capacity,

3 Low Network Productivity Line capacity is key constraint on major freight routes Sub optimal Signaling leading to larger blocks and lower traffic density Reduced speeds due to risk of track damage and derailments caused by defective rolling stock Inadequate remote asset monitoring and dynamic line optimization Network Productivity (TKM millions per Route km) Russia USA China India Low Wagon Productivity Wagon availability is key constraint to freight throughput High wagon turnaround times due to procedures requiring physical examination and maintenance Lower speeds and lower loads due to lack of failure prediction systems such as wheel impact load detectors, hot box detectors and bearing failure detectors Wagon Productivity (TKM millions per wagon) Russia USA China India 3

4 Low Employee Productivity Large staff of maintenance personnel for manual examination and maintenance in workshops Large staff of field personnel to detect and predict track or rolling stock failure Redundant capacity essential due to lack of predictive systems for traffic and maintenance 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 - Employee Productivity (TKM millions per Employee) 16,256 2,099 1, Russia USA China India Safety vs. Capacity? In 2011 alone, Indian Railways has been over 10 derailments and close to 100 deaths Due to the lack of technology systems, the railways has to respond by slowing down speeds and increasing examination and maintenance frequency Such practices lead to further decline in productivity and do not really address the safety issues India has dire need for capacity any decline in capacity causes immediate overloading and overcrowding Use of technology can kill two birds with one stone achieve both safety and productivity 4

5 $ 1 Billion of Technology = $ 100 Billion Plus of Value $ 500 million investment in wayside systems such as Wheel Impact Load Detectors (WILD), Acoustic Bearing Detectors (ABD), hot box-hot wheel detectors can leading to a minimum productivity increase of 5% across the network $ 500 million investment in signaling works can lead to doubling of line capacity on 1250 km of the most dense routes Given past record, more than 1000 lives can be saved over the life of these investments A 10% productivity improvement on a $ 1 trillion asset base translates into $ 100 billion of value! Political leadership is under huge pressure to improve productivity and avoid accidents therefore they are now focusing in time and capital efficient investments Which are the Companies that can address this market? Integrated technology systems for the safety and efficiency of transportation, energy, defence and aerospace assets 10 5

6 Company Vision & Overview Vision: To emerge as the world s leading provider of integrated technology systems for the safety and efficiency of transportation and energy assets globally. Designs, manufactures and deploys systems that integrate control systems, signal processing, electrical and electronics with specialized algorithms for data acquisition, analysis and monitoring, using expertise in acoustics, vibration, fluid mechanics and thermodynamics Founded and managed by an entrepreneurial team with more than 100 years of collective R&D and commercialization experience with leading multinationals across US, Europe and India. Offices in Bangalore, Chennai, Delhi and Lucknow and 15 project offices across India, including 12,000 sq ft Office Space & 40,000 sq ft industrial space APNA Wayside Detectors Wheel Impact Load Detector (WILD) & Acoustic Bearing Detectors (ABD) Defective rail wheels and roller bearings have damaged billions of dollars of track infrastructure, caused derailments and hundreds of passenger fatalities; and constrained speed, load and efficiency of the railways WILDs sit under tracks and monitor the impact of each passing train wheel, transmit the information to a centralized control room and web server, and use a proprietary algorithm system to analyze and report data as well as raise action alerts and emergency alarms to detain the train if required. APNA has jointly developed the WILD with IIT-Kanpur and Indian Railways R&D unit, and successfully deployed 15 systems since 2008; APNA has full ownership of the product s IP. ABDs similarly consist of a series of trackside microphones that capture, transmit and analyze acoustic data to identify defective bearings. APNA has an exclusive collaboration with TTCI USA, a world leader in rail technology for a transfer of technology to design, manufacture and deploy ABDs for the Indian market. Market Potential Market Potential US$ 500 million in India; $ 2 billion abroad WILD tender in advanced stage, likely to be followed by another soon. Tenders for ABDs already at bid stage 100+ deaths due to wheel defect caused derailments in the last six months have created extreme urgency. Dedicated Freight Corridor (DFC), private railways by Adani, GVK, ports and massive rail spend in Africa, Middle East and South East Asia. Competitive Positioning Likely Market Share 75% Only Indian company with WILDs international competitors are 3x cost and not emerging markets focused Competitors would need technical certification from Indian Railways a 12 to 24 month process. TTCI APNA s partner for ABDs - has 90%+ global market share for the product. Clients and Technology Partners 6

7 APNA Remote Asset Management Railman Web based platform for remote management of railways assets to monitor safety and manage preventive maintenance Railman already under operation by Indian Railways and fully integrated with 15 WILD systems US$ 1 billion + market potential in Indian Railways, including potential from metro systems, DFC, private railways and emerging market rail systems Already in discussions with DeltaRail (UK), Ansaldo STS & Alstom for management of their Railway assets Comprehensive Product Portfolio 7

8 E to E Rail Group e2e Rail Group Services Expertise Signalling & Telecom Electrification Track & Structures Relay Interlocking OLE & Third Rail Traction Embankment & Cutting Automatic Signalling Sub-Station Bridges & Tunnels Computer Based Interlocking Switching Station Points and Crossings Level Crossing Protection Level Crossings Train Detection & LV Detection Station, Office buildings ETCS / ERTMS ROB & RUB 8

9 e2e s Roles and values TOTAL SOLUTION Cost Effectiveness Lower, predictable Design costs Improved technical resources Experienced, knowledgeable staff Integrated systems Improved Business Performance Increased revenue, cash flow Higher quality operations Concentrate on Core business Integrated processes Key Clients India Malaysia Saudi Arabia 9

10 Presence International UK Nigeria Saudi Arabia Sierra Leone Malaysia Indonesia Confirmed Projects Pipeline Projects Australia Double line between IPOH Padang Besar Project Provision of train control system in connection with the conversion of Single line to Double line between IPOH of Malaysia and Padang Besar of Thailand Client KTMB Main Contractor MMC Gamuda Hikamat Asia. Sub Contractor E to E Transportation Infrastructure Pvt. Ltd. Scope Design, Supply, Installation support, testing & commissioning of temporary signalling SSB package for Kedah line, in connection with the conversion of single line into double line between IPOH and PADANG BESAR

11 Platform Screen Doors Delhi Metro Project Installation, Testing and commissioning of Platform Screen Doors in Delhi Metro Airport Express Link stations Client Delhi Metro Airport Express Link Main Contractor Faiveley Transport India Pvt. Ltd. Sub Contractor E to E Transportation Infrastructure Pvt. Ltd. Scope Installation, Testing and commissioning of Platform Screen Doors in Delhi Metro Airport Express Link stations. Makkah Metro Phase 1 Project Installation & Testing of Signalling & Telecom Systems at Makkah Metro Phase-1 Client Thales, Saudi Arabia Main Contractor Mohawarean Railway Services, Saudi Arabia. Sub Contractor E to E Transportation Infrastructure Pvt. Ltd., India Scope Installation & Testing of Signalling & Telecom Systems at Makkah Metro Phase

12 Why Partner with Indian Companies? Indian Railways is a 150 year old organization with indigenously developed standards and specifications successful selling requires local innovation, cultural adaptation and strong relationships High cost sensitivity requires local development, manufacturing and deployment India s technology talent pool offers low cost development for global markets Indian technologies are highly relevant to other emerging markets a tremendous opportunity for global partnership India has a strong track record of IP protection as seen in the IT and pharmaceutical sectors Financial capital and global experience of international players, combined with human capital and local expertise of Indian companies can create a win-win opportunity for all emerging markets For further information, please contact: Vishal Dixit vd@zmlp.com Muchas Gracias! 12