Vous êtes sur la page 1sur 319





5HSRUWRIWKH&RPPLWWHH
IRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWV
DQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG




6KUL%LEHN'HEUR\
0HPEHU1,7,$D\RJ
&KDLUPDQ
































6KUL.0&KDQGUDVHNKDU
9LFH&KDLUPDQ.HUDOD6WDWH
3ODQQLQJ%RDUGDQG
)RUPHU&DELQHW6HFUHWDU\
0HPEHU


6KUL*XUFKDUDQ'DV

)RUPHU&0' 

3URFWHU *DPEOH ,QGLD  
0HPEHU


















6KUL5DYL1DUDLQ
)RUPHU0'
1DWLRQDO6WRFN([FKDQJH
0HPEHU

6KUL5DMHQGUD.DVK\DS
)RUPHU)LQDQFLDO&RPPLVVLRQHU
5DLOZD\V

0HPEHU













6K$MD\1DUD\DQ-KD
$GGLWLRQDO6HFUHWDU\
'HSDUWPHQWRI([SHQGLWXUH
0LQLVWU\RI)LQDQFH
0HPEHU



3URI3DUWKD0XNKRSDGK\D\

6U)HOORZ&HQWUHIRU3ROLF\5HVHDUFK
0HPEHU




6KUL$MD\7\DJL 


$GGLWLRQDO6HFUHWDU\

'HSDUWPHQWRI(FRQRPLF$IIDLUV

0LQLVWU\RI)LQDQFH


0HPEHU









June 2015
Ministry of Railways
Rail Bhavan
New Delhi

1


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

2


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

7DEOHRI&RQWHQWV

3DJHQR



$FNQRZOHGJHPHQWV 



([HFXWLYH6XPPDU\ 



&KDSWHU3UHIDFH 



&KDSWHU7KH5ROHDQG3XUSRVHRI,QGLDQ5DLOZD\V



&KDSWHU7KH'HFLVLRQ0DNLQJ6WUXFWXUHRI,5



&KDSWHU$FFRXQWLQJ5HIRUPV



&KDSWHU+XPDQ5HVRXUFH0DQDJHPHQW



&KDSWHU%XGJHWDU\5HODWLRQVKLSVEHWZHHQ*RYHUQPHQWVDQG,5



&KDSWHU)LQDQFLQJDQG*HQHUDWLRQRI5HVRXUFHV



&KDSWHU7KH&DVHIRUDQ,QGHSHQGHQW5HJXODWRU





&KDSWHU7LPH/LQHDQG%H\RQGWKH,QLWLDO<HDUVDQGWKH 
7HUPLQDO*RDO 







$QQH[XUHD5HFRPPHQGDWLRQVRI(DUOLHU&RPPLWWHHV




$QQH[XUHE6WRFNWDNLQJE\,5RI(DUOLHU5HFRPPHQGDWLRQV



$QQH[XUH,5'DWDDQG7DEOHV 



$QQH[XUH*OREDO5DLOZD\5HVWUXFWXULQJ([SHULHQFHV



$QQH[XUH&RPSDUDWLYH,QGLFDWRUV,QGLDDQG86$



$QQH[XUH6WDNHKROGHU&RQVXOWDWLRQV 



3


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

$FNQRZOHGJHPHQWV
7KLV&RPPLWWHHDFNQRZOHGJHVWKHYDOXDEOHFRQWULEXWLRQVPDGHE\WKHIROORZLQJDQGLVWKDQNIXO
WRWKHP:LWKRXWWKHLULQSXWVDQGFRQWULEXWLRQVWKLV5HSRUWZRXOGQRWKDYHEHHQSRVVLEOH


0U$.0LWDO&KDLUPDQ5DLOZD\%RDUG IRUPHU0HPEHU 6WDII 5DLOZD\%RDUG




0U$ORN-RKUL)RUPHU0HPEHU0HFKDQLFDO5DLOZD\%RDUG


0U$PLWDEK.DQW6HFUHWDU\'HSDUWPHQWRI,QGXVWULDO3ROLF\ 3URPRWLRQ


0U$UXQHQGUD.XPDU)RUPHU&KDLUPDQ5DLOZD\%RDUG


0U'HYL3UDVDG3DQGH)RUPHU0HPEHU7UDIILF5DLOZD\%RDUG


0U*XPDQ6LQJK3UHVLGHQW1DWLRQDO)HGHUDWLRQRI,QGLDQ5DLOZD\PHQ1),5


0U+HPDQW.XPDU0HPEHU0HFKDQLFDO5DLOZD\%RDUG IRUPHU*0RI:HVWHUQ5DLOZD\


0U.3.ULVKQDQ)RUPHU$GGLWLRQDO6HFUHWDU\'($0LQLVWU\RI)LQDQFH


'U05DJKDYDLDK*HQHUDO6HFUHWDU\1DWLRQDO)HGHUDWLRQRI,QGLDQ5DLOZD\PHQ1),5


0U5DGKH\6K\DP*HQHUDO0DQDJHU6RXWK(DVWHUQ5DLOZD\


0U5DMHHY0HKURWUD&0'5,7(6/WG


0U5DMLY9LVKQRL)RUPHU*HQHUDO0DQDJHU'/:9DUDQDVL


0UV5DMODNVKPL5DYL.XPDU)LQDQFLDO&RPPLVVLRQHU5DLOZD\%RDUG


0U5DNKDO'DV*XSWD3UHVLGHQW$OO,QGLD5DLOZD\PHQV)HGHUDWLRQ$,5)


0U5.*XSWD*HQHUDO0DQDJHU(DVWHUQ5DLOZD\


0U6KLYD*RSDO0LVKUD*HQHUDO6HFUHWDU\$OO,QGLD5DLOZD\PHQV)HGHUDWLRQ$,5)


0U6.6RRG*HQHUDO0DQDJHU&HQWUDO5DLOZD\


0U9.*XSWD0HPEHU(QJLQHHULQJ5DLOZD\%RDUG


&RQIHGHUDWLRQRI,QGLDQ,QGXVWU\ &,, 


)HGHUDWLRQRI,QGLDQ&KDPEHUVRI&RPPHUFH ,QGXVWU\ ),&&, 




3+'&KDPEHURI&RPPHUFH ,QGXVWU\ 3+' 




7KH$VVRFLDWHG&KDPEHUVRI&RPPHUFH ,QGXVWU\RI,QGLD $662&+$0 



7KH,QWHULP5HSRUWRIWKLV&RPPLWWHHZDVVXEPLWWHGDQG SODFHGLQWKHSXEOLFGRPDLQRQVW
0DUFK   'HWDLOHG FRPPHQWV RQ WKH ,QWHULP 5HSRUW ZHUH UHFHLYHG IURP WKH 1DWLRQDO
)HGHUDWLRQ RI ,QGLDQ 5DLOZD\PHQ 1),5  WKH $OO ,QGLD 5DLOZD\PHQV )HGHUDWLRQ $,5)  WKH
)HGHUDWLRQRI5DLOZD\2IILFHUV$VVRFLDWLRQV )52$ WKH,QGLDQ5DLOZD\V3URPRWHH2IILFHUV
)HGHUDWLRQ WKH )HGHUDWLRQ RI 5DLOZD\ %RDUG 6HFUHWDULDW 2IILFHUV DQG 6WDII $VVRFLDWLRQV WKH
5DLOZD\ %RDUG 6HFUHWDULDW 6HUYLFH *URXS $ 2IILFHUV $VVRFLDWLRQ WKH 5DLOZD\ %RDUG
6HFUHWDULDW 6HUYLFHV *URXS % 2IILFHUV $VVRFLDWLRQ WKH ,QGLDQ 5DLOZD\ 0HGLFDO 6HUYLFH
$VVRFLDWLRQ DQG 9 9LMD\DUDJKDYDQ D PHPEHU RI ,5)&$  IURP &KHQQDL  ,Q DGGLWLRQ WKLV
&RPPLWWHH KHOG FRQVXOWDWLRQV RQ WKH ,QWHULP 5HSRUW ZLWK '50V LQ 'HOKL  7KH )LQDO 5HSRUW
LQFRUSRUDWHVDOOWKHVHLQSXWV

7KLV &RPPLWWHH DOVR DFNQRZOHGJHV LWV GHEW WR 0U 1LUPDO 0RKDQW\ DQG 0V9LG\D
.ULVKQDPXUWKLIRUKHOSLQGUDIWLQJERWKWKH,QWHULP5HSRUWDQGWKH)LQDO5HSRUW

7KDQNV DUH DOVR GXH WR 0U 6DQMD\ &KDGKD 6HFUHWDU\ WR WKLV &RPPLWWHH DQG KLV WHDP 0U 9
6RPDGDV  0U 5DMHVK .XPDU 0U 7 0 (VPDLO 0U 9LVKUDP 0HHQD 0U 9LMD\ .XPDU IRU WKH
XQVWLQWHGVXSSRUWSURYLGHGE\WKHPDQGIRUWKHVPRRWKIXQFWLRQLQJRIWKLV&RPPLWWHH
4


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG




5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIIRU0
0DMRU5
5DLOZD\3
3URMHFWVD
DQG5
5HVWUXFWXULQJR
RI5
5DLOZD\0
0LQLVWU\DQG5DLOZD\%RDUG

([HFXWLYH6XPPDU\
,QWURGXFWLRQ

















,QGLDKDVWKHIRXUWKODUJHVWUDLOZD\QHWZRUNLQWKHZRUOG&RYHULQJ6WDWHVDQG8QLRQ
7HUULWRULHVDFURVVDOPRVWVWDWLRQVIURP%DUDPXOODLQWKHQRUWKWR.DQ\DNXPDULLQ
WKHVRXWKDQGIURP1DOL\DLQWKHZHVWWR/HGRLQWKHHDVWWKH,QGLDQ5DLOZD\VVSDQVWKH
FRXQWU\ a capite ad calcem. 7KHQDWLRQDOFDUULHUSOD\VDVLJQLILFDQWUROHLQGHYHORSPHQW
DQG JURZWK RI WKH FRXQWU\ DQG WRXFKHVOLYHV RI DOO LWV SHRSOH DFURVV WKH FRXQWU\ ,WUXQV
QHDUO\  WUDLQV  DERXW  SDVVHQJHU WUDLQV WKDW FDUU\ PRUH WKDQ  PLOOLRQ
SDVVHQJHUVDQGIUHLJKWWUDLQVWKDWFDUU\DURXQGPLOOLRQWRQQHVRIIUHLJKWSHUGD\,QGLDLV
RQH RI WKH IRXU FRXQWULHV LQ WKH ZRUOG WKDW FDUU\ PRUH WKDQ  ELOOLRQ WRQQHV RI IUHLJKW D
\HDU
$VIDUDV,5VSHUIRUPDQFHLVFRQFHUQHGLWFDQQRWEHGHQLHGWKDWLWKDVFRPHDORQJZD\
VLQFHLQWHUPVRIQXPEHURIWUDLQVDQGWKHLUFDUU\LQJFDSDFLW\DVZHOODVLQWHUPV
RIWKHTXDQWXPRIWUDIILFFDUULHG7KHUHVWLOOLVKRZHYHUDZLGHJDSEHWZHHQWKHVXSSO\
VLGHLPSURYHPHQWVDQGWKHGHPDQGVLGHH[SHFWDWLRQVERWKLQWHUPVRIVSHHGVRIWUDLQVDV
ZHOODVTXDOLW\RIVHUYLFHV
,WLVRIWHQUHLWHUDWHGWKDWWKH,5PD\HQGXSDVDEXUGHQRQQDWLRQDOHFRQRP\ZKLFKPDNHV
LW QHFHVVDU\ WR UHORRN DQG UHGHILQH WKH UROH RI ,5 ZLWK WKH FKDQJLQJ WLPHV 2QH RI WKH
VLJQLILFDQWLVVXHVLVWKDWPDQ\GHFLVLRQVRQ,5OLNHLQFUHDVHLQIDUHLQWURGXFWLRQRIQHZ
WUDLQV SURYLVLRQ RI KDOWV DQG HVWDEOLVKPHQW RI QHZ SURMHFWV  DUH WDNHQ RQ WKH EDVLV RI
RWKHUWKDQFRPPHUFLDOFRQVLGHUDWLRQV$VFRPPHUFLDODFFRXQWLQJSULQFLSOHVWRRDUHQRWLQ
XVHRQWKH,5WKHFRVWVDQGWKHUHWXUQVIURPVXFKLQYHVWPHQWVDUHDOVRQRWHDV\WRDVVHVV
7KH HIIRUWV IRU HQJDJLQJ 6WDWH *RYHUQPHQWV DQG RWKHU LQWHUHVWHG SDUWLHV IRU VKDULQJ WKH
EXUGHQRIXQUHPXQHUDWLYHSURMHFWVKDYHEHHQIHZDQGIDUEHWZHHQ
,W LV LQFUHDVLQJO\ DFFHSWHG WKDW ,5 LV QR ORQJHU D PRQRSRO\ DQG IDFHV VWLII FRPSHWLWLRQ
IURP WKH URDG VHFWRU 7KH FURVVVXEVLGLVDWLRQ RI ORZ SDVVHQJHUIDUHV E\ DUWLILFLDOO\ KLJK
IUHLJKWUDWHVKDVOHGWRVKLIWLQIDYRXURIURDGWUDQVSRUWIRUERWKIUHLJKWDVZHOODVVKRUW
GLVWDQFHSDVVHQJHUWUDIILF,WQHHGVWREHUHFRJQLVHGWKDWPRVWSDVVHQJHUVDUHZLOOLQJWR
SD\KLJKHUIDUHVDOEHLWRQO\LIDFFRPSDQLHGE\HQKDQFHGVHUYLFHV
:KLOH OLEHUDOLVDWLRQ DQG QRW SULYDWLVDWLRQ  IRU HQWU\ RI QHZ RSHUDWRUV LQWR UDLOZD\
RSHUDWLRQV LV VHHQ E\ WKLV &RPPLWWHH DV D YLDEOH RSWLRQ IRU HQFRXUDJLQJ JURZWK DQG
LPSURYLQJ VHUYLFHV  D UHJXODWRU\ PHFKDQLVP WR SURPRWH D KHDOWK\ FRPSHWLWLRQ DQG WR
SURWHFWWKHLQWHUHVWRIDOOVWDNHKROGHUVLVDQHVVHQWLDOSUHUHTXLVLWH
)XUWKHUPRUH WKH ,5 LQ DGGLWLRQ WR LWV FRUH IXQFWLRQ RI UXQQLQJ WUDLQV LV HQJDJHG LQ
YDULRXVRWKHUDFWLYLWLHVZKLFKDUHXQUHPXQHUDWLYHLQQDWXUHOLNHSURYLVLRQRIVHFXULW\WR
LWV FXVWRPHUV PHGLFDO DQG HGXFDWLRQDO IDFLOLWLHV WR LWV HPSOR\HHV HWF ZKLFK OD\V
DGGLWLRQDOEXUGHQRQ,5
6

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG












$V SRLQWHG RXW E\ PDQ\ SUHYLRXV &RPPLWWHHV RYHU WKH \HDUV WKH ,5 RUJDQL]DWLRQ KDV
JURZQ LQWR DQ RYHUO\ FHQWUDOL]HG DQG KLHUDUFKLFDO RUJDQLVDWLRQ 7KH IHHOLQJ RI
GHSDUWPHQWDOLVP DGYHUVHO\ DIIHFWV WKH ZRUNLQJ FXOWXUH LQ WKH ,5 DQG KDV UHVXOWHG LQ
DFWLRQV DQG  GHFLVLRQV EDVHG RQ QDUURZ GHSDUWPHQWDO JRDOV LQVWHDG RI RQ RUJDQL]DWLRQDO
REMHFWLYHVRUEHQHILWV
7RDGGUHVVWKHLVVXHVEURXJKWRXWDERYHWKLV&RPPLWWHHEXLOGVLWVUHFRPPHQGDWLRQVRQ
WKUHHSLOODUVQDPHO\L FRPPHUFLDODFFRXQWLQJLL FKDQJHVLQ+5DQGLLL DQLQGHSHQGHQW
UHJXODWRU
,WQHHGVWREHXQGHUVWRRGWKDWWKLV&RPPLWWHHGRHVQRWUHFRPPHQGSULYDWL]DWLRQRI,5,W
GRHVKRZHYHUHQGRUVHSULYDWHHQWU\ZKLFKLVQRWab initioEXWab hinc - DVWKLVLVDOUHDG\
SDUW RI WKH DFFHSWHG ,5 SROLF\  ZLWK WKH SURYLVR RI DQ LQGHSHQGHQW UHJXODWRU 7KLV
&RPPLWWHHSUHIHUVXVHRIWKHZRUGOLEHUDOL]DWLRQDQGQRWSULYDWL]DWLRQRUGHUHJXODWLRQDV
ERWKWKHODWWHUDUHDSWWRPLVLQWHUSUHWDWLRQ
7KLV&RPPLWWHHDFNQRZOHGJHVWKDWWKHUHVWUXFWXULQJRI,5LVDQRQHURXVWDVNDQGWKXVKDV
UHFRPPHQGHG D WLPH OLQH RI ILYH \HDU IRU WKH WKUHH EXLOGLQJ EORFNV LH WUDQVLWLRQ WR
FRPPHUFLDO DFFRXQWLQJ HIIHFWLQJ +5 FKDQJHV DQG WKH VHWWLQJ XS RI DQ LQGHSHQGHQW
UHJXODWRU$ZD\IRUZDUGEH\RQGWKHILUVWILYH\HDUVKDVDOVREHHQHQYLVDJHGZKLFKLV
LQFXPEHQWRQWKHVXFFHVVRIWKHFKDQJHVLQWKHLQLWLDOILYH\HDUVgradibus ascendimus


7KH'HFLVLRQPDNLQJ6WUXFWXUHRQ,5

 $SDUWIURPWUDLQRSHUDWLRQVWKH,5DOVRXQGHUWDNHVDZLGHJDPXWRISHULSKHUDODFWLYLWLHV
VXFK DV UXQQLQJ RI KRVSLWDOV DQG VFKRROV FDWHULQJ UHDO HVWDWH GHYHORSPHQW LQFOXGLQJ
KRXVLQJ FRQVWUXFWLRQ DQG PDLQWHQDQFH RI LQIUDVWUXFWXUH  PDQXIDFWXUH RI ORFRPRWLYHV
FRDFKHV ZDJRQV DQG WKHLU SDUWV VHFXULW\ HWF )RU VRPH RI WKHVH XQUHPXQHUDWLYH
DFWLYLWLHVWKH,5EHDUVDKXJHILQDQFLDOEXUGHQ7KLVKDVDOVRUHVXOWHGLQDVNHZHGPDQ
SRZHUSURILOHDQDGYHUVHWHHWKWRWDLOUDWLR

 7KLV &RPPLWWHH UHFRPPHQGV WKDW WKHVH RIIOLQH DFWLYLWLHV VKRXOG EH VHSDUDWHG IURP WKH
FRUHIXQFWLRQRI,5VEXVLQHVVZKLFKLVUXQQLQJRIWUDLQV7KH5DLOZD\3URWHFWLRQ)RUFH
DQG5DLOZD\3URWHFWLRQ6SHFLDO)RUFHDUHPHDQWWRHQVXUHEHWWHUSURWHFWLRQDQGVHFXULW\RI
5DLOZD\ SURSHUW\ SDVVHQJHU DUHDV DQG SDVVHQJHUV DOEHLW ZLWK OLPLWHG SROLFH SRZHUV
ZKLFKDUHPDLQO\YHVWHGZLWKWKH*53IRUZKLFKWRR,5SD\VKDOIWKHFRVW/DZDQGRUGHU
EHLQJHVVHQWLDOO\D6WDWHVXEMHFWWKLV&RPPLWWHHUHFRPPHQGVWZRIROGDFWLRQ)LUVWWKH
6WDWH *RYHUQPHQWV VKRXOG EH SHUVXDGHG WR EHDU WKH HQWLUH FRVW RI *53 DQG VHFRQG WKH
*0V'50V VKRXOG KDYH WKH IUHHGRP WR FKRRVH EHWZHHQ SULYDWH VHFXULW\ DJHQFLHV DQG
53)IRUVHFXULW\RQWKHWUDLQV

 $VUHJDUGVUXQQLQJRIVFKRROVWKLV&RPPLWWHHVXJJHVWVWKDWWKHHGXFDWLRQDOQHHGVRIWKH
FKLOGUHQ RI 5DLOZD\ HPSOR\HHV FRXOG EH PHW WKURXJK VXEVLGL]LQJ WKHLU HGXFDWLRQ LQ
DOWHUQDWLYH VFKRROV LQFOXGLQJ .HQGUL\D 9LG\DOD\DV DQG SULYDWH VFKRROV  7KH 5DLOZD\V
QHHGV WR WDNH D FDOO EHWZHHQ UXQQLQJ RI UDLOZD\ VFKRROV DW ORFDWLRQV ZKHUH JRRG
7


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

DOWHUQDWLYH VFKRROV DUH DYDLODEOH YHUVXV HVWDEOLVKLQJ HGXFDWLRQDO IDFLOLWLHV DW UHPRWH
ORFDWLRQV ZKHUH WKHVH DUH FRPSOHWHO\ ODFNLQJ  ,Q HLWKHU FDVH WKH FRVW RI UXQQLQJ WKHVH
VFKRROVZRXOGEHEHVWVHUYHGWKURXJKIRUPDWLRQRIDVRFLHW\IRUWKHSXUSRVHUDWKHUWKDQ
HGXFDWLRQLVWVEHLQJWDNHQRQWKHUROOVRI,5IRUWKHSXUSRVH












7KHIXQFWLRQVSHUIRUPHGE\WKH,QGLDQ5DLOZD\0HGLFDO6HUYLFHEHLQJPRUHGLYHUVHWKLV
&RPPLWWHHUHFRPPHQGVDPXOWLSURQJHGDSSURDFK,WUHFRPPHQGVWKDWIRUIXQFWLRQVVXFK
DV SHULRGLF PHGLFDO H[DPLQDWLRQ SUHHPSOR\PHQW H[DPLQDWLRQ PHGLFDO ERDUGV VDIH
ZDWHUDQGIRRGVXSSO\DWVWDWLRQVHWFWKH*0V'50VDVZHOODVWKHHPSOR\HHVFRXOGEH
JLYHQ WKH FKRLFH WRRSW IRU VHUYLFHV HLWKHU WKURXJK ,506 RU WKURXJK SULYDWH HPSDQHOOHG
SUDFWLWLRQHUV  )RU SUHYHQWLYH DQG FXUDWLYH KHDOWK FDUH RI HPSOR\HHV WKH FKRLFH PD\ EH
H[WHQGHGWRWKH&*+6IUDPHZRUNDQGVXEVLGL]HGKHDOWKFDUHLQSULYDWHKRVSLWDOVVKRXOG
QRWEHUHVWULFWHGRQO\WRUHIHUUDOVHUYLFHV
7KH ,5 H[HFXWHV LWV SURMHFWV WKURXJK WZR W\SHV RI DJHQFLHV 7KH ILUVW W\SH LV WKH ]RQDO
SURMHFW RUJDQLVDWLRQ DQG WKH RWKHU LV WKH SURMHFW RUJDQLVDWLRQV  OLNH &25(  UHSRUWLQJ
GLUHFWO\WR5DLOZD\%RDUG7KH]RQDORUJDQLVDWLRQVDUHYHU\ODUJHDQGXQZLHOG\DQGODFN
WKHFXWWLQJHGJHIRUWLPHO\H[HFXWLRQRISURMHFWV7RRYHUFRPHWKHUHVXOWLQJWLPHDQGFRVW
RYHUUXQVZKLFKSODJXHLQKRXVHSURMHFWH[HFXWLRQWKLV&RPPLWWHHUHFRPPHQGVEULQJLQJ
DOOWKH]RQDOFRQVWUXFWLRQRUJDQLVDWLRQVXQGHUWKHXPEUHOODRIRQHRUPRUH368VVXFKDV
591/,5&21HWF
,QWKH,5PDQ\ZRUNVRIVLPLODUQDWXUHOLNHFOHDQLQJRIWUDLQVDQGVWDWLRQV,7LQLWLDWLYHV
HWFDUHSHUIRUPHGLQSDUDOOHOE\PXOWLSOHDJHQFLHVUHVXOWLQJLQVXERSWLPDOSHUIRUPDQFH
7KHUHLVDQHHGWRLQWHJUDWHDQGV\QHUJLVHVXFKIXQFWLRQVWRDFFRPSOLVKFRPSUHKHQVLYH
UHVXOWV
7KLV&RPPLWWHHLVRIWKHYLHZWKDWWKHUHDUHWRRPDQ\=RQHVDQG'LYLVLRQVRQ,5DQG
UDWLRQDOLVDWLRQ RI WKH VDPH LV UHTXLUHG )XUWKHU LW LV WKLV &RPPLWWHHV YLHZ WKDW WKHUH
PXVWEHGHFHQWUDOL]DWLRQGRZQWRWKHOHYHORIGLYLVLRQVDQGWKHGLYLVLRQVPXVWEHWUHDWHG
DV LQGHSHQGHQW EXVLQHVV XQLWV '50V VKRXOG EH VXIILFLHQWO\ HPSRZHUHG WR KDQGOH DOO
WHQGHUV FRQQHFWHG ZLWK ZRUNV VWRUHV SURFXUHPHQW VHUYLFH RU HYHQ UHYHQXHHDUQLQJ
FRPPHUFLDO WHQGHUV SHUWDLQLQJ WR WKHLU GLYLVLRQ  7KLV &RPPLWWHH IXUWKHU VXJJHVWV WKDW
ZKHQDPRQHWDU\FHLOLQJLVVHWRQWKHILQDQFLDOSRZHUVRI'50VLWVKRXOGQRWEHVHWLQ
DEVROXWHPRQHWDU\WHUPVEXWVKRXOGLQVRPHIDVKLRQEHLQIODWLRQLQGH[HG6HFRQGLIWKH
HDUQLQJV WDUJHW LV DFKLHYHG WKHUH VKRXOG EH D SURYLVLRQ IRU UHDSSURSULDWLRQ DFURVV WKH
EXGJHWDU\ 3ODQ KHDGV  7KLUG VRPH HDUQLQJV RI WKH GLYLVLRQ VKRXOG EH UHWDLQHG DW WKH
OHYHO RI WKH 'LYLVLRQ WR EH VSHQW RQ VSHFLILF SXUSRVHV  )RXUWK '50V VKRXOG KDYH
SRZHUV WR VDQFWLRQ QHZ SRVWV WKDW DUH ILQDQFLDOO\ QHXWUDO FUHDWHG DJDLQVW VXUUHQGHUHG
SRVWV )LIWKILQDQFHPXVWFRPSOHWHO\EHXQGHUWKH'50'50VPXVWKDYHWKHRSWLRQ
WR FKRRVH EHWZHHQ 53) DQG RWKHU VHFXULW\ DJHQFLHV  6L[WK $'50V VKRXOG EH
HPSRZHUHG DQG PDGH DQ H[SOLFLW SDUW RI WKH DGPLQLVWUDWLYH FKDLQ  6HYHQWK EHIRUH
UHJLVWHULQJ D YLJLODQFH FDVH RQH VKRXOG DVFHUWDLQ WKH YLHZV RI WKH '50  ,Q JHQHUDO
EHIRUH UHJLVWHULQJ D YLJLODQFH FDVH YLHZV VKRXOG EH VRXJKW IURP DW OHDVW WKUHH KLJKHU
UHSRUWLQJOHYHOV 
8

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG









$W SUHVHQW WKH VWDWLRQ PDQDJHUV VXSHULQWHQGHQWV XQGHU WKH HDUOLHU QRPHQFODWXUH  WRR
KDYH OLPLWHG SRZHUV RWKHU WKDQ SRZHUV RYHU FRPPHUFLDO RSHUDWLRQV 7KLV &RPPLWWHH
UHFRPPHQGV WKDW DOO $ DQG $ W\SH VWDWLRQV VKRXOG EH PDQQHG E\JD]HWWHG RIILFHUV DV
VWDWLRQ PDQDJHUV  ,Q WKH -XQLRU DQG 6HQLRU WLPHVFDOH WKHVH SRVWV ZLOO KDYH WR EH UH
GHVLJQDWHG DV JHQHUDO SRVWV  6XSHUYLVRUV DQG RWKHU VWDII ZKR ZRUN LQ WKH VWDWLRQV ZLOO
UHSRUWWRWKHLUGHSDUWPHQWDOGLYLVLRQDORIILFHUVRQO\WKURXJKWKHVWDWLRQPDQDJHU
7KLV&RPPLWWHHIHHOVWKDWWKHSRZHUVRIWKH*0KDYHEHHQFRQVWULFWHGRYHUWKH\HDUVE\
DGGLWLRQVDQGTXDOLILFDWLRQVWRWKHH[FOXGHGOLVWPRVWO\ZLWKWKHREMHFWLYHRIEXGJHWDU\
FRQWUROZKLFKVHYHUHO\KDPSHUVGHFLVLRQPDNLQJ7KHKHDGRIWKH=RQH *0 PXVWEH
IXOO\ HPSRZHUHG WR WDNH DOO QHFHVVDU\ GHFLVLRQV ZLWKRXW UHIHUHQFH WR 5DLOZD\ %RDUG
ZLWKLQWKHIUDPHZRUNRISROLFLHV7KLV&RPPLWWHHUHFRPPHQGVWKDWZLWKLQWKHUHYHQXH
EXGJHWILQDQFLDORXWOD\WKH=RQDO5DLOZD\VVKRXOGKDYHIXOOSRZHUVIRUH[SHQGLWXUHUH
DSSURSULDWLRQ DQG VDQFWLRQV VXEMHFW WR LW PHHWLQJ LWV SURSRUWLRQDWH HDUQLQJ WDUJHW 7KLV
ZRXOGPDNHHDFK=RQDO5DLOZD\DFFRXQWDEOHIRULWVWUDQVSRUWRXWSXWDQGSURILWDELOLW\
2QFHWKH=RQHVDUHPDGHDXWRQRPRXVWKH5DLOZD\%RDUGZLOOKDYHOLWWOHUROHWRSOD\LQ
WKHLUGD\WRGD\IXQFWLRQLQJDQGFDQEHFRPHOLNHDFRUSRUDWHERDUGIRU,5SROLF\EHLQJ
GHWHUPLQHG E\ WKH 0LQLVWU\ RI 5DLOZD\V DQG FRPSHWLWLRQ HQVXUHG E\ WKH 55$,  2XU
VXJJHVWHGFRPSRVLWLRQRIWKH%RDUGZRXOGKDYHVRPHWKLQJOLNH D 0HPEHU 7UDFWLRQ
 5ROOLQJ 6WRFN  E  0HPEHU 3DVVHQJHU  )UHLJKW %XVLQHVV  F  0HPEHU +5 
6WRUHV  G 0HPEHU )LQDQFH 333  H 0HPEHU ,QIUDVWUXFWXUH DQGWZRRXWVLGHDQG
LQGHSHQGHQW H[SHUWV 0HPEHU )LQDQFH  333  DQG 0HPEHU +5  6WRUHV  QHHG QRW
QHFHVVDULO\EH IURP LQVLGH WKH ,5 V\VWHP DQG ODWHUDO LQGXFWLRQ IURP WKH RXWVLGH VKRXOG
QRWEHUXOHGRXW7KH&KDLUPDQ D  E DQG H VKRXOGEHIURPLQVLGHWKH,5V\VWHP$Q
LQGLYLGXDOVKRXOGEHDSSRLQWHGDV&KDLUPDQRU0HPEHURQO\LIKHVKHSRVVHVVHVDWOHDVW
\HDUVRIVHUYLFHOHIW 7KLVFODXVHVKRXOGDOVRDSSO\WRDSSRLQWPHQWDV*0 


$FFRXQWLQJ5HIRUPV


7KHSUHVHQWDFFRXQWLQJV\VWHPRI,5LVOHVVWKDQFRQGXFLYHIRUDWUDQVSRUWHUDVLWGRHV
QRW FDSWXUH WKHVHUYLFHZLVH FRVW LQFOXGLQJ WKHGHSUHFLDWLRQDULVLQJ DFFXUDWHO\7KH,5
DFFRXQWLQJ SUDFWLFHV DUH QRW LQ WKH VDPH EDQG RI FRPPHUFLDO DFFRXQWLQJ IROORZHG E\
PRVW RWKHU UDLOZD\ V\VWHPV :LWK WKH GLPLQLVKLQJ *RYHUQPHQW IXQGLQJ ,5 KDV OLWWOH
RSWLRQ EXW WR ORRN IRU QRQJRYHUQPHQW VRXUFHV RI IXQGV 7KLV LPSHUDWLYH LV D PDMRU
GULYHU IRU QHHGEDVHG UHILQHPHQWV LQ WKH ZD\ ,5 SUHSDUHV DQG PDLQWDLQV DFFRXQWV DQG
FRVWVLWVEXVLQHVVHVDFWLYLWLHVDQGVHUYLFHV



8QOHVVFRPPHUFLDODFFRXQWHGLVDGRSWHGWKH,5EHFRPHVQRQFRQGXFLYHIRULQYHVWPHQW
7KH ,5V DFFRXQWLQJ V\VWHP KDV EHHQ VXEMHFW WR PXFK FULWLFLVP LQFOXGLQJ WKH ODWHVW
17'3& UHSRUW DQG RWKHU DV KLJKOLJKWHG LQ FKDSWHU   $ PDMRU RYHUKDXO RI ,5V
DFFRXQWLQJ V\VWHPVLVDOVRVWURQJO\VXJJHVWHG E\WKHSDUDPRXQWQHHGWRSXW LQSODFH D
UHVSRQVLYHDQGUHOLDEOHFRVWLQJIUDPHZRUNWRFRVWLWVEXVLQHVVHVVHUYLFHVDQGDFWLYLWLHV
ZKLFK ZRXOG XQGHUSLQ PDMRU PDQDJHULDO DQG VWUDWHJLF GHFLVLRQV RI ,5 LQ WKH HPHUJLQJ
HFRQRPLFPLOLHX,5KDVWUDGLWLRQDOO\KDGDFRVWLQJV\VWHPRIVRPHVXEVWDQFHEXWWKHUH
KDVEHHQOLWWOHDWWHQWLRQWRUHYLVLQJRUXSGDWLQJWKHXQGHUO\LQJQRUPVIRUDSSRUWLRQPHQW
9

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

RI MRLQW FRVWV DQG RWKHU SDUDPHWHUV 7KH FXUUHQW V\VWHP DOVR QHLWKHU WUDFNV DVVHWV QRU
DVVHVVHVOLDELOLWLHV:LWKWKHXQGHUO\LQJDFFRXQWLQJV\VWHPVXIIHULQJIURPKDQGLFDSVWKH
UHVXOWDQWFRVWLQJVXIIHUVIURPFRUUHVSRQGLQJVKRUWFRPLQJV


7KLV&RPPLWWHHUHFRPPHQGVHVWDEOLVKPHQWRIDUHVSRQVLYHDQGWUDQVSDUHQWDFFRXQWLQJ
DQGFRVWLQJV\VWHPDVWKHILUVWVWHSSLQJVWRQHWRDFRPPHUFLDOO\YLDEOH5DLOZD\V\VWHP
)RULPSOHPHQWDWLRQRIWKHDFFRXQWLQJUHIRUPVDFOHDUURDGPDSPD\EHGUDZQZLWKWLPH
IUDPHV IRU FRQVWLWXHQW DFWLYLWLHV ZKLFK QHHGV WR EH PRQLWRUHG DQG JXLGHG DW WKH WRS
OHYHO ,W LV DOVR UHFRPPHQGHG WKDW D PRQLWRULQJ DJHQF\ VXSSRUWHG E\ GRPDLQ H[SHUWV
IURP RXWVLGH WKH 5DLOZD\ V\VWHP VKRXOG EH FRQVWLWXWHG 7KLV &RPPLWWHH UHFRPPHQGV
WKDWWKHUHIRUPVVKRXOGEHFDUULHGRXWZLWKLQDQRXWHUOLPLWRI\HDUV

+XPDQ5HVRXUFH0DQDJHPHQW


9DULRXV DFWLYLWLHV DQG MREV LQ ,5 DUH VSHFLDOL]HG DQG FXUUHQWO\ RUJDQL]HG LQ WR
GHSDUWPHQWV DORQJ IXQFWLRQDO OLQHV 7KHVH GHSDUWPHQWV GR QRW SRVVHVV WKH
FXVWRPHUEXVLQHVV RULHQWDWLRQ WKDW LV QRUPDOO\ DVVRFLDWHG ZLWK D FRPPHUFLDO
RUJDQL]DWLRQ)XUWKHUPRUHDVSRLQWHGRXWE\PDQ\SUHYLRXVFRPPLWWHHVRYHUWKH\HDUV
WKH,5RUJDQL]DWLRQKDVEHFRPHRYHUO\FHQWUDOL]HGDQGKLHUDUFKLFDODQGRQHRIWKHFUXFLDO
LVVXHVKDVEHHQ WKHGHSDUWPHQWDOLVP WKDW DGYHUVHO\ DIIHFWV WKH ZRUNLQJ FXOWXUH LQ WKH
,57KHVHQVHRIGHSDUWPHQWDOLVPKDVPRXQWHGLQWRSXUVXLQJQDUURZGHSDUWPHQWDOJRDOV
ZKLFKKDVVQDSSHGWKHVSLULWRIWHDPZRUNDQGWKLVKDVIXUWKHUVQRZEDOOHGLQWRODFNRI
WUDQVSDUHQWDQGIDLUSROLFLHVFRPSHWLWLRQDPRQJVWGHSDUWPHQWVLQDOORFDWLRQRIUHVRXUFHV
DQGLQYHVWPHQWGHFLVLRQVDQGVXERSWLPDOGHFLVLRQPDNLQJ,WKDVDOVRIXUWKHUVSLUDOOHG
WKH H[LVWLQJ UDLOZD\ RUJDQL]DWLRQ VWUXFWXUH LQWR LQZDUG ORRNLQJ DQG QRQFXVWRPHU
RULHQWHG HDFK GHSDUWPHQW KDYLQJ GLIIHUHQW SULRULWLHV DQG PHDVXUHV ZKLFK IRFXV RQ
GHSDUWPHQWDOLQVWHDGRIRUJDQL]DWLRQDOREMHFWLYHVRUEHQHILWV



,W KDV DOVR EHHQ QRWHG WKDW WKH HPSOR\HH FRVWV LQFOXGLQJ SHQVLRQ FRQVWLWXWH WKH VLQJOH
ODUJHVWFRPSRQHQWLQWKH,5ZKLFKKDVIXUWKHUEHFRPHXQPDQDJHDEOHDIWHUWKH6L[WK3D\
&RPPLVVLRQ 7KH 6HYHQWK 3D\ &RPPLVVLRQ LQ  ZRXOG IXUWKHU SXVK XS WKH VWDII
FRVWVDQGSHQVLRQFRVWVZKLFKZLOOKDYHVHULRXVILQDQFLDOLPSOLFDWLRQVRQWKH,57KXV
WKHUH LV DQ XUJHQW QHHG WR UDWLRQDOL]H WKH PDQSRZHU 7KLV &RPPLWWHH HQGRUVHV WKH
SUHYLRXV &RPPLWWHHV YLHZ WKDW IRU ,5 WR EH FRPSHWLWLYH IRU LWV ORQJ WHUPHFRQRPLF
YLDELOLW\ FXVWRPHU VDWLVIDFWLRQ DQG IRU EHLQJ DGDSWLYH DQG IOH[LEOH RUJDQL]DWLRQ WKH
,QGLDQ5DLOZD\VVKRXOGIRFXVRQEXVLQHVVFXVWRPHUXQLWVOLNHIUHLJKWEXVLQHVVSDVVHQJHU
EXVLQHVVVXEXUEDQEXVLQHVVSDUFHOEXVLQHVVHWF



2QH RI WKH FDXVHV RI GHSDUWPHQWDOLVP LV WKH PXOWLSOLFLW\ RIGLIIHUHQW FKDQQHOV RI HQWU\
LQWR WKH ,5 $IWHU GLVFXVVLRQV ZLWK YDULRXV VWDNHKROGHUV WKLV &RPPLWWHH KDV QRWHG WKDW
WKH PDLQ FRQWULEXWRU RI GHSDUWPHQWDO WHQGHQF\ LV WKH VLOR VWUXFWXUH RI WKH PXOWLIDULRXV
*URXS $ VHUYLFHV 7KLV &RPPLWWHH VWURQJO\ UHFRPPHQGV UHGXFWLRQ LQ WKH QXPEHU RI
*URXS$ VHUYLFHV LQ ,5 DQG DOVR VXJJHVWV WZR RSWLRQV IRU WKLV 2QH RSWLRQ LV WKH
DPDOJDPDWLRQRIDOOH[LVWLQJVHUYLFHVLQWRDVLQJOHXQLILHG5DLOZD\V6HUYLFH7KHVHFRQG
RSWLRQWKDWWKLV&RPPLWWHHVXJJHVWVLVWKDW,5VKRXOGFRQVROLGDWHDQGPHUJHWKHH[LVWLQJ
HLJKWRUJDQLVHG*URXS$VHUYLFHVSUHIHUDEO\LQWRWZRVHUYLFHVLHWKH,QGLDQ5DLOZD\
7HFKQLFDO 6HUYLFH ,57HFK6  FRPSULVLQJ WKH H[LVWLQJ ILYH WHFKQLFDO VHUYLFHV ,56(
10

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

,566(,56((,560(DQG,566 DQGWKH,QGLDQ5DLOZD\/RJLVWLFV6HUYLFH ,5/RJ6 


FRPSULVLQJ WKH WKUHH QRQWHFKQLFDO VHUYLFHV ,5$6 ,536 $1' ,576  7KH FRPPRQ
PHUJHG FDGUHVHUYLFHV UHIHU WR WKHLU PHUJLQJ LQWR RSWLPDO QXPEHU RI ORJLFDO JURXSLQJV
FDGUHVVHUYLFHV  WKDW PLQLPL]H GLVVRQDQFH DQG PD[LPL]H V\QHUJLHV DQG RUJDQL]DWLRQDO
HIILFLHQF\ :H UHFRPPHQG WKDW QHFHVVDU\ PRGDOLWLHV IRU PDNLQJ WKHVH FKDQJHV EH
LQLWLDWHGE\5DLOZD\VLQFRQVXOWDWLRQZLWK'R3 7DQG836&:HGRUHFRJQLVHWKDWD
ZRUNDEOH PHWKRGRORJ\ WR HQVXUH SRVLWLRQLQJ RI *URXS $ RIILFHUV ZLWK DSSURSULDWH
TXDOLILFDWLRQVFRPSHWHQFLHVDJDLQVWYDULRXVSRVWVZLOOEHUHTXLUHG7KHUHIRUHWREUHDN
GRZQWKHVLORVZKLOHWKHRQHVHUYLFHDQGWZRVHUYLFHRSWLRQVDUHERWKIHDVLEOHRSWLRQV
IRU,5WKLV&RPPLWWHHH[SUHVVHVLWVSUHIHUHQFHIRUWKHWZRVHUYLFHRSWLRQV


)XUWKHUWKLV&RPPLWWHHQRWHVWKDWDVORQJDVRIILFHUVDUHSRVLWLRQHGDJDLQVWWKH*HQHUDO
SRVWV VXFK DV *0 '50 HWF WKH\ DUH GULYHQ E\ ODUJHU RUJDQL]DWLRQDO LQWHUHVWV UDWKHU
WKDQ E\ QDUURZ GHSDUWPHQWDO LQWHUHVWV +RZHYHU UHWXUQ RI VXFK RIILFHUV WR WKHLU
GHSDUWPHQWDO HQYLURQPHQW RQ FRPSOHWLRQ RI WHQXUH FDXVHV D UHODSVH LQWR GHSDUWPHQWDO
VTXDEEOLQJ 7KLV &RPPLWWHH DFFRUGLQJO\ IHHOV WKDW WKHUH LV D VWURQJ FDVH IRU DQ
LQVWLWXWLRQDO PHFKDQLVP ZKHUHE\ VHOHFWHG RIILFHUV RQFH SRVLWLRQHG DJDLQVW *HQHUDO
0DQDJHPHQW SRVWV FRQWLQXH WR SHUIRUP WKDW UROH IRU WKHLU UHVLGXDO FDUHHUV *LYHQ WKH
LPSRUWDQFH RI WKHVH JHQHUDO PDQDJHPHQW SRVWV LQ 5DLOZD\V WKH QHHG IRU KLJKHU
SURIHVVLRQDOLVPLQWKHVHSRVWVFDQEHIXOILOOHGE\LQVWLWXWLQJDQDSSURSULDWHHPSDQHOPHQW
PHFKDQLVPDQGPLGFDUHHUWUDLQLQJ5DLOZD\VZLOOQHHGWRWDNHQHFHVVDU\SUHFDXWLRQVWR
HQVXUH WKDW UHSUHVHQWDWLRQ RI RIILFHUV IURP WKH GLIIHUHQW VWUHDPV LV GHWHUPLQHG LQ D
WUDQVSDUHQW DQG UDWLRQDO PDQQHU DFFRUGLQJ WR SUHGHWHUPLQHG SURFHGXUHV DQG UXOHV
7KHUHIRUHZHIHHOWKDWDde jurePHWKRGRORJ\RILGHQWLILFDWLRQRILQGLYLGXDORIILFHUVIRU
VXFK D FDUHHU SDWK ZLOO EH WKH EHVW RSWLRQ DW WKLV VWDJH SULPDULO\ EHFDXVH D GH IDFWR
PHWKRGZLOODOZD\VUHPDLQGLVFUHWLRQDU\



,QFDVHRIWKHSURPRWLRQRI*URXS%RIILFHUVWRWKH*URXS$WKHH[LVWLQJSURFHGXUH
LQYROYLQJDSSURYDORI836&VKRXOGEHFRQWLQXHGWKHRQO\GLIIHUHQFHEHLQJWKDWLQVWHDG
RI WKH GLIIHUHQW VHQLRULW\ OLVWV WKDW H[LVW FXUUHQWO\ IRU WKH GLIIHUHQW VHUYLFHV D FRPPRQ
VHQLRULW\OLVWVRI*URXS%RIILFHUV ZLOOEHGUDZQXSDQG XVHGIRUWKHQHZVHUYLFHRU
VHUYLFHVDVWKHFDVHPD\EH,5VKRXOGZRUNRXWWKHGHWDLOVIRUWKLV,QWKHHYHQWD*URXS
% RIILFHU LQGXFWHG LQWR *URXS $ KDV D UHODWLYHO\ VKRUWHU UHVLGXDO VHUYLFH OHIW
GHSOR\PHQWFRXOGEHDVVLJQHGWRKLPLQWKHIXQFWLRQDODUHDRIKLVVSHFLDOL]DWLRQRQO\



7KLV &RPPLWWHH XQGHUOLQHV WKH LPSRUWDQFH RI SODQQHG MRE URWDWLRQ  IRU GHYHORSLQJ
FRPSHWHQFLHVLQUHOHYDQWDUHDVDQGWRWUDLQLQJDWDSSURSULDWHVWDJHV



$IWHU LQGHSWK DQDO\VLV RI QDWXUH RI GXWLHV SHUIRUPHG E\ WKH *URXS & % DQG $
SHUVRQQHO WKLV &RPPLWWHH VXJJHVWV DQ DSSURDFK RI  OHYHOV RI JURXSLQJ ZKLFK ZLOO
EDODQFHWKHWZRFRQIOLFWLQJQHHGVIRUIXQFWLRQDOVSHFLDOL]DWLRQDQGUHGXFWLRQRIQXPEHU
RI VSHFLDOL]HG FDWHJRULHVFDGUHVVHUYLFHV LQ ,5 )ROORZLQJ LV WKH WKUHH OHYHOV D 
VSHFLDOL]HGIXQFWLRQDO FDGUHV DW *URXS & OHYHO   DQG E  VHPLPHUJHG FDGUH IRU
PLGGOHMXQLRU PDQDJHPHQW OHYHO   7KH VHPLPHUJHG VWUXFWXUH ZRXOG LQYROYH
FRPPRQPHUJHGFDGUHVHUYLFHVIRU*URXS$RIILFHUVDQGIXQFWLRQDOVSHFLDOL]HGFDGUH
IRUWKH*URXS%RIILFHUVZLWKLQWKLVJURXSLQJF $WWKHVHQLRU*URXS$OHYHOVWKHUH
ZRXOGEHFRPPRQPHUJHGFDGUHVHUYLFHV OHYHO 
11

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG



7KLV&RPPLWWHHLVRIWKHYLHZWKDW5DLOZD\VQHHGWRWDNHDSSURSULDWHDFWLRQWRUHVWRUH
WKH VWDWXV DVVRFLDWHG ZLWK IXQFWLRQLQJ RI VHQLRU VXSHUYLVRUV :LWK D YLHZ WR HQVXULQJ
KLJKOHYHORIFRPSHWHQFHDQGSURIHVVLRQDOLVP5DLOZD\VVKRXOGFRQVLGHUDV\VWHPZKHUH
FDUHHU SURJUHVVLRQ LV OLQNHG WR VXFFHVVIXOO\ FRPSHWLQJ LQ UDWKHU ULJRURXV TXDOLI\LQJ
H[DPLQDWLRQV $SSURSULDWH WUDLQLQJ LQWHUYHQWLRQV DQG VXLWDEOH HPSRZHUPHQW WKURXJK
GHOHJDWLRQ RI SRZHUV DW OHDVW DW $SH[ *URXS & OHYHOV ZRXOG JR D ORQJ ZD\ LQ
LPSDUWLQJGLJQLW\WRWKHPIRUEHWWHUFRQWULEXWLRQVDQGKLJKHUPRWLYDWLRQ



7KLV&RPPLWWHHDOVRUHFRPPHQGVODWHUDOLQIORZRIWDOHQWIURPRXWVLGHVXFKDVFKDUWHUHG
DFFRXQWDQWV FRVW DFFRXQWDQWV EDQNHUV ILQDQFLDO PDQDJHPHQW H[SHUWV LQ ILQDQFLDO
PDQDJHPHQW SRVWV SHUVRQQHO IURP &3:' UHVHDUFK DVVLVWDQWV IURP OHDGLQJ ODEV DQG
XQLYHUVLWLHV ,,7VHWF VFLHQWLVWVIURP*RYHUQPHQWODEVHWF WRMRLQ5'62DQGWUDLQLQJ
LQVWLWXWLRQV  RQ GHSXWDWLRQ /DWHUDO PRYHPHQW RI 5DLOZD\ RIILFLDOV WR RWKHU
GHSDUWPHQWV368 VKRXOG DOVR EH HQFRXUDJHG 7KLV ZRXOG ZLGHQ WKH NQRZOHGJH DQG
H[SHULHQFHEDVHRI,5DQGPDNHLWPRUHYLEUDQWDQGRXWZDUGORRNLQJ



)RUDOOWKHVHFKDQJHVWREHHIIHFWLYHWKLV&RPPLWWHHVWURQJO\IHHOVWKDWDSHUIRUPDQFH
DVVHVVPHQWV\VWHPGULYHQE\HQKDQFHGREMHFWLYLW\DQGWUDQVSDUHQF\QHHGVWREHUROOHG
RXWDQGLPSOHPHQWHGLQ,57KLVVKRXOGHTXLS,5ZLWKDQDELOLW\WRQRWRQO\UDWLRQDOO\
GLIIHUHQWLDWH WKH SHUIRUPDQFH FDSDELOLW\ DQG DSWLWXGH RI LWV HPSOR\HHV EXW DOVR WR
SURYLGHLQSXWVIRUDFKLHYLQJDEHWWHUILWEHWZHHQUHVSRQVLELOLWLHVDVVLJQHGWRDQHPSOR\HH
DQGKLVKHUFDSDELOLWLHVDQGD PHDQVIRULGHQWLI\LQJDQGVWUHQJWKHQLQJLPSURYHPHQWLQ
DUHDVRIZHDNQHVVHVGHWHFWHGLQDQHPSOR\HH



7KLV&RPPLWWHHZDVLQIRUPHGWKDWRQHLPSRUWDQWIDFWRULPSHGLQJTXLFNGHFLVLRQVLVWKH
UROHSOD\HGE\WKH9LJLODQFHRUJDQL]DWLRQRI,5:HVXJJHVWWKDWDQDSSURSULDWHV\VWHP
EH SXW LQ SODFH WR HQVXUH ULJKW SHUVRQV EHLQJ SRVLWLRQHG DJDLQVW 9LJLODQFH SRVWV ZLWK
DSSURSULDWHW\SRORJ\WHVWVIRUPLQJRQHRIWKHLQSXWV

%XGJHWDU\5HODWLRQVKLSEHWZHHQ*RYHUQPHQWDQG,5


,5 VSHQGV VR PXFK RQ UHYHQXH H[SHQGLWXUH WKDW LW LV XQDEOH WR LQYHVW LQ FDSLWDO
H[SHQGLWXUHRIWKHUHVRXUFHVIRUILQDQFLQJSODQH[SHQGLWXUHLQFDPHIURP
EXGJHWDU\VXSSRUW'LYLGHQGVDUHSDLGEHFDXVHRIWKHFDSLWDOWKDWWKH8QLRQJRYHUQPHQW
KDVLQYHVWHGLQ,5,QRWKHUZRUGVWKHEXGJHWDU\VXSSRUWIURPWKH8QLRQJRYHUQPHQWLV
QRW IRU UHYHQXH H[SHQGLWXUH EXW IRU FDSLWDO H[SHQGLWXUH DQG WKH FUHDWLRQ RI DVVHWV DQG
WKLV LV WUHDWHG DV D ORDQ LQ SHUSHWXLW\ ZLWK WKH FDSLWDODWFKDUJH DFFRXQWHG IRU DW
KLVWRULFDOYDOXHVRIWKHDVVHWV'LYLGHQGVDUHWKHLQWHUHVWSDLGRQWKDWSHUSHWXDOORDQWKH
SULQFLSDO QHYHU EHLQJ H[WLQJXLVKHG 7KH FDSLWDODWFKDUJH H[FOXGHV FHUWDLQ LGHQWLILHG
LWHPVOLNHFDSLWDOH[SHQGLWXUHRQQDWLRQDOSURMHFWVDQGVWUDWHJLFOLQHVRQZKLFKGLYLGHQG
LVQRWUHTXLUHGWREHSDLG)XUWKHUWKH*%6LVJHQHUDOO\HDUPDUNHGIRUSURMHFWVWKDWDUH
GHHPHG WR EH QDWLRQDOO\ LPSRUWDQW DQG WKRXJK ,5 KDV OLPLWHG GHJUHHV RI IUHHGRP LQ
GHWHUPLQLQJZKDWWKDW*%6LVWREHXVHGIRULWFRQWLQXHVWREHDUWKHGLYLGHQGOLDELOLW\
7KLV &RPPLWWHH UHFRPPHQGV WKDW WKH &HQWUDO *RYHUQPHQW UHYLHZ WKH GLYLGHQG SROLF\
IRU,5DQGSURYLGHLWZLWKD*%6QHWRIWKHGLYLGHQGSD\PHQW7KLVZRXOGHQDEOHWKH,5
WRDSSRUWLRQPRUHPRQH\WRLWV'5)IRUDVVHWUHQHZDODOLJQHGWRLWVDULVLQJ
12

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG



,QDGGLWLRQVXSSRUWWRWKH368VZLWKLQ,5LVDOVRURXWHGWKURXJK,57RWKDWH[WHQWWKH
VXSSRUW IURP *2, LV QRW MXVW WR ,5 EXW DOVR WR VHSDUDWH HQWLWLHV ([WHUQDO ORDQV IRU
5DLOZD\SURMHFWVLPSOHPHQWHGE\5DLOZD\368VDUHWKXVFXUUHQWO\EHLQJURXWHGWKURXJK
WKH5DLOZD\EXGJHW7KLVV\VWHPWHQGVWRFURZGWKHILVFDOVXSSRUWVSDFHDYDLODEOHWRWKH
5DLOZD\V 7KLV &RPPLWWHH UHFRPPHQGV WKDW DOO IXWXUH H[WHUQDO ERUURZLQJV VKRXOG EH
UHFHLYHG GLUHFWO\ E\ WKH 5DLOZD\ 368V DQG WKH RQJRLQJ ORDQ DJUHHPHQWV PD\ DOVR EH
UHYLVHGWRJLYHHIIHFWWRVXFKGLVLQWHUPHGLDWLRQ



7KH VRFLDO VHUYLFH REOLJDWLRQV RI ,5 DUH HVWLPDWHG DW DURXQG 5V  FURUHV HYHU\
\HDU7KLVLVEHFDXVHSDVVHQJHUDQGIUHLJKWLVFDUULHGDWUDWHVWKDW DUHEHORZ FRVW7KLV
&RPPLWWHH UHFRPPHQGV WKDW D UHJXODWRU WKH 55$, IXUWKHU HODERUDWHG LQ &KDSWHU 
VKRXOGGHWHUPLQHWKHH[WHQWRI362WKURXJKDFRQVXOWDWLYHUHJXODWRU\SURFHVV:KLOHWKLV
ZRXOG UHTXLUH WKDW WKH DFFRXQWV EH UHVWUXFWXUHG DSSURSULDWHO\ D SUHSDUDWRU\ EHJLQQLQJ
FDQEH PDGHLQWKDWUHVSHFWE\LGHQWLI\LQJSRVVLEOHRSHUDWLRQVWKDWFRXOGTXDOLI\XQGHU
WKLVUXEULFDQGVHSDUDWLQJWKHP7KHVHVRFLDOREMHFWLYHVDQGWKHLUFRVWVQHHGWREHFOHDQO\
VHSDUDWHGIURPFRPPHUFLDOFRQVLGHUDWLRQV



+RZHYHULWLVQRW\HWFOHDUZKHUHWKH,5VWDQGVILQDQFLDOO\LQWKHDEVHQFHRIDFFRXQWLQJ
UHIRUPV7KLV&RPPLWWHHRSLQHVWKDWRQFHWKHDFFRXQWLQJUHIRUPVDUHLQSODFHLWVKRXOG
EHSRVVLEOHWRFOHDUO\VSHFLI\WKHFRVWVWR,5RIYDULRXVDFWLYLWLHVDQGWKHUHIRUHVHSDUDWH
RXW WKH IROORZLQJ D  LQYHVWPHQW RQ VSHFLILHG SURMHFWV WKLV LV DOUHDG\ DYDLODEOH  E 
H[SHQGLWXUH RQ LGHQWLILHG VWUDWHJLF RSHUDWLRQV DQG F  H[SHQGLWXUH RQ 362V 7KLV
&RPPLWWHHDOVRVXJJHVWVWKDWVXEVLG\VKRXOGEHERUQHE\WKH8QLRQJRYHUQPHQWLQVWHDG
RI,5



)RUHVVHQWLDOVDIHW\UHODWHGZRUNWKLV&RPPLWWHHUHLQIRUFHVWKHUHFRPPHQGDWLRQRIWKH
.DNRGNDU &RPPLWWHH LQ  WR HVWDEOLVK D QRQIXQJLEOH QRQODSVDEOH VDIHW\ IXQG
IXQGHGDVDVDIHW\VXUFKDUJHZLWKPDWFKLQJJUDQWEXGJHWDU\VXSSRUW



5HVWUXFWXULQJ RI ILQDQFLDO UHODWLRQV EHWZHHQ *2, DQG ,5 FDQQRW KDSSHQ RYHUQLJKW  ,Q
&KDSWHURIWKLVUHSRUWWKLV&RPPLWWHHVXJJHVWVDEURDGRXWOLQHIRUDURDGPDSVRWKDW
SURJUHVV FDQ EH REVHUYHG ZKLFK LQ WXUQ ZLOO EXLOG FUHGLELOLW\ DERXW WKH GLUHFWLRQ RI
UHIRUP

)LQDQFLQJDQG*HQHUDWLRQRI5HVRXUFHV


,W KDV EHHQ QRWHG E\ DOO WKH HDUOLHU FRPPLWWHHV WKDW WKH ILQDQFLDO VWDWXV RI WKH ,QGLDQ
5DLOZD\V LV DW SUHFDULRXV VLWXDWLRQ ZKLFK KDV D GLUHFW EHDULQJ RQ WKH PRGHUQL]DWLRQ
XSJUDGDWLRQRIWHFKQRORJ\UHSODFHPHQWRIWKHROGDVVHWVDQGVDIHW\DVSHFWVRIUDLOZD\V
7KHLQWHUQDOJHQHUDWLRQRIILQDQFHVKDVDOVRFRPHXQGHUSUHVVXUHZLWKLQFUHDVHLQVWDII
FRVWVGXHWRVL[WK3D\&RPPLVVLRQ7KLV&RPPLWWHHIHHOVWKDWWKHUHLVDQHHGQRWRQO\WR
LPSURYH WKH LQWHUQDO UHVRXUFH JHQHUDWLRQ DQG H[SORUH YDULHG PHWKRGV RI ILQDQFLQJ EXW
DOVRWRLPSURYHWKHXWLOL]DWLRQRIDYDLODEOHUHVRXUFHV



,5 ZDV WUDGLWLRQDOO\ ILQDQFHG WKURXJK D FRPELQDWLRQ LQWHUQDO JHQHUDWLRQ DQG EXGJHWDU\
VXSSRUWIURPWKHJRYHUQPHQWDQGQRWIURPH[WHUQDOVRXUFHV7KXVWKHFULWLFDOJD]HRI
WKH ILQDQFLHU ZDV ODUJHO\ EHHQ DEVHQW IURP SURMHFW RYHUVLJKW LQ ,5 $V D UHVXOW
LQYHVWPHQW LV PDGH LQ SURMHFWV QHZ OLQHV H[SDQVLRQ RI ROG OLQHV HOHFWULILFDWLRQ RI
13

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

H[LVWLQJ OLQHV HWF  WKDW HLWKHU GR QRW KDYH WUDIILF WKH PL[ RI SDVVHQJHU DQG IUHLJKW LV
XQEDODQFHG LH WKHUH LV WRR OLWWOH IUHLJKW WUDIILF WR JHQHUDWH WKH QHFHVVDU\ UHYHQXH
%HVLGHVHIILFLHQF\LPSURYHPHQWVWKDWZHUHXVHGWRMXVWLI\WKHSURMHFWDQGFRQFRPLWDQW
LQFUHDVH LQ UHYHQXH GRHV QRW IUXFWLI\ DQG WKH SURMHFW LPSOHPHQWDWLRQ LV GHOD\HGZKLFK
PDNHVLWGLIILFXOWWRUHFRYHUWKHLQYHVWPHQWHYHQLIWKHUHLVVXIILFLHQWWUDIILF


,5KDVDODUJHVKHOIRISURMHFWVWKDWVXIIHUIURPWLPHDQGFRQVHTXHQWFRVWRYHUUXQ,Q
WKHYLHZRIWKLV&RPPLWWHHWKHUHLVOLWWOHSXUSRVHLQJHQHUDWLQJUHVRXUFHVWRIXQGWKHVH
SURMHFWVZLWKRXWDWKRURXJKUHYLHZIURPD]HUREDVHEXGJHWSHUVSHFWLYH(YLGHQWO\WKH
EDVLV IRU VDQFWLRQLQJ VRPH RI WKHVH SURMHFWV KDV FKDQJHG VLQFH WKH\ ZHUH LQLWLDWHG  ,I
WKH\ZHUHHYHUFRPPHUFLDOO\YLDEOHWKHH[WHQVLYHGHOD\VDUHOLNHO\WRKDYHDOWHUHGWKDW
VLWXDWLRQ 7KLV &RPPLWWHH UHFRPPHQGV WKDW WKH VPDOOHU ODQJXLVKLQJ SURMHFWV VKRXOG EH
IXOO\IXQGHGVRDVWRILQLVKDOORIWKHPLQWZR\HDUVWLPHDQGDQ\SURMHFWWKDWFDQQRWEH
FRPSOHWHG LQ WKDW WLPH VKRXOG QRW UHFHLYH DQ\ IXUWKHU IXQGLQJ  'HWDLOHG
UHFRPPHQGDWLRQVUHJDUGLQJGHOD\HGSURMHFWVDUHFRQWDLQHGLQ&KDSWHURIWKLVUHSRUW



,QWKHUHFHQW\HDUVWKHJURVVEXGJHWDU\VXSSRUWWR,5KDVEHHQGHFOLQLQJDQGERUURZLQJV
IURP H[WHUQDO VRXUFHV SULPDULO\ WKURXJK ,5)&  KDYH LQFUHDVHG VKDUSO\ WR EULGJH WKH
JDS EHWZHHQ DYDLODEOH UHVRXUFHV DQG WKH 3ODQ VL]H $ VXEVWDQWLDO SDUW RI DQQXDO
ERUURZLQJVDUHQRZSORXJKHGEDFNWR,5)&DVUHSD\PHQWV



7KHDPRXQWUDLVHGIURPSULYDWHLQYHVWPHQWKDVKRZHYHUEHHQQHJOLJLEOHGHVSLWHPDQ\
SURQRXQFHPHQWV,QWKLVFRQWH[WWKHQHHGIRULQFUHDVLQJHIILFLHQF\RIUDLOZD\VHUYLFHVWR
JHQHUDWHPRUHLQWHUQDOUHVRXUFHVLVLPSRUWDQW,WLVWKLV&RPPLWWHHVRSLQLRQWKDWIRU,5
LQFUHDVHLQSURGXFWLYLW\LVSRVVLEOHIURPEHWWHUXWLOL]DWLRQRIH[LVWLQJFDSDFLW\DQGDVVHWV
WKURXJK LPSURYHG RSHUDWLQJ DQG VFKHGXOLQJ SUDFWLFHV  :KHUHDV WKLV ZRXOG WR VRPH
H[WHQW WDNH FDUH RI WKH H[SHQGLWXUH VLGH IRU LQFUHDVLQJ WKH UHYHQXH WKHUH LV D QHHG WR
DGRSWSULFLQJSULQFLSOHVWKDWFDQFRPELQHFRVWDQGGHPDQGIDFWRUVLQDQRSWLPDOPDQQHU



7KLV &RPPLWWHH LV RI WKH YLHZ WKDW WR LPSURYH WKH SURGXFWLYLW\ DQG HIILFLHQF\ WKH ,5
PXVW IRFXV RQ WKH UHPXQHUDWLYH IUHLJKW VHJPHQW DQG HFRPPHUFH VHJPHQW ZKLFK KDV
EHHQVRIDUXQWDSSHGE\WKH,5,5PXVWHQFRXUDJHRQERDUGFDWHULQJWKURXJKODUJHIRRG
FKDLQV DQG ORFDO UHVWDXUDQWV RQ WKH SD\PHQW RI D PRGHVW OLFHQVH IHH /HDVLQJRI SDUFHO
YDQV LQ WUDLQV WKURXJK DXFWLRQ RI FDUU\LQJ FDSDFLW\ 3ULYDWH SDUFHO WUDLQV DQG
FRQFHVVLRQLQJRIWUDLQVHUYLFHVDUHFRQVLGHUHGYLDEOHRSWLRQV'HWDLOHGUHFRPPHQGDWLRQV
LQWKLVUHJDUGKDYHEHHQLQFRUSRUDWHGLQ&KDSWHU



7KLV&RPPLWWHHLVRIWKHYLHZWKDWZKHUHDV,5FRXOGEHIXQGHGWKURXJK,5)&LQDYDULHW\
RIZD\VEXWWKHUHLVRQO\VRPXFKWKDWFDQEHGRQHWKURXJK,5)&,5DOVRQHHGVWRORRN
IRU RWKHU H[WUD EXGJHWDU\ VRXUFHV VXFK DV PXOWLODWHUDO IXQGLQJ DJHQFLHV DQG FKDQJH LWV
LQYHVWPHQW VWUDWHJ\ WKURXJK ULQJIHQFHG LQYHVWPHQWV LQ +LJK <LHOG 3URMHFWV ,W LV
UHFRPPHQGHG WKDW WKH IXQGV ERUURZHG IURP WKH PDUNHW VKRXOG EH XVHG IRU FDSDFLW\
JHQHUDWLRQLQVWHDGRIDVVHWVUHSODFHPHQW,QUHVSHFWRIGHYHORSPHQWRIUDLOZD\VWDWLRQV
WKLV &RPPLWWHH UHFRPPHQGV WKDW H[SUHVVLRQ RI LQWHUHVW PD\ EH LQYLWHG IURP SRWHQWLDO
XVHUVRIODQGDURXQGHDFKVWDWLRQDQGDSDUWQHUVKLSDJUHHPHQWZRUNHG RXWZLWKVHOHFWHG
ELGGHUV IROORZLQJ D WUDQVSDUHQW SURFHVV 6RPH RI WKH SURMHFWV RI WKH ,5 WKRXJK QRQ
UHPXQHUDWLYHKDYHDVRFLDOYDOXHVXFKDVRSHUDWLRQRIVXEXUEDQDQGEUDQFKOLQHVVHUYLFHV
14

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

2Q WKH RWKHU KDQG DFWLYLWLHV VXFK DV VWDWLRQ GHYHORSPHQW FDQ EH UHPXQHUDWLYH 7KLV
&RPPLWWHH LV RI WKH RSLQLRQ WKDW WKHVH DFWLYLWLHV VKRXOG EH VHSDUDWHG DV VSHFLDO SXUSRVH
YHKLFOHV 639  LQYROYLQJ -RLQW 9HQWXUHV -9V  LQYROYLQJ 6WDWHV DQG ORFDO JRYHUQPHQWV
ZKLFK ZRXOG DOVR IRVWHU WKH VSLULW RI FRRSHUDWLYH IHGHUDOLVP 7KH ,5 KDV DWWHPSWHG
UHVRXUFH JHQHUDWLRQ WKURXJK 333 LQ DUHDV OLNH VHWWLQJ XS WZR QHZ ORFRPRWLYH IDFWRULHV
VWDWLRQGHYHORSPHQWDQGVRPHSRUWFRQQHFWLYLW\KRZHYHUIDLOHGWRVHUYHLWVSXUSRVH7KXV
WKHUH LV D QHHG WR UHORRN WKH EXVLQHVV HQJDJHPHQW ZLWK WKH SULYDWH VHFWRU WR DWWUDFW
LQYHVWPHQW LQ LQIUDVWUXFWXUH SURGXFWLRQ RI JRRGV DQG GHOLYHU\ RI VHUYLFHV DFURVV WKH
UDLOZD\HFRV\VWHP
6HWWLQJXSDQ,QGHSHQGHQW5HJXODWRU


7KH ,5 KDV HQDEOHG WKH HQWU\ RI WKH SULYDWH VHFWRU WKURXJK YDULRXV VFKHPHV VLQFH 
6RPH RI ZKLFK DUH 2ZQ \RXU :DJRQ 6FKHPH ODXQFKHG LQ  6SHFLDO )UHLJKW 7UDLQ
2SHUDWRU VFKHPH 'HGLFDWHG )UHLJKW &RUULGRUV LQ  $XWRPRELOH )UHLJKW 7UDLQ
2SHUDWRUVFKHPHLQ6SHFLDO3DUFHO7UDLQ2SHUDWRUVFKHPHLQHWF7KLVUHIOHFWV
WKHGHGLFDWHGDWWHPSWVE\WKH,5WRDOORZWKHSULYDWHVHFWRUSDUWLFLSDWLRQ+RZHYHUGHVSLWH
VRPHH[WHQWRIVXFFHVVWKHVFKHPHVIDLOHGWRVHUYHWKHJRDOGXHWRKLJKFRVWVDQGORZHU
UHWXUQVSROLF\XQFHUWDLQW\ODFNRIDUHJXODWRUWRFUHDWHDOHYHOSOD\LQJILHOGWKHODFNRI
LQFHQWLYHV IRU LQYHVWRUV DQG SURFHGXUDORSHUDWLRQDO LVVXHV KDYH VLJQLILFDQWO\ UHVWULFWHG
SULYDWH VHFWRU SDUWLFLSDWLRQ 2QH RI WKH SULPH UHDVRQV LGHQWLILHG LV WKDW WKH VDPH
RUJDQL]DWLRQ GHDOV ZLWK WKH WKUHH SULPH IXQFWLRQV LH SROLF\ PDNLQJ WKH UHJXODWRU\
IXQFWLRQ DQG RSHUDWLRQV 7KLV &RPPLWWHH VWURQJO\ UHFRPPHQGV IRU DQ LQGHSHQGHQW
UHJXODWRU WR EH HVWDEOLVKHG LH 5DLOZD\ 5HJXODWRU\ $XWKRULW\ RI ,QGLD 55$,  ZLWK D
VHSDUDWHEXGJHWDQGWREHLQGHSHQGHQWRIWKH0LQLVWU\RI5DLOZD\V7KH55$,ZLOOKDYH
WKH SRZHUV DQG REMHFWLYHV RI HFRQRPLF UHJXODWLRQ LQFOXGLQJ ZKHUHYHU QHFHVVDU\ WDULII
UHJXODWLRQ VDIHW\ UHJXODWLRQ IDLU DFFHVV UHJXODWLRQ LQFOXGLQJ DFFHVV WR UDLOZD\
LQIUDVWUXFWXUH IRU SULYDWH RSHUDWRUV VHUYLFH VWDQGDUG UHJXODWLRQ OLFHQVLQJDQG HQKDQFLQJ
FRPSHWLWLRQ DQG VHWWLQJ WHFKQLFDO VWDQGDUGV  ,W ZLOO SRVVHVVTXDVLMXGLFLDO SRZHUV ZLWK
DSSRLQWPHQW DQG UHPRYDO RI 0HPEHUV GLVWDQFHG IURP WKH 0LQLVWU\ RI 5DLOZD\V 7KH
LVVXHVOLNHFRQVXPHUFRPSODLQWVLQFOXGLQJFODVVDFWLRQFRPSODLQWVZLOOQRWEHDGGUHVVHG
E\55$,



7KLV&RPPLWWHHIHHOVWKDWWKHQHZWUDFNVSUHVHQWO\EHLQJEXLOWDVSDUWRIWKHWZRIUHLJKW
FRUULGRUV ')&&,/  VKRXOG JLYH QRQGLVFULPLQDWRU\ DFFHVV ERWK WR ,5 DQG WR SULYDWH
RSHUDWRUV)RUWKLVSXUSRVH')&&,/VKRXOGEHPDGHDXWRQRPRXVDQGVHSDUDWHGIURP,5
$Q\RQHZKRUXQVWUDLQVRQ')&&,/VKRXOGSD\GLUHFWO\WR')&&,/DQGQRWWR,5 RUYLD
,5   (TXDOO\ SULYDWH RSHUDWRUV VKRXOG EH DOORZHG WR ORDG DQG XQORDG WUDLQV RQ WKH
')&&,/QHWZRUN ZLWKRXWKDYLQJWRVHHN,5VSHUPLVVLRQ 



0RGDOLW\DQG7LPHOLQHVIRU,PSOHPHQWDWLRQ

 7KLV &RPPLWWHH DFNQRZOHGJHV WKDW WKH UHVWUXFWXULQJ RI ,5 ZLOO EH D KXPRQJRXV WDVN
XVKHULQJ D ODUJH VFRSH RI SURSRVHG FKDQJHV 7KXV WR LPSOHPHQW WKH UHFRPPHQGDWLRQV
WKLV FRPPLWWHH VXJJHVWV WKDW WKH UHVSRQVLELOLW\ VKRXOG YHVW LQ WKH 0LQLVWHU RI 5DLOZD\V
15


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

DORQHZLWKDQDSSURSULDWHUHSRUWLQJWR3027KLV&RPPLWWHHUHFRPPHQGVVHWWLQJXSD
VWURQJ IRUPDO LPSOHPHQWDWLRQ DQG PRQLWRULQJ PHFKDQLVP WR LPSOHPHQW WKH HQRUPRXV
WUDQVIRUPDWLYH UHIRUPV DQG FRQVLGHULQJ WKH VKHHU VL]H RI WKH RUJDQL]DWLRQ DORQJ ZLWK
LQFOXVLRQ RI RIILFHUV ZLWK H[SHUWLVH LQ WKH IXQFWLRQDO GRPDLQ NQRZOHGJH 7KHVH RIILFHUV
VKRXOGEHGHDOLQJZLWKGD\WRGD\PRQLWRULQJRISURJUHVVRILPSOHPHQWDWLRQEXWDOVRIRU
UHVROYLQJIRUUHVROYLQJDQ\GRXEWVGLVSXWHVFURVVIXQFWLRQDOFRRUGLQDWLRQDQDO\]LQJDQG
SURSRVLQJ DQ\ FKDQJHV WKDW PD\ EH ZDUUDQWHG DQG IRU LQWHUDFWLRQ ZLWK RWKHU 0LQLVWULHV
)XUWKHULIQHFHVVDU\DERG\RILQGHSHQGHQWRXWVLGHH[SHUWVVKRXOGDOVREHVHWXSWRJXLGH
DQGKHOSLQWKHLPSOHPHQWDWLRQH[HUFLVH


7KLV &RPPLWWHH KDV GUDZQ XS D WLPH OLQH IRU WKH LPSOHPHQWDWLRQ RI SURSRVHG
UHFRPPHQGDWLRQV IRU WKH ILUVW ILYH \HDUV ZKLFK ZLOO LQYROYH LQ WKH ILUVW WZR \HDUV
WUDQVLWLRQ WR FRPPHUFLDO DFFRXQWLQJ DQG JUHDWHU GHFHQWUDOL]DWLRQ WR ]RQHVGLYLVLRQV DQG
SURGXFWLRQXQLWVDQGWKHFOHDQLQJXSRIILQDQFHVEHWZHHQWKH8QLRQJRYHUQPHQWDQG,5
7KHUHPDLQLQJWKUHH\HDUVZLOOVHH WKHVHWWLQJXSRI55$,OHJLVODWLYHO\DQG LQFOXGH +5
FKDQJHV



$VDZD\IRUZDUGEH\RQGWKHILYH\HDUVWKLV&RPPLWWHHHQYLVDJHVWKUHHSRLQWVRIYLHZ
D  WKH H[LVWLQJ SURGXFWLRQ XQLWV RI WKH ,5 ZLOO EH H[SRVHG WR FRPSHWLWLRQ IURP SULYDWHV
VHFWRUV 7R IDFH WKH FRPSHWLWLRQV WKH H[LVWLQJ SURGXFWLRQ XQLWV PD\ EH SODFHG XQGHU
JRYHUQPHQW 639 NQRZQ DV ,QGLDQ 5DLOZD\ 0DQXIDFWXULQJ &RPSDQ\ ,50&  E  2QFH
WKH FKDQJHV RI WKH ILUVW  \HDUV DUH LPSOHPHQWHG LQFOXGLQJ WKH UHVROXWLRQ RI WKH VRFLDO
FRVWV LVVXH WKH 5DLOZD\ %XGJHW VKRXOG EH SKDVHG RXW ZLWK *%6 WR ,5 PHQWLRQHG DV D
SDUDJUDSK LQ WKH 8QLRQ %XGJHW DQG QR PRUH F  2QFH WKH 55$, EHJLQV WR IXQFWLRQ DQG
UHVROYHVWKHDFFHVVWRWUDFNIRUSULYDWHWUDLQRSHUDWRUVDQG,5]RQHVDFDVHIRUELIXUFDWLRQ
PD\ EH FRQVLGHUHG EHWZHHQ WKH ,QGLDQ 5DLOZD\V ,QIUDVWUXFWXUH &RUSRUDWLRQ ,5,&  DQG
UHVWRI,5DVWUDLQRSHUDWRUVLQFRPSHWLWLRQZLWKSULYDWHRSHUDWRUV

16


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG













P
R





E
F
A
C
E


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIIRU0
0DMRU5
5DLOZD\3
3URMHFWVD
DQG5
5HVWUXFWXULQJR
RI5
5DLOZD\0
0LQLVWU\DQG5DLOZD\%RDUG

&KDSWHU3UHIDFH


 2Q WKH QG 6HSWHPEHU  2IILFH 2UGHU 1R (5%,  WKH 0LQLVWU\ RI
5DLOZD\V 5DLOZD\%RDUG FRQVWLWXWHGD&RPPLWWHHIRUPDNLQJUHFRPPHQGDWLRQVIRUWKH
PRELOL]DWLRQRIUHVRXUFHVIRUPDMRUUDLOZD\SURMHFWVDQGUHVWUXFWXULQJRI5DLOZD\0LQLVWU\
DQG5DLOZD\%RDUG7KHVSHFLILFWHUPVRIUHIHUHQFH 725 RIWKLV&RPPLWWHHVWDWH L 
5HRUJDQL]LQJDQGUHVWUXFWXULQJWKH%RDUGDQGVXEVHTXHQWO\WKH'HSDUWPHQWVRWKDWSROLF\
PDNLQJ DQG RSHUDWLRQV DUH VHSDUDWHG WKH 'HSDUWPHQW GRHV QRW ZRUN LQ VLORV SROLF\
PDNLQJIRFXVHVRQORQJWHUPDQGPHGLXPWHUPSODQQLQJLVVXHVDQGRSHUDWLRQVIRFXVHVRQ
GD\WRGD\IXQFWLRQLQJRIWKH2UJDQL]DWLRQ LL 3URPRWHH[FKDQJHRI2IILFHUVEHWZHHQWKH
5DLOZD\VDQGRWKHUGHSDUWPHQWV LLL (VWLPDWHILQDQFLDOQHHGVRIWKH5DLOZD\VDQGHQVXUH
DSSURSULDWH IUDPHZRUNV DQG SROLFLHV DUH LQ SODFH WR UDLVH UHVRXUFHV ERWK LQWHUQDOO\ DQG
IURPRXWVLGHWKH*RYHUQPHQWWRHQDEOH5DLOZD\VWRPHHWWKHGHPDQGVRIWKHIXWXUHDQG
LY  ([DPLQH DQG VXJJHVW PRGDOLWLHV IRU LPSOHPHQWLQJ WKH H[LVWLQJ &DELQHW GHFLVLRQ RQ
VHWWLQJXS D5DLO7DULII$XWKRULW\DQGJLYHUHFRPPHQGDWLRQV(VSHFLDOO\LQYLHZRI L 
DQG LLL WKH725LVIDLUO\EURDGDQGGHIDFWRDPRXQWVWRDEOXHSULQWIRUUHIRUPLQJWKH
,QGLDQ5DLOZD\V


 7KH KLVWRU\ RI WKH 5DLOZD\V LQ ,QGLD LV FRQYHQWLRQDOO\ GDWHG WR WK $SULO  ZKHQ D
WUDLQ OHIW %RUL %XQGHU IRU 7KDQH WKHQ 7DQQDK   6WULFWO\ VSHDNLQJ WKLV ZDV WKH ILUVW
FRPPHUFLDOSDVVHQJHUWUDLQVLQFH5DLOZD\VZHUHHDUOLHUXVHGIRURWKHUKDXODJHSXUSRVHV
:LWKWKUHHVWHDPORFRPRWLYHV 6LQGK6XOWDQDQG6DKLE WKDWMRXUQH\WRRNKRXUDQG
PLQXWHV LQ   %RUL %XQGHU VWDWLRQ LV QR ORQJHU XVHG  $ QRQVWRS (08 HOHFWULF
PXOWLSOH XQLW  WUDLQ IURP &KKDWUDSDWL 6KLYDML 7HUPLQXV WR 7KDQH VWLOO WDNHV  PLQXWHV
7KHVWDQGDUGDUJXPHQWVLQIDYRXURIWKH5DLOZD\VYLVjYLVRWKHUIRUPVRIWUDQVSRUWDWLRQ
ILJXUHGHYHQWKHQ)RULQVWDQFHDUHSRUWDXWKRUHGE\50DFGRQDOG6WHSKHQVRQLQ
VDLG $ &DOFXWWD PHUFKDQW ZKR GHVLUHV WR YLVLW 0LU]DSRUH PXVW LQFXU DQ H[SHQGLWXUH RI
SRXQGV  DQG D ORVV RI VL[ ZHHNV LI KH DYDLOV KLPVHOI RI WKH 6WHDP YHVVHOV DQG LI KH
SURFHHGVE\'DNWKHDPRXQWZLOOEHQHDUO\WKHVDPHDQGWKHSHULRGUHTXLUHGWRSHUIRUP
WKH GLVWDQFH WKHUH DQG EDFN ZLOO EH DERXW WHQ GD\V RI XQUHPLWWLQJ DQG PRVW IDWLJXLQJ
WUDYHOOLQJ7KH5DLOZD\ZLOOHQDEOHKLPWRSHUIRUPWKHHQWLUHGLVWDQFHWR0LU]DSRUHDQG
EDFNWR&DOFXWWDLQWKLUW\KRXUV7KHVHUDWHVZRXOGXQTXHVWLRQDEO\LQGXFHYHU\PDQ\WR
DYDLOWKHPVHOYHVRIWKHIDFLOLWLHVRIIHUHGZKRDUHDWSUHVHQWRIQHFHVVLW\SUHYHQWHGE\WKH
GHOD\ DQG ORVV RI WLPH PRUH WKDQ RQ DFFRXQW RI WKH H[SHQVH ZKLFK LV HQWDLOHG  7KH
5DLOZD\V HYROYHG WKURXJK WKH JXDUDQWHH V\VWHP  7KH LVVXH RI QRQUHPXQHUDWLYH OLQHV
DQGWKHLUIXQGLQJZDVDFRQFHUQHYHQWKHQ


 ,Q  WKH UHFRPPHQGDWLRQV RI WKH 7KRPDV 5REHUWVRQ &RPPLWWHH OHG WR WKH LQLWLDO
IRUPDWLRQRIWKH5DLOZD\%RDUGODWHUIRUPDOL]HGLQDQGUHFRQVWLWXWHGDJDLQLQ

1

Report upon the Practicability and Advantages of the Introduction of Railways into British India, R. Macdonald
Stephenson,1845,https://archive.org/stream/reportuponpract00stepgoog#page/n10/mode/2up
2
See,forexample,IanJ.Kerr,BuildingtheRailwaysoftheRaj,18501900,OxfordUniversityPress,1995.

18


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

DIWHUWKH5DLOZD\)LQDQFH&RPPLWWHHVXEPLWWHGLWVUHFRPPHQGDWLRQV7KH,QGLDQ
5DLOZD\ %RDUG $FW FRQIHUUHG WKH SRZHUV RU IXQFWLRQV RI WKH &HQWUDO *RYHUQPHQW XQGHU
WKH ,QGLDQ 5DLOZD\V $FW RI  RQ WKH 5DLOZD\ %RDUG  6XEVHTXHQWO\ IROORZLQJ WKH
UHFRPPHQGDWLRQV RI WKH $FZRUWK &RPPLWWHH   WKHUH ZDV WKH 6HSDUDWLRQ
&RQYHQWLRQRIOHDGLQJWRWKHVHSDUDWLRQRI5DLOZD\ILQDQFHVIURPJHQHUDOILQDQFHV
:KHQWKHSURSRVDOIRUUHVROXWLRQZDVSUHVHQWHGWRWKH/HJLVODWLYH$VVHPEO\LQWKH
JRYHUQPHQW VWDWHG WKH IROORZLQJ ,Q WKH ILUVW SODFH DV IDU DV 6WDWH 5DLOZD\V DUH
FRQFHUQHG ZH ZDQW WR DEROLVK DOWRJHWKHU WKLV V\VWHP RI SURJUDPPH UHYHQXH YRWHG IRU D
\HDU:HZDQWWRHVWDEOLVKDSURSHUGHSUHFLDWLRQIXQGDGHSUHFLDWLRQIXQGDUUDQJHGLQ D
VFLHQWLILF DQG LQWHOOLJLEOH PDQQHU 6HFRQGO\ ZH ZDQW WR EXLOG XS 5DLOZD\ UHVHUYHV :H
ZDQWWREXLOGWKHPXSLQRUGHUWKDWRXUILQDQFHVPD\EHPRUHHODVWLFLQRUGHUWKDWZHPD\
KDYH SURYLVLRQ WR HTXDOL]H GLYLGHQGV $QG JHQHUDOO\ ZH ZDQW WR LQWURGXFH D V\VWHP RI
ILQDQFH ZKLFK ZKLOH PDLQWDLQLQJ XQLPSDLUHG WKH FHQWUDOLW\ RI WKLV +RXVH DQG ZKLOH
HQVXULQJWRJHQHUDOUHYHQXHVDIDLUUHWXUQIURPWKHLU5DLOZD\SURSHUW\ZLOOEHPRUHVXLWHG
WRWKHQHHGVRIDYDVWFRPPHUFLDOXQGHUWDNLQJ)LQDOO\DQGPRVWLPSRUWDQWRIDOOZHZDQW
WRHVWDEOLVKWKHSULQFLSOHLW LVULJKWDQGSURSHU WKDWWKH WD[SD\HUWKH6WDWHVKRXOG JHW D
IDLUDQGVWDEOHUHWXUQIURPWKHPRQH\LWKDVVSHQWRQLWV5DLOZD\VEXWLI\RXJRIXUWKHULI
\RX WDNH IURP WKH 5DLOZD\V PRUH WKDQ WKDW IDLU UHWXUQ WKHQ \RX DUH LQGXOJLQJ LQ D
FRQFHDOHG ZD\ LQ RQH RI WKH PRVW YLFLRXV IRUPV RI WD[DWLRQ QDPHO\ D WD[ RQ
WUDQVSRUWDWLRQ2QHRIWKHREMHFWVZHKDYHPRVWDWKHDUWLQSXWWLQJWKHVHSURSRVDOVEHIRUH
WKLV+RXVHLVWRHVWDEOLVKWKDWSULQFLSOH3HUKDSVRQHVKRXOGPHQWLRQWKH,QGLDQ5DLOZD\
(QTXLU\&RPPLWWHHRIXQGHUWKH&KDLUPDQVKLSRI5DOSK:HGJHZRRG$PRQJ
RWKHU WKLQJV WKLV &RPPLWWHH ZDV RQH RI WKH ILUVW WR IODJ SDVVHQJHU DPHQLWLHV SXEOLF
UHODWLRQV DQG DGYHUWLVLQJ  ,WDOVR UHFRPPHQGHG WKHFORVLQJ GRZQ RI XQHFRQRPLF EUDQFK
OLQHV  $W WKH WLPH RI ,QGHSHQGHQFH LQ  WKHUH ZHUH  VHSDUDWH 5DLOZD\ V\VWHPV
LQFOXGLQJOLQHVRSHUDWHGE\IRUPHU3ULQFHO\6WDWHV$OORIWKHVHZHUHEURXJKWWRJHWKHU
XQGHUSXEOLFRZQHUVKLSLQ


 7KHUHLVDORQJOLVWRI&RPPLWWHHVWKDWKDYHH[DPLQHGWKHIXQFWLRQLQJRIWKH5DLOZD\VDW
YDULRXVSRLQWVLQWLPH7KHUHKDYHDOVREHHQUHODWHGGRFXPHQWV$QLQGLFDWLYHOLVWLVWKH
IROORZLQJ  7KHUH KDYH DOVR EHHQ 5DLO 7DULII (QTXLU\ &RPPLWWHHV )UHLJKW 6WUXFWXUH
(QTXLU\&RPPLWWHHVDQG5DLOZD\&RQYHQWLRQ&RPPLWWHHV,QGLDQ5DLOZD\(QTXLU\
&RPPLWWHH5DLOZD\$FFLGHQWV&RPPLWWHH(QTXLU\&RPPLWWHHRQ5DLOZD\
$FFLGHQWV :DQFKRR .XQ]UX&RPPLWWHHDVSDUWRIWKHVW$GPLQLVWUDWLYH5HIRUPV
&RPPLVVLRQ   5HSRUW RI WKH ([SHUW *URXS RQ WKH &DSLWDO 6WUXFWXUH RI ,QGLDQ
5DLOZD\V5HSRUWRIWKH+LJK/HYHO&RPPLWWHHRQWKH6RFLDO%XUGHQVRIWKH,QGLDQ
5DLOZD\V   5DLOZD\ 5HIRUPV &RPPLWWHH 6DULQ    5DLOZD\ )DUH DQG
)UHLJKW &RPPLWWHH 1DQMXQGDSSD    5DLOZD\ &DSLWDO 5HVWUXFWXULQJ &RPPLWWHH
3RXORVH    &RPPLWWHH WR 6WXG\ 2UJDQL]DWLRQDO 6WUXFWXUH DQG 0DQDJHPHQW (WKRV
3UDNDVK7DQGRQ &RPPLWWHHRQ5DWLRQDOL]DWLRQRI0DQDJHPHQW6HUYLFHV *XSWD

3

ReportoftheCommitteeonIndianRailwayFinanceandAdministration,EastIndia(Railways),1908.
Revisedin1989.
5
http://www.indianrailways.gov.in/railwayboard/uploads/codesmanual/ADMIN_FINANCE/AdminFinanceCh7_Dat
a.htm
4

19


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

1DUDLQ    7KH ,QGLDQ 5DLOZD\V 5HSRUW 5DNHVK 0RKDQ    ,QGLDQ 5DLOZD\V
9LVLRQ:KLWH3DSHURQ,QGLDQ5DLOZD\V([SHUW&RPPLWWHHRQ333
IXQGLQJ $PLW0LWUD ,QGLDQ5DLOZD\V$FFRXQWLQJ5HIRUPV5HSRUWRIWKH
([SHUW *URXS RQ 0RGHUQL]DWLRQ RI 5DLOZD\V 6DP 3LWURGD    +LJK /HYHO 6DIHW\
5HYLHZ &RPPLWWHH $QLO .DNRGNDU    5HSRUW RI WKH &RPPLWWHH RQ &UHDWLYH
)LQDQFLQJIRU,QGLDQ5DLOZD\V 0RQWHN6LQJK$KOXZDOLD ,QGLD7UDQVSRUW5HSRUW
1DWLRQDO7UDQVSRUW'HYHORSPHQW&RPPLWWHH WKH'.0LWWDO&RPPLWWHH
WKH6UHHGKDUDQ&RPPLWWHH  7KLVODUJHQXPEHURIUHSRUWVKDVERWKDSRVLWLYHDQGD
QHJDWLYHDQJOH2QWKHSRVLWLYHVLGHWKLVODUJHQXPEHULOOXVWUDWHVWKHLPSRUWDQFHDWWDFKHG
WRWKH5DLOZD\V2QWKHQHJDWLYHVLGHUHSHDWHGUHSRUWVKLJKOLJKWWKHQRQLPSOHPHQWDWLRQ
RI UHFRPPHQGDWLRQV FRPSRXQGHG VRPHWLPHV E\ WKH SKHQRPHQRQ RI UHFRPPHQGDWLRQV
EHLQJFRQIOLFWLQJ7KLV&RPPLWWHHKDVJRQHWKURXJKWKRVHHDUOLHUUHFRPPHQGDWLRQVZLWK
D IRFXV RQ UHSRUWV WKDW DUH RI PRUH UHFHQW YLQWDJH  ,Q DGGLWLRQ WKLV &RPPLWWHHV UHSRUW
HPSKDVL]HV WKH SURFHVV WKH URDG PDS RI WUDQVLWLQJ WR D PRUH HIILFLHQW 5DLOZD\ V\VWHP
7KHUHFRPPHQGDWLRQVRIWKRVHHDUOLHU&RPPLWWHHVDUHJLYHQLQ$QQH[XUHD7KHUHKDV
EHHQ DQ LQWHUQDO VWRFNWDNLQJ E\ WKH ,QGLDQ 5DLOZD\V RQ WKH LPSOHPHQWDWLRQ RI WKH
UHFRPPHQGDWLRQV RI VRPH RI WKHVH &RPPLWWHHV WKRXJK QRW DOO  7KDW LV DSSHQGHG LQ
$QQH[XUHE


 ,Q WHUPV RI WKH UHFRPPHQGDWLRQV RI WKLV &RPPLWWHH WKLV 5HSRUW LV VWUXFWXUHG LQWR 
&KDSWHUVDQG$QQH[XUHV,QRUGHURIVHTXHQFHWKHVH&KDSWHUVDUH  7KH5ROHDQG
3XUSRVH RI ,QGLDQ 5DLOZD\V   7KH 'HFLVLRQ0DNLQJ 6WUXFWXUH RI ,5   $FFRXQWLQJ
3UDFWLFHV RI ,5   +XPDQ 5HVRXUFH 0DQDJHPHQW LQ ,5   %XGJHWDU\ 5HODWLRQVKLSV
EHWZHHQ*RYHUQPHQWVDQG,5  )LQDQFLQJDQG*HQHUDWLRQRI5HVRXUFHVE\,5  7KH
&DVHIRUDQ,QGHSHQGHQW5HJXODWRUDQG  %H\RQGWKH,QLWLDO<HDUVDQGWKH7HUPLQDO
*RDO7KLVVHTXHQFLQJRI&KDSWHUVGHYLDWHVIURPWKHVHTXHQFLQJDQGQRPHQFODWXUHXVHGLQ
WKH ,QWHULP 5HSRUW  7KHUH DUH WZR UHDVRQV ZK\ WKH &RPPLWWHH IHHOV WKH SUHVHQW
VHTXHQFLQJ DQG QRPHQFODWXUH RI WKH &KDSWHUV WR EH VXSHULRU  )LUVW WKH HQWU\ RI SULYDWH
SOD\HUVLQYDULRXVIRUPVLVDOUHDG\SDUWRISROLF\,QLWV,QWHULP5HSRUWDQGLQWKHSUHVHQW
RQH WKH &RPPLWWHH GLG QRW DQG GRHV QRW UHFRPPHQG DQ\WKLQJ QHZ LQ WKDW UHVSHFW
,QVWHDGERWK5HSRUWVSRLQWRXWFRQVWUDLQWVWKDWLPSHGHHIILFLHQWIXQFWLRQLQJRIWKDWSULYDWH
HQWU\  +RZHYHU UHDFWLRQV HVSHFLDOO\ RQ WKH SDUW RI WKH PHGLD IDLOHG WR GLVWLQJXLVK
EHWZHHQWKHVHWZRDVSHFWV,QWHUPVRIUHVWUXFWXULQJWKH5DLOZD\VERWK5HSRUWVEXLOGRQ
WKUHH SLOODUV  D  FRPPHUFLDO DFFRXQWLQJ E  FKDQJHV LQ +5 DQG F  DQ LQGHSHQGHQW
UHJXODWRU  7KH SUHVHQW VHTXHQFLQJ DQG QRPHQFODWXUH UHIOHFWV WKLV IRFXV EHWWHU  :KLOH D
7LPH/LQHDWWKHHQGRIWKH5HSRUWLQ&KDSWHUVSHOOVRXWWKH&RPPLWWHHVWKRXJKWVRQ
GHWDLOHG VHTXHQFLQJ RI UHIRUPV D  E  DQG F  RXJKW WR EH LPSOHPHQWHG LQ WKH ILUVW 
\HDUV6HFRQGLQWKHFRXUVHRIFRQVXOWDWLRQVRQWKH,QWHULP5HSRUWLWZDVSRLQWHGRXWWR
WKH&RPPLWWHHWKDWRQFH D  E DQG F DUHDFFRPSOLVKHGLWLVLPSRVVLEOHIRUDQ\RQHWR
SUHGLFW LQ DGYDQFH ZKDW FKDQJHV FRPSHWLWLYH SUHVVXUHV ZLOO EULQJ DERXW LQ WKH 5DLOZD\
V\VWHP7KH&RPPLWWHHILQGVPHULWLQWKLVDUJXPHQW7KRXJKWKRVHQRUPDWLYHSULQFLSOHV
UHPDLQ DV WHUPLQDO JRDOV WKH )LQDO 5HSRUW PRYHV WKHP WR &KDSWHU  RQ ZKDW KDSSHQV
EH\RQGWKHILUVW\HDUV

20


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

 $ ZRUG RI H[SODQDWLRQ LV QHHGHG DERXW WKH H[SUHVVLRQV XVHG  7KLV &RPPLWWHH
DFNQRZOHGJHVFKRLFHDQGFRPSHWLWLRQDQGWKHHQWU\RISULYDWHSOD\HUV7RGD\WKH,QGLDQ
5DLOZD\V\VWHPLVYLUWXDOO\V\QRQ\PRXVZLWKDSXEOLFVHFWRUSURYLGHU:LWKWKHHQWU\RI
SULYDWH VHFWRU SOD\HUV WKDW QHHG QR ORQJHU EH WKH FDVH  7KURXJKRXW WKLV 5HSRUW E\ WKH
H[SUHVVLRQ ,QGLDQ 5DLOZD\V ZH ZLOO PHDQ WKH EURDGHU UDLOZD\ QHWZRUN DQG SURYLGHUV
ZKLOH,5ZLOOUHIHUWRWKHSXEOLFVHFWRUSURYLGHU7KXV,QGLDQ5DLOZD\VLVEURDGHUWKDQ,5
$QQH[XUHKDVDOUHDG\EHHQPHQWLRQHG$QQH[XUHFRQWDLQVGDWDDQGWDEOHVSHUWDLQLQJ
WR ,5  ,W LV DOVR LPSRUWDQW WR EHQFKPDUN DQG OHDUQ IURP ZKDW RWKHU FRXQWULHV KDYH
DFFRPSOLVKHG  $QQH[XUH  LV WKXV RQ WKH JOREDO UDLOZD\ UHVWUXFWXULQJ H[SHULHQFH ZKLOH
$QQH[XUHLVRQVRPHJOREDOUDLOZD\SHUIRUPDQFHSDUDPHWHUV7KH([HFXWLYH6XPPDU\
HQFDSVXODWHVWKHUHFRPPHQGDWLRQVLQEXOOHWHGIRUP


 7KHVSHFLILFWHUPVLQWKH&RPPLWWHHV725DUHDGGUHVVHGDVIROORZV,WHP L LVFRYHUHG
LQ &KDSWHUV     DQG  ,WHP LL  LV FRYHUHG LQ &KDSWHU   ,WHP LLL  LV FRYHUHG LQ
&KDSWHUVDQG,WHP LY LVDGGUHVVHGLQ&KDSWHUVDQG


21


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG








The













Role
and
Purpose
of
Indian











Railways
Past,

Present




and
Future

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIIRU0
0DMRU5
5DLOZD\3
3URMHFWVD
DQG5
5HVWUXFWXULQJR
RI5
5DLOZD\0
0LQLVWU\DQG5DLOZD\%RDUG



&KDSWHU7KH5ROHDQG3XUSRVHRI,QGLDQ5DLOZD\V
3DVW3UHVHQWDQG)XWXUH
7KH5ROHRIWKH5DLOZD\V


 ,QGLDLVDYDVWDQGFRPSOH[SODFH7KHSKRQHVVHOGRPZRUNWKHPDLOLVXQUHOLDEOHWKH
HOHFWULFLW\ LV OLDEOH WR VXGGHQ VWRSSDJHV  7KHUH DUH QXPHURXVQDWXUDO GLVDVWHUV DQG WKHUH
DUH  PLOOLRQ SHRSOH ,W LV DOPRVW LQFRQFHLYDEOH WKDW WKH FRXQWU\ LV VWLOO
YLDEOH7RZDUGV WKH HQG RI P\ ,QGLDQ MRXUQH\ , GHFLGHG WKDW ,QGLD UXQV SULPDULO\
EHFDXVH RI WKH UDLOZD\,W LV LPSRVVLEOH WR LPDJLQH ,QGLD ZLWKRXW WKH UDLOZD\ RU WR
WKLQN ZKDW FRXOG SRVVLEO\ UHSODFH LW  %XW ZKHQ \RX KDYH RQFH LQWURGXFHG PDFKLQHU\
LQWR WKH ORFRPRWLRQ RI D FRXQWU\ ZKLFK SRVVHVVHV LURQ DQG FRDOV \RX DUH XQDEOH WR
ZLWKKROGLWIURPLWVIDEULFDWLRQ<RXFDQQRWPDLQWDLQDQHWRIUDLOZD\VRYHUDQLPPHQVH
FRXQWU\ZLWKRXWLQWURGXFLQJDOOWKRVHLQGXVWULDOSURFHVVHVQHFHVVDU\WRPHHWWKHLPPHGLDWH
DQGFXUUHQWZDQWVRIUDLOZD\ORFRPRWLRQDQGRXWRIZKLFKWKHUHPXVWJURZWKHDSSOLFDWLRQ
RIPDFKLQHU\WRWKRVHEUDQFKHVRILQGXVWU\QRWLPPHGLDWHO\FRQQHFWHGZLWKUDLOZD\V7KH
UDLOZD\V\VWHPZLOOWKHUHIRUHEHFRPHLQ,QGLDWUXO\WKHIRUHUXQQHURIPRGHUQLQGXVWU\
7KHVHDUHWZRFRPSOHWHO\GLIIHUHQWDXWKRUVZULWLQJZLWKDJDSRIPRUHWKDQ\HDUV


 ,QGLDKDVRQHRIWKHODUJHVWUDLOZD\QHWZRUNVLQWKHZRUOGUHJDUGOHVVRIWKHLQGLFDWRUXVHG
$ VWDQGDUG LQGLFDWRU LV UDLOZD\ OHQJWK LQ NP ZKLFK LQFOXGHV XUEDQVXEXUEDQ PDVV
WUDQVSRUW V\VWHPV DQG WUDFNV XVHG IRU IUHLJKW EXW QRW QHFHVVDULO\ IRU SDVVHQJHUV  7KH
,QWHUQDWLRQDO8QLRQRI5DLOZD\VKDVGDWDWRFRPSDUHDFURVVFRXQWULHVDQG,QGLDKDVWKHWK
ODUJHVW UDLOZD\ QHWZRUN LQ WKH ZRUOG  7KH 8QLWHG 6WDWHV KDV  NP &KLQD KDV
NP5XVVLDKDVNPDQG,QGLDKDV$PRQJWKHWRSFRXQWULHVLQ
WKHZRUOGXVLQJWKLVLQGLFDWRUKDYHQDWLRQDOL]HGUDLOZD\VWKH8QLWHG6WDWHVDQG&DQDGD
EHLQJ WKH RQO\ H[FHSWLRQV  7KRVH DEVROXWH ILJXUHV FDQ EH QRUPDOL]HG E\ JHRJUDSKLFDO
DUHDRUE\SRSXODWLRQ1RUPDOL]HGE\JHRJUDSKLFDODUHDHDFKNPRIWUDFNFRYHUV
VT NP LQ ,QGLD  7KLV LV URXJKO\ FRPSDUDEOH WR WKDW LQ WKH 8QLWHG 6WDWHV VLJQLILFDQWO\
ORZHUWKDQWKDWLQ*HUPDQ\EXWPXFKORZHUWKDQWKHILJXUHVIRU5XVVLD&KLQDRU&DQDGD
1RUPDOL]HGE\SRSXODWLRQHDFKNPRIWUDFNFDWHUVWRSHRSOHLQ,QGLD7KH&KLQHVH
ILJXUHLV$PRQJFRXQWULHVZLWKODUJHUDLOZD\QHWZRUNVWKHUHLVQRRWKHUFRXQWU\
ZLWK D ILJXUH OLNH WKDW RI ,QGLD IRU SHRSOH FRYHUHG SHU NP RI WUDFN  2QH ZRXOG KDYH WR
ORRNWRFRXQWULHVOLNH,QGRQHVLD3DNLVWDQ7KDLODQGRU9LHWQDP


6

PaulTheroux,TheImperialWay,1983.
KarlMarx,TheFutureResultsofBritishRuleinIndia,1853.
8
Therearesomeproblemswiththedata.Forexample,ifrailwaylinesusedforcommonusagealonearecounted,
theRussianfigureismorelike85,000km.Therearealsotimelagswithdata.The201213Indianroutelengthis
65,436km,with115,833oftrackkm.
7

23


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

7UDYHORQWKH,QGLDQUDLOZD\VGXULQJWKH\HDUVRIWKH5DM$FRPSDULVRQRIWKHWZR
FODVVHVH[WUDFWVIURPWKHGLDULHVRIDQ(QJOLVKPDQ


Gentlemen always carry with them a counterpane padded with wool, and a small pillow
or two. At night the settee is converted into a sleeping berth by the aid of the counterpane
and pillows. At daybreak the train stops to allow passengers time to eat the chota-hazare,
or early breakfast, and inhale the cool, dewy air before the intolerable heat begins.
Etiquette permits ladies and gentlemen to appear during this meal in the light sleeping
costume always worn by through travelers. After the early breakfast comes the bath,
dressing, and reading of the novel or newspaper. Native gentlemen used to travel firstclass, but they made themselves such a nuisance to the English lady passengers by
chewing pan, smoking their hookahs, and removing their clothing above their waists,
that they were quarreled with by English gentlemen, and soon by tacit agreement they
learned to take the second-class cars, where they make themselves disagreeable to
English clerks and soldiers only.
The swart Hindoos arrive at the station four or five hours before the starting of the train.
They are always accompanied to the depot by friends, or dependents, numbering from
two to a hundred, and the peasant, if his stay abroad is to be for a week or so, often
fetches along a bag of rice, one of flour, a supply of ghee (or clarified butter), and a
small donkey-load of sugar-cane; for he has heard that provisions are dear where he is
going, and he chuckles at his foresight in taking his supplies with him. But the poor
fellow finds at the last moment that the freight charges are such as to turn the scales the
other way; he cannot, however, throw away his provisions, and so pays the bill with a
heavy heart, and many groans and maledictions. There are often as many as one or two
thousand natives at a station awaiting the arrival of a train. They are not admitted within
doors until about an hour before the train starts. So they squat on their hams outside in
the sun, chewing sugar-cane, eating sweetmeats, and chatting with those who have come
to see them off. The noise, confusion, and stench are something wonderful. When the
ticket office is opened the clatter of voices rises into a wild uproar as the crowd rushes in,
each man fighting his way forward as best he can. When a native from the back country
presents himself at the ticket-window he is told that his fare to such a place is, say one
rupee six annas. Now he has all his life been accustomed to have one price asked him,
and to pay another, and the state of mind of the English official may be imagined when
he is asked if he will not take one rupee two annas for the ticket. If the native does not
come instantly to terms he gets a rap from the stick of the policeman who stands nearby
in order to expedite matters. The Hindoo next rushes to the freight agent to get his
baggage weighed; and there again he tries to beat down the price asked. In the meantime
the train has arrived, and is now ready to start. But the locomotive whistles and the
station-bell rings in vain; only one half of the crowd is yet aboard. If one of them wishes
to find a friend in the crowd he raises so terrific a yell for him calling him by name
that the sound drowns even the locomotive whistle. It is usually half an hour after the
advertised time before the last man is in. his place and the train moves off. There are no
seats in the cars occupied by the natives; they all squat on the floor, first stripping
themselves to the waist. "The third and fourth-class cars," says an anonymous writer,
"are one and all distinguished by the quiet and the fragrance of a monkey-house, the
roominess of a herring-barrel, and all the picturesqueness derivable from an endless
welter of bare brown arms and legs, shaven crowns, and shaggy black hair, white cloaks,
red wrappers, blue or scarlet caps and turbans, grinning teeth, rolling black eyes, and
sharp-pointed noses adorned with silver rings so huge that you feel tempted to seize them
and give them a double knock, all exhaling a mingled perfume of coconut oil and
overheated humanity sufficient to knock down a fireman."
24




5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIIRU0
0DMRU5
5DLOZD\3
3URMHFWVD
DQG5
5HVWUXFWXULQJR
RI5
5DLOZD\0
0LQLVWU\DQG5DLOZD\%RDUG

 7KH UHFHQW :KLWH 3DSHU SURGXFHG E\ WKH 0LQLVWU\ RI 5DLOZD\V LOOXVWUDWHV KRZ LPSRUWDQW
WKH 5DLOZD\V DUH IRU ,QGLD  (YHU\ GD\ WKHUH DUH QHDUO\  WUDLQV  DERXW 
SDVVHQJHUWUDLQVWKDWFDUU\PRUHWKDQPLOOLRQSDVVHQJHUVDQGWKHEDODQFHIUHLJKWWUDLQV
WKDW FDUU\ DURXQG  PLOOLRQ WRQQHV RI IUHLJKW SHU GD\  7KHUH DUH RQO\  FRXQWULHV LQ WKH
ZRUOG WKDW FDUU\ PRUH WKDQ  ELOOLRQ WRQQHV RI RULJLQDWLQJ IUHLJKW D \HDU DQG WKHVH DUH
&KLQD5XVVLDWKH8QLWHG6WDWHVDQG,QGLD,5LVDFKHDSDQGDIIRUGDEOHPHDQVRISXEOLF
WUDQVSRUW FHUWDLQO\ IRU SDVVHQJHUV DQG FRYHUV  6WDWHV DQG  8QLRQ 7HUULWRULHV DFURVV
DOPRVW  VWDWLRQV IURP %DUDPXOOD LQ WKH QRUWK WR .DQ\DNXPDUL LQ WKH VRXWK IURP
1DOL\DLQWKHZHVWWR/HGRLQWKHHDVW,5KDVSOD\HGDVLJQLILFDQWUROHLQWKHGHYHORSPHQW
DQGJURZWKRILQGXVWULHV7KHWH[WLOHLQGXVWU\LQ0XPEDLWKHMXWHLQGXVWU\LQDQGDURXQG
.RONDWD DQG WKH FRDO LQGXVWU\ LQ -KDUNKDQG DUH H[DPSOHV  5DZ PDWHULDOV DUH FDUULHG WR
IDFWRU\ VLWHV DQG ILQLVKHG JRRGV DUH FDUULHG WR PDUNHWV  $JULFXOWXUDO SURGXFH LV FDUULHG
FKHDSO\WKURXJKEXONUDLOWUDQVSRUWDWLRQ$SDUWIURPWKHQDWLRQDOLQWHJUDWLRQREMHFWLYHLQ
WLPHV RI QDWXUDO FDODPLWLHV GURXJKWV IORRGV IDPLQHV DQG HDUWKTXDNHV  DQG PDQPDGH
FDODPLWLHV GLVWXUEDQFHV LQVXUJHQF\  ,5 KDV KHOSHG UHOLHI DQG UHVFXH DV ZHOO DV
PRYHPHQWVRISROLFHWURRSVDQGGHIHQFHHTXLSPHQWZKHQUHTXLUHG


 7KH UHFHQWO\ SXEOLVKHG (FRQRPLF 6XUYH\ EXLOGV D FDVH IRU SXEOLF LQYHVWPHQW LQ WKH
5DLOZD\V  5DLOZD\V DUH IRXQG WR IRFXV VWURQJ EDFNZDUG OLQNDJHV GHPDQG SXOO IURP
RWKHUVHFWRUV ZLWKPDQXIDFWXULQJDQGVHUYLFHV)URPWKHGDWD WKHODWHVW\HDUIRU
ZKLFKWKHLQSXWRXWSXWWDEOHVDUHDYDLODEOH LWDSSHDUVWKDWLQFUHDVLQJWKHUDLOZD\RXWSXW
E\5VZRXOGLQFUHDVHRXWSXWLQWKHHFRQRP\E\5V7KLVODUJHPXOWLSOLHUKDVEHHQ
LQFUHDVLQJRYHUWLPHDQGWKHHIIHFWLVJUHDWHVWRQWKHPDQXIDFWXULQJVHFWRU,QYHVWLQJLQ
WKH,5 FRXOGWKXVEHJRRGIRU0DNHLQ,QGLD)XUWKHUWKHUH DUHVHFWRUVZKHUHUDLOZD\
VHUYLFHVDUHDQLQSXWWRSURGXFWLRQ IRUZDUGOLQNDJHV $Q5VSXVKLQUDLOZD\VHFWRUZLOO
LQFUHDVHWKHRXWSXWRIWKHRWKHUVHFWRUVE\DERXW5V7KLVIRUZDUGOLQNDJHKDVGHFOLQHG
RYHU WLPH EXW WKLV LV ODUJHO\ HQGRJHQRXV WR FDSDFLW\ FRQVWUDLQWV LQ WKH UDLOZD\V VHFWRU
ZKLFKKDVOHGWRUHOLDQFHRQRWKHUPRGHVRIWUDQVSRUW&RPELQLQJIRUZDUGDQGEDFNZDUG
OLQNDJHHIIHFWVVXJJHVWVDYHU\ODUJHPXOWLSOLHU RYHU RILQYHVWPHQWVLQWKH5DLOZD\V
(YHQZLWKRXWWKHVHSUHFLVHQXPEHUVWKHPXOWLSOLHUHIIHFWVDUHREYLRXVHQRXJK




9

IndianRailways,LifelineoftheNation,MinistryofRailways,February2015.
EconomicSurvey201415,Vol.I,DepartmentofEconomicAffairs,MinistryofFinance,February2015.
11
ThoughEconomicSurveysaysmanufacturing,itactuallymeansindustry.
10

25


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

(;,67,1*5$,/:$</,1(6
67$7(%281'$5<
6$1&7,21('1(:/,1(6

'(/+,

3$778..277$,








26


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

7DEOH6WDWLVWLFDO6QDSVKRW
1XPEHURISDVVHQJHUVFDUULHG PLOOLRQV 



3DVVHQJHUNLORPHWUHV ELOOLRQ 



3DVVHQJHUHDUQLQJVDVRIJURVVHDUQLQJV



([SUHVVORQJGLVWDQFHSDVVHQJHUDVRISDVVHQJHUHDUQLQJV



$YHUDJHVXEXUEDQOHDG NP 



$YHUDJHQRQVXEXUEDQOHDG NP 



1XPEHURIUDLOZD\VWDWLRQV



1XPEHURIUDLOZD\VWDWLRQVLGHQWLILHGIRUPXOWLIXQFWLRQDOFRPSOH[HV
1XPEHURIGDLO\SDVVHQJHUWUDLQV




$YHUDJHVSHHGRIPDLOH[SUHVVWUDLQVRQEURDGJDXJH NPKRXU 



$YHUDJHVSHHGRIRUGLQDU\SDVVHQJHUWUDLQVRQEURDGJDXJH NPKRXU 



$YHUDJHUDWHSHUSDVVHQJHUNP SDLVH 



5HYHQXHRULJLQDWLQJWRQQHV PLOOLRQ 



1HWWRQQHVNP ELOOLRQ 



%XONIUHLJKWDVRIJRRGVHDUQLQJV



1XPEHURIGDLO\JRRGVWUDLQV



:DJRQWXUQDURXQGWLPHRQEURDGJDXJH GD\V 



$YHUDJHVSHHGRIJRRGVWUDLQVRQEURDGJDXJH NPKRXU 



$YHUDJHQHWORDGRIJRRGVWUDLQVRQEURDGJDXJH WRQQHV 



$YHUDJHUDWHSHU17.0 SDLVH 



3URSRVDOVIRUSULYDWHIUHLJKWWHUPLQDOV

 ILQDOL]HG 

:RUNLQJH[SHQVHVDVRIJURVVHDUQLQJV RSHUDWLQJUDWLR 



1XPEHURIHPSOR\HHV WKRXVDQGV 



:DJHELOODVRIZRUNLQJH[SHQVHV



5DWHRIUHWXUQRQFDSLWDO  
1XPEHURIORFRPRWLYHV




:DJRQV



&RDFKHV



/DQGRZQHGE\,5

ODNKKHFWDUHV






12

ExcludingKonkanRailway.
90%requiredforoperationalandalliedusage.

13

27


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

,5V3HUIRUPDQFH
 7KH EHQFKPDUN IRU FRPSDULVRQ LV LPSRUWDQW  2QH NLQG RI EHQFKPDUN LV WHPSRUDO WKH
SHUIRUPDQFHRIWKH5DLOZD\VRYHUWLPH)RULQVWDQFHLQURXWHNPKDVLQFUHDVHG
WRIURPLQ)UHLJKWFDUULHGKDVLQFUHDVHGIURPPLOOLRQWRQQHV
LQ  WR  PLOOLRQ WRQQHV LQ   ,Q GD\V WKH ZDJRQ WXUQDURXQG KDV
GHFOLQHGIURPLQWRLQ7KHZDJRQFDSDFLW\KDVLQFUHDVHGIURP
 PLOOLRQ WRQQHV LQ  WR  PLOOLRQ WRQQHV LQ   7KH QXPEHU RI
RULJLQDWLQJ SDVVHQJHUV KDV LQFUHDVHG IURP  PLOOLRQ LQ  WR  PLOOLRQ LQ
7KHQXPEHURIGDLO\SDVVHQJHUWUDLQVKDVLQFUHDVHGIURPLQWR
 LQ   7KH VHDWEHUWK FDSDFLW\ KDV LQFUHDVHG DQG VR RQ  7KHVH DUH
XQGHQLDEOH LPSURYHPHQWV  +RZHYHU WKH SRLQW LV WKDW WKHVH VXSSO\VLGH LPSURYHPHQWV
KDYHQRWEHHQFRPPHQVXUDWHZLWKGHPDQGHQGUHTXLUHPHQWV$VRQHLQVWDQFHQRWLFHWKH
VORZ VSHHGV RI SDVVHQJHU DQG JRRGV WUDLQV LQGLFDWHG LQ 7DEOH    7KLV LVQW D QHZ
SKHQRPHQRQ,Q6HSWHPEHUDUDWKHUSUHVFLHQW1RWHRQ5DLOZD\VZDVDXWKRUHG
E\ 6KUL $. &KDQGUD 6HFUHWDU\ 5DLOZD\V DQG GLVFXVVHG LQ D &DELQHW PHHWLQJ  :H
ZLOOUHWXUQWRWKLVQRWHODWHU+RZHYHULWDOVRVWDWHG'HVSLWHVXEVWDQWLDODGGLWLRQVWRWKH
UROOLQJ VWRFN DQG DQ DSSUHFLDEOH LPSURYHPHQW LQ WKH SRZHU SRVLWLRQ LW LV GLVWUHVVLQJ WR
ILQGWKDWWKLV\HDUVEXGJHWVWDWLVWLFVUHYHDOWKDWWKHUHKDVEHHQDGHWHULRUDWLRQLQRSHUDWLQJ
HIILFLHQF\  (YHQ RWKHUZLVH WKH VSHHG DW ZKLFK IUHLJKW DQG SDVVHQJHU WUDIILF KDV EHHQ
PRYLQJ LQ UHFHQW \HDUV KDV \HW WR DWWDLQ WKH SUHZDU OHYHO  7KLV OHQGV VXSSRUW WR WKH
JHQHUDOFRPSODLQWWKDWQRQDYDLODELOLW\RIWUDQVSRUWLVWHQGLQJWREHFRPHDQLPSHGLPHQW
LQ LQGXVWULDO GHYHORSPHQW  :HUH WKLV WR EH ZULWWHQ WRGD\ WKH ZRUGV ZRXOG KDYH EHHQ
DUWLFXODWHGIDUPRUHIRUFHIXOO\7RUHWXUQWRWKHVSHHGLVVXHWKHKLJKGHQVLW\QHWZRUNLV
URXJKO\ LGHQWLFDO ZLWK WKH QHWZRUN WKDW FRQQHFWV WKH PHWURV DQG WKLV LV RYHUVWUHWFKHG
7KHEURDGJDXJHOLQHVDUHQRZFODVVLILHGLQWR*URXSV$WR(GHSHQGLQJRQWKHPD[LPXP
SHUPLVVLEOH VSHHGV  *URXS $ SHUPLWV VSHHGV XS WR  NPKRXU  *URXS % SHUPLWV
VSHHGVXSWRNPKRXU*URXS&FRQVLVWVRIVXEXUEDQOLQHV*URXS'DUHOLQHVWKDW
SHUPLW VSHHGV XS WR  NPKRXU  *URXS ( FRQVLVWV RI VHFWLRQV DQG EUDQFK OLQHV WKDW
KDYH VSHHGV XS WR  NPKRXU  1RQH RI WKHVH LV DQ\ZKHUH QHDU DWWDLQLQJ WKRVH
PD[LPXP SHUPLVVLEOH VSHHGV DQG WKH SUREOHP LVQW RQH WKDW LV DVVRFLDWHG ZLWK UROOLQJ
VWRFN  ,W KDV WR GR ZLWK WUDFN DQG RYHUVWUHWFKHG FDSDFLWLHV ZLWK PL[HG WUDIILF RI
5DMGKDQL6KDWDEGL'XURQWRVORZSDVVHQJHUWUDLQVDQGJRRGVWUDLQV7DEOHVDQG
LOOXVWUDWH KRZ EDG WKH VLWXDWLRQ LV 7KH PDSV WKDW IROORZ LOOXVWUDWH WKH VDPH SUREOHP
YLVXDOO\6XFKKLJKOHYHOVRIFDSDFLW\XWLOL]DWLRQZLWKWKHLQWURGXFWLRQRIPRUHDQGPRUH
WUDLQVOHDGWRVSHHGVVORZLQJGRZQ








14

Dependingonthesource,thereissometimesadiscrepancyinthefigures.ThesefiguresarefromtheFebruary
2015WhitePaper.
15
No.179/CF/54of18thSeptember1954.

28


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


7DEOH&DSDFLW\8WLOL]DWLRQIRU6HFWLRQVRQ,5

5DLOZD\
&HQWUDO
(DVW&RDVW
(DVW&HQWUDO
(DVWHUQ
1RUWK&HQWUDO
1RUWK(DVWHUQ
1RUWK)URQWLHU
1RUWKHUQ
1RUWK:HVWHUQ
6RXWK&HQWUDO
6RXWK(DVWHUQ
6RXWK(DVW
&HQWUDO
6RXWKHUQ
6RXWK:HVWHUQ
:HVW&HQWUDO
:HVWHUQ
7RWDO



 



!

2QH WUDLQ
7RWDO
RQO\V\VWHP













































































































































7DEOH&DSDFLW\8WLOL]DWLRQIRU6HFWLRQVRQ,5DORQJWKH+LJK'HQVLW\1HWZRUN

5DLOZD\
 
 
!
7RWDO
&HQWUDO






(DVW&RDVW






(DVW&HQWUDO






(DVWHUQ






1RUWK&HQWUDO






1RUWK(DVWHUQ






1RUWK)URQWLHU






1RUWKHUQ






6RXWK&HQWUDO






6RXWK(DVWHUQ






6RXWK(DVW&HQWUDO






6RXWKHUQ






:HVW&HQWUDO






:HVWHUQ






7RWDO







29


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

(POSITION AS ON 31-03-2013)

LINE CAPACITY AND UTILISATION ABOVE 100%


PATHANKOT
TALWARA

AMRITSAR

GOVINDWAL
FIROZPUR
KOTKAPURA

JOGINDER NAGAR

JALANDHAR
UNA
NAGAL DAM

BEAS

ATARI

SHIMLA
Sanehwal

KALKA

LUDHIANA

FAZILKA
AMBALA
INDA
BATH

DEHRADUN
RISHIKESH

KRDE
JIND

PANIPAT

HISAR

LOHARU

ALWAR
RINGUS
JAIPUR

MERTA RD.

MERTA
CITY

JODHPUR

SAMDARI

BHIND
NONERA
GWALIOR

SHEOPURKALA
SHIVPURI

KOTA

BHILDI

OKHA

AR
AG
HIN
ND AD
GA DAB MODASA
MA
AH
KAPADVAJJ

VIRAMGRAM
MALIYA
KUDA
MIYANA

GANDHIDHAM
KANDLA

SABARMATI

WANKANER

NADIAD

SURENDRANAGAR
RAJKOT
WANSJALIYA
JETALSAR
PORBANDAR

BHAVNAGAR

RAE
BARELI

DAHEJ

RATLAM

REWA

CHOPAN
BILLI

HALDIBARI
SAHARSA

OI
BARS
RADHIKAPUR

KHAGARIA

KUMARGHAT
KATIHAR
KIUL

RAJGIR

JHAJHA
MANPUR
JASIDIH

GARHWA ROAD

GIRIDIH

BALURGHAT

BHAGALPUR

AMLA
NARKHER
ACHALPUR

BHUSAVAL

BHILAI

CHALISGAON

VIRAR

UMRER

AKOLA
KHAMGAON

WARDHA
PULGAON
YAVATMAL
MAJRI
RAJUR
TADALI
PIMPALKUTTI

AURANGABAD

ADILABAD
PURNA

PARBHANI
LONAVALA

MUDKHED

NANDED

PARLI VAIJNATH
DAUND
BHIGWAN
LATUR
KURDUWADI
MOHOL
SOLAPUR
HOTGI

BARAMATI
PANDHARPUR

CHANDA
FORT

ARJUNI
WADSA

NAGBHIR

DAMANJODI
KORAPUT
KIRANDUL

SUKINDA
RD.

HOWRAH
AR

AG
PU
R

SEALDAH
CALCUTTA
LAKSHMIKANTAPUR
KAKDWIP

RUPSA
DIGHA
NAMKHANANAVIKWANA
BHADRAK
NISCHINTPUR
DHAMRA PORT
JAKHAPURA

KAPILAS RD.
NERGUNDI
CUTTACK

BHUBANESWAR
KHURDA RD.

PARADEEP

SINGAPURAM
RAYAGADA
GUNUPUR
BOBBILI
NAUPADA
VIZIANAGARAM

VISAKHAPATNAM

GUDIVADA
NARASPUR
MACHILIPATNAM

DONAKONDA
GUNTAKAL

DAITARI

KH

GOPALAPATNAM

GUNTUR

LONDA

HARBOUR

BHAIRABI
DULLABCHERRA

RAJAMUNDRY
MOTUMARI
SAMALKOT
VIJAYAWADA
KAKINADA

MACHERLA

RAICHUR

MANUGURU

KUMARGHAT

PALASA

SALUR

KOTTAVALASA

BHADRACHALAM ROAD
DORNAKAL

SECUNDERABAD

HYDERABAD

BANGRIPOSI
BANSPANI
JORURI

ANGUL
BUDHAPANK
RAJATHGARH

LANJIGARH

DIPHU
LUMDING
MIGRENDISA
BADARPUR
KATAKHAL
JIRIBAM
SILCHAR

PURI

LAKSHMIPUR

JAGDALPUR

BOLARUM
BIBINAGAR

VIKARABAD

BOLANGIR

TITLAGARH

WARANGAL

AR
AH
MP
DA
BA

TALCHER

JUNAGARH

KARIM NAGAR

GUA

BIMLAGARH
Rengali
BARSUAN
MANESNAR

BALLARSHAH
MANIKGARH

JAGTIAL

KAZIPET

JHARSUGUDA
URKURA
SAMBALPUR
RAIPUR
MANDIRHASAUD

RAJIM
DHAMTARI
DALLI RAJHARA

GADCHANDUR

MANOHARAPUR

ROURKELA
BNDM

DURG

PEDDAPALLI

LATUR RD.
NIZAMABAD

WADI

MIRAJ

TUMSAR

NAGPUR

JAMNER
MANMAD

BILASPUR

BALAGHAT
GONDIA

AMARVATI

JALGAON

GUWAHATI

DITOKCHERRA

PETRAPOL
BANGAON
BARASAT

NAWAGAON

CHAMPA

RANGIYA

AGARTALA

KATWA

KHANA
BANDEL

CHANDIL
GAMHARIA
TATANAGAR

SINI
RAJKHARSWAN

GEVRA ROAD

NAINPUR

CHHINDWARA
RAMTEK

PURULIYA
BANKURA

MURI

ANUPPUR

MANDLA FORT

SIA
PARA

AZIMGANJ

LEKHAPANI

AMGURI
JORHAT
NAGINIMORA
RANGAPARA
TULI
SILGHAT
FURKATING
SENCHOA
CHAPARMUKH

ADRA
RANCHI

ITARSI

I
UBR JOGIGHOPA
DH
GOLAPARA
DUDHNOI

DIBRUGARH
MORANHUT

BALIPARA
HAIBARGAON

LALGOLA

RAMPUR
HUT

L
DA
AN

KOTSHILA

NEW BONGAIGAON

SINGHABAD

MANDAR HILL

MADHUPUR
SITARAMPUR
SAINTHIA

DHANBAD

LOHARDAGA

BISHRAMPUR
JABALPUR

INDORE
MHOW

BARKAKANA

SHAKTINAGAR

MAKSI

KHANDWA

UMARPADA

MADGAON

GAYA

VARANASI

MAHADIYA

DEWAS

UDHNA

MARMAGAO

SAMASTIPUR
SONPUR

PATNA

SONNAGAR

SATNA

KATNI

Samuktala Rd.

JOGBANI

HAZIPUR

CHHAPRA
MUGHAL SARAI

CHUNAR

SAKRI
DARBHANGA

INDARA

MAU

SILIGURI

MUZ
AF
FA
RP
UR

BHALUKPONG

NEW JALPAIGURI
ALIPURDUAR

DARJEELING

XA
UL

CHHOTA AMBANA

NAGDA
UJJAIN

DAHOD
GODHRA
PANIMINES
PRATAPNAGAR
CHOTA
UDEPUR

PUNE

BHATNI

ZBD

BINA

PIPAVAV
BILIMORA

PEN
ROHA

RA

Chauri Chaura

ALLAHABAD

GUNA

RUTHIYAI

NARKATIAGANJ

KATRA
GORAKHPUR
SULTANPUR
TANDA
SHAHGANJ

KHRIRAR

NAINI
MANIKPUR

HARMUTI

KAPTANGANJ

FD

UNNAO

AIT

KHAJURI
JHANSI

TANKHALA
ALANG

LKO

KANPUR
BHIMSEN

VALMIKINAGAR

GONDA
MANKAPUR

BHOPAL

JUNAGARH

VERAVAL

NIMACH

BARI SADRI

TARANGA HILL

UR
PAL ANP
MAHESANA

SAMAKHIALI
BHUJ

NALIYA

CHHITAUNI

BURHWAL

CHITTAURGARH

UDAIPURCITY

DANGARI
MURKONGSELEK
TINSUKIA

NEPAL GANJ

SITAPUR
SITAPUR
CANTT.

PANIHAR

SAWAI MADHOPUR

MAVLI

SHIKOHABAD
ETAWAH

DHOLPUR

AJMER

MARWAR

MAILANI

HARDUAGANJ

AGRA

LI
GAU
SA

LUNI

TANAKPUR

PILIBHIT

CHANDAUSI

ROSA
BAREILLY
KASGANJ
HATHRAS
BALAMAU
ETAH
TUNDALA

MATHURA
BANDIKUI
BAYANA

PHULERA

Daurai
BILARA

MUNABAO

KHURJA

ALIGARH

SIKAR
DEGANA

POKARAN

KATHGODAM
LALKUA

GZB

REWARI
PALWAL

BIKANER

JAISALMER

Ramnagar

HPU

DELHI

LALGARH
KOLAYAT

MORADABAD

ROHTAK

BHIWANI

SARDAR SHAHR

LAKSAR
KOTDWARA

PUR
RAN

SURATGARH

SAHA

JAKHAL

SARUPSAR
ANUPGARH

RA
MPU

SRI-GANGANAGAR

RAJPURA

TENALI

NANDYAL

REPALLE

AMBEWADI
Gooty
KALLURU

RAYADURG
ONGOLE

DHARMAVARAM

PENUKONDA

GUDUR

BIRUR
PANAMBUR

TIRUPATI
PAKALA

MANGLORE
SAKLESHPUR

KATPADI

BANGOLORE

CHENNAI
ARAKKONAM

MYSORE

CHENGALPATTU

JOLARPETTAI

CHAMARAJA NAGAR

VILLUPURAM

UDAGAMANDALAM

PODUCHERRY

SALEM
ERODE

COIMBATORE
SHORANUR
ERNAKULAM
COCHIN
HARBOUR

Ariyalur
Lalgudi

IRUGUR

Ponmalai
TIRUCHCHIRAPPALLI

TRICHUR
BODINAYAKKANUR

MADURAI

VIRUDUNAGAR

QUILON

VANCHI MANIYACHCHI

TENKASI
TIRUNELVELI

TRIVANDRUM
KANNIYAKUMARI


 ,QGHHGWKHLQWURGXFWLRQRIQHZWUDLQVDQGVFKHGXOLQJRIVWRSVLOOXVWUDWHKRZGHFLVLRQVDUH
RIWHQQRWWDNHQRQWKHEDVLVRIFRPPHUFLDOFRQVLGHUDWLRQV6HYHUDOUHTXHVWVDUHUHFHLYHG
IRUWKHLQWURGXFWLRQRIQHZWUDLQVDQGH[WHQVLRQVRIH[LVWLQJWUDLQV7KHVHDUHRVWHQVLEO\
VFUXWLQL]HG E\ D =RQDO 7LPH 7DEOH &RPPLWWHH DQG VXEVHTXHQWO\ E\ D QDWLRQDO ,QWHU
30


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

5DLOZD\ 7LPH 7DEOH &RPPLWWHH ,577&    7KHUHDIWHU GHFLVLRQV DUH WDNHQ DERXW QHZ
WUDLQV DQG H[WHQVLRQV  $Q H[DPLQDWLRQ RI ,577& PLQXWHV UHYHDOV WKDW WKHUH LV UDUHO\ D
VFUXWLQ\RIZKDWWKHFRVWVDQGEHQHILWVDUHRIVXFKGHFLVLRQVRIZKDWVXFKQHZWUDLQVDQG
H[WHQVLRQV PHDQ LQ WHUPV RI GLVUXSWLRQ WR H[LVWLQJ WUDIILF IORZV  $W EHVW WKHUH DUH
DVVHUWLRQVDERXWGHPDQGDQGDFKHFNRQZKHWKHUUDNHVDQGORFRPRWLYHVDUHDYDLODEOH
'LWWRIRUVWRSVDQGKDOWV,QFOXGLQJKDOWVWKHUHDUHVWDWLRQVDVVKRZQLQ7DEOH
7KHVHVWDWLRQVDUHGLYLGHGLQWRYDULRXVFDWHJRULHV$DUHQRQVXEXUEDQVWDWLRQVZLWKDQ
DQQXDOSDVVHQJHUHDUQLQJRIPRUHWKDQ5VFURUHV$DUHQRQVXEXUEDQVWDWLRQVZLWKDQ
DQQXDO SDVVHQJHU HDUQLQJ EHWZHHQ 5V  DQG 5V  FURUHV % DUH HLWKHU QRQVXEXUEDQ
VWDWLRQVZLWKDQDQQXDOSDVVHQJHUHDUQLQJEHWZHHQ5VDQG5VFURUHVRUVWDWLRQVWKDW
KDYHWRXULVWLPSRUWDQFHRUDUHLPSRUWDQWMXQFWLRQVWDWLRQV&DUHDOOVXEXUEDQVWDWLRQV'
DUHQRQVXEXUEDQVWDWLRQVZLWKDQQXDOSDVVHQJHUHDUQLQJVEHWZHHQ5VODNKVDQG5V
FURUHV(DUHQRQVXEXUEDQVWDWLRQVZLWKDQQXDOSDVVHQJHUHDUQLQJVOHVVWKDQ5VODNKV
DQG ) DUH KDOWV  $V LV REYLRXV D SULRUL  $ VWDWLRQV DFFRXQW IRU WKH EXON RI WKH
SDVVHQJHU UHYHQXH  %DUULQJ VWRSV EHFDXVH RI RSHUDWLRQDO UHDVRQV WKHUH DUH FOHDU
JXLGHOLQHVRQZKHQDVWRSDWDVWDWLRQLVZDUUDQWHG)RULQVWDQFHWKHPLQLPXPQXPEHU
RI WLFNHWV WR EH VROG DW D VWDWLRQ PXVW EH DW OHDVW  RU PRUH IRU VOHHSHU FODVV IRU D
GLVWDQFH RI DW OHDVW  NP ZLWK D PXOWLSOH DGGHG IRU KLJKHU FODVVHV  ,Q WKH VXEXUEDQ
VHFWLRQ QR DGGLWLRQDO VWRSSDJHV DUH WR EH SURYLGHG WR ORQJ GLVWDQFH WUDLQV  :KHQ D
VHFWLRQ KDV D FDSDFLW\ XWLOL]DWLRQ RI PRUH WKDQ  QR DGGLWLRQDO VWRSSDJH ZLOO EH
SURYLGHG DORQJ WKDW VWUHWFK  $Q H[DPLQDWLRQ RI WKH SUHVHQW VWRSV VKRZV WKDW WKHVH
SULQFLSOHV DUH RIWHQ EUHDFKHG  7KHUH DUH ODUJHU UHDVRQV ZK\ ,5 GRHVQW IROORZ
FRPPHUFLDOSULQFLSOHVDQGZHZLOOWXUQWRWKRVHODWHU)RUWKHPRPHQWWKHOLPLWHGSRLQW
EHLQJ PDGH LV WKDW HYHQ ZKHQ WKH DSSOLFDWLRQ RI FRPPHUFLDO SULQFLSOHV LV SRVVLEOH ,5
GRHVQWDOZD\VGRVR7KHFRVWLQJRIWUDLQVLVDFDVHLQSRLQW2QHGRHVQWTXLWHNQRZ
KRZPXFKDWUDLQFRVWV,QWKHSUHVHQWFRVWLQJV\VWHPDOODQQXDOH[SHQVHVDUHDOORFDWHG
WRGLIIHUHQWVHUYLFHVDQGRQHWKXVDUULYHVDWDXQLWFRVWIRUWUDLQV7KDWGRHVQWHQDEOHRQH
WR NQRZ KRZ PXFK D VSHFLILF WUDLQ FRVWV  7KH UHYHQXH ILJXUHV DUH HDVLHU WR GHWHUPLQH
+RZHYHU VLQFH RQH GRHVQW NQRZ KRZ PXFK D VSHFLILF WUDLQ FRVWV RQH GRHVQW NQRZ
KRZPXFKRISURILWVDVSHFLILFWUDLQEULQJVLQ7KLVLVWUXHRIERWKSDVVHQJHUDQGIUHLJKW
WUDLQV,QDSURSHUFRVWLQJV\VWHPVD\IRUDSDVVHQJHUWUDLQRQHZRXOGFRVWIRUGLIIHUHQW
W\SHVRIFRDFKHVSRZHUFDUSDQWU\DQGSDUFHOYDQDGGGHSUHFLDWLRQDQGLQWHUHVW FRVWV
DGGWHUPLQDODQGOLQHKDXOFRVWVDQGVRRQLPSXWLQJSHUKDSVFRVWVEHFDXVHRIORVVRISDWK
WRJRRGVWUDLQV)RUWKH\HDUDQGIRU5DMGKDQL6KDWDEGLDQG'XURQWRVXFKD
WHQWDWLYHH[HUFLVHZDVXQGHUWDNHQIRUWKLV&RPPLWWHHDQGWKHUHVXOWVDUHVKRZQLQ7DEOH
%HIRUHDGHFLVLRQLVWDNHQWRLQWURGXFHWRDQHZWUDLQRUHOLPLQDWHDQH[LVWLQJRQH
VXFK DQ H[HUFLVH VKRXOG EH DXWRPDWLF DQG PDQGDWRU\  ,W LV QRW LPSRVVLEOH WR GR
+RZHYHUWKHSUHVHQWV\VWHPVHHVQRUHDVRQWRGRLW









31


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


7DEOH&DWHJRU\ZLVHEUHDNXSRIVWDWLRQVEDVHGRQDQQXDOSDVVHQJHUHDUQLQJVIRU
5DLOZD\
&5
(5
(&5
(&25
15
1&5
1(5
1)5
1:5
65
6&5
6(5
6(&5
6:5
:5
:&5
05
7RWDO

$



















$



















%



















&



















'



















(



















)



















7RWDO




















7DEOH)XOO\GLVWULEXWHGFRVWVIRU5DMGKDQL6KDWDEGLDQG'XURQWR LOOXVWUDWLYH 

7UDLQ1R
,WLQHUDU\
&RDFKHV
'LVWDQFH
5HYHQXHSHU &RVW
SHU 3URILWORVV
QXPEHU 
NP 
WULS 5V 
WULS 5V 
SHUWULS 5V 
5DMGKDQL([SUHVV

'%5*1'/6




 

+:+1'/6






1'/65-3%






6'$+1'/6






1'/6'%57




 

1'/6%&7





6KDWDEGL([SUHVV

1'/6+%-






./.1'/6






1'/6./.






1'/6$//




 

1'/6$65





'XURQWR([SUHVV

<35'((




 

<35+:+




 

/77(56




 

&670




 
+:+

381(




 
1=0



 7KLV LV SDUW RI D EURDGHU PDODLVH VLQFH ,5 GRHVQW IROORZ D FRPPHUFLDO DFFRXQWLQJ
V\VWHP7KHUHIRUHRQHGRHVQWTXLWHNQRZWKHDFFRXQWVIRUIL[HGUDLOZD\LQIUDVWUXFWXUH
32


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

SDVVHQJHU WUDIILF IUHLJKW WUDIILF VXEXUEDQ UDLOZD\V DQG WKH SURGXFWLRQ DQG FRQVWUXFWLRQ
XQLWV7KLVLVQWDQDUJXPHQWDJDLQVWVXEVLGL]DWLRQ$SURSHUDFFUXDOEDVHGGRXEOHHQWU\
DFFRXQWLQJ V\VWHP ELIXUFDWHG FOHDQO\ LQWR FDSLWDO WUDQVDFWLRQV DQG RSHUDWLRQV DQG
FRPPHUFLDO DFFRXQWV HQDEOHV RQH WR NQRZ WKH SUHFLVH H[WHQW RI VXEVLGL]DWLRQ 7KH
SUHVHQW RUJDQL]DWLRQDO VWUXFWXUH RI ,QGLDQ 5DLOZD\V ,5  LV VKRZQLQ WKHFKDUW ZLWK WKH
0LQLVWU\ RI 5DLOZD\V DQG WKH 5DLOZD\ %RDUG DW WKH WRS RI WKH S\UDPLG  %HORZ WKDW
LQFOXGLQJ .RONDWD 0HWUR 5DLO WKHUH DUH  ]RQHV HDFK KHDGHG E\ D *HQHUDO 0DQDJHU
*0   (DFK ]RQH LV GLYLGHG LQWR GLYLVLRQV KHDGHG E\ D 'LYLVLRQDO 5DLOZD\ 0DQDJHU
'50 DQGWKHUHDUHGLYLVLRQV7KHUHDUHHVWDEOLVKHGSURGXFWLRQXQLWVDQGSXEOLF
VHFWRU XQGHUWDNLQJV 368V  WKDW DUH XQGHU WKH DGPLQLVWUDWLYH FRQWURO RI WKH 0LQLVWU\ RI
5DLOZD\V  :KLOH RQH GRHVQW H[SHFW HYHU\ ]RQH WR EH SURILWPDNLQJ FRPPHUFLDO
DFFRXQWLQJ HQDEOHV RQH WR DOORZ WKH  ]RQHV WR IXQFWLRQ DV VHSDUDWH FRVW DQG SURILW
FHQWUHV  2QH REWDLQV DQ LQYHQWRU\ RI IL[HG DVVHWV DQG UROOLQJ VWRFN  2QH FDQ FRVW
VHUYLFHV LQFOXGLQJ ZHOIDUH VHUYLFHV OLNH 53) VFKRROV DQG PHGLFDO VHUYLFHV SURSHUO\
7KHUHFDQEHQRUHIRUPVRIDQ\W\SHZLWKRXWWUDQVLWLQJWRVXFKDFRPPHUFLDODFFRXQWLQJ
V\VWHP2IWKH]RQHVLQ,5RQHKDSSHQVWREH.RONDWD0HWURHVWDEOLVKHGLQ2FWREHU
7KHUHDUHRWKHUPHWURUDLOZD\VLQWKHFRXQWU\DQGWKH\KDYHQRWKLQJWRGRZLWK,5
:K\ VKRXOG .RONDWD 0HWUR EH D SDUW RI ,5"  )RU WKH UHFRUG .RONDWD 0HWURV ZRUNLQJ
H[SHQVHVDUHIDULQH[FHVVRILWVHDUQLQJVDQGLWVRSHUDWLQJUDWLRGHSHQGLQJRQWKH\HDULV
DOPRVW:K\ZDVDGHFLVLRQWDNHQWRLQFOXGH.RONDWD0HWURDVDQ,5]RQHLQVWHDG
RI PDNLQJ LW LQGHSHQGHQW"  )RU D ORQJ WLPH ,5 SRVVHVVHG RQO\  ]RQHV  (DVW &HQWUDO
ZLWK KHDGTXDUWHUV LQ +DMLSXU  DQG 1RUWK :HVWHUQ ZLWK KHDGTXDUWHUV LQ -DLSXU  ZHUH
DGGHG LQ   (DVW &RDVW ZLWK KHDGTXDUWHUV LQ %KXEDQHVZDU  1RUWK &HQWUDO ZLWK
KHDGTXDUWHUV LQ $OODKDEDG  6RXWK (DVW &HQWUDO ZLWK KHDGTXDUWHUV LQ %LODVSXU  6RXWK
:HVWHUQ ZLWK KHDGTXDUWHUV LQ +XEOL  DQG :HVW &HQWUDO ZLWK KHDGTXDUWHUV LQ -DEDOSXU 
ZHUH DGGHG LQ   6XFK QHZ ]RQHV PD\ KDYH OLPLWHG PXOWLSOLHU HIIHFWV LQ WKH
LPPHGLDWHYLFLQLW\WKRXJKWKHUHDUHRSSRUWXQLW\FRVWVRIWKRVHH[SHQGHGUHVRXUFHVDOVR
%XWLQWHUPVRIHFRQRPLFUDWLRQDOHWKHDUELWUDU\FUHDWLRQRI]RQHVGRHVQRWDGGWR,5V
HIILFLHQF\KRZHYHU GHILQHG  ,Q ZKDWHYHUIDVKLRQHIILFLHQF\ LV GHILQHG DQG GHVSLWH WKH
GDQJHUVRIDSRVWKRFHUJRSURSWHUKRFNLQGRIIDOODF\E\HYHU\HIILFLHQF\LQGLFDWRU,5V
HIILFLHQF\ZDVEHWWHUZLWK]RQHVWKDQZLWK,QGHHG.RWDGLYLVLRQLVUDWKHUDVWUDQJH
H[DPSOH  ,W LV SDUW RI :HVW &HQWUDO DQG WKH KHDGTXDUWHUV DUH LQ -DEDOSXU  .RWD WR
-DEDOSXULVDGLVWDQFHRINPDQGWDNHVDERXWKRXUVE\WUDLQ7KHKHDGTXDUWHUVRI
1RUWK:HVWHUQGLYLVLRQLVLQ-DLSXU.RWDWR-DLSXUWDNHVOHVVWKDQKRXUVE\WUDLQ:K\
LV .RWD GLYLVLRQ QRW SDUW RI WKH 1RUWK :HVWHUQ ]RQH"  7KLV WRR XQGHUOLQHV WKH H[WUHPH
DUELWUDULQHVVLQGHFLVLRQPDNLQJ


 7KHODFNRIFOHDUFRPPHUFLDOSULQFLSOHVVSLOOVRYHULQWRWKHHYDOXDWLRQRISURMHFWV%XW
EHIRUH WKDW D IHZ ZRUGV DUH QHFHVVDU\ DERXW ,5V ILVFDO FULVLV ZKLFK LV DOVR DQ
RSSRUWXQLW\ IRU WULJJHULQJ UHIRUPV DV KDV EHHQ WKH FDVH LQ PDQ\ RWKHU FRXQWULHV LQ WKH
ZRUOG$VWKHJUDSKEHORZLQGLFDWHVLQUHFHQW\HDUV,5KDVQRWPDGHRSHUDWLQJORVVHV
GHILQHG DV WKH GLIIHUHQFH EHWZHHQ WRWDO HDUQLQJV JURVV WUDIILF UHFHLSWV  DQG WRWDO

16

Itwas286in201314.Thefinalfiguresfor201415arentavailableyet,butmaydeclineabit.

33


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

H[SHQGLWXUH RUGLQDU\ZRUNLQJH[SHQVHV 6LQFHWKHVSLNHLQRUGLQDU\ZRUNLQJ


H[SHQVHVKDVRFFXUUHGDVDFRQVHTXHQFHRIDQLQFUHDVHLQVWDIIFRVWVDIWHUWKH6L[WK3D\
&RPPLVVLRQ$QLQGLFDWRUWKDWLVRIWHQXVHGLVWKHFRVWFRYHUDJHUDWLRWKHUDLORSHUDWRUV
FRVWWRUHYHQXHUDWLRDQXPEHUFROORTXLDOO\UHIHUUHGWRDVWKHRSHUDWLQJUDWLR:KLOHWKHUH
FDQEHQRREMHFWLYHO\GHILQHGLGHDORSHUDWLQJUDWLRLQPDQ\FRXQWULHVLWLVRIWKHRUGHU
RI$KLJKRSHUDWLQJUDWLRVLPSO\PHDQVWKDWWKHUHDUHOLPLWHGUHVRXUFHVIRUFDSLWDO
LQYHVWPHQWV,5SD\VIRULWVRZQSHQVLRQV,QDGGLWLRQWKHUHLVD'HSUHFLDWLRQ5HVHUYH
)XQG '5) IRUWKHUHSODFHPHQWRIDVVHWV+RZHYHUQHLWKHU'5)QRUZKDWLVSDLGLQWKH
QDPHRIGLYLGHQGVWRWKH8QLRQJRYHUQPHQWDUHREMHFWLYHO\GHWHUPLQHG)RUDVWDUW
GLYLGHQGV DUHQW ZKDW RQH ZRXOG DVVXPH WKHP WR EH LQ D FRPPHUFLDO IUDPHZRUN
(IIHFWLYHO\ WKH 8QLRQ JRYHUQPHQW KDV H[WHQGHG D ORDQ LQ SHUSHWXLW\ WR ,5 DQG
GLYLGHQGVUHSUHVHQWDUHSD\PHQWRILQWHUHVWRQWKDWZLWKRXWWKHSULQFLSDOHYHUJHWWLQJ
H[WLQJXLVKHG'LYLGHQGVDUHH[RJHQRXVO\GHWHUPLQHG:LWKGLYLGHQGVDQGDSSURSULDWLRQ
WRWKHSHQVLRQIXQGIL[HGDGHVLUDEOHRSHUDWLQJUDWLRLVGHWHUPLQHGDQGDSSURSULDWLRQV
WRWKH'5)REWDLQHGDVDUHVLGXDO7KXVZKHQHYHUDSSURSULDWLRQVWRWKH3HQVLRQ)XQG
KDYHLQFUHDVHGDVWKH\KDYHDIWHUWKH6L[WK3D\&RPPLVVLRQDSSURSULDWLRQVWR'5)KDYH
GHFOLQHG DQG ,5 KDV EHHQ FRQVWUDLQHG WR IXQG HYHQ UROOLQJ VWRFN WKURXJK PDUNHW
ERUURZLQJVWKURXJK,5)&


34


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

35


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

 6RPHRIWKHOHJDF\LQFOXGLQJWKDWRIDVHSDUDWH5DLOZD\%XGJHWLVGXHWRWKHUHSRUWRI
WKH :LOOLDP $FZRUWK &RPPLWWHH ZKLFK VXEPLWWHG D UHSRUW LQ   $ ORQJLVK TXRWH
IURPWKH$FZRUWK&RPPLWWHHVUHSRUWLVZDUUDQWHG7KHGHIHFWVPHQWLRQHGLQWKHODVW
&KDSWHUDUHSULPDULO\GXHWRWKHIDLOXUHRIWKH*RYHUQPHQWWRSURYLGHWKH5DLOZD\VZLWK
DGHTXDWH IXQGV IRU FDSLWDO H[SHQGLWXUH RQ GHYHORSPHQW DQG H[WHQVLRQ DQG HYHQ IRU
HVVHQWLDORSHUDWLRQVRIUHQHZDODQGUHSDLUV7KH\DUHWKHLQHYLWDEOHUHVXOWRIDSDUDO\]LQJ
V\VWHP ZKLFK KDV QRW EHHQ DGDSWHG DQG GHYHORSHG WR PHHW WKH UHTXLUHPHQWV RI ZKDW LV
HVVHQWLDOO\ D FRPPHUFLDO HQWHUSULVH RI WKH ILUVW PDJQLWXGH:H GR QRW WKLQN WKDW WKH
,QGLDQ 5DLOZD\V FDQ EH PRGHUQL]HG LPSURYHG DQG HQODUJHG VR DV WR JLYH ,QGLD WKH
VHUYLFHRIZKLFKLWLVLQFU\LQJQHHGDWWKHPRPHQWQRUWKDWWKH5DLOZD\VFDQ\LHOGWRWKH
,QGLDQ SXEOLF WKH ILQDQFLDO UHWXUQ ZKLFK WKH\ DUH HQWLWOHG WR H[SHFW IURP VR YDOXDEOH D
SURSHUW\ XQWLO WKH ZKROH ILQDQFLDO PHWKRGV DUH UDGLFDOO\ UHIRUPHG  $QG WKH HVVHQFH RI
UHIRUPLVFRQWDLQHGLQWZRWKLQJV  WKHFRPSOHWHVHSDUDWLRQRIWKHUDLOZD\EXGJHWIURP
WKH JHQHUDO EXGJHW RI WKH FRXQWU\ DQG LWV UHFRQVWUXFWLRQ LQ D IRUP ZKLFK IUHHV D JUHDW
FRPPHUFLDO XQGHUWDNLQJ IURP WKH WUDPPHOV RI D V\VWHP ZKLFK DVVXPHV WKDW D FRQFHUQ
JRHVRXWRIEXVLQHVVRQHDFKVWRI0DUFKDQGUHFRPPHQFHVGHQRYRRQWKHVWRI$SULO
DQG   WKH HPDQFLSDWLRQ RI WKH UDLOZD\ PDQDJHPHQW IURP WKH FRQWURO RI WKH )LQDQFH
'HSDUWPHQWWKH5DLOZD\'HSDUWPHQWVXEMHFWWRWKHJHQHUDOFRQWURORIWKH*RYHUQPHQW
RQFH LW KDV PHW LWV OLDELOLW\ WR LWV FUHGLWRUV VKRXOG LWVHOI UHJXODWH WKH GLVSRVDO RI WKH
EDODQFH DQG VKRXOG EH IUHH WR GHYRWH LW WR QHZ FDSLWDO SXUSRVH ZKHWKHU GLUHFWO\ RU DV
VHFXULW\ IRU QHZ GHEW LQFXUUHG  RU WR UHVHUYHV RU WR GLVVLSDWH LW LQ WKH IRUP HLWKHU RI
UHGXFWLRQRIUDWHVRULPSURYHPHQWRIVHUYLFHV


 7KHVHSDUDWLRQRIWKH5DLOZD\%XGJHWIURPWKH8QLRQ%XGJHWZDVRQO\RQHVPDOOSLHFH
RIWKHSLHWKHRQO\RQHWKDWZDVUHDOO\LPSOHPHQWHG7KHJRYHUQPHQWZDVVXSSRVHGWR
EH QR PRUH WKDQ D VKDUHKROGHU DQG ZDV VXSSRVHG WR DOORZ ,5 WR IXQFWLRQ IUHHO\ DQG
LQGHSHQGHQWO\ LQ DFFRUGDQFH ZLWK FRPPHUFLDO SULQFLSOHV  $QG LQ DGGLWLRQ ,5 ZDV
VXSSRVHG WR SD\ DQ LQWHUHVW RQ ORDQV WDNHQ IURP WKH JRYHUQPHQW WKH LQWHUHVW EHLQJ WKH
VDPHDVWKHLQWHUHVWSDLGE\WKHJRYHUQPHQWZKHQLWERUURZHGWRIXQGLQYHVWPHQWVLQ,5
7KHVKRUWSRLQWLVWKDWZLWKWKHH[FHSWLRQRIWKHVHSDUDWLRQRIWKH5DLOZD\%XGJHWIURP
WKH8QLRQ%XGJHWQRQHRIWKHRWKHUUHFRPPHQGDWLRQVZHUH HYHULPSOHPHQWHG7KLVLV
QRW WR VXJJHVW WKDW HYHU\WKLQJ GRQH E\ ,5 PXVW EH RQ FRPPHUFLDO FRQVLGHUDWLRQV  7KH
GHEDWHRQWKHIXQGLQJRIXQUHPXQHUDWLYHSDVVHQJHUOLQHVDQGEUDQFKOLQHVKDVEHHQJRLQJ
RQ VLQFH WKH WK FHQWXU\ ZKHQ WKH UDLOZD\V ZHUH GHYHORSHG SULYDWHO\ ZLWKRXW DQ\
VDWLVIDFWRU\UHVROXWLRQ7KDWVWKHUHDVRQVRPHDQQXDOORVVHVRQWKHRSHUDWLRQRIVWUDWHJLF
OLQHV DUH ERUQH E\ WKH JHQHUDO UHYHQXH  7KDWV WKH UHDVRQ WKHUH DUH VXEVLG\ UHOLHIV LQ
GLYLGHQG SD\PHQWV IRU VWUDWHJLF OLQHV  6XEMHFW WR ZKDW ZDV VDLG DERXW DFFRXQWLQJ ,5
FRPSXWHV WKH EXUGHQ RI VRFLDO FRVW REOLJDWLRQV GLYLGHG LQWR D  FDUU\LQJ HVVHQWLDO
FRPPRGLWLHV EHORZ FRVW E  SDVVHQJHU DQG RWKHU FRDFKLQJ VHUYLFHV F  RSHUDWLRQ RI
XQHFRQRPLFEUDQFKOLQHVDQG G QHZOLQHV([FOXGLQJVWDIIZHOIDUHFRVWV 5V
FURUHV  DQG ODZ DQG RUGHU FRVWV 5V  FURUHV  LQ  WKHVH VRFLDO VHUYLFH

17

QuotedinIndianRailways,StrategyforReform,K.B.Verma,FoundationBooks,2015.Onlyasmallpartofthe
quotehasbeenreproduced.ThereismuchmoreinthelongerquoteandintheAcworthCommittee.
18
Thereareanestimated90uneconomicbranchlines.

36


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

REOLJDWLRQV ZHUH HVWLPDWHG WR LPSRVH D EXUGHQ RI 5V  FURUHV  8QGHU DOO IRXU
KHDGV WKHUH VKRXOG EH EHWWHU ZD\V RI KDQGOLQJ WKH SUREOHP  3URMHFWV DUH QRZ GLYLGHG
LQWR  FDWHJRULHV  QDWLRQDO SURMHFWV $  SURMHFWV RQ FRVW VKDULQJ EDVLV $  FULWLFDO
SURMHFWV $ VXEFULWLFDOSURMHFWV $ LPSRUWDQWSURMHFWV $ RWKHUSURMHFWV % DQG
OHDVWLPSRUWDQWSURMHFWV & $$DQG$DUHSULRULW\SURMHFWVIURPWKHSHUVSHFWLYHRI
,5  :LWKLQ WKLV VHJPHQW WKHUH LV D WKURZIRUZDUG RI PRUH WKDQ  SURMHFWV ZLWK DQ
RULJLQDO HVWLPDWHG FRVW RI PRUH WKDQ 5V  FURUHV VSDQQLQJ QHZ OLQHV JDXJH
FRQYHUVLRQ GRXEOLQJ WUDIILF IDFLOLWLHV VLJQDOLQJ DQG WHOHFRPPXQLFDWLRQ UDLOZD\
HOHFWULILFDWLRQDQGZRUNVKRSV3URMHFWH[HFXWLRQKDVEHHQWDUG\DQGFDOFXODWLRQRIUDWHV
RIUHWXUQVOLSVKRG)RU$DQG$WKHUHVKRXOGEHFOHDQHUEHDULQJRIWKHVXEVLG\EXUGHQ
EHWZHHQ WKH 8QLRQ JRYHUQPHQW DQG 6WDWH JRYHUQPHQWV RQ WKH RQH VLGH DQG ,5 RQ WKH
RWKHU FRYHULQJ QRW RQO\ FDSLWDO LQYHVWPHQWV EXW DOVR RSHUDWLQJ ORVVHV  $Q LQVWDQFH RI
VXFK FOHDQ VHSDUDWLRQ LV VXEXUEDQ UDLO WUDQVSRUW WKH 0XPEDL 8UEDQ 7UDQVSRUW 3URMHFW
0873 EHLQJDQ LQVWDQFHRIZKDW FDQEHGRQHWKURXJKWKH-9URXWH7KHUH LV DOVR WKH
0XPEDL5DLOZD\9LNDV&RUSRUDWLRQ 059& IRUVXEXUEDQUDLOLPSURYHPHQWSURMHFWV


 2Q D DQG E DERYHQRWRQO\LVWKHV\VWHPQRQWUDQVSDUHQWWKHFURVVVXEVLGL]DWLRQRI
ORZ SDVVHQJHU IDUHV E\ DUWLILFLDOO\ KLJK IUHLJKW UDWHV KDV RIWHQ EHHQ FRPPHQWHG XSRQ
'HVSLWH5DLOZD\VEHLQJLQKHUHQWO\FKHDSHUDQGPRUHHQYLURQPHQWDOO\IULHQGO\WKHPRGDO
PL[RIWUDQVSRUWKDVVKLIWHGLQIDYRXURIURDGWUDQVSRUWQRWRQO\IRUIUHLJKWEXWDOVRIRU
SDVVHQJHUWUDQVSRUWZLWKVKRUWHUOHDGV,WLVHVWLPDWHGWKDWWKHVNHZHGLQWHUPRGDOPL[RI
,QGLDV WUDQVSRUW LQIUDVWUXFWXUH FRVWV WKH FRXQWU\ XS WR WKH HTXLYDOHQW RI  SHU FHQW RI
*'35DLVLQJWKHVKDUHRIUDLOWRDWOHDVWSHUFHQWLQIUHLJKWWUDQVSRUWDVLVWKHFDVHLQ
&KLQD DQG WKH 8QLWHG 6WDWHV VKRXOG EH D VWUDWHJLF SULRULW\ RI WKH QHZ JRYHUQPHQW DQG
ZRXOG HQWDLO D PDMRU H[SDQVLRQ LQ UDLOZD\ FDSDFLW\ 1RU IRU ERWK SDVVHQJHU DQG
IUHLJKW WDULIIV ZLWKLQ WKRVH FDWHJRULHV DUH SULFHV VHW LQ DFFRUGDQFH ZLWK HODVWLFLWLHV RI
GHPDQG7ZRDGGLWLRQDOSRLQWVVKRXOGEHPDGHDERXWWKRVHORZSDVVHQJHUIDUHV)LUVWDV
LV WKH FDVH ZLWK RWKHU HFRQRPLF VHUYLFHV WKHUH LV QR FRQYLQFLQJ DUJXPHQW LQ IDYRXU RI
ORZ XVHU FKDUJHV DFURVV WKH ERDUG  ,I VXEVLGLHV DUH ZDUUDQWHG IRU WKRVH ZKR DUH SRRU
WKHUHDUHEHWWHUZD\VRIWDUJHWLQJWKHPVXFKDVWKURXJKGLUHFWEHQHILWWUDQVIHUV3HUKDSV
LWLVZRUWKPHQWLRQLQJWKHH[WHQWRIWKLVVXEVLGL]DWLRQZRUNHGRXWE\WKLV&RPPLWWHHIRU
$SULO2FWREHUIRUQRQVXEXUEDQVHFRQGFODVVSDVVHQJHUWUDIILF7KLVLVQRWSURSHU
PDUJLQDOFRVWSULFLQJVLQFHWKHSUHVHQWDFFRXQWLQJV\VWHPGRHVQWDOORZWKH&RPPLWWHH
WRGRWKLV7KHVHQXPEHUVDUHEHVWXQGHUVWRRGDVDEHWWHUGLVWULEXWLRQRIFRVWVWKRXJKIDU
VKRUWRIPDUJLQDOFRVWSULQFLSOHV)RUPDLOH[SUHVVWUDLQVWKHHDUQLQJVSHUSDVVHQJHUNP
ZHUH  SDLVH ZKLOH WKH FRVWV ZHUH  SDLVH  )RU RUGLQDU\ WUDLQV WKH HDUQLQJV SHU
SDVVHQJHUNPZHUHSDLVHZKLOHWKHFRVWVZHUHSDLVH6HFRQGLWLVQRWWKHFDVH
WKDWSDVVHQJHUVDUHXQZLOOLQJWRSD\KLJKHUIDUHV,Q1&$(5FRQGXFWHGDVXUYH\
IRU,5207KLVFRYHUHGERWKVXEXUEDQDQGQRQVXEXUEDQSDVVHQJHUVUHVHUYHGDVZHOODV

19

ModernizingTransportInfrastructure,RajivLallandRituAnand,in,BibekDebroy,AshleyJ.TellisandReece
Trevoredited,GettingIndiaBackonTrack,AnActionAgendaforReform,RandomHouse,2014.The4.5%figureis
throughPlanningCommission.
20
ShashankaBhide,SaurabhBandyopadhyayandPalashBaruah,UnderstandingPassengerDemandfortheIndian
Railways:IssuesandPerceptionsinaSocioDemographicFramework,NCAER,August2012.

37


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

XQUHVHUYHG  2QH RI WKH ILQGLQJV ZDV DQ REYLRXV RQH  3DVVHQJHUV DUH ZLOOLQJ WR SD\
KLJKHU IDUHV SURYLGHG WKHUH LV WKH TXLG SUR TXR RI DQ LPSURYHPHQW LQ WKH TXDOLW\ RI
VHUYLFHVDYDLODEOHWRSDVVHQJHUVDWVWDWLRQVDQGRQWUDLQV6HUYLFHVWRSDVVHQJHUVFRYHUD
ZLGH VSHFWUXP  7KHUH KDYH EHHQ VHYHUDO VXUYH\V RI SDVVHQJHU FRPSODLQWV 7\SLFDOO\
WKHVH DUH WKH IROORZLQJ RQH FDQW JHW UHVHUYDWLRQV ZKHQ RQH ZDQWV RQERDUG DQG RII
ERDUGWKHUHDUHSUREOHPVZLWKFOHDQOLQHVVIRRGDQGEHGOLQHQWUDLQVUXQODWHWKHUHDUH
VDIHW\ DQG VHFXULW\ LVVXHV  :KLOH WKHUH LV QR TXHVWLRQ WKDW SDVVHQJHU IDUHV KDYH WR EH
LQFUHDVHGWKHUHPXVWEHWKHTXLGSURTXRRIEHWWHUSDVVHQJHUVHUYLFHVDQGDPHQLWLHV


 :LWK VXEXUEDQ WUDLQV LQFOXGHG WKHUH DUH DOPRVW  SDVVHQJHU WUDLQV HYHU\ GD\
7KHUHDUH WRR PDQ\ WUDLQV DQG WRR PDQ\ FODVVHV  )RU H[DPSOH LW LV SRVVLEOH WR FOHDQO\
GLYLGHQRQVXEXUEDQSDVVHQJHU MRXUQH\VORWVLQWRWKRVHRIKRXUV DURXQGNPV 
 KRXUV  NPV   KRXUV  NPV  DQG  KRXUV  NPV 
)RUGLVWDQFHVOHVVWKDQ NPVLW LVSRVVLEOH WRLQFUHDVH WKHVKDUHRI $&FKDLU FDUVLQ
UDNHV  )RU GLVWDQFHV OHVV WKDQ  NPV LW LV SRVVLEOH WR H[SHULPHQW ZLWK (08V WR EH
HYHQWXDOO\ UHSODFHG ZLWK WUDLQ VHWV  $V WKH RWKHU D[LV RI WKDW PDWUL[ LW LV SRVVLEOH WR
FROODSVH DOO WUDLQV LQWR RQO\ WKUHH FDWHJRULHV VSHFLILFDOO\ GHILQHG LQ WHUPV RI VSHHG 
VXSHUIDVW PDLOH[SUHVV DQG RUGLQDU\  %HWWHU SDVVHQJHU VHJPHQWDWLRQ LV SRVVLEOH IRU
WUDLQVWKDWEHORQJWRWKHKHULWDJHFDWHJRU\$VWKLQJVVWDQGDOOWKHVHKHULWDJHWUDLQVDUH
VXEMHFWHG WR WKH VDPH VWDQGDUGL]HG WHPSODWH  7KHVH LQVWDQFHV DUH QRW PHDQW WR WHOO ,5
ZKDW WR GR  7KDW LV IRU ,5 WR GHFLGH  %XW KDG ,5 EHHQ GULYHQ E\ FRPPHUFLDO
FRQVLGHUDWLRQVWKHVHDUHREYLRXVH[DPSOHVRISDVVHQJHUVHJPHQWDWLRQ6LPLODUO\RQWKH
IUHLJKWVLGHZK\LVWKHHPSW\UXQRIZDJRQVVRKLJK",IWKHWDUJHWIRUGHWHQWLRQLVOHVV
WKDQKRXUVZK\LVWKHDYHUDJHGHWHQWLRQPRUHWKDQKRXUV":K\GRWZRWKLUGVRI
JRRGV WUDLQV OHDYH ODWH EHFDXVH ORFRPRWLYHV DUH QRW DYDLODEOH"  :K\ GR WZRWKLUGV RI
ORFRPRWLYHVGHYHORSSUREOHPVZLWKLQPRQWKVRIWKHSHULRGLFRYHUKDXO":K\GRDODUJH
QXPEHURIORDGLQJVWDWLRQVQRWKDYHZHLJKLQJHTXLSPHQW"7KHVHDUHUKHWRULFDOTXHVWLRQV
EXWWKH\GULYHKRPHWKHSRLQW


 7KHUH ZDV D WLPH ZKHQ ,5 ZDV DOPRVW D PRQRSRO\ ERWK RQ SDVVHQJHU DQG IUHLJKW
RSHUDWLRQV$FODVVLFPRQRSROLVWKDVQRUHDVRQWRERWKHUDERXWDWWUDFWLQJQHZFXVWRPHUV
RU UHWDLQLQJ FXUUHQW RQHV  7KDWV QR ORQJHU WKH FDVH ZKHQ WKH PRQRSRO\ VWDWXV LV
WKUHDWHQHGE\FRPSHWLWLRQ7KUHDWHQHGE\FRPSHWLWLRQ,5VV\VWHPVKDYHQWEHHQDEOHWR
DGDSWRUKDYHQWDGDSWHGIDVWHQRXJK$QLGHDRIZKDW,5LQWHQGVFDQEHREWDLQHGIURP
WKH &LWL]HQV &KDUWHU WKDW KDV EHHQ DFFHSWHG22  7KH 3UHDPEOH VWDWHV 3URYLGH VDIH DQG
GHSHQGDEOH WUDLQ VHUYLFHV VHW QRWLILHG VWDQGDUGV IRU YDULRXV VHUYLFHV ZKHUHYHU SRVVLEOH
SURYLGH FRXUWHRXV DQG HIILFLHQW FRXQWHU VHUYLFHV VHW XS D UHVSRQVLYH DQG HIIHFWLYH
JULHYDQFHUHGUHVVDOPDFKLQHU\DWYDULRXVOHYHOVIRUWLPHERXQGUHVROXWLRQRIFRPSODLQWV
DQG JULHYDQFHV DV IDU DV SRVVLEOH (ODERUDWLQJ IXUWKHU WKHUH DUH PDMRU VHJPHQWV RQ
UHVHUYDWLRQVERRNLQJV DQG UHIXQGV GLVVHPLQDWLRQ RI LQIRUPDWLRQ DERXW WLPHWDEOHV DQG
UXQQLQJ SRVLWLRQV RI WUDLQV FDWHULQJ FOHDQOLQHVV RIIERDUG DPHQLWLHV ZDLWLQJ KDOOV

21

TheseexamplescomefromShriV.Vijayaraghavan.
http://www.goicharters.nic.in/railways.htm#pre

22

38


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

SODWIRUPV UHIUHVKPHQW URRPV  RQERDUG DPHQLWLHV OLJKWLQJ EHUWKVVHDWV WRLOHWV 


UHGUHVVDO RI SXEOLF JULHYDQFHV DQG DFFLGHQWV ZLWK VRPH RWKHU VHJPHQWV WRR  7KLV
VXJJHVWV WKDW RQ HDFK RI WKHVH WKHUH ZLOO EH VWDQGDUGV WKDW ZLOO EH QRWLILHG  +RZHYHU
WKHUH DUH QRQH WKDW KDYH EHHQ QRWLILHG  7R PDNH PDWWHUV ZRUVH WKDW &LWL]HQV &KDUWHU
GRHV QRW ILQG D SODFH LQ DQ\ RI WKH =RQDO RU GLYLVLRQDO ZHEVLWHV ZLWK WKH H[FHSWLRQ RI
6RXWK&HQWUDO7DEOHLOOXVWUDWHVWKHTXDOLW\RIFXVWRPHULQIRUPDWLRQDYDLODEOHDWWKHVH
ZHEVLWHVLQDGGLWLRQWRWKDWRIRYHUDOO,5
7DEOH4XDOLW\RIFXVWRPHULQIRUPDWLRQ
5DLOZD\

3DVVHQJHUVHUYLFHV

,5

(WLFNHWLQJ315VWDWXV 5XOHVUDWHV
WUDLQDUULYDOGHSDUWXUH ZKDUIDJHFDELQ
OD\RXW

&HQWUDO

315VWDWXV
UHVHUYDWLRQVWUDLQ
VFKHGXOHVHDW
DYDLODELOLW\

(DVW
&HQWUDO

315VWDWXV
UHVHUYDWLRQVWUDLQ
VFKHGXOHVHDW
DYDLODELOLW\
315VWDWXV
UHVHUYDWLRQVWUDLQ
VFKHGXOHVVHDW
DYDLODELOLW\

(DVW
&RDVW

(DVWHUQ

1RUWK
&HQWUDO

1RUWK
(DVWHUQ
1RUWK
:HVWHUQ

1RUWK
(DVW
)URQWLHU

1RUWKHUQ

315VWDWXV
UHVHUYDWLRQVWUDLQ
VFKHGXOHVVHDW
DYDLODELOLW\UXOHVIRU
),5
315VWDWXV
UHVHUYDWLRQVWUDLQ
VFKHGXOHVVHDW
DYDLODELOLW\SDVVHQJHU
FODLPV
315VWDWXV
UHVHUYDWLRQVWUDLQ
VFKHGXOHVVHDW
DYDLODELOLW\FODLPV
315VWDWXV
UHVHUYDWLRQVWUDLQ
VFKHGXOHVVHDW
DYDLODELOLW\GRUPLWRU\
DQGUHWLULQJURRPV

3DUFHOVHUYLFHV

1RVHSDUDWH
LQIRUPDWLRQ
LQFRPSOHWH
LQIRUPDWLRQXQGHU
FRPPHUFLDO
1RLQIRUPDWLRQ

)UHLJKWVHUYLFHV

&RPSODLQWV

VXJJHVWLRQV
6WDWLRQVVLGLQJVUDNHV &RPSODLQWV
WUDFNDQGWUDFH
PHQX606
FDOOVHUYLFHV
IRUSDVVHQJHUV
1RVHSDUDWH
0HQXVH[LVWEXW
LQIRUPDWLRQLQFRPSOHWH GRQWZRUN
LQIRUPDWLRQXQGHU
FRPPHUFLDO
1RLQIRUPDWLRQ

2QO\DIHHGEDFN
PHQX

1RLQIRUPDWLRQ

1RLQIRUPDWLRQ

3DUFHOUXOHVUDWHV
FODLPVIRUORVW
SDUFHOVXQGHU
SDVVHQJHU
LQIRUPDWLRQ
1RLQIRUPDWLRQ

)UHLJKWFKDUJHVDQG
IUHLJKWFODLPVXQGHU
SDVVHQJHULQIRUPDWLRQ

2QO\DIHHGEDFN
PHQXJULHYDQFH
UHGUHVVDOWDNHV
RQHWR'HSWRI
$GPLQLVWUDWLYH
5HIRUPV
'HWDLOHGSXEOLF
JULHYDQFH
UHGUHVVDO

3DUFHOKDQGOLQJ
OLFHQFHV

'HPXUUDJH ZKDUIDJH /LPLWHG


LQIRUPDWLRQRQ
SXEOLFJULHYDQFHV

1RLQIRUPDWLRQ

1RLQIRUPDWLRQ

315VWDWXV
/RVWJRRGV
UHVHUYDWLRQVWUDLQ
VFKHGXOHVVHDW
DYDLODELOLW\UHIXQGV
UHWLULQJURRPVFDWHULQJ
ORGJLQJ),5
315VWDWXV
1RLQIRUPDWLRQ
UHVHUYDWLRQVWUDLQ
VFKHGXOHVVHDW
DYDLODELOLW\UHIXQGV

1RLQIRUPDWLRQ

'HWDLOHGSXEOLF
JULHYDQFH
UHGUHVVDO

/RVWSDUFHOV

*ULHYDQFH
UHGUHVVDOWDNHV
RQHWRWKH
'HSDUWPHQWRI
$GPLQLVWUDWLYH
5HIRUPV
)HHGEDFNPHQX

1RLQIRUPDWLRQ

)HHGEDFNPHQX

39


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


5DLOZD\

3DVVHQJHUVHUYLFHV

3DUFHOVHUYLFHV

)UHLJKWVHUYLFHV

6RXWK
&HQWUDO

315VWDWXV
UHVHUYDWLRQVWUDLQ
VFKHGXOHVVHDW
DYDLODELOLW\LQWHUQHW
ERRNLQJ356FHQWUHV
315VWDWXV
UHVHUYDWLRQVWUDLQ
VFKHGXOHVVHDW
DYDLODELOLW\UHIXQGV

1RLQIRUPDWLRQ

1RLQIRUPDWLRQ

1RLQIRUPDWLRQ

1RLQIRUPDWLRQ

([WUHPHO\GHWDLOHG
LQIRUPDWLRQIRU
SDVVHQJHUV
([WUHPHO\GHWDLOHG
LQIRUPDWLRQIRU
SDVVHQJHUV
([WUHPHO\GHWDLOHG
LQIRUPDWLRQIRU
SDVVHQJHUV
([WUHPHO\GHWDLOHG
LQIRUPDWLRQIRU
SDVVHQJHUV
([WUHPHO\GHWDLOHG
LQIRUPDWLRQIRU
SDVVHQJHUV
'HWDLOHGLQIRUPDWLRQIRU
SDVVHQJHUV

2QO\FODLPVIRU
SDUFHOV

([WUHPHO\GHWDLOHG
LQIRUPDWLRQIRUJRRGV

1RLQIRUPDWLRQ

'HPXUUDJHZKDUIDJH
UDNHV

1RLQIRUPDWLRQ

1RLQIRUPDWLRQ

6RXWK
(DVW
&HQWUDO

6RXWK
(DVWHUQ
6RXWK
:HVWHUQ
6RXWKHUQ
:HVW
&HQWUDO
:HVWHUQ
0HWUR
.RONDWD

5XOHVDQGUDWHV
/RDGLQJXQORDGLQJ
RISDUFHOV


&RPSODLQWV

VXJJHVWLRQV
'HWDLOHG
JULHYDQFH
UHGUHVVDOPHQX
*ULHYDQFH
UHGUHVVDOWDNHV
RQHWRWKH
'HSDUWPHQWRI
$GPLQLVWUDWLYH
5HIRUPV
)HHGEDFNPHQX
XQGHU
FRQVWUXFWLRQ
)HHGEDFNPHQX

'HWDLOHG
JULHYDQFH
UHGUHVVDOPHQX
5XOHVUDWHVZDJRQ
)HHGEDFNPHQX
ORDGLQJXQORDGLQJ
FRPSODLQW
IRUHFDVWV
QXPEHUV
'HWDLOHGLQIRUPDWLRQRQ )HHGEDFN 
IUHLJKW
FRPSODLQWV
LQFOXGLQJ606

)HHGEDFN
JULHYDQFHFHOO


 7KHUHLVDQRIWTXRWHGDQGWKHUHIRUHVRPHZKDWFOLFKpGOHWWHUZULWWHQE\2NKLO&KDQGUD

6HQ WR WKH 'LYLVLRQDO 6XSHULQWHQGHQW RI 6DKLEJDQM LQ  IDPLOLDU WR DOO WKRVH ZKR
NQRZ DERXW ,QGLDQ UDLOZD\ KLVWRU\  7KH RULJLQDO OHWWHU LV LQ WKH 1DWLRQDO 5DLOZD\
0XVHXP 'HOKL  7KLV LV EHOLHYHG WR KDYH OHG WR WKH LQWURGXFWLRQ RI WRLOHWV RQ WUDLQV D
VWDWHPHQW WKDW LV QRW TXLWH WUXH VLQFH PDQ\ WUDLQV SDUWLFXODUO\ LQ WKH XSSHU FODVV
VHJPHQWVVWDUWHGWRKDYHWRLOHWVLQWKHV7KDWVHOIH[SODQDWRU\OHWWHULVVKRZQLQWKH
ER[6DKLEJDQM LQ-KDUNKDQG KDVVHHQEHWWHUGD\VIURPWKH5DLOZD\SRLQWRIYLHZ,WLV
QRORQJHURQWKH+RZUDK'HOKLPDLQOLQH$KPHGSXULVLQ:HVW%HQJDODQG0U6HQPXVW
KDYHWUDYHOOHGDORQJWKH%DUGKPDQ6DLQWKLDVHFWLRQRIZKDWLVFDOOHGWKH6DKLEJDQMORRS
7KDWVSDUWRIUDLOZD\KLVWRU\%XWWKHSRLQWLVWKHIROORZLQJ:HUHVXFKDOHWWHUWREH
UHFHLYHGWRGD\ZRXOG,5DFWRQLW"+RZFRQVFLRXVLV,5JLYHQLWVKLVWRU\RIDSULYLOHJHG
DQGPRQRSRO\VWDWXVRIWKHFOLHQWSDVVHQJHUIUHLJKWDQGSDUFHO":KDWGR352VGR"
+RZ WUDLQHG DUH *0V '*0V '50V VWDWLRQ PDVWHUV DQG RWKHU UDLOZD\ RIILFLDOV LQ
KDQGOLQJPHGLDLQFOXGLQJVRFLDOPHGLD",VWKHUHDQRWLRQRIFRUSRUDWHUHODWLRQVDQG35"
'R WKH RIILFHUV DQG VWDII RI WKH SXEOLF UHODWLRQV GHSDUWPHQWV KDYH GHJUHHV LQ PDVV
FRPPXQLFDWLRQ RU MRXUQDOLVP"   +RZ PXFK HIIRUW KDV ,5 SXW LQWR SURPRWLQJ WKH ,5
EUDQG"7KHVHDUHPHDQWWREHUKHWRULFDOTXHVWLRQV&RQVHTXHQWO\HYHQZKHQ,5KDVD
JRRG FDVH RU LQWURGXFHV D VHUYLFH IRU WKH FOLHQW WKHUH LV OLWWOH HIIRUW LQ SURPRWLQJ RU
GLVVHPLQDWLQJLW7KHUHLVDQHHGIRUDUHORRN DW WKH FRPSRVLWLRQRIWKH 5DLOZD\8VHUV
&RQVXOWDWLYH &RPPLWWHHV VHW XS DW YDULRXV OHYHOV DQG DW ZKDW WKH\ DUH PHDQW WR GR
7KH\GRQRWSURYLGHEURDGHUFOLHQWIHHGEDFN1RUGRWKH\DFWDVEUDQGDPEDVVDGRUVIRU
,5  2Q WKH RWKHU KDQG WKHUH DUH RUJDQL]DWLRQV OLNH WKH ,5)&$ ,QGLDQ 5DLOZD\V )DQ
40


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

&OXE$VVRFLDWLRQ 1RDWWHPSWLVPDGHWRURSHVXFKRUJDQL]DWLRQVLQIRUWKHFDXVHRI
WKHUDLOZD\V,QFLGHQWDOO\,5)&$VXJJHVWVDUDWKHUQHDWDFURQ\P5$,/:$<6 5LGH
$FURVV,QGLD/LIHORQJ:LWK8V$W<RXU6HUYLFH 


7KRXJKWVRQ5HVWUXFWXULQJDQGWKH:D\)RUZDUG


 7KHUH LV D EURDGHU LVVXH RI GHWHUPLQLQJ ZKDW ,5 LV VXSSRVHG WR GR  :KDW LV LWV FRUH
IXQFWLRQ"7KHFRUHIXQFWLRQRI,5VKRXOGEHWKHEXVLQHVVRIUXQQLQJWUDLQV7KHWRWDO
ZRUNIRUFHRIPLOOLRQKDVEHHQPHQWLRQHGHDUOLHU2IWKLVZLWKLQ*URXSV&DQG
' WKHUH DUH  5DLOZD\ 3URWHFWLRQ )RUFH 53)  DQG 5DLOZD\ 3URWHFWLRQ 6SHFLDO
)RUFH 536)  SHUVRQQHO  :LWK VLJQLILFDQW YDULDWLRQV DFURVV WKH ]RQHV LW FRVWV DQ
DYHUDJHRI5VSHUWUDLQNPWRHQVXUHVHFXULW\RQWUDLQV,5UXQVDPHGLFDOVHUYLFH
ZLWK DQ LQIUDVWUXFWXUH RI  KRVSLWDOV  KHDOWK XQLWV DQG  EHGV  7KHUH DUH
PHGLFDORIILFHUVDQGSDUDPHGLFDOVWDII,5UXQVGHJUHHFROOHJHDQG

23

www.irfca.org.
V.VijayaraghavanssubmissiontotheCommittee.

24

41


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

UDLOZD\VFKRROV$VDILUVWVOLFLQJRIFRUHYHUVXVQRQFRUHGRWKHVHQHHGWREHSDUWRI
WKH ,5 V\VWHP RU FDQ WKH\ EH GHOLQNHG DQG PDGH LQGHSHQGHQW"  ,5V HIILFLHQF\
LQGLFDWRUV KDYH LPSURYHG RYHU WLPH  )RU H[DPSOH WUDIILF XQLWV QHW WRQQHV NP 
SDVVHQJHU NP  SHU HPSOR\HH ZDV  LQ  DQG LQFUHDVHG WR  LQ
%XWMXGJHGE\LQWHUQDWLRQDOEHQFKPDUNVOLNHWUDIILFXQLWVSHUHPSOR\HHWKH\
DUH VWLOO ORZ  6OLJKWO\ GDWHG GDWD IURP  VKRZ WKDW WKLV LQGLFDWRU WUDIILF
XQLWVHPSOR\HHZDVIRU,QGLDIRU&KLQDIRU-DSDQIRU6RXWK$IULFD
 IRU &DQDGD  IRU WKH 8QLWHG 6WDWHV DQG  IRU 5XVVLD  2QH PXVW EH D WULIOH
FDUHIXOLQXVLQJVXFKLQGLFDWRUVWKRXJKEHFDXVHWKLVLVDQDJJUHJDWHLQGLFDWRUDQGLVD
IXQFWLRQ RI WKH FRPSRVLWLRQ RI SDVVHQJHU DQG IUHLJKW ZKLFK YDULHV DFURVV FRXQWULHV
7KHDIRUHPHQWLRQHG:KLWH3DSHUKDVPRUHUHFHQWGDWDIRUDQGKDVQXPEHUV
IRU5XVVLD&KLQDDQG,QGLD17.0SHUHPSOR\HHZDVPLOOLRQLQ5XVVLDLQ
&KLQDDQGLQ,QGLD3.0SHUHPSOR\HHZDVPLOOLRQLQ5XVVLDLQ&KLQD
DQGLQ,QGLD7KDWLV,QGLDIDUHVEHWWHURQWKHSDVVHQJHULQGLFDWRUDQGZRUVHRQ
IUHLJKW  0RUH LPSRUWDQWO\ WKH RYHUVWDIILQJ RI ,5 LV WRR PXFK RI D JHQHUDOL]DWLRQ
:LWKVXEVWDQWLDOUHFUXLWPHQWVKDYLQJWDNHQSODFHLQ53)536)PHGLFDOHGXFDWLRQDQG
*URXS'WKHUHDOSUREOHPLVWKHFRPSRVLWLRQRIWKHZRUNIRUFHZLWKDVKRUWDJHLQWKH
FRUH VNLOOHG RSHUDWLRQV RI UXQQLQJ WUDLQV  7KH VRFDOOHG WHHWKWDLO UDWLR LV ORZ  $V D
VHFRQGVOLFLQJRIFRUHYHUVXVQRQFRUHGRWKH368VQHHGWREHSDUWRIWKH,5V\VWHP"
$VDWKLUGVOLFLQJRIFRUHYHUVXVQRQFRUHGRWKHSURGXFWLRQXQLWVQHHGWREHSDUWRIWKH
,5V\VWHPRUFDQWKH\EHPDGHLQGHSHQGHQW":HZLOOUHWXUQWRWKHVHSRLQWVODWHULQWKH
UHSRUW)RUWKHPRPHQWLQWKLVFKDSWHUWZRSUHOLPLQDU\SRLQWVQHHGWREHPDGH)LUVW
LQQRFRXQWU\LQWKHZRUOGZKHUHVXFFHVVIXOUDLOZD\UHVWUXFWXULQJKDVEHHQDWWHPSWHG
KDVWKHDWWHPSWEHHQRYHUQLJKW,WKDVWDNHQPRUHWKDQ\HDUV:LWKWKHWHUPLQDOJRDO
FOHDUWKHUHKDVEHHQDJUDGXDODQGLQFUHPHQWDOPRYHWRZDUGVWKDWREMHFWLYH6HFRQG
UHVWUXFWXULQJ LV LQWHJUDOO\ OLQNHG WR D +5 LVVXH ZLWK SURWHFWLRQ RI H[LVWLQJ VWDII DQG
UHFUXLWPHQW RIQHZVWDIIRQQHZWHUPV7KHUH LVDQDWXUDO DWWULWLRQGXH WRUHWLUHPHQWV
DQGWKHUHLVDEXQFKLQJWRJHWKHURIVXFKUHWLUHPHQWVLQWKHQH[WIHZ\HDUV)RULQVWDQFH
UHWLUHPHQWVLQ*URXSV&DQG'ZLOOLQFUHDVHIURPLQWRLQ
  LQ  DQG  LQ  EHIRUH EHJLQQLQJ WR WDSHU RII  7KLV LV
WKXVDQRSSRUWXQHWLPHWRWDNHDORRNDWSURVSHFWLYHDSSRLQWPHQWVZKLOHSURWHFWLQJWKH
LQWHUHVWVRISUHVHQWHPSOR\HHV

 7KLV&KDSWHULVDERXW,QGLDQ5DLOZD\V,WLVQRWRQ,5DQGSUHVXSSRVHVWKDWWKHUHZLOO
EHDVHJPHQWRIUDLOZD\RSHUDWRUVZKRDUHQRORQJHUSXEOLF7KDWLVWKHLGHQWLILFDWLRQ
RI ,QGLDQ 5DLOZD\V ZLWK ,5 ZLOO EUHDN GRZQ  +DYLQJ VDLG WKLV LW LV E\ QR PHDQV
REYLRXV D SULRUL WKHRUHWLFDOO\ RU HPSLULFDOO\ RQ WKH EDVLV RI WKH H[SHULHQFHV RI RWKHU
FRXQWULHVZKDWIRUPWKDWFRPSHWLWLRQVKRXOGWDNH1HWZRUNXWLOLWLHVOLNHWKH5DLOZD\V
H[KLELW HFRQRPLHV RI VFDOH DQG GHQVLW\  (FRQRPLHV RI VFDOH RFFXU ZKHQ XQLW FRVWV
GHFOLQH DV WKH VL]H RI WKH QHWZRUN LQFUHDVHV  (FRQRPLHV RI GHQVLW\ RFFXU ZKHQ XQLW
FRVWVGHFOLQHDVWKHYROXPHRIWUDIILFLQFUHDVHV6LQFHUDLOZD\VH[KLELWIHDWXUHVRIERWK

25

ThisparagraphdrawsonCompetitioninIntermodalRailTransport:TheCaseofIndianRailways,ManojSingh,
PhDthesissubmittedattheUniversityofLeeds,2009.

42


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

WKH\ RIWHQODFN FRPSHWLWLRQ  7KHUH PD\ DOVREH HFRQRPLHV RI VFRSH ZKHQ XQLW FRVWV
GHFOLQH EHFDXVH VHYHUDO IXQFWLRQV DUH VLPXOWDQHRXVO\ SHUIRUPHG 7KH H[SUHVVLRQV
SULYDWL]DWLRQ OLEHUDOL]DWLRQ DQG GHUHJXODWLRQ DUH IUHHO\ XVHG LQ WKH FRQWH[W RI UDLOZD\
UHVWUXFWXULQJ RIWHQ V\QRQ\PRXVO\  7KLV &RPPLWWHH ZLOO XVH WKH ZRUG OLEHUDOL]DWLRQ
DQGQRWWKHWHUPVSULYDWL]DWLRQDQGGHUHJXODWLRQDVERWKRIWKHVHWZRWHUPVDUHDSWWREH
PLVXQGHUVWRRG'HUHJXODWLRQVXJJHVWVWKHDEVHQFHRIDUHJXODWRUXQOHVVLWLVFODULILHG
RWKHUZLVH  )RU UHDVRQV WKDW ZLOO EHFRPH HYLGHQW WKLV &RPPLWWHH ZLOO WDON DERXW WKH
QHHGIRUDUHJXODWRUDQGKHQFHDYRLGXVDJHRIWKHZRUGGHUHJXODWLRQ7KLV&RPPLWWHH
GRHVQRWUHFRPPHQGSULYDWL]DWLRQRI,5,WGRHVHQGRUVHSULYDWHHQWU\DOUHDG\SDUWRI
DFFHSWHG SROLF\  %XW EHFDXVH RI WKH WZR YHU\ GLIIHUHQW VHQVHV LQ ZKLFK WKH ZRUG
SULYDWL]DWLRQLVLVVXHGWKLV5HSRUWSUHIHUVWRXVHWKHZRUGOLEHUDOL]DWLRQVRWKDWWKHUHLV
QR FRQIXVLRQ  7KHUH LV VWURQJ HPSLULFDO HYLGHQFH WR VXJJHVW WKDW UDLOZD\ QHWZRUNV
H[KLELWHFRQRPLHVRIVFDOHGHQVLW\DQGVFRSH,QDGGLWLRQWKHUHDUHKLJKIL[HGFRVWVLQ
UDLOZD\ LQIUDVWUXFWXUH LQ WKH IRUP RI WUDFN VLJQDOLQJ DQG WHUPLQDOV HYHQ LI RQH
XQEXQGOHV DQG WDNHV RXW UROOLQJ VWRFN  ,QWHUSUHWLQJ OLEHUDOL]DWLRQ LQ D YHUWLFDOO\
LQWHJUDWHG UDLOZD\ QHWZRUN OLNH ,5 LV TXLWH GLIIHUHQW IURP WKDW LQ D FRXQWU\ OLNH WKH
8QLWHG 6WDWHV ZKHUH WKH KLVWRULFDO HYROXWLRQ KDV EHHQ HQWLUHO\ GLIIHUHQW 7KHUH DUH
HVVHQWLDOO\WKUHHPRGHVIRUOLEHUDOL]DWLRQ,QWHUPVRIWKHWD[RQRP\WKDWKDVEHHQXVHG
LQWKHOLWHUDWXUHILUVWWKHUHFDQEHFRPSHWLWLRQIRUWKHPDUNHW)RUD]RQHRUEHWZHHQ
WZR SRLQWV WKLV HVVHQWLDOO\ PHDQV D FRPSHWLWLYH DZDUG RI D FRQFHVVLRQ IRU D OLPLWHG
SHULRG RI WLPH WR D ELGGHU ZKR RIIHUV WKH ORZHVW SULFH RU RIIHUV WKH EHVW VHUYLFH  ,Q
GLIIHUHQW IRUPV WKLV KDV EHHQ WULHG RXW LQ 6RXWK $PHULFD $IULFD DQG VRPH (XURSHDQ
FRXQWULHV6HFRQGEHWZHHQWZRSRLQWVRUIRUD]RQHWKHUHFDQEHFRPSHWLWLRQLQWKH
PDUNHW7KLVPHDQVWKDWLQWKLVVHJPHQWWKHUHLVDSDLURIYHUWLFDOO\LQWHJUDWHGUDLOZD\
RSHUDWRUVWKDWFRPSHWH)RUIUHLJKWRSHUDWLRQVWKLVLVWKHPRGHOLQWKH8QLWHG6WDWHVDQG
&DQDGD7KLUGWKHUHFDQEHRSHQDFFHVVIRUDQ\QHZRSHUDWRUZKRZLVKHVWRHQWHUWKH
PDUNHW IRU RSHUDWLQJ WUDLQV  7KHUH LV QRQGLVFULPLQDWRU\ DFFHVV WR WKH UDLOZD\
LQIUDVWUXFWXUH DQG D OHYHO SOD\LQJ ILHOG  7KHUH DUH LQVWDQFHV LQ (XURSH DQG $XVWUDOLD
*LYHQ WKH KLVWRU\ DQG WKH FRQWH[W WKLV &RPPLWWHH UHFRPPHQGV WKH WKLUG PHWKRG RI
OLEHUDOL]DWLRQZKHUHHLWKHUSDWKVRUURXWHVSUREDEO\WKHIRUPHUDUHDOORFDWHGWKURXJK
WUDQVSDUHQWPHDQVWRGLIIHUHQWRSHUDWRUV


 7KHUHLVDQLPSRUWDQWFDYHDWWKRXJK$V7DEOHDQGWKHDFFRPSDQ\LQJJUDSKVKRZV
,5HDUQVDVLJQLILFDQWVKDUHRILWVUHYHQXHWKURXJKIUHLJKWDQGZLWKLQWKDWWKURXJKEXON
IUHLJKW(VWLPDWHVE\WKLV&RPPLWWHHVXJJHVWWKDWRQFHWKH'HGLFDWHG)UHLJKW&RUULGRU
&RUSRUDWLRQ RI ,QGLD /LPLWHG ')&&,/  LV IXOO\ RSHUDWLRQDO  RI WKH SUHVHQW
UHYHQXHHDUQLQJIUHLJKWRI,5PD\PRYHWR')&&,/:KLOHWKLVIUHHVXSWUDFNFDSDFLW\
IRU,5LWGRHVQRWDXJXUZHOOIRULWVFRPPHUFLDORSHUDWLRQV,QDGGLWLRQWKHZHOFRPH
WLPHWDEOLQJ RI JRRGV WUDLQV LQ WKH 5DLOZD\ %XGJHW PDNHV WKH HQWU\ RI SULYDWH IUHLJKW
RSHUDWRUV PRUH DWWUDFWLYH  ,Q WKLV VLWXDWLRQ LI OXFUDWLYH SDVVHQJHU OLQHV DUH DOVR EHLQJ
RSHQHGXSWRWKHSULYDWHVHFWRUZKHUHGRHVWKLVOHDYH,5"7KH&RPPLWWHHUHFRPPHQGV
WKDW WKH ,QGLDQ 5DLOZD\V $FW EH DPHQGHG WR DOORZ WKH OHY\ RI WDULIIV E\ SULYDWH
RSHUDWRUVDQGWKDWWKHUHQRORQJHUEHDQ\DGPLQLVWHUHGWDULIIGHWHUPLQDWLRQIDUHVEHLQJ
OHIWWRWKHPDUNHWZLWKDTXDOLILFDWLRQDERXWSDVVHQJHUIDUHVWKDWZHZLOOKLJKOLJKWODWHU
43


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

+DYLQJ VDLG WKLV ZKDW KDSSHQV LI SULYDWH VHUYLFH SURYLGHUV UHPRYH ORZHUIDUH
FDWHJRULHVDQGGRQRWRIIHUVHUYLFHVDORQJXQUHPXQHUDWLYHOLQHV"7KHUHLVWKXVDQHHG
WR VWLSXODWH VRPH JXDUDQWHHV RQ WKH SURYLVLRQ RI D FHUWDLQ DPRXQW RI VHUYLFHV RI D
SDUWLFXODUSDVVHQJHUFODVVVXFKDVRUGLQDU\VLWWLQJFODVVDQGVOHHSHUFODVV7KLVLVDELW
OLNHDXQLYHUVDOVHUYLFHREOLJDWLRQ7KH&RPPLWWHHIHHOVWKHQHHGIRUWKHVHWWLQJXSRID
3XEOLF 6HUYLFH &RVWLQJ 36&  H[HUFLVH LQGHSHQGHQW RI ,5  7KH 36& H[HUFLVH FDQ EH
HQWUXVWHGWRWKH55$, 5DLOZD\5HJXODWRURI,QGLD 7KH55$,ZLOOEHHODERUDWHGRQ
ODWHU7KH36&H[HUFLVHZLOOGHWHUPLQHWKHFRVWVLQFXUUHGE\,5DQGRWKHUUDLOVHUYLFH
SURYLGHUV LQ SURYLGLQJ VRFLDO VHUYLFHV VXFK DV WKH FRQVWUXFWLRQ RSHUDWLRQ DQG
PDLQWHQDQFH RI OLQHV LQ VSHFLILHG ORFDWLRQV DQG LQ SURYLGLQJ VSHFLILHG UDLO VHUYLFHV RQ
LGHQWLILHG H[LVWLQJ EUDQFK OLQHV  )RU VXFK FODVVHV WKH 0LQLVWU\ RI 5DLOZD\V ZLOO
SUHVFULEH VWDQGDUGV RI WUDYHO DQG D SURSRVHG FDSDFLW\ DV D SURSRUWLRQ RI WKH WRWDO
SDVVHQJHUFDUU\LQJFDSDFLW\RIWKHWUDLQURXWH 7KLVPHDQVWKDWWKHVHUYLFHSURYLGHUFDQ
FKRRVH WR UXQ D WUDLQ DORQJ D URXWH ZLWKRXW DQ\ VXFK LGHQWLILHG FODVVHV DV ORQJ DV LW
SURYLGHVFRPSHQVDWLQJFDSDFLW\RQRWKHUWUDLQVDORQJWKDWURXWH )RUVXFKFODVVHVWKH
36&H[HUFLVHZLOOFDOFXODWHWKHRSSRUWXQLW\FRVWRIWKHVHUYLFHSURYLGHULQSURYLGLQJWKH
GHVLJQDWHG SDVVHQJHU FDSDFLW\  $IWHU WKH 36& FDOFXODWLRQV WKH 0LQLVWU\ RI 5DLOZD\V
ZLOOFRPSHQVDWHWKURXJKWKH8QLRQ*RYHUQPHQWDQGWKH6WDWHJRYHUQPHQWVWKHVHUYLFH
SURYLGHU IRU SURYLGLQJ WKH VSHFLILHG FDSDFLW\ DW WKH VSHFLILHG IDUH  :H ZLOO KDYH
FRPPHQWVRQIUHHLQJSDVVHQJHUWDULIIVIXUWKHUGRZQ ,GHDOO\WKLV&RPPLWWHHEHOLHYHV
WKDWDVDWHUPLQDOJRDOVXEXUEDQVHUYLFHVVKRXOGEHVHSDUDWHGDQGUXQDV-9VZLWK6WDWH
DQGRUORFDOJRYHUQPHQWVZLWKWDULIIGHWHUPLQDWLRQE\6WDWHDQGRUORFDOJRYHUQPHQWV
%XWXQWLOWKDWWHUPLQDOJRDOLVDFKLHYHGVXEXUEDQSDVVHQJHUWUDIILFFRXOGDOVREHVXEMHFW
WRVLPLODUSULQFLSOHV

7DEOH)5(,*+723(5$7,21
&2002',7<:,6(5(9(18(($51,1*6 5VLQPLOOLRQV 
%8/.&2002',7,(6
&RDO
,URQ2UHV





&HPHQW



0LQHUDO2LOV



)RRG*UDLQV



2WKHU



7RWDO



 /HW XV UHWXUQ WR D TXRWH IURP WKH DIRUHPHQWLRQHG  &DELQHW 1RWH RQ WKH5DLOZD\V
:KLOH LQLWLDOO\ WKH 5DLOZD\ %RDUG ZDV FRQVWLWXWHG IRU D OLPLWHG SXUSRVH ZLWK LWV
UHFRQVWLWXWLRQ LQ  LW EHFDPH IRU WKH ILUVW WLPH UHVSRQVLEOH IRU ERWK SROLF\ DQG
WHFKQLFDODGPLQLVWUDWLRQ,QWKHEHVWRIFLUFXPVWDQFHVLWLVVRPHZKDWGLIILFXOWWRHQWUXVW
SROLF\ DQG DGPLQLVWUDWLRQ DV ZHOO DV WHFKQLFDO FRQWURO WR WKH VDPH ERG\ RI PHQ7KH
44


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

XQLWDU\FRQFHSWLRQRIWKH,QGLDQ5DLOZD\VDOVRUHTXLUHVWKHDGRSWLRQRIWKH%ULWLVKPRGHO
LQ ZKLFK SROLF\PDNLQJ LV VHSDUDWHG IURP IXQFWLRQV RI WHFKQLFDO FRQWURO,W PD\ EH
GHVLUDEOHDVDIXUWKHU PHDVXUHRIUHRUJDQL]DWLRQWRSODFHXQGHUWKHVDPHXPEUHOODDOO
WUDQVSRUWDFWLYLWLHVRI*RYHUQPHQWVXFKDV5DLOZD\V&LYLO$YLDWLRQ5RDG7UDQVSRUWDQG
&RDVWDO6KLSSLQJ7KLVPD\EHFRQVLGHUHGVHSDUDWHO\DWWKHDSSURSULDWHVWDJH:LWKWKH
LQWHUPRGDO QDWXUH RI WUDQVSRUWDWLRQ WKH HYHQWXDO WUDQVLWLRQ WR D 0LQLVWU\ RI 7UDQVSRUW
PD\ LQGHHG KDSSHQ  %XW WKDW LV LQ WKH IXWXUH  )RU WKH PRPHQW LQ RXU IUDPHZRUN WKH
0LQLVWU\RI5DLOZD\VVHWVWKHSROLF\IRURSHQDFFHVVDVH[SODLQHGDERYH,QDGGLWLRQWKH
5DLOZD\0LQLVWU\GHWHUPLQHVWKHSROLF\IRUUDLVLQJUHVRXUFHVIRUVRFLDOFRVWREOLJDWLRQV
H[WHQGLQJ WKH UDLOZD\ QHWZRUN DQG RIIHULQJ RQEXGJHW DQG WDUJHWHG VXEVLGLHV WR SRRU
SDVVHQJHUVZKRQHHGWKHP)RUWKH36&%WKH5DLOZD\0LQLVWU\DOVRVHWVWKHSROLF\RQ
SDVVHQJHUVHUYLFHVWDQGDUGV7KH5DLOZD\%RDUGEHFRPHVDERDUGIRU,5DORQH
 ,Q VXP WKLV &KDSWHU KDV VHW RXW WKH WHPSODWH RI OLEHUDOL]DWLRQ FRQWHPSODWHG E\ WKLV
&RPPLWWHH  8QGHU WKDW WHPSODWH ZLWK IUHH SULYDWH HQWU\ RQH QHHGV DQ LQGHSHQGHQW
UHJXODWRUZLWKSROLF\ODLGGRZQE\WKH0LQLVWU\RI5DLOZD\V6LQFHZHKDYHVDLGWKDW
SROLF\ VKRXOG EH GHWHUPLQHG E\ WKH 0LQLVWU\ RI 5DLOZD\V ZLWK D SRVVLEOH WUDQVLWLRQ
IURP WKH 0LQLVWU\ RI 5DLOZD\V WR D XQLILHG 0LQLVWU\ RI 7UDQVSRUW ZH VKRXOG H[SODLQ
ZKDWWKLV&RPPLWWHHPHDQVE\SROLF\,QWKLV&RPPLWWHHVYLHZWKLVSROLF\VKRXOG
EHEDVHGRQHQVXULQJZKDWLVLQWKHEHVWLQWHUHVWVRIWKHFRXQWU\DVDZKROHDQGIRUWKH
5DLOZD\VHFWRUDQGQRWEDVHGRQZKDWDUHWKHLQWHUHVWVRI,5DORQH7KDWSROLF\VKRXOG
HQVXUH FRPSHWLWLRQ LQ WKH 5DLOZD\V VHFWRU DQG HQFRXUDJH SULYDWH HQWU\ DQG SULYDWH
LQYHVWPHQWV  ,W ZLOO LQYROYH D  VRPH DVSHFWV WKDW DUH VHFWRUDO E  3DUOLDPHQWDU\
IXQFWLRQV DQG LQWHUDFWLRQV F  3ODQQLQJ IRU LQYHVWPHQW UHVRXUFHV DQG HQVXULQJ WKHLU
DYDLODELOLW\ G 7DNLQJFDUHRIVRFLDOUHVSRQVLELOLW\DQGWKHIXQGLQJRIVRFLDOFRVWVDQG
H ,QWHUDFWLRQZLWKRWKHU0LQLVWULHV,SVRIDFWRFRPSDUHGWRWKHSUHVHQWVLWXDWLRQWKH
0LQLVWU\ RI 5DLOZD\V ZLOO EHFRPH OHDQHU  +RZHYHU LW VWLOO QHHGV WR EH VHUYHG E\
RIILFHUV ZKR SRVVHVV VXIILFLHQW VHQLRULW\  0RUH VSHFLILFDOO\ 0LQLVWU\ RI 5DLOZD\V
VKRXOG EH VWDIIHG E\ DW OHDVW  6HFUHWDU\ OHYHO RIILFHUV DQG E\ WKLV ZH GR QRW PHDQ
RIILFHUVZKRDUHDWWDFKHGWRWKH5DLOZD\%RDUG


 7KLV WHPSODWH DOVR UHTXLUHV ,5 WR DGMXVW 5DLOZD\ UHVWUXFWXULQJ LV D ORQJGUDZQ RXW
SURFHVVVSDQQLQJDWOHDVW\HDUV7KLVLVERWKEHFDXVHRIWKHLQWHUQDWLRQDOH[SHULHQFH
DQG EHFDXVH RI WKH LPSRUWDQFH WKDW 5DLOZD\V KDYH LQ ,QGLD 'UDPDWLF DQG RYHUQLJKW
H[SHULPHQWVDWUHVWUXFWXULQJDUHGRRPHGWRIDLODQGVKRXOGQRWEHDWWHPSWHG7KHFRVWV
RI IDLOXUH DUH WRR GLVDVWURXV  ,QVWHDG RQFH WKDW \HDU URDGPDS LV FOHDU RQH ZRUNV
WRZDUGVLWLQFUHPHQWDOO\

45


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


CaseStudyofFrontierMail
TheFrontierMail(rechristenedastheGoldenTempleMailin1996)runsbetweenBombay(now
rechristenedasMumbai)Central&AmritsarJunction.Itisadailyservice,coveringthedistanceof
1891km in 32 hours 15 mins. It leaves Mumbai Central every day at 21:30 hrs and reaches
AmritsarJunctionat05:45hrsthethirdday,averagingaspeedof58.6Kmphoverthisjourney.
In1928,whenthetrainservicewasintroduced,ittook40hrsfromBombaytoAmritsar,leaving
Bombay at1950 hrsandreachingAmritsarat1145 AMthethirdday,averagingaspeedof47.3
Kmph. The train was nonvestibuled and needed at least 30 minute halts at each of the major
stations for passengers, to alight for meals inthe diningcars(for upper class passengers) and at
rd
refreshmentroomsfor3 classpassengers.Thiswasalsotheintervalforthirdclasspassengersto
nd
attend to natures call, as only the first class, Inter class and 2  Class coaches had toilets
provisioned.Adiningcartimetableoftheeraisreproducedbelow.Thetotaltimenecessitatedby
thesemealhaltswasonefourthofthetotaljourneytime.
FrontierMailNorthbound
6WDLRQ

'D\

$UULYH

'HSDUW

1RWHV

%RPED\

$



SP

'HSDUWXUH

%DURGD

%

DP

DP

EUHDNIDVWEHJLQV

1DJGD

%

DP

DP

OXQFKHRQEHJLQV

.RWD

%

SP

SP

GLQQHUEHJLQV

0DWKXUD

&

PLGQLJKW

DP

'HOKL

&

DP

DP

$PEDOD

&

DP

DP

EUHDNIDVWEHJLQV

$PULWVDU

&

DP

QRRQ

OXQFKHRQEHJLQV

/DKRUH

&

SP

SP

5DZDOSLQGL

&

SP

SP

3HVKDZDU

&

SP




FDUULDJHVFKDQJHG


GLQQHUEHJLQV
'HVWLQDWLRQ

Severalminorwaterandcoalingstopsnotshown
While several arguments can be put forth that the number of coaches hauled have been
augmentedfromsix(carryingcapacityof450passengers)totwentyone,steamtractionhasbeen
replacedwithdiesel/electrictraction,themaximumspeedshavinggoneupfrom90Kmphto130
Kmph,theaveragespeedstelladifferentstory.Highermaximumspeedshavenottranslatedinto
lowerjourneytimeforpassengers.

46


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG








The





Decision





Making
Structure
of
Indian
Railways


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIIRU0
0DMRU5
5DLOZD\3
3URMHFWVD
DQG5
5HVWUXFWXULQJR
RI5
5DLOZD\0
0LQLVWU\DQG5DLOZD\%RDUG

&KDSWHU7KH'HFLVLRQ0DNLQJ6WUXFWXUHRI,5
&RUHYHUVXV1RQ&RUH
 $V D SUHOLPLQDU\ RQH QHHGV WR GHILQH ZKDW RQH PHDQV E\ ,5 DQG WKLV DPRXQWV WR D
UHYLVLWLQJRIWKHFRUHYHUVXVQRQFRUHGLVFXVVLRQLQGLFDWHGLQ&KDSWHU7KXVZHILUVWSLQ
GRZQ WKH FRUH ,5 IXQFWLRQ DV RQH RI UXQQLQJ WUDLQV  +DYLQJ GRQH WKDW WKH RYHUDUFKLQJ
DUJXPHQW LV WKDW RI GHFHQWUDOL]DWLRQ WKH LPSOLFLW DUJXPHQW EHLQJ WKDW ,5 LV RYHUO\
FHQWUDOL]HGDQGWKDWWKLVFHQWUDOL]DWLRQSUREOHPKDVZRUVHQHGGRZQWKH\HDUV,QWKHFRUH
DUHRIUXQQLQJWUDLQV,5V]RQHVDQGGLYLVLRQVZLOOIDFHLQFUHDVLQJFRPSHWLWLRQ7RHQDEOH
WKHP WR FRPSHWH *0V DQG '50V ZLOO QHHG WR UHGXFH FRVWV DQG LPSURYH HIILFLHQF\
7KHUHIRUHWKH\VKRXOGEHJUDQWHGJUHDWHUIUHHGRPLQGHFLGLQJZKRWKHQRQFRUHIXQFWLRQV
ZLOOEHSHUIRUPHGE\


3ROLFLQJRU3URWHFWLRQRI5DLOZD\3URSHUW\
 7KH5DLOZD\3URWHFWLRQ)RUFH 53) ZDVFRQVWLWXWHGXQGHUWKH53)$FWRIDQGKDV
D VDQFWLRQHG VWUHQJWK RI   ,WV WDVN LV EHWWHU SURWHFWLRQ DQG VHFXULW\ RI UDLOZD\
SURSHUW\ SDVVHQJHU DUHDV DQG SDVVHQJHUV  8QGHU WKH 5DLOZD\V $FW LW DOVR KDV SRZHUV
DJDLQVW RIIHQFHV OLNH WKH SXOOLQJ RI DODUP FKDLQV WUDYHOOLQJ RQ URRIV WRXWLQJ WLFNHWOHVV
WUDYHO DQG XQDXWKRUL]HG HQWU\ LQWR FRDFKHV HDUPDUNHG IRU ZRPHQ  8QGHU WKH 5DLOZD\
3URSHUW\ 8QODZIXO 3RVVHVVLRQ  $FW RI  LW FDQ DOVR GHDO ZLWK RIIHQFHV OLNH WKHIW
GLVKRQHVW PLVDSSURSULDWLRQ DQG XQODZIXO SRVVHVVLRQ RI UDLOZD\ SURSHUW\  7KDW DSDUW
WKHUH DUH VRPH EDWWDOLRQV RI WKH 5DLOZD\ 3URWHFWLRQ 6SHFLDO )RUFH 536)  ZKLFK ZLOO
QRZDOVRKDYHD0DKLOD%DWWDOLRQ8QOHVV5DLOZD\SURSHUW\LVLQYROYHG53)SRVVHVVHV
OLPLWHG SRZHUV  7KRVH SROLFH SRZHUV IRU WKH UHJLVWUDWLRQ RI FULPHV DQG WKHLU
LQYHVWLJDWLRQDUHYHVWHGZLWKWKH*RYHUQPHQW5DLOZD\3ROLFH *53 ,5EHDUVRI
WKHFRVWRI*53WKHUHPDLQGHULVERUQHE\6WDWHJRYHUQPHQWV7KRXJK,5EHDUVRI
WKHFRVWRI*53,5KDVQRDGPLQLVWUDWLYHFRQWURORYHU*537KDWLVYHVWHGZLWK6WDWH
JRYHUQPHQWV  ,Q DGGLWLRQ WKHUH LV WKH 'LVWULFW 3ROLFH HQWUXVWHG ZLWK WKH WDVN RI
SURWHFWLQJUDLOZD\WUDFNVEULGJHVDQGWXQQHOV'HVSLWHDWWHPSWVWRFRQIHUJUHDWHUSROLFH
SRZHUVWR53)WKLVKDVPHWZLWKUHVLVWDQFHE\6WDWHJRYHUQPHQWVODZDQGRUGHUEHLQJD
6WDWHVXEMHFW:LWKWKUHHOD\HUVRIDSROLFHIRUFHLQYROYHGWKHUHLVODFNRIFRRUGLQDWLRQ
DQG FRQIOLFWV RI MXULVGLFWLRQ  :KLOH VHFXULW\ RQ UXQQLQJ WUDLQV LV LPSRUWDQW WKHUH DUH
PRUHHIILFLHQWZD\VRIDFFRPSOLVKLQJWKLV7RGD\PDLOH[SUHVVWUDLQVDUHHVFRUWHG
E\ 53)  %XW DQRWKHU  PDLOH[SUHVV WUDLQV DUH HVFRUWHG E\ *53  2QH PXVW
UHPHPEHU WKDW WKHUH KDYH EHHQ RWKHU VHFXULW\UHODWHG LQLWLDWLYHV WRR VXFK DV WKH
LQVWDOODWLRQRI&&79VDQGWKHLQWURGXFWLRQRIDFRPPRQVHFXULW\KHOSOLQH+LVWRULFDOO\
WKH ZDWFK DQG ZDUG IXQFWLRQ RQ UDLOZD\V ZDV SHUIRUPHG E\ WUDLQ RSHUDWRUV WKURXJK D
SULYDWH SROLFH IRUFH WKH JRYHUQPHQWDO IXQFWLRQ RI HQVXULQJ ODZ DQG RUGHU EHLQJ
SHUIRUPHGWKURXJKJRYHUQPHQWSROLFH7KHIRUPHUPRUSKHGLQWR53)ZKLOHWKHODWWHU
PRUSKHG LQWR *53 DQG WKLV V\VWHP FRQWLQXHG WLOO  )RU WKH *53 WKLV &RPPLWWHH
IHHOVWKDWVLQFH,5KDV QRFRQWURORYHU*536WDWHJRYHUQPHQWV VKRXOG EHSHUVXDGHGWR
48


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

EHDUWKHHQWLUHFRVWQRWMXVW6WDWHGPRUHVSHFLILFDOO\WKHUHVKRXOGEHQHJRWLDWLRQV
ZLWK 6WDWH JRYHUQPHQWV WR SKDVH RXW ,5V FRQWULEXWLRQ WR WKH *53 RYHU D VWLSXODWHG
SHULRG RI WLPH ,W LV DOVR ZRUWK PHQWLRQLQJ WKDW WKHUH DUH LQVWDQFHV RI 53) IXQFWLRQV
DOUHDG\EHLQJRXWVRXUFHG7DEOHLOOXVWUDWHVWKHFRVWWR,5RIHQVXULQJVHFXULW\WKURXJK
53)  7KRXJK WKHUH DUH YDULDWLRQV DFURVV ]RQHV WKH FRVWV DUH LQRUGLQDWHO\ KLJK  :LWK
EURDGHUJRYHUQPHQWDOSROLFHIXQFWLRQVWDNHQFDUHRIE\*53DQGWKH'LVWULFW3ROLFHWKHUH
UHPDLQV WKH TXHVWLRQRI HQVXULQJVHFXULW\RQWUDLQVVRPHRIZKLFK PD\EHRSHUDWHGE\
SULYDWH RSHUDWRUV  7KHUH LV QR UHDVRQ ZK\ WKLV IXQFWLRQ VKRXOG QRW EH HQWUXVWHG WR WKH
SULYDWHRSHUDWRUVWKHPVHOYHVDVXVHGWREHWKHFDVHLQWKHZDWFKDQGZDUGHUD%\WKH
VDPH WRNHQ VLQFH ,5 ZLOO EH FRQVWUDLQHG WR FRPSHWH ZLWK WKHVH SULYDWH WUDLQ RSHUDWRUV
WKHUH LV QR UHDVRQ WR EXUGHQ D *0 RU D '50 ZLWK WKH FRVWV RI PDLQWDLQLQJ D 53) RU
536)*LYHQWKHWDVNRIHQVXULQJVHFXULW\RQDWUDLQWKH*0RIWKH]RQHVKRXOGEHIUHH
WRXVHSULYDWHVHFXULW\DJHQFLHVRUHYHQWKH53)RQFRQWUDFWXDOWHUPV7KLVEHFRPHVD
PDWWHURIFRQVFLRXVFKRLFH7KDWDUJXPHQWH[WUDSRODWHVWR'50VWRR
7DEOH&RVWRIWKH3ROLFH)RUFHDQG5DLOZD\3URWHFWLRQ)RUFH(PSOR\HGRQ5DLOZD\V  
5DLOZD\ &RQWULEXWLRQ
5DLOZD\3URWHFWLRQ)RUFH
7RWDO
&RVW
WR6WDWH
&RVWWR 3HU5RXWH 3HU7UDLQ

5O\
5O\
&RQWLQJHQFLHV
7RWDO
*RYHUQPHQW 3URWHFWLRQ 3URWHFWLRQ
WKH
.LORPHWUH .LORPHWUH
IRU3XEOLF
5DLOZD\ LQ5XSHHV  ,Q5V 
IRUFH
6SO)RUFH
&HQWUDO




 


(DVWHUQ

















(DVW

&HQWUDO
(DVW

&RDVW
1RUWKHUQ 











































1RUWK
&HQWUDO
1RUWK
(DVWHUQ
1RUWKHUQ
)URQWLHU
1RUWKHUQ
:HVWHUQ
6RXWKHUQ



























 

















































6RXWK
&HQWUDO
6RXWK
(DVWHUQ
6RXWK
(DVW
&HQWUDO
6RXWK
:HVWHUQ
:HVWHUQ

















































































:HVW
&HQWUDO
.RONDWD
0HWUR

































7RWDO









  





49


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

5XQQLQJ6FKRROV


 :H QRZ WXUQ WR WKH TXHVWLRQ RI WKH  UDLOZD\ VFKRROV  7KH KLJKHU HGXFDWLRQ
FRPSRQHQW LQFOXGLQJ WKH FHQWUDOL]HG WUDLQLQJ LQVWLWXWHV ZLOOEH DGGUHVVHG LQ &KDSWHU 
7KHVH VFKRROV DUH HVWLPDWHG WR SURYLGH HGXFDWLRQ WR  FKLOGUHQ RI 5DLOZD\
HPSOR\HHV DQG DOVR WR  ZKR DUH QRW WKH FKLOGUHQ RI 5DLOZD\ HPSOR\HHV
+LVWRULFDOO\ SUH,QGHSHQGHQFH WKHVH VFKRROV QHHGHG WR EH VHW XS EHFDXVH WKHUH ZDV D
PDUNHWIDLOXUHLQDUHDVZKHUHQHZ5DLOZD\OLQHVZHUHEHLQJEXLOWRUZKHUHQHZ5DLOZD\
VWDWLRQV DQG ZRUNVKRSV VHW XS  7KHUH LV D JHRJUDSKLFDO FRQFHQWUDWLRQ RI WKHVH VFKRROV
EHFDXVH RI KLVWRULFDO UHDVRQV DQG WKH\ DUH QRW QHFHVVDULO\ FRQFHQWUDWHG LQ WKH PRVW
GHSULYHG SDUWV RI WKH FRXQWU\  )RU LQVWDQFH WKHUH DUH VHYHUDO 5DLOZD\ VFKRROV LQ
XQGLYLGHG $QGKUD 3UDGHVK $VVDP 0DGK\D 3UDGHVK 0DGK\D 3UDGHVK 2GLVKD 7DPLO
1DGX DQG :HVW %HQJDO  7KHUH DUHQW WKDW PDQ\ LQ %LKDU &KKDWWLVJDUK -DPPX 
.DVKPLU-KDUNKDQG 5DMDVWKDQ RU WKH 1RUWK(DVW  ,Q FRQWUDVWWKHUH DUH .HQGUL\D
9LG\DOD\DV UXQ E\ WKH .HQGUL\D 9LG\DOD\D 6DQJDWKDQD DQG WKH\ DUH PXFK PRUH HYHQO\
VSUHDGWKURXJKRXWWKHFRXQWU\,5LWVHOIVXSSRUWV.HQGUL\D9LG\DOD\DV7KHUHDUHDOVR
QRUPV IRU VHWWLQJ XS QHZ .HQGUL\D 9LG\DOD\DV 2XWVLGH .HQGUL\D 9LG\DO\DV LQ SODFHV
ZKHUH WKHUH DUH UDLOZD\ FRORQLHV RWKHU VFKRROV LQFOXGLQJ SULYDWH RQHV H[LVW QRZ
7KHUHIRUHDQ\DUJXPHQWDERXWPDUNHWIDLOXUHLVGLIILFXOWWRVXVWDLQ7KLV&RPPLWWHHLVRI
WKHYLHZWKDWVRIDUDVWKHQHHGVRI5DLOZD\HPSOR\HHVDUHFRQFHUQHGWKHUHDUHHIILFLHQW
ZD\V RI VXEVLGL]LQJ WKH HGXFDWLRQ RI WKHLU FKLOGUHQ LQ DOWHUQDWLYH VFKRROV LQFOXGLQJ
SULYDWHVFKRROV5DLOZD\HPSOR\HHVVKRXOGKDYHWKHFKRLFHRIHGXFDWLQJWKHLUFKLOGUHQLQ
UDLOZD\VFKRROV.HQGUL\D9LG\DOD\DVRUSULYDWHVFKRROVZLWKWKHVXEVLG\FRVWVERUQHE\
,5


5XQQLQJ+RVSLWDOVDQG0HGLFDUH


 7KH LVVXH RI WKH ,QGLDQ 5DLOZD\ 0HGLFDO 6HUYLFH ,506  LV D WULIOH PRUH SUREOHPDWLF
 PHGLFDO RIILFHUV DQG  SDUDPHGLFDO VWDII UXQ WKH VHUYLFHV VKRZQ LQ 7DEOH
  $V WKLV WDEOH VKRZV ,506 SHUIRUPV GLYHUVH VHUYLFHV D  DWWHQGLQJ 5DLOZD\
DFFLGHQWVDQGVLPLODULQFLGHQWV E HPHUJHQF\PHGLFDOWUHDWPHQWIRUVLFNSDVVHQJHUV F 
SUHHPSOR\PHQWPHGLFDOH[DPLQDWLRQIRUSURVSHFWLYHHPSOR\HHV G SHULRGLFDOPHGLFDO
H[DPLQDWLRQ IRU HPSOR\HHV H  PHGLFDO ERDUGV DQG RWKHU PHGLFDO FHUWLILFDWLRQ IRU
HPSOR\HHV I  VDIH ZDWHU VXSSO\ DW 5DLOZD\ VWDWLRQV J  VDIH IRRG VXSSO\ DW 5DLOZD\
VWDWLRQV K  UXQQLQJ PHGLFDO ILUVWDLG SRVWV IRU ,5 IDFWRULHVXQGHU WKH )DFWRULHV $FW L 
FHUWLILFDWLRQRIGHDGERGLHV M FHUWLILFDWLRQRISHULVKDEOHJRRGV N FXUDWLYHKHDOWKFDUH
DQG O  SUHYHQWLYH KHDOWKFDUH  7KH FXUDWLYH DQG SUHYHQWLYH IXQFWLRQ LV QRW RQO\ IRU
5DLOZD\HPSOR\HHVEXWDOVRIRUWKRVHZKRKDYHQRWKLQJWRGRZLWKWKH5DLOZD\V7KHUH
LVDOVRD5HWLUHG(PSOR\HHV/LEHUDOL]HG+HDOWK6FKHPH 5(/+6 $V7DEOHVKRZV
VRPH SULYDWH KRVSLWDOV DUH DOUHDG\ UHFRJQL]HG IRU PHGLFDO WUHDWPHQW  7KLV &RPPLWWHH
EHOLHYHV WKDW IXQFWLRQV F  G  H  I  DQG J  FDQ EH SHUIRUPHG E\ RXWVRXUFLQJ WR

26

IndianRailwaysAnnualReportandAccounts,201314.FSSAistheFoodSafetyandStandardsAct.

50


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

UHFRJQL]HGDQGHPSDQHOOHGSULYDWHSUDFWLWLRQHUVDQGWKHUHIRUHERWK*0VDQG'50VDQG
5DLOZD\ HPSOR\HHV VKRXOG EH JLYHQ D FKRLFH LQ GHWHUPLQLQJ ZKHWKHU WKH\ ZLVK WR XVH
,506 RU H[HUFLVH DQ DOWHUQDWLYH RSWLRQ  )RU N  DQG O  RXU YLHZ LV WKDW RQH VKRXOG
VHULRXVO\ H[DPLQH WKH SRVVLELOLW\ RI H[WHQGLQJ WKH FKRLFH WR WKH &*+6 IUDPHZRUN  ,Q
DGGLWLRQIRU N DQG O VXEVLGL]HGKHDOWKFDUHVKRXOGEHH[WHQGHGWR5DLOZD\HPSOR\HHV
LQ PRUHDQGPRUHSULYDWHKRVSLWDOVDQGQRW PHUHO\IRUUHIHUUDOSXUSRVHV,WQHHGVWREH
VWUHVVHGWKDWWKLVWUHDWPHQWIRUH[LVWLQJ5DLOZD\HPSOR\HHVVKRXOGEHFDVKOHVVDQGVKRXOG
QRWRQUHLPEXUVDEOHEDVLV
7DEOH7KH,5066\VWHP
1XPEHURIKRVSLWDOV
1XPEHURILQGRRUEHGV
1XPEHURIKHDOWKXQLWVSRO\FOLQLFV
1XPEHURISULYDWHKRVSLWDOVUHFRJQL]HGIRUPHGLFDOWUHDWPHQW
1XPEHURISDWLHQWVWUHDWHGLQ23'
1XPEHURISDWLHQWVWUHDWHGDVLQSDWLHQWV
0DMRUDQGVSHFLDOVXUJHULHVSHUIRUPHG
7RWDOQXPEHURIVXUJHULHVSHUIRUPHG
&DQGLGDWHVSUHSODFHPHQWPHGLFDOH[DPLQDWLRQ
1XPEHURIHPSOR\HHVSHULRGLFDOH[DPLQDWLRQ
1XPEHURIUDLOZD\LQFLGHQWVDWWHQGHG
1XPEHURIFRQILQHPHQWV GHOLYHULHV LQUDLOZD\KRVSLWDOV
1XPEHURIZDWHUVDPSOHVH[DPLQHGIRUEDFWHULRORJLFDOUHDVRQV
1XPEHURIZDWHUVDPSOHVH[DPLQHGIRUUHVLGXDOFKORULQH
1XPEHURIIRRGVDPSOHVFROOHFWHGXQGHU)66$
1XPEHURIIRRGVDPSOHVFROOHFWHGXQGHUGHSDUWPHQWDOTXDOLW\FKHFNV


















3URMHFW([HFXWLRQDQG&RQVWUXFWLRQ


 ,5XVHVWZRW\SHVRISURMHFWRUJDQL]DWLRQVIRUH[HFXWLRQRILWVSURMHFWV7KHILUVWW\SHLV
WKH]RQDOSURMHFWRUJDQL]DWLRQV7KHVH]RQDOSURMHFWRUJDQL]DWLRQVKDYHDPDWUL[VWUXFWXUH
ZLWK WKH SURMHFW RUJDQL]DWLRQ FKLHI UHSRUWLQJ WR WKH ]RQDO KHDG 7KH SURMHFW SHUVRQQHO
UHSRUW WR WKH SURMHFW RUJDQL]DWLRQ FKLHI ZKLOVW WDNLQJ WHFKQLFDO GLUHFWLRQV DQG UHVRXUFHV
IURP UHVSHFWLYH IXQFWLRQDO RUJDQL]DWLRQV RI WKH ]RQH 7KH VHFRQG W\SH LV SURMHFW
RUJDQL]DWLRQVUHSRUWLQJGLUHFWO\WRWKH5DLOZD\%RDUG7KHVHRUJDQL]DWLRQVKDQGOHODUJH
VFDOH SURMHFWV RU SURMHFWV LQYROYLQJ ZRUN DFURVV JHRJUDSKLFDO ]RQHV ([DPSOHV RI VXFK
SURMHFW VWUXFWXUHV DUH WKH &HQWUDO 2UJDQL]DWLRQ IRU 5DLOZD\ (OHFWULILFDWLRQ DQG WKH
FRQVWUXFWLRQ RUJDQL]DWLRQ IRU WKH H[SDQVLRQRI5DLOZD\ LQIUDVWUXFWXUH LQ GLIILFXOW WHUUDLQ
LQWKH1RUWK(DVWHUQSDUWVRI,QGLD7KHVHRUJDQL]DWLRQVDOVRKDYHPDWUL[VWUXFWXUHV7KHLU
SHUVRQQHODUHKRZHYHUGUDZQIURPDFURVV]RQHV7KH&LYLO(QJLQHHULQJGHSDUWPHQWRI,5
KDVWZRGLVWLQFWRUJDQL]DWLRQVQDPHO\2SHQ/LQHDQG&RQVWUXFWLRQ:KLOHWKH2SHQ/LQH
LV UHVSRQVLEOH IRU PDLQWHQDQFH RI DOO IL[HG DVVHWV RI ,5 LH WUDFNV EULGJHV EXLOGLQJV
URDGVZDWHUVXSSO\HWFWKH&RQVWUXFWLRQ2UJDQL]DWLRQLVUHVSRQVLEOHIRUFRQVWUXFWLRQRI
QHZ DVVHWV VXFK DV QHZ OLQHV JDXJH FRQYHUVLRQ GRXEOLQJ DQG RWKHU H[SDQVLRQ DQG
GHYHORSPHQWDO ZRUNV LQ 5DLOZD\V $W WKH ]RQDO OHYHO WKH 2SHQ /LQH GHSDUWPHQW LV
KHDGHG E\ WKH 3ULQFLSDO &KLHI (QJLQHHU 3&(  ZKR LV DVVLVWHG E\ YDULRXV &KLHI
(QJLQHHUV IRU WUDFN EULGJH SODQQLQJ WUDFN PDFKLQHV JHQHUDO PDWWHUV HWF ,Q DGGLWLRQ
HDFK =RQDO 5DLOZD\ KDV D FRQVWUXFWLRQ XQLW KHDGHG E\ D &KLHI $GPLQLVWUDWLYH 2IILFHU
51


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

ZKR LV UHVSRQVLEOH IRU PDMRU FRQVWUXFWLRQ ZRUNV VXFK DV QHZ OLQHV GRXEOLQJ JDXJH
FRQYHUVLRQV HWF DQG LV DVVLVWHG E\ YDULRXV &KLHI (QJLQHHUV FRQVWUXFWLRQ   )RU FLYLO
HQJLQHHULQJ DFWLYLWLHV0HPEHU (QJLQHHULQJ 5DLOZD\%RDUGLVWKH DSH[DXWKRULW\DQG
VXFKDFWLYLWLHVDUHSHUIRUPHGLQILYH'LUHFWRUDWHVVKRZQLQWKHIORZFKDUWEHORZ



 'HVSLWH WKHFUHDWLRQRI VXFKD PDPPRWKGHSDUWPHQWDORUJDQL]DWLRQVSUHDGDFURVVHQWLUH


,5DVLQRWKHU,QGLDQLQIUDVWUXFWXUHVHFWRUV,5VSURMHFWVDOVRVXIIHUDORWIURPFRVWDQG
WLPH RYHU UXQV 7KH PDMRU UHDVRQV IRU WLPH DQG FRVW RYHUUXQV RI ,5 SURMHFWV DUH WKH
LQDGHTXDF\RIIXQGVDOORWWHGIRUSURMHFWVSUREOHPVRIDFTXLVLWLRQRIODQGUHTXLUHGIRUWKH
SURMHFWDQGVHFXULW\SUREOHPVLQWKHSURMHFWDUHD2WKHUUHDVRQVIRUWLPHRYHUUXQDUHODFN
RIVXSSRUWLQJLQIUDVWUXFWXUHIDFLOLWLHVGHOD\VLQILQDOL]DWLRQRIGHWDLOHGHQJLQHHULQJSODQV
VFRSHFKDQJHVGHOD\VLQVFRSHILQDOL]DWLRQXQDQWLFLSDWHGJHRORJLFDOFRQGLWLRQVDQGODFN
RI IDPLOLDULW\ ZLWK ODWHVW WHFKQRORJ\ <HW RWKHU UHDVRQV IRU FRVW RYHUUXQV DUH WLPH
RYHUUXQV FKDQJHV LQ IRUHLJQ H[FKDQJH UDWHV DQG VWDWXWRU\ GXWLHV LQFUHDVH LQ FRVW RI
UHKDELOLWDWLRQ RI GLVSODFHG SHUVRQV DQG SURYLGLQJ HQYLURQPHQWDO VDIHJXDUGV LQFUHDVH LQ
FRVWRIODQGDFTXLVLWLRQDQGLQIODWLRQRYHUSURMHFWGXUDWLRQ,QDVWXG\RIGHOD\VLQ
,5 FRQVWUXFWLRQ SURMHFWV WKH 0LQLVWU\ RI 6WDWLVWLFV DQG 3URJUDPPH ,PSOHPHQWDWLRQ
,QIUDVWUXFWXUH DQG 3URMHFW 0RQLWRULQJ 'LYLVLRQ  LGHQWLILHG WKH IROORZLQJ VHYHQ FULWLFDO
IDFWRUV LQ GHVFHQGLQJ RUGHU RI LPSRUWDQFH L  /DFN RI FRPPLWPHQW E\ FOLHQWV
FRQWUDFWRUVDQGYHQGRUVOHDGLQJWRDFFLGHQWVLPSURSHURUREVROHWHFRQVWUXFWLRQPHWKRGV
GHOD\V LQ PDWHULDO GHOLYHU\ LL  ,QHIILFLHQW VLWH PDQDJHPHQW GXH WR DPELJXRXV
VSHFLILFDWLRQV XQVNLOOHG ODERXU LQHIIHFWLYH VXSHUYLVLRQ LQDGHTXDWH H[SHULHQFH RI
FRQWUDFWRUVODFNRIFRQWURORYHUVXEFRQWUDFWRUV LLL 3RRUVLWHFRRUGLQDWLRQGXHWRODFNRI
FRRUGLQDWLRQ EHWZHHQ VLWH DQG GHVLJQ RIILFHV QRQDYDLODELOLW\ RI GUDZLQJVGHVLJQV RQ
WLPHXQUHDOLVWLFWLPHVFKHGXOHVEXLOWLQWRWKHFRQWUDFW LY ,PSURSHUSODQQLQJLQLJQRULQJ
H[WUHPHZHDWKHUFRQGLWLRQVZKLFKOHDGWRORZODERXUSURGXFWLYLW\DQGWKHUHIRUHOHDGWR
HUURUV LQ WLPH HVWLPDWLRQ LPSURSHU SODQQLQJ IRU UHFUXLWPHQW RI VNLOOHG RSHUDWRUV IRU
VSHFLDOL]HG HTXLSPHQW LPSURSHU SODQQLQJ LQ WKH UHTXLUHPHQW RI HTXLSPHQW DQG WKHLU
XWLOL]DWLRQ Y /DFNRIFODULW\RISURMHFWVFRSHUHVXOWLQJLQUHZRUNRUVFRSHFUHHSGXHWR
PLVXQGHUVWDQGLQJE\WKHFRQWUDFWRURUSURMHFWPDQDJHU YL /DFNRIFRPPXQLFDWLRQZLWK
ORFDO DXWKRULWLHV UHVXOWLQJ LQ GHOD\V LQ SHUPLVVLRQV ODFN RI FRPPXQLFDWLRQ EHWZHHQ
FRQWUDFWRUVDQGFOLHQWVUHVXOWLQJLQGHOD\VLQWKHDSSURYDORIVWDJHVDQG YLL VXEVWDQGDUG
FRQWUDFWVVHOHFWLRQRIFRQWUDFWRUVZLWKLQDGHTXDWHH[SHULHQFHRUVNLOOVHWV



 ,QWKHV,5VWDUWHGWKHSURFHVVRIFUHDWLRQRIZKROO\RUSDUWLDOO\RZQHGSXEOLFVHFWRU
FRUSRUDWLRQV 36&V LQLWLDOO\IRUWKHVROHSXUSRVHRISURMHFWH[HFXWLRQ7\SLFDOH[DPSOHV
DUH .RQNDQ 5DLOZD\ &RUSRUDWLRQ .5&  5DLO 9LNDV 1LJDP /WG 591/  ,5&21 DQG
')&&,/7KHFUHDWLRQRIWKHVH36&VZDVVXFFHVVIXOGXHWRIROORZLQJPDMRUUHDVRQV7KH
JRYHUQDQFHVWUXFWXUHRIWKHVH36&VLVLQGHSHQGHQWRI,536&VUHODWLRQVKLSVZLWK,5DUH
JRYHUQHG E\ QHJRWLDWHG 0HPRUDQGXPV RI 8QGHUVWDQGLQJ 028V  DFFRUGLQJ WR
JXLGHOLQHV ODLG GRZQ E\ WKH 'HSDUWPHQW RI 3XEOLF (QWHUSULVHV '3(  7KH 36&V KDYH
RSHUDWLRQDO DXWRQRP\ ZKLOH EHLQJ HYDOXDWHG DW SHULRGLF LQWHUYDOV RQ FHUWDLQ SUHYLRXVO\
DJUHHG SHUIRUPDQFH PHDVXUHV E\ ,5 7KH 36&V FDQ IUDPH WKHLU RZQ SROLFLHV UHJDUGLQJ
52


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

KXPDQ UHVRXUFH UHFUXLWPHQW WUDLQLQJ SURPRWLRQ DQG WUDQVIHUV 7KH 36& SHUVRQQHO DUH
QRWVXEMHFWWREHLQJWUDQVIHUUHGRXWRIWKH36&EHIRUHFRPSOHWLRQRIWKHLUWHQXUHZLWKWKH
36& 7KLV HQDEOHV WKH FUHDWLRQ DQG UHWHQWLRQ RI H[SHULHQFHG PDQSRZHU IRU SURMHFW
PDQDJHPHQW 7KH FUHDWLRQ RI VXFK H[SHULHQFHG PDQSRZHU HQDEOHV WKH 36& WR WDNH XS
SURMHFWVLQRWKHUDUHDVIRUH[DPSOH.5&LVH[HFXWLQJDSDUWRIWKH-86%5/SURMHFW7KH
DFFRXQWV RI WKHVH 36&V DUH PDLQWDLQHG LQGHSHQGHQW RI ,5V V\VWHP 7KLV DOORZV
PRQLWRULQJ DQG FRQWURO RI WKHVH RUJDQL]DWLRQV HVSHFLDOO\ LQ VLWXDWLRQV ZKHUH WKH 639V
UHFHLYH IXQGV IURP VRXUFHV RWKHU WKDQ ,5 36&V KDYH KLJKHU DXWRQRP\ DQG ILQDQFLDO
SRZHUV LQ UHVSHFW WR FDSLWDO H[SHQGLWXUH MRLQW YHQWXUHV DQG VWUDWHJLF DOOLDQFHV 7KHVH
36&V KDYH WKH IUHHGRP WR PRGLI\ SURFXUHPHQW SROLFLHV LQ OLQH ZLWK OHQGLQJ DJHQF\
UHTXLUHPHQWV,5KDVVXFFHVVIXOO\UHVRUWHGWRILQDQFLQJIURPH[WHUQDODJHQFLHVLQWKHFDVH
RI YHU\ ODUJH 36&H[HFXWHG SURMHFWV .5& ZDV WKH ILUVW %27 SURMHFW FRQVWUXFWHG ZLWK
HTXLW\ SDUWLFLSDWLRQ RI ,5 DQG WKH 6WDWH *RYHUQPHQWV RI .DUQDWDND .HUDOD *RD DQG
0DKDUDVKWUD 7KLV ZDV IROORZHG E\ WKH -RLQW 9HQWXUH 3LSDYDY 5DLOZD\ &RUSRUDWLRQ
/LPLWHG 35&/  EHWZHHQ ,5 DQG *XMDUDW 3LSDYDY 3RUW /LPLWHG ZLWK HTXDO HTXLW\
SDUWLFLSDWLRQ 35&/ KDV FRQFHVVLRQDLUH ULJKWV WR FRQVWUXFW RSHUDWH DQG PDLQWDLQ WKH
6XUHQGUDQDJDU5DMXOD3LSDYDY3RUWSURMHFWOLQHIRU\HDUV591/XVHVSURMHFWVSHFLILF
HTXLW\ URXWHV DQG %27 URXWHV IRU SURMHFW LPSOHPHQWDWLRQ ,Q YLHZ RI WKH GLVWLQFW
DGYDQWDJHV RI SURMHFW H[HFXWLRQ WKURXJK 368V RYHU LQKRXVH H[HFXWLRQ WKURXJK WKH
FRQVWUXFWLRQRUJDQL]DWLRQVRI=RQDO5DLOZD\VLWZRXOGEHGHVLUDEOHWREULQJDOOWKH=RQDO
&RQVWUXFWLRQRUJDQL]DWLRQVXQGHUWKHXPEUHOODRIRQHRUPRUH368VOLNH591/,5&21
HWF 7KLV ZRXOG QRW RQO\ LPSURYH WKH VSHHG HIILFLHQF\ DQG TXDOLW\ RI H[HFXWLRQ EXW
ZRXOG DOVR UHVXOW LQ FRQVLGHUDEOH GRZQVL]LQJ RI WKH RUJDQL]DWLRQ  $V 7DEOH  VKRZV
WKHQXPEHURIFRQVWUXFWLRQVWDIIHPSOR\HGLQ]RQHVLVQRWKLQJVKRUWRIVWDJJHULQJ


53

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

,QWHJUDWHG6WDWLRQ'HYHORSPHQW
 3DUDJUDSKRIWKH%XGJHW6SHHFKVWDWHV:KLOHWKHSURFHVVIRUGHYHORSPHQW
RIWKHDOUHDG\VHOHFWHGVWDWLRQVZRXOGFRQWLQXHIRUWKHUHVWRIWKHVWDWLRQVZHSURSRVHWR
UHYDPS WKH VWDWLRQ GHYHORSPHQW SROLF\ FRPSOHWHO\ DQG VLPSOLI\ SURFHVVHV IRU IDVWHU
UHGHYHORSPHQWE\LQYLWLQJRSHQELGVIURPLQWHUHVWHGSDUWLHV7KHSUHVHQWVWDWLRQVZLOOEH
DYDLODEOHIRUGHYHORSPHQWRQDVLVZKHUHLVEDVLVWRH[SORLWWKHVSDFHDQGDLUULJKWVRQ
FRQFHVVLRQEDVLV7KHUHLVDGHWDLOHGPDQXDORQVWDQGDUGVDQGVSHFLILFDWLRQVIRUUDLOZD\
VWDWLRQV HVSHFLDOO\ RI WKH JUHHQILHOG YDULHW\ 2WKHU WKDQ FRPPHUFLDO WUDLQ RSHUDWLRQV
WKLV KDV SDUDPHWHUV RQ XWLOLWLHV ZDWHU VXSSO\ HOHFWULFLW\ GUDLQDJH  SDVVHQJHU XWLOLWLHV
FRPPXQLFDWLRQV FORDNURRPV WRLOHWVVKRZHUV F\EHUFDIHV $70V ERRNVWDOOV IRRG
FRXUWVFDWHULQJZDLWLQJURRPVSRWDEOHDQGQRQSRWDEOHZDWHUHVFDODWRUVOLIWVHPHUJHQF\
PHGLFDODLG FOHDQLQJJDUEDJHFROOHFWLRQDQGGLVSRVDOSDUNLQJSUHSDLGSXEOLFWUDQVSRUW
FLUFXODWLQJ DUHDV TXDOLW\ RI VWDWLRQ EXLOGLQJV SDUFHOKDQGOLQJ VHFXULW\ SRUWHUV WUROOH\V
HWF  ,5 DOVR KDV D PRGHO VWDWLRQ VFKHPH QRZ WUDQVIRUPHG LQWR WKH $GDUVK VWDWLRQ
VFKHPHVWDWLRQV KDYHEHHQVHOHFWHGIRUGHYHORSPHQWDV$GDUVKVWDWLRQV6LQFH
 WKH 5DLOZD\ /DQG 'HYHORSPHQW $XWKRULW\ 5/'$  H[LVWV ZLWK WKH REMHFWLYH RI
FRPPHUFLDOGHYHORSPHQWRIYDFDQWUDLOZD\ODQG$VRI0DUFKKHFWDUHV
RI UDLOZD\ ODQG KDYH EHHQ HQWUXVWHG WR 5/'$ ZLWK  VLWHV   PXOWLIXQFWLRQDO
FRPSOH[HV ZLOO EH GHYHORSHG E\ 368V ,5&21 5,7(6 591/  DQG  PXOWL
IXQFWLRQDO FRPSOH[HV ZLOO EH GHYHORSHG E\ 5/'$  7KH ,QGLDQ 5DLOZD\ 6WDWLRQV
'HYHORSPHQW &RUSRUDWLRQ ,56'&  KDV DOVR EHHQ VHW XS LQ  ZLWK  HTXLW\
SDUWLFLSDWLRQ IURP ,5&21 DQG  IURP 5/'$  )RU H[DPSOH ,56'& LV HQJDJHG LQ
VWDWLRQ GHYHORSPHQW LQ &KDQGLJDUK +DELEJDQM 6KLYDML 1DJDU %LMZDVDQ DQG $QDQG
9LKDU  7KLV &RPPLWWHH SHUFHLYHV WKH QHHG IRU VRPH UDWLRQDOL]DWLRQ EHWZHHQ WKH
LQWHQWLRQVRISDUDJUDSKRIWKH%XGJHW6SHHFKDQGWKHZRUNRI5/'$DQG,56'&,Q
GHYHORSLQJVWDWLRQVLVVXHVDUHRIWHQFRQIURQWHGDERXWFKDQJHVLQODQGXVHDQGPXQLFLSDO
FOHDUDQFHV  $IWHU WKH LQVHUWLRQ RI 6HFWLRQ  GD  LQ &KDSWHU ,9 RI WKH 5DLOZD\ $FW LQ
ZKLFKLVLQWKHQDWXUHRIDnon obstanteFODXVH,5GRHVVHHPWRSRVVHVVRYHUULGLQJ
SRZHUVDWOHDVWde jure.%XWde factoFOHDUDQFHVZLOOVWLOOEHUHTXLUHGIURPPXOWLSOH6WDWH
DQGORFDOERG\DJHQFLHV7KLV&RPPLWWHHZDVLPSUHVVHGZLWKWKHV\VWHPWKDWKDVEHHQ
HYROYHGE\&5 &HQWUDO5DLOZD\ ZKHUHDFRRUGLQDWLRQFRPPLWWHHKDVEHHQFUHDWHGDQG
WKLV FRRUGLQDWLRQ FRPPLWWHH PHHWV RQ D IL[HG GD\ RI HYHU\ ZHHN  7KH &RPPLWWHH
UHFRPPHQGVWKDWWKLVLVDWHPSODWHWKDWDOORWKHU=RQHV'LYLVLRQVVKRXOGDGRSW


0RUH5DWLRQDOL]DWLRQRI&RUH$FWLYLWLHV
 ,5KDVXVHGRXWVRXUFHGPHFKDQL]HGFOHDQLQJLQFRDFKLQJGHSRWV7KHUHLVD&OHDQ7UDLQ
6WDWLRQ &76 VFKHPHZKHUHSDUWVRIDWUDLQ WRLOHWVGRRUDUHDVDLVOHV DUHFOHDQHGZKHQD

27

Manual for Standards and Specifications for Railway Stations, Ministry of Railways and Railway Board, June
2009.
28
ThecompletelistisavailableinOutcomeandPerformanceBudgetofRailwaysfor201516,MinistryofRailways
(Railway Board), 26 February 2015.  The stipulated amenities in this scheme understandably fall short of those
mentionedintheManualandareprimarily,thoughnotexclusively,forA1andAstations.

54


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


7DEOH=RQHZLVHDQG*URXSZLVH&RQVWUXFWLRQ6WDII
$VRQVW0DUFK
5DLOZD\

*URXS$

*URXS%

*URXS&

*URXS'

7RWDO

&HQWUDO











(DVWHUQ











(DVW&HQWUDO











(DVW&RDVW











1RUWKHUQ











1RUWK&HQWUDO











1RUWK(DVWHUQ











1RUWKHDVW)URQWLHU











1RUWK:HVWHUQ











6RXWKHUQ











6RXWK&HQWUDO











6RXWK(DVWHUQ











6RXWK(DVW&HQWUDO











6RXWK:HVWHUQ











:HVWHUQ











:HVW&HQWUDO











.RONDWD5DLOZD\





















7RWDO


WUDLQ KDV D VFKHGXOHG VWRS  7KHUH LV DQ 2Q %RDUG +RXVH .HHSLQJ 6FKHPH 2%+6  LQ
DURXQG  ORQJGLVWDQFH PDLOH[SUHVV WUDLQV  7KHUH LV SUHVFULEHG SHVW DQG URGHQW
FRQWURO WUHDWPHQW  7KHUH DUH PHFKDQL]HG ODXQGULHV IRU ZDVKLQJ OLQHQ VRPH RQ %227
%XLOW2ZQ2SHUDWH7UDQVIHU EDVLV+RZHYHUGHVSLWHWKHSRVVLELOLWLHVRIRXWVRXUFLQJ
VRPH FOHDQOLQHVV LQLWLDWLYHV ZLOO KDYH WR EH SHUIRUPHG LQKRXVH LI QRWKLQJ HOVH WR
PRQLWRU WKH ZRUN WKDW LV EHLQJ RXWVRXUFHG  7RGD\ LQ WKH SUHVHQW GHSDUWPHQWDO VHWXS
PXOWLSOHDJHQFLHVDUHLQYROYHGZLWKDODFNRIFRRUGLQDWLRQ7KHIROORZLQJTXRWHLVIURP
&$*5HSRUW1RRIWKH3HUIRUPDQFH$XGLW 5HSRUW IRUWKH 5DLOZD\V
$QXPEHURIGLUHFWRUDWHVLQ5DLOZD\%RDUGDUHUHVSRQVLEOHIRUGHDOLQJZLWKWKHLVVXHRI
FOHDQOLQHVV LQ WKH 5DLOZD\V 7KH 0HFKDQLFDO (QJLQHHULQJ GLUHFWRUDWH LV UHVSRQVLEOH IRU
PDLQWHQDQFHDQGFOHDQOLQHVVRIFRDFKHVLQVHUYLFH(QJLQHHULQJGLUHFWRUDWHIRUWUDFNVWKH
0HGLFDO GLUHFWRUDWH IRU FOHDQOLQHVV RI D IHZ UDLOZD\ VWDWLRQV WKURXJK &KLHI +HDOWK
,QVSHFWRUV &+, +RZHYHUWKHRYHUDOOFOHDQOLQHVVDWUDLOZD\VWDWLRQVLVWKHUHVSRQVLELOLW\
RI &KLHI &RPPHUFLDO 0DQDJHUV LQ ]RQDO UDLOZD\ +HDGTXDUWHUV DQG 'LYLVLRQDO 5DLOZD\
0DQDJHUV LQ 'LYLVLRQV XQGHU WKH RYHUDOO GLUHFWLRQ RI WKH &RPPHUFLDO

29

http://cag.nic.in/html/reports/railways/2007_6_peraud/contents.htm

55


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

GLUHFWRUDWH0XOWLSOHGHSDUWPHQWVZHUHLQYROYHGLQFOHDQOLQHVVDFWLYLWLHVOHDGLQJWRODFN
RI FRRUGLQDWLRQ DPRQJ WKHP DQG UHQGHULQJ WKH FOHDQOLQHVV HIIRUWV LQHIIHFWLYH $V VXFK
DFFRXQWDELOLW\GLGQRWJRZLWKUHVSRQVLELOLW\5DLOZD\VQHLWKHUKDGDQ\PHFKDQLVPWR
DVVHVVRUFRQWUROWKHOHYHORIH[SHQGLWXUHRQPDLQWHQDQFHRIFOHDQOLQHVVLQVWDWLRQVDQGLQ
WUDLQVQRUDSROLF\RQZDVWHPDQDJHPHQW,QDGHTXDWHPHFKDQLVPWRPRQLWRUWKHZRUNRI
FRQWUDFWRUV IRU RXWVRXUFHG FOHDQOLQHVV DFWLYLWLHV LQFOXGLQJ SHVW FRQWURO DQG EHG OLQHQ
ZDVKLQJFRQWUDFWVOHGWRFRPSURPLVHLQTXDOLW\RIZRUNGRQH7KH&OHDQ7UDLQ6WDWLRQ
VFKHPH LQWURGXFHG IRU HQ URXWH FOHDQLQJ RI WUDLQV ZDV VRPHZKDW LQHIIHFWLYH GXH WR D
QXPEHURIGHILFLHQFLHVLQLWVLPSOHPHQWDWLRQ7KHUHLVPXFKPRUHDORQJVLPLODUOLQHV

 2WKHUWKDQVLORVDFURVV&LYLO0HGLFDODQG0HFKDQLFDOSDUWRIWKHSUREOHPLVSLHFHPHDO
FRQWUDFWVLVVXHGE\=RQHV'LYLVLRQVXQGHUGLIIHUHQWEXGJHWDU\KHDGV7KLV&RPPLWWHHV
YLHZLVWKDWWKHUHLVDQHHGWRVWUHDPOLQHWKHSUHVHQWV\VWHPIRUFOHDQLQJ VWDWLRQVWUDFNV
DQGWUDLQV ZKHWKHUGRQHGHSDUWPHQWDOO\RUWKURXJKRXWVRXUFLQJ&RQWUDFWVVKRXOGEH
ORQJHU WHUP DQG WKHUH VKRXOG EH GHFHQWUDOL]DWLRQ DQG VWUHDPOLQLQJ RI UHVSRQVLELOLW\ VR
WKDWLWFDQEHSLQQHGGRZQ7KLVLVHVSHFLDOO\WKHFDVHZLWKVWDWLRQVDQGWUDFNV


 :HQH[WZLVKWRWXUQWRWKH368VDQGRWKHURUJDQL]DWLRQVWKDWDUHZLWK,57KLVPHDQV
5,7(6 LQH[LVWHQFHVLQFH ,5&21  &5,6  ,5)&  &21&25
  .5&/   5&,/   ,5&7&   35&/   591/  
5/'$  ')&&,/  059&  %:(/  %6&/  DQG %&/
 2XWRIWKHVH%:(/ZDVLQFRUSRUDWHGLQWKURXJKWKHWDNHRYHURIWZRVLFN
SULYDWH ZDJRQPDNLQJ FRPSDQLHV $UWKXU %XWOHU DQG &RPSDQ\ /LPLWHG 0X]DIIDUSXU 
DQG %ULWDQQLD (QJLQHHULQJ &RPSDQ\V ZDJRQ GLYLVLRQ 0RNDPD   7KH XQLW IRU WKH
PDQXIDFWXUH RI /3* F\OLQGHUV DW %HOD 0X]DIIDUSXU  ZDV DGGHG LQ   %:(/V
UROH LV WR PDQXIDFWXUH ZDJRQV DQG XQGHUWDNH VWUXFWXUDO IDEULFDWLRQ MREV DQG LW KDV EHHQ
ZLWK ,5 IURP   7KHUH DUH  PDQXIDFWXULQJ XQLWV LQ 0RNDPD DQG LQ 0X]DIIDUSXU
7KH &RPPLWWHH EHOLHYHV WKDW %:(/ VKRXOG EH HLWKHU UHYLYHG RU FORVHG GRZQ ZKLOH
%6&/ DQG %&/ VKRXOG EH EURXJKW XQGHU RQH RI WKH H[LVWLQJ SURGXFWLRQ XQLWV 7KLV LV
HVSHFLDOO\ WUXH RI %6&/ %XUQ 6WDQGDUG &RPSDQ\ /LPLWHG  ZLWK HQJLQHHULQJ DQG
IRXQGU\ XQLWV LQ +RZUDK DQG %XUQSXU DQG %6&/ ZKLFK LV VLPLODU LQ QDWXUH  ,W KDV 
XQLWVLQ.RONDWDDQGLQ+RRJKO\ZLWKDIRXQGU\XQLW7KH&RPPLWWHHKDVQRFRPPHQWV
WR PDNHDERXW.5&/ .RQNDQ5DLOZD\&RUSRUDWLRQ /LPLWHG 35&/ 3LSDYDY 5DLOZD\
&RUSRUDWLRQ /LPLWHG  ')&&,/ 'HGLFDWHG )UHLJKW &RUULGRU &RUSRUDWLRQ RI ,QGLD
/LPLWHG DQG059& 0XPEDL5DLOZD\9LNDV&RUSRUDWLRQ VLQFHWKHVHDUHMRLQWYHQWXUHV
ZLWK ,5 5,7(6 5DLO ,QGLD 7HFKQLFDO DQG (FRQRPLF 6HUYLFHV  ,5&21 ,5&21
,QWHUQDWLRQDO ,5)& ,QGLDQ5DLOZD\)LQDQFH&RUSRUDWLRQ 5&,/ 5DLOWHO&RUSRUDWLRQRI
,QGLD /LPLWHG  ,5&7& ,QGLDQ 5DLOZD\ &DWHULQJ DQG 7RXULVP &RUSRUDWLRQ  &21&25
&RQWDLQHU &RUSRUDWLRQ RI ,QGLD  DQG 591/ 5DLO 9LNDV 1LJDP /LPLWHG  DUH DOVR
FRPSDQLHV7KHLUUROHLQH[SDQGLQJ5DLOZD\VFDSDFLW\ERWKLQLQIUDVWUXFWXUHDQGUROOLQJ
VWRFN KDV QRW EHHQ KDUQHVVHG DV PXFK DV LW VKRXOG KDYH EHHQ ,QVWHDG SUHIHUHQFH KDV
EHHQJLYHQWRGHSDUWPHQWDOH[HFXWLRQ


56


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

,QWHJUDWLRQRI,7,QLWLDWLYHV


 :HKDYHFRPPHQWVRQWKHODFNRIHIILFLHQWXVDJHRI,77KHUHLVDODFNRIFRRUGLQDWLRQ
EHWZHHQ,5&7&&5,6 &HQWUHIRU5DLOZD\,QIRUPDWLRQ6\VWHPV DQG5&,/&5,6ZDV
VHW XS DV D UHJLVWHUHG DXWRQRPRXV VRFLHW\ LQ  WR GHYHORS ,7 V\VWHPV IRU SDVVHQJHU
WLFNHWLQJIUHLJKWLQYRLFLQJIUHLJKW DQGSDVVHQJHUWUDLQRSHUDWLRQV PDQDJHPHQWRI WUDLQ
FUHZV DQG PDQDJHPHQW RI IL[HG DQG UROOLQJ DVVHWV  2WKHU WKDQ FDWHULQJ KRVSLWDOLW\
WUDYHO WRXULVP DQG SDFNDJHG GULQNLQJ ZDWHU ,5&7& LV LQ WKH ,QWHUQHWEDVHG WLFNHWLQJ
VHJPHQW5&,/VPDQGDWHLVWRRIIHUWHOHFRPDQGPXOWLPHGLDQHWZRUNVWKURXJKWKHRSWLF
ILEUHQHWZRUNV WKDW H[LVWDORQJ 5DLOZD\WUDFNV  ,GHDOO\ WKHUH VKRXOG EH V\QHUJ\ DFURVV
WKHVHWKUHHRUJDQL]DWLRQV8QIRUWXQDWHO\WKLVGRHVQWKDSSHQ7HFKQRORJ\DGRSWLRQE\
,5VXIIHUVDQGVRGRHVWKHXVHRIWHFKQRORJ\WRSURYLGHEHWWHUSDVVHQJHUDPHQLWLHV+RZ
DUHWKH)UHLJKW2SHUDWLRQV,QIRUPDWLRQ6\VWHP )2,6 WKH3DVVHQJHU5HVHUYDWLRQ6\VWHP
356  RU WKH ,QWHJUDWHG &RDFKLQJ 0DQDJHPHQW 6\VWHP ,&06  XVHG LQ PDQDJHULDO
GHFLVLRQPDNLQJ"0RUHVSHFLILFDOO\WKHVLORVDFURVV,5&7&&5,6DQG5&,/FDQRQO\
EH EURNHQ GRZQ LI ,7 DQG ,&7 UHFHLYH HPSKDVLV DW WKH OHYHO RI WKH %RDUG  :KLOH ZH
GLVFXVVWKHUHYDPSHG%RDUGODWHUDQH[FDGUHSRVWRID&KLHI7HFKQRORJ\2IILFHU &72 
QHHGVWREHFUHDWHGUHSRUWLQJGLUHFWO\WRWKH&KDLUPDQRIWKH%RDUGDQGDOO,7LQLWLDWLYHV
EH LQWHJUDWHG DQG EURXJKW XQGHU WKH XPEUHOOD RI WKLV GLUHFWRUDWH H[FOXVLYH RI DQ\
GHSDUWPHQWDOKDQGOLQJLQ%RDUG



5HRUJDQL]DWLRQRI5DLOZD\%RDUGDQG=RQHV'HFHQWUDOL]DWLRQDQG(PSRZHUPHQW


 $V7DEOHVKRZV,5QRZKDV]RQHVDQGGLYLVLRQV:HKDYHUHPRYHG.RONDWD
0HWURIURP7DEOHWKRXJK$VZHKDYHDUJXHGLQ&KDSWHUWKLV&RPPLWWHHEHOLHYHV
WKDW .RONDWD 0HWUR VKRXOG EH WDNHQ RXW RI ,5  +HQFH .RONDWD 0HWUR LV QRW VKRZQ LQ
7DEOHDQGRQO\]RQHVDQGGLYLVLRQVKDYHEHHQVKRZQ$VZDVDOVRDUJXHGLQ
&KDSWHU  LW LV WKLV &RPPLWWHHV YLHZ WKDW WKHUH QHHGV WR EH D UDWLRQDOL]DWLRQ RI WKH
]RQHVGLYLVLRQV  7KHUH DUH WRR PDQ\ =RQHV DQG 'LYLVLRQV  7KDW LV D VHSDUDWH
UDWLRQDOL]DWLRQH[HUFLVHRXWVLGHWKLV&RPPLWWHHVPDQGDWH$OOWKDWLVEHLQJSRLQWHGRXW
LV WKDW WKH SUHVHQW VWUXFWXUH RI =RQHV DQG 'LYLVLRQV KDV HYROYHG EHFDXVH RI KLVWRULFDO
UHDVRQV DQG LV QRW FDVW LQ VWRQH  2QH VKRXOG WDNH D UDWLRQDO ORRN DW UHVWUXFWXULQJ WKH
SUHVHQWRUJDQL]DWLRQLQWR]RQHVGLYLVLRQV


7KHWRWDOHPSOR\PHQWDFURVVWKH]RQHVYDULHVZLGHO\DVWKHSUHVHQW]RQHVDUHVRPHZKDW
KHWHURJHQHRXV   (YHQ LI RQH H[FOXGHV .RONDWD 0HWUR WKH WRWDO HPSOR\PHQW LQ D ]RQH
YDULHV IURP VRPHWKLQJ D OLWWOH RYHU  6:5  WR DURXQG  15    ,W LV WKLV
&RPPLWWHHVYLHZWKDWWKHUHPXVWEHGHFHQWUDOL]DWLRQGRZQWRWKHOHYHORIGLYLVLRQVZLWK
DQ DYHUDJH HPSOR\PHQW RI VRPHWKLQJ EHWZHHQ  DQG  7KH GLYLVLRQV PXVW
WKHUHIRUH EH WUHDWHG DV LQGHSHQGHQW EXVLQHVV XQLWV 7KLV GRHVQW QHFHVVDULO\ PHDQ WKDW
HDFK GLYLVLRQ PXVW HDUQ SURILWV RU HOLPLQDWH ORVVHV  *LYHQ JHRJUDSKLFDO ORFDWLRQ DQG
WUDIILFFRPSRVLWLRQLWLVLPSRVVLEOHIRUVRPHGLYLVLRQVWRDFFRPSOLVKWKLV+RZHYHUZLWK
57


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


7DEOH,5=RQHVDQG'LYLVLRQV

1DPH
6RXWKHUQ 65 
&HQWUDO &5 
:HVWHUQ :5 
(DVWHUQ (5 
1RUWKHUQ 15 
1RUWK(DVWHUQ
1(5 
6RXWK(DVWHUQ
6(5 
1RUWKHDVW)URQWLHU
1)5 
6RXWK&HQWUDO
6&5 
(DVW&HQWUDO
(&5 
1RUWK:HVWHUQ
1:5 
(DVW&RDVW
(&25 
1RUWK&HQWUDO
1&5 
6RXWK(DVW
&HQWUDO 6(&5 
6RXWK:HVWHUQ
6:5 
:HVW&HQWUDO
:&5 

'DWH
(VWDEOLVKHG
$SULO

+HDGTXDUWHUV

1RYHPEHU

1RYHPEHU

$SULO
$SULO

0XPEDL

.RONDWD
'HOKL

$SULO

*RUDNKSXU

&KHQQDL7LUXFKLUDSSDOOL0DGXUDLDQG6DOHP
3DODNNDG7KLUXYDQDQWKDSXUDP
0XPEDL&67%KXVDZDO3XQH6RODSXUDQG
1DJSXU
0XPEDL&HQWUDO5DWODP$KPHGDEDG5DMNRW
%KDYQDJDUDQG9DGRGDUD
+RZUDK6HDOGDK$VDQVRODQG0DOGD
'HOKL$PEDOD)LUR]SXU/XFNQRZ0RUDGDEDG
DQG8GKDPSXU
,]]DWQDJDU/XFNQRZDQG9DUDQDVL



.RONDWD

$GUD&KDNUDGKDUSXU.KDUDJSXUDQG5DQFKL

-DQXDU\

2FWREHU

2FWREHU

2FWREHU

$SULO

*XZDKDWL

%KXEDQHVZDU

.KXUGD5RDG6DPEDOSXUDQG:DOWDLU

$SULO

$OODKDEDG

$OODKDEDG$JUDDQG-KDQVL

$SULO

%LODVSXU

%LODVSXU5DLSXUDQG1DJSXU

$SULO

+XEOL

+XEOL%DQJDORUHDQG0\VRUH

$SULO

-DEDOSXU

&KHQQDL

0XPEDL

6HFXQGHUDEDG

+DMLSXU

-DLSXU

'LYLVLRQV

$OLSXUGXDU.DWLKDUVLOFKDU5DQJLD/XPGLQJDQG
7LQVXNLD
9LMD\DZDGD6HFXQGHUDEDG*XQWDNDO*XQWXU
+\GHUDEDG3DUEKDQLDQG1DQGHG
'DQDSXU'KDQEDG0XJKDOVDUDL6DPDVWLSXUDQG
6RQSXU
-DLSXU$MPHU%LNDQHUDQG-RGKSXU

-DEDOSXU%KRSDODQG.RWD

WKH DFFHSWDQFH RI *$$3 JHQHUDOO\ DFFHSWHG DFFRXQWLQJ SULQFLSOHV  DQG FRPPHUFLDO
DFFRXQWLQJLWVKRXOGEHSRVVLEOHWRFRPSXWHRSHUDWLQJUDWLRVDQGSURILWDQGORVVDFFRXQWV
DWWKHOHYHORIDGLYLVLRQ7KHFRVWFRPSXWDWLRQVDUHVLPSOHU$WHPSODWHZLOOKDYHWREH
GHYLVHG IRU D GLYLVLRQV HDUQLQJV PHDQLQJ QRW MXVW RULJLQDWLQJ RU WHUPLQDWLQJ HDUQLQJV
EXW DOVR DSSRUWLRQHG HDUQLQJV IRU WUDIILF WKDW SDVVHV WKURXJK WKH GLYLVLRQ  7KHUH LV D
GRXEOH SUREOHP ZLWK WKH SUHVHQW SRZHUV RI '50V  *LYHQ WKH SUHVHQW GHSDUWPHQWDO
VWUXFWXUH RIILFHUV LQ GLYLVLRQV UHSRUW QRW RQO\ WR WKH '50 EXW DOVR WR WKH IXQFWLRQDO
3+2'V 3ULQFLSDO+HDGVRI'HSDUWPHQW ZKRLQWXUQUHSRUWWRWKH*0ZKRLVLQFKDUJH
RI WKH ]RQH  ,Q DQ\ YHUWLFDO VWUXFWXUH RI DFFRXQWDELOLW\ WKLV LVQW GHVLUDEOH  +RZHYHU
ZLWK WKH +5UHODWHG FKDQJHV WKDW DUH SURSRVHG LQ &KDSWHU  WKLV SUREOHP RI
GHSDUWPHQWDOLVP VKRXOG GLVDSSHDU  6HFRQG '50V GR QRW SRVVHVV VXIILFLHQW
GHFHQWUDOL]HG SRZHUV LQ KDQGOLQJ WHQGHUV FRQQHFWHG ZLWK ZRUNV VWRUHV SURFXUHPHQW
VHUYLFHRUHYHQUHYHQXHHDUQLQJFRPPHUFLDOWHQGHUV:KHWKHUDWWKHOHYHORIWKH'LYLVLRQ
RU WKH =RQH WKHUH VKRXOG EH D VZLWFK WRZDUGV HWHQGHULQJ ZLWK DQ HPSKDVLV RQ ORQJ
GXUDWLRQ VD\  \HDUV  UDWH FRQWUDFWV  ,Q  D ZHOFRPH GHFLVLRQ KDV EHHQ WDNHQ WR
GHOHJDWHSRZHUVWR*0VIRUWHQGHUV%XWWKLVKDVFRPHZLWKWKHULGHUWKDWDQ\GHOHJDWLRQ
58


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

IXUWKHUGRZQWRWKHOHYHORI'50VFDQQRWEHGRQHZLWKRXWWKHH[SOLFLWFRQFXUUHQFHRI
WKH5DLOZD\%RDUG7KLVJRHVDJDLQVWWKHWKUXVWRIGHFHQWUDOL]DWLRQ

 7KH&RPPLWWHHWKHUHIRUHKDVWKHIROORZLQJVXJJHVWLRQV)LUVWZKHQDPRQHWDU\FHLOLQJ
LVVHWRQWKHILQDQFLDOSRZHUVRI'50VLWVKRXOGQRWEHVHWLQDEVROXWHPRQHWDU\WHUPV
EXWVKRXOGLQVRPHIDVKLRQEHLQIODWLRQLQGH[HGVRWKDWWKHPRQHWDU\YDOXHDXWRPDWLFDOO\
LQFUHDVHV RYHU WLPH  6HFRQG D VDQFWLRQHG EXGJHW LV EDVHG RQ HDUQLQJV DV ZHOO DV
H[SHQGLWXUH  ,I WKH HDUQLQJV WDUJHW LV DFKLHYHG WKHUH VKRXOG EH D SURYLVLRQ IRU UH
DSSURSULDWLRQ DFURVV WKH EXGJHWDU\ RU 3ODQ KHDGV  7KLV UHDSSURSULDWLRQ SRZHU VKRXOG
FRYHUERWKZLWKLQWKHVDPHGHPDQGEHWZHHQ5DLOZD\)XQGVWKDWDUHXQGHUWKHVDPH3ODQ
KHDG DQG EHWZHHQ 3ODQ KHDGV WKDW DUH XQGHU WKH VDPH 5DLOZD\ )XQG  7KLUG VRPH
HDUQLQJV E\ WKH GLYLVLRQ VKRXOG EH UHWDLQHG DW WKH OHYHO RI WKH 'LYLVLRQ WR EH VSHQW RQ
VSHFLILF SXUSRVHV  )RU LQVWDQFH HDUQLQJV IURP FRPPHUFLDO SXEOLFLW\ FDQ EH HDUPDUNHG
IRUVWDWLRQXSNHHSHDUQLQJVIURPGHPXUUDJHDQGZKDUIDJHFDQEHHDUPDUNHGIRUJRRGV
VKHGVDQGHDUQLQJVIURPSDUFHOVFDQEHHDUPDUNHGIRUIDFLOLWLHVDWSDUFHOORDGLQJSRLQWV
)RXUWK '50V VKRXOG KDYH SRZHUV WR VDQFWLRQ QHZ SRVWV WKDW DUH ILQDQFLDOO\ QHXWUDO
FUHDWHG DJDLQVWVXUUHQGHUHGSRVWV )LIWKILQDQFH PXVWFRPSOHWHO\EHXQGHUWKH '50
7RWKHH[WHQW53)UHPDLQVVRPXVW53)6L[WK$'50VVKRXOGEHDQH[SOLFLWSDUWRIWKH
DGPLQLVWUDWLYHFKDLQ )RUH[DPSOHWKH$QQXDO3HUIRUPDQFH$SSUDLVDO5HSRUW $3$5 
FDQEHLQLWLDWHGE\WKH$'50UHYLHZHGE\WKH'50FRXQWHUVLJQHGE\WKH3+2'DQG
DFFHSWHGE\WKH*0 6HYHQWKEHIRUHUHJLVWHULQJDYLJLODQFHFDVHRQHVKRXOGDVFHUWDLQ
WKHYLHZVRIWKH'50 ,QJHQHUDOEHIRUHUHJLVWHULQJDYLJLODQFHFDVHYLHZVVKRXOGEH
VRXJKWIURPDWOHDVWWKUHHKLJKHUUHSRUWLQJOHYHOV 

 $ZRUGQHHGVWREHVDLGDERXWVWDWLRQVDQGVWDWLRQPDQDJHUV VXSHULQWHQGHQWVXQGHUWKH
HDUOLHU QRPHQFODWXUH   6LQFH ,5 ZRUNV LQ VLORV PDQ\ VWDWLRQ PDQDJHUV DQG FHUWDLQO\
VWDWLRQPDVWHUVKDYHOLPLWHGSRZHUVRWKHUWKDQSRZHUVRYHUFRPPHUFLDORSHUDWLRQV$OO
$DQG$W\SHVWDWLRQVVKRXOGEHPDQQHGE\JD]HWWHGRIILFHUVDVVWDWLRQPDQDJHUV7KLV
ZLOODOVRHQDEOH*URXS$VHUYLFHVWRKDYHH[SRVXUHWRZRUNLQJDWWKHJUDVVURRWVOHYHOLQ
VWDWLRQVHDUOLHULQWKHLUFDUHHUVSHUKDSVIRU\HDUV,QWKH-XQLRUDQG6HQLRUWLPHVFDOH
WKHVH SRVWV ZLOO KDYH WR EH UHGHVLJQDWHG DV JHQHUDO SRVWV  6XSHUYLVRUV DQG RWKHU VWDII
ZKRZRUNLQWKHVWDWLRQVZLOOUHSRUWWRWKHLUGHSDUWPHQWDOGLYLVLRQDORIILFHUVRQO\WKURXJK
WKHVWDWLRQPDQDJHU

 7KH VDPH SULQFLSOHV RI GHFHQWUDOL]LQJ WR WKH GLYLVLRQV DOVR DSSO\ WR SULQFLSOHV RI
GHFHQWUDOL]LQJ WR ]RQHV (DFK =RQDO 5DLOZD\ LV UHVSRQVLEOH IRU RSHUDWLRQ PDQDJHPHQW
DQG GHYHORSPHQW RI WKH 5DLOZD\ V\VWHP XQGHU LWV MXULVGLFWLRQ 7KH KHDG RI WKH =RQH
*0  PXVW EH IXOO\ HPSRZHUHG WR WDNH DOO QHFHVVDU\ GHFLVLRQV ZLWKRXW UHIHUHQFH WR
5DLOZD\ %RDUG ZLWKLQ WKH IUDPHZRUN RI SROLFLHV ,W LV IRU WKLV SXUSRVH WKDW WKH SRZHU
GHOHJDWLRQWRWKH*HQHUDO0DQDJHUVZDVRULJLQDOO\FRQFHLYHGDVDQHJDWLYHOLVW LHRQO\
WKH SRZHUV LQ DQ H[FOXGHG OLVW UHTXLUH WKH *HQHUDO 0DQDJHU WR VHHN 5DLOZD\ %RDUGV
59


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

DSSURYDO +RZHYHURYHUWKH\HDUVWKHUHSRZHUVKDYHEHHQFRQVWULFWHGE\DGGLWLRQVDQG
TXDOLILFDWLRQVWRWKLVH[FOXGHGOLVWPRVWO\ZLWKWKHREMHFWLYHRIEXGJHWDU\FRQWUROWKXV
VWUDLJKW MDFNHWLQJ WKH *HQHUDO 0DQDJHUV ZLWK OLWWOH OHHZD\ IRU LQGHSHQGHQW FRQWURO DQG
GHFLVLRQPDNLQJ)XUWKHUHYHQWKHVHSRZHUVZHUHQRWOLQNHGWRDQ\LQIODWLRQDU\LQGLFHV
DQGWKXVWKH\HURGHGZLWKSDVVDJHRIWLPHWLOODUHYLVLRQZDVDJDLQHIIHFWHG7KHSRZHUV
RI HDFK =RQDO 5DLOZD\ PXVW VXIILFH DQG EH FRQGXFLYH IRU PRQLWRULQJ RI GD\WRGD\
RSHUDWLRQVLQFOXGLQJ PDLQWHQDQFHRIIL[HGDVVHWVDVZHOODVUROOLQJVWRFNGHYHORSPHQW
RI WKH LQIUDVWUXFWXUH VXFK DV FRQVWUXFWLRQXSJUDGDWLRQ RI VWDWLRQV DQG GHVLJQLQJ DQG
FRQVWUXFWLRQRISODWIRUPVEDVHGRQWKHFXUUHQWDQGSURMHFWHGWUDIILFYROXPHVDGGLWLRQRU
UHPRYDO RI WUDLQV EHWZHHQ URXWHV XSJUDGLQJ RI UDLO LQIUDVWUXFWXUH RQ WKHLU ]RQHV
PDQDJLQJ ILQDQFHV DQG PRQHWL]LQJ 5DLOZD\ ODQG XQGHU WKHLU MXULVGLFWLRQ (DFK =RQDO
5DLOZD\SUHSDUHVLWVDQQXDO=RQDO5DLOZD\UHYHQXHEXGJHWDQGVXEPLWVLWWRWKH5DLOZD\
%RDUG+RZHYHUWKH5DLOZD\%RDUGSURYLGHVWKHDQQXDOILQDQFLDOEXGJHWRXWOD\IRUHDFK
=RQDO 5DLOZD\ :LWKLQ WKH UHYHQXH EXGJHW ILQDQFLDO RXWOD\ WKH =RQDO 5DLOZD\V VKRXOG
KDYHIXOOSRZHUVIRUH[SHQGLWXUHUHDSSURSULDWLRQDQGVDQFWLRQVVXEMHFWWRLWPHHWLQJLWV
SURSRUWLRQDWH HDUQLQJ WDUJHW 7KLV ZRXOG PDNH HDFK =RQDO 5DLOZD\ DFFRXQWDEOH IRU LWV
WUDQVSRUW RXWSXW DQG SURILWDELOLW\ :H QHHG QRW VD\ PRUH RQ WKLV EHFDXVH WKLV SDUDOOHOV
ZKDWKDVDOUHDG\EHHQVDLGDERXWWKHHPSRZHUPHQWRIWKH'LYLVLRQV7KHUHLVRQHSRLQW
WKDW QHHGV WR EH VWUHVVHG WKRXJK  7KLV &RPPLWWHH YLVXDOL]HV D IUDPHZRUN ZKHUH WKH
=RQHV EHFRPH LQGHSHQGHQW DQG DXWRQRPRXV DQG WR VRPH H[WHQW HYHQ FRPSHWH DJDLQVW
HDFKRWKHU

 7KLV WDNHV RQH WR WKH OHYHO RI WKH 5DLOZD\ %RDUG  7R UHFDSLWXODWH WKH =RQHV DUH
HPSRZHUHG DQG PDGH DXWRQRPRXV WKH 5DLOZD\ %RDUG KDYLQJ QR UROH WR SOD\ LQ WKHLU
GD\WRGD\ IXQFWLRQLQJ  3ROLF\ LV GHWHUPLQHG E\ WKH 0LQLVWU\ RI 5DLOZD\V DQG
FRPSHWLWLRQHQVXUHGE\WKH55$,7KRXJKWKLV&RPPLWWHHIDOOVVKRUWRIUHFRPPHQGLQJ
FRUSRUDWL]DWLRQ RI ,5 VHYHUDO SUHFRQGLWLRQV DUH QHFHVVDU\ IRU WKDW WR EH SRVVLEOH  WKH
5DLOZD\ %RDUG EHFRPHV D ELW OLNH D FRUSRUDWH ERDUG IRU ,5  7KH &KDLUPDQ RI WKH
5DLOZD\%RDUGVKRXOGWKXVEHOLNHD&(2+H6KHLVQRWILUVWDPRQJHTXDOVDQGVKRXOG
WKHUHIRUH KDYH WKH SRZHUV RI ILQDO GHFLVLRQPDNLQJ DQG YHWR LQ WKH FDVH RI D GLYLGHG
YLHZ :LWKWKHGHSDUWPHQWDOLVPEURNHQGRZQ DVH[SODLQHGLQ&KDSWHU RXUVXJJHVWHG
FRPSRVLWLRQ RI WKH %RDUG ZRXOG KDYH VRPHWKLQJ OLNH D  0HPEHU 7UDFWLRQ  5ROOLQJ
6WRFN  E  0HPEHU 3DVVHQJHU  )UHLJKW %XVLQHVV  F  0HPEHU +5  6WRUHV  G 
0HPEHU )LQDQFH 333  H 0HPEHU ,QIUDVWUXFWXUH DQGWZRRXWVLGHDQGLQGHSHQGHQW
H[SHUWV3HUKDSVLWQHHGVWREHUHLWHUDWHGWKDWWKH0LQLVWU\RI5DLOZD\VZLOOEHVWDIIHGE\
6HFUHWDU\OHYHORIILFHUV0HPEHU )LQDQFH 333 DQG0HPEHU +5 6WRUHV QHHG
QRWQHFHVVDULO\EHIURPLQVLGHWKH,5V\VWHPDQGODWHUDOLQGXFWLRQIURPWKHRXWVLGHVKRXOG
QRWEHUXOHGRXW7KH&KDLUPDQ D  E DQG H VKRXOGEHIURPLQVLGHWKH,5V\VWHP$Q
60


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

LQGLYLGXDOVKRXOGEHDSSRLQWHGDV&KDLUPDQRU0HPEHURQO\LIKHVKHSRVVHVVHVDWOHDVW
\HDUVRIVHUYLFHOHIW 7KLVFODXVHVKRXOGDOVRDSSO\WRDSSRLQWPHQWDV*0 

 7KHSUHVHQW5DLOZD\%RDUGLVVDGGOHGZLWKH[FHVVPDQSRZHU$VIDUDVWKLV&RPPLWWHH
FDQPDNHRXWWKHUHDUH0HPEHUV'*V6HFUHWDU\$0V$GYLVHUV('V
'LUHFWRU-'V''V86VDQG62V7KDWVDVWUHQJWKRIRIILFHUV7KLV
&RPPLWWHH LV QRW FRQYLQFHG DERXW WKH QHHG IRU D VHSDUDWH 5DLOZD\ %RDUG 6HFUHWDULDW
6HUYLFHV 5%66 RUWKH5DLOZD\%RDUG&OHULFDO6HUYLFHV 5%&6 RQFHUHIRUPVWDNHKROG
DQGWKH5DLOZD\%RDUGDQGLWVIXQFWLRQVDUHUHVWUXFWXUHG%XWWKDWLVLQWKHIXWXUHDQGLV
LPSRVVLEOH WR DQWLFLSDWH QRZ ,Q WKH UHYDPSHG 5DLOZD\ %RDUG EHORZ WKH %RDUG WKH
&RPPLWWHH UHFRPPHQGV QR PRUH WKDQ D OHYHO KLHUDUFK\ $GGLWLRQDO 0HPEHUV
$GYLVRUV6$*RIILFHUVDQG6*-$*RIILFHUV 7KHQXPEHURI'LUHFWRU-'DQG''86
RIILFHUVVKRXOGEHUDWLRQDOL]HGIURPWKHSUHVHQWWRDWOHDVWKDOIWKDWQXPEHU

 ,5GHYHORSHGDVDV\VWHPRIGHFHQWUDOL]HGUDLOZD\V,WKDVEHFRPHRYHUO\FHQWUDOL]HGDQG
FRQWUROOHG$VWKHPHVVDJHRIUDLOZD\UHIRUPLQRWKHUFRXQWULHVDOVRVKRZV,5QHHGVWR
EHFRPHPRUHGHFHQWUDOL]HG7KDWLVWKHRQO\ZD\IRULWWRIDFHXSWRFRPSHWLWLRQ%XWLQ
WKDWPRYHPHQWWRZDUGVGHFHQWUDOL]DWLRQDQGUHVWUXFWXULQJDSURSHUDFFRXQWLQJV\VWHPLV
DQHFHVVDU\SUHUHTXLVLWH:HWXUQWRZDUGVWKDWLVVXHLQ&KDSWHU













30

 Though these numbers have been contested in comments received on the Interim Report, no one has come
forwardtogivetheCommitteeanalternativesetofnumbers.

61


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG



















A
C
C
O
U
N
T
I
N
G

R
E
F
O
R
F
M
S


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIIRU0
0DMRU5
5DLOZD\3
3URMHFWVD
DQG5
5HVWUXFWXULQJR
RI5
5DLOZD\0
0LQLVWU\DQG5DLOZD\%RDUG

&KDSWHU$FFRXQWLQJ5HIRUPV

%DFNJURXQG

 ,5 ,QGLDQ 5DLOZD\V  LV D SDUW RI WKH *RYHUQPHQW \HW E\ YLUWXH RI EHLQJ HQJDJHG LQ
FRPPHUFLDODFWLYLWLHVLWLVGLIIHUHQWDQGXQLTXHLQPDQ\ZD\V*LYHQDVHSDUDWH%XGJHW
DQG D ODUJHO\ VHOIFRQWDLQHG GHFLVLRQ PDNLQJ VHW XS WKH RUJDQL]DWLRQ KDV DQ HODERUDWH
DFFRXQWLQJ V\VWHP ZKLFK LV PRUH VRSKLVWLFDWHG DQG LQIRUPDWLYH DQG H[SODQDWRU\ WKDQ
DFFRXQWLQJ V\VWHPV LQ RWKHU VHJPHQWV RI WKH *RYHUQPHQW 7KH V\VWHP OHQGV LWVHOI WR
DFFRXQWLQJ IRU H[SHQGLWXUH DQG DFFRXQWLQJ IRU HDUQLQJV %HLQJ D FRPPHUFLDO DQG
RSHUDWLRQDORUJDQL]DWLRQ,5KDVDOVRWUDGLWLRQDOO\XVHGLWVDFFRXQWLQJGDWDIRUWKHSXUSRVH
RIFRVWLQJRIYDULRXVDFWLYLWLHVDQGVHUYLFHV7KHFRVWLQJV\VWHPSXWLQSODFHPDQ\\HDUV
DJRLVEDVHGRQVRXQGSULQFLSOHVDQGVWULYHVWRH[WUDFWXVHIXOPDQDJHULDOLQIRUPDWLRQWR
VXSSRUWGHFLVLRQPDNLQJ


 7KHDFFRXQWLQJV\VWHPIROORZHGE\,5VHUYHGWKHREMHFWLYHVIRUTXLWHVRPHWLPH7KRVH
ZHUHWKHGD\VZKHQH[WHUQDOIXQGLQJVXSSRUWWR,5FDPHDOPRVWHQWLUHO\IURPWKH*HQHUDO
5HYHQXHVRIWKH*RYHUQPHQWLQWKHIRUPRI*URVV%XGJHWDU\6XSSRUW+RZHYHURYHUD
SHULRG RI WLPH QHZ FKDOOHQJHV KDYH HPHUJHG IRU ,5 )XQGLQJ VXSSRUW IURP WKH
*RYHUQPHQW LV QR ORQJHU IHDVLEOH DW HDUOLHU SURSRUWLRQV RI WRWDO SODQ VL]H DQG FHUWDLQO\
QRWDGHTXDWHWRVDWLDWHWKHHQRUPRXVDSSHWLWHRIDODUJHLQIUDVWUXFWXUHHQWLW\VXFKDVWKLV
([SHFWDWLRQV RI XVHUV KDYH XQGHUJRQH D SDUDGLJP FKDQJH FRPSHWLWLRQ LV SHUSHWXDOO\
WKUHDWHQLQJ WR GULYH EXVLQHVV DZD\ DQG QHHG IRU HIILFLHQFLHV RI RSHUDWLRQ KDYH EHFRPH
SDUDPRXQW0DUNHWVKDUHLQWKHIUHLJKWVHJPHQWKDVGZLQGOHGIURPRYHUWKUHHIRXUWKVWRD
OLWWOH RYHU RQH WKLUG RYHU D SHULRG RI DERXW KDOI D FHQWXU\ 7KLV KDV KDSSHQHG QRW RQO\
EHFDXVH WKH FRPSHWLQJ DOWHUQDWLYHV DUH PRUH DWWUDFWLYH IRU XVHUV EXW DOVR EHFDXVH ,5 LV
DIIOLFWHGZLWKDFDSDFLW\VDWXUDWLRQV\QGURPHDQGLVQRWJHDUHGWRFDUU\PRUH&DSDFLW\
DXJPHQWDWLRQ KDV EHHQ IDU VORZHU WKDQ ZDUUDQWHG RQ HFRQRPLF DQG HYHQ HQYLURQPHQWDO
FRQVLGHUDWLRQV:LWK*RYHUQPHQWIXQGLQJJHWWLQJWKLQQHURQDFFRXQWRIWKH*RYHUQPHQW
LWVHOI EHLQJ KDPVWUXQJ IRU UHVRXUFHV ZKLFK KDYH WR DOVR IHHG RWKHU FRPSHWLQJ DUHDV LQ
LQIUDVWUXFWXUH DQG VRFLDO VHFWRUV ,5 KDV OLWWOH RSWLRQ EXW WR ORRN IRU QRQJRYHUQPHQW
VRXUFHV RI IXQGV IRU LQYHVWPHQW 7KLV LPSHUDWLYH LV D PDMRU GULYHU IRU QHHGEDVHG
UHILQHPHQWV LQ WKH ZD\ ,5 SUHSDUHV DQG PDLQWDLQV DFFRXQWV DQG FRVWV LWV EXVLQHVVHV
DFWLYLWLHVDQGVHUYLFHV


 6KRUWFRPLQJVLQWKHDFFRXQWLQJV\VWHPIROORZHGE\,5KDYHEHFRPHDKDQGLFDSLQUHFHQW
\HDUV PDLQO\ EHFDXVH GHVSLWH WKH UHODWLYHO\ PLQXWH GHWDLO LQ ZKLFK DFFRXQW NHHSLQJ LV
GRQH E\ ,5 LWV DFFRXQWV DUH NHSW LQ D IRUP TXLWH UHPRYHG IURP WKH SULQFLSOHV DQG
SUDFWLFHV LQ VWDQGDUG FRPPHUFLDO DFFRXQWLQJ IROORZHG E\ FRPSDQLHV DQG RWKHUEXVLQHVV
HQWLWLHV &RQVHTXHQWO\ WKH\ DUH ODUJHO\ XQLQWHOOLJLEOH WR QRQ5DLOZD\ SHUVRQV HYHQ WR
WUDLQHGDFFRXQWDQWV$QRXWVLGHUZLWKDQLQWHUHVWLQLQYHVWLQJLQ,5RUGRLQJEXVLQHVVZLWK
63


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

,5 ZRXOG VXIIHU IURP ODFN RI FODULW\ DERXW ,5V ILQDQFLDO KHDOWK DQG ZRXOG JHW
GLVFRXUDJHGIRUODFNRIFRPIRUWRQDFFRXQWRIWKHWUDQVOXFHQWDFFRXQWV
 $GPLWWHGO\QRQJRYHUQPHQWIXQGLQJLQ,5KDVEHHQLQIXVHGIRURYHU\HDUVQRZLQWKH
IRUP RI PDUNHW ERUURZLQJV WKURXJK ,QGLDQ 5DLOZD\ )LQDQFH &RUSRUDWLRQ ,5)&  DQG
WKURXJK VSRUDGLF 333 LQLWLDWLYHV LQ UHFHQW \HDUV 6LPLODU FRQFHUQV KDYH DOZD\V H[LVWHG
ZLWK LQYHVWRUV LQ ,5)& +RZHYHU LW KDV EHHQ SRVVLEOH IRU ,5)& WR FUHDWH FRPIRUW
DPRQJVW LWV LQYHVWRUV RQ WKH EDVLV RI WUDQVSDUHQW DQG LQIRUPDWLYH DFFRXQWV RI WKH
FRPSDQ\ D VWURQJ EDODQFH VKHHW VWUHQJWK RI WKH EXVLQHVV PRGHO ZKLFK FHQWUHV DURXQG
ILQDQFLQJYLDEOHDQGUHYHQXHJHQHUDWLQJUROOLQJVWRFNDVVHWVDQGDSUDFWLFHRIVKDULQJRI
EURDG
RSHUDWLQJ
DQG
ILQDQFLDO SHUIRUPDQFH RI InvestmentinIRhastobesharplyfocusedanddirected
,5DVHYLGHQFHGEURDGO\LQ towards solution of the capacity constraint or
WKH5DLOZD\%XGJHWSDSHUV improvementofoperations.Quickpayoffprojectsthat
7KH PRGHO JLYHV DGHTXDWH caneasethecapacityconstraintthefastestwouldneed
FRQILGHQFH WR ,5)&V to be prioritized. IR needs to shift to a programme
LQYHVWRUV EROVWHULQJ WKH approach from the current projectoriented approach.
FRPSDQ\V DELOLW\ WR UDLVH Planhead wise investment approach has to be
WDUJHW UHVRXUFHV DW PRVW dispensed with, as it distorts investment priorities and
RSWLPXP FRVWV :LWK WKH promotes departmentalism. Investment should be
TXDQWXP RI QRQ5DLOZD\ focused on total capacity creation, including rolling
stock,assetrenewal,technologyinduction,Information
IXQGLQJ UHTXLUHG WR EH
Technology
and
identified
investments
in
LQIXVHG LQWR ,5 LQ WKH
modernizationetc.Thisshouldbequantifiableinterms
IRUHVHHDEOH IXWXUH JHWWLQJ ofincrementaltonnekms.Replacementandrenewalof
SLWFKHG DW PXFK KLJKHU assetsshouldbeensured.Forthispurpose,theadhoc
OHYHOV WR PHHW WKH JURZLQJ approach followed in respect of appropriation to
LQYHVWPHQW QHHGV RI WKH Depreciation Reserve Fund needs to be changed to a
5DLOZD\ V\VWHP DQG DUHDV rulebasedapproachthatadequatelytakescareofthis
RI LQYHVWPHQW FKDQJLQJ WR requirement. 17'3&)LQDO5HSRUW  
WKRVH SHUFHLYHG DV ULVNLHU
E\LQYHVWRUVWRGUDZVXFKDQLQGLUHFWFRPIRUWZRXOGEHFRPHLQFUHDVLQJO\GLIILFXOW6XFK
KLJKTXDQWXPRIUHVRXUFHPRELOL]DWLRQZRXOGGHPDQGDVDSUHUHTXLVLWHWUDQVSDUHQWDQG
LQWHOOLJLEOHDFFRXQWVRI,5ZKLFKVXJJHVWDKHDOWK\EXVLQHVVSRVLWLRQRI,5IRULQYHVWRUV
WRGHULYHDGHTXDWHFRPIRUW
 $PDMRURYHUKDXORI,5VDFFRXQWLQJV\VWHPVLVDOVRVWURQJO\VXJJHVWHGE\WKHSDUDPRXQW
QHHG WR SXW LQ SODFH D UHVSRQVLYH DQG UHOLDEOH FRVWLQJ IUDPHZRUN WR FRVW LWV EXVLQHVVHV
VHUYLFHVDQGDFWLYLWLHVZKLFKZRXOGXQGHUSLQPDMRUPDQDJHULDODQGVWUDWHJLFGHFLVLRQVRI
,5LQWKHHPHUJLQJHFRQRPLFPLOLHX$VVWDWHGEHIRUH,5KDVWUDGLWLRQDOO\KDGDFRVWLQJ
V\VWHPRIVRPHVXEVWDQFHEXW WKHUHKDVEHHQ OLWWOH DWWHQWLRQWRUHYLVLQJ RUXSGDWLQJ WKH
XQGHUO\LQJ QRUPV IRU DSSRUWLRQPHQW RI MRLQW FRVWV DQG RWKHU SDUDPHWHUV :LWK WKH
XQGHUO\LQJDFFRXQWLQJV\VWHPVXIIHULQJIURPKDQGLFDSVWKHUHVXOWDQWFRVWLQJVXIIHUVIURP

64


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

FRUUHVSRQGLQJ VKRUWFRPLQJV  %HIRUH ZH SURFHHG IXUWKHU D EULHI GHVFULSWLRQ RI WKH
VWUXFWXUHRI5DLOZD\$FFRXQWVDVLWH[LVWVWRGD\LVQHFHVVDU\


6WUXFWXUHRI5DLOZD\$FFRXQWV

 ,5FRPPDQGVDXQLTXHSODFHLQWKHVHQVHWKDWLWLVDFRPPHUFLDOHQWHUSULVHEXWGXHWRLWV
VWDWXV DV D SDUW RI WKH *RYHUQPHQW RI ,QGLD LW QHHGV WR DOVR FRQIRUP WR WKH DFFRXQWLQJ
UHTXLUHPHQWV ODLG GRZQ E\ WKH &RPSWUROOHU DQG $XGLWRU *HQHUDO &$*  DQG &RQWUROOHU
*HQHUDO RI $FFRXQWV &*$   ,WV DFFRXQWV DUH WKXV VWUXFWXUHG QRW RQO\ WR VHFXUH WKH
HVVHQWLDOUHTXLUHPHQWVRIFRPPHUFLDODFFRXQWLQJEXWDOVRWRFRQIRUPWRWKHSUDFWLFHVDQG
UHTXLUHPHQWV RI JRYHUQPHQW DFFRXQWLQJ 7KLV REMHFWLYH LV DFKLHYHG E\ NHHSLQJ WKH
DFFRXQWV RI ,5 RQ D FRPPHUFLDO EDVLV RXWVLGH WKH UHJXODU JRYHUQPHQW DFFRXQW DQG E\
PDLQWDLQLQJ D OLQN EHWZHHQ WKH WZR WR Theaccountingsystematpresentisorganized
VKRZ KRZ PXFK LV FRPLQJ LQWR to cater to government budget and control
*RYHUQPHQW UHYHQXHV WKURXJK ,5 DQG functionsandnottoshedlightonthecostof
KRZ PXFK LV VSHQW E\ WKH *RYHUQPHQW various activities and services. As a result,
ZKHWKHU DV FDSLWDO RU UHYHQXH computationofthelossesonvariousactivities
H[SHQGLWXUHLQFDUU\LQJRXWDFWLYLWLHVRI andthecontributionmadebyvariousservices
,5
is difficult. There is virtually no support to
 ,5 OD\V GHPDQGV IRU *UDQW management from the accounting side to
6XSSOHPHQWDU\'HPDQGV$SSURSULDWLRQ enable the manager to achieve his/her
$FFRXQWV HWF EHIRUH 3DUOLDPHQW OLNH objectives. IRs accounting system must be
RWKHU0LQLVWULHVRIWKH8QLRQ7KLVWKH\ revamped to accurately reflect the cost of
various activities and services. Only with a
GR WKURXJK D VHSDUDWH %XGJHW  ,Q
credible accounting system, IR can manage
DGGLWLRQ WKH\ DOVR SUHVHQW D EDODQFH
the commercial and social parts of the
VKHHW DQG SURILW DQG ORVV VWDWHPHQWV
business on a rational footing. The
XQOLNH DQ\RWKHU0LQLVWU\RIWKH8QLRQ
commercial part of the business must be
7KH $FFRXQWV RI ,5 JHW VXEVXPHG LQWR
managedtoyieldasurplusforreinvestmentin
WKHDFFRXQWVERRNRIWKH8QLRQRI,QGLD
thesystem.17'3&5HSRUW  
7R IDFLOLWDWH VXFK PHUJHU WKH OLVW RI
PDMRU PLQRU KHDGV /00+  RI $FFRXQWV RI 8QLRQ RI ,QGLD FRUUHVSRQGV ZLWK OLVW RI
KHDGVRI,QGLDQ,5DWWKHPDMRUKHDGOHYHO

 7KH ERRNV RI DFFRXQWV RI ,5 DUH DXGLWHG E\ WKH RIILFH RI WKH &$* DW YDULRXV OHYHOV 
GLYLVLRQVZRUNVKRS=RQDO+HDGTXDUWHUV3URGXFWLRQ8QLWVDQG5DLOZD\%RDUGVRDVWR
HQVXUH FRQIRUPLW\ ZLWK WKH JXLGHOLQHV DQGSULQFLSOHV ODLG GRZQE\ WKH &$*DQG &*$
3XEOLF$FFRXQWV&RPPLWWHH 3$& RI3DUOLDPHQWDOVRH[DPLQHVWKHDFFRXQWVLQWKHVDPH
PDQQHUDVLWZRXOGIRUDQ\RWKHU0LQLVWU\7KHDFFRXQWVPDLQWDLQHGLQDFFRUGDQFHZLWK
WKH UHTXLUHPHQWV RI *RYHUQPHQW $FFRXQWV DUH NQRZQ DV WKH )LQDQFH $FFRXQWV 7KH
)LQDQFH$FFRXQWVRIDUDLOZD\DUHFRPSLOHGDQQXDOO\IRUWKHSXUSRVHRISUHVHQWLQJLQD
FRQGHQVHG IRUP DQG YDULRXV WUDQVDFWLRQV DUH EURXJKW WR DFFRXQW LQ WKH ERRNV RI WKH

65


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

UDLOZD\ GXO\ FRQGHQVHG DQG FODVVLILHG LQ DFFRUGDQFH ZLWK WKH KHDGV RI DFFRXQW
SUHVFULEHGIRU*RYHUQPHQWDFFRXQWLQJ

 2QWKHRWKHUKDQGDFFRXQWVRIDUDLOZD\SUHVHQWHGLQDIRUPVRDVWRIDFLOLWDWHUHYLHZRI
LWVILQDQFHVDVDFRPPHUFLDOXQGHUWDNLQJDUHNQRZQDV&DSLWDODQG5HYHQXH$FFRXQWV


 7KHH[SHQGLWXUHLQ,5OLNH DQ\RWKHUHQWHUSULVHLVFODVVLILHGEURDGO\XQGHU&DSLWDODQG
5HYHQXH([SHQGLWXUHZLWKWKHFKDUDFWHURILQYHVWPHQWLVFODVVLILHGXQGHUYDULRXVKHDGV
VXFK DV &DSLWDO 'HSUHFLDWLRQ 5HVHUYH )XQG 'HYHORSPHQW )XQG HWF :LWK D YLHZ WR
JLYLQJ DQ RYHUDOO SLFWXUH RI
H[SHQGLWXUH RI FDSLWDO LQYHVWPHQW  The current accounting system in IR has not
QDWXUH LQFXUUHG E\ ,5 DV GLVWLQFW conformed to generally accepted accounting
IURP H[SHQGLWXUH DFWXDOO\ FKDUJHG principles, reporting and management practices.
Majoraspectsincludethecashbasedsystemandthe
WR&DSLWDO ORDQDFFRXQW DVHSDUDWH
fragmented and manual systems, and without a
DFFRXQW LV FRPSLOHG QDPHO\ WKH
general ledger. For commercial oriented business,
%ORFN $FFRXQW ZKLFK H[KLELWV WKH
the focus should be more attuned to performance,
HQWLUH H[SHQGLWXUH RI D FDSLWDO
risk management, customer focus, effectiveness,
QDWXUH LUUHVSHFWLYH RI WKH KHDG RI
governance, rewards and sanctions, cost
DFFRXQW WR ZKLFK LW KDV DFWXDOO\
management,value,servicequality,competitionand
EHHQ FKDUJHG  7KH /RDQ $FFRXQW
sustainablerelationships.
ZLOO JLYH RQO\ WKH H[WHQW RI WR
- ADBRailwaySectorInvestmentProgram(RRPIND
ZKLFK H[SHQGLWXUH LV DFWXDOO\ 36330).
FKDUJHGWRFDSLWDO


 :LWKDYLHZWRSURYLGLQJLQVLJKWLQWRWKHQDWXUHRIDVVHWVLQZKLFKLQYHVWPHQWLVPDGH
H[SHQGLWXUHRI&DSLWDOQDWXUHLVVHJUHJDWHGLQWRYDULRXVRWKHUKHDGVRIH[SHQGLWXUHFDOOHG
3ODQ+HDGV7KHSODQKHDGVLQGLFDWHDUHDVRI&DSLWDO([SHQGLWXUHUHODWLQJWR5DLOZD\V
EXVLQHVV VXFK DV 7UDFN 5HQHZDOV :RUNVKRSV 5ROOLQJ 6WRFN (OHFWULILFDWLRQ HWF
/LNHZLVH5HYHQXHH[SHQGLWXUHLVIXUWKHUEURNHQXSLQWR'HPDQGVZKLFKDUHIXQFWLRQDO
DUHDV RI RSHUDWLRQDO H[SHQGLWXUH  5HYHQXH DQG &DSLWDO WUDQVDFWLRQV DUH IXUWKHU
FODVVLILHG DV &RPPHUFLDO DQG 6WUDWHJLF DFFRUGLQJ WR WKH FODVV RI VHFWLRQ RI WKH
5DLOZD\ OLQH WR ZKLFK WKH\ SHUWDLQ 5HYHQXH H[SHQGLWXUH LV DOVR EURNHQ XS JDXJH ZLVH
%URDG*DXJH0HWHUDQG1DUURZ*DXJHHYHQWKRXJKQRZZLWKODUJHSURSRUWLRQJDXJH
EHLQJ%URDG*DXJHWKLVFODVVLILFDWLRQLVEHFRPLQJLQFUHDVLQJO\UHGXQGDQW 

 $VVWDWHGHDUOLHUWKHERRNVRI$FFRXQWVRI,5FRQWDLQDFFRXQWVGUDZQXSLQDFFRUGDQFH
ZLWK *RYHUQPHQWDO $FFRXQWLQJ SULQFLSOHV DQG DFFRXQWV GUDZQ XS DV D FRPPHUFLDO
HQWHUSULVHRIWKH8QLRQ7KHOLQNLQJRIWKHVHDFFRXQWVLVGRQHE\SDVVLQJWKHPWKURXJK
FHUWDLQDFFRXQWKHDGVLQWKHUDLOZD\ERRNV


66


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

1HHGIRU$FFRXQWLQJ5HIRUPV


 'HVSLWH D FRPSUHKHQVLYH DFFRXQWLQJ DUFKLWHFWXUH DQG SUHVHQWDWLRQ RI WKH DFFRXQWV WR
3DUOLDPHQWFRQFHUQVKDYHEHHQUDLVHGDVWRWKHFRPSOH[LW\RIDFFRXQWVRI,5LQWHUPVRI
WKHLU LQWHOOLJLELOLW\ PDLQO\ EHFDXVH RI D QRQVWDQGDUG DSSURDFK IROORZHG  DQG ODFN RI
VWDWHGSROLFLHVRIDFFRXQWLQJDQGSUDFWLFHVDVLVPDQGDWRU\LQDFFRXQWLQJIRUDQ\RWKHU
FRPPHUFLDO HQWHUSULVH WKH ZRUOG RYHU  ,QGHSHQGHQW RXWVLGHUV VXFK DV PXOWLODWHUDO
DJHQFLHVKDYHRIWHQREVHUYHGWKDWWKHDFFRXQWVRI,5DUHLQKHUHQWO\FRPSOH[DQGGRQRW
UHYHDO WKH WUXH ILQDQFLDO VWDWH RI WKH RUJDQL]DWLRQ  &RQVHTXHQWO\ WKHUH LV D JURZLQJ
FRQFHUQ IRU LWV ERRNV WR DOLJQ ZLWK FRPPHUFLDO HQWHUSULVHV EULQJLQJ RXW LWV OLDELOLWLHV
DVVHWVUHYHQXHVH[SHQGLWXUHHWFLQDPRUHOXFLGPDQQHU

 $VVHVVPHQWRIFXUUHQWOLDELOLWLHVDQGWKHLUSHULRGLFUHYDOXDWLRQLVQRWFXUUHQWO\EXLOWLQWR
WKH 5DLOZD\ $FFRXQWLQJ VWUXFWXUH 7KHUH LV QR PDQGDWH LQ WKH *RYHUQPHQW DFFRXQWLQJ
SULQFLSOHV WR DVVHVV OLDELOLWLHV  ERWK LQ SURMHFWV ZRUNV  DQG VWDII UHODWHG OLDELOLWLHV
SHQVLRQDU\   ,5 GRHV SURMHFW WKH OLDELOLWLHV WKURXJK EXGJHWDU\ DVVHVVPHQWV DQG UHYLVLWV
WKHDVVXPSWLRQVGXULQJWKH\HDUEXWVXFKUHYLHZVDUHEDVHGRQSDVWSURMHFWLRQVDQGQRW
RQ UHDO JURZWK DV ZRXOG DFWXDOO\ KDSSHQ  7KHUH DUH FHUWDLQ RWKHU FRQFHUQV ZLWK WKH
DFFRXQWLQJ V\VWHP RI ,5 ZKLFK In other words, IR accounts are not available in a
DUH EULHIO\ VWDWHG DV XQGHU D  format that is readily interpretable by lenders and
7KHFDVKEDVHGV\VWHPGRHVQRW investors. The present system of accounting does not
SURYLGH D IXOO SLFWXUH RI ,5V giveatrueandfairfinancialpicture.Forexample,the
ILQDQFLDO SRVLWLRQ DW DQ\ JLYHQ balance sheet does not show depreciation provisions
SRLQW RI WLPH DQG FKDQJHV WKDW and as a result it is impossible to ascertain the net
WDNH SODFH LQ WLPH DV D UHVXOW RI block.Similarly,thereisanoclearseparationbetween
JRYHUQPHQWSROLF\7KHV\VWHP revenue and capital, or between top of the line and
ODFNV D PHFKDQLVP WR UHIOHFW belowtheline,andthedataispresentedinawayin
,5V OLDELOLWLHV VXFK DV DFFUXHG which one cannot ascertain labour productivity or
OLDELOLWLHV DULVLQJ GXH WR employee cost. This is actually funny! Neither the
XQIXQGHG
SHQVLRQ
DQG government nor the Railway Board has any clue how
VXSHUDQQXDWLRQ EHQHILWV DQG the organization would fare if its accounts were
FXUUHQW OLDELOLWLHV DULVLQJ IURP presentedaspertheIndianGAAP(GenerallyAccepted
GLVFRQQHFW
EHWZHHQ Accounting Principles) followed by companies
FRPPLWPHQWVDQGSD\PHQWV E  incorporated under the Companies Act. Would you
7KH FXUUHQW V\VWHP GRHV QRW invest in such an entity? According to the NTDPC
WUDFN DVVHWV 'XH WR WKH ODUJH report, The need for Accounting Reform has been
H[SDQVHRI 5DLOZD\DVVHWV WKHLU recognized and accepted in the Railway Board. An
HQXPHUDWLRQ DQG YDOXDWLRQ LV Accounting Reform project was initiated and
DOZD\V D FDXVH IRU FRQFHUQ  ,W sanctionedin200405.However,theworkhasmadea
GRHVQRWSURYLGHLQIRUPDWLRQRQ tardy progress and the final results are far off yet.
WKH DVVHWV DQG WKH LPSDFW RI Unless IR undertakes sweeping accounting reform, no
FXUUHQW FRQVXPSWLRQ RQ WKH one is going to risk putting money into it. FDI will
VWRFN RI DVVHWV  F  7KH SUHVHQW remainapipedream.SadipanDeb,LiveMint
DFFRXQWLQJ V\VWHPOLPLWVWKH DELOLW\WRUHFRUGWKHWUXH FRVWRISURYLGLQJVHUYLFHVE\,5
67


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

:KLOH DQ DFFUXDO EDVHG DFFRXQWLQJ V\VWHP ZRXOG UHFRUG IORZ RI UHVRXUFHV DQG LQ
DGGLWLRQ WR FDVK IORZV LW ZRXOG DOVR UHFRUG XQSDLG FRQVXPSWLRQ SD\DEOHV  DQG
XQUHDOL]HG LQFRPHV UHFHLYDEOHV  DQG ZRXOG UHFRJQL]H ZKHQ WKH HFRQRPLF YDOXH LV
FUHDWHG WUDQVIRUPHG WUDQVIHUUHG RU H[WLQJXLVKHG LUUHVSHFWLYH RI ZKHWKHU RU QRW FDVK LV
H[FKDQJHG DW WKDW WLPH WKH SUHVHQW DFFRXQWLQJ V\VWHP LQ ,5 IDLOV WR GR VR $V D UHVXOW
DEHUUDWLRQV RFFXU 7R WDNH DQ H[DPSOH UHYHQXH UHDOL]HG E\ ZD\ RI DGYDQFH SDVVHQJHU
ERRNLQJLQWUDLQVJHWVDFFRXQWHGIRULQWKHZURQJSHULRGVRPHWLPHVLQWKHZURQJ\HDU
8QGHU D VWDQGDUG FRPPHUFLDO DFFRXQWLQJ V\VWHP SD\PHQWV PDGH IRU DFTXLVLWLRQ RI
SK\VLFDODVVHWVWKDWKDYHIXWXUHVHUYLFHSRWHQWLDODUHDPRUWL]HGRYHUWKHHQWLUHXVHIXOOLIH
RI WKH DVVHWV E\ FKDUJLQJ GHSUHFLDWLRQ  +RZHYHU WKH SROLF\ RI GHSUHFLDWLRQ LQ ,5 LV
ODUJHO\ XQVWDWHG DQG ZKDWHYHU UHTXLUHPHQW H[LVWV WR FRPSXWH TXDQWXP RI GHSUHFLDWLRQ
HDFK\HDUEDVHGRQWKH6LQNLQJ)XQGPHWKRGDQGUHVLGXDOOLIHRIHDFKDVVHWLVREVHUYHG
PRUH LQGLVXVH 7KH PHWKRGRORJ\ FRQWDLQHG LQIndian IR Finance Code Volume-, SDUD
  DOVR VXIIHUV IURP WKH VKRUWFRPLQJ WKDW LW HQYLVDJHV SURYLVLRQLQJ XQGHU WKH
'HSUHFLDWLRQ 5HVHUYH )XQG RQO\ LQ UHIHUHQFH WR KLVWRULFDO FRVW RI WKH DVVHW DQG QRW LWV
UHSODFHPHQW FRVW &RQVHTXHQWO\ SURYLVLRQ PDGH IRU GHSUHFLDWLRQ RI 5DLOZD\ DVVHWV
FRQWLQXHV WR EH ODUJHO\ DQ ad hoc H[HUFLVH GULYHQ PRUH E\ DYDLODELOLW\ RI PRQH\ WKDW
FRXOGEHDSSURSULDWHGWR'5)DQGQRWE\WKHLQWULQVLFUHTXLUHPHQWWRHIIHFWSURYLVLRQLQJ
DFFRUGLQJWRDQDFFHSWHGDFFRXQWLQJFRQYHQWLRQ0XFKWKHVDPHSUDFWLFHLVIROORZHGE\
,5IRUSURYLVLRQLQJIRUSHQVLRQOLDELOLWLHV



 ,Q FRQFOXVLRQ WKH DGYDQWDJHV RI UHOLDEOH FRVWSULFH FDOFXODWLRQV UHFRUGLQJ XVDJH RI
FDSLWDO SURSHUO\ GLVWLQJXLVKLQJ IRisfacedwithanimpendingfinancialcrisisduetothe
EHWZHHQ FXUUHQW DQG FDSLWDO GoIbeingcashstrappedandIRitselfbeinginneedof
H[SHQGLWXUHV
SUHVHQWLQJ
D huge investments in near future. The surplus
FRPSOHWH SLFWXUH RI GHEW DQG generatedbyoperationsofIRissimplynotenoughto
RWKHU OLDELOLWLHV DQG IRFXVLQJ supplytherequisitefunds.Thusitbecomesimperative
SROLF\ DWWHQWLRQ RQ ILQDQFLDO to look for external sources of funds. In this context,
SRVLWLRQ UDWKHU WKDQ MXVW FDVK adoption of accounting standards which are
IORZV LQKHUHQW LQ DQ HIILFLHQW understood by all becomes important. Unless the
DFFRXQWLQJ V\VWHP DUH GHQLHG WR accounting procedures of IR are transparent and
,5 &RQVHTXHQWO\ OHDYLQJ DVLGH intelligible to all, external investors cannot be
TXDOLWDWLYH JXHVVWLPDWHV ,5 LV expectedtoputinmoney.
XQDEOH WR TXDQWLWDWLYHO\ DVVHVV Other benefits of switching to Indian GAAP are:
LPSDFWRISROLF\LQWHUYHQWLRQVRQ Increased transparency in operations and Finances of
IR. 
FRVWRIYDULRXVVHUYLFHV


'LYHUVLI\LQJ,QYHVWRU%DVHRI,5


 6LQFH  ,5 KDV EHHQ


XWLOL]LQJ PRQH\ ERUURZHG IURP
WKH PDUNHW WKURXJK LWV ILQDQFLDO
DUP ,QGLDQ 5DLOZD\V )LQDQFH

A prerequisite for implementing financial discipline,


which is very necessary for longterm viability of IR.
Standardizationofaccountingsystemisnotrelatedto
privatization. It is in a sense linked with the very
viabilityofIR. 
A very important lacuna in accounting in IR is
inadequate handling of depreciation. The written
downvalueoftheassetisnotshown.
68

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

&RUSRUDWLRQ ,5)&  LWV IXOO\ RZQHG VXEVLGLDU\ IRU FUHDWLRQ RI LQIUDVWUXFWXUH
SUHGRPLQDQWO\ UROOLQJ VWRFN DVVHWV ,5 LV SUHFOXGHG IURP ERUURZLQJ IURP PDUNHWV
GLUHFWO\ ,5)& KDV FUHDWHG LQIUDVWUXFWXUH YDOXHG 5V  FURUH 5V  FURUH
ZRUWKRIUROOLQJVWRFNDQG5VFURUHZRUWKRIRWKHU5DLOZD\DVVHWV WLOOWKHHQGRI



:LWK LWV LQIUDVWUXFWXUH QHHGV JURZLQJ DQG FRQVWUDLQWV RQ EXGJHWDU\ VXSSRUW IURP WKH
*RYHUQPHQWQRWOLNHO\WRHDVHLQWKHIRUHVHHDEOHIXWXUHWKHFRPSXOVLRQRI,5WRDWWUDFW
SULYDWH LQYHVWPHQW LQ GLYHUVH IRUPV VKDOO RQO\ LQFUHDVH  :KHWKHU LW LV DVVHW FUHDWLRQ
WKURXJK WKH 333 PRGH RU WKURXJK )', RU DQ\ RWKHU PRGH LQFOXGLQJ ORDQV IURP
PXOWLODWHUDOIXQGLQJDJHQFLHVWKHLQYHVWRUVZRXOGQHHGWREHSURYLGHGDSSURSULDWHOHYHOV
RI FRPIRUW LI ELJWLFNHW LQIXVLRQ RI FDSLWDO LQ WKH 5DLOZD\ VHFWRU KDV WR EH IDFLOLWDWHG
(YHQRWKHUZLVH WKHKXJHVKHOIRI VDQFWLRQHG ZRUNVYDOXHGDW DERXW5V ODNKFURUHDW
ODVW VDQFWLRQHG FRVW FRPSOHWLRQ FRVW FRXOG EH RYHU 5V  ODNK FURUH  ZRXOG UHTXLUH
VWUHDPOLQHG IXQGLQJ PRGDOLWLHV WR FRPSOHWH DW OHDVW WKH PRUH SURGXFWLYH DQG XVHIXO
DPRQJVWWKHPLQDUHDOLVWLFDQGHFRQRPLFDOO\H[SHGLHQWWLPHIUDPH6XFKDKXJHTXDQWXP
RIIXQGLQJFDQQRWEHRSHUDWLRQDOL]HGSXUHO\RQWKHVWUHQJWKRI,5)&VEDODQFHVKHHW7KH
WDLOFDQFHUWDLQO\QRWZDJWKHGRJ,QVXFKDVFHQDULRDSDUWIURPEDQNDELOLW\DQGYLDELOLW\
RIVSHFLILFSURMHFWVLQYHVWRUVZRXOGH[SHFWUHOHYDQWLQIRUPDWLRQDERXWPHGLXPWRORQJ
WHUPILQDQFLDOKHDOWKRI,5WREHVKDUHGZLWKWKHPWKURXJKDFFRXQWVRIWKHRUJDQL]DWLRQ
&RQVHTXHQWO\ FDVWLQJ DFFRXQWV LQ VWDQGDUG FRPPHUFLDO DFFRXQWLQJ IRUPDW DQG PDNLQJ
DSSURSULDWH ILQDQFLDO GLVFORVXUHV ZLOO DVVXPH D JUHDWHU VLJQLILFDQFH IRU SURVSHFWLYH
LQYHVWRUVWRIDFLOLWDWHDVVHVVPHQWRIULVNDQGGHFLVLRQRQWKHLUSRVVLEOHLQYHVWPHQWIRUD\V
LQWR ,5 $SSURSULDWH ILQDQFLDO GLVFORVXUHV DQG DFFRXQWLQJ VWDWHPHQWV LQ DSSURSULDWH
GHWDLOVWREULQJRXWVWUHQJWKRIILQDQFLDOSRVLWLRQRI,5LQFOXGLQJLWVORQJWHUPOLDELOLWLHV
DORQH ZLOO FUHDWH D PRGHO IRU OHQGLQJ E\ WKHVH ILQDQFLDO LQVWLWXWLRQV DQG PXOWLODWHUDO
DJHQFLHV  ,Q IROORZ XS RI WKH GLVFXVVLRQ KHOG E\ WKH &RPPLWWHH ZLWK WKH FRQFHUQHG
RIILFLDOVWKH&RPPLWWHHKDVEHHQLQIRUPHGWKDW,&$,$5)KDVEHHQPDQGDWHGWRDGGUHVV
PRVW RI WKH DUHDV IODJJHG LQ WKH SUHFHGLQJ SDUDJUDSKV WKURXJK D 3LORW 6WXG\ DW $MPHU
'LYLVLRQDQG$MPHU*URXSRI:RUNVKRSV


 7KH ERRNV RI DFFRXQWV LQ LWV FXUUHQW IRUP FDQQRW IRUP D VWURQJ LPSDFW GXH WR UHDVRQV
VWDWHGLQDERYHSDUDJUDSKV7KHILQDQFLDOVWDWHPHQWVRI,5QHHGWREHUHGUDZQFRQVLVWHQW
ZLWK SULQFLSOHV DQG QRUPV QDWLRQDOO\ DQG LQWHUQDWLRQDOO\ DFFHSWHG $W D WLPH ZKHQ
FRPSDQLHV LQ ,QGLD DUH ORRNLQJ DW WLPHOLQHV IRU UHDOLJQLQJ WKHLU DFFRXQWV LQ OLQH ZLWK
,QWHUQDWLRQDO )LQDQFLDO 5HSRUWLQJ 6WDQGDUGV ,)56  ,5 DV D FRPPHUFLDO HQWLW\ FDQQRW
DIIRUGWRLQGHILQLWHO\H[LVWLQWKHSDVW


$FFRXQWLQJ5HIRUPVLQ,5


 $FFRXQWLQJQRUPVDQGSUDFWLFHVDUHEHLQJUHYLVLWHGZRUOGRYHU7KHHYROXWLRQRISXEOLF
ILQDQFLDO PDQDJHPHQW V\VWHPV DQG RSHQQHVV RI JRYHUQPHQW DFFRXQWV WR SXEOLF DQG
PDUNHWV KDYH OHG WR GHPDQG IRU LPSURYHPHQW RI VWDQGDUGV RI DFFRXQWLQJ DQG SUDFWLFHV
7KH HPSKDVLVRQVXVWDLQDELOLW\ RI NH\ JRYHUQPHQWSURJUDPPHV DQG LQLWLDWLYHV SRVVLEOH
69


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

DYDLODELOLW\ RI FUHGLWV IURP PDUNHWV DQG DFFRPSDQ\LQJ ULVN DSSUDLVDOV E\ PDUNHWV DQG
WUDQVSDUHQF\LQLWLDWLYHV RIWKHJRYHUQPHQWKDYH OHG WRDQ HYHQIXUWKHUDFFHQWXDWHG QHHG
IRU,5WREULQJLQPRUHH[DFWLQJDQGUHVSRQVLYHDFFRXQWLQJVWDQGDUGV7KHVHIDFWRUVKDYH
DOVR OHG WR D JUHDWHU QHHG IRU XQGHUVWDQGLQJ WKH DFFRXQWLQJ VWUXFWXUH DQG WKH QHHG IRU
WKRVH VWUXFWXUHV WR IRUP D FRPPRQ GHQRPLQDWRU IRU LQVWLWXWLRQV DQG PDUNHWV WR
XQGHUVWDQG DQG HYDOXDWH .H\ GHYHORSPHQWV LQ WKLV GLUHFWLRQ LQVRIDU DV ,5 LV FRQFHUQHG
DUHVXPPDUL]HGEHORZ
o ,Q*$6$% *RYHUQPHQW$FFRXQWLQJ6WDQGDUGVDQG$GYLVRU\%RDUG ZDV
HVWDEOLVKHGWROD\GRZQDFFRXQWLQJVWDQGDUGVIRU*RYHUQPHQW%RGLHV

o 7KHWK)LQDQFH&RPPLVVLRQRIVXSSRUWHGDFFUXDODFFRXQWLQJ,WVWDWHG
WKDWFDVKEDVHGV\VWHPIRFXVHVRQWUDQVDFWLRQVYLVjYLVWKHEXGJHW,WGRHVQRW
UHFRUGDQGUHSRUWFRPSOHWHILQDQFLDOLQIRUPDWLRQQHFHVVDU\IRUPDQDJHPHQWRI
UHVRXUFHV7KHWK)LQDQFH&RPPLVVLRQKDVDOVRVWUHVVHGDEXEEOHXSDSSURDFK
LQDFFUXDODFFRXQWLQJIRUJRYHUQPHQWERGLHV

o 6XFK WULJJHUV DORQJ ZLWK LQWHUQDWLRQDO H[SHULHQFH RI FRXQWULHV VXFK DV 1HZ
=HDODQG DQG $XVWUDOLD PRYLQJ WR IXOO DFFUXDO DFFRXQWLQJ DQG HYROYLQJ
SUDFWLFHVLQZRUOGERGLHVVXFKDV812(&'DQG(XURSHDQ8QLRQKDYHIXUWKHU
EURXJKWLQWRVKDUSIRFXVDQHHGIRUDFFRXQWLQJUHIRUPV

o 6HYHUDO&RPPLWWHHVVHWXSE\WKH0LQLVWU\KDYHDOVRFRPPHQWHGRQVXEVWDQWLDO
LQDGHTXDFLHV RI WKH DFFRXQWLQJ V\VWHP DQG QHHG IRU LQLWLDWLQJ UHIRUPV 0RUH
QRWDEO\5DNHVK0RKDQ  VWDWHG"The existing managerial, financial and
accounting systems are such that these new financial requirements cannot be
met in a business-as-usual scenario. ,W DOVR DGGHG WKDW If Indian Railways
have to attract funds from external sources, accounts need to be in the format
that is understood by lenders and investors. The methodology used by IR to do
its accounts has served it well as a government entity, so long as government
earned sufficient tax revenue to provide for socially desirable service and IR
operated under a monopolistic transportation market. The accounting
procedures were well understood within the organization but translucent to
outside world  7KH 5HSRUW ZHQW RQ WR DGYRFDWH WKH UDWLRQDOH DQG D FDVH IRU
XQGHUWDNLQJ$FFRXQWLQJ5HIRUPVRQDQXUJHQWEDVLV


 ,Q UHVSRQVH WR LQDGHTXDFLHV RI LWV DFFRXQWLQJ V\VWHP DQG LWV FULWLFLVP DQ $FFRXQWLQJ
5HIRUPV SURMHFW KDV EHHQ XQGHU H[HFXWLRQ LQ ,5 VLQFH  7KH REMHFWLYH RI WKH
$FFRXQWLQJ 5HIRUPV 3URMHFW LV WR FRQWULEXWH WRZDUGV LPSURYHG SHUIRUPDQFH RI ,5 E\
VXSSRUWLQJ LPSOHPHQWDWLRQ RI D SURJUDPPH RI LQVWLWXWLRQDO DQG SROLF\ UHIRUPV WR
LPSURYHWKHFRPPHUFLDORULHQWDWLRQRI,5LQFOXGLQJLPSOHPHQWDWLRQRILPSURYHPHQWVLQ
LWVDFFRXQWLQJV\VWHP7KLVLVLQWHQGHGWRSURYLGHILQDQFLDOFRPPHUFLDODQGPDQDJHPHQW
LQIRUPDWLRQ DQG WR VXSSRUW H[SDQVLRQ RI FRUH EXVLQHVVHV E\ ILQDQFLQJ SULRULW\
70


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

LQYHVWPHQWVWRRYHUFRPHUDLOZD\FDSDFLW\ERWWOHQHFNVDQGLPSURYHRSHUDWLRQDOHIILFLHQF\
DQGVDIHW\


 ,5 LQLWLDWHG HIIRUWV WRZDUGV $FFRXQWLQJ 5HIRUPV E\ DSSRLQWLQJ D FRQVRUWLXP RI
&RQVXOWDQWVZLWKDPDQGDWHWRUHVWUXFWXUHWKHH[LVWLQJDFFRXQWLQJV\VWHPLQVXFKDZD\
DVWR
L 6XSSRUWWKHH[LVWLQJJRYHUQPHQWUHSRUWLQJUHTXLUHPHQWVDQGWRFRQFXUUHQWO\PHHW
DOO DFFRXQWLQJ VWDQGDUGV VHW LQ IXWXUH E\ WKH *RYHUQPHQW
V $FFRXQWLQJ 6WDQGDUG
$GYLVRU\%RDUG *$6$% 
LL

3URYLGH DFWLYLW\ EDVHG UHYHQXH DQG FRVW GDWD ZKLFK ZRXOG EH FDSDEOH RI
LGHQWLI\LQJ DQG PLWLJDWLQJ V\VWHPLF PDLQWHQDQFH DQG RSHUDWLQJ LQHIILFLHQFLHV
IDFLOLWDWHJHQHUDWLRQRIGHWDLOHGUHYHQXHDQGFRVWLQSXWVIRUDVVHVVLQJ

D 3URILWDELOLW\RIGLIIHUHQWRSHUDWLRQV
E 3URILWDELOLW\RIGLIIHUHQWURXWHVVHFWLRQV
F 0DUJLQVIRUIOH[LELOLW\LQWDULIIUHJXODWLRQ
LLL

%H FDSDEOH RI SURGXFLQJ ILQDQFLDO VWDWHPHQWV RI WKH KLJKHVW TXDOLW\ DQG PHHWLQJ
DOO FRPPHUFLDO DFFRXQWLQJ UHTXLUHPHQWV LQWHUQDWLRQDOO\ DGRSWHG IRU UDLO LQGXVWU\
DQGDOVRWKHDFFRXQWLQJVWDQGDUGVODLGGRZQE\*$6$% *RYHUQPHQW$FFRXQWLQJ
6WDQGDUGV$GYLVRU\%RDUG 

LY

3URYLGH WKH 0LQLVWU\ RI 5DLOZD\V WKH FDSDELOLW\ WR HYDOXDWH WKH FRVWV DQG
SURILWDELOLW\RILQGLYLGXDOWUDIILFVWUHDPVEHWZHHQGLIIHUHQWSDLUVRISRLQWVDQGLQ
DGGLWLRQWRGHYHORSILQDQFLDOVWDWHPHQWVIRUYDULRXVOLQHV

Y

)DFLOLWDWHEUHDNGRZQE\PDLQOLQHVRIEXVLQHVVDQGE\PDLQVHUYLFHVZLWKLQWKHVH
OLQHV RI EXVLQHVV ,W VKRXOG XOWLPDWHO\ KHOS LQ RUJDQL]LQJ HDFK EXVLQHVV DV D
VHSDUDWHSURILWFHQWUHDQGDOVRHDFKVHJPHQWZLWKLQDEXVLQHVVXSWRWKHOHYHORID
WUDLQDVVHSDUDWHSURILWFHQWHU

YL

)DFLOLWDWH D FRPSOHWH DFFRXQWLQJ VHSDUDWLRQ RI WKH ILYH PDMRU DUHDV  IL[HG UDLO
LQIUDVWUXFWXUH SDVVHQJHU RSHUDWLRQV IUHLJKW RSHUDWLRQV VXEXUEDQ RSHUDWLRQV DQG
VXEXUEDQUDLOV\VWHPDVDVHSDUDWHEXVLQHVVVHJPHQWDQGRWKHUQRQFRUHVHUYLFHV
(DFK RI WKH QRQFRUH DFWLYLWLHV LQFOXGLQJ PDQXIDFWXULQJ XQLWV ZLOO KDYH
DFFRXQWLQJVHSDUDWLRQVRDVWRIDFLOLWDWHGHYHORSPHQWRIFRVWDQGSURILWFHQWHUV

YLL

)DFLOLWDWH LGHQWLILFDWLRQ RI ORVV PDNLQJ VHUYLFHV DQG DFWLYLWLHV DQG DOVR VRXQG
DQDO\VLVRIWKHXQGHUO\LQJUHDVRQVWRKHOSWKHPDQDJHPHQWLQGHFLVLRQPDNLQJ

YLLL

(YROYHVRXQGEDVLVDQGPRGHOVIRULGHQWLILFDWLRQRIMRLQWFRVWVDQGLWVDOORFDWLRQ
SDUWLFXODUO\ ZKHUH FRVWV RI VKDULQJ LQIUDVWUXFWXUH OLNH WUDFN 2+( V\VWHP
VLJQDOWHOHFRP VWDWLRQV \DUGV DQG WHUPLQDOV HWF DUH LQYROYHG $ PRGHO FRVW
VKDULQJSURWRFROEDVHGRQLQWHUQDWLRQDOO\DFFHSWHGSULQFLSOHVDOORFDWLRQVIROORZHG
E\ PDMRU HIILFLHQW UDLO V\VWHPV LQ WKH ZRUOG WR EH HYROYHG ,W PD\ DOVR FRQVLGHU
LGHQWLILFDWLRQ RI FHUWDLQ FRPPRQ DVVHWV DV LQGHSHQGHQW SURILW FHQWHUV YL] ELJ
SDVVHQJHUDQGIUHLJKWWHUPLQDOV
71

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

L[

%HDEOHWRSURYLGHVSHFLILFFRVWLQIRUPDWLRQWREHXVHGIRUPDUNHWLQJSXUSRVHV

[

)DFLOLWDWHDPRUHGHSHQGDEOHHVWLPDWLRQRIERWKIXOO\DOORFDWHGFRVWVDQGPDUJLQDO
FRVWV

[L

7RHYROYHDZRUNDEOHPHWKRGRORJ\IRUDUULYLQJDWWKHRSHUDWLQJDQGPDLQWHQDQFH
FRVWV RI WKH 0XPEDL VXEXUEDQ UDLOZD\ V\VWHP ZKLFK ZLOO LQYROYH VHSDUDWLRQ RI
0XPEDL VXEXUEDQ UDLOZD\ DFFRXQWV IURP WKH DFFRXQWV RI :HVWHUQ 5DLOZD\ DQG
&HQWUDO5DLOZD\


 7KH LQWHQWLRQ ZDV WKDW QHZ GHVLJQ DUFKLWHFWXUH VKRXOG IDFLOLWDWH FRPSOHWH DFFRXQWLQJ
VHSDUDWLRQ WKURXJK LQWURGXFWLRQ RI /2%V OLQHV RI EXVLQHVV  DQG /26V OLQHV RI VHUYLFH 
ZLWKLQ ,5 DQG OHDG WR D PRUH LQGHSHQGHQW DQG IRFXVHG DSSURDFK $W WKH VDPH WLPH LW
ZRXOG FUHDWH FRPSHWLWLRQ IRU DVVHWV DQG VHUYLFHV WKHUHE\ HOLPLQDWLQJ V\VWHPLF DQG
RSHUDWLRQDOLQHIILFLHQFLHV7KHQHZDUFKLWHFWXUH ZRXOGHQDEOHSUHSDUDWLRQRISURILWDELOLW\
VWDWHPHQWVIRUHDFKLGHQWLILHG/2%DQG/26WRVXSSRUWFULWLFDOPDQDJHPHQWDQGVWUDWHJLF
GHFLVLRQV $Q DFWLYLW\ EDVHG FRVWLQJ PRGHO ZDV DOVR H[SHFWHG WR EH RQH RI WKH NH\
GHOLYHUDEOHV,WZDVDOVRHQYLVDJHGWKDWDIWHUWKHLQLWLDOUHSRUWZDVVXEPLWWHGDQGDFFHSWHG
DQGDUHDVRQDEOHFRQVHQVXVFUHDWHGQRUPVDQGSDUDPHWHUVIRUDSSRUWLRQPHQWRIRYHUKHDGV
LQYDULRXVDFWLYLWLHVZRXOGEHZRUNHGRXWEDVHGRQDFWLYLW\EDVHGVXUYH\V


7KH&RQVXOWDQWVVXEPLWWHGWKHLU)LUVW5HSRUWLQ0D\ZKLFKZDVQRWDFFHSWDEOHWR
WKH 0LQLVWU\ 0RUH ZRUN HQVXHG DQG D )LQDO 5HSRUW ZDV VXEPLWWHG LQ -XO\  DIWHU
IXUWKHUGHOLEHUDWLRQV7KLV&RPPLWWHHLVRIWKHYLHZWKDWWKH&RQVXOWDQWVKDYHSURGXFHGD
UHDVRQDEO\ YDOXDEOH VHW RI UHFRPPHQGDWLRQV DQG WKHLU 5HSRUW FDQ HIIHFWLYHO\ IRUP WKH
FRUH RI IXUWKHU DFWLRQ E\ ,5 WR EULQJ DERXW $FFRXQWLQJ 5HIRUPV $ERXW WKH H[LVWLQJ
V\VWHP WKH &RQVXOWDQWV REVHUYHG WKDW The existing accounting system structured on
activity based demands, minor heads, sub-heads and detailed heads is adequate for
bringing into account the expenditure of the Indian Railways as per the extensively
detailed accounting classifications. The existing accounting system at times falls short of
the requirements in providing necessary inputs for business segments based on costing of
rail services with capabilities for identifying systemic, maintenance and operational
inefficiencies7KH&RQVXOWDQWVUHFRPPHQGHGUHRUJDQL]DWLRQRI,5VEXVLQHVVLQWROLQHV
RI EXVLQHVV /2%  DQG OLQHV RI VHUYLFHV /26   ,W ZDV DOVR HQYLVDJHG WKDW ,5 ZLOO
UHRUJDQL]H LWV PDQDJHPHQW VWUXFWXUH DURXQG WKHVH /2%V DQG /26V  7KH DFFRXQWLQJ
DUFKLWHFWXUH KDV EHHQ UHZRUNHG WR DOLJQ LW ZLWK FRPPHUFLDO SULQFLSOHV DORQJ ZLWK
JHQHUDWLRQ RI FRVW VWDWHPHQWV 7KH FRQFHSW RI FRVW VKDULQJ EHWZHHQ /2%V KDV EHHQ
HQYLVLRQHG DORQJ ZLWK VHUYLFH OHYHO DJUHHPHQWV 6/$  EHWZHHQ /2%V 7KH FRQFHSW RI
DFWLYLW\EDVHGFRVWLQJKDVDOVREHHQEURXJKWLQ,WKDVDOVREHHQODLGRXWWKDWDFFRXQWLQJ
UHIRUPVLQ,5KDYHWREH,7GULYHQDQGYDULRXVRWKHUVXEV\VWHPVKDYHWREHLQSODFHIRUD
FRPSUHKHQVLYHDFFRXQWLQJVROXWLRQ

 7KLV &RPPLWWHH ILQGV WKDW IROORZ XS DFWLRQ RQ WKH UHFRPPHQGDWLRQV RI WKH &RQVXOWDQWV
ODFNHGWKHVHQVHRIXUJHQF\WKDWZDVUHTXLUHGIRUVXFKDQLPSRUWDQWH[HUFLVH1RFRJHQW
72


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

UHDVRQVZHUHIRUWKFRPLQJIRUDOPRVWQRDFWLRQEHLQJWDNHQHLWKHUWRLPSOHPHQWRUPRGLI\
RUUHMHFWWKHUHFRPPHQGDWLRQVRIWKH&RQVXOWDQWVIRURYHUIRXU\HDUV:HUHFRPPHQGWKDW
WKLVPDWWHUVKRXOGEHDFFRUGHGWRSPRVWSULRULW\E\,5DVWKHHVWDEOLVKPHQWRIDQHIILFLHQW
DQGUHVSRQVLYHDFFRXQWLQJDQGFRVWLQJV\VWHPLVWKHILUVWVWHSSLQJVWRQHWRZDUGVDYLEUDQW
DQGFRPPHUFLDOO\YLDEOH5DLOZD\V\VWHP


 7KLV &RPPLWWHH ZDV LQIRUPHG WKDW ,5 KDV QRZ DSSRLQWHG $FFRXQWLQJ 5HVHDUFK
)RXQGDWLRQ $5)  RI ,QVWLWXWLRQ RI &KDUWHUHG $FFRXQWDQWV RI ,QGLD ,&$,  WR GHOLEHUDWH
DQG VXJJHVW VWHSV WRZDUGV DFFUXDO DFFRXQWLQJ DQG WR YDOLGDWH DVVXPSWLRQV PDGH LQ WKH
$FFRXQWLQJ 5HIRUPV UHSRUW RI WKH &RQVXOWDQWV  ,&$, $5) VKRXOG DOVR VXJJHVW DQ
RSHUDWLRQDO IUDPHZRUN WR HQVXUH WKH UHFRPPHQGDWLRQV DUH LPSOHPHQWHG ZLWKRXW
GLVORFDWLRQRIWKHH[LVWLQJDFFRXQWLQJV\VWHP


 *LYHQ WKH YDVW H[SDQVH RI ,5 VSDQQLQJ WKH OHQJWK DQG EUHDGWK RI WKH FRXQWU\ ZLWK D
FRPSOH[ IXQFWLRQDO VWUXFWXUH LQ WKH VPDOO ILHOG XQLWV ZRUNVKRSV GLYLVLRQV WUDLQLQJ
LQVWLWXWLRQVSURGXFWLRQXQLWVDQG]RQDOVHJPHQWVRI,5ZKLFKLVFDGUHEDVHGZLWKVWURQJ
GHSDUWPHQWDO DOOHJLDQFHV FKDQJHV VXJJHVWHG E\ WKLV &RPPLWWHH LQ WKLV EHKDOI ZLOO
LQHYLWDEO\ WDNH D ZKLOH WR VKRZ HIIHFW  WKLV ZRXOG UHTXLUH VXVWDLQHG FURVV IXQFWLRQDO
LQWHUIDFHVWRFUHDWHDQRZQHUVKLSRIDFFRXQWLQJUHIRUPV$FFRXQWLQJUHIRUPVDUHDOVRDQ
H[HUFLVH LQ FKDQJH PDQDJHPHQW QRW RQO\ LQ WKH ZD\ SURFHVVHV DQG PHFKDQLVPV DUH
ORRNHGDWEXWDOVRLQTXHVWLRQLQJGHHSO\LQJUDLQHGRUJDQL]DWLRQDOYDOXHV7KHHIIRUWDOVR
KDVWREHDSSURDFKHGZLWKIRFXVVLQFHLWLQYROYHVVKLIWLQJWKHDFFRXQWDELOLW\PDQWOHIURP
DODUJHVSUHDGRXWERG\WRFHUWDLQIRFXVHGJURXSV7KLV&RPPLWWHH LVFRQVFLRXVRIWKH
IDFW WKDW LPSOHPHQWDWLRQ RI WKHVH NLQGV RI V\VWHPLF FKDQJHV ZRXOG UHTXLUH WLPH DQG
VXVWDLQHG HIIRUWV:HDOVRUHFRJQL]HWKDWGXHWRQXPHURXVLQWHUIDFHVRIWKH DFFRXQWLQJ
UHIRUP SURMHFW ZLWK YDULRXV VWDNHKROGHUV FRQVHQVXV ZRXOG EH KDUG WR FRPH E\
7KHUHIRUHFRQFHUWHGHIIRUWVZLOOEHUHTXLUHGSLORWHGDQGFRQVWUXFWLYHO\JXLGHGDWDYHU\
KLJKOHYHOWRRSHUDWLRQDOL]HWUDQVLWLRQWRDQHIILFLHQWDQGUHVSRQVLYHDFFRXQWLQJV\VWHPLQ
DUHDOLVWLFWLPHIUDPH


5HFRPPHQGDWLRQVIRU,PSOHPHQWDWLRQRI$FFRXQWLQJ5HIRUPV


 )RU DFFRXQWLQJ UHIRUPV WR EH VXFFHVVIXOO\ LPSOHPHQWHG LW LV QHFHVVDU\ WKDW D FOHDU
URDGPDS EH ODLG RXW ZLWK WLPHOLQHV IRU FRQVWLWXHQW DFWLYLWLHV  ,W LV DOVR QHFHVVDU\ WR
FUHDWH RZQHUVKLS RI WKH SURMHFW ZLWK WKH WRS PDQDJHPHQW 7KH SURMHFW DOVR UHTXLUHV D
WHDP DFURVV ]RQDO ,5 ZKLFK QHHGV WR EH PRQLWRUHG DQG JXLGHG IURP WKH DSH[ OHYHO $
GHGLFDWHG3URMHFW2IILFHDWWKH0LQLVWU\OHYHOFRXOGDOVREHFRQVLGHUHG7KLV&RPPLWWHH
IXUWKHU UHFRPPHQGV WKDW WKH PRQLWRULQJ DJHQF\ ZKLFKHYHU IRUP LW WDNHV PXVW EH
VXSSRUWHGE\GRPDLQH[SHUWVIURPRXWVLGHWKH5DLOZD\V\VWHPDVDGHTXDWHFRPSHWHQFLHV
WR JXLGH WKH 3URMHFW PD\ QRW H[LVW ZLWKLQ ,5 7KH SURMHFW ZRXOG DOVR UHTXLUH VXVWDLQHG
IXQGLQJFRPPLWPHQWDVWKHSURMHFWZRXOGVSDQDIHZ\HDUVWLPH


73


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

 7KLV &RPPLWWHH UHFRJQL]HV WKDW FRPSOHWLRQ RI DFFRXQWLQJ UHIRUPV LQ ,5 LV DQ HVVHQWLDO
SUHUHTXLVLWH IRU WKH RUJDQL]DWLRQ JHDULQJ XS DQG PRYLQJ WRZDUGV D SURIHVVLRQDO DQG
FRPPHUFLDODSSURDFKWRLWVEXVLQHVV+DYLQJUHJDUGWRWKHIDFWWKDWWLPHLVRIHVVHQFHLQ
WKLV PDWWHU ZH UHFRPPHQG WKDW LPSOHPHQWDWLRQ RI WKH SURMHFW EH EURNHQ GRZQ LQWR
VPDOOHU VWDQGDORQH HOHPHQWV ZLWK FULWLFDO PDVV WR GHOLYHU YDOXH RQ FRPSOHWLRQ )RU
LQVWDQFH WLOO VXFK WLPH DV QRUPV IRU DSSRUWLRQPHQW RI RYHUKHDGV DUH ILQDOL]HG WKURXJK
DFWLYLW\EDVHGVXUYH\V,5FRXOGUHO\RQWKHH[LVWLQJQRUPVVXEMHFWWRVRPHQHHGEDVHG
DGMXVWPHQWV ZKLFK FRXOG EH LQFRUSRUDWHG FHQWHUHG RQ PDQDJHPHQWV SHUFHSWLRQ ,5
FDQQRWDIIRUGWRZDLWLQGHILQLWHO\IRUWKHZKROHSURMHFWWREHFRPSOHWHSDQ,QGLDEHIRUHLW
EHJLQVWRUHDSEHQHILWV

 7KLV &RPPLWWHH ZDV LQIRUPHG WKDW LQ ,5V YLHZ LW ZRXOG EH GHVLUDEOH WR ILUP XS D
WHPSODWHIRURQHGLYLVLRQRQHZRUNVKRSRQH]RQDO5DLOZD\SURGXFWLRQXQLWDQGWHVWDQG
SURYHLWEHIRUHWKHVFKHPHLVUROOHGRXWDFURVV,5:HFRQFXUZLWKVXFKDQDSSURDFK,W
ZRXOGDOVREHDGYLVDEOHWKDWDVVXPSWLRQVPDGHLQWKHFRQVXOWDQWVUHSRUWDUHWHVWHGLQRQH
ZRUNVKRS DQG RQH GLYLVLRQ IROORZHGE\ RQH ]RQDOKHDGTXDUWHUV  7KH RXWFRPH RI VXFK
WHVWLQJ QHHGV WR EH GHEDWHG DFURVV PDQDJHUV FRQWUROOLQJ YDULRXV OLQHV RI EXVLQHVV DQG
OLQHVRIVHUYLFHVEHIRUHWKHPRGHOLVH[WHQGHGWRRWKHUXQLWVRI,5,WZRXOGDOVREHXVHIXO
WR WDNH LQWR FRQVLGHUDWLRQ WKH DFFRXQWLQJ VWDQGDUGV ,QGLDQ *RYHUQPHQW $FFRXQWLQJ
6WDQGDUGV  ,*$6  DQG ,QGLDQ *RYHUQPHQW )LQDQFLDO 5HSRUWLQJ 6WDQGDUGV ,*)56  DV
SUHVFULEHG E\ *RYHUQPHQW $FFRXQWLQJ 6WDQGDUGV $GYLVRU\ %RDUG *$6$%   7KH
&RPPLWWHH EHOLHYHV WKDW WKH NH\ WR VSHHG\ $FFRXQWLQJ UHIRUPV LQ 5DLOZD\V ZLOO EH DQ
HIILFLHQW GHFLVLRQ WDNLQJ PHFKDQLVP DW HDFK VWDJH DQG WKLV PXVW UHFHLYH DSSURSULDWH
DWWHQWLRQ


 $ FRQFXUUHQW H[HUFLVH WKDW QHHGV WR EH XQGHUWDNHQ LV WR KDYH D UHORRN DW WKH H[LVWLQJ
DFFRXQWLQJDUFKLWHFWXUHLQWKHIRUPRIFKDUWRIDFFRXQWVZKLFKKDVQRWEHHQYLVLWHGDIWHU
WKH UHYLVHG DOORFDWLRQV FDPH LQWR EHLQJ LQ WKH ILUVW LQVWDQFH LQ   7KH EXVLQHVV
ODQGVFDSH RI ,5 KDV FKDQJHG FRQVLGHUDEO\ DQG WKH DOORFDWLRQV GR QHHG UHYLHZ LQ PDQ\
LQVWDQFHV,WPD\QRZEHGHVLUDEOHWRUHDOLJQWKHPZLWKWKH/2%VDQG/26V6LQFHWKH
DFFRXQWLQJ UHIRUPV FRQVXOWDQWV KDYH EDVHG WKHLU UHFRPPHQGDWLRQV RQ WKHH[LVWLQJ FKDUW
RIDOORFDWLRQVLWZRXOGEHSUXGHQWWRUHYLVLWWKHVDPHVRWKDWLQFRQVLVWHQFLHVLIDQ\DUH
DGGUHVVHG$VLQWKHFDVHRILPSOHPHQWDWLRQRIWKHFRUHSURMHFWZHUHFRPPHQGWKDW,5
PLJKW FRQVLGHU IRUPLQJ D *URXS WR UHYLVLW WKH FKDUW RI DFFRXQWV :KLOH GRLQJ VR WKH\
VKRXOG VHHN QDWLRQDO DQG LQWHUQDWLRQDO SUDFWLFHV DQG PLJKW REWDLQ SURIHVVLRQDO KHOS LI
QHFHVVDU\

 $VVHWVRI,5DUHVSUHDGDFURVVWKHFRXQWU\DUHYHU\ODUJHLQQXPEHUVDQGWKHGDWHDQG
FRVWRIDFTXLVLWLRQDUHQRWDOZD\VDYDLODEOHUHDGLO\%ULQJLQJDOODVVHWVWRWKHERRNZRXOG
EH D VXEVWDQWLDO H[HUFLVH QRW RQO\ LQ WHUPV RI HQXPHUDWLRQ EXW DOVR WKHLU YDOXDWLRQ ,W
ZRXOG EH QHFHVVDU\ WKDW WKLV H[HUFLVH LV SODQQHG PHWLFXORXVO\ DQG H[HFXWHG LQ HDUQHVW
7KHSROLF\IRUDVVHWHQXPHUDWLRQDQGWKHIRUPLQZKLFKLWVKDOOEHPDLQWDLQHGDFURVVWKH
RUJDQL]DWLRQ LQ YDULRXV DVVHW FODVVHV QHHGV WR EH FOHDUO\ ODLG RXW  $ UHDOLVWLF DQG
74


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

SUDJPDWLF DSSURDFK LQ FDVHV ZKHUH GHWDLOV RI WKH FUHDWLRQ RI DVVHWV DUH QRW DYDLODEOH LQ
UHTXLUHG GHWDLOV DQG VXFK FDVHV FRXOG EH PDQ\ LQ DQ RUJDQL]DWLRQ ZKLFK LV RYHU 
\HDUVROG ZRXOGQHHGWREHODLGGRZQLQDGYDQFHWRVLPSOLI\DQGH[SHGLWHWKHSURFHVV
,QWKHLUTXHVWIRUWKHSHUIHFW,5PXVWQRWVSXUQWKHYHU\JRRG7KHVHDFWLYLWLHVQHHGWREH
WDNHQ XS RQ XUJHQW EDVLV LQ FRQVXOWDWLRQ ZLWK GRPDLQ H[SHUWV RXWVLGH ,5 DV QHFHVVDU\
7KHZKROHH[HUFLVHPXVWFRQIRUPWRWKHJHQHUDOO\DFFHSWHGDFFRXQWLQJSULQFLSOHV

 6XERSWLPDO SURJUHVV LQ WKH $FFRXQWLQJ 5HIRUPV 3URMHFW GXULQJ WKH ODVW IHZ \HDUV LV
SDUWO\ GXH WR WKH IDFW WKDW 5DLOZD\V DVVLJQHG LW D ORZHU SULRULW\ LQ FRPSDULVRQ WR RWKHU
GD\WRGD\RSHUDWLRQDOLVVXHVRIKLJKHUYLVLELOLW\$QRWKHUUHDVRQLVWKDW5DLOZD\VGRQRW
KDYH PDQ\ RIILFHUV ZLWK WKH ULJKW SURIHVVLRQDO H[SHUWLVH WR VWHHU WKH SURMHFW :KDW LV
UHTXLUHGLVDPXOWLGLVFLSOLQDU\WHDPRI5DLOZD\RIILFHUVDQGGRPDLQH[SHUWVIURPRXWVLGH
5DLOZD\V ZLWK FOHDU PDQGDWH DQG DFFHVV WR WRS PDQDJHPHQW IRU TXLFN GHFLVLRQV RQ
FULWLFDOPDWWHUVUHODWHGWRWKHSURMHFW2QHRSWLRQEHIRUHWKH5DLOZD\VFRXOGEHWRDVVLJQ
WKH3URMHFWWRDSURIHVVLRQDORUJDQL]DWLRQNHHSLQJLQPLQGWKDWWKLVLVQRWPHUHO\DQ,7
SURMHFWEXWDFRPSRVLWHRQHLQYROYLQJDOVRVRXQGXQGHUVWDQGLQJDQGGRPDLQNQRZOHGJH
RI5DLOZD\DFFRXQWLQJV\VWHPVFRPPHUFLDODFFRXQWLQJV\VWHPDFURVVLQGXVWULHVDQGWKH
PDQQHU LQ ZKLFK 5DLOZD\V FDUU\ RXW EXVLQHVV ([SHUWLVH RI FRVWLQJ LQ FRPSOH[
PXOWLOD\HUHG V\VWHPV ZRXOG DOVR EH D SUHUHTXLVLWH 7KHUHIRUH VHOHFWLRQ RI WKH DJHQF\
PXVWEHGRQHIROORZLQJ ULJRURXVGXHGLOLJHQFH,IQHFHVVDU\WKHVHOHFWHGDJHQF\ PLJKW
DOVR EH LQ WKH IRUP RI D V\QGLFDWH RI PXOWLSOH RUJDQL]DWLRQV ZLWK GLYHUVH VHWV RI
FRPSHWHQFLHV 5HDOLVWLF WLPHOLQHV PXVW EH GUDZQ XS DQG HQIRUFHG D FRUH WHDP ZLWK
PHPEHUV IURP 5DLOZD\V DQG SURIHVVLRQDOV IURP WKH KLUHG RUJDQL]DWLRQ HQJDJLQJ HYHQ
RXWVLGHUGRPDLQH[SHUWVRQMREVSHFLILFEDVLV QRPLQDWHGIDFLOLWDWLRQWHDPVVHWXSDFURVV
5DLOZD\ ]RQHV DQG D 8VHU 5HTXLUHPHQW 6WXG\ *URXS HVWDEOLVKHG &RQWLQXLW\ RI
DVVRFLDWHG RIILFHUV WKURXJK WKH WHQXUH RI WKH 3URMHFW PXVW EH DVVXUHG IRU WKH 3URMHFW WR
VXFFHHG$VVWDWHGHDUOLHUWKHUHZLOOEHQHHGIRUPRQLWRULQJDQGJXLGDQFHDWWKHWRSOHYHO
LQ5DLOZD\VIRUWKHSURMHFWWRSURGXFHWKHGHVLUHGGHOLYHUDEOH

 ,QWKHRYHUDOOVWUXFWXUHRIWKHRUJDQL]DWLRQDQGLWVEXVLQHVVHVWKDWZHKDYHUHFRPPHQGHG
FRVWLQJ RI VHUYLFHV DFWLYLWLHV /2%V /26V HWF IRU DSSURSULDWH PDQDJHPHQW GHFLVLRQV
ZRXOG EH FULWLFDO 7KH FRVWLQJ DVSHFW QHHGV VSHFLDO DWWHQWLRQ JLYHQ WKH IDFW WKDW LQ WKH
FRPSOH[ RUJDQL]DWLRQDO PDWUL[ RI ,5 D PDMRULW\ RI DFWLYLWLHV DUH FKDUDFWHUL]HG E\ MRLQW
FRVWV  7KH PRYHPHQW DZD\ IURP DQ DSSURDFK FHQWHUHG RQ IXOO\ GLVWULEXWHG FRVW WR D
FRQFHSW RI GLUHFW FRVWV LQGLUHFW FRVWV DQG PDUJLQDO FRVWV QHHGV WR EH FDUHIXOO\ VWHHUHG
1HFHVVDU\PHFKDQLVPVDQGSURWRFROVKDYHWREHHVWDEOLVKHGIRUFRQFHSWRIXVHUSD\VEH
LWIRUWKHVHUYLFHRUSURGXFWVRI,5RULQWHUQDOFXVWRPHUVRIWKHRUJDQL]DWLRQ,WLVDORQJ
WKHVHOLQHVWKDWWKH/2%DQG/26QHHGVWREHGHVLJQHG

 $VDOVRVWDWHGLQWKH)LQDO5HSRUWRIWKH&RQVXOWDQWVIRUDUHDVRQDEOHFKDQFHRIVXFFHVV
LW ZRXOG EH QHFHVVDU\ WKDW D UREXVW VHFXUH PRGHUQ HIILFLHQW DQG HIIHFWLYH LQIRUPDWLRQ
WHFKQRORJ\ ,7  LQIUDVWUXFWXUH LQ SXW LQ SODFH :H UHFRPPHQG WKDW DGHTXDWH IXQG
SURYLVLRQLQJ EH HQVXUHG 7KH IROORZLQJ WLPHOLQHV KDYH EHHQ LQGLFDWHG WR XV E\ WKH
FRQFHUQHGGLUHFWRUDWHLQ5DLOZD\%RDUG
75


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


7HUP
6KRUW
7HUP

PRQWKV

0HGLXP
7HUP

PRQWKV

/RQJ
7HUP

PRQWKV

'HVFULSWLRQ

/LQHDULW\

x 5DWLRQDOL]DWLRQDQGVDQLWL]DWLRQRI&KDUWRIDOORFDWLRQVWRUHVWRUHOLQHDULW\DQG
FRQVLVWHQF\LQFODVVLILFDWLRQRIKHDGVIRUDFFRXQWLQJWUDQVDFWLRQVDQGIDFLOLWDWH
FRPSLODWLRQRIDFFRXQWVLQ/LQHRI%XVLQHVV /2% DQG/LQHVRI6HUYLFH /26 
x 5HYLVLRQRI)LQDQFLDO$FFRXQWLQJUHSRUWLQJSUHVHQWDWLRQ
x 6WDWHPHQWRIVLJQLILFDQWDFFRXQWLQJSROLFLHV
x $GRSWLRQRI,*$6
x 9DOLGDWLQJ$FFRXQWLQJ5HIRUPV5HSRUWDQGLQLWLDWLQJPHDVXUHVIRUDWHVWLQJRIWKH
UHSRUWLQDILHOGXQLW
x ,QLWLDWLQJPHDVXUHVIRUHQXPHUDWLRQRI$VVHWVRI,5
x &UHDWLRQRI$FFRXQWLQJ5HIRUPVLQIRUPDWLRQERDUGIRU,5WRYLHZWKH
GHYHORSPHQWVDQGFRQWULEXWH7KLVQHHGVWREHDQ,7EDVHGVROXWLRQFDSDEOHRI
VHHNLQJYLHZVRQGRFXPHQWVDQGLVVXHV
x ,QLWLDWLRQRIUHTXLUHPHQWIRUPRYHWRZDUGVDFFUXDODFFRXQWLQJ
x ,QLWLDWLRQRIOLDELOLW\DVVHVVPHQWDQGSURMHFWLRQIRU,5

x6HHNLQJUHVXOWVRIWKHYDOLGDWLRQVRIDFFRXQWLQJUHIRUPVUHSRUWDQGLQWHUQDO
GHOLEHUDWLRQDPRQJVWDNHKROGHUVIRUDFRPSUHKHQVLYHYLHZ
x'HFLVLRQRQIRUPDWRI$VVHWVHQXPHUDWLRQLQWKHIRUPRI$VVHWVUHJLVWHUIRU,5
x,QLWLDWLRQRIOD\LQJGRZQDGHSUHFLDWLRQSROLF\IRU,5IRUYDULRXVFODVVHVRIDVVHWV
x)LQDOL]DWLRQRI/HDVHDFFRXQWLQJDQGSURMHFWDFFRXQWLQJVWDQGDUGV
x'UDZLQJXSRIVDPSOHDVVHWVUHJLVWHUVRIDILHOGXQLWRIDGLYLVLRQDQG+HDGTXDUWHUV
RID]RQDOUDLOZD\,QLWLDWLRQRIDQRQOLQH$VVHW0DQDJHPHQWV\VWHPVRWKDWILHOG
XQLWVFRXOGORJLQWKHLUDVVHWVZLWKQHFHVVDU\GHWDLOV
x)LQDOL]DWLRQRIOLDELOLW\DVVHVVPHQWDQGSURMHFWLRQIRU,5
x)LQDOL]DWLRQRI&KDUWRIDOORFDWLRQV
x,VVXDQFHRIJXLGDQFHQRWHVIRUFRUUHFWDFFRXQWLQJWUHDWPHQWVDVSHUDFFRXQWLQJ
VWDQGDUGV
x,QLWLDWLRQRIFRVWLQJPHWKRGRORJ\IRUFRVWLQJRIDFWLYLWLHVDQGVHUYLFHV
x)LQDOL]DWLRQRIUHYHQXHVKDULQJPHWKRGRORJLHVEHWZHHQ/2%V
x)LQDOL]DWLRQRIWUDFNDFFHVVFKDUJHPHWKRGRORJ\
x6HOHFWLRQRIDSSURSULDWHDFFRXQWLQJ,7QHWZRUNVHFXULW\DJHQFLHVIRUFRQYHUWLQJ
WKHGHWDLOVRIDFFRXQWLQJUHIRUPVSULQFLSOHVDQGGHWDLOVIRUFRQYHUWLQJWRVRIWZDUH
VSHFLILFDWLRQV,7LQIUDVWUXFWXUHQHHGV
x7UDLQLQJRIWHDPVLQEHVWSUDFWLFHVDFFRXQWLQJVWDWHPHQWVXQGHUDFFRXQWLQJ
UHIRUPV,WLVQHFHVVDU\WKDWDFRUHJURXSWUDLQNH\UHVRXUFHVZKLFKLQWXUQEHFRPH
UDLOZD\ZLGHUHVRXUFHV
x'HYHORSPHQWRIILQDQFLDODQGPDWKHPDWLFDOPRGHOVIRUFDSLWDOEXGJHWLQJ
DSSUDLVDOVRILQIUDVWUXFWXUHSURMHFWVFRVWEHQHILWDQDO\VLVHQYLURQPHQWDOLPSDFW
VHQVLWLYLW\DQDO\VLVHWF7KLVZLOOHQDEOHWREULQJEHVWLQGXVWU\SUDFWLFHVLQWRWKH
PDLQVWUHDP
x'HYHORSPHQWRISURGXFWVHUYLFHVFRVWLQJPRGHOVIRUSULFLQJSURGXFWVVHUYLFHVDQG
VHWWLQJXSRIWDULIIV

x )LQDOL]DWLRQRIDVVHWVUHJLVWHUIRU,5
x *HQHUDWLRQRIDEDODQFHVKHHWDQGSURILWDQGORVVDFFRXQWRID]RQDO,5DORQJZLWK
WKRVHRIYDULRXV/2%VLQGLFDWLQJSURILWDELOLW\RURWKHUZLVHRI]RQDO,5DQG/2%V
x 3UHVHQWDWLRQRI,QGLDQ,5EDODQFHVKHHWDQG3 /VWDWHPHQWDVSHU&RPPHUFLDO
SULQFLSOHV
x $QH[WHQGHGKDQGKROGLQJDUUDQJHPHQWZLWKDFFRXQWLQJ,7QHWZRUNVHFXULW\
DJHQFLHVIRUPDLQWHQDQFHDQGXSJUDGDWLRQRIWKHV\VWHPV
x (VWDEOLVKLQJNH\SHUIRUPDQFHSDUDPHWHUVDQGLQGLFDWRUV


$OOWKHVH
DFWLYLWLHVFDQ
EHSDUDOOHOWR
HDFKRWKHUDV
WKHRXWFRPHRI
RQHLVQRW
FRQQHFWHGWR
WKHRWKHU

7KHILUVWWKUHH
DFWLYLWLHVDUH
OLQHDUDQGWKH
UHPDLQLQJDUH
SDUDOOHO





76

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

7LPHOLQHVDQG%UHDN8SRI$FWLYLW\


:H KDYH HPSKDVL]HG HDUOLHU WKDW LQ PDQ\ZD\V FRPSOHWLQJ LPSOHPHQWDWLRQ RI WKH DFFRXQWLQJ
DQG FRVWLQJ UHIRUPV LQ ,5 ZRXOG EH FHQWUDO WR PDQ\ FKDQJHV HQYLVDJHG LQ RWKHU
UHFRPPHQGDWLRQVWKDWZHKDYHPDGHHOVHZKHUHLQWKLV5HSRUW:HWKHUHIRUHIHHOWKDWDWLPHOLQH
VSDQQLQJPRQWKVIRUORQJWHUP PLOHVWRQHVZRXOGVHULRXVO\FRPSURPLVHRQWKHSRWHQWLDO
RI ,5 WR ODXQFK LWVHOI RQ D QHZ JURZWK WUDMHFWRU\ 2XU DWWHQWLRQ LV DWWUDFWHG WR WKH 3URMHFW
7LPHOLQHVLQGLFDWHGLQ WKH&RQVXOWDQWV)LQDO 5HSRUWZKHUHDWLPHSHULRGRIDERXW PRQWKV
IRUWKH,PSOHPHQWDWLRQ3KDVHKDVEHHQVXJJHVWHG7KLV&RPPLWWHHGRHVDFNQRZOHGJHWKDWDV
DJDLQVWPRQWKVHQYLVDJHGIRUWKHGHVLJQSKDVHWKHDFWXDOWLPHWDNHQZDVPXFKORQJHU<HW
ZH DUH QRW SHUVXDGHG WR DFFHSW WKH WLPHOLQHV RI  PRQWKV VXJJHVWHG WR XV LQ LQWHUDFWLRQV
ZLWK5DLOZD\RIILFLDOV:HEHOLHYHWKDWJLYHQWKHFDSDELOLWLHVWKDWH[LVWLQWKHRSHUDWLRQVGULYHQ
RUJDQL]DWLRQWKDW,5LVLWVKRXOGEHSRVVLEOHWRKDYHWKH3URMHFWJRRQVWUHDPLQDSKDVHGPDQQHU
LQ D PXFK VKRUWHU WLPH IUDPH ZLWK DQ RXWHU OLPLW RI DERXW WZR \HDUV :H UHLWHUDWH RXU
UHFRPPHQGDWLRQPDGHHDUOLHUWKDWLPSOHPHQWDWLRQRIWKHDFFRXQWLQJUHIRUPVSURMHFWEHEURNHQ
GRZQ LQWR VPDOOHU VWDQGDORQH HOHPHQWV ZLWK FULWLFDO PDVV WR GHOLYHU YDOXH RQ FRPSOHWLRQ ,5
FDQQRWDIIRUGWRZDLWLQGHILQLWHO\IRUWKHZKROHSURMHFWWREHFRPSOHWHSDQ,QGLDEHIRUHLWVWDUWV
WRUHDSEHQHILWV

77


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

7LPHOLQHVDQG%UHDN8SRI$FWLYLW\


:H KDYH HPSKDVL]HG HDUOLHU WKDW LQ PDQ\ZD\V FRPSOHWLQJ LPSOHPHQWDWLRQ RI WKH DFFRXQWLQJ
DQG FRVWLQJ UHIRUPV LQ ,5 ZRXOG EH FHQWUDO WR PDQ\ FKDQJHV HQYLVDJHG LQ RWKHU
UHFRPPHQGDWLRQVWKDWZHKDYHPDGHHOVHZKHUHLQWKLV5HSRUW:HWKHUHIRUHIHHOWKDWDWLPHOLQH
VSDQQLQJPRQWKVIRUORQJWHUP PLOHVWRQHVZRXOGVHULRXVO\FRPSURPLVHRQWKHSRWHQWLDO
RI ,5 WR ODXQFK LWVHOI RQ D QHZ JURZWK WUDMHFWRU\ 2XU DWWHQWLRQ LV DWWUDFWHG WR WKH 3URMHFW
7LPHOLQHVLQGLFDWHGLQ WKH&RQVXOWDQWV)LQDO 5HSRUWZKHUHDWLPHSHULRGRIDERXW PRQWKV
IRUWKH,PSOHPHQWDWLRQ3KDVHKDVEHHQVXJJHVWHG7KLV&RPPLWWHHGRHVDFNQRZOHGJHWKDWDV
DJDLQVWPRQWKVHQYLVDJHGIRUWKHGHVLJQSKDVHWKHDFWXDOWLPHWDNHQZDVPXFKORQJHU<HW
ZH DUH QRW SHUVXDGHG WR DFFHSW WKH WLPHOLQHV RI  PRQWKV VXJJHVWHG WR XV LQ LQWHUDFWLRQV
ZLWK5DLOZD\RIILFLDOV:HEHOLHYHWKDWJLYHQWKHFDSDELOLWLHVWKDWH[LVWLQWKHRSHUDWLRQVGULYHQ
RUJDQL]DWLRQWKDW,5LVLWVKRXOGEHSRVVLEOHWRKDYHWKH3URMHFWJRRQVWUHDPLQDSKDVHGPDQQHU
LQ D PXFK VKRUWHU WLPH IUDPH ZLWK DQ RXWHU OLPLW RI DERXW WZR \HDUV :H UHLWHUDWH RXU
UHFRPPHQGDWLRQPDGHHDUOLHUWKDWLPSOHPHQWDWLRQRIWKHDFFRXQWLQJUHIRUPVSURMHFWEHEURNHQ
GRZQ LQWR VPDOOHU VWDQGDORQH HOHPHQWV ZLWK FULWLFDO PDVV WR GHOLYHU YDOXH RQ FRPSOHWLRQ ,5
FDQQRWDIIRUGWRZDLWLQGHILQLWHO\IRUWKHZKROHSURMHFWWREHFRPSOHWHSDQ,QGLDEHIRUHLWVWDUWV
WRUHDSEHQHILWV

78


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

H



















U
M
A
N

R
E
S
O
U
R
C
E

M
A
N
A
G
E
M
E
N
T



&KDSWHU+XPDQ5HVRXUFH0DQDJHPHQW
7KH1DWXUHRIWKH3UREOHP


 ,5 LV D FRPSOH[ PXOWLGHSDUWPHQWDO DQG RSHUDWLRQDO RUJDQL]DWLRQ VSUHDG DFURVV WKH
FRXQWU\ ZLWK DSSUR[LPDWHO\  PLOOLRQ HPSOR\HHV 7KHUH DUH DERXW  GLIIHUHQW
FDWHJRULHVRI*URXS&HPSOR\HHVDQG*URXS$VHUYLFHVRIZKLFKDUHRUJDQL]HG
*URXS$VHUYLFHV,WKDVDPDWUL[RUJDQL]DWLRQVWUXFWXUHZLWKLWVRSHUDWLRQDOILHOGXQLWV
RUJDQL]HG LQ WKUHH OD\HUV ]RQHV GLYLVLRQV DQG RWKHU RSHUDWLRQDO XQLWV  %HLQJ D
*RYHUQPHQWGHSDUWPHQW,5KDVDYHU\KLJKOHYHORIIRUPDOL]DWLRQDQGFHQWUDOL]DWLRQRI
SRZHU 9DULRXV DFWLYLWLHV DQG MREV LQ ,5 DUH VSHFLDOL]HG DQG FXUUHQWO\ RUJDQL]HG LQWR
GHSDUWPHQWV DORQJ IXQFWLRQDO OLQHV 7KHVH GHSDUWPHQWV GR QRW SRVVHVV WKH
FXVWRPHUEXVLQHVV RULHQWDWLRQ WKDW LV QRUPDOO\ DVVRFLDWHG ZLWK D FRPPHUFLDO
RUJDQL]DWLRQ


 2YHUWKH\HDUVLVVXHVUHODWLQJWRRUJDQL]DWLRQVWUXFWXUHRUJDQL]DWLRQFXOWXUHDQGKXPDQ
UHVRXUFHVRI,5KDYHEHHQH[WHQVLYHO\DQDO\]HGE\PDQ\H[SHUWFRPPLWWHHVZKLFKKDYH
SRLQWHG RXW D QXPEHU RI VKRUWFRPLQJV DQG DOVR PDGH GLYHUVH DQG ZHOO WKRXJKW RXW
UHFRPPHQGDWLRQV 6RPH RI WKH NH\ SUREOHP DUHDV KLJKOLJKWHG E\ PRVW RI WKH H[SHUW
FRPPLWWHHV LQFOXGH H[FHVVLYH GHSDUWPHQWDO IHHOLQJV WKDW FXUUHQWO\ H[LVW RYHU
FHQWUDOL]DWLRQ RI SRZHUV H[FHVVLYH IRUPDOL]DWLRQ DQG DOVR WKH PDQQHU LQ ZKLFK WKH
IXQFWLRQV GHSDUWPHQWV DUHRUJDQL]HGDQG PDQQHG7KLV&RPPLWWHHKDVEHQHILWHGIURP
WKHYROXPLQRXVPDWHULDODYDLODEOHLQWKLVUHJDUG,WDOVRLQWHUDFWHGZLWKDZLGHVSHFWUXP
RIVWDNHKROGHUVDQGGRPDLQH[SHUWVWRVHHNJXLGDQFHIRULWVUHFRPPHQGDWLRQV


 )ROORZLQJ H[WHQVLYH GLVFXVVLRQV DQG H[DPLQDWLRQ RI LQIRUPDWLRQ FROOHFWHG WKLV
&RPPLWWHH LV RI WKH YLHZ WKDW WKH IROORZLQJ NH\ +5RUJDQL]DWLRQ VWUXFWXUH LVVXHV WKDW
H[LVWWRGD\LQ,5QHHGWREHDGGUHVVHGRQDSULRULW\EDVLV


 ([SHQGLWXUH RQ VWDII LV XQPDQDJHDEO\ KLJK DQG JURZLQJ DW DQ DODUPLQJ UDWH 7KH WRWDO
H[SHQGLWXUH RI ,5 LQFOXGLQJ WRWDO ZRUNLQJ H[SHQVHV DQG PLVFHOODQHRXV UHYHQXH
H[SHQVHV  IRU  ZDV 5V  FURUHV ZKLOH WKH WRWDO UHFHLSWV ZHUH DW 5V
FURUHV6WDIIFRVWVFRQVWLWXWHGRI2UGLQDU\:RUNLQJ([SHQVHVDQGRI
*URVV7UDIILF5HFHLSWV3HQVLRQRXWJRDQG6WDII&RVWVSXWWRJHWKHUZHUHRI*URVV
7UDIILF 5HFHLSWV 7KH VWDII FRVWV KDYH LQFUHDVHG IURP  WR  %(  DW D
&$*5 FRPSRXQGDQQXDOJURZWKUDWH RIDQGVWDIIFRVWVSOXVSHQVLRQVDW


 7KLV &RPPLWWHH REVHUYHV WKDW WKH HPSOR\HH FRVWV LQFOXGLQJ SHQVLRQV  FRQVWLWXWH WKH
VLQJOH ODUJHVW FRVW FRPSRQHQW LQ ,5 DQG DUH WKH PDLQ GULYHUV WKDW SXVK WKH 2SHUDWLQJ
5DWLRXS7KHVHFRVWVKDYHDOUHDG\UHDFKHGXQVXVWDLQDEOHOHYHOV:LWKWKHLPSOHPHQWDWLRQ
RI WKH LPPLQHQW UHFRPPHQGDWLRQV RI WKH WK &HQWUDO 3D\ &RPPLVVLRQ ORRPLQJ
SUHVXPDEO\ZLWKUHWURVSHFWLYHHIIHFWIURPVW-DQXDU\WKHUHLVERXQGWREHDIXUWKHU
XSZDUGTXDQWXPMXPSLQVWDIIFRVWVDQGSHQVLRQFRVWV7KLVKDVWKHSRWHQWLDOWRVHULRXVO\
80


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

GHVWDELOL]H,5ILQDQFHV7KH&RPPLWWHHPDNHVWKLVVWDWHPHQWEHFDXVHXQOLNHDWWKHWLPH
RI WKH WK &HQWUDO 3D\ &RPPLVVLRQ ZKHQ ,5 SRVVHVVHG KHDOWK\ )XQG %DODQFHV ZKLFK
FRQVWLWXWH 5HVHUYHV  RI DOPRVW 5V  FURUHV WKH RUJDQL]DWLRQ GRHV QRW KDYH DQ\
UHVHUYHVDWSUHVHQWWRPHHWWKHODUJHILQDQFLDOLPSDFW$FFRUGLQJO\XUJHQWVWHSVQHHGWR
EHWDNHQWRULJKWVL]H,5E\UDWLRQDOL]LQJPDQSRZHU6LQFHWKHUHLVYHU\OLWWOHWKDW,5FDQ
GR WR PLWLJDWH WKH LQFUHDVLQJ EXUGHQ RI SHQVLRQ RXWJR LW LV LPSHUDWLYH WKDW LPPHGLDWH
FRUUHFWLYH VWHSV DUH WDNHQ WR UDWLRQDOL]H H[SHQGLWXUH RQ VDODULHV DQG ZDJHV RI H[LVWLQJ
HPSOR\HHV




 'HSDUWPHQWDOLVP,5EHFDXVHRILWVFRPSOH[LW\VKHHUVL]HWHFKQLFDOQDWXUHRIRSHUDWLRQV
DQGQHHGIRUIXQFWLRQDOVSHFLDOL]DWLRQKDVEHHQWUDGLWLRQDOO\RUJDQL]HGDORQJIXQFWLRQDO
OLQHV7KHWHUP GHSDUWPHQWDOLVPDVEHLQJXVHGKHUHUHIHUVWRWKHQHJDWLYHDVSHFWVRI
IXQFWLRQDOVSHFLDOL]DWLRQLQ,57KLVPDQLIHVWVLWVHOILQWKHIRUPRIXQKHDOWK\FRPSHWLWLRQ
DPRQJVW GHSDUWPHQWV IRU DSSURSULDWLQJ D ODUJHU VKDUH RI VFDUFH UHVRXUFHV LQMXULRXV
FRPSHWLWLRQIRUXVXUSLQJDODUJHUVKDUHRINH\JHQHUDOPDQDJHPHQWSRVWVIRUEHWWHUDFFHVV
WRSRZHUDXWKRULW\HWFDFODPRXUIRUSXUVXLQJQDUURZGHSDUWPHQWDOJRDOVDWWKHFRVWRI
RUJDQL]DWLRQDOJRDOVDQGREMHFWLYHVDQGODFNRIWHDPZRUNDQGFRKHVLRQ7KLVDVSHFWKDV
EHHQGHOLEHUDWHGLQGHSWKE\PRVWRIWKHH[SHUWFRPPLWWHHVVHWXSLQWKHSDVWWRVXJJHVW
UHIRUPV LQ ,5  7KH PRVW UHFHQW 17'3&  5DLOZD\V UHSRUW DOVR VWDWHV WKDW   the
result is an over-differentiated organisation which prevents a coherent world view on the

31

NationalTransportDevelopmentPolicyCommittee.

81


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

basic role and purpose of the organisation.32 DQG:KLOHLQWKHRU\VXFKDVWUXFWXUH


ZRXOG SURPRWH IXQFWLRQDO VSHFLDOLVDWLRQ HDFK GHSDUWPHQW EHLQJ PDQQHG E\ VHSDUDWH
FDGUHKDVOHGWRDODFNRIXQLW\DQGVWUDWHJLFFRKHUHQFH$JUHDWGHDORIRUJDQLVDWLRQDO
HQHUJ\LVH[SHQGHGLQLQWHUGHSDUWPHQWDOFRPSHWLWLRQIRUUHVRXUFHVDQGD]HURVXPJDPH
RI RQH XSPDQVKLS DQG GHSDUWPHQWDO DJJUDQGL]HPHQW  ,Q DGGLWLRQ WKLV LVVXH KDV
DOVREHHQGHDOWDWOHQJWKLQPDQ\RWKHUH[SHUWFRPPLWWHHUHSRUWVIURPWLPHWRWLPHVRPH
RIZKLFKDUHVXPPDUL]HGLQ)LJXUHEHORZ

)LJXUH2EVHUYDWLRQVRI([SHUW&RPPLWWHHVRQ'HSDUWPHQWDOLVP






















The deep roots of Departmentalism in IR, that is, excessive departmental
consciousness, beyond what would be legitimately be in order in a multi
disciplinaryorganization,lienotsomuchintheexistenceofdifferentspecialized
functional services and disciplines as in .. Inadequate implementation from
timetotimeofexistingnorms&policies;Lackoftransparency;.Continued
existenceofseriousinequalitiesininterservicenorms&policiesthemselvesand
Shorttenuresatdecisionmakinglevelsleadingtoinitiativesinimprovements
notgettingtheadequatefollowupaction.
 
GuptaNarainCommitteereport

thecurrentstructureencouragesexcessivedepartmentalismatthemanagement
levelandoftenleadstoprioritiesbeingsetnotfortheorganisationasawhole,but
on departmental considerations(page 62  Human Resources Management,
NTDPCRailwaysreport)

RailTransporthastwocharacteristics:aseverelyguidedmode,andwithcontrolled
access.Thisinturnmakesmultidisciplinaryinputsamustforitsoutput...Thisisthe
rootcause ofthedepartmentalism in theIR atthemanagement level. (Page63,
NTDPC,Railwaysreport)


 9DULRXV FDXVHV RI GHSDUWPHQWDOLVP  PXOWLSOLFLW\ LQ QXPEHU RI RUJDQL]HG *URXS $
VHUYLFHV'HOLEHUDWLRQVZLWKGLIIHUHQWVWDNHKROGHUVLQGLFDWHWKDWDPRQJVWYDULRXVFDXVHV
H[LVWHQFH RI WKH VLOR VWUXFWXUH RI WKH PXOWLIDULRXV *URXS $ VHUYLFHV LV D PDMRU
FRQWULEXWRU WR SHUSHWXDWLRQ RI WKLV WHQGHQF\ WR QXUWXUH WKH WULEH HYHQ DW WKH FRVW RI WKH
RUJDQL]DWLRQ7KLVLVQXUWXUHGHYHQDWWKHWRSPDQDJHPHQWOHYHODVWKH\DOVRFRPSHWHIRU
UHVRXUFHV 7KH HQWLUH JDPXW RI RSHUDWLRQVSROLF\UHJXODWRU\ IXQFWLRQV EHLQJ YHVWHG LQ D
VLQJOH ERG\ YL] 5DLOZD\ %RDUG PDNHV LW DOO SHUYDGLQJ )XUWKHU LW LV DOVR D IDFW WKDW
'HSDUWPHQWDOLVP JHWV IXUWKHU DFFHQWXDWHG ZKHQ WRS PDQDJHPHQW EHKDYLRXU LV QRW
SHUFHLYHGWREHFRPSOHWHO\IDLUDQGXQELDVHGDVDSSHDUVWREHWKHSHUFHSWLRQLQ,57KLV
&RPPLWWHHQRWHVWKDWWKHREVHUYDEOHPDQLIHVWDWLRQVRIGHSDUWPHQWDOLVPLQ,5LQFOXGH D 

32

Para4.8page3940ofNTDPCreportonRailways.
Para14.3.4page153ofNTDPCreportonRailways.

33

82


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

ODFN RI WUDQVSDUHQW DQG IDLU SROLFLHV HVSHFLDOO\ LQ UHJDUG WR PDQQLQJ RI SOXP JHQHUDO
PDQDJHPHQW SRVLWLRQV E  FRPSHWLWLRQ DPRQJVW GHSDUWPHQWV LQ DOORFDWLRQ RI UHVRXUFHV
DQG LQYHVWPHQW GHFLVLRQV DQG F  VXERSWLPDO GHFLVLRQ PDNLQJ 6XFK LQVWDQFHV DQG
EHKDYLRXUUHLQIRUFHWKH'HSDUWPHQWDOIHHOLQJVDQGVWUHQJWKHQWKHYLFLRXVF\FOH

 7KHH[LVWLQJ5DLOZD\RUJDQL]DWLRQDOVWUXFWXUHLVQRWFXVWRPHURULHQWHGEXWUDWKHULQZDUG
ORRNLQJ'HSDUWPHQWDOL]DWLRQUHSUHVHQWVWKHPDQQHULQZKLFKWKHDFWLYLWLHVRUMREVLQDQ
RUJDQL]DWLRQ DUH VSHFLDOL]HG LQWR JURXSV RU GHSDUWPHQWV $Q\ RUJDQL]DWLRQDO VWUXFWXUH LV
UHDOO\DJURXSLQJDQGOLQNLQJRIDFWLYLWLHVZLWKLQDQRUJDQL]DWLRQ,WLVUHDOO\DERXWKRZ
LQGLYLGXDOVMREVIXQFWLRQVRUDFWLYLWLHVDUHGLIIHUHQWLDWHGDQGDJJUHJDWHGLQDPDQQHUWKDW
RSWLPL]HV LQIRUPDWLRQ IORZ ZLWKLQ WKH JURXS EXW W\SLFDOO\ FUHDWHV EDUULHUV ZLWK RWKHU
JURXSV 7KHPHFKDQLVPVRILQWHJUDWLRQXVHGWRFRRUGLQDWHDQGVKDUHLQIRUPDWLRQDFURVV
JURXSVPXVWHQDEOHWKHRUJDQL]DWLRQDOOHDGHUVKLSWRSURYLGHJXLGDQFHDQGGLUHFWLRQDFURVV
WKH RUJDQL]DWLRQ 7KH GHSDUWPHQWDO PRGHO LV IDYRXUHG WR GHYHORS GHSWK RI VNLOOV LQ D
SDUWLFXODU IXQFWLRQ RU GHSDUWPHQW PRVW MREV DUH IXQFWLRQDO LQ QDWXUH  DQG SURPRWH
IXQFWLRQDOGHSDUWPHQWDOLQQRYDWLRQHFRQRPLHVRIVFDOHDQGORZHUFRVWV+RZHYHURQWKH
IOLSVLGHGHSDUWPHQWV FDQZRUNDW FRXQWHUSXUSRVHVLI WKH\KDYHGLIIHUHQWSULRULWLHV DQG
PHDVXUHV ZKLFK IRFXV RQ GHSDUWPHQWDO UDWKHU WKDQ RYHUDOO RUJDQL]DWLRQDO REMHFWLYHV RU
EHQHILWV 8QGHU WKHVH FLUFXPVWDQFHV LQGLYLGXDOV DUH XQFOHDU RQ WKHLU UROHV DQG FURVV
IXQFWLRQDOGHFLVLRQVJHWSXVKHGXSIRUUHVROXWLRQDQGRIWHQUHVXOWLQVWDOHPDWHV


 ,5 IROORZV D PDWUL[ RUJDQL]DWLRQ VWUXFWXUH ZKLFK LV D FRPELQDWLRQ RI WKH GHSDUWPHQWDO
DQGWKHJHRJUDSKLFDOPRGHO \HWWKHUHLVDJUHDWHUHPSKDVLVRQGHSDUWPHQWDOIXQFWLRQDO
IRUPVDVWKHJHRJUDSKLFDOOD\HUVLQWKH,5PDWUL[VWUXFWXUHDOVRIRFXVRQWKHGHSDUWPHQWDO
RXWSXWV RI WKH RSHUDWLRQDO XQLWV ]RQHGLYLVLRQ  UDWKHU WKDQ DQ\ VSHFLILF SURGXFWVHUYLFH
7KLV &RPPLWWHH QRWHV WKDW D QXPEHU RI LWV SUHGHFHVVRU H[SHUW FRPPLWWHHV KDYH
HPSKDVL]HGRQWKHQHHGIRUVWUXFWXULQJ,5LQDPDQQHUVRDVWRFUHDWHDQRXWZDUGORRNLQJ
EXVLQHVVRULHQWHGDQGFXVWRPHUGULYHQLQVWLWXWLRQ7KLV&RPPLWWHHDOVRQRWHVWKDWYDULRXV
FRPPLWWHHV HDUOLHU LQFOXGLQJ WKH ([SHUW &RPPLWWHH RQ 5DLOZD\V  DV ZHOO DV WKH
17'3&  5DLOZD\V 5HSRUW KDYH DOVR DGYRFDWHG FKDQJH WR IRFXV RQ EXVLQHVVFXVWRPHU
XQLWV OLNH IUHLJKW EXVLQHVV SDVVHQJHU EXVLQHVV VXEXUEDQ EXVLQHVV SDUFHO EXVLQHVV HWF
7KLV &RPPLWWHH IXOO\ HQGRUVHV WKLV YLHZ DV DQ HVVHQWLDO LQJUHGLHQW IRU ,5 WR EH
FRPSHWLWLYHIRULWVORQJWHUPHFRQRPLFYLDELOLW\FXVWRPHUVDWLVIDFWLRQDQGIRUEHLQJDQ
DGDSWLYHIOH[LEOH RUJDQL]DWLRQ WKLV ZLOO LQYROYH UHRUJDQL]LQJ WKH FRUH WUDQVSRUWDWLRQ
QHWZRUNLQWRLWVNH\FRPSRQHQWSDUWVIUHLJKWSDVVHQJHUVXEXUEDQVKDUHGLQIUDVWUXFWXUH
IL[HGDQGUROOLQJLQIUDVWUXFWXUHHWF7KHVHEXVLQHVVXQLWVZLOORSHUDWHZLWKDODUJHGHJUHH
RIDXWRQRP\\HWEHDFFRXQWDEOH34

34

Page72,ExpertGrouponIR2001.

83


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

 +LJK OHYHO RI EXUHDXFUDF\ DQG VORZ GHFLVLRQ PDNLQJ ,5 EHLQJ D *RYHUQPHQW
GHSDUWPHQW LV KLJKO\ IRUPDOL]HG LQ LWV SROLFLHV SURFHGXUHV MRE GHVFULSWLRQV DQG UXOHV
EHLQJZULWWHQDQGH[SOLFLWO\DUWLFXODWHGWKHUHE\OHDYLQJOLWWOHOHHZD\IRUDQHPSOR\HHWR
H[HUFLVHKLVKHUGLVFUHWLRQRQHDFKFDVHEDVHGRQLWVPHULW)XUWKHUPRUHWKHRUJDQL]DWLRQ
EHLQJVWUXFWXUHGOLNHDWUDGLWLRQDO*RYHUQPHQWGHSDUWPHQWDOVRKDVDYHU\ODUJHQXPEHU
RIYHUWLFDODQGODWHUDOOHYHOVLQLWVKLHUDUFK\WKHUHE\VORZLQJGRZQWKHGHFLVLRQPDNLQJ
SURFHVV$QDGYDQWDJHRIDKLJKO\IRUPDOL]HGRUJDQL]DWLRQLVWKDWLWPDNHVRUJDQL]DWLRQDO
UHVSRQVHVPRUHFRQVLVWHQWDQGSUHGLFWDEOHDQGUHGXFHVDPELJXLW\DQGDUELWUDULQHVV,WLV
DQHVWDEOLVKHGIDFWWKDWH[FHVVLYHIRUPDOL]DWLRQOHDGVWRVORZHUSDFHRIGHFLVLRQPDNLQJ
DQG LV DOVR QRW FRQGXFLYH IRU LQQRYDWLRQV DQG VWUDWHJLF EXVLQHVV GHFLVLRQPDNLQJ 7KLV
&RPPLWWHHLVRIWKHYLHZWKDWWKHVHUYLFHLQGXVWU\LVSDUWLFXODUO\VXVFHSWLEOHWRSUREOHPV
DVVRFLDWHGZLWKKLJKOHYHOVRIIRUPDOL]DWLRQ$VVXFKLI,5LVWRRSHUDWHVXFFHVVIXOO\DVD
FRPPHUFLDO RUJDQL]DWLRQ ZLWK KLJK OHYHOV RI FXVWRPHU VDWLVIDFWLRQ HIIRUWV WR GLOXWH
IRUPDOL]DWLRQE\ZD\RIUHGXFLQJWKHKLHUDUFKLFDOGHFLVLRQPDNLQJOHYHOVFRXSOHGZLWK
VLPSOLILFDWLRQRIUXOHVDQGSROLFLHVZLWKJUHDWHUDXWRQRP\DQGHPSRZHUPHQWWRWKHILHOG
OHYHORUJDQL]DWLRQZLOOQHHGWREHXQGHUWDNHQ


 2YHUFHQWUDOL]DWLRQ RI SRZHU ,Q GHFHQWUDOL]HG RUJDQL]DWLRQV GHFLVLRQV DUH WDNHQ DQG
SUREOHPV VROYHG E\ HPSRZHUHG ILHOGOHYHO HPSOR\HHV ZKR DUH FORVHU WR JURXQG UHDOLWLHV
DQG WKH FXVWRPHU $ GHFHQWUDOL]HG RUJDQL]DWLRQ SURYLGHV PRUH DXWKRULW\ WR IURQW OLQH
HPSOR\HHV ZKLFK UHVXOW LQ TXLFNHU GHFLVLRQV HQDEOHG WKURXJK HPSRZHUPHQW /DFN RI
DGHTXDWH GHOHJDWLRQV WR =RQDO 5DLOZD\V DQG RWKHU ILHOG XQLWV LV WKH PDMRU IDFWRU
FRQWULEXWLQJ WR LQRUGLQDWH GHOD\V LQ GHFLVLRQPDNLQJ DQG WKH FRQVHTXHQW LQHIILFLHQFLHV
EHLQJ EUHG $V JUHDWHU GHOHJDWLRQ HQVXUHV IOH[LELOLW\ DQG IDVWHU UHVSRQVH LW QHHGV WR EH
HQFRXUDJHG FRPPHQVXUDWH WR WKH DFFRXQWDELOLW\ 7KHUH LV D VWURQJ FDVH IRU GHOHJDWLRQ RI
SRZHUV WR WKH ]RQHVILHOG XQLWV SDUWLFXODUO\ LQ DUHDV UHODWHG WR GD\ WR GD\ RSHUDWLRQV
VDIHW\SDVVHQJHUDPHQLWLHVWUDIILFIDFLOLW\YDULRXVZRUNVDQGFDSLWDOLQYHVWPHQWSURJUDPV
WR EH XQGHUWDNHQ ZLWKLQ WKHLU DOORFDWHG EXGJHWV  7KLV LV ZKDW WKLV 5HSRUW IODJJHG LQ
&KDSWHU  7KH RQO\ FDYHDW LV WKDW WKHUH EH FRPPHQVXUDWH DFFRXQWDELOLW\ DW WKRVH OHYHOV
ZKLFKH[HUFLVHVXFKHQKDQFHGGHOHJDWLRQ0RVWRIWKHH[SHUWFRPPLWWHHVVHWXSE\,5KDYH
XQDQLPRXVO\ UHFRPPHQGHG GHFHQWUDOL]DWLRQ DQG GHOHJDWLRQ RI SRZHUV WR ]RQHV DQG
GLYLVLRQV 5HFHQWO\ WKH +LJK /HYHO 6DIHW\ 5HYLHZ &RPPLWWHH  .DNRGNDU
&RPPLWWHH KDGDOVRUHFRPPHQGHGVSHFLILFSRZHUVWREHGHOHJDWHGWR*0VDQG'50V$V
VXFK *0V RI =RQDO 5DLOZD\V3URGXFWLRQ 8QLWV VKRXOG EH HPSRZHUHG WR WDNH GHFLVLRQV
ZLWKLQDIUDPHZRUNRIUXOHVDQGLQYHVWPHQWOLPLWVDQGWKH=RQDO5DLOZD\VVKRXOGDOVREH
PDGH DFFRXQWDEOH IRU UHWXUQV RQ LQYHVWPHQW RXWSXW SURILWDELOLW\ VDIHW\ DQG FXVWRPHU
VDWLVIDFWLRQ 7KLV &RPPLWWHH QRWHV WKDW VLJQLILFDQW FRPPHQGDEOH VWHSV KDYH EHHQ WDNHQ
UHFHQWO\ E\ WKH 0LQLVWU\ RI 5DLOZD\V WRZDUGV GHFHQWUDOL]DWLRQ RI SRZHUV RI GHFLVLRQ

84


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

PDNLQJ7KLV&RPPLWWHHIHHOVWKDWWKLVLVDZHOFRPHGHYHORSPHQWDQGSHUIRUPDQFHPXVW
EHZDWFKHGIRUFRUUHFWLRQVLIUHTXLUHG


 6WUHQJWKHQLQJRI+50LQ,5(IIHFWLYHDQGHIILFLHQWPDQDJHPHQWRIDQ\RUJDQL]DWLRQ
HVVHQWLDOO\ UHTXLUHV RSWLPXP XWLOL]DWLRQ RI YDULRXV UHVRXUFHV  LWV ILQDQFLDO UHVRXUFHV
LQIRUPDWLRQUHVRXUFHVSK\VLFDOUHVRXUFHVDQGKXPDQUHVRXUFHV7KHSURSHUXWLOL]DWLRQ
RI DOO WKHVH UHVRXUFHV GHSHQGV ODUJHO\ RQ WKH KXPDQ UHVRXUFHV DYDLODEOH LQ WKH
RUJDQL]DWLRQ,QWKHSUHVHQWVFHQDULRPDQDJLQJKXPDQFDSLWDONQRZOHGJHPDQDJHPHQW
DQGFDSDFLW\WRLQQRYDWHKDYHEHFRPHWKHEDVLVRIVXVWDLQDEOHFRPSHWLWLYHDGYDQWDJHIRU
RUJDQL]DWLRQV,QFUHDVHGFRPSHWLWLRQDQGJOREDOL]DWLRQUHTXLUHRUJDQL]DWLRQVWREHPRUH
DGDSWDEOHUHVLOLHQWDQGDJLOHDQGFXVWRPHUIRFXVHGLQRUGHUWRVXFFHHG7KHUHIRUHWKH
VXFFHVV RU IDLOXUH RI DQ RUJDQL]DWLRQ GHSHQGV SUHGRPLQDQWO\ RQ WKH FRPSHWHQFH RI LWV
SHRSOHDQGWKHDELOLW\RIWKHRUJDQL]DWLRQWRHIIHFWLYHO\PDQDJHDQGOHYHUDJHLWVKXPDQ
UHVRXUFHV,QWKLVFRQWH[W+50WRGD\KDVEHFRPHDFULWLFDOIXQFWLRQIRUWKHVXFFHVVRI
DQ\RUJDQL]DWLRQ


 )RFXVRQQRQFRUHDUHDV7KH0LQLVWU\RI5DLOZD\VXQGHUWDNHVDZLGHJDPXWRIGLYHUVH
DFWLYLWLHV WKDW DUH QRW DW WKH FRUH RI WKH SULPH EXVLQHVV RI UDLO WUDQVSRUWDWLRQ 7KHVH
LQFOXGH UXQQLQJ KRVSLWDOV DQG VFKRROV FDWHULQJ UHDO HVWDWH GHYHORSPHQW LQFOXGLQJ
KRXVLQJ FRQVWUXFWLRQ DQG PDLQWHQDQFH RI LQIUDVWUXFWXUH PDQXIDFWXULQJ ORFRPRWLYHV
FRDFKHVZDJRQVDQGWKHLUSDUWVHWF7RWKLVOLVWPXVWEHDGGHGWKH5DLOZD\3URWHFWLRQ
)RUFH DQG 5DLOZD\ 3URWHFWLRQ 6SHFLDO )RUFH ZKLFK FDUU\ RXW IXQFWLRQV WKDW VKRXOG
QRUPDOO\EHSHUIRUPHGE\6WDWH3ROLFHIRUFHVRUFRQYHQLHQWO\RXWVRXUFHG7RPDLQWDLQ
DQG UXQ WKHVH GLYHUVH VHWV RI SHULSKHUDO DFWLYLWLHV ,5 KDV FUHDWHG D PRQROLWK
RUJDQL]DWLRQDOVWUXFWXUH7KHUHLVDVWURQJFDVHIRUUHYLVLWLQJWKHVHDFWLYLWLHV7KLVLVVXH
KDVEHHQGHDOWZLWKLQJUHDWHUGHWDLOLQRWKHU&KDSWHUVRIWKLV5HSRUWHVSHFLDOO\&KDSWHU


 7KRXJK WKH 53) KDV EHHQ PHQWLRQHG LQ &KDSWHU  ZH ZDQW WR VWUHVV LW DJDLQ LQ WKLV
&KDSWHU :H IHHO WKDW WKH RXWVRXUFLQJ PRGHO PD\ QRW EH D FRPSOHWH VROXWLRQ 7KLV LV
EHFDXVHDVVHWVRI,5ZKLFK53)SURWHFWVDUHQXPHULFDOO\KXJHDQGGLVSHUVHGDFURVVWKH
OHQJWK DQG EUHDGWK RI WKH FRXQWU\ 7R IL[ UHVSRQVLELOLW\ IRU ORVVHV ZKHQ WKH ZDWFK DQG
ZDUGIXQFWLRQLVDVVLJQHGWRDWKLUGSDUW\ERXQGWKURXJKFRQWUDFWV PD\EHFRPHUDWKHU
GLIILFXOW DV WKH UHTXLUHPHQW RI VKDULQJ LQYHQWRU\ RI SURSHUW\ XQGHU WKH FKDUJH RI WKH
DJHQF\ ZLOO EH GLIILFXOW WR IXOILOO LQ DQ RUJDQL]DWLRQ ZKHUH VWRUHV PRYH LQ DQG RXW RI
GHSRWVDOOWKHWLPH,QVXFKDVFHQDULRWKHPHUHDFWRISURYLQJDWKHIWRUSLOIHUDJHDQG
UHFRUGLQJ ),5 ZLWK WKH ORFDO SROLFH ZRXOG EHFRPH D GLIILFXOW WDVN 7KHUHIRUH WKH FRUH
SRLQWLVWKDW,5V*0VDQG'50VVKRXOGSRVVHVVWKHIOH[LELOLW\DQGIUHHGRPWRFKRRVH
ZKHWKHU 53) ZLOO EH XVHG IRU D VSHFLILF SXUSRVH RU QRW  $V UHJDUGV *53 WKH\
85


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

XQGRXEWHGO\SHUIRUPDIXQFWLRQWKDWOLHVVTXDUHO\ZLWKLQWKHGRPDLQRIWKH6WDWHSROLFH
DQG WKHUHIRUH WKHUH LV D VWURQJ FDVH RI GLVFRQWLQXLQJ *53 DQG DVVLJQLQJ WKH IXQFWLRQV
GLVFKDUJHG E\ WKHP WR WKH 6WDWH SROLFH  +RZHYHU WKLV LV D GHFLVLRQ IRU WKH 6WDWH
JRYHUQPHQWVWRWDNH)RURXUSXUSRVHV,5VKRXOGEHJLQDSURFHVVRIQHJRWLDWLRQVZLWK
6WDWHJRYHUQPHQWVVRWKDWWKHFRQWULEXWLRQE\,5WRWKH*53LVSKDVHGRXWRYHUD
PXWXDOO\DJUHHGSHULRGRIWLPH


,VVXHVLQ+XPDQ5HVRXUFH0DQDJHPHQW

 2EMHFWLYHV 7KLV &RPPLWWHH LV RI WKH YLHZ WKDW WKHUH DUH ILYH GLVWLQFW \HW FORVHO\ LQWHU
UHODWHG REMHFWLYHV WKDW QHHG WR EH FRQVLGHUHG ZKLOH XQGHUWDNLQJ RUJDQL]DWLRQDO
UHVWUXFWXULQJRI,5 LQFOXGLQJWKHDSH[VWUXFWXUHRI,5  D PDNLQJWKHRUJDQL]DWLRQPRUH
EXVLQHVVFXVWRPHU RULHQWHG IOH[LEOHDJLOH DQG DPHQDEOH WR SULYDWH SDUWLFLSDWLRQ
RSHUDWLRQDOL]LQJ EXVLQHVV VWUDWHJLHV  E  UHWDLQLQJ GHVLUHG RSWLPDO OHYHO RI IXQFWLRQDO
VSHFLDOL]DWLRQ LQ ,5 F  UHVROYLQJ H[FHVVLYH GHSDUWPHQWDOLVP ZLWKLQ WKH RUJDQL]DWLRQ
G  FULWLFDOO\ H[DPLQLQJ WKH UHTXLUHPHQW RI HLJKW RUJDQL]HG *URXS $ VHUYLFHV DORQJ
IXQFWLRQDO OLQHV DQG H  GHYHORSLQJ QHZ FRPSHWHQFLHV DQG VNLOOV LQ NH\ IXQFWLRQV
GHSDUWPHQWV  WKDW ZLOO KDYH LPSRUWDQW UROHV WR VXSSRUW WKH UHYLVHG EXVLQHVV VWUDWHJ\ RI
WKH RUJDQL]DWLRQ VWUHQJWKHQLQJ HQULFKPHQW DQG UHRULHQWDWLRQ RI NH\ IXQFWLRQV
0DUNHWLQJ)LQDQFHHWF 7KHUHFRPPHQGDWLRQVRIWKLV&RPPLWWHHDUHPDGHNHHSLQJLQ
PLQGWKHVHEURDGILYHHQGREMHFWLYHV%DVHGRQWKHNH\+5LVVXHVFXUUHQWO\FRQIURQWLQJ
,5 DQG JXLGHG E\ WKH EURDG REMHFWLYHV RXWOLQHG DERYH WKH UHFRPPHQGDWLRQV RI WKLV
&RPPLWWHHRQWKHYDULRXVLVVXHVDUHDVIROORZV

 7DFNOLQJ WKH SUREOHP RI GHSDUWPHQWDOLVP $V DOUHDG\ LQGLFDWHG HDUOLHU WKH SUREOHP RI
GHSDUWPHQWDOLVPLQ,5LVRQDFFRXQWRIPXOWLSOHLVVXHVWKDWLQFOXGHRUJDQL]DWLRQFXOWXUH
LVVXHVH[LVWHQFHRIDODUJHQXPEHURIRUJDQL]HG*URXS$VHUYLFHVODFNRIWUDQVSDUHQF\
DQGIDLUQHVVLQNH\SROLFLHVLQFOXGLQJIRUPDQQLQJRIVHQLRUJHQHUDO PDQDJHPHQWSRVWV
E\RIILFHUVRIYDULRXVVHUYLFHVFRPSHWLWLRQDPRQJVWYDULRXVGHSDUWPHQWVIRUDOORFDWLRQRI
VFDUH UHVRXUFHV LQHTXDOLWLHV RI LQVHUYLFH QRUPV DQG FRQGLWLRQV EHWZHHQ GLIIHUHQW
VHUYLFHV HWF :KLOH FKDQJLQJ WKH RUJDQL]DWLRQ FXOWXUH LV D ORQJ GUDZQ RXW SURFHVV WKLV
&RPPLWWHH LV RYHUZKHOPLQJO\ RI WKH YLHZ WKDW LPSOHPHQWDWLRQ RI LWV UHFRPPHQGDWLRQV
ZLWKUHVSHFWWRWKHVHSDUDWLRQRIWKH0LQLVWU\RI5DLOZD\VDQGWKH5DLOZD\%RDUGDORQJ
ZLWKLWVRWKHUUHFRPPHQGDWLRQVIRUUHGXFLQJWKHQXPEHURIVHUYLFHVFUHDWLRQRID*HQHUDO
0DQDJHPHQW6HUYLFHUHRULHQWDWLRQRIGHSDUWPHQWVDOORZLQJODWHUDOPRYHPHQWRIRIILFHUV
EHWZHHQRWKHU*URXS$&HQWUDOVHUYLFHVDQGWKH5DLOZD\VHUYLFHVVWUHQJWKHQLQJRI+5
PDQDJHPHQW DVGHWDLOHGVXEVHTXHQWO\LQWKLV&KDSWHU ZLOOWRJHWKHUKHOSQRWRQO\LQWKH
UHVROXWLRQRIWKLVSUREOHPEXWDOVRUHVXOWLQDPXFKKHDOWKLHURUJDQL]DWLRQFXOWXUHLQ,5
86


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

7KH GHWDLOV ZLWK UHVSHFW WR HDFK RI WKHVH UHFRPPHQGDWLRQV DUH RXWOLQHG LQ VXEVHTXHQW
SDUDJUDSKVRIWKLV&KDSWHU


 ,VVXHRIPXOWLSOHVHUYLFHV,QRUGHUWRPDNHUHFRPPHQGDWLRQVIRUUHVROYLQJWKHYDULRXV
SUREOHPVDVVRFLDWHGZLWKWKHH[LVWHQFHRID PXOWLWXGHRIRUJDQL]HG*URXS$VHUYLFHV
ZKLFKDOVRFRQWULEXWHVVLJQLILFDQWO\WRWKHH[LVWLQJSUREOHPRIGHSDUWPHQWDOLVPLQ,5
WKLV&RPPLWWHHLQWHUDFWHGZLWKYDULRXVVWDNHKROGHUVH[DPLQHGWKHVXJJHVWLRQVRIYDULRXV
H[SHUW FRPPLWWHHV VHW XS LQ WKH SDVW DQG FRQVLGHUHG YDULRXV RSWLRQV DYDLODEOH 7KLV
&RPPLWWHHQRWHVWKDWWKH)HGHUDWLRQRI5DLOZD\2IILFHUV$VVRFLDWLRQ )52$ WKHERG\
UHSUHVHQWLQJ WKH RIILFHUV RI WKH YDULRXV RUJDQL]HG *URXS $ VHUYLFHV KDV VWURQJO\
VXSSRUWHG WKH LGHD RI D UHGXFWLRQ LQ WKH QXPEHU RI RUJDQL]HG *URXS $ VHUYLFHV LQ ,5
DQG KDV VXJJHVWHG DPDOJDPDWLRQ RI DOO H[LVWLQJ VHUYLFHV LQWR DVLQJOH 8QLILHG 5DLOZD\V
6HUYLFH ,QGLDQ5DLOZD\6HUYLFH 


 7KH H[LVWLQJ SRVLWLRQ $W SUHVHQW WKHUH DUH HLJKW RUJDQL]HG *URXS $ VHUYLFHV LQ ,5
)LJXUH   'HSOR\PHQW WR WKHVH VHUYLFHV LV E\ GLUHFW UHFUXLWPHQW IURP 836& &LYLO
6HUYLFHDQGWKH(QJLQHHULQJH[DPLQDWLRQV DQGDOVRE\SURPRWLRQRI*URXS%RIILFHUV
RI WKH GHSDUWPHQW 7KHUH LV DOVR D VPDOO EXW VLJQLILFDQW HOHPHQW RI UHFUXLWPHQW RI
0HFKDQLFDO (QJLQHHUV WKURXJK WKH 6SHFLDO &ODVV 5DLOZD\ $SSUHQWLFHV H[DPLQDWLRQ
IROORZHG E\ WUDLQLQJ 7KH HLJKW VHUYLFHV FDQ EH EURDGO\ FDWHJRUL]HG LQ WZR ELJJHU
JURXSLQJVYL]WHFKQLFDODQGQRQWHFKQLFDOVHUYLFHV


)LJXUH(LJKW*URXS$6HUYLFHVLQ5DLOZD\V


 7KH UHFRPPHQGDWLRQV RI YDULRXV H[SHUW FRPPLWWHHV RQ D UHGXFWLRQ LQ WKH QXPEHU RI
*URXS $ VHUYLFHV LQ WKH 5DLOZD\V ,Q WKH SDVW D QXPEHU RI H[SHUW FRPPLWWHHV KDYH
GZHOW XSRQ WKH LVVXH RI ODUJH QXPEHU RI *URXS $ VHUYLFHV LQ WKH 5DLOZD\V 7KLV
&RPPLWWHH H[DPLQHG GHOLEHUDWHG DW OHQJWK WKH YLHZV DQG UHFRPPHQGDWLRQV RI WKHVH
FRPPLWWHHV DQG KDV WDNHQ WKHVH LQWR FRJQL]DQFH ZKLOH PDNLQJ LWV UHFRPPHQGDWLRQV
:KLOHVRPHRIWKHREVHUYDWLRQVDQGUHFRPPHQGDWLRQVRIWKHVHFRPPLWWHHVKDYHDOUHDG\
EHHQPHQWLRQHGLQSUHFHGLQJSDUDJUDSKVDQGDUHDOVROLVWHGRXWLQ$QQH[XUHWKHRWKHU
LPSRUWDQWNH\ UHFRPPHQGDWLRQV PDGH E\ WKHVH FRPPLWWHHV RQ WKLV LVVXH DUH EULHIO\ DV
IROORZV


 3UDNDVK 7DQGRQ &RPPLWWHH 7KH 3UDNDVK 7DQGRQ &RPPLWWHH LQ  UHFRPPHQGHG
FUHDWLRQRIDXQLILHG,QGLDQ5DLOZD\6HUYLFHDQGHQYLVDJHGWKDWWKRVHUHFUXLWHGHDFKZLWK
87


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

FHUWDLQVSHFLILHGHGXFDWLRQDOTXDOLILFDWLRQVZRXOGEHORQJWRDVLQJOHVHUYLFHZLWKGXWLHV
DVVLJQHGLQGLIIHUHQWGHSDUWPHQWVDFFRUGLQJWRQHHGV,WDOVRUHFRPPHQGHGPHUJHURIWKH
RIILFHUVRIWKHH[LVWLQJHLJKWRUJDQL]HGVHUYLFHV H[FOXGLQJ53)DQG0HGLFDOVHUYLFHV WR
IRUP D FRPPRQ FDGUH ZLWK D FRPPRQ VHQLRULW\ ,Q RUGHU WR LPSOHPHQW WKHVH
UHFRPPHQGDWLRQVWKH*XSWD1DUDLQFRPPLWWHHZDVFRQVWLWXWHGWRVXJJHVWDPHWKRGRORJ\
IRUXQLILFDWLRQRIWKHHLJKWRUJDQL]HGVHUYLFHVDQGWRH[DPLQHDOOUHODWHGLVVXHV


 *XSWD1DUDLQ &RPPLWWHH 7KH *XSWD1DUDLQ &RPPLWWHH QRWHG WKDW GHSDUWPHQWDOLVP LV
QRW RQO\ GXH WR D ODUJH QXPEHU RI VHUYLFHV EXW LV DOVR GXH WR RSDTXH LQHTXLWDEOH DQG
LQFRQVLVWHQW SROLFLHV ODFN RI WUDQVSDUHQF\ LQ SHUVRQQHO PDQDJHPHQW DQG LQHTXDOLW\
DPRQJVW HTXDOV 7KH &RPPLWWHH KRZHYHU UHFRPPHQGHG WKDW WKH XQLILHG UHFUXLWPHQW WR
WKHHLJKW*URXS$VHUYLFHVRQWKH,5ZRXOGQRWEHSRVVLEOHRQDFFRXQWRIWKHLQDELOLW\RI
836& WR JLYH D SUHGHWHUPLQHG GLVFLSOLQHZLVH PL[ LQ NHHSLQJ ZLWK WKH HGXFDWLRQDO
EDFNJURXQGVRIHDFKRIWKH5DLOZD\GLVFLSOLQHVZKHQUHFUXLWHGRQO\WKURXJKWKH&LYLO
6HUYLFH([DPLQDWLRQ)XUWKHUWKH&RPPLWWHHREVHUYHGWKDWHYHQLIWKLVZHUHSRVVLEOHLW
ZRXOG RQO\ VROYH WKH SUREOHP RI LQLWLDO GHSOR\PHQW WR WKH -XQLRU 6FDOH SRVWV 7KHUH
ZRXOG EH D SUREOHP LQ GHSOR\PHQW IURP WKH 6HQLRU 6FDOH RQZDUGV ZKLFK ZRXOG DOVR
UHVXOW LQ HURVLRQ RI VSHFLDOL]HG IXQFWLRQDO VWUHDPV DW WKH *UDGH $ OHYHO DQG OHDG WR
GLVDVWURXVFRQVHTXHQFHVRQWKHHIILFLHQWIXQFWLRQLQJRIWKHRUJDQL]DWLRQDQGRQLWVVDIHW\
,W KRZHYHU REVHUYHG WKDW WKH V\VWHP RI SUHSDULQJ D FRPPRQ FRPELQHG LQWHUVHUYLFHV
UDQNLQJOLVWOLQNHGZLWKWKHUHVXOWVRIWKHH[LVWLQJH[DPLQDWLRQVZDVQRWRQO\IHDVLEOHEXW
DOVR ZRXOG DFKLHYH WKH VDPH UHVXOWV GHVLUHG IURP WKH SURSRVHG FRPPRQ H[DPLQDWLRQ
VFKHPH ZLWKRXW KDYLQJ DQ\ RI WKH QHJDWLYH FRQVHTXHQFHV ,W IXUWKHU VXJJHVWHG WKDW WKH
,QGLDQ 5DLOZD\ 6HUYLFH RI 0HFKDQLFDO (QJLQHHUV VKRXOG EH PHUJHG ZLWK WKH ,QGLDQ
5DLOZD\6HUYLFHRI(OHFWULFDO(QJLQHHUVWRFUHDWHDVLQJOHVHUYLFHDVWKLVZRXOGOHDGWR
EHWWHULQWHJUDWLRQDYRLGDQFHRIXQQHFHVVDU\GXSOLFDWLRQDQGEHWWHUIXQFWLRQDOHIILFLHQF\
)XUWKHUDOOWUDQVSRUWDWLRQDQGFRPPHUFLDOSRVWVDWWKH'LYLVLRQDOOHYHOH[FHSWDWWKH-U
6FDOH OHYHO VKRXOG EH PHUJHG LQWR FRPELQHG WUDIILF SRVWV LQ WKH LQWHUHVWV RI FORVHU
LQWHJUDWLRQEHWZHHQWKHWZRVWUHDPV


 -XVWLFH +5.KDQQD UHSRUW 7KH -XVWLFH + 5 .KDQQD UHSRUW   ZKLOH H[SUHVVLQJ
JUDYH FRQFHUQV DERXW DGYHUVH HIIHFW RI 'HSDUWPHQWDOLVP DPRQJVW RWKHU WKLQJV DOVR
UHFRPPHQGHGWKDWWKHSRVVLELOLW\RIDPDOJDPDWLRQRIGHSDUWPHQWVRQIXQFWLRQDOEDVLVDQG
WKHIRUPDWLRQRIDVLQJOHPDQDJHPHQWFDGUHVKRXOGEHH[SORUHG


 ,QGLDQ5DLOZD\9LVLRQ7KH5DLOZD\9LVLRQGRFXPHQWDOVRUHFRJQL]HVWKHIDFW
WKDW D EDODQFH QHHGV WR EH DFKLHYHG EHWZHHQ WKH IRUFHV RI GLIIHUHQWLDWLRQ IXQFWLRQDO
VSHFLDOL]DWLRQ  DQG LQWHJUDWLRQ ,W DFFHSWHG WKH IDFW WKDW WKH H[LVWLQJ 5DLOZD\ VWUXFWXUH
ZRXOG SURYH LQFUHDVLQJO\ ULJLG DQG LQFDSDEOH RI DQDO\]LQJ DQG UHVSRQGLQJ WR WKH
FKDOOHQJHV SRVHG E\ ULVLQJ FRPSHWLWLRQ IURP WKH URDG DQG DYLDWLRQ VHFWRUV ,W
88


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

UHFRPPHQGHG WKDW RQH SRVVLEOH DSSURDFK FRXOG EH WR UHFRQILJXUH WKH RUJDQL]DWLRQ E\
VHSDUDWLQJ WKH LQIUDVWUXFWXUH IURP RSHUDWLRQV DQG UHRUJDQL]DWLRQ RQ EXVLQHVV OLQHV LH
SDVVHQJHUIUHLJKW DQGSDUFHO DQG RWKHU DX[LOLDU\ VHUYLFHV VRWKDWHDFK VHUYLFH FRXOGEH
PDQDJHGDQGPHDVXUHGRQDSURILWFHQWHUEDVLV$UHDVRWKHUWKDQFRUHRSHUDWLRQVZKHUH
DSSURSULDWHFRXOGEHFRUSRUDWL]HGWRLPSDUWEXVLQHVVIRFXVDQGPDQDJHULDODXWRQRP\IRU
VXFKWDVNV


 17'3&5DLOZD\VUHSRUW7KHPRVWUHFHQW17'3&5DLOZD\V5HSRUWDOVRHPSKDVL]HVRQ
WKH QHHG WR VLJQLILFDQWO\ UDWLRQDOL]H WKH H[LVWLQJ PXOWLSOH VHUYLFHV DQG FDGUHV RI WKH
5DLOZD\V ,W UHFRPPHQGHG WKDW WKH VHUYLFHV VKRXOG EH PHUJHG LQWR WZR FDGUHV 7KH
17'3&5DLOZD\V5HSRUW $QQH[RIWKH5HSRUW VXJJHVWHGWKDW&LYLO(QJLQHHULQJ 
6 7 VHUYLFHV 0HFKDQLFDO  (OHFWULFDO VHUYLFHV EH PHUJHG ZLWK WKH UROH RI 3HUVRQQHO
DQG 6WRUHV VHUYLFH EHLQJ FDUULHG RXW E\ WKH H[HFXWLYH DFFRXQWDEOH IRU WKH RXWSXW $V DQ
DOWHUQDWLYH LW DOVR VXJJHVWHG DQ LQFUHPHQWDO YLHZ RI UHGXFLQJ WKH UHYLVHG VWUXFWXUH WR
VHYHQ VHUYLFHV JLYHQ LQ $QQH[   7KH WZRFDGUH DSSURDFK SURSRVHV WKDW D  WKH
UHFUXLWPHQWWRWKH5DLOZD\FDGUHVRIRIILFHUVVKRXOGEHWRWDOO\GLVVRFLDWHGIURPWKH&LYLO
6HUYLFHV DQG &HQWUDO (QJLQHHULQJ 6HUYLFHV H[DP E  5DLOZD\ HQJLQHHULQJ GHJUHH ZLOO
HQFRPSDVV LQWHUDOLD DOO DVSHFWV RI HQJLQHHULQJFLYLO PHFKDQLFDO HOHFWULFDO VLJQDOLQJ
DQGWHOHFRPHWFVRWKDWWKHRIILFHUVKDYHDKROLVWLFDSSURDFKWRWKHUDLOZD\UHODWHGLVVXHV
F /RJLVWLFVFRXUVHZLOOSUHSDUHWKHFDQGLGDWHVIRU5DLOZD\RSHUDWLRQVLQFOXGLQJILQDQFH
DQGKXPDQUHVRXUFHGHYHORSPHQW,WFRXOGEHLQWKHIRUP RIDQ0%$RUDQ0$ G $
VXSHULRU PDQDJHULDO FDGUH RI OHDGHUV FDQ EH FUHDWHG DW WKH WLPH RI JUDQWLQJ 6HOHFWLRQ
*UDGHLHLQWKHWK\HDURIVHUYLFH7KHVHRIILFHUVFDQEHVHOHFWHGWKURXJKDSURFHVVRI
DVVHVVPHQWWKURXJKWKH836&7KHOHDGHUVVRVHOHFWHGZLOOPDQWKHSRVWVRI$GGLWLRQDO
'LYLVLRQDO 5DLOZD\ 0DQDJHUV 'LYLVLRQDO 5DLOZD\ 0DQDJHUV &KLHI 9LJLODQFH 2IILFHUV
*HQHUDO0DQDJHUVHWF H /DWHUDOUHFUXLWPHQWIURPWKHPDUNHWIRUMREVLQ5 '


 1HHG IRU UHWDLQLQJ GHVLUHG OHYHO RI IXQFWLRQDO VSHFLDOL]DWLRQ 2QH RI WKH LPSRUWDQW
DUJXPHQWV IRU MXVWLI\LQJ FRQWLQXDWLRQ RI WKH H[LVWLQJ ODUJH QXPEHU HLJKW  RI RUJDQL]HG
*URXS $ VHUYLFHV LQ ,5 LV WKDW WKLV DUUDQJHPHQW KHOSV LQ PHHWLQJ WKH UHTXLUHPHQW RI
IXQFWLRQDO VSHFLDOL]DWLRQ 7KLV &RPPLWWHH DSSUHFLDWHV WKH IDFW WKDW ,5 EHLQJ D FRPSOH[
WHFKQLFDOGHSDUWPHQWLWQHHGVWRKDYHDGHJUHHRIVSHFLDOL]DWLRQDQGGRPDLQH[SHUWLVH$W
SUHVHQWPRVWRIWKHRIILFHUVZRUNDQGUHPDLQLQWKHLUVSHFLDOL]HGGHSDUWPHQWVWKURXJKRXW
WKHLUFDUHHUV,QWHUGHSDUWPHQWDOSRVWLQJVDUHQRWWKHQRUPDQGWKHQXPEHURI*HQHUDO
PDQDJHPHQW SRVWV LV QRW ODUJH +RZHYHU LW LV DOVR DQ DFFHSWHG IDFW WKDW DOWKRXJK WKHVH
RIILFHUV UHPDLQ LQ WKHLU GHSDUWPHQWV QRUPDOO\ WKH QDWXUH RI WKHLU ZRUN EHFRPHV PRUH
JHQHUDO PDQDJHPHQW RULHQWHG DQG OHVV WHFKQLFDO DV WKH\ PRYH XS WKH KLHUDUFK\ ODGGHU
7KLVLVWUXHRIPRVWRIWKHWHFKQLFDOVSHFLDOL]HGIXQFWLRQVLQRWKHURUJDQL]DWLRQVDOVR7KLV
LVGHSLFWHGLQ)LJXUHEHORZ7KHDERYHIDFWFRXSOHGZLWKDQDQDO\VLVRIWKHH[LVWLQJ
QDWXUH RI GXWLHV SHUIRUPHG E\ 5DLOZD\ HPSOR\HHV LQ *URXSV & % DQG $ DQG D
89


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

ORJLFDOJURXSLQJRIHPSOR\HHVLQWKHGHSDUWPHQWDOKLHUDUFK\EDVHGRQWKHLUQDWXUHRIMREV
ZRXOGVXJJHVWWKDWDWDPDFUROHYHODQDSSURDFKDVGHSLFWHGLQ)LJXUHFRXOGEHRQH
RSWLRQ 7KLV ZRXOG HQWDLO PRUH RU OHVV PDLQWDLQLQJ WKH VWDWXV TXR IRU VSHFLDOL]HG
IXQFWLRQDO FDGUHV DW *URXS & OHYHO   DQG D VHPLPHUJHG FDGUH IRU PLGGOHMXQLRU
PDQDJHPHQW OHYHO   6HPLPHUJHG VWUXFWXUH ZRXOG LQYROYH D FRPPRQ PHUJHG
FDGUHVHUYLFHIRU*URXS$RIILFHUVDQGIXQFWLRQDOVSHFLDOL]HGFDGUHIRUWKH*URXS%
RIILFHUVZLWKLQWKLVJURXSLQJ$WWKHVHQLRU*URXS$OHYHOVWKHUHZRXOGEHDFRPPRQ
PHUJHGFDGUHVHUYLFH OHYHO 


 +HUHLWQHHGVWREHHPSKDVL]HGWKDWWKHWHUP&RPPRQPHUJHGFDGUHVHUYLFHDVUHIHUUHG
WRDERYHGRHVQRWPHDQWKDWRIILFHUVRIDOORUJDQL]HG*URXS$VHUYLFHVVKDOOEHPHUJHG
LQWR D VLQJOH FDGUHVHUYLFH VWUXFWXUH 5DWKHU LW UHIHUV WR WKHLU PHUJLQJ LQWR RSWLPDO
QXPEHU RI ORJLFDO JURXSLQJV FDGUHVVHUYLFHV  WKDW PLQLPL]H GLVVRQDQFH DQG PD[LPL]H
V\QHUJLHVDQGRUJDQL]DWLRQDOHIILFLHQF\7KLVDSSURDFKDOVREDODQFHVWKHWZRFRQIOLFWLQJ
QHHGV IRU IXQFWLRQDO VSHFLDOL]DWLRQ DQG UHGXFWLRQ RI QXPEHU RI VSHFLDOL]HG
FDWHJRULHVFDGUHVVHUYLFHVLQ,5,QDGGLWLRQPXOWLWDVNLQJDWWKHERWWRPRIWKHS\UDPLG
DOVRQHHGVWREHDGRSWHG


)LJXUH6SHFLDOL]DWLRQGHFUHDVHVDVZHPRYHXSWKHKLHUDUFK\

)LJXUH/RJLFDO*URXSLQJRI(PSOR\HHVDSSURDFKWRVSHFLDOL]DWLRQ


90


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

 7KLV &RPPLWWHH LV RYHUZKHOPLQJO\ RI WKH YLHZ WKDW WKLV DSSURDFK DORQJ ZLWK WKH
DSSURSULDWH SROLFLHV RQ PRGH RI UHFUXLWPHQW PDQQLQJ FDUHHU SURJUHVVLRQ IL[DWLRQ RI
VHQLRULW\WUDLQLQJDQGSRVWLQJRIRIILFHUVFDQIXOO\UHVROYHWKHDSSUHKHQVLRQVH[SUHVVHG
E\WKH*XSWD1DUDLQFRPPLWWHH


 /RJLFDO JURXSLQJ RI IXQFWLRQV DQG PDQDJHDEOH VNLOOFRPSHWHQF\ VSUHDG VKRXOG EH WKH
EDVLVIRUPHUJHURI*URXS$VHUYLFHV+DYLQJFRQYLQFHGLWVHOIWKDWODUJHPXOWLSOLFLW\RI
*URXS $ FDGUHV LV ZRUNLQJ DJDLQVW WKH LQWHUHVWV RI WKH RUJDQL]DWLRQ WKLV &RPPLWWHH
IHHOVWKDWYDULRXVRSWLRQVIRUUHGXFWLRQLQWKHQXPEHURI*URXS$VHUYLFHVLQ,5WRDQ
RSWLPDOPLQLPDO QXPEHU RI VHUYLFHV VKRXOG EH HYDOXDWHG RQ WKH IROORZLQJ HVVHQWLDO
SDUDPHWHUV


 5DWLRQDOL]DWLRQ RI WKH QXPEHU RI VHUYLFHV VKRXOG DFKLHYH WKH UHTXLUHG HQG REMHFWLYH RI
HUDGLFDWLQJ XQKHDOWK\ LQWHUVHUYLFH ULYDOU\FRPSHWLWLRQ WKDW FRQWULEXWHV WR
GHSDUWPHQWDOLVP,QWKLVUHJDUGWKLV&RPPLWWHHIHHOVWKDWWKHRSWLRQRIIRXURUJDQL]HG
*URXS$VHUYLFHVWKDWZDVVXJJHVWHGDVDQDOWHUQDWLYHRSWLRQLQWKH17'3&5DLOZD\
UHSRUW $QQH[RIWKHUHSRUW ZKHUHLQ&LYLO(QJLQHHULQJ 6 7VHUYLFHV0HFKDQLFDO
(OHFWULFDOVHUYLFHVKDYHEHHQSURSRVHGWREHPHUJHGDORQJZLWKWKHUROHRI3HUVRQQHO
DQG6WRUHVVHUYLFHEHLQJFDUULHGRXWE\DOOWKHRWKHUVHUYLFHVZLOOQRWDORQHVXIILFH7KLV
RSWLRQ WKRXJK D VWHS IRUZDUG VXIIHUV IURP WKH OLPLWDWLRQ WKDW UHGXFWLRQ RI MXVW D IHZ
VHUYLFHVE\PHUJHURIVRPHIXQFWLRQVLVQRWOLNHO\WRKDYHDPDMRULPSDFWRQPLWLJDWLQJ
LQWHUVHUYLFH ULYDOU\ DV WKH URRW FDXVH RI LQWHUVHUYLFH ULYDOU\ ZLOO UHPDLQ ODUJHO\
XQDGGUHVVHGDQGWKHKLWKHUWRLQIOXHQWLDOFRPSHWLQJVHUYLFHVZLOOHPHUJHLQDQHYHQPRUH
FRQVROLGDWHG IRUP 7KLV PD\ LQ IDFW OHDG WR KHLJKWHQHG ULYDOULHV. 7KH HYDOXDWLRQ RI
YDULRXV RSWLRQV RQ WKLV SDUDPHWHU ZRXOG UHTXLUH DQ DVVHVVPHQW RI WKH JURXSLQJ RI
IXQFWLRQV MRE FRQWHQW  DQG WKH JURXSLQJ RI FRPSHWHQFLHVVNLOO VHWV UHTXLUHG WR SHUIRUP
WKHMREWDVN MREUHTXLUHPHQW RIWKHSURSRVHGVHUYLFHV,QDGGLWLRQWKHRSWLRQDOVRQHHGV
WR EH HYDOXDWHG IURP D SHUVSHFWLYH RI IHDVLELOLW\ RI URWDWLRQ RI WKH H[LVWLQJ RIILFHUV WR
GLIIHUHQW 6XE'HSDUWPHQWV6XEIXQFWLRQV WKDW KDYH EHHQ FOXEEHG DV WKH GHSDUWPHQWV
WKHPVHOYHVUHPDLQGLIIHUHQWLDWHGDWORZHUOHYHOV*URXS&DVVXEGHSDUWPHQWV DQGWKH
UHWUDLQLQJUHTXLUHPHQWVRIWKHH[LVWLQJRIILFHUVZKRZLOOQHHGWRFDUU\RXWZRUNWKDWZLOO
HQFRPSDVVGLIIHUHQWVSKHUHVRIVSHFLDOL]DWLRQ


 (YDOXDWLRQ RI IHDVLEOH RSWLRQV %DVHG RQ WKH DIRUHPHQWLRQHG HYDOXDWLRQ SULQFLSOHV WZR
IHDVLEOH RSWLRQV IRU UHGXFWLRQ LQ WKH QXPEHU RI *URXS $ VHUYLFHV LQ ,5 WR DQ
RSWLPDOPLQLPDO QXPEHU DUH VKRZQ LQ )LJXUH  7KH ILJXUH DOVR VKRZV JURXSLQJV RI
FRPSHWHQFLHVUHTXLUHGLQFDVHRIWKHVHRSWLRQV7KLV&RPPLWWHHIHHOVWKDWDVZHJRIURP
WKHSUHVHQWHLJKWVHUYLFHVWRRQH5DLOZD\VHUYLFHRSWLRQDVKDVEHHQVWURQJO\VXJJHVWHG
WRXVE\WKHUHSUHVHQWDWLYHERG\RI*URXS$RIILFHUV WKHUHLVERXQG WREH DGUDPDWLF
GHFUHDVHLQWKHGHJUHHRIVSHFLDOL]DWLRQ7KLVZDVDOVRRQHRIWKHPDMRUFULWLFLVPVE\WKH
*XSWD1DUDLQ &RPPLWWHH DJDLQVW WKH RQH 5DLOZD\ VHUYLFH RSWLRQ 0RUHRYHU LI DQ
DQDO\VLVRIWKHRSWLRQVLVGRQHIURPWKHSRLQWRIYLHZRIFRPSHWHQF\JURXSLQJVLWLV
REYLRXVWKDWWKHRQH5DLOZD\VHUYLFHRSWLRQZRXOGUHTXLUHDYHU\GLYHUVHVHWRIVNLOOV
DQG FRPSHWHQFLHV WR EH DYDLODEOH LQ D GLUHFWO\ UHFUXLWHG FDQGLGDWH ZKLFK LV QRW DQ
91


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

RSWLPXP VLWXDWLRQ DQG FRXOG FHUWDLQO\ QRW SURYLGH WKH RSWLPDO PL[ RI WKH NLQG RI
SURIHVVLRQDOLVP DQG EURDG EDVH UHTXLUHG )XUWKHUPRUH DWWDLQLQJ SURILFLHQF\ LQ VXFK
GLYHUVHDUHDVIRUH[LVWLQJRIILFHUVDQGWKRVHWKDWDUHSURPRWHGIURP*URXS%PD\DOVR
QRW EH IHDVLEOH 7KXV JRLQJ IURP WKH SUHVHQW V\VWHP WR WKH RQH VHUYLFH RSWLRQ ZRXOG
DSSHDU WR EH UDWKHU GLIILFXOW ,Q WKH RQHVHUYLFH RSWLRQ SURSRVHG WR XV E\ )52$ LW KDV
EHHQVXJJHVWHGWKDW5DLOZD\%RDUGZLOOSODFHLQGHQWRQ836&VSHFLI\LQJWKHQXPEHU
RIUHFUXLWVQHHGHGIRUHDFKGLVFLSOLQHVXFKDV&LYLO0HFK(OHF6 7(QJLQHHUVRUVLPSOH
JUDGXDWHV LQ DQ\ VXEMHFW ,QLWLDOO\ 836& ZLOO UHFUXLW VSHFLILHG QXPEHU RI RIILFHUV IRU
HDFKVSHFLDOL]DWLRQ WKURXJKDQH[DPVLPLODUWRSUHVHQWHQJLQHHULQJVHUYLFHVH[DPV DQG
ZLOODOVRUHFUXLWVSHFLILHGQXPEHURIRIILFHUVIURPJHQHUDOVXEMHFWVWKURXJKFLYLOVHUYLFHV
H[DP2QFHUHFUXLWHG836&ZLOOSUHSDUHDQGSXEOLVKDFRPELQHGLQWHUVHVHQLRULW\OLVW
RI DOO VWUHDPV RI 5DLOZD\ RIILFHUV RI D EDWFK WKURXJK D SUHQRWLILHG IRUPXOD
$OWHUQDWLYHO\PHUJHUVFKHPHFDQDOVREHVLPLODUWRH[LVWLQJVFKHPHRI
,QGLDQ2UGQDQFH
)DFWRULHV 6HUYLFH
 ZKHUHLQ UHFUXLWV IURP IRXU (QJLQHHULQJ 6HUYLFHV DV ZHOO DV UHFUXLWV
IURP&LYLO6HUYLFHVH[DPLQDWLRQVDUH PHUJHG LQWR DVLQJOH6HUYLFHDQGWKHLULQWHUVH
VHQLRULW\LVDOVRIL[HGE\836&DWWKHEHJLQQLQJLWVHOI'XULQJLQLWLDO\HDUVWKHVHRIILFHUV
VHUYHLQWKHLUUHVSHFWLYHGRPDLQDUHDVDQGDIWHUFHUWDLQ\HDUVWKH\FDQEHSXWRQDQ\RI
WKHSRVWV%XWWKHLULQWHUVHVHQLRULW\DQG&DGUHFRQWLQXHVWRUHPDLQVDPH$SDUWIURP
DERYH 836& DOVR KDV WKH RSWLRQ WR FRQGXFW UHFUXLWPHQW RI WKH SURSRVHG ,5/6 ,QGLDQ
5DLOZD\6HUYLFH RIILFHUVWKURXJKDQDOWRJHWKHUQHZH[DPLQDWLRQRQWKHOLQHVRI,QGLDQ
)RUHVW 6HUYLFH 7KH SDSHU, ZLOO EH FRPPRQ WR DOO FDQGLGDWHV DQG SDSHU,, ZLOO EH
SHUWDLQLQJ WR UHOHYDQW VSHFLDOLVDWLRQJHQHUDO VXEMHFWV  $IWHU VHOHFWLRQ RI SUHGHFLGHG
QXPEHUV IURP HDFK VSHFLDOLVDWLRQJHQHUDO VXEMHFWV WKH\ ZLOO EH PHUJHG LQWR D VLQJOH
,5/6 E\ 836& LWVHOI WKURXJK D SUHGHFLGHG IRUPXOD RI LQWHUVHVHQLRULW\ :KLOH ZH
DSSUHFLDWHWKHLQWHQWLRQRIWKHRIILFHUVWREULQJJUHDWHUFRKHUHQFHLQWRDGPLQLVWUDWLRQRI
WKH ,QGLDQ 5DLOZD\V DQG WR UHGXFH LQWHU GHSDUWPHQWDO ULYDOU\ ZH KDYH GRXEWV DV WR
ZKHWKHU WKH JRDOV RI WKH RUJDQL]DWLRQ ZLOO EH FRPSOHWHO\ DFKLHYHG LQ WKH PDQQHU
$GYDQWDJHIURPDVLQJOHVHUYLFHVFHQDULRFDQDFFUXHRQO\LIPHPEHUVRIWKDWVHUYLFHFDQ
EH JHQHUDOO\ SRVLWLRQHG LQWHUFKDQJHDEO\ 7KH &RPPLWWHH ILQGV WKDW WKH IRUPXODWLRQ RI
)52$KDVVRPHFRPPRQDOLWLHVZLWKWKHWZRVHUYLFHIRUPXODWLRQDQGVRPHGLIIHUHQFHV
7KHDQDORJLHVZLWK,QGLDQ5DLOZD\6WRUHV6HUYLFHDQG,QGLDQ2UGQDQFH)DFWRULHV6HUYLFH
,2)6 TXRWHGGRQRWDSSHDUTXLWHDSWEHFDXVHWKHQDWXUHRIMREUHTXLUHPHQWLQ,566LV
VXFKWKDWRQO\DEDVLFHQJLQHHULQJEDFNJURXQGLVDGHTXDWHDQGLQWKHFDVHRI2UGQDQFH
)DFWRULHVWKHVL]HRISRSXODWLRQLVUDWKHUVPDOO WRWDOVWUHQJWKRI,2)6LVDERXWRI
ZKLFK  DUH SURPRWHG IURP *URXS %  ,W LV D VHUYLFH ZLWK SUHSRQGHUDQFH RI
HQJLQHHUV DQG WHFKQRORJLVWV ZLWK RQO\ D KDQGIXO RI DGPLQLVWUDWLYH RIILFHUV UHFUXLWHG
WKURXJK &LYLO 6HUYLFHV ([DPLQDWLRQ &6(  7KRVH LQ WKH $GPLQLVWUDWLYH RIILFHUV SRRO
UHPDLQ FRQILQHG WR WKDW SRRO DQG DUH QRW GHSOR\HG LQWHUFKDQJHDEO\ ZLWK (QJLQHHUV HWF
UHFUXLWHG WKURXJK (QJLQHHULQJ 6HUYLFH ([DPLQDWLRQ (6(  RU DEVRUSWLRQ IURP RWKHU
VHUYLFHV RU WKURXJK UHFUXLWPHQW RI H[SHUWV E\ 836& 7KHUHIRUH PHUJHU LQWR D XQLILHG
VHUYLFH LV DWEHVW QRWLRQDO LQ WKHDEVHQFH RI IUHH PRELOLW\ EHWZHHQ SRVWV ,Q FRQWUDVWLQ
5DLOZD\V WKH RYHUDOO DQG &LYLO 6HUYLFHV ([DPLQDWLRQ UHFUXLWV DUH PXFK ODUJHU LQ
QXPEHUVDQGUHVSRQVLELOLWLHVGHYROYLQJRQ&6(UHFUXLWVPXFKPRUHGLYHUVHDQGRQHURXV
DQGQRWLRQDOXQLILFDWLRQLQWRDVLQJOHVHUYLFHRQWKHOLQHVRI,2)6ZRXOGEHRIOLWWOHDYDLO
92


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

 7KHWZRVHUYLFHRSWLRQWKDWKDVDOVREHHQSURSRXQGHGE\PDQ\FRPPLWWHHVLQFOXGLQJWKH
ODWHVW17'3&5DLOZD\5HSRUW  SURYLGHVPHUJHURIH[LVWLQJVHUYLFHVLQWRWZRVXE
JURXSV  7HFKQLFDO DQG 1RQWHFKQLFDO  RQ D UDWLRQDO EDVLV LQ WHUPV RI ZRUNDEOH
SDUDPHWHUV,QWKHFDVHRIWHFKQLFDOGHSDUWPHQWVWKHUHDUHDQXPEHURIIXQFWLRQVWKDWDUH
VLPLODU DFURVV GHSDUWPHQWV OLNH SODQWDQG HTXLSPHQW PDQDJHPHQWWHQGHU PDQDJHPHQW
FRQWUDFW PDQDJHPHQW SURMHFW PDQDJHPHQW DQG DGPLQLVWUDWLRQ HWF 6LPLODUO\ LQ FDVH RI
WKHQRQWHFKQLFDOGHSDUWPHQWVWKHUHDUHIXQFWLRQVWKDWDUHSHUIRUPHGDFURVVGHSDUWPHQWV
*LYHQ WKH IDFW WKDW VSHFLDOL]HG QDWXUH RI ZRUN GHFUHDVHV DW KLJKHU OHYHOV LQ DOO
GHSDUWPHQWV WKLV DSSURDFK FRXSOHG ZLWK DGRSWLRQ RI D KLHUDUFKLFDO DSSURDFK WR
VSHFLDOL]DWLRQDVHQXQFLDWHGLQWKHSUHFHGLQJSDUDJUDSKV )LJXUHVDQG PDNHVWKH
JURXSLQJ RI IXQFWLRQV MRE FRQWHQW  TXLWH IHDVLEOH 7KH JURXSLQJ RI VHUYLFHV ZLOO DOVR
UHVXOW LQ HOLPLQDWLRQ RI PXOWLSOLFLW\ RI DFWLYLWLHV DQG UHGXQGDQFLHV WKHUHE\ LQFUHDVLQJ
HIILFLHQF\ DQG IUHHLQJ UHVRXUFHV WKDW FDQ EH XWLOL]HG PRUH HIIHFWLYHO\ ,Q DQ\ FDVH
ZKHUHYHUVSHFLDOL]DWLRQDWKLJKHUOHYHOVLVUHTXLUHGWKHVDPHFDQEHUHWDLQHGDQGPDUNHG
DVVSHFLDOL]HGIXQFWLRQDOSRVWVZLWKLQWKHPHUJHGFDGUHVHUYLFH7KLVRSWLRQDOVRSURYLGHV
IRU ORJLFDO FRPSHWHQF\ JURXSLQJV  0%$ DQG (QJLQHHULQJ FRPSHWHQFLHV DV IDU DV
UHFUXLWPHQWWUDLQLQJ LV FRQFHUQHG ,W LV YLHZHG WKDW UHWUDLQLQJ DQG URWDWLRQ RI H[LVWLQJ
SURPRWHGRIILFHUVWRYDULRXVVXEIXQFWLRQVZRXOGDOVRQRWEHWRRGLIILFXOW,WLVWKHYLHZ
RI WKLV &RPPLWWHH WKDW D WZRVHUYLFH PRGHO ZLOO DQVZHU WR WKH UHTXLUHPHQW RI
LQWHUFKDQJHDELOLW\ PRUH HIILFLHQWO\ WKDQ D VLQJOH VHUYLFH PRGHO 7KHVH FRQVLGHUDWLRQV
WKHUHIRUHPDNHWKHWZRVHUYLFHRSWLRQUHODWLYHO\PRUHYLDEOHDQGLPSOHPHQWDEOHIURPWKH
SHUVSHFWLYHVRIUHFUXLWPHQWWUDLQLQJDQGFDGUHPDQDJHPHQW,IWKHPDLQDGYDQWDJHLQWKH
VLQJOH VHUYLFH RSWLRQ LV WR EH DEOH WR HYROYH D FRPPRQ VHQLRULW\ WKLV FDQ EH DWWDLQHG
WKURXJKDIRUPXODWLRQVXJJHVWHGWRXVE\)52$DQGDQRWKHUIRUPXODWLRQSURSRVHGE\XV
EDVHG RQ SUDFWLFH IROORZHG E\ YDULRXV 8QLYHUVLWLHV HWF 7KHVH DUH GLVFXVVHG ODWHU LQ WKH
5HSRUW:HEHOLHYHWKDWRQHVHUYLFHRSWLRQFDQZRUNRQO\LIDOOUHFUXLWPHQWWDNHVSODFH
IURPDPRQJVWSHUVRQVZLWKKRPRJHQHRXVTXDOLILFDWLRQVZKLFKLVQRWWKHFDVHDWSUHVHQW
ZKHQ UHFUXLWPHQW LV WKURXJK WZR GLIIHUHQW H[DPLQDWLRQV $V VXFK WKLV FRPPLWWHH
UHFRPPHQGV WKDW ,5 VKRXOG FRQVROLGDWH DQG PHUJH WKH H[LVWLQJ HLJKW RUJDQL]HG *URXS
$ VHUYLFHV LQWR WZR VHUYLFHV LH WKH ,QGLDQ 5DLOZD\ 7HFKQLFDO 6HUYLFH ,57HFK6 
FRPSULVLQJWKHH[LVWLQJILYHWHFKQLFDOVHUYLFHV ,56(,566(,56((,560(DQG,566 
DQG WKH ,QGLDQ 5DLOZD\/RJLVWLFV 6HUYLFH ,5/RJ6  FRPSULVLQJ WKH WKUHH QRQWHFKQLFDO
VHUYLFHV ,5$6,536DQG,576 $VZHKDYHLQGLFDWHGWKHQRPHQFODWXUHRIWKH6HUYLFHV
LVQRWVLJQLILFDQWDQGZHFDQOHDYHLWWRWKH,QGLDQ5DLOZD\VWRGHFLGH:HUHFRPPHQG
WKDW QHFHVVDU\ PRGDOLWLHV IRU PDNLQJ WKHVH FKDQJHV EH LQLWLDWHG E\ 5DLOZD\V LQ
FRQVXOWDWLRQZLWK'R3 7DQG836&:HGRUHFRJQLVHWKDWDZRUNDEOHPHWKRGRORJ\WR
HQVXUH SRVLWLRQLQJ RI *URXS $ RIILFHUV ZLWK DSSURSULDWH TXDOLILFDWLRQVFRPSHWHQFLHV
DJDLQVW YDULRXV SRVWV ZLOO EH UHTXLUHG 7KLV KDV EHHQ GLVFXVVHG VXEVHTXHQWO\ LQ WKH
&KDSWHU7KHUHIRUHWREUHDNGRZQVLORVZKLOHWKHRQHVHUYLFHDQGWZRVHUYLFHRSWLRQV
DUH ERWK IHDVLEOH RSWLRQV IRU ,5 WKLV &RPPLWWHH H[SUHVVHV LWV SUHIHUHQFH IRU WKH WZR
VHUYLFHRSWLRQ




93


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

)LJXUH9DULRXV2SWLRQVIRU5HGXFWLRQLQWKH1XPEHURI*URXS$6HUYLFHVLQ,5



 &UHDWLRQ RI D *HQHUDO 0DQDJHPHQW 6HUYLFH ,5 KDV D ODUJH QXPEHU RI *HQHUDO
PDQDJHPHQWSRVWVVXFKDV$'50'50DWWKH'LYLVLRQDOOHYHO$*06'*0DQG*0
DW WKH =RQDO OHYHO DQG D IHZ SRVWV LQ WKH 5DLOZD\ %RDUG RIILFH DOVR 7KHVH SRVWV DUH
FULWLFDO IRU VPRRWK 5DLOZD\ RSHUDWLRQV DQG WKH LQFXPEHQWV LQ WKH ILHOG DUH LQ FKDUJH RI
WKHPDQDJHPHQWRIWKH'LYLVLRQ=RQHDQGVXSHUYLVHDQGFRRUGLQDWHDFWLYLWLHVRIYDULRXV
GHSDUWPHQWV$WSUHVHQWWKHVHSRVWVDUHILOOHGXSE\VXLWDEOHDQG HOLJLEOHRIILFHUVRIWKH
HLJKW RUJDQL]HG *URXS $ VHUYLFHV 7KH RIILFHUV ZKR DUH SRVWHG WR WKHVH SRVWV KDYH D
IL[HGWHQXUHDQGXSRQFRPSOHWLRQRIWKHLUWHQXUHWKH\DUHSRVWHGEDFNWRWKHLUUHVSHFWLYH
GHSDUWPHQWV 7KLV &RPPLWWHH QRWHV WKDW DV ORQJ DV RIILFHUV DUH SRVLWLRQHG DJDLQVW WKH
*HQHUDO SRVWV WKH\ DUH GULYHQ E\ ODUJHU RUJDQL]DWLRQDO LQWHUHVWV UDWKHU WKDQ E\ QDUURZ
GHSDUWPHQWDO LQWHUHVWV +RZHYHU UHWXUQ RI VXFK RIILFHUV WR WKHLU GHSDUWPHQWDO
HQYLURQPHQWRQFRPSOHWLRQRIWHQXUHFDXVHVDUHODSVHLQWRGHSDUWPHQWDOVTXDEEOLQJ7KLV
&RPPLWWHH DFFRUGLQJO\ IHHOV WKDW WKHUH LV D VWURQJ FDVH IRU DQ LQVWLWXWLRQDO PHFKDQLVP
ZKHUHE\ VHOHFWHG RIILFHUV RQFH SRVLWLRQHG DJDLQVW *HQHUDO 0DQDJHPHQW SRVWV FRQWLQXH
WR SHUIRUP WKDW UROH IRU WKHLU UHVLGXDO FDUHHUV ,Q RXU ,QWHULP 5HSRUW ZH KDG VXJJHVWHG
WKDW WKLV ZRXOG QHHG D QHZFDGUH  D *HQHUDO 0DQDJHPHQW FDGUH  EHLQJ FUHDWHG 7KLV
&RPPLWWHHGHOLEHUDWHGRQWKHUHFRPPHQGDWLRQVFRQWDLQHGLQWKH17'3&5DLOZD\5HSRUW
UHJDUGLQJWKHFUHDWLRQRIDPDQDJHULDOFDGUHRIOHDGHUVDWWKHWLPHRIJUDQWLQJ6HOHFWLRQ
*UDGHLHLQWKHWK\HDURIVHUYLFHDQGDOVRYLHZVH[SUHVVHGE\YDULRXVVWDNHKROGHUV
RQ WKLV SURSRVDO LQ RXU ,QWHULP 5HSRUW $SSUHKHQVLRQV KDYH EHHQ H[SUHVVHG E\ YDVW
PDMRULW\ RI UHVSRQGHQWV RQ WKH UDWLRQDOH GHVLUDELOLW\ DQG GRZQVLGH RI VXFK D PRYH
)52$KDVDOVRSRLQWHGRXWWRXVWKDW836&PD\ILQGLWGLIILFXOWWRFRQGXFWVHOHFWLRQLQWR
D VLQJOH VHUYLFH IURP WZR GLIIHUHQW VWUHDPV :H VHH PHULW LQ WKHVH 7DNLQJ QRWH RI WKH
SRVVLEOHSLWIDOOVLQ FUHDWLQJDQHZ6HUYLFH DW PLGFDUHHUVWDJHWKLV&RPPLWWHH LVRIWKH
94


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

YLHZ WKDW FUHDWLRQ RI ,5*06 FRXOG EHFRPH FRXQWHUSURGXFWLYH DQG PLJKW KDYH WKH
XQLQWHQGHG HIIHFW RI FUHDWLQJ DQRWKHU FODVV QHXWUDOL]LQJ WKH EHQHILWV RI UHGXFLQJ WKH
QXPEHU RI VHUYLFHV IURP WKH H[LVWLQJ HLJKW WR WZR  +RZHYHU JLYHQ WKH LPSRUWDQFH RI
WKHVHJHQHUDOPDQDJHPHQWSRVWVLQ5DLOZD\VQHHGIRUKLJKHUSURIHVVLRQDOLVPLQ*HQHUDO
PDQDJHPHQWSRVWVLQ5DLOZD\VFDQEHIXOILOOHGE\LQVWLWXWLQJDQDSSURSULDWHHPSDQHOPHQW
PHFKDQLVP DQG PLGFDUHHU WUDLQLQJ DV DOVR VXJJHVWHG WR XV E\ )52$ 5DLOZD\V ZLOO
QHHGWRWDNHQHFHVVDU\SUHFDXWLRQVWRHQVXUHWKDWUHSUHVHQWDWLRQRIRIILFHUVIURPWKHWZR
VWUHDPV LV GHWHUPLQHG LQ D WUDQVSDUHQW DQG UDWLRQDO PDQQHU DFFRUGLQJ WR SUHGHWHUPLQHG
SURFHGXUHVDQGUXOHV7KHUHIRUHZHIHHOWKDWDGHMXUHPHWKRGRORJ\RILGHQWLILFDWLRQRI
LQGLYLGXDORIILFHUVIRUVXFKD FDUHHUSDWKZLOOEHWKHEHVWRSWLRQDWWKLVVWDJHSULPDULO\
EHFDXVHDGHIDFWRPHWKRGZLOODOZD\VUHPDLQGLVFUHWLRQDU\

 ,QGLDQ5DLOZD\7HFKQLFDO6HUYLFH ,57HFK6 'LUHFWUHFUXLWPHQWRIRIILFHUVWR,57HFK6
VKRXOGFRQWLQXHWREHIURPWKH,QGLDQ(QJLQHHULQJ6HUYLFHV ,(6 H[DPLQDWLRQFRQGXFWHG
E\ 836& DV LV EHLQJ GRQH FXUUHQWO\ 7KHUHDIWHU RQFH WKDW QHZ V\VWHP RI HQWU\ LV LQ
SODFH WKH UHFUXLWPHQW RI D IHZ RIILFHUV WKURXJK WKH 6SHFLDO &ODVV 5DLOZD\ $SSUHQWLFHV
URXWH VKRXOG EH GLVFRQWLQXHG DV WKH raison dtre IRU LW LV QR ORQJHU YDOLG &DQGLGDWHV
EHORQJLQJWRWKHH[LVWLQJHQJLQHHULQJVWUHDPV HOHFWULFDOPHFKDQLFDO6 7FLYLOHWF ZKR
DUH HOLJLEOH IRU DQ\ RI WKH 5DLOZD\ HQJLQHHULQJ VHUYLFHV DQG ZKR DSSHDU TXDOLI\ DQG
REWDLQ SUHIHUHQFH EDVHG RQ WKHLU PHULW VKRXOG EH UHFUXLWHG WR WKH FRPPRQ VLQJOH
,57HFK6 $OWHUQDWLYHO\ WKH RSWLRQ RI FRQGXFWLQJ D VHSDUDWH 5DLOZD\ HQJLQHHULQJ H[DP
E\WKH836&KDVDOVREHHQVXJJHVWHGWRXV+RZHYHUWKLV&RPPLWWHHLVRIWKHYLHZWKDW
KROGLQJDVHSDUDWHH[DPIRU,57HFK6PD\QRWEHGHVLUDEOHDVLWPD\OHDGWRGLOXWLRQLQ
WKH TXDOLW\ RI FDQGLGDWHV VHOHFWHG DQG ZRXOG DOVR HQWDLO H[WUD H[SHQGLWXUH RQ WKH
H[FKHTXHU 7KH SURPRWLRQ RI *URXS % RIILFHUV WR WKH *URXS $ ,57HFK6 ZRXOG
FRQWLQXHWREHGRQHWKURXJKWKHH[LVWLQJSURFHGXUHLQYROYLQJDSSURYDORI836&WKHRQO\
GLIIHUHQFHEHLQJWKDWLQVWHDGRIWKHILYHGLIIHUHQWVHQLRULW\OLVWVWKDWH[LVWFXUUHQWO\IRUWKH
ILYH GLIIHUHQW WHFKQLFDO VHUYLFHV D FRPPRQ VHQLRULW\ OLVW RI *URXS % RIILFHUV ZLOO EH
GUDZQXSDQGXVHG7KHGHWDLOVIRUWKLVVKRXOGEHZRUNHGRXWE\,5,QWKHHYHQWD*URXS
% RIILFHU LQGXFWHG LQWR *URXS $ KDV D UHODWLYHO\ VKRUWHU UHVLGXDO VHUYLFH OHIW
GHSOR\PHQW FRXOG EH DVVLJQHG WR KLP LQ WKH IXQFWLRQDO DUHD RI KLV VSHFLDOL]DWLRQ RQO\
7KHUHZLOOEHQRFKDQJHLQWKHPDQQHURISURPRWLRQRI*URXS&RIILFLDOVWR*URXS%
SRVWV LQ ,5 7KH RSWLRQ RI 836& FRQGXFWLQJ D VHSDUDWH H[DPLQDWLRQ IRU UHFUXLWPHQW WR
,57HFK6DIWHUFODVVWKDQGWKHQLPSDUWLQJWKHPVSHFLDOL]DWLRQLQ5DLOZD\(QJLQHHULQJ
KDV DOVR EHHQ VXJJHVWHG WR XV 7KLV &RPPLWWHH LV RI WKH YLHZ WKDW KROGLQJ D VHSDUDWH
H[DPWKURXJK836&DQGWKHQJURRPLQJWKHVHOHFWHGFDQGLGDWHVLQ5DLOZD\WHFKQRORJ\LQ
D 5DLOZD\ 8QLYHUVLW\ LV VWLOO SUHPDWXUH ,I WKHUH DUH LQGHHG 5DLOZD\ 8QLYHUVLWLHV DV
IRUPHGLQ&KLQDDQG5XVVLD WKHUHZLOOEHDSRRORIVSHFLDOLVWVLQ5DLOZD\HQJLQHHULQJ
%XW,QGLDLVVWLOOVRPHGLVWDQFHIURPWKDWREMHFWLYH2QFHWKDW5DLOZD\8QLYHUVLW\FKDQQHO
LVRSHQHGXSWKH836&URXWHWKURXJK6&5$VKRXOGFRQWLQXH0XOWLSOHFKDQQHOVVKRXOG
QRWH[LVW

 ,QGLDQ5DLOZD\V/RJLVWLFV6HUYLFH ,5/RJ6 'LUHFWUHFUXLWPHQWRIRIILFHUVWR,5/RJ6
VKRXOGFRQWLQXHWREHIURPWKH,QGLDQ&LYLO6HUYLFHV([DP ,&(6 FRQGXFWHGE\836&
95


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

DVLVEHLQJGRQHFXUUHQWO\$VLQWKHFDVHRI,57HFK6WKLV&RPPLWWHHLVRIWKHYLHZWKDW
KROGLQJ D VHSDUDWH H[DP IRU ,5/RJ6 PD\ QRW EH GHVLUDEOH $ VLPLODU SURFHGXUH DV
UHFRPPHQGHGIRU,57HFK6VKRXOGEHIROORZHGLQWKHFDVHRI*URXS%RIILFHUVLQGXFWHG
LQWR *URXS $ 3URPRWLRQ RI *URXS & RIILFLDOV WR *URXS % SRVWV RI WKH DFFRXQWV
SHUVRQQHO FRPPHUFLDO DQG RSHUDWLRQV GHSDUWPHQWV VKRXOG FRQWLQXH WR EH GRQH WKURXJK
WKHH[LVWLQJSURFHGXUHH[FHSWWKDWIRUSURPRWLRQWR*URXS$,5/RJ6WKHUHZLOOEHD
FRPPRQ VHQLRULW\ OLVW GUDZQ XS RI DOO *URXS % RIILFHUV EHORQJLQJ WR GLIIHUHQW
GHSDUWPHQWV$VLQWKHFDVHRI,57HFK6WKHGHWDLOHGSROLF\IRUWKLVLVEHLQJOHIWWR,5WR
IRUPXODWH

 )L[DWLRQRILQWHUVHVHQLRULW\'HWHUPLQDWLRQRIinter-seVHQLRULW\RIRIILFHUVEHORQJLQJWR
YDULRXV FDGUHV UHFUXLWHG IURP GLIIHUHQW FKDQQHOV KDV DOZD\VEHHQD FRQWHQWLRXV LVVXHLQ
,5:LWKWKHPHUJHUDQGFRQVROLGDWLRQRIWKHH[LVWLQJHLJKWRUJDQL]HG*URXS$VHUYLFHV
LQWR WZR VHUYLFHV DW ORZHU OHYHOV DQG WKUHH VHUYLFHV DW PLGGOH PDQDJHPHQW OHYHOV D
FUHGLEOHPDQQHUIRUHYROYLQJDPHUJHGVHQLRULW\OLVWRIWKHYDULRXVEDWFKHVZLOOKDYHWR
EHDGRSWHG,QWKHILUVWLQVWDQFHWKLVZLOOLQFOXGHGUDZLQJXSFRPPRQVHQLRULW\OLVWIRU
,5/RJ6 DQG ,57HFK6 ZLWKLQ WKH WZR VXEJURXSV DQG WKHQ D FRPELQHG VHQLRULW\ OLVW RI
RIILFHUV EHORQJLQJ WR ERWK WKHVH VXEJURXSV 0RUH LPSRUWDQWO\ WKH FRPELQHG VHQLRULW\
OLVWVZLOOEHUHTXLUHGQRWRQO\IRUIUHVKUHFUXLWVEXWDOVRIRUWKRVHDOUHDG\LQVHUYLFHZLWK
ORQJ \HDUV DOUHDG\ VSHQW LQ WKH ,5 V\VWHP  :KLOH WKLV &RPPLWWHH DGPLWWHGO\ GRHV QRW
SRVVHVVWKHH[SHUWLVHWRZRUNRXWWKHFRPPRQinter seVHQLRULW\RI*URXS$RIILFHUVRI
WKHWZRVHUYLFHV ,5/RJ6 ,57HFK6 DQGWKLVVKRXOGLGHDOO\EHZRUNHGRXWLQGHWDLOHG
FRQVXOWDWLRQZLWK836&DQGGRPDLQH[SHUWVZHGRZLVKWRXQGHUOLQHWKDWDFUHGLEOHDQG
HTXLWDEOHPHWKRGRORJ\IRUWKHSXUSRVHLVDsine qua non IRUWKHSURSRVHGUHVWUXFWXULQJ.
8QOHVV D VDWLVIDFWRU\ IRUPXODWLRQ LV HYROYHG DQG H[HFXWHG UHFRPPHQGDWLRQV RQ
UHVWUXFWXULQJRI*URXS$VHUYLFHVLQ5DLOZD\VZLOOHVVHQWLDOO\UHPDLQDQRQVWDUWHU$V
DQ LOOXVWUDWLYH H[DPSOH RI KRZ LQWHU VH VHQLRULW\ FDQ SHUKDSV EH ZRUNHG RXW VRPH
0HPEHUVRIWKH&RPPLWWHHZRUNHGRXWWZRSRVVLEOHPHWKRGVWKDWDUHJLYHQDWWKHHQGRI
WKLV&KDSWHU


 ,W JRHV ZLWKRXW VD\LQJ WKDW SHUVRQQHO PDWWHUV DUH KLJKO\ VHQVLWLYH DQG UHTXLUH SURSHU
DQDO\VLVDQGWKLQNLQJLQRUGHUWRDYRLGILHOGOHYHOSUREOHPV:HWKHUHIRUHUHFRPPHQGWKDW
WKHUHRUJDQL]DWLRQRIWKH5DLOZD\VPD\EHVWXGLHGLQFRQVXOWDWLRQZLWK836&DQG'R37
DQG VXFK RWKHU H[SHUWV DV FRQVLGHUHG QHFHVVDU\ WR HQVXUH RSWLPXP UHVXOWV 6XFK VWXGLHV
VKRXOGQRWEHSURWUDFWHGDQGVKRXOGEHFRPSOHWHGZLWKLQDSHULRGRIWKUHHPRQWKVVRWKDW
WKHQHZV\VWHPFDQEHEURXJKWLQWRHIIHFWZLWKWKHQH[WVHWRI836&H[DPLQDWLRQV


 0DQQLQJ 3RVWLQJ DQG &DUHHU SURJUHVVLRQ 7KH RIILFHUV LQ WKH WZR VHUYLFHV ,5/RJ6 DQG
,57HFK6ZLOOSURJUHVVLQWKHLUFDGUHDQGZLOOXQGHUJRFRPSXOVRU\MREIXQFWLRQURWDWLRQV
ZLWKLQDVSHFLILHGSHULRGRIWLPHVRDVWRJDLQFRPSHWHQF\LQDOOWKHIXQFWLRQVZLWKLQWKH
GRPDLQRIWKHVXEJURXS+RZHYHUDWOHDVWLQWKHLQLWLDO\HDUV,5VKRXOGEHSHUPLWWHGWR
PDNH RSWLPDO XVH RI KLJKO\ VSHFLDOL]HG NQRZOHGJHH[SHULHQFH RI DQ\ RIILFHU ZLWKRXW
VLJQLILFDQWO\ GLOXWLQJ WKH MRE URWDWLRQ UHTXLUHPHQW 7UDLQLQJ RI RIILFHUV ZRXOG DOVR EH
DOLJQHGWRPHHWWKHVHFDUHHUSURJUHVVLRQUHTXLUHPHQWVDVVXEVHTXHQWO\GLVFXVVHG
96


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

 7UDLQLQJ:LWKLPSOHPHQWDWLRQRIWKHDERYHUHFRPPHQGDWLRQV*URXS$RIILFHUVERWK
IURPWHFKQLFDODQGQRQWHFKQLFDOVWUHDPVZLOOEHUHTXLUHGWRFDUU\RXWDZLGHUDQGQHZHU
VSHFWUXPRIDFWLYLWLHV,PSDUWLQJFRPSUHKHQVLYHWUDLQLQJDWWKHLQGXFWLRQVWDJHIRUQHZO\
UHFUXLWHG RIILFHUV DV ZHOO DV DSSURSULDWH JDSILOOLQJ WUDLQLQJ LQWHUYHQWLRQV DV SDUW RI LQ
VHUYLFHWUDLQLQJDWUHJXODULQWHUYDOVIRUH[LVWLQJRIILFHUVZLOOEHQHHGHG7KLV&RPPLWWHH
IHHOV WKDW WKLV ZLOO UHTXLUH D FRPSUHKHQVLYH UHYDPS DQG VWUHQJWKHQLQJ RI WKH WUDLQLQJ
IXQFWLRQ DV D SURJUDPPH RI JLJDQWLF SURSRUWLRQV 7UDLQLQJ DQG DXJPHQWDWLRQ RI
FRPSHWHQFLHV ZLOO UHTXLUH WR EH SODQQHG LPSOHPHQWHG DQG PRQLWRUHG IRU HQVXULQJ
VXFFHVVRIPHUJHURIVHUYLFHV,5ZLOOQHHGWRGHYLVHFXUULFXODSUHSDUHFRXUVHPDWHULDO
FUHDWH FRPSHWHQW IDFXOW\ VWUHQJWKHQ WKH WUDLQLQJ LQIUDVWUXFWXUH DQG GHYLVH HIIHFWLYH
WUDLQLQJ HIILFDF\ PHDVXUHPHQW WRROV $W SUHVHQW WKHUH DUH VL[ &HQWUDOL]HG 7UDLQLQJ
,QVWLWXWHV &7,V LQ,5IRXUIRUWHFKQLFDOGLVFLSOLQHVDQGWZRIRUQRQWHFKQLFDODUHDV:H
UHFRPPHQG WKDW WKH H[LVWLQJ LQIUDVWUXFWXUH RI WKHVH VL[ &HQWUDOL]HG 7UDLQLQJ LQVWLWXWHV
&7,V EHXVHGIRUWKLVSXUSRVH


 5DLOZD\VKDYHKDGDORQJWUDGLWLRQRIVHQLRUVXSHUYLVRUVLQYDULRXVGHSDUWPHQWVSOD\LQJD
GHILQLQJ UROH 7KLV OHYHO RI 5DLOZD\ SHUVRQQHO XVHG WR EH YLHZHG DV EDFNERQH RI WKH
RUJDQL]DWLRQ 7KLV KDV KRZHYHU FKDQJHG VLJQLILFDQWO\ 2QH UHDVRQ LV WKDW VXFFHVVLYH
FDGUH UHVWUXFWXULQJ H[HUFLVHV RYHU WKH \HDUV KDYH UHVXOWHG LQ DQ LQFUHDVLQJO\ ODUJHU
QXPEHURISHUVRQQHOEHLQJSRVLWLRQHGDWKLJKHUHFKHORQLQRUJDQL]DWLRQDOKLHUDUFK\ZLWK
WKHUHVXOWWKDWZKDWXVHGWREHGRQHE\VHQLRUVXSHUYLVRUVHDUOLHULVQRZGRQHE\*URXS
%RUHYHQ*URXS$RIILFHUV

 7KH&RPPLWWHHLVRIWKHYLHZWKDW5DLOZD\VQHHGWRWDNHDSSURSULDWHDFWLRQWRUHVWRUHWKH
VWDWXV DVVRFLDWHG ZLWK IXQFWLRQLQJ RI VHQLRU VXSHUYLVRUV :LWK D YLHZ WR HQVXULQJ KLJK
OHYHORIFRPSHWHQFHDQGSURIHVVLRQDOLVP5DLOZD\VVKRXOGFRQVLGHUDV\VWHPDNLQWRWKH
VFKHPH RI SURPRWLRQV LQ $FFRXQWV 'HSDUWPHQW ZKHUH FDUHHU SURJUHVVLRQ LV OLQNHG WR
VXFFHVVIXOO\ FRPSHWLQJ LQ UDWKHU ULJRURXV TXDOLI\LQJ H[DPLQDWLRQV %HVLGHV DSSURSULDWH
WUDLQLQJLQWHUYHQWLRQVDQGVXLWDEOHHPSRZHUPHQWWKURXJKGHOHJDWLRQRISRZHUVDWOHDVWDW
$SH[ *URXS & OHYHOV ZRXOG JR D ORQJ ZD\ LQ LPSDUWLQJ GLJQLW\ WR WKHP IRU EHWWHU
FRQWULEXWLRQVDQGKLJKHUPRWLYDWLRQ


 /DWHUDO HQWU\ 7KLV &RPPLWWHH IRXQG WKDW DOWKRXJK WKHUH DUH VRPH ,5 RIILFHUV ZKR
SURFHHG RQ GHSXWDWLRQ WR RWKHU 0LQLVWULHV LQ WKH &HQWUDO *RYHUQPHQW XQGHU WKH &HQWUDO
6WDIILQJ 6FKHPH WKLV QXPEHU LV TXLWH VPDOO DQG LV ODUJHO\ UHVWULFWHG WR GHSXWDWLRQ DW
'HSXW\ 6HFUHWDU\'LUHFWRU OHYHO SRVWV ZLWK WKH H[FHSWLRQ RI D IHZ DW WKH -6 OHYHO 7KLV
&RPPLWWHH REVHUYHG WKDW SHUIRUPDQFH RI ,5 RIILFHUV RQ GHSXWDWLRQ KDV EHHQ ODUJHO\ RI
KLJK VWDQGDUGV DQG WKDW WKHVH RIILFHUV KDYH DOVR EHHQ HQULFKHG E\ VXFK H[SRVXUH DQG
H[SHULHQFH +RZHYHU WKLV &RPPLWWHH QRWHV WKDW WKHUH LV YLUWXDOO\ QR GHSXWDWLRQ RI
RIILFHUVRI$OO,QGLD6HUYLFHV2WKHU&HQWUDO*URXS$VHUYLFHVWR,5&RQVHTXHQWO\,5
VXIIHUVIURPLQEUHHGLQJDQGLVGHSULYHGRIWKHEHQHILWRIVHUYLFHVRIRIILFHUVZLWKDZLGHU
VHW RI FRPSHWHQFLHV DQG YDULHG H[SHULHQFH $V VXFK WKLV &RPPLWWHH LV RI WKH YLHZ WKDW
ODWHUDOPRYHPHQWRIRIILFHUVERWKIURPRXWVLGHWR,5DQGIURP,5WRRXWVLGHVKRXOGEH
HQFRXUDJHG ZLWKRXW DGYHUVHO\ LPSDFWLQJ GHOLYHU\ RI 5DLOZD\ VHUYLFHV 7KH ODWHUDO
97


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

HQWU\PRYHPHQW VKRXOG EH SHUPLWWHG ERWK LQ QRQWHFKQLFDO DQG WHFKQLFDO GHSDUWPHQWV
UHVSHFWLYHO\EDVHGRQWKH&HQWUDO6WDIILQJ6FKHPHSDWWHUQ7KLV&RPPLWWHHIXUWKHUIHHOV
WKDWLQRUGHUWRHQKDQFHWKHDFFHSWDELOLW\RIVXFKDSURSRVLWLRQ D 7KHQXPEHURISRVWV
WR ZKLFK GHSXWDWLRQV ODWHUDO HQWU\ IURP RXWVLGH  DUH WR EH SHUPLWWHG PXVW EH FOHDUO\
LGHQWLILHGEDVHGRQDUDWLRQDOFULWHULD E ,QIORZRIWDOHQWIURPRXWVLGHVXFKDVFKDUWHUHG
DFFRXQWDQWV FRVW DFFRXQWDQWV EDQNHUV ILQDQFLDO PDQDJHPHQW H[SHUWV LQ ILQDQFLDO
PDQDJHPHQW SRVWV SHUVRQQHO IURP &3:' UHVHDUFK DVVLVWDQWV IURP OHDGLQJ ODEV DQG
XQLYHUVLWLHV ,,7VHWF VFLHQWLVWVIURP*RYHUQPHQWODEVHWF WRMRLQ5'62DQGWUDLQLQJ
LQVWLWXWLRQV  RQ GHSXWDWLRQ VKRXOG EH HQFRXUDJHG F  $ V\VWHP RI EDODQFLQJ KDV WR EH
GHYLVHG VR DV WR HQVXUH WKDW FDUHHU DGYDQFHPHQW RI 5DLOZD\ RIILFHUV LV QRW DGYHUVHO\
LPSDFWHG7KLVFDQEHGRQHE\HQVXULQJDQHWRXWIORZRI5DLOZD\RIILFHUV LHQXPEHURI
5DLOZD\ RIILFHUV RQ GHSXWDWLRQ PLQXV QXPEHU RI RWKHU VHUYLFHV RIILFHUV FRPLQJ RQ
GHSXWDWLRQ WR 5DLOZD\V  LV UHWDLQHG DW SUHVHQW OHYHOV G  'HSXWDWLRQ RI RIILFHUV ZHOO
FRQYHUVDQW ZLWK )LQDQFH 333 UHVRXUFH PRELOL]DWLRQ HWF LQ RWKHU ZLQJV RI WKH
*RYHUQPHQW FDQ EH HIIHFWHG WKURXJK WKH &HQWUDO 6WDIILQJ 6FKHPH 7KHVH FRXOG EH WR
JHQHUDO PDQDJHPHQW DQG ILQDQFLDO PDQDJHPHQW SRVWV LQ WKH 5DLOZD\ %RDUG WHFKQLFDO
SRVWVLQ5'62DVIDFXOW\WR1$,5DQGRWKHUWUDLQLQJLQVWLWXWLRQV


 7KLV &RPPLWWHH DOVR IHOW WKDW ,5 VKRXOG OLEHUDOO\ DOORZ QRQHVVHQWLDO PDQSRZHU WR
SURFHHG RQ GHSXWDWLRQ WR RXWVLGH RUJDQL]DWLRQV OLNH 368V RI ,5 WKURXJK WKH &HQWUDO
6WDIILQJ 6FKHPH RWKHU 368V DQG RWKHU RUJDQL]DWLRQV ,5 QHHGV WR UHWKLQN LWV H[LVWLQJ
SROLF\ RI XQQHFHVVDULO\ UHVWULFWLQJ HPSOR\HHV GHVLURXV RI SURFHHGLQJ RQ GHSXWDWLRQ
HVSHFLDOO\ IURP FDWHJRULHV WKDW UHTXLUH WR EH ULJKW VL]HG  DV QRW RQO\ GRHV WKLV PHDQ
VDYLQJV RQ VDODU\ H[SHQGLWXUH LW DOVR UHVXOWV LQ WKH ERUURZLQJ RUJDQL]DWLRQ SD\LQJ WKH
)RUHLJQ 6HUYLFH &KDUJHV WRZDUGV SHQVLRQ DQG VHWWOHPHQW GXHV RI WKH HPSOR\HH  WR ,5
7KH HPSOR\HH DOVR JDLQV YDULHG H[SHULHQFH 6LQFH RIILFHUV FDWHJRULHV LQ PRVW
GHSDUWPHQWV DUH DFWXDOO\ RYHUPDQQHG WKLV LV D JRRG PHFKDQLVP IRU PDQDJLQJ FRVWV
)XUWKHULQRUGHUWRKHOSLQULJKWVL]LQJRI,5LWLVIHOWWKDWWKHPDQSRZHUUHTXLUHPHQWVRI
QHZ 368V XQGHU ,5 VKRXOG EH PHW E\ DSSRLQWPHQW RI 5DLOZD\PHQ LQLWLDOO\ RQ
GHSXWDWLRQ IROORZHG E\ DEVRUSWLRQ RU GLUHFW DEVRUSWLRQ DOVR  HVSHFLDOO\ IRU FDWHJRULHV
ZLWKH[FHVVPDQSRZHU


 9DULRXV JURXSV RI VWDNHKROGHUV GXULQJ WKHLU LQWHUDFWLRQ ZLWK WKH &RPPLWWHH DUWLFXODWHG
VHULRXV GLVVDWLVIDFWLRQ ZLWK WKH ZD\ 9LJLODQFH GHSDUWPHQW IXQFWLRQV LQ WKH 5DLOZD\V
:KLOHWKH&RPPLWWHHLVFRQVFLRXVWKDWWKHSROLFLHVLQWKHPDWWHUDUHJHQHUDOO\GULYHQE\
*RYHUQPHQW GLUHFWLYHV DQG WKDW WKH LPSRUWDQFH RI WKH UROH RI YLJLODQFH LQ HQVXULQJ
WUDQVSDUHQW DQG FOHDQ DGPLQLVWUDWLRQ RI UDLOZD\ IXQFWLRQV FDQQRW EH RYHUHPSKDVL]HG LW
ZLVKHV WR QRWH WKDW WKH 5DLOZD\V PXVW HYROYH D V\VWHP ZKHUHE\ WKH EHVW RIILFHUV DQG
VWDII ZLWK WKH ULJKW NQRZOHGJH DQG H[SHULHQFH DUH SRVWHG DJDLQVW YLJLODQFH SRVLWLRQV
(YHQPRUHLPSRUWDQWLVWRHQVXUHWKDWSHUVRQVZLWKDEDODQFHGSHUVRQDOLW\DQGDUDWLRQDO
DQGXQSUHMXGLFHGDWWLWXGHDUHDVVLJQHGWRYLJLODQFHSRVWV7KHUHDUHWHFKQLTXHVDYDLODEOH
QRZ HJ-XQJ%U\JP\HU7\SRORJ\WHVWLQJ PHWKRGRORJ\ WRDVVHVVLQGLYLGXDOVIRUWKHLU
DWWLWXGLQDO WUDLWV WKURXJK YDULRXV W\SRORJ\ WHVWV :KLOH PHDVXUHV WR EULQJ DERXW RUJDQLF
FKDQJHV LQ WKH ZD\ 9LJLODQFH RUJDQL]DWLRQ ZRUNV ZLOO QHFHVVDULO\ KDYH WR DZDLW ODUJHU
98


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

*RYHUQPHQW LQLWLDWLYHV LQ WKH PDWWHU ZH VXJJHVW WKDW DQ DSSURSULDWH V\VWHP EH SXW LQ
SODFH WR HQVXUHULJKW SHUVRQVEHLQJ SRVLWLRQHG DJDLQVW 9LJLODQFH SRVWVZLWK DSSURSULDWH
W\SRORJ\ WHVWV IRUPLQJ RQH RI WKH LQSXWV 7KH &RPPLWWHH ZDV DOVR LQIRUPHG WKDW
9LJLODQFH ,QVSHFWRUV RIWHQ UHPDLQ LQ WKH VDPH SRVW IRU ORQJ SHULRGV RI WLPH WKHUHE\
GHYHORSLQJYHVWHGLQWHUHVWVLQPDQ\LQVWDQFHV7KLVQHHGVWREHFKHFNHGDQGDWHQXUHRI
QRWPRUHWKDQ\HDUVVKRXOGEHSHUPLWWHGWRVXFKLQVSHFWRUV


 5HYDPSLQJ WKH SHUIRUPDQFH DSSUDLVDO V\VWHP ,Q RUGHU WR VXFFHVVIXOO\ UHDOL]H WKH IXOO
SRWHQWLDO RI RXWFRPHV IURP WKH RWKHU LQWHUYHQWLRQV EHLQJ UHFRPPHQGHG E\ WKLV
&RPPLWWHH DQG IRU LPSURYLQJ WKH HIILFLHQF\ DQG HIIHFWLYHQHVV RI WKH RUJDQL]DWLRQ
PHULWRFUDF\LQ,5KDVWREHQXUWXUHGDQGVWUHQJWKHQHG7KLV&RPPLWWHHLVRIWKHYLHZWKDW
WKH FXUUHQW SHUIRUPDQFH DVVHVVPHQW V\VWHP ZKLFK ZDV LQWURGXFHG UHFHQWO\ LQ ,5 LV
ZRHIXOO\ODFNLQJDQGDVDUHVXOWLWLVQRWVXUSULVLQJWKDWPRVWRIHPSOR\HHVDUHDVVHVVHG
DV RXWVWDQGLQJ ZLWK OLWWOH RU QR UHODWLRQVKLS ZLWK WKHLU DFWXDO SHUIRUPDQFH DQG
DFKLHYHPHQWV7KHV\VWHPVKRZVYHU\OLWWOHGLIIHUHQWLDWLRQEHWZHHQSHUIRUPHUVDQGQRQ
SHUIRUPHUV:HUHFRJQL]HWKDWWKHPDODLVHRIXQLYHUVDOL]DWLRQRIH[FHOOHQFHKDVEHFRPH
GHHSHUDIWHUWKHV\VWHPRIVKDULQJSHUIRUPDQFHDSSUDLVDOVZLWKUHSRUWHGXSRQHPSOR\HHV
7KLV PDODLVH LV DOVR W\SLFDO RI *RYHUQPHQW DQG &36(V $QRWKHU FRQWULEXWRU WR WKH
SUHVHQW VRUU\ VWDWH LV WKH IDFW WKDW JUDGLQJ RI RXWVWDQGLQJ KDV EHFRPH YLUWXDOO\
PDQGDWRU\ IRU FDUHHU SURJUHVVLRQ DQG D XVXDO EHOO FXUYH DSSURDFK WR JUDGLQJ FRXOG
VLPSO\MHRSDUGL]H PDQ\DFDUHHUEHVLGHVFDXVLQJDGURXJKWRIVXLWDEOHFDQGLGDWHVIRU
EHLQJSURPRWHGWRKLJKHUSRVWV:HGRH[SHFWWKDWWKHVHDQGUHODWHGLVVXHVZLOOEHSODFHG
EHIRUH WKH WK &HQWUDO 3D\ &RPPLVVLRQ IRU DSSURSULDWH FRUUHFWLRQV DFURVV *RYHUQPHQW
GHSDUWPHQWV &RQVLGHULQJ DOO DVSHFWV WKLV &RPPLWWHH VWURQJO\ IHHOV WKDW D YLEUDQW
SHUIRUPDQFHDVVHVVPHQWV\VWHPGULYHQE\HQKDQFHGREMHFWLYLW\DQGWUDQVSDUHQF\QHHGV
WREHUROOHGRXWDQGLPSOHPHQWHGLQ,57KLVVKRXOGHTXLS,5ZLWKDQDELOLW\WRQRWRQO\
UDWLRQDOO\GLIIHUHQWLDWHWKHSHUIRUPDQFHFDSDELOLW\DQGDSWLWXGHRILWVHPSOR\HHVEXWDOVR
WR SURYLGH LQSXWV IRU DFKLHYLQJ D EHWWHU ILW EHWZHHQ UHVSRQVLELOLWLHV DVVLJQHG WR DQ
HPSOR\HH DQG KLVKHU FDSDELOLWLHV DQG D PHDQV IRU LGHQWLI\LQJ DQG VWUHQJWKHQLQJ
LPSURYHPHQW LQ DUHDV RI ZHDNQHVVHV GHWHFWHG LQ DQ HPSOR\HH 'HYHORSPHQW RI KLVKHU
FRPSHWHQFLHVDQGFDSDELOLWLHVVKRXOGEHFRPHWKHGULYHU7KHUHIRUH,5RYHUDSHULRGRI
WLPH PXVW PLJUDWH IURP WKH H[LVWLQJ SHUIRUPDQFH DVVHVVPHQW V\VWHP WKDW PHUHO\ DQG
ULWXDOLVWLFDOO\ VHHNV WR DVVLJQ D JUDGLQJ WR RQH ZKHUH SHUIRUPDQFH HQKDQFHPHQW LV WKH
ZDWFKZRUG7KLVDORQHVKDOOSURYLGHUDWLRQDODQGREMHFWLYHLQSXWVIRUGHFLVLRQVUHODWHGWR
DVVLJQPHQWRIUHVSRQVLELOLWLHV SRVWLQJ FDUHHUJURZWKWUDLQLQJDQGGHYHORSPHQWVWUDWHJ\
DQG VXEVHTXHQWO\ DOVR IRU FRPSHQVDWLRQ PDQDJHPHQW IRU DFKLHYLQJ GLIIHUHQWLDWHG
FRPSHQVDWLRQ OLQNHG WR SHUIRUPDQFH  ,W LV IHOW WKDW LQ RUGHU WR DFKLHYH WKLV WKH
SHUIRUPDQFHDVVHVVPHQWV\VWHPEDVHGRQDVVHVVPHQWE\DVLQJOHUHSRUWLQJDXWKRULW\ WKH
ERVV  PXVW JLYH ZD\ WR D JURXSEDVHG DVVHVVPHQW V\VWHP ZKHUH D QRPLQDWHG JURXS RI
FRPSHWHQW VXSHULRUV JRHV WKURXJK DYDLODEOH SHUIRUPDQFH UHFRUGV HWF RU HYHQ LQWHUDFWV
ZLWK WKH UHSRUWHG RIILFLDO LI QHFHVVDU\ DQG UHFRUGV D FRPSUHKHQVLYH DQG REMHFWLYH
DVVHVVPHQW IRU H[DPSOH  GHJUHH DVVHVVPHQW  6XFK DVVHVVPHQW V\VWHPV PXVW DOVR
HQFRPSDVVDQQXDOSHUIRUPDQFHWDUJHWVHWWLQJWDUJHWRZQHUVKLS RZQHGE\WKHDVVHVVHH 
99


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

SHULRGLFDO SHUIRUPDQFH UHYLHZV FRUUHFWLYH DFWLRQ DQG DQ LQGHSHQGHQWREMHFWLYH UHYLHZ


V\VWHP


 7KHIROORZLQJIUDPHZRUNLVLQGLFDWLYHRIZKDWFDQEHDWWHPSWHG L $VHOIDVVHVVPHQWLQ
QDUUDWLYHIRUPE\WKHRIILFHUKLPVHOIKLJKOLJKWLQJKLVKHUDFKLHYHPHQWVDQGFRQWULEXWLRQV
GXULQJ WKH \HDU LL $QDVVHVVPHQW E\ WKH UHSRUWLQJ RIILFHU DJDLQ HPSKDVL]LQJ VSHFLILF
DQG FRQFUHWH FRQWULEXWLRQV WKDW WKH RIILFHU KDV PDGH SDUWLFXODUO\ LQQRYDWLYH FKDQJHV
PDGH E\ KLPKHU LLL  *UDGLQJ VKRXOG EH GRQH LQGHSHQGHQWO\ RQ WKH EDVLV RI WKH VHOI
DVVHVVPHQWDQGUHSRUWLQJRIILFHUVDVVHVVPHQWE\DJURXSRIVHQLRURIILFHUVZKLFKFRXOG
LQFOXGHUHWLUHGRIILFHUVDVZHOODVUHSXWHGSHUVRQVIURPRXWVLGH


 5DLOZD\V EHLQJ DQ RSHUDWLRQDO RUJDQL]DWLRQ ZLWK RSWLPXP RXWSXW UHTXLULQJ V\QHUJLHV
DPRQJVW YDULRXV IXQFWLRQDO WHDPV DQG JURXSV WKH &RPPLWWHH KDV UHFHLYHG VXJJHVWLRQV
WKDW SHUIRUPDQFH DSSUDLVDO VKRXOG EH DQ LQWHJUDWHG PL[ RI HYDOXDWLQJ SHUIRUPDQFH DW
LQGLYLGXDO OHYHO DQG DW JURXSWHDP OHYHO 7KH &RPPLWWHH VXSSRUWV VXFK D V\VWHP EHLQJ
SXWLQSODFH$ZHLJKWRIWRWKHIRUPHUDQGWRWKHODWWHU FRXOGEH FRQVLGHUHG
UDLOZD\VPD\WZHDNZLWKWKHPL[DVGHHPHGDSSURSULDWH 7KLVZRXOGKHOSWKH5DLOZD\V
WR PLWLJDWH WKH SUHVHQW DQRPDO\ RI D YHU\ ODUJH QXPEHU RI LQGLYLGXDOV EHLQJ JUDGHG
RXWVWDQGLQJ HYHQ ZKLOH SHUIRUPDQFH RI WKH WHDPJURXS FRQWLQXHV WR ODQJXLVK DW
XQDFFHSWDEO\ VXERSWLPDO OHYHOV 7KH V\VWHP ZRXOG FRQWULEXWH LQ D PDMRU ZD\ WR
LQFXOFDWLQJ WHDP VSLULW DPRQJVW WKH FRQVWLWXHQWV DQG RSWLPL]LQJ RUJDQL]DWLRQDO
SHUIRUPDQFH

 7KH&HQWUDO*RYHUQPHQWKDVDOUHDG\DFTXLUHGFRQVLGHUDEOHH[SHULHQFHLQLPSOHPHQWLQJD
3HUIRUPDQFH0DQDJHPHQW6\VWHPIRULWVHPSOR\HHV6LPLODUH[SHULHQFHLVDOVRUHIOHFWHG
LQ WKH SHUIRUPDQFH UDWLQJ V\VWHP RI &HQWUDO 3XEOLF 6HFWRU 8QGHUWDNLQJV %DVHG RQ DOO
VXFK H[SHULHQFH JDLQHG ZLOO EH GHVLUDEOH WR LQWURGXFH D SHUIRUPDQFH PDQDJHPHQW
V\VWHP TXDQWLI\LQJ SHUIRUPDQFH DQG FRYHULQJ DOO DVSHFWV RI 5DLOZD\ IXQFWLRQLQJ )RU
WKLVWRWDNHVKDSHQHZV\VWHPVKDYHWREHGHYLVHGDQGWKLVZLOOQHHGWREHSURIHVVLRQDOO\
DQG LQGHSHQGHQWO\ FRRUGLQDWHG DQG DGPLQLVWHUHG WKURXJK D PHFKDQLVP WKDW HQVXUHV DQ
DUPV OHQJWK IURP WKH H[HFXWLYH ERVV ZKLOH VWLOO NHHSLQJ KLPKHU DFWLYHO\ LQYROYHG
3HUIRUPDQFH DVVHVVPHQW EHLQJ D FRUH +5 IXQFWLRQ ZLOO KDYH WR EH FRRUGLQDWHG DQG
DGPLQLVWHUHG E\ D VSHFLDOL]HG FRUH JURXS ZLWKLQ +5 LQYROYLQJ UHOHYDQW OLQH PDQDJHUV
7KLVZLOODOVRQHFHVVLWDWHDGHTXDWHWUDLQLQJWREHLPSDUWHGWRWKH+5PDQDJHUVWDVNHGWR
FDUU\RXWWKLVDFWLYLW\

 :KDWDOVRQHHGVWREHGRQHLVHYDOXDWLRQUHYLHZRISHUIRUPDQFHDWKLJKHUOHYHOVLQRUGHU
WRILOWHURXWWKHQRQSHUIRUPHUV7RHQVXUHWKLVZHZRXOGOLNHWRGUDZDWWHQWLRQWRSDUD
 RI WKH WK5HSRUW RI WKH 6HFRQG $GPLQLVWUDWLYH 5HIRUPV &RPPLVVLRQ ,W
UHFRPPHQGHG D V\VWHP RI WZR LQWHQVLYH UHYLHZV RQH RQ FRPSOHWLRQ RI  \HDUV RI
VHUYLFH DQG DQRWKHU RQ FRPSOHWLRQ RI  \HDUV RI VHUYLFH IRU DOO *RYHUQPHQW VHUYDQWV
7KHILUVWUHYLHZDW\HDUVZRXOGSULPDULO\VHUYHWKHSXUSRVHRILQWLPDWLQJWRWKHSXEOLF
VHUYDQW KHUKLV VWUHQJWKV DQG VKRUWFRPLQJV IRU KHUKLV IXWXUH DGYDQFHPHQW 7KH VHFRQG
UHYLHZ DW  \HDUV ZRXOG PDLQO\ VHUYH WR DVVHVV WKH ILWQHVV RI WKH RIILFHU IRU KHUKLV
100


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

IXUWKHUFRQWLQXDWLRQLQ*RYHUQPHQWVHUYDQWV:HUHFRPPHQGWKDWV\VWHPVEHSXWLQSODFH
IRUVXFKUHYLHZVEHLQJFDUULHGRXWLQ5DLOZD\V

 5HZDUGLQJ H[FHOOHQFH 7KLV &RPPLWWHH LV RI WKH YLHZ WKDW ,5 QHHGV WR LQVWLWXWLRQDOL]H
FUHGLEOHWUDQVSDUHQWDQGIDLUPHFKDQLVPVIRUUHFRJQLWLRQDQGUHZDUGRIH[FHOOHQFHLQWKH
RUJDQL]DWLRQ7KLVFDQKHOSPRWLYDWHRIILFHUVWRVWULYHIRUH[FHOOHQFH7REHHIIHFWLYHWKH
UHZDUGV ZLOO QHHG WR EH WDQJLEOH LQ WHUPV RI KDYLQJ DQ LPSDFW E\ ZD\ RI SRVWLQJ
DVVLJQPHQWDQGHYHQFDUHHUJURZWKRIHPSOR\HHV,QH[FHSWLRQDOFDVHVRIFRQWULEXWLRQWR
HQKDQFHPHQW RI V\VWHPLF HIILFLHQFLHV HIIHFWLQJ VLJQLILFDQW VDYLQJV LPSURYLQJ VDIHW\
VFHQDULRHWFPRQHWDU\UHZDUGVFRXOGDOVREHFRQVLGHUHG


 5HVWUXFWXULQJWKHRUJDQL]DWLRQWREHPRUHFXVWRPHUEXVLQHVVRULHQWHG7KH([SHUW*URXS
RQ ,5  DQG WKH ([SHUW *URXS IRU PRGHUQL]DWLRQ RI ,5   KDG UHFRPPHQGHG
UHRUJDQL]DWLRQRI,5DORQJEXVLQHVVOLQHVVRDVWREHPRUHUHVSRQVLYHDJLOHIOH[LEOHDQG
FRPSHWLWLYH7KLV&RPPLWWHHFRQFXUVWKDWFXVWRPHUEXVLQHVVRULHQWHGVWUXFWXULQJRI,5LV
HVVHQWLDO IRU ,5 WR IXQFWLRQ DORQJ FRPPHUFLDO OLQHV ZLWK JUHDWHU SDUWLFLSDWLRQ IURP WKH
SULYDWHVHFWRU


 5HRUJDQL]DWLRQ RI 'HSDUWPHQWV 5HRUJDQL]DWLRQ RI YDULRXV H[LVWLQJ GHSDUWPHQWV LQ ,5
ZLOOUHTXLUHFKDQJHVLQWKHPDQQHULQZKLFKYDULRXVDFWLYLWLHV VHFRQGOHYHOJURXSLQJVRI
IXQFWLRQV ZLWKLQ HDFK GHSDUWPHQW  DUH FXUUHQWO\ EXQFKHGJURXSHG DQG RULHQWHG DV D
IXQFWLRQGHSDUWPHQW ZLWKLQ WKH RUJDQL]DWLRQ 7KH LQGLFDWLYH OLVW RI WKH VHFRQG OHYHO RI
IXQFWLRQV FDUULHG RXW E\ YDULRXV GHSDUWPHQWV DQG PDQQHG E\ *URXS $ VHUYLFHV LV
GHSLFWHGLQ)LJXUHVDQG7KHH[DPSOHRIH[LVWLQJWHFKQLFDOVHUYLFHV )LJXUH 
VKRZVWKDWLWLVSRVVLEOHWRUHDUUDQJHDQGFODVVLI\WRJHWKHUYDULRXVIXQFWLRQVRIGLIIHUHQW
GHSDUWPHQWV EDVHG RQ FHUWDLQ ORJLFDO VLPLODULWLHVFULWHULD )RU LQVWDQFH *HQHUDO
HQJLQHHULQJ EXLOGLQJVVWDWLRQ PDLQWHQDQFH WHOHFRPPXQLFDWLRQ JHQHUDO VWDWLRQEXLOGLQJ
OLJKWLQJHWF (QJLQHHULQJIXQFWLRQVUHODWHGWRIL[HG5DLODVVHWV WUDFNV3HUPDQHQWZD\
WUDFN VLJQDOLQJ HWF  DQG 0RWLYH 3RZHU $OO ORFRV  (OHFWULF DQG 'LHVHO DQG WUDFWLRQ
LQVWDOODWLRQV DQG5ROOLQJVWRFN FRDFKHVZDJRQVDQGDOOVHOISURSHOOHGYHKLFOHV FRXOG
IRUP GLIIHUHQW FOXVWHUV 7KLV FDQ EH XVHG DV D SRVVLEOH EDVLV WR UHRULHQW WKH H[LVWLQJ
GHSDUWPHQWV WR PHHW WKH RUJDQL]DWLRQV EXVLQHVV VWUDWHJLHV $V DOUHDG\ LQGLFDWHG
UHRUJDQL]DWLRQ RI GHSDUWPHQWV LV UHTXLUHG WR DFKLHYH D EHWWHU RUJDQL]DWLRQDO VWUDWHJ\ 
VWUXFWXUH DOLJQPHQW WKDW LV UHTXLUHG WR PDNH WKH RUJDQL]DWLRQ PRUH DJLOHIOH[LEOH DQG
FXVWRPHUEXVLQHVVRULHQWHG7KLVLVGHSLFWHGLQ)LJXUHEHORZ

)LJXUH5DLOZD\7HFKQLFDO6HUYLFHV

Work
shops


101


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

)LJXUH5DLOZD\1RQ7HFKQLFDOVHUYLFHV


* The green, blue, yellow and grey colours indicate similarity of classification of various functions across
different departments.


 'LIIHUHQWLDWHGDSSURDFKIRUYDULRXVKLHUDUFKLFDOOHYHOVLVUHTXLUHG7KLV&RPPLWWHHLVRI
WKH YLHZ WKDW VLQFH D FRPSOH[ RUJDQL]DWLRQ OLNH ,5 ZLOO QHFHVVDULO\ UHTXLUH IXQFWLRQDO
VSHFLDOL]DWLRQ DQG DV FRPSOHWH WUDQVIRUPDWLRQ RI WKH SUHVHQW YHUWLFDO IXQFWLRQDO
JURXSLQJVWRDGLIIHUHQWIRUPDWZLOOQRWEHHDV\EXVLQHVVUHRULHQWDWLRQRIWKHRUJDQL]DWLRQ
ZRXOG EHVW EH SRVVLEOH E\ KDYLQJ D GLIIHUHQWLDWHG DSSURDFK IRU WKH YDULRXV KLHUDUFKLFDO
OHYHOV7KDWZRXOGPHDQWKDWZKLOHYHUWLFDOIXQFWLRQDOVSHFLDOL]DWLRQPD\FRQWLQXHDWWKH
ORZHU *URXS & OHYHO WKH FOXEELQJ RI GLIIHUHQW IXQFWLRQV DW WKH KLJKHU OHYHOV RI WKH
'LYLVLRQV=RQHVFDQEHRUJDQL]HGDURXQGEXVLQHVVXQLWVFXVWRPHUOLQHV7KLVZLOOUHTXLUH
WKDW GLIIHUHQW IXQFWLRQDO FRPSHWHQFLHV DUH DFTXLUHG E\ RIILFHUV DV WKH\ FOLPE XS WKH
RUJDQL]DWLRQODGGHU


102


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

M(Infra)
P.Way,Signals,
Telecom,AllFixed
structures,&OHE,

IRSE,IRS&T,
IRSEE

M(Staff)

Establishment,HR
policies,labourlaws,
noncoreservices

IRSE,IRSEE,IRSME,IRTS

IRPS,

CRB

IRSS

IRSME,IRSEE,

EMUs, DEMUs,Train
sets

IRSS,

IRSEE,IRSME

M(MP)
AlltypesofMotive
Power(Electric&and
Diesel)

M(RS)
Coaches,Wagons,

Publicrelations,Safety,
Interministerial
coordination

M(P&F)

IRS&T

IRTS,IRAS,

Passenger,Freight,
Marketing,Business
development

M(Fin)

IRAS,IRTS,IRSE

Finance,Budgeting,
Costsaving,
Outsourcing,PPP

)LJXUH

103

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

 %DVHGRQZKDWKDVDOUHDG\EHHQVDLGDSRVVLEOHRUJDQLVDWLRQVWUXFWXUHDWWKH]RQDOOHYHOLV
GHSLFWHG LQ )LJXUH  7KH PDQQLQJ RI WKH GHSDUWPHQWV ZLOO EH IURP WKH WZR VHUYLFHV
,5/RJ6 DQG ,57HFK6  $W OHYHO WKUHH *URXS &  WKH VSHFLDOL]HG FDGUHV RQ WUDGLWLRQDO
IXQFWLRQDOOLQHVVKDOOFRQWLQXHDQGWKLVZLOOEHVHPLPHUJHGLQOHYHOWZR -XQLRUWLPHVFDOH
-766HQLRU7LPH6FDOH676-XQLRU$GPLQLVWUDWLYH*UDGH6HOHFWLRQ*UDGH-$*6* DV
GLVFXVVHG HDUOLHU $V VXFK RIILFHUV SRVWHG WR -76 XSRQ SURPRWLRQ IURP *URXS & VKDOO
FRQWLQXHWRZRUNLQWKHLUVSHFLDOL]HGIXQFWLRQVVWUHDPV7KH\ZLOOEHSXWWKURXJKLQVHUYLFH
WUDLQLQJDQGDIWHUDWWDLQLQJWKHUHTXLUHGOHYHORIFRPSHWHQF\DQGSURILFLHQF\ZLOOEHSRVWHG
WR RWKHU JURXS IXQFWLRQV XSRQ SURPRWLRQ WR 676 +RZHYHU MRE URWDWLRQ WR GLIIHUHQW
IXQFWLRQV  ZLOO EH HQVXUHG IRU GLUHFWO\ UHFUXLWHG RIILFHUV MRLQLQJ LQ -76 ZKR KDYH DOUHDG\
UHFHLYHG PXOWLGLVFLSOLQDU\ WUDLQLQJ RI ORQJHU GXUDWLRQ WKDQ DW SUHVHQW DV UHFRPPHQGHG
HOVHZKHUH GXULQJSUREDWLRQSHULRG5DLOZD\VZLOOKRZHYHUEHIUHHWRGHSOR\WKHVHRIILFHUV
LQWKHLQLWLDOVWDJHVLIQHFHVVDU\LQNHHSLQJZLWKWKHLUDFDGHPLFIXQFWLRQDOVSHFLDOLVDWLRQ
HYHQWKRXJKMREURWDWLRQZLOOEHWKHZDWFKZRUG6LPLODUO\URWDWLRQWRDOOIXQFWLRQVZLOOWDNH
SODFH ZLWKLQ WKH JURXS IRU WKHVH RIILFHUV E\ WKH WLPH WKH\ UHDFK QRQIXQFWLRQDO VHOHFWLRQ
JUDGH 7KLV ZLOO HQVXUH WKDW DW OHYHO  6$* DQG DERYH  VHDPOHVV DQG FRPSOHWH PHUJHU LV
HIIHFWHG DQG WZR EURDG VHUYLFHV ZLOO FRQWLQXH ZLWK WKHLU LQFXPEHQWV SRVWHG WR GLIIHUHQW
IXQFWLRQVZLWKLQWKHLUDOORFDWHGGHSDUWPHQWV)RUH[DPSOHLQWKHFDVHRIQRQWHFKQLFDOJURXS
ILQDQFH+5EXVLQHVVGHYHORSPHQWSDVVHQJHUVHUYLFHVIUHLJKWVHUYLFHVIXQFWLRQV DQGVXE
GHSDUWPHQWVIXQFWLRQV XQGHU WKHVH GHSDUWPHQWV PDQQLQJ ZLOO EH VRXUFHG IURP ,5/RJ6
VWUHDP RIILFHUV 6R D GLUHFWO\ UHFUXLWHG RIILFHU WUDLQHG LQ 0%$ W\SH RI FRXUVH LQ VHUYLFH 
XSRQ MRLQLQJ LQ -76 PD\ JHW SRVWHG WR DQ\ VXEGHSDUWPHQW DQG WKHQ ZLOO EH URWDWHG
SHULRGLFDOO\ VR WKDW KHVKH LV SRVWHG WR DOO PDMRU GHSDUWPHQWV GXULQJ WKH FDUHHU 7KLV LV
VRPHZKDW VLPLODU WR WKH H[LVWLQJ FDVH RI RSHUDWLQJ DQG FRPPHUFLDO GHSDUWPHQWV ZKHUHLQ
,576 RIILFHUV DUH SRVWHG LQ URWDWLRQ WR ERWK WKH GHSDUWPHQWV $V DOUHDG\ LQGLFDWHG WKH
*HQHUDO0DQDJHPHQWSRVWVOLNH*0$*0'50$'50HWFZLOOEHPDQQHGE\RIILFHUV
HPSDQHOOHGIRUVXFKSRVLWLRQV)XUWKHULQRUGHUWRHPSRZHUWKH]RQDODQGGLYLVLRQDOXQLWV
RI ,5 WKLV &RPPLWWHH SURSRVHV WKDW WKHUH VKRXOG EH JUHDWHU GHOHJDWLRQ RI SRZHU WR WKH
RIILFHUVRIWKHVHXQLWV DQGVLPXOWDQHRXVO\FRPPHQVXUDWH DXWKRULW\ZRXOGQHHGWR EHJLYHQ
PHQWLRQHGLQ&KDSWHU ZKLFKZRXOGQHFHVVLWDWHDSSURSULDWHXSJUDGDWLRQRINH\SRVWVLQ
WKHVHXQLWV$FFRUGLQJO\WKHOHYHORIRIILFHUV LHJUDGH6$*+$*$SH[HWF GHSLFWHGLQ
)LJXUH  LV DV SHU WKH UHTXLUHPHQW RI PDNLQJ WKH ]RQHV DQG WKHLU PDQDJHPHQW IXOO\
HPSRZHUHGWRUXQWKH]RQHZLWKHQKDQFHGGHOHJDWLRQRISRZHUV$VVXFKWKH*0LVVKRZQ
DWDSH[VFDOH DVRSSRVHGWRWKHSUHVHQW+$* $*0LQ+$*JUDGHHWF


 $WWKLVVWDJHDEULHIPHQWLRQRIWKHFDUHHUSURJUHVVLRQVFHQDULRZLWKLQ*URXS$VHUYLFHV
ZLOO EH LQ RUGHU :LWK WKH *URXS $ RIILFHUV SODFHG LQWR WZR VHUYLFHV ZLWK *HQHUDO
0DQDJHPHQWH[SHUWVGUDZQIURPERWKWKHVHVWUHDPVWKHSUHVHQWSUREOHPRILQWHUVHUYLFH
GLVSDULWLHV LQ WKH PDWWHU RI FDUHHU SURJUHVVLRQ ZRXOG JHW UHGXFHG FRQVLGHUDEO\ :LWKLQ D
6HUYLFH FDUHHU SURJUHVVLRQ ZLOO EH RQ WKH EDVLV RI FRPELQHG VHQLRULW\ FXP VXLWDELOLW\
+RZHYHU DV VWDWHG EHIRUH 5DLOZD\V ZLOO EH IUHH WR SRVW RIILFHUV ZLWK SDUWLFXODU DFDGHPLF
EDFNJURXQGRUFRPSHWHQFLHVDJDLQVWVSHFLILFSRVWVLIQHHGEH1HFHVVDU\DGMXVWPHQWVZLWKLQ
WKH FDGUH VKRXOG EH SHUPLWWHG WR IDFLOLWDWH WKLV 7R LOOXVWUDWH LI D -$* SRVW UHVSRQVLEOH IRU
WUDFN PDLQWHQDQFH IDOOV YDFDQW DQG WKH 5DLOZD\V IHHO WKDW D SDUWLFXODU RIILFHU QRW \HW GXH
104


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

SURPRWLRQ WR -$* EXW ZLWK FHUWDLQ VSHFLILF FRPSHWHQFLHV RU VNLOO VHWV  QHHGV WR EH
SRVLWLRQHG WKHUH WKH SRVW FRXOG EH RSHUDWHG LQ VHQLRU VFDOH DQG WKH -$* SRVW VKLIWHG WR
SHUPLWSURPRWLRQRIWKHVHQLRUPRVWHOLJLEOHRIILFHULQWKHFRPELQHGVHQLRULW\OLVW

)LJXUH3RVVLEOH5HDUUDQJHPHQWRI)XQFWLRQV 'HSW ZLWK&XVWRPHU%XVLQHVV)RFXV

W/shop




 7UDLQLQJDQGUHVNLOOLQJ7UDLQLQJUHVNLOOLQJDQGLPSDUWLQJQHZHUVHWRIFRPSHWHQFLHVWR
HPSOR\HHVZLOOEHVRPHRIWKHPRVWFULWLFDODFWLYLWLHVXSRQZKLFKWKHVXFFHVVRIDOORWKHU
WKH NH\ UHFRPPHQGDWLRQV RI RUJDQL]DWLRQDO UHVWUXFWXULQJ ZLOO GHSHQG $V DOUHDG\
PHQWLRQHG QHHG IRU WUDLQLQJ ZLOO QRW RQO\ DULVH IURP WKH PHUJHUFRQVROLGDWLRQ RI
VHUYLFHVEXWDOVRIURPWKHUHRUJDQL]DWLRQRIGHSDUWPHQWV7KHVXFFHVVIXOUHRULHQWDWLRQRI
WUDGLWLRQDO GHSDUWPHQWV DV VKRZQ LQ )LJXUH  DERYH ZLOO UHTXLUH QRW RQO\ D
UHDUUDQJHPHQW RI H[LVWLQJ GHSDUWPHQWDO VWUXFWXUHV EXW DOVR LPSDUWLQJ RI QHZHU
FRPSHWHQFLHVDQGVNLOOVHWVDVPHPEHUVRIHDFKSUHVHQWGD\GHSDUWPHQWZLOOEHUHTXLUHG
WRSHUIRUPUROHVRIRWKHUGHSDUWPHQWVZLWKLQWKHVXEJURXS%HVLGHVWKHFKDQJHGIRFXVRI
WKH RUJDQL]DWLRQ ZLOO UHTXLUH QHZHU NLQGV RI FRPSHWHQFLHV EHLQJ FUHDWHG )RU H[DPSOH
WKH H[LVWLQJ FRPPHUFLDO GHSDUWPHQW KDV KDUGO\ DQ\ IRFXV RQ PDUNHWLQJ EUDQG EXLOGLQJ
HWF ,Q DGGLWLRQ QHZ IXQFWLRQV OLNH SURYLGLQJ GRRU WR GRRU WUDQVSRUWDWLRQ VROXWLRQV
WKURXJK LQWHUPRGDO WLH XSV WHUPLQDO VWDWLRQ  PDQDJHPHQW DQG VHUYLFHV HWF ZLOO EH
UHTXLUHGWREHFDUULHGRXW7KLVLVHTXDOO\WUXHRIILQDQFHDQGSHUVRQQHOGHSDUWPHQWV7KH
WHFKQLFDOGHSDUWPHQWVZLOOQHHGWRIRFXVPRUHRQWHFKQLFDOO\VSHFLDOL]HGDUHDV7KLVZLOO
QHFHVVLWDWHIRFXVRQGHVLJQLQJQHZMREUHVSRQVLELOLWLHVOLVWLQJWKHFRPSHWHQFLHVUHTXLUHG
WR SHUIRUP WKH MREV VDWLVIDFWRULO\ GHILQLQJ QHZ UHSRUWLQJ SDWWHUQV GHVLJQLQJ WUDLQLQJ
PRGXOHVIRUH[LVWLQJHPSOR\HHVUHYLVLQJWKHUHFUXLWPHQWVWUDWHJ\ VRXUFHRIUHFUXLWPHQW
HGXFDWLRQDO TXDOLILFDWLRQV UHTXLUHG HWF  LQWURGXFLQJ FKDQJHV LQ WKH PDQQLQJ SROLF\
SHUIRUPDQFH PDQDJHPHQW DQG LQWURGXFWLRQ RI VXFFHVVLRQ SODQQLQJ ,QGXFWLRQ WUDLQLQJ
105


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

JLYHQWRRIILFHUVUHFUXLWHGWR,57HFK6 ,5/RJ6ZLOOQHHGWREHPXFKPRUHEURDGEDVHG
7KLV &RPPLWWHH UHFRPPHQGV WKDW ,5 PXVW UHYLVLW WKH GXUDWLRQ RI WUDLQLQJ DQG PDNH
DSSURSULDWHFKDQJHVLIWKHGXUDWLRQQHHGVWREHHQKDQFHG7KHH[LVWLQJRIILFHUVZLOODOVR
QHHG WR EH WUDLQHG H[WHQVLYHO\ LQ QHZHU DUHDV LQ ZKLFK WKH\ ZLOO EH FDOOHG XSRQ WR
SHUIRUP DV D UHVXOW RI WKH SROLF\ RI MRE URWDWLRQ ,Q YLHZ RI WKHVH UHTXLUHPHQWV
UHDUUDQJHPHQWRIWKHH[LVWLQJGHSDUWPHQWVDQGLQWURGXFWLRQRIQHZHUIXQFWLRQVQHHGVWR
EHSODQQHGDQGSKDVHGDSSURSULDWHO\


 &7,V $V DOUHDG\ QRWHG EHVLGHV 1$,5 ,5 FXUUHQWO\ KDV VL[ &HQWUDOL]HG 7UDLQLQJ
,QVWLWXWHV &7,V   IRXU IRU WHFKQLFDO GLVFLSOLQHV DQG WZR IRU QRQWHFKQLFDO DUHDV 7KHVH
IDFLOLWLHV VKRXOG EH XVHG IRU UXQQLQJ ERWK LQGXFWLRQ DV ZHOO DV LQFDUHHU WUDLQLQJ
SURJUDPPHV *LYHQ WKH HQRUPLW\ RI WKH WDVN &7,V ZLOO UHTXLUH VLJQLILFDQW FDSDFLW\
DXJPHQWDWLRQ ERWK LQ WHUPV RI SK\VLFDO LQIUDVWUXFWXUH DV ZHOO DV RQ WKH VRIW VLGH OLNH
FXUULFXOXPGHYHORSPHQWIDFXOW\GHYHORSPHQWHWF)RUWKLVSXUSRVHLWLVIHOWWKDWWKH&7,V
VKRXOGGHYHORSSDUWQHUVKLSVZLWKOHDGLQJSURIHVVLRQDODFDGHPLFLQVWLWXWLRQVERWKLQ,QGLD
DV ZHOO DV DEURDG ,Q DGGLWLRQ WKH RIILFHUV ZLOO DOVR QHHG WR EH WUDLQHG WKURXJK
SURIHVVLRQDODFDGHPLFLQVWLWXWHVDVZHOO7KH=RQDO7UDLQLQJ,QVWLWXWHVZRXOGDOVRQHHGWR
EHXSJUDGHGERWKLQWHUPVRILQIUDVWUXFWXUHDQGFDSDFLW\E\FUHDWLQJVXLWDEOHWLHXSVIRU
UDGLFDOO\LPSURYLQJWKHWUDLQLQJLPSDUWHGWRWKHQRQJD]HWWHGRIILFLDOVRI5DLOZD\V


 1$,5 7KLV &RPPLWWHH LV RI WKH YLHZ WKDW 1$,5 VKRXOG EH DVVLJQHG WKH VWDWXV RI D
XQLYHUVLW\IRULQVHUYLFHWUDLQLQJDQGDOVRIRULPSDUWLQJHGXFDWLRQWUDLQLQJLQWKHILHOGRI
PDQDJHPHQW RIIHULQJ VSHFLDOL]DWLRQV LQ WKH DUHDV RI +5 )LQDQFH 0DUNHWLQJ
&RPPXQLFDWLRQV%UDQGLQJ/RJLVWLFV7UDQVSRUW0DQDJHPHQWDQGDOVR5DLOZD\FHQWULF
DUHDVRIJHQHUDOPDQDJHPHQW,WLVUHFRPPHQGHGWKDW1$,5VKRXOGFRQGXFWSRVWJUDGXDWH
FRXUVHV LQFOXGLQJ DQ H[HFXWLYH 0%$ W\SH FRXUVH RI RQH\HDU GXUDWLRQ WR PHHW WKH
WUDLQLQJQHHGVRIERWKQHZUHFUXLWVDQGWKRVHDOUHDG\LQVHUYLFH


 2SWLPL]DWLRQRIWKHVL]HDQGVNLOOV RI PDQSRZHULQ,5$VDOUHDG\KLJKOLJKWHG WKH VWDII
FRVW LQFOXGLQJ SHQVLRQV  LV WKH VLQJOH PRVW VLJQLILFDQW H[SHQGLWXUH LWHP DFFRXQWLQJ IRU
WKH OLRQV VKDUH LQ ,5V WRWDO H[SHQGLWXUH 9HU\ OLWWOH FDQ EH GRQH WR WDFNOH WKH SHQVLRQ
H[SHQGLWXUH ZKLFK LV D FRPPLWWHG OLDELOLW\ H[FHSW SHUKDSV EXLOGLQJ D 3HQVLRQ )XQG
FRUSXV RYHU WLPH WKURXJK PRQHWL]DWLRQ RI DVVHWV DQG DOWHUQDWH UHYHQXH JHQHUDWLRQ
7KHUHIRUH FXUWDLOLQJ H[SHQGLWXUH RQ VDODU\ DQG ZDJHV VHHPV WR EH WKH RQO\ RSWLRQ IRU
UHYHQXH H[SHQGLWXUH FRQWURO E\ ,5 6LQFH WKH VDODU\ FRVW LV D IXQFWLRQ RI WKH VDODU\
VWUXFWXUHDQGWKHWRWDOQXPEHURIHPSOR\HHVDQGDVWKHVDODU\VWUXFWXUHZLOORQO\EHFRPH
LQFUHDVLQJO\ PRUH H[SHQVLYH DV D UHVXOW RI VDODU\ UHYLVLRQV '$ KLNHV HWF WKH RQO\
IOH[LELOLW\DYDLODEOHIRUVDODU\FRVWUHGXFWLRQLVUDWLRQDOL]DWLRQRIWKHQXPEHURIHPSOR\HHV
WKURXJK WKH DGRSWLRQ RI GLYHUVH VWUDWHJLHV ,Q RUGHU WR DUULYH DW SRVVLEOH RSWLRQV IRU
UDWLRQDOL]DWLRQRIPDQSRZHUFRVWVDQDQDO\VLVRIPDQSRZHUVWDIIVWUHQJWKMRESRVLWLRQV
RUJDQL]DWLRQDOVWUXFWXUHVSURGXFWLYLW\OHYHOVV\VWHPVDQGSURFHVVHVHWFFXUUHQWO\H[LVWLQJ
LQ,5QHHGWREHXQGHUWDNHQ(YDOXDWLRQRISRVVLEOHDOWHUQDWLYHDSSURDFKHVWKDWFRXOGEH
DGRSWHG WR UHRUJDQL]H DQG UDWLRQDOL]H ZRUN PDQSRZHU GHSOR\PHQW LQWURGXFWLRQ RI
WHFKQRORJ\LQWHUYHQWLRQVUHPRYDORIREVROHWHSURFHVVHVHWFZRXOGEHLPSHUDWLYH
106


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

 7KLV&RPPLWWHHQRWHVWKDWDOWKRXJKWKHHUVWZKLOH*URXS'FDWHJRULHVKDYHEHHQPHUJHG
DQG JUDQWHG WKH ORZHVW *URXS & 3D\ %DQG DQG *UDGH 3D\ E\ WKH WK &HQWUDO 3D\
&RPPLVVLRQUHRUJDQLVDWLRQWRDVVLJQFRPPHQVXUDWHKLJKHUUHVSRQVLELOLWLHVDQGIXQFWLRQV
WR WKH VWDII FRQFHUQHG KDV QRW WDNHQ SODFH LQ WKH GHVLUHG PDQQHU  $V WKHVH FDWHJRULHV
FRQVWLWXWH WKH ODUJHVW FKXQN RI ,5 HPSOR\HHV WKH FRVWWRFRPSDQ\ RI WKLV FDWHJRU\ RI
HPSOR\HHV KDV EHFRPH VLJQLILFDQW 7KLV &RPPLWWHH LV RI WKH ILUP EHOLHI WKDW LI ,5 WUXO\
ZLVKHV WR VLJQLILFDQWO\ UDWLRQDOL]H LWV VWDII FRVWV RU LPSURYH LWV SURGXFWLYLW\ LW LV WKHVH
FDWHJRULHVRIHPSOR\HHVWKDWZLOOQHHGWRUHFHLYHWRSPRVWDWWHQWLRQDQGLWZLOOQHHGWREH
HQVXUHG WKDW WKH\ DUH GHSOR\HG RQ GXWLHV DQG IXQFWLRQV ZKLFK JHQHUDWH FRPPHQVXUDWH
YDOXHIRUWKHRUJDQL]DWLRQ,5GDWDUHODWLQJWRWKHYDULRXVHUVWZKLOH*URXS'FDWHJRULHV
LQGLFDWHVWKDWDVRQVW2FWREHUWKHUHZHUHDSSUR[LPDWHO\ODNKVDQFWLRQHGSRVWV
DQGODNKHPSOR\HHVRQUROOVEHORQJLQJWRWKHVHFDWHJRULHVLQWKHRSHQOLQHVHWXS WKLV
GRHV QRW LQFOXGH VWDII RI 3URGXFWLRQ 8QLWV DQG RWKHU XQLWV  )XUWKHU LQIRUPDWLRQ
JDWKHUHGIURP,5DOVRUHYHDOVWKDWPDQ\DPRQJVWWKHVHFDWHJRULHVVWLOOFRQWLQXHWRFDUU\
RXWMREVDQGUHVSRQVLELOLWLHVWKDWDUHQRZTXLWHREVROHWH,WQHHGVWREHUHFRJQL]HGWKDWWKH
ZRUNSHUIRUPHGE\DODUJHQXPEHURIWKHVHFDWHJRULHVFDQHDVLO\EHRXWVRXUFHGDWPXFK
FKHDSHU FRVW ZLWKRXW ORVV RI TXDOLW\ ,Q WKH HYHQW WKHVH SHUVRQQHO VKRXOG EH LPSDUWHG
WUDLQLQJWRXSJUDGHWKHLUVNLOOVUHOHDVHGIURPWKHLUSUHVHQWORZVNLOOSRVLWLRQVDQGXWLOL]HG
LQ RWKHU DUHDV RI JUHDWHU LPSRUWDQFH ,W LV DOVR IHOW WKDW UHVSRQVLELOLWLHV RI PDQ\ RI WKHVH
FDWHJRULHV FDQ EH FRPELQHG WKURXJK PXOWLVNLOOLQJ DQG PXOWLWDVNLQJ 5DLOZD\V VKRXOG
DOVRDWWHPSWLQFRQVXOWDWLRQZLWK6WDII)HGHUDWLRQVDQH[HUFLVHDLPHGDWUDWLRQDOL]DWLRQLQ
WKHOLJKWRIVLJQLILFDQWWHFKQRORJLFDOLPSURYHPHQWVDQGDXWRPDWLRQLQPDQ\DUHDVLQ,5
7KLV ZRXOG KHOS HOLPLQDWH SUHVHQW DQRPDO\ RI SRFNHWV RI H[FHVV LQ PDQ\ DUHDV
FRH[LVWLQJ ZLWK DEVHQFH RI VWDII WR PDQ QHZO\ FUHDWHG DVVHWV 7KH V\VWHP RI PDWFKLQJ
VXUUHQGHUVDQGYDFDQF\EDQNLQRSHUDWLRQLQWKH5DLOZD\VKDVREYLRXVO\IDOOHQVKRUWRI
H[SHFWDWLRQV 5DWLRQDO UHGLVWULEXWLRQ RI PDQSRZHU LQ ,5 LV WKH FU\LQJ QHHG RI WKH KRXU
DQGQHHGVWREHXQGHUWDNHQZLWKDFWLYHLQYROYHPHQWRI)HGHUDWLRQVZKLFKKDYHDVPXFK
VWDNHLQZHOOEHLQJRI5DLOZD\VDVWKHDGPLQLVWUDWLRQKDV


 ,Q EULQJLQJ DERXW +5 FKDQJHV WKHUH LV D GLIIHUHQFH EHWZHHQ SURVSHFWLYH DSSRLQWPHQWV
DQG DSSO\LQJ WKRVH SURYLVLRQV UHWURVSHFWLYHO\ WR H[LVWLQJ HPSOR\HHV  7KH ODWWHU ZLOO EH
VRPHZKDWPRUHSUREOHPDWLFDQGZLOOUHTXLUHDORQJHUWLPHSHULRGLQWHUPVRIVHTXHQFLQJ
+RZHYHUWKHIRUPHUVKRXOGQRWEHKHOGXSZKLOHRQHLVZDLWLQJIRUWKHODWWHUSUREOHPWR
EHVROYHG,QRWKHUZRUGVWKHSURVSHFWLYHVKRXOGEHLPPHGLDWHO\VWDUWHG7KHODWWHULVVXH
FDQEHVRUWHGRXWVXEVHTXHQWO\

107


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

THESEAREONLYAFEWILLUSTRATIVEOPTIONSASSUGGESTEDBYSOMEMEMBERS

Methodology1:
Commoninterse seniorityofGroupA officersofthetwoservices(IRLogS&IRTechS)canbearrivedatbygoingthroughthe following
steps:
(a)Takeintoaccountthemarks/ranksecuredbytheofficersintheCivilServiceExam,theIndianEngineeringServiceExamortheSCRA,as
thecasemaybe.Addthemarksallottedtoeachofficerduringtraining,whereverapplicable.Basedonthecombinedmarksatrecruitment
and training stages, a combined seniority should be drawn up for each stream  one list for members of five existing services recruited
throughIES,anotherformembersofthreeservicesrecruitedthroughICE,andathirdforthoserecruitedthroughSCRAexamination;
(b)Inordertomergethethreesenioritylists,ranksecuredbyeachofficerinthethreelistswillbeconvertedtoapercentilenumber,so
thateachofficerinthethreesenioritylistswillgetauniquenumber;
(c)Basedontheuniquepercentilenumbersassignedtoeachofficer,thethreelistswillbemerged.Twoormoreofficersobtainingsame
percentile(asmusthappenatleastinthecaseand topandbottomplaced officers)will be ranked/sortedonthebasis of theirDateof
Birth,withtheoldercandidatebeingrankedassenior.
(d)Normalisationoftrainingmarks,ifrequired,couldbedone.InterpolationofGroupBofficersinthesenioritylistwillcontinuetobe
doneasperthepresentprovisionsoftherecruitmentrulesoftheexistingservices.
Anillustrativedepictionofthemethodologyisgivenbelow.


A:

ModeofRecruitmentUPSCIndianEngineeringServiceExamination
ServiceA

 Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20













A1
A2
A3
A4
A5
A6
A7
A8
A9
A10
A11
A12
A13
A14
A15
A16
A17
A18
A19
A20















CombinedSeniorityServiceA
andServiceB

ServiceB

UPSC Training Total


Dateof
UPSC Training Total Dateof
 Name
Marks Marks Marks
Birth
Marks Marks Marks
Birth
54
18
72 02121960
B1
57
18
75 14021960
51
18
69 03111960
B2
50
17
67 13021960
50
17
67 26011961
B3
50
16
66 13021961
49
16
65 23121960
B4
47
18
65 12091960
46
18
64 18121959
B5
49
15
64 14031960
51
12
63 16041961
B6
48
16
64 18091960
46
15
61 15031960
B7
47
14
61 23061960
45
14
59 11081960
B8
43
17
60 14091960
45
13
58 13091960
B9
39
15
54 03111958
40
17
57 12021961
B10
39
12
51 12111959
43
12
55 17081960
B11
39
11
50 19021960
36
16
52 08011961
B12
30
12
42 17061959
37
14
51 19011961
34
16
50 15091959
36
13
49 16081958
33
15
48 14031960
34
13
47 01011961
33
12
45 13091960
33
11
44 17041960
33
10
43 14011959



















































Name

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32

B1
A1
A2
B2
A3
B3
B4
A4
A5
B5
B6
A6
A7
B7
B8
A8
A9
A10
A11
B9
A12
B10
A13
B11
A14
A15
A16
A17
A18
A19
A20
B12

Total Percentile
Marks
Position
75
100.0000%
72
96.7742%
69
93.5484%
67
90.3226%
67
87.0968%
66
83.8710%
65
80.6452%
65
77.4194%
64
74.1935%
64
70.9677%
64
67.7419%
63
64.5161%
61
61.2903%
61
58.0645%
60
54.8387%
59
51.6129%
58
48.3871%
57
45.1613%
55
41.9355%
54
38.7097%
52
35.4839%
51
32.2581%
51
29.0323%
50
25.8065%
50
22.5806%
49
19.3548%
48
16.1290%
47
12.9032%
45
9.6774%
44
6.4516%
43
3.2258%
42
0.0000%



108


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


B:

ModeofRecruitmentUPSCIndianCivilServiceExamination
ServiceC





UPSC Training Total


UPSC Training Total
Dateof
DateofBirth  Name
Marks Marks Marks
Marks Marks Marks
Birth
C1
51
17
68
04051960
D1
54
18
72 14021960
C2
50
17
67
13021960
D2
48
17
65 13021960
C3
50
16
66
12081960
D3
48
16
64 13021961
C4
51
15
66
16091960
D4
48
15
63 12091960
C5
47
15
62
18041960
D5
45
14
59 12041960
C6
46
14
60
16041961
D6
43
16
59 18091960
C7
47
11
58
15031959
D7
41
12
53 23061960
C8
36
12
48
14031960
D8
36
16
52 14091960
C9
33
13
46
19121958
D9
39
11
50 03111958
C10
32
11
43
13021960
D10
37
12
49 12111959





D11
37
11
48 19021960





D12
30
12
42 17061959





D13
29
12
41 13091960





D14
27
13
40 17041960



















































Name

1
2
3
4
5
6
7
8
9
10

















C:

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20



Name

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24

D1
C1
C2
C3
C4
D2
D3
D4
C5
C6
D5
D6
C7
D7
D8
D9
D10
D11
C8
C9
C10
D12
D13
D14

Total
Marks
72
68
67
66
66
65
64
63
62
60
59
59
58
53
52
50
49
48
48
46
43
42
41
40

Percentile
Position
100.0000%
95.6522%
91.3043%
86.9565%
82.6087%
78.2609%
73.9130%
69.5652%
65.2174%
60.8696%
56.5217%
52.1739%
47.8261%
43.4783%
39.1304%
34.7826%
30.4348%
26.0870%
21.7391%
17.3913%
13.0435%
8.6957%
4.3478%
0.0000%


CombinedSeniorityofallcandidates,basedonPercentile
Number

Seniority
Percentile Seniority
Percentile
Name
Name
Rank
Score
Rank
Score

CombinedSeniorityService
CandServiceD

ServiceD

D1
B1
A1
C1
A2
C2
B2
A3
C3
B3
C4
B4
D2
A4
A5
D3
B5
D4
B6
C5

100
100
96.7742
95.6522
93.5484
91.3043
90.3226
87.0968
86.9565
83.871
82.6087
80.6452
78.2609
77.4194
74.1935
73.913
70.9677
69.5652
67.7419
65.2174

21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40

A6
A7
C6
B7
D5
B8
D6
A8
A9
C7
A10
D7
A11
D8
B9
A12
D9
B10
D10
A13

64.5161
61.2903
60.8696
58.0645
56.5217
54.8387
52.1739
51.6129
48.3871
47.8261
45.1613
43.4783
41.9355
39.1304
38.7097
35.4839
34.7826
32.5281
30.4348
29.0323

Seniority
Percentile
Name
Rank
Score
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56

D11
B11
A14
C8
A15
C9
A16
C10
A17
A18
D12
A19
D13
A20
B12
D14

26.087
25.8065
22.5806
21.7391
19.3548
17.3913
16.129
13.0435
12.9032
9.6774
8.6957
6.4516
4.3478
3.2258
0
0



109


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


Methodology2:

Thismethodologyinvolvesinterpolationofofficersofvariousservicesinacombinedlist,arrangedininproportiontototalstrengthofeach
service. The service with the largest number of officers will form thebase. Atthe top of the combined list, toppers of all services will be
placed in order of their date of birth  those born earlier being assigned higher seniority. Thereafter, officers of various services will be
interpolatedinbetweentheofficersofthebaseserviceintheratioofnumberofofficersinthatservicevisvisthenumberofofficersinthe
baseservice.

Forexample,supposetherearefourservicesA,B,CandD.Theirstrengthinaparticularyearsbatchis20,11,8and5respectively.Service
Awillbethebaseservice.Inthefirstround,toppersofeachoftheseservicesA1,B1,C1andD1willbeplacedatthetop,intheorderof
theirdateofbirth.

RatioofnumberofofficersinthebaseserviceAtoratioofnumberofofficersinservicesB,C,andDis20/11=1.8,20/8=2.5,20/5=4
respectively.Inthesecondround,B2willbeinterpolatedat1.8+1=2.8levelinA,i.e.betweenA2andA3.C2willbeinterpolatedat2.5+1
=3.5,i.e.betweenA3andA4,andD2at4+1=5,i.e.betweenA4andA5.Inotherwords,combinedinterseseniorityrankwillbe=1+
(Rankinownservice1)xratio.
















110


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG











Budgetary





Relationships




Between
Governments
And
Indian
Railways 




&KDSWHU%XGJHWDU\5HODWLRQVKLSVEHWZHHQ*RYHUQPHQWVDQG,5
,QWURGXFWLRQDQG/HJDF\
 %HIRUH  DOO ZRUN DVVRFLDWHG ZLWK WKH 5DLOZD\V ZDV KDQGOHG E\ WKH (QJLQHHULQJ
'HSDUWPHQW RI WKH $UP\ XQGHU WKH DHJLV RI D 0LOLWDU\ %RDUG LQ HDFK RI WKH WKUHH
3UHVLGHQFLHV0DGUDV%RPED\DQG%HQJDO7KH0LOLWDU\%RDUGZDVDEROLVKHGLQE\
/RUG'DOKRXVLHDQGD &HQWUDO3XEOLF:RUNV6HFUHWDULDWZDVHVWDEOLVKHGLQWXUQDQG&KLHI
(QJLQHHUV ZHUH DSSRLQWHG XQGHU HYHU\ /RFDO *RYHUQPHQW WR PDQDJH ZRUN HIIHFWLYHO\
:LWK WKH FRQWURO RI ,QGLD WUDQVIHUUHG WR WKH %ULWLVK FURZQ LQ  DQ 2IILFLDO 'LUHFWRU
*RYHUQPHQW 'LUHFWRU RI 5DLOZD\V  ZDV DSSRLQWHG WR MRLQ WKH %RDUG RI 'LUHFWRUV RI DOO
5DLOZD\ &RPSDQLHV 7KH 'LUHFWRU HQMR\HG YHWR SRZHUV DQG KHOG H[WHQVLYH DXWKRULW\
VDQFWLRQLQJLQGHQWVDQGSXUFKDVHV7KHILQDQFLDOSROLF\DQGRWKHULPSRUWDQW PDWWHUVZHUH
UHIHUUHGWRWKH6HFUHWDU\RI6WDWHLQ/RQGRQ:LWKWKLVEHJDQWKHUHODWLRQVKLSEHWZHHQWKH
*RYHUQPHQWRI,QGLDDQGWKH,QGLDQ5DLOZD\V$VVKRZQLQ)LJXUHWKLVEHJDQDSHULRG
RIVWHDG\H[SDQVLRQRIWKH,QGLDQUDLOQHWZRUN

 7KLV SHULRG IURP  FDQ EH GLYLGHG LQWR IRXU SKDVHV 7LOO  WKH WUXQN OLQHV ZHUH
FRQVWUXFWHGDQGPDQDJHGE\SULYDWH%ULWLVKILUPVXQGHUDSXEOLFJXDUDQWHH)RUWKHQH[WWHQ
\HDUVRUVRWKH*2, *RYHUQPHQWRI,QGLD FRQVWUXFWHGDQGPDQDJHGVWDWHUDLOZD\V7KH
ORQJHVW SKDVH ZDV WKH WKLUG VWDUWLQJ LQ WKH V ZKHUH *2, ZDV PDMRULW\ RZQHU RI WKH
OLQHVDQGSULYDWHILUPVZHUHLQFKDUJHRIFRQVWUXFWLRQDQGRSHUDWLRQDW\SHRI333)LQDOO\
LQ  *2, EHJDQ WDNLQJ RYHU UDLOZD\ RSHUDWLRQV  +RZHYHU WKLV EURDG SKDVLQJ KDG
VLJQLILFDQWUHJLRQDOYDULDWLRQV7KHWKUHHUDLOZD\VLQWKHQRUWK FROOHFWLYHO\UHIHUUHGWRDV
PLOLWDU\OLQHV ZHUHPHUJHGDQG*2,GHFLGHGWRPDQDJHWKHLURSHUDWLRQVDIWHUWKHRXWEUHDN
RI WKH $IJKDQ :DU  6LPLODUO\ WKH 6RXWKHUQ 0DKUDWWD V\VWHP DQG WKH %HQJDO 1DJSXU
5DLOZD\ZHUHGHVLJQHGWRDOOHYLDWHIDPLQHVIROORZLQJWKHUHFRPPHQGDWLRQVRIWKH)DPLQH
&RPPLVVLRQ7KHFKRLFHRIFLWLHVIRUVWDWLRQVZDVDOVRDIIHFWHGE\PLOLWDU\DQGVWUDWHJLF
FRQFHUQV

 (YHQLQWKH ILUVWSKDVH GHFLVLRQVRQWKHURXWHDQGJDXJHZHUH PDGHE\*2,ZKLFKDOVR
KDGVXSHUYLVRU\SRZHUVRYHUFRQVWUXFWLRQDQGRSHUDWLRQV8QGHUD\HDUFRQWUDFWZLWK
RSWLRQVIRUSXUFKDVHVWDUWLQJWKHWK\HDUWKHSULYDWHILUPV DQRYHUZKHOPLQJPDMRULW\RI
WKH VKDUHKROGHUV ZHUH IURP WKH 8. DQG ILQDQFLQJ ZDV DOO WKURXJK HTXLW\ QRW GHEW  ZHUH
JXDUDQWHHGDSHUFHQWUHWXUQDWDIL[HGH[FKDQJHUDWHLHERWKULVNVZHUHFRYHUHG7KH
JXDUDQWHH ZDV QRW WKHRUHWLFDOO\ RQHZD\  (DFK 5DLOZD\ SDLG LWV QHW HDUQLQJV LH WRWDO
UHFHLSWVOHVVZRUNLQJH[SHQVHVLQWRWKHWUHDVXU\ WKHFXUUHQWFRQVROLGDWHGIXQG ZKLFKLW
WKHQ UHFHLYHG EDFN  ,I LWV HDUQLQJV ZHUH OHVV WKDQ  LQ DQ\ \HDU *2, DGGHG WKH
UHPDLQGHU EXW WKHVH WRSXS SD\PHQWV ZHUH UHWXUQDEOH :KHQHYHU LWV HDUQLQJV H[FHHGHG
 WKH 5DLOZD\ ZDV VXSSRVHG WR WUDQVIHU KDOI WKH H[FHVV RYHU   WR *2, WLOO DOO VXFK
JXDUDQWHH SD\PHQWV ZHUH H[WLQJXLVKHG 7KXV LW ZDV OLNH D UHYHQXHVKRUWIDOO ORDQ DW D
FHUWDLQOHYHO7KH*2,HQIRUFHGDQGDGPLQLVWHUHGWKHFRQWUDFWV
112


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

 (YHQDWWKDWWLPHWKLVVWUXFWXUHZDVFRQWHVWHG,QWKHRSLQLRQRIWKHILQDQFHPHPEHURIWKH
9LFHUR\V FRXQFLO 6 /DLQJ WKLV VWUXFWXUH WRRN DZD\ WKH EHQHILWV RI WKH SULYDWH VHFWRU
EHFDXVHQRDGHTXDWHPRWLYHH[LVWHGIRUUHVWUDLQLQJWKHRXWOD\RQWKHZRUNV$VIHDUHG
WKHFRVWVRQWKHLQLWLDOOLQHVZHUHDOPRVW*%3SHUPLOHDERXWWZRWKLUGVPRUHWKDQ
WKHRULJLQDOHVWLPDWH&RQVHTXHQWO\DVWUDIILFJURZWKZDVVORZDQGWKHUXSHHGHSUHFLDWHG
E\ DERXW  WKH *2, PDGH JXDUDQWHH SD\PHQWV RI *%3  PLOOLRQ E\  WR WKHVH
ILUPV ,Q  WKH *RYHUQRU*HQHUDO 6LU -RKQ /DZUHQFH VWDWHG 7KH *RYHUQPHQW RI
,QGLDKDVIRUVHYHUDO\HDUVEHHQVWULYLQJWRLQGXFHFDSLWDOLVWVWRXQGHUWDNHFRQVWUXFWLRQRI
UDLOZD\V LQ ,QGLD DW WKHLU RZQ ULVN DQG RQ WKHLU UHVSRQVLELOLW\ ZLWK D PLQLPXP RI
*RYHUQPHQW LQWHUIHUHQFH %XW WKH DWWHPSW KDV HQWLUHO\ IDLOHG DQG LW KDV EHFRPH REYLRXV
WKDWQRFDSLWDOFDQEHREWDLQHGIRUVXFKXQGHUWDNLQJVRWKHUZLVHWKDQXQGHUDJXDUDQWHHRI
LQWHUHVWIXOO\HTXDOWRWKDWZKLFKWKH*RYHUQPHQWZRXOGKDYHWRSD\LILWERUURZHGRQLWV
RZQ DFFRXQW 6R LQ  DV \LHOGV RQ *2, ERQGV GURSSHG EHORZ  LW ERUURZHG
FRQVWUXFWHGDQGRSHUDWHG5DLOZD\OLQHV6LQFHWKHLQLWLDOSULYDWHILUPVRZQHGDQGRSHUDWHG
WKHWUXQNOLQHVWKHVHZHUHZKDWFRXOGEHFDOOHGVHFRQGDU\OLQHV7RVDYHFRQVWUXFWLRQFRVWV
PDQ\RIWKHVHZHUHPHWUHJDXJH

Figure5.1:TrackKilometresofIndianRailwaySystem1854to1939



 6WDUWLQJLQ*2,VWDUWHGWRUHVXPHRZQHUVKLSRIWKHLQLWLDOJURXSRISULYDWH5DLOZD\V
,Q*2,SXUFKDVHGRIWKHVKDUHVLQ(DVW,QGLDQ5DLOZD\WKRXJKDQHZSULYDWH
FRPSDQ\ ZKLFK KDG WKH UHPDLQLQJ  ZRXOG PDQDJH RSHUDWLRQV XQGHU D QHZ \HDU
FRQWUDFW2YHUWKHQH[WWHQ\HDUVILYHPRUH5DLOZD\VZRXOGEHWDNHQRYHUDQGWKHRWKHUV
ZHUHFRPSOHWHGE\)RUILYH5DLOZD\VDSULYDWHFRQFHVVLRQDLUHOLNHLQ(DVW,QGLDQ

35

Bell(1894),pp.6566,quotedinBogartandChaudhury(2012).

113


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

RSHUDWHGWKH5DLOZD\EXWIRUIRXUYL](DVWHUQ%HQJDO6LQG3XQMDEDQG'HOKLDQG2XGK
DQG 5RKLONKDQG ZHUH PDQDJHG E\ *2, )RU WKHVH WKUHH VXUSOXVHV ZHUH SDLG LQWR WKH
WUHDVXU\ DQG FDSLWDO ZDV SURYLGHG WKURXJK DQQXDO DSSURSULDWLRQV IURP WKH *2, EXGJHW
$IWHUWKHVWKLVVWUXFWXUHRI*2,RZQHUVKLSDQGSULYDWHRSHUDWLRQZDVDGRSWHGIRUDOO
QHZ 5DLOZD\V EXW ZLWK YDULHG FRQWUDFWXDO WHUPV ,Q VRPH FDVH OLNH %HQJDO &HQWUDO WKH
JXDUDQWHH ZDV  EXW RQO\ IRU  \HDUV ZKLOH LQ RWKHUV OLNH 5RKLONKDQG DQG .XPDRQ
WKHUHZDVDQDQQXDOVXEYHQWLRQRI5VIRU\HDUVDIWHUFRQVWUXFWLRQLQDGGLWLRQWR
D  JXDUDQWHH GXULQJ WKH FRQVWUXFWLRQ SKDVH 3URILWV ZHUH VKDUHG ZLWK *2, ZKLFK ZDV
WKHPDMRULW\RZQHULQSURSRUWLRQWRLWVVKDUHRIFDSLWDO


 7KH5DLOZD\FRPSDQLHVZHUHDOVRVXEVWDQWLDOO\UHRUJDQL]HG0DQ\ZHUHPHUJHGZLWKRQH
DQRWKHU ZKLOH LQ VRPH FDVHV ODUJHU 5DLOZD\V PDQDJLQJ WKH WUXQN URXWHV ZHUH DVNHG WR
PDQDJHWKHRSHUDWLRQVRIWKHEUDQFKRUIHHGHUOLQHVLQWRWKHLUQHWZRUNRQDSURILWVKDULQJ
EDVLV,QVXFKFDVHVWKHDFFRXQWVRIWKHSULQFLSDO5DLOZD\ZRXOGRIWHQLQFOXGHLQIRUPDWLRQ
RQ VXFK ZRUNHG OLQHV UHJDUGOHVV RI RZQHUVKLS 7KH *2,V JURZLQJ LQYROYHPHQW ZLWK
5DLOZD\ FRQVWUXFWLRQ DSSHDUV WR KDYH PDGH LW PRUH FRQILGHQW ,W RUJDQL]HG 5DLOZD\
FRQIHUHQFHV LQWURGXFLQJ D FRGH RI JHQHUDO UXOHV IRU WKH ZRUNLQJ RI DOO OLQHV LQFOXGLQJ
DJUHHPHQWV IRU WKH LQWHUFKDQJH RI UROOLQJ VWRFN D XQLIRUP FODVVLILFDWLRQ RI JRRGV DQG
DFFRXQWLQJ VWDQGDUGV 7KHUH ZDV HYHQ D VSHFLDO FRPPLWWHH IRU VWDQGDUGV DQG UHVHDUFK ,Q
FRQFRPLWDQWWRLWVVHSDUDWLRQIURPWKHSXEOLFZRUNVGHSDUWPHQWWKH5DLOZD\%RDUG
ZDV FRQVWLWXWHG LQ  WR GHWHUPLQH 5DLOZD\ SROLF\ VXFK DV QHWZRUN H[WHQVLRQV QHZ
OLQHVDQGPDQDJLQJRSHUDWLRQVRQH[LVWLQJOLQHV
Figure5.2:RailwaysrevenueasashareofoverallGOIrevenue


 'XULQJWKLVSHULRGKRZHYHUFRPSDQ\RSHUDWHG5DLOZD\VKDGWRVHFXUH*2,DSSURYDOIRU
FDSLWDO LQYHVWPHQW VLQFH WKH 5DLOZD\ EXGJHW ZDV SDUW RI WKH JHQHUDO EXGJHW 7KLV
GHSHQGHQFH RQ WKH RYHUDOO EXGJHWDU\ VLWXDWLRQ OHG WR DOOHJDWLRQV RI XQGHUFDSLWDOL]DWLRQ
HYHQWKRXJK5DLOZD\VUHYHQXHVKDGULVHQE\WKHHQGRIWKH)LUVW:RUOG:DUWRRYHUDWKLUG
RI JHQHUDO JRYHUQPHQW UHYHQXHV )LQDOO\ LQ  WKH $FZRUWK &RPPLWWHH DSSRLQWHG LQ
114


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

YLHZ RIWKH XSFRPLQJUHQHZDORI WKH FRQWUDFW ZLWK (DVW ,QGLDQ 5DLOZD\UHFRPPHQGHG D


VHSDUDWH 5DLOZD\ EXGJHW LQ H[FKDQJH IRU FRQWULEXWLRQV WR WKH JHQHUDO UHYHQXH LH WKH
GLYLGHQG ODUJHO\ LQ RUGHU WR SUHVHUYH WKH FRPPHUFLDO FKDUDFWHU RI WKH ,QGLDQ 5DLOZD\V
,QGLDQ 5DLOZD\V KDG WKXV FRPH IXOO FLUFOH IURP D JXDUDQWHH UHFHLYLQJ SULYDWH ILUP WR D
GLYLGHQGSD\LQJSDUWRIJRYHUQPHQW$VVKRZQLQ)LJXUHDIWHUZRUNLQJH[SHQVHVQHW
5DLOZD\UHYHQXHVDFFRXQWHGIRUDERXWRQHVHYHQWKRI*2,UHYHQXHVLQWKLVSHULRG:KLOH
WKH ,QGLDQ 5DLOZD\V FRPPHUFLDO RULHQWDWLRQ LV QRZ YHU\ PXFK FRQWHVWHG DQG 5DLOZD\
GLYLGHQG UHYHQXHV DUH QRW D VLJQLILFDQW VRXUFH RI *2, UHYHQXHV WKH VHSDUDWH 5DLOZD\
EXGJHWLVDSUDFWLFHWKDWFRQWLQXHVWLOOGDWH


,QWHUQDWLRQDO([SHULHQFH

 ,QWHUQDWLRQDOO\LWLVQRWXQFRPPRQWRILQGJRYHUQPHQWVXSSRUWIRU5DLOZD\VDFWXDOO\WKH
RSSRVLWH LV WUXH 7KLV LV WUXH HYHQ IRU WKH 8QLWHG .LQJGRP ZKLFK XQGHUZHQW UDGLFDO
UHIRUP VHSDUDWLQJ WKH UDLO WUDFN IURP RSHUDWLQJ FRPSDQLHV DQG DOORZLQJ IXOO SULYDWH
SDUWLFLSDWLRQLQRSHUDWLRQV WKHWUDFNWRRZDVLQLWLDOO\SULYDWL]HGEXWVXEVHTXHQWO\LWKDGWR
EHEURXJKWEDFNLQWRSXEOLFRZQHUVKLS DQGHVWDEOLVKLQJDUDLOUHJXODWRU1HWZRUN5DLO
WKH RZQHU DQG RSHUDWRU RI 8.V QDWLRQDO UDLO QHWZRUN DQG LWV LQIUDVWUXFWXUH DVVHWV 
GHSHQGV RQ WKH %ULWLVK 6FRWWLVK DQG :HOVK JRYHUQPHQWV IRU DERXW  RI LWV LQFRPH
7DEOH  SURYLGHV GHWDLOV RQ WKH UHODWLRQVKLS EHWZHHQ JRYHUQPHQW DQG WKH 5DLOZD\V LQ
GLIIHUHQWFRXQWULHV7DEOHVWRUHVWDWHWKHLQIRUPDWLRQE\QDWXUHRIVHUYLFHDQGW\SH
RIVXSSRUW


 $VFDQEHVHHQJRYHUQPHQWRZQHUVKLSHVSHFLDOO\RIWUDFNLQIUDVWUXFWXUHLVTXLWHFRPPRQ
LQGHHG WKH 1RUWK $PHULFDQ V\VWHP RI SULYDWHO\ RZQHG WUDFN QHWZRUNV LV DQ H[FHSWLRQ
+RZHYHU LQ VRPH FRXQWULHV WKH WUDFN PD\ EH RQ ORQJWHUP OHDVH WR SULYDWH ILUPV
HVSHFLDOO\ ZKHQ LW LV IRU VSHFLDOL]HG WUDIILF )RU H[DPSOH WKH7LHU  JUDLQ IUHLJKW OLQHV LQ
:HVWHUQ $XVWUDOLD KDYH EHHQ OHDVHG WR %URRNILHOG 5DLO DQG UHJXODWHG E\ WKH 3XEOLF
7UDQVSRUW $XWKRULW\   &RQVHTXHQWO\ WKHUH LV DOVR ILQDQFLDO VXSSRUW IURP WKH JRYHUQPHQW
IRU WKHVH HQWLWLHV 7KLV FDQ FRPH LQ WKH IRUP RI GLUHFW JUDQWV ERWK SODQQHG DQG
RFFDVLRQDOO\ XQSODQQHG ZKHQ ORDQV EHFRPH XQUHSD\DEOH DV LQ 5XVVLD  DQG ORDQV RU DV
JXDUDQWHHVLPSOLFLW DVLQ&KLQD RUH[SOLFLWIRUPDUNHWERUURZLQJV





7DEOH6XSSRUWIURP*RYHUQPHQWWR5DLOZD\VLQ6HOHFW&RXQWULHV

36

CollatedfromMORDiscussionPaperJan16,2015;RecentDevelopmentsinRailTransportationServices(OECD
paper);RecentDevelopmentsinRailTransportationServices(OECDpaper);andRoleofGovernmentinEuropean
RailwayInvestmentandFunding.

115


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


&RXQWU\
$XVWUDOLD

7\SHRI)LQDQFLDOVXSSRUWE\*RYHUQPHQW
7KH)HGHUDODQGWKH6WDWH*RYHUQPHQWVHLWKHULQGLYLGXDOO\RUVLPXOWDQHRXVO\SURYLGHVXEVWDQWLDOJUDQWVWRPRVW
QHZPDMRUUDLOZD\LQIUDVWUXFWXUHSURMHFWVRQQDWLRQDOUDLOQHWZRUN$XVWUDOLDQ5DLO7UDFN&RUSRUDWLRQ $57& 
D )HGHUDO JRYHUQPHQW RZQHG FRUSRUDWLRQ ZKLFK FRQWUROV PDMRULW\ RI VWDQGDUG JDXJH UDLO OLQHV UHFHLYHV DQ
DQQXDO JUDQW IURP WKH JRYHUQPHQW 3XEOLF VHFWRU LQYHVWPHQWV KDYH EHHQ HTXDOO\ IRFXVHG RQ H[SDQGLQJ DQG
XSJUDGLQJWKHFXUUHQWQHWZRUNSDUWLFXODUO\ZLWKUHVSHFWWRUHJLRQDODQGLQWHUVWDWHIUHLJKWDQGXUEDQSDVVHQJHU
UDLO

&DQDGD

7KH&DQDGLDQ*RYHUQPHQWIXQGVPDMRUSDVVHQJHULQIUDVWUXFWXUHXVHGE\VWDWHRZQHGSDVVHQJHUWUDLQRSHUDWRU
9,$5DLO7KHWZRPDLQSULYDWHRSHUDWRUV&DQDGLDQ1DWLRQDODQG&DQDGLDQ3DFLILFPXVWIXQGWKHLURZQ
QHWZRUNLQIUDVWUXFWXUHFDSLWDOLQYHVWPHQWSURMHFWV

&KLQD

&KLQD5DLO&RUSRUDWLRQUHFHLYHVRQO\PRGHVWEXGJHWVXSSRUWJHQHUDOO\OHVVWKDQSHUFHQWRIFDSLWDOVSHQGLQJ
IRUQHZOLQHVWRUHPRWHDUHDV5HYHQXHIURPUDLOZD\XVHUV LQFOXGLQJDFRQVWUXFWLRQVXUFKDUJHDGGLWLRQDOWR
IUHLJKWWDULIIV LVUHTXLUHGWRIXQGWKHUHVW/RDQVDUHDOVRH[WHQGHGE\SXEOLFVHFWRUEDQNV)UHLJKWWUDQVSRUW
XVHUVILQDQFHWKHPDMRUSDUWRIWKLVDPRXQW

*HUPDQ\ 7KH)HGHUDO*RYHUQPHQWIXQGVPDMRULW\RILQIUDVWUXFWXUHLQYHVWPHQW7KH)HGHUDO*RYHUQPHQWSURYLGHVJUDQWV
DQG LQWHUHVW IUHH ORDQV WR '% 1HW]  WKH QDWLRQDO 5DLOZD\ ,QIUDVWUXFWXUH 0DQDJHPHQW &RPSDQ\  IRU
LQIUDVWUXFWXUHUHSODFHPHQWXSJUDGLQJDQGQHZFRQVWUXFWLRQSDUWO\VRXUFHGIURP*HQHUDO%XGJHW$FFRXQWDQG
SDUWO\IURPSHWUROHXPWD[HV
*UHDW
%ULWDLQ

*RYHUQPHQW IXQGV  RI WRWDO LQIUDVWUXFWXUH FRVWV LQFOXGLQJ RSHUDWLQJ ILQDQFLQJ DQG GHSUHFLDWLRQ FRVW
1HWZRUN5DLOWKHRZQHUDQGRSHUDWRURIQDWLRQDOUDLOQHWZRUNDQGLWVLQIUDVWUXFWXUHDVVHWVVRXUFHVSDUWRILWV
LQFRPHIURP8.6FRWWLVKDQG:HOVKJRYHUQPHQWV

-DSDQ

$SDUWIURP6KLQNDQVHQ KLJKVSHHG OLQHVWKHWKUHHPDMRUSULYDWHO\RZQHGSDVVHQJHUFRPSDQLHVILQDQFHWKHLU


RZQLQIUDVWUXFWXUH7KHFDSLWDOLQYHVWPHQWRQ6KLQNDQVHQSURMHFWVDUHERUQHE\WKHQDWLRQDOJRYHUQPHQW WZR
WKLUGV  DQG ORFDO JRYHUQPHQWV RQHWKLUG  $ OLWWOH PRUH WKDQKDOI RI WKH QDWLRQDOJRYHUQPHQW IXQGLQJ FRPHV
IURPWKHSD\PHQWVUHFHLYHGIURPFRPSDQLHVIRUXVHRIH[LVWLQJ6KLQNDQVHQOLQHV EDVLFDOO\SD\PHQWE\XVHUV 
ZKLOHWKHUHPDLQGHUFRPHVIURPWKH-DSDQV*HQHUDO%XGJHW$FFRXQW7KHUDLOZD\VDUHFRQVWUXFWHGDQGRZQHG
E\-DSDQ5DLOZD\&RQVWUXFWLRQ7UDQVSRUWDQG7HFKQRORJ\$JHQF\ -577 DQGPDQDJHGDQGRSHUDWHGE\WKH
FRPSDQLHV -577 FKDUJHV WKH SDVVHQJHU UDLOZD\ FRPSDQLHV IRU WKH XVH RI WKLV LQIUDVWUXFWXUH RQO\ ZKDW WKH
FRPSDQ\FDQEHDUIURPFRPPHUFLDORSHUDWLRQV

5XVVLD

5XVVLDQ 5DLOZD\V 5='  KDYH PDLQO\ WR IXQG WKHLU RZQ LQIUDVWUXFWXUH GHYHORSPHQW SURJUDPV EXW WKH
*RYHUQPHQW GRHV PDNH HTXLW\ LQMHFWLRQV HIIHFWLYHO\ JUDQWV  IRU VSHFLDO SURMHFWV DQG JHQHUDO UDLO QHWZRUN
LQIUDVWUXFWXUHGHILQHGLQ D )HGHUDO7DUJHW3URJUDP EXWWKH DFWXDOOHYHORIIXQGLQJFXUUHQWO\SURYLGHGIRUUDLO
LQIUDVWUXFWXUHLVWKRXJKWWRIDOOIDUVKRUWRIZKDWLVUHTXLUHGWRGHOLYHUWKDW3URJUDP$OVRWKHUHDUHSURMHFWVWKDW
DUHILQDQFHGE\DFRPELQDWLRQRISXEOLFSULYDWHLQYHVWPHQWV

86$

7KH SULYDWH FRPSDQLHV PXVW IXQG WKH JUHDW PDMRULW\ RI WKHLU RZQ LQIUDVWUXFWXUH FDSLWDO LQYHVWPHQW SURMHFWV
IURP FXVWRPHUV RQ D FRPPHUFLDO EDVLV +RZHYHU WKH )HGHUDO 5DLOURDG $GPLQLVWUDWLRQ PDNHV FDSLWDO DQG
RSHUDWLQJ  JUDQWV WR $075$. WKH JRYHUQPHQWRZQHG LQWHUFLW\ SDVVHQJHU WUDLQ RSHUDWRU DQG WR WKH $ODVND
5DLOURDGRZQHGE\WKH6WDWHRI$ODVND,WIXUWKHUVXSSRUWVSDVVHQJHUDQGIUHLJKWUDLOZD\VWKURXJKDYDULHW\RI
FRPSHWLWLYH JUDQW GHGLFDWHG JUDQW DQG ORDQ SURJUDPV WR GHYHORS VSHFLILF VDIHW\ LPSURYHPHQWV UHOLHYH
FRQJHVWLRQDQGHQFRXUDJHWKHH[SDQVLRQDQGXSJUDGHRISDVVHQJHUDQGIUHLJKWUDLOLQIUDVWUXFWXUHDQGVHUYLFHV
WKDW PHHW VSHFLILF SXEOLF LQWHUHVW REMHFWLYHV 7KH WRWDO DPRXQWV DUH KRZHYHU PLQRU FRPSDUHG WR FRPPHUFLDO
IXQGLQJE\WKHSULYDWHIUHLJKWUDLOURDGVWKHPVHOYHV



116


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


7DEOH%\7\SHRI)LQDQFLDO6XSSRUWIURPWKH*RYHUQPHQW
7\SHRI
)LQDQFLDO
6XSSRUWE\WKH
*RYHUQPHQW

&DSLWDO,QYHVWPHQWV
)L[HG$VVHWV

5ROOLQJ6WRFN

3DVVHQJHU

)UHLJKW

$XVWUDOLD

)HGHUDO DQG 6WDWH JRYHUQPHQWV *HQHUDOO\ WKH 6WDWH )HGHUDO6WDWH


SURYLGH VXSSRUW HLWKHU LQGLYLGXDOO\ *RYHUQPHQWVLQYHVW JRYHUQPHQWV
RUVLPXOWDQHRXVO\
LQ5ROOLQJ6WRFN

&DQDGD

*RYHUQPHQW LQYHVWV LQ FDSLWDO )RU9LD5DLO


DVVHWV HJ 7KH 1HZ %XLOGLQJ
&DQDGD3ODQ

7KURXJK9LD5DLO 

&KLQD

/HVV WKDQ  RI FDSLWDO VSHQGLQJ )URP WZR 62(V 


GLUHFWO\SURYLGHGE\JRYHUQPHQW
&KLQD
1RUWK
/RFRPRWLYH

5ROOLQJ 6WRFN &R
DQG &KLQD 6RXWK
/RFR  5ROOLQJ
6WRFN&R

*RYHUQPHQW VXSSRUWV WKURXJK )LVFDO


EXGJHWDVZHOODVE\JXDUDQWHHLQJWKH
GHEW ILQDQFLQJ RI 5DLOZD\V %XW
PDMRULW\RIIXQGVFRPHIURPXVHUVYLD
DFRQVWUXFWLRQVXUFKDUJH

*HUPDQ\

)HGHUDO JRYHUQPHQW IXQGV PDMRULW\ 3DUW RI IXHO WD[


RILQIUDVWUXFWXUH
UHYHQXHV
DUH
HDUPDUNHG
IRU
ILQDQFLQJ 5ROOLQJ
6WRFN

'% 1HW] D  VXEVLGLDU\ RI


'HXWVFKH %DKQ LV WKH VLQJOH ODUJHVW
LQIUDVWUXFWXUH
SURYLGHU
)HGHUDO
JRYHUQPHQW SURYLGHV JUDQWV DQG
LQWHUHVWIUHHORDQVWR'%1HW]IRUWKLV
SXUSRVH

*UHDW%ULWDLQ

*RYHUQPHQW IXQGV  RI WRWDO 


LQIUDVWUXFWXUHFRVWV

1HWZRUN 5DLO D VWDWHRZQHG


FRPSDQ\ SURYLGHV DQG RSHUDWHV
%ULWLVK UDLO LQIUDVWUXFWXUH ,W UHFHLYHV
SDUW RI LWV IXQGLQJ IURP 8. 6FRWWLVK
DQG :HOVK JRYHUQPHQWV ,WV GHEW DUH
JXDUDQWHHGE\8.JRYHUQPHQW

-DSDQ

$SDUW IURP UHYHQXHV 6KLQNDQVHQ 


DUH IXQGHG E\ QDWLRQDO JRYHUQPHQW
UGIURP-DSDQ
V*HQHUDO%XGJHW
$FFRXQW  DQG ORFDO JRYHUQPHQWV
UG 

)RU6KLQNDQVHQ

5XVVLD

*RYHUQPHQW GRHV PDNH HTXLW\


LQMHFWLRQV HIIHFWLYHO\ JUDQWV  IRU
VSHFLDO SURMHFWV DQG JHQHUDO UDLO
QHWZRUN LQIUDVWUXFWXUH GHILQHG LQ D
)HGHUDO7DUJHW3URJUDP

5XVVLDQ
5XVVLDQJRYHUQPHQWIXQGV5='SDUWO\
JRYHUQPHQW IXQGV RQDSURMHFWWRSURMHFWEDVLV
DFTXLVLWLRQ
RI
5ROOLQJ
6WRFN
SDUWO\

86$

)HGHUDO 5DLOURDG $GPLQLVWUDWLRQ


PDNHV FDSLWDO JUDQWV WR $075$.
JRYHUQPHQWRZQHG
LQWHUFLW\
SDVVHQJHU WUDLQ RSHUDWRU  DQG
$ODVND 5DLOURDG RZQHG E\ WKH
VWDWHRI$ODVND 

%RWK )HGHUDO DQG 6XSSRUW WKURXJK D YDULHW\ RI


6WDWH IXQGLQJ LV FRPSHWLWLYHJUDQWGHGLFDWHGJUDQWDQG
SURYLGHG
IRU ORDQSURJUDPV
SURFXUHPHQW

PDLQWHQDQFH
RI
5ROOLQJ 6WRFN IRU
$075$.  
$ODVND5DLOURDG

)HGHUDO6WDWH
JRYHUQPHQWV






117


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


7DEOH%\7\SHRI)LQDQFLDO6XSSRUWIURPWKH*RYHUQPHQW
7\SH RI )LQDQFLDO 3XEOLF6HUYLFH2EOLJDWLRQV
6XSSRUW E\ WKH
1HZ/LQHV
0DLQWHQDQFH
*RYHUQPHQW
)HGHUDO6WDWH
JRYHUQPHQWV

2SHUDWLRQDQG0DLQWHQDQFH
3DVVHQJHU

)UHLJKW

)HGHUDO6WDWH
JRYHUQPHQWV

)HGHUDO6WDWHJRYHUQPHQWV

9LD5DLO



$XVWUDOLD

)HGHUDO6WDWH
JRYHUQPHQWV

&DQDGD

7KURXJK9LD5DLO 9LD5DLORSHUDWHV
PDLQWHQDQFHIDFLOLWLHV

&KLQD

*RYHUQPHQW ZLOO IXQG UDLOZD\V EXLOW IRU 


VRFLDOUHDVRQV

*HUPDQ\

'% 1HW] D  VXEVLGLDU\ RI 'HXWVFKH %DKQ LV WKH VLQJOH ODUJHVW LQIUDVWUXFWXUH SURYLGHU )HGHUDO
JRYHUQPHQWSURYLGHVJUDQWVDQGLQWHUHVWIUHHORDQVWR'%1HW]IRUWKLVSXUSRVH

*UHDW%ULWDLQ

3ULYDWH RSHUDWRUV DUH IXQGHG XQ 7KURXJK1HWZRUN5DLO


UHPXQHUDWLYHVHUYLFHVE\WKHUHJLRQDO37$V
DQGWKH&HQWUDO*RYW

-DSDQ

/LQHV RXWVLGH 7RN\R1DJR\D2VDND DUH )RU6KLQNDQVHQ


RZQHG DV VPDOOHU -5 &RV E\ WKH  1DWLRQDO
*RYHUQPHQW  VPDOOHU OLQHV GHYROYHG WR
/RFDO*RYHUQPHQWV

5XVVLD

5XVVLDQJRYHUQPHQWIXQGV5='SDUWO\RQDSURMHFWWRSURMHFWEDVLV

86$

7KURXJK$075$.

7KURXJK$075$.





)HGHUDO 5DLOURDG PDNHV RSHUDWLQJ JUDQWV WR $075$. DQG


$ODVND5DLOURDG

7DEOH%\7\SHRI)LQDQFLDO6XSSRUWIURPWKH*RYHUQPHQW
7\SH
RI *RYHUQPHQWRZQHG
)LQDQFLDO
GLVWDQFH /RQJ GLVWDQFH 8UEDQ6XEXUEDQ
6XSSRUW E\ /RQJ
SDVVHQJHUVHUYLFH
IUHLJKWVHUYLFH
VHUYLFH
*RYHUQPHQW
6RPHRSHUDWHGE\ 6RPHRSHUDWHGE\
*RYHUQPHQWHJ *RYHUQPHQWHJ
4XHHQVODQG5DLO 6\GQH\7UDLQV

2WKHUV
3URGXFWLRQXWLOLWLHV

$XVWUDOLD

6RPHRSHUDWHGE\
*RYHUQPHQWHJ
4XHHQVODQG5DLO

*RYHUQPHQWRZQV
VRPHLQFOXGLQJ$57&

*RYW RZQHG $57&


FRQWUROV PDMRULW\ RI
VWDQGDUGJXDJHOLQHV

&DQDGD

9LD5DLO

7ZRPDMRU
9LD5DLOSURYLGHV
SULYDWHRSHUDWRUV UDSLGLQWHUFLW\
&DQDGLDQ
VHUYLFHV
1DWLRQDODQG
&DQDGLDQ3DFLILF





&KLQD

6WDWHRZQHG

6WDWHRZQHG

*HUPDQ\

6WDWHRZQHG'HXWVFKH%DKQLWVVXEVLGLDULHVDQGEXVLQHVVXQLWV
SURYLGHDOOWKHVHVHUYLFHV

*UHDW%ULWDLQ





1HWZRUN5DLO

-DSDQ

1DWLRQDO /RFDO
*RYWVEHDUWKH
FDSLWDOFRVWVIRU
6KLQNHQVHQ



5XVVLD

3URYLGHGE\5='
DQ6R(



86$

$075$.

$ODVND5DLOURDG
VWDWHRI$ODVND





6WDWHRZQHG



6WDWHRZQHG

-DSDQ
6KRUWHUOLQHVFDOOHG

)UHLJKW
WKLUGVHFWRUGHYROYHG
5DLOZD\&R WR/RFDO*RYHUQPHQWV


'%1HW]DPRQRSRO\LV
DVVLJQHGWRVWDWH
DXWKRULWLHVWKH)HGHUDO
5DLOZD\$XWKRULW\DQG
)HGHUDO1HWZRUN$JHQF\

-DSDQ5DLOZD\
&RQVWUXFWLRQ7UDQVSRUW
DQG7HFKQRORJ\ -577 

118


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

 :KLOH VXSSRUW IRU WUDFN LQIUDVWUXFWXUH REYLRXVO\ VXSSRUWV ERWK IUHLJKW DQG SDVVHQJHU
VHUYLFHV LQGLUHFWO\ DGGLWLRQDO GLUHFW VXSSRUW LV DOVR SURYLGHG IRU SDVVHQJHU UDLO LQ PDQ\
FRXQWULHV,QVRPHFDVHVWKHUHPD\EHFRPSHWLWLYHELGVIRUWKHSURYLVLRQRISDVVHQJHUWUDLQ
VHUYLFHVZKLFKLVWKHQIXQGHGIURPWKHEXGJHW,QWKH(XURSHDQ8QLRQ (8 VRPHSXEOLF
IXQGLQJ GHFLVLRQV IRU SDVVHQJHU VHUYLFHV DUH GHFHQWUDOL]HG WR VXEQDWLRQDO JRYHUQPHQWV
7KLV HQDEOHV FORVHU PDWFK EHWZHHQ ORFDOO\ SHUFHLYHG DQG SROLWLFDOO\ H[SUHVVHG GHPDQGV
DQG DYDLODEOH UHVRXUFHV IRU WKH VHUYLFH ,W FDQ HQFRXUDJH WKHVH JRYHUQPHQWV WR ILQG PRUH
FRVW HIIHFWLYH PHWKRGV RI PHHWLQJ WKHLU REMHFWLYHV ,W DOVR IRFXVHV VXSSRUW WR LQWHQGHG
WDUJHWVDQGGRHVQRWGLIIXVHLWDFURVVRWKHUSDUWVRIWKH5DLOZD\7KHUHDUHDOVRRWKHUZD\V
RIVXSSRUWLQJRSHUDWLQJ ILUPV,Q-DSDQWKHSULFLQJRI LQIUDVWUXFWXUHLVDGMXVWHGWRUHIOHFW
WKHSD\PHQWFDSDFLW\RIWKHRSHUDWLQJFRPSDQLHV+RZHYHULQWHUQDWLRQDOO\WKHGLUHFWLRQ
LV WR PRYH WRZDUGV D UXOHEDVHG UHODWLRQVKLS EHWZHHQ WKH JRYHUQPHQW DQG D EURDGO\
FRPPHUFLDOO\RULHQWHG5DLOZD\VUDWKHUWKDQRSHQHQGHGILQDQFLDOVXSSRUW


 7KHUHVWUXFWXULQJRIWKH(XURSHDQ5DLOZD\VLVDJRRGH[DPSOHRIUXOHEDVHGUHODWLRQVKLSV
EHWZHHQ WKH JRYHUQPHQW DQG 5DLOZD\V HVSHFLDOO\ SXEOLFO\ RZQHG UDLO FRPSDQLHV  7KH
FRUH FRQFHUQ ZDV QRW RQO\ EXGJHWDU\ WKRXJK WKH GHFOLQLQJ VKDUH RI 5DLOZD\ LQ IUHLJKW
WUDQVSRUW DQG DFFXPXODWHG GHILFLWV LQ 5DLOZD\V UDQJLQJ IURP  WR  RI *'3 ZHUH D
FRQFHUQ  EXW WKH QHHG WR HQVXUH IDLU FRPSHWLWLRQ DFURVV GLIIHUHQW QDWLRQDO SURYLGHUV LQ D
(XURSHZLGHUDLOQHWZRUN7KHPDLQGLUHFWLYHIRUUHVWUXFWXULQJWKH(XURSHDQ5DLOZD\VZDV
((&7KHER[ SURYLGHVKLJKOLJKWVIURPWKHUHVWUXFWXULQJSURFHVVIRFXVHGRQWKH
UHODWLRQVKLSEHWZHHQWKHJRYHUQPHQWDQGUDLOFRPSDQLHV


 %URDGO\ LQ (XURSH WHQ \HDUV DIWHU WKH UHVWUXFWXULQJ SXEOLF FRQWULEXWLRQV WR 5DLOZD\V
ZHUH VSOLW EHWZHHQ VXSSRUWLQJ SDVVHQJHU WUDLQ RSHUDWLRQV LQ FRPSHQVDWLRQ IRU SXEOLF
VHUYLFHREOLJDWLRQV  FDSLWDOLQYHVWPHQWV VRPHRIWKLVFRXOGEHWUDFNUHQHZDOVZKLFK
FRXOGEHFODVVLILHGDVPDLQWHQDQFH LQLQIUDVWUXFWXUHDQGVSHFLDOIXQGVIRUKLJKVSHHGOLQHV
 DQGRSHUDWLRQVDQGPDLQWHQDQFHFRVWVRIUDLOLQIUDVWUXFWXUH  7KHUHPDLQLQJ
VXSSRUW ZDV IRU GHEW VHUYLFLQJ DQG VWDII HVSHFLDOO\ SHQVLRQ FRVWV  7KHVH SHQVLRQ
REOLJDWLRQV DURVH EHFDXVH 5DLOZD\ ZRUNHUV LQ PDQ\ FRXQWULHV ZHUH HPSOR\HG DV FLYLO
VHUYDQWV$VSDUWRIWKHUHVWUXFWXULQJSURFHVV(8UHJXODWLRQ((&DOORZHGSXEOLF
EXGJHWFRQWULEXWLRQVWRFRYHUH[FHVVFRVWVDWWULEXWDEOHWRWKHLUHDUOLHUVWDWXV






These numbers are from 2001. See Perkins, Stephen (2005) Role of Government in European Railway
InvestmentandFunding,paperpresentedatChinaRailwayInvestmentandFinancingReformForum,Beijing2005
38
As such, Railway employees enjoyed more generous pension allowances and earlier retirement than average
industryworkers.Insomerailwaysretirementdateswerebroughtforwardinthepastinplaceofpayincreases,in
ordertodeferdemandsonpublicbudgets

119


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

Box:RelationshipbetweentheGovernmentandRailCompaniesinEurope
Directive91/440/EECcoveredthreekeyareas:
x Restructuringdeficitstoputrailwaycompaniesonaviablefinancialfootingandmaintain

financial sustainability, specifying the kinds of public budget contributions permitted for
reducingtheindebtednessofrailways;
x Unbundling of servicesstarting with separation of accounts for infrastructure and train

operations but subsequently extended by Directive 2001/12/EC to separate freight from
passengeraccounts;
x Introductionoftrackaccessrightstoenablecompetitionforfreightservicesinitiallyinan

extremely limited way but subsequently extended (by Directives 2001/12/EC and
2004/51/EC) to cover all freight services both international and domestic. European
Commissionproposalsforintroducingtrackaccessrightsforpassengertrainoperatorsare
nowunderexamination.
Two further regulations on the financing of rail operations concern public service obligations.
PSOs aredefinedas a governmentrequirementfor a train operatorto provide services (often
withregulatedtariffs)thatwouldnotbeoperatedifthetraincompanywereactingsolelyinits
own commercial interest. Regulation 69/1191/EEC defines the public budget contributions
permittedby EUlaw forthe support of rail passenger servicesand requires compensation for
public service obligations to be adequate. In 1991, in conjunction with Directive 91/440, the
rules were complemented with regulation 91/193/EEC. This requires PSO compensationto be
providedforbyacontract(ratherthanbudgettransferstoregularizeaccountsattheendofthe
financialyear)anditimposedaccountingseparationbetweenPSOoperationsandcommercial
services. In July 2005, the Commission proposed a long awaited amendment to regulation
69/1191/EEC that if adopted [Note: this has since been adopted in July 2007] will make
competitivetenderingcompulsoryfortheawardofPSOcontractsforsuburbantrainservicesin
the interests of efficiency. As an alternative, Governments will be allowed to contract these
services to a dedicated local operator that will not be allowed to compete for contracts
elsewhere. Forthetimebeinginterregionalservicessupported byPSOsare exemptfromthis
proposedcompetitionforthemarket.
State aid to infrastructure is permitted under a specific regime, subject to EU regulation
70/1107/EEConthegrantingofaidsfortransportbyrail,roadandinlandwaterway.Thisallows
various types of public budget contributions to support operating costs for the management
andmaintenanceofinfrastructureandforcapitalgrantsforinvestingininfrastructure.
Aid to train operating companies requires approval from the European Commissions
competitionauthorities.Suchsupporthasbeenapprovedinrecentyearsonthebasisofonce
only payments to support restructuring in the transition to a competitive market
environment. This was the case for example in March 2005 when the French government
obtainedapprovaltocontribute800milliontoSNCFtorestructureitsfreightbusinessovera
three year period.   The financial discipline formalized in EU Directives and regulations has
been reasonably successful in putting European train operating companies on a more
financiallysustainablepath.
Source:ExtractedfromPerkins,Stephen(2005)RoleofGovernmentinEuropeanRailwayInvestmentandFunding,paper
presentedatChinaRailwayInvestmentandFinancingReformForum,Beijing2005


120


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

5HODWLRQVKLSVZLWKWKH8QLRQ*RYHUQPHQW


7KHEXGJHWLVWKH*RYHUQPHQWVNH\SROLF\GRFXPHQWRIDOOSODQQHGUHYHQXHDQGFDSLWDO
H[SHQGLWXUH  7KH EXGJHW LV QHFHVVDU\ IRU SODQQLQJ GHFLVLRQPDNLQJ DQG MXGLFLRXV
DOORFDWLRQ RI UHVRXUFHV  ,Q ,5 WKH 5DLOZD\ %XGJHW LV SUHVHQWHG E\ WKH 0LQLVWHU IRU
5DLOZD\VWRERWK+RXVHVRI3DUOLDPHQWVHSDUDWHO\IURPDQGDKHDGRIWKH*HQHUDO%XGJHW
7KH 5DLOZD\ ILQDQFHV ZHUH VHSDUDWHG IURP WKH JHQHUDO ILQDQFHV RI WKH JRYHUQPHQW
WKURXJKD6HSDUDWLRQ &RQYHQWLRQLQ DV SHUWKHUHFRPPHQGDWLRQVRIWKH $FZRUWK
&RPPLWWHH  7KRXJK WKH 5DLOZD\ %XGJHW LV VHSDUDWHO\ SUHVHQWHG WR 3DUOLDPHQW WKH
ILJXUHV UHODWLQJ WR WKH UHFHLSWV DQG H[SHQGLWXUH RI WKH 5DLOZD\V DUH D SDUW RI WKH WRWDO
UHFHLSW DQG H[SHQGLWXUH RI WKH *RYHUQPHQW RI ,QGLD 7KH HIILFLHQF\ RI WKH EXGJHWLQJ
SURFHVVSULPDIDFLHGHSHQGVRQWKHUHDOLVWLFDVVHVVPHQWRIWKHH[SHQGLWXUHDQGHDUQLQJV
VR DV WR HQVXUH RSWLPXP XWLOL]DWLRQ RI IXQGV  :KLOH DOORWWLQJ IXQGV WR HDFK ]RQH WKH
5DLOZD\%RDUGPRGHUDWHVWKHUHTXLUHPHQWRIHDFK]RQHRQWKHEDVLVRIWKHDYDLODELOLW\RI
UHVRXUFHV7KHUHIRUHDQ\GHILFLHQF\ZLWKUHJDUGWRWKHDFFXUDF\RIWKHHVWLPDWHVUHVXOWHG
LQH[FHVVH[SHQGLWXUHVXUUHQGHURIDOORWWHGIXQGV


7KHURRWVRIWKHSUREOHPKDYHEHHQDOOXGHGWRLQ&KDSWHUVDQGDQGDOVRVWDWHGWRZDUGV
WKHEHJLQQLQJRIWKLV&KDSWHU6WDWHGVLPSO\,5VSHQGVVRPXFKRQUHYHQXHH[SHQGLWXUH
WKDW LW LV XQDEOH WR LQYHVW LQ FDSLWDO H[SHQGLWXUH  RI WKHUHVRXUFHV IRU ILQDQFLQJ SODQ
H[SHQGLWXUHLQFDPHIURPEXGJHWDU\VXSSRUWIURPWKH5DLOZD\6DIHW\)XQG
IURPLQWHUQDOUHVRXUFHVDQGIURPH[WUDEXGJHWDU\UHVRXUFHV7KHIRFXVRIWKLV
&KDSWHULVRQWKHEXGJHWDU\SDUWDQGDOVRRQZKDWFDQEURDGO\EHFDOOHGVRFLDOFRVW7KH
URRWV RI EXGJHWDU\ VXSSRUW JR EDFN WR WKH 6HSDUDWLRQ &RQYHQWLRQ RI   ,5 EHFDPH
ILQDQFLDOO\LQGHSHQGHQWEXWRQO\SDUWLDOO\ )RULQVWDQFHDVD'HSDUWPHQWDO8QGHUWDNLQJ
LWLVQRWLQGHSHQGHQWRQZDJHVDQGSHQVLRQVHLWKHU%XWWKDWLVGLVFXVVHGHOVHZKHUHLQWKLV
5HSRUW 'LYLGHQGVDUHSDLGEHFDXVHRIWKHFDSLWDOWKDWWKH8QLRQJRYHUQPHQWKDVLQYHVWHG
LQ,5,QRWKHUZRUGVWKHEXGJHWDU\VXSSRUWIURPWKH8QLRQJRYHUQPHQWLVQRWIRUUHYHQXH
H[SHQGLWXUH EXW IRU FDSLWDO H[SHQGLWXUH DQG WKHFUHDWLRQ RI DVVHWV DQG WKLV LV WUHDWHG DV D
ORDQ LQ SHUSHWXLW\ ZLWK WKH FDSLWDODWFKDUJH DFFRXQWHG IRU DW KLVWRULFDO YDOXHV RI WKH
DVVHWV'LYLGHQGVIL[HGE\WKH5DLOZD\&RQYHQWLRQ&RPPLWWHHRI3DUOLDPHQWDUHLQWHUHVW
SDLGRQWKDWSHUSHWXDOORDQWKHSULQFLSDOQHYHUEHLQJH[WLQJXLVKHG2QWKHIDFHRILWWKH
UDWH RI GLYLGHQG QRZ SDLG LV   +RZHYHU WKLV UHTXLUHV D TXDOLILFDWLRQ  7KHUH DUH
H[HPSWLRQVIURPWKHJHQHUDOUDWHRIGLYLGHQGDQGVRPHVXEVLGLHVDUHFODLPHGEDFN+HQFH
IRUWKHHIIHFWLYHUDWHRIGLYLGHQGSD\DEOHWR02) 0LQLVWU\RI)LQDQFH ZRUNV
RXW WR URXJKO\  RI WKH GLYLGHQG EHDULQJ FDSLWDODWFKDUJH 7KH FDSLWDODWFKDUJH
H[FOXGHV FHUWDLQ LGHQWLILHG LWHPV OLNH FDSLWDO H[SHQGLWXUH RQ QDWLRQDO SURMHFWV DQG
VWUDWHJLFOLQHVRQZKLFKGLYLGHQGLVQRWUHTXLUHGWREHSDLG6HHQWKLVZD\WKHWUXHJUDQWWR

39

Indian Railways, Lifeline of the Nation, White Paper, Ministry of Railways, February 2015.  These are the BE
figuresfor201415.ExtrabudgetaryresourcesincludetheIRFCchannel.
40
Thereareminorexceptionstothis.Thecapitalmaybeamortized,ortherecanbewritebackadjustments.But
theseareminor.
41
WhitePaper,Ibid.

121


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

,5 IURP *2, LV WKHUHIRUH QRW WKH HQWLUH H[WHQW RI EXGJHWDU\ VXSSRUW EXW WKH GLIIHUHQFH
EHWZHHQZKDWWKH*2,VERUURZLQJFRVWDQGWKHUHWXUQLWJHWVIURP,5$WFXUUHQWOHYHOVRI
*2,ERQG\LHOGVRIWRWKLVZRXOGLPSO\DQDPRXQWRIURXJKO\WRRIWKH
FDSLWDODWFKDUJHDSSUR[LPDWLQJWRDERXW5VWRFURUHVDQQXDOO\


,QDGGLWLRQVXSSRUWWRWKH368VZLWKLQ,5KDVDOVRLQWKHSDVWEHHQURXWHGWKURXJK,57R
WKDWH[WHQWWKHVXSSRUWIURP*2,LVQRWMXVWWR,5EXWWRVHSDUDWHHQWLWLHV)RUH[DPSOHRI
WKH5VFURUHVIURP*2,LQWKLV\HDUVEXGJHW5VFURUHVLVIRUWKH'HGLFDWHG
)UHLJKW&RUULGRU&RUSRUDWLRQ/WGDQG5VFURUHVIRUGLIIHUHQWPHWUR5DLOZD\SURMHFWV
([WHUQDOORDQVIRU5DLOZD\SURMHFWVLPSOHPHQWHGE\5DLOZD\368VDUHWKXVFXUUHQWO\EHLQJ
URXWHGWKURXJKWKH5DLOZD\EXGJHW7KLVWHQGVWRFURZGWKHILVFDOVXSSRUWVSDFHDYDLODEOH
WRWKH5DLOZD\V,QWKHSDVWORDQDJUHHPHQWVZHUHUHYLVHGWRSURYLGHIRUGLVLQWHUPHGLDWLRQ
RIWKHVXSSRUWWKHUHE\HQDEOLQJWKHH[WHUQDODVVLVWDQFHWREHURXWHGGLUHFWO\WRWKHSURMHFW
FRPSDQLHV 3UHYLRXV FRPPLWWHHV WKH ODWHVW EHLQJ 3ODQQLQJ &RPPLVVLRQ   KDYH
UHFRPPHQGHGGLVLQWHUPHGLDWLRQ7KLV&RPPLWWHHDJUHHVZLWKDQGUHLWHUDWHVWKDWSRVLWLRQ
,W LV UHFRPPHQGHG WKDW DOO IXWXUH H[WHUQDO ERUURZLQJV VKRXOG EH UHFHLYHG GLUHFWO\ E\ WKH
5DLOZD\368VDQGWKHRQJRLQJORDQDJUHHPHQWVPD\DOVREHUHYLVHGWRJLYHHIIHFWWRVXFK
GLVLQWHUPHGLDWLRQ6XEVHTXHQWWRDFFRXQWLQJUHIRUPVWKLVZRXOGJLYHDWUXHSLFWXUHRIWKH
QDWXUH RI ILQDQFLDO VXSSRUW EHLQJ H[WHQGHG E\ *2, ZKLFK FDQ EH JUDGXDOO\ DOWHUHG RYHU
WLPHDVQRWHGODWHU
Figure5.4:Dividendasshareofcapitalatcharge

Source:IndianRailwayBudgetStatements


 2QWKHRWKHUKDQGWKHVRFLDOVHUYLFHREOLJDWLRQVRI,5DUHHVWLPDWHGDWDURXQG5V
FURUHVHYHU\\HDU7KLVLVEHFDXVHSDVVHQJHUDQGIUHLJKWLVFDUULHGDWUDWHVWKDWDUHEHORZ
FRVW  ,QGHHG EHFDXVH RI ZKDW ZLOO EH VDLG DERXW FRVWLQJ DQG DFFRXQWLQJ SULQFLSOHV LQ

42
  
43

Ibid.

122


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

&KDSWHU  WKLV ILJXUH LV QR PRUH WKDQ LQGLFDWLYH  5HLPEXUVHPHQW RI WKLV FRVW KDV EHHQ
FRQVLGHUHGE\*RYHUQPHQWDQGD&RPPLWWHHRI6HFUHWDULHVKDGUHFRPPHQGHGWKDWWKHVHEH
UHLPEXUVHG WR WKH 5DLOZD\V EXW VWLOO UHPDLQV XQUHVROYHG   ,W LV QRW FOHDU ZK\ WKLV
GHILQLWLRQ LV DSSURSULDWH VLQFH WDULIIV IRU VHUYLFHV DUH GHFLGHG E\ ,5 LWVHOI DQG LW FDQ EH
DUJXHGWKDW,5KDVWKHDXWKRULW\WRUDLVHWDULIIVWRPHHWFRVW,QWKHVRFLDOVHUYLFHREOLJDWLRQ
FRVWVFRPSXWHGE\,5ILJXUH D HVVHQWLDOFRPPRGLWLHVFDUULHGDWORZHUWKDQFRVWIUXLWV
DQG YHJHWDEOHV RUJDQLF PDQXUH SDSHU FKDUFRDO EDPERR UDZ DQG SUHVVHG FRWWRQ UDZ
ZRROVXJDUFDQH E FRQFHVVLRQVRQSDVVHQJHUDQGRWKHUVHUYLFHVVXFKDVVHFRQGFODVVDQG
VXEXUEDQWUDIILF F RSHUDWLRQRIXQHFRQRPLFEUDQFKOLQHV G QHZOLQHVRSHQHGIRUWUDIILF
2Q E LWLVQHFHVVDU\WRSRLQWRXWWKDWVXFKORVVHVDUHQRWRQO\EHFDXVHRIVXEXUEDQDQG
QRQVXEXUEDQ SDVVHQJHU IDUHV EHLQJ ORZ  7KHUH LV D ORQJ OLVW RI LQGLYLGXDOV ZKR DUH
HOLJLEOH IRU FRQFHVVLRQDO IDUHV  UHFLSLHQWV RI JDOODQWU\ DZDUGV QDWLRQDO VSRUWV DZDUGHHV
SDUWLFLSDQWV LQ VSRUWV WRXUQDPHQWV WHDFKHUV ZKR KDYH ZRQ QDWLRQDO DZDUGV 6KUDP
DZDUGHHV ZDU ZLGRZV SDWLHQWV VXIIHULQJ IURP VRPH GLVHDVHV KDQGLFDSSHG SHRSOH SUHVV
FRUUHVSRQGHQWVILOPWHFKQLFLDQVDQGSRVWDOWUDIILFWUDQVSRUWDWLRQRIUHJLVWHUHGQHZVSDSHUV
DQGPDJD]LQHVDQGWUDIILFWRWKH1RUWK(DVW


 2WKHUWKDQWKHEURDGHULVVXHWRZKLFKZHZLOOUHWXUQLQDPRPHQWLWLVVXUSULVLQJWKDW,5
FRQWLQXHV WR XVH WKH H[SUHVVLRQ EUDQFK OLQH ZKHQ QR VXFK FRQFHSW H[LVWV DQ\ PRUH
7RGD\DVKDVEHHQPHQWLRQHGLQ&KDSWHUDWOHDVWVRIDUDVEURDGJDXJHLVFRQFHUQHG
OLQHV DUH FODVVLILHG IURP $ WR ) GHSHQGLQJ SULPDULO\ RQ WKH VSHHG WKDW WKHVH OLQHV FDQ
VXVWDLQ  )RU H[DPSOH $ FDQ KDQGOH PD[LPXP VSHHGV XS WR  NPKRXU % 
NPKRXU'NPKRXUDQG(DQG)RQO\OHVVWKDQNPKRXU&OLQHVDUH
XVHGIRUVXEXUEDQWUDIILF7KHH[SUHVVLRQEUDQFKOLQHLVUHDOO\DKLVWRULFDOOHJDF\DQG
WKLV&RPPLWWHHGRHVQRWIHHOWKDWVXFKLPSUHFLVHH[SUHVVLRQVVKRXOGEHXVHGDQ\ORQJHU
7KHKLVWRULFDOOHJDF\LVEDVHGRQ WKH ZD\UDLOZD\VZHUHFRQVWUXFWHG LQ,QGLDLQWKHWK
FHQWXU\DQGWKHJXDUDQWHHWKDWZDVILUVWH[WHQGHGWRWKH,QGLDQ%UDQFK5DLOZD\&RPSDQ\
LQ   7KLV FRPSDQ\ ZDV PHDQW WR FRQVWUXFW IHHGHU OLQHV WR WKH PDLQ URXWHV  7KHUH
ZHUH VLPLODU RWKHU JXDUDQWHHV H[WHQGHG QRW RQO\ WR EUDQFK OLQHV EXW DOVR WR UDLOZD\V
RSHUDWHGE\'LVWULFW%RDUGVDQG3ULQFHO\6WDWHV6XFKH[SUHVVLRQVVKRXOGKHQFHIRUWKEH
UHVWULFWHG RQO\ WR PHWUH DQG QDUURZ JDXJHV UHGHVLJQDWHG SHUKDSV DV KHULWDJH URXWHV DV
KDVEHHQGRQHLQVRPHFRXQWULHVLQWKHZRUOGLQFOXGLQJWKH8QLWHG.LQJGRP5HWXUQLQJ
WR EURDG JDXJH ZKDW LV WKH GLIIHUHQFH EHWZHHQ F  DQG G "  7KHUH DUH FDSLWDO FRVWV
DVVRFLDWHGZLWKFUHDWLQJQHZWUDFNVDQLPSRUWDQWFRQVLGHUDWLRQIURPWKHSRLQWRIYLHZRI
LQWHJUDWLQJ WKH FRXQWU\ DQG SURYLGLQJ DOO FLWL]HQV ZLWK WUDQVSRUW FRQQHFWLYLW\ 7KDW
REMHFWLYHFDQQRWEHORVWVLJKWRI7RVRPHH[WHQWWKH8QLRQJRYHUQPHQWEHDUVWKHFDSLWDO
FRVWVRIEXLOGLQJWKHVHQHZOLQHVEXWZKDWWKHULJKWKDQGJLYHVWKHOHIWKDQGWDNHVDZD\
LQWKHIRUPRIGLYLGHQGV7RUHFDSLWXODWHZKDWZDVVDLGLQ&KDSWHU,5SURMHFWVDUHQRZ
GLYLGHGLQWRVHYHQFDWHJRULHVQDWLRQDOSURMHFWV $ SURMHFWVRQFRVWVKDULQJEDVLV $ 
FULWLFDO SURMHFWV $  VXEFULWLFDO SURMHFWV $  LPSRUWDQW SURMHFWV $  RWKHU SURMHFWV
%  DQG OHDVW LPSRUWDQW SURMHFWV &   ,Q WHUPV RI EHDULQJ WKH FDSLWDO FRVWV RQ VXFK QHZ

44
45

Ibid.
SeeIndianRailwaysYearBook201314,MinistryofRailways.

123


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

OLQHV RQH LV SUHVXPDEO\ DIWHU FDWHJRULHV $ DQG $  :KLOH WKH 8QLRQ JRYHUQPHQW
FRQWLQXHV WR EHDU WKH FDSLWDO FRVWV WKURXJK JURVV EXGJHWDU\ VXSSRUW *%6  WKDW *%6 LV
HDUPDUNHG IRU SURMHFWV WKDW DUH GHHPHG WR EH QDWLRQDOO\ LPSRUWDQW DQG ,5 KDV OLPLWHG
GHJUHHV RI IUHHGRP LQ GHWHUPLQLQJ ZKDW WKDW *%6 LV PHDQW WR EH XVHG IRU  ,W LV ULQJ
IHQFHGVRWRVSHDN+RZHYHUWKH*%6NHHSVDGGLQJWRWKHFDSLWDODWFKDUJHDQGWKXVWR
WKHIXWXUHGLYLGHQGOLDELOLW\$SDUWIURPHYHU\WKLQJHOVHWKHV\VWHPLVQRWWUDQVSDUHQW


 +RZHYHU WKHUH DUH PDQ\ SDWHQWO\ YDOLG 362V SXEOLF VHUYLFH REOLJDWLRQV  WKDW ,5 GRHV
EHDU 7KH FOHDUHVW H[DPSOH RI WKLV LV WKH VXSSRUW IRULQYHVWPHQW LQ QDWLRQDO SURMHFWV DQG
VWUDWHJLF OLQHV VXFK DV WKRVH LQ WKH -DPPX DQG .DVKPLU DQG WKH 1RUWKHDVWHUQ VWDWHV
&RQYHUVHO\RSHUDWLQJORVVHV LIWKH\ZHUHWRRFFXUHYHQZLWKHIILFLHQWRSHUDWLRQ RQWKHVH
OLQHV VKRXOG DOVR TXDOLI\ DV 362 /LNHZLVH RQ VXEXUEDQ FRPPXWHU OLQHV LW LV SRVVLEOH
WKDW WKHLU ODUJH H[WHUQDOLWLHV ERWK HFRQRPLF DQG HQYLURQPHQWDO DV DQ HIILFLHQW SXEOLF
WUDQVSRUW PRGH ZRXOG UHTXLUH WKHP WR EH RSHUDWHG EHORZ FRVW WR PD[LPL]H WKH VRFLDO
EHQHILW &XUUHQWO\ WKH\ DUH QRW VHHQ DV VXFK  ,QGHHG LQ RUGHU WR EXLOG D GLVLQFHQWLYH
DJDLQVW FRQVWUXFWLRQ RI XQHFRQRPLF OLQHV WKH 6DULQ &RPPLWWHH LQ  DUJXHG WKDW
JHQHUDO DVGLVWLQFWIURP5DLOZD\ UHYHQXHVVKRXOGEHDURIWKHDQQXDOORVV$GHFDGH
ODWHU WKH 7DQGRQ &RPPLWWHH VWDWHG WKDW WKH 5DLOZD\V VKRXOG EH DOORZHG WR HOLPLQDWH
XQHFRQRPLF DFWLYLWLHV RU EH GLUHFWO\ VXEVLGL]HG IRU WKHVH DFWLYLWLHV (YHQ WKH ([SHUW
&RPPLWWHH LQ  DUJXHG IRU VXEVLG\ IRU XQUHPXQHUDWLYH OLQHV 7KLV &RPPLWWHH
UHFRPPHQGVWKDWDUHJXODWRUWKH55$,IXUWKHUHODERUDWHGLQ&KDSWHUVKRXOGGHWHUPLQH
WKHH[WHQWRI362WKURXJKDFRQVXOWDWLYHUHJXODWRU\SURFHVV:KLOHWKLVZRXOGUHTXLUHWKDW
WKH DFFRXQWV EH UHVWUXFWXUHG DSSURSULDWHO\ D SUHSDUDWRU\ EHJLQQLQJ FDQ EH PDGH LQ WKDW
UHVSHFW E\ LGHQWLI\LQJ SRVVLEOH RSHUDWLRQV WKDW FRXOG TXDOLI\ XQGHU WKLV UXEULF DQG
VHSDUDWLQJ WKHP ,QLWLDOO\ WKHVH FDQ EH FOHDUO\ LGHQWLILHG EUDQFK OLQHV DQG WKH VXEXUEDQ
QHWZRUN ,QGHHG HYHQ WRGD\ ,5 DQG HVSHFLDOO\ FRQVWLWXHQW 5DLOZD\V VXFK DV &HQWUDO
5DLOZD\ GRHV PDNH DQ DWWHPSW WR VHSDUDWH WKH H[SHQGLWXUH RQ WKH VXEXUEDQ QHWZRUNV
WKURXJK DQ HODERUDWH DQG VLQFHUHO\ GHILQHG WKRXJK SRVVLEO\ IODZHG LQ WKH DEVHQFH RI
DFFRXQWLQJUHIRUP SURFHVVRIFRVWDOORFDWLRQ6LPLODUO\WKHORVVLQUHYHQXHLQWHUPVRI
WKH WDULII UHGXFWLRQV LH FRQFHVVLRQDO IDUHV RIIHUHG WR D ODUJH FODVV RI LGHQWLILHG
SDVVHQJHUV VXFK DV VHQLRU FLWL]HQV DQG GLIIHUHQWO\ DEOHG SHUVRQV EXW DOVR LQFOXGLQJ D
QXPEHURIRWKHUFDWHJRULHVWKDWDUHKDUGHUWRMXVWLI\ LVFOHDUO\UHFRJQL]HGDQGVHSDUDWHG
7KRXJKJLYHQWKDWLQFUHDVHVLQSDVVHQJHUIDUHVKDYHUHFHQWO\EHHQIHZDQGIDUEHWZHHQ
WKLVDPRXQWLVOLNHO\WREHDQXQGHUHVWLPDWHLWVWLOOSURYLGHVDVWDUWLQJSRLQWRIUHIHUHQFH


 (VVHQWLDOO\ WKH GHFLVLRQ WR GHWHUPLQH ZKHWKHU D SDUWLFXODU VHUYLFH LV D SXEOLF VHUYLFH
REOLJDWLRQLVSROLWLFDOWREHGHFLGHGLQLWLDOO\E\WKH0LQLVWU\RI5DLOZD\V DVGLVWLQFWIURP
,5  DQG WKHQ E\ WKH &DELQHW ,W LV QRW WHFKQRFUDWLF LQ QDWXUH 7KH GHWHUPLQDWLRQ RI WKH
DVVRFLDWHGDGGLWLRQDOH[SHQGLWXUHLVKRZHYHUWHFKQRFUDWLFDQGWKLVH[HUFLVHLVOLNHO\WREH
ORQJGUDZQDQGFRQWHQWLRXV,QWKHYLHZRIWKLV&RPPLWWHHSHQGLQJWKHHVWDEOLVKPHQWRI

 



124


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

55$,WKLVH[HUFLVHVKRXOGEHJLQIRUWKZLWK7KLVZLOOHQDEOHWKH55$,WREHWDVNHGZLWK
FOHDUWHUPVRIUHIHUHQFHRQ362VZLWKDQLQLWLDOPHWKRGRORJ\DQGVWDUWLQJSRLQWWKDWKDV
DOUHDG\ EHHQ DJUHHG EHWZHHQ ,5 DQG *2, 7KH GLUHFW H[SHQGLWXUH RQ 362V PD\ DOVR
UHGXFHLIWKHUHFRPPHQGDWLRQVRIWKLV&RPPLWWHHWRVHSDUDWHRXWWKHVXEXUEDQEXVLQHVV
DQGRWKHUORZXVDJHEUDQFKOLQHVRILPSRUWDQFHWR6WDWHJRYHUQPHQWV DVDMRLQWYHQWXUH
ZLWKWKH6WDWHJRYHUQPHQWLVIROORZHGWKURXJK+RZHYHUWKHGHWHUPLQDWLRQRIWKHH[DFW
DPRXQWZLOOEHDGHFLVLRQRI55$,
)LJXUH




5HWXUQLQJ WR WKH OLQN ZLWK WKH 8QLRQ %XGJHW WKH LGHD RI D FOHDQ VHSDUDWLRQ KDV EHHQ
WDONHG DERXW IRU VRPH WLPH DQG KDV ILJXUHG LQ WKH GHOLEHUDWLRQV RI ERWK WKH 6DULQ
&RPPLWWHHDQGWKH$93RXORVH&RPPLWWHH)RULQVWDQFHWKH3RXORVH&RPPLWWHHVSRNH
DERXWD&KDUWHUIRU,QGLDQ5DLOZD\VZKLFKFDQDOVREHWKRXJKWRIDVD028EHWZHHQ
WKH8QLRQJRYHUQPHQWDQG,5$VRQHSDUWRIWKDW028QRWWKHRQO\SDUWRQHFDQWKLQJ
RI DQ H[WLQJXLVKPHQW RI DQ\ GHEW WKDW LV PRUH WKDQ VD\\HDUV ,Q DGGLWLRQ WKHUH DUH
SRVVLELOLWLHV RI VHWWLQJ XS DQ DPRUWL]DWLRQ IXQG E\ FRQWULEXWLRQV IURP WKH 8QLRQ
JRYHUQPHQW  :KDWHYHU GHEW UHPDLQV DIWHU H[WLQJXLVKPHQW FDQ EH FRQYHUWHG LQWR SDUW
HTXLW\ LQIXVLRQ E\ WKH 8QLRQ JRYHUQPHQW  7KHUH DUH VHYHUDO SRVVLELOLWLHV  )RU WKH
125


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

PRPHQW WKLV &RPPLWWHH RQO\ UHFRPPHQGV WKDW WKH *%6 DQG GLYLGHQGV ERWK QHHG D
UHWKLQN  %\ WKH VDPH WRNHQ LI WKHUH DUH FDSLWDO FRVWV FRQFHUQHG ZLWK FRQVWUXFWLQJ QHZ
VXEXUEDQ OLQHV WKRVH EHORQJ WR WKH $ FDWHJRU\ PHQWLRQHG DERYH DQG VKRXOG RQO\ EH
XQGHUWDNHQ DV MRLQW YHQWXUHV ZLWK 6WDWH JRYHUQPHQWV QRW RWKHUZLVH  7KDW LV WKH UHDVRQ
WKHWLWOHRIWKLV&KDSWHUPHQWLRQVJRYHUQPHQWVLQWKHSOXUDOUDWKHUWKDQLQWKHVLQJXODU


 7KH UHDVRQ ZH IODJJHG WKH LPSRUWDQW FRQFHSWXDO GLIIHUHQFH EHWZHHQ F  XQHFRQRPLF
EUDQFKOLQHV DQG G  QHZOLQHV LVWKHIROORZLQJ)RUWKHUHFRUGWKH6DULQ&RPPLWWHH
VSRNH DERXW  XQYLDEOH EUDQFK OLQHV DQG ,5 QRZ WDONV DERXW  XQHFRQRPLF EUDQFK
OLQHV  2QFH WKH FDSLWDO FRVWV KDYH EHHQ WDNHQ FDUH RI ZKDW GRHV LW PHDQ WR VD\ WKDW D
EUDQFKOLQHLVXQYLDEOH"$UHWKHUHIL[HGFRVWVDVVRFLDWHGZLWKVXFKOLQHV"7KHUHZLOO
LQGHHG EH PLQRU IL[HG FRVWV  %XW ZKDW WKLV UHDOO\ PHDQV LV WKDW WKH RSHUDWLRQ RI WUDLQV
SULPDULO\ SDVVHQJHU  DORQJ WKHVH OLQHV LV XQYLDEOH  7KLV LV WKH SUREOHP IRU WUDLQ
RSHUDWRUV LQFOXGLQJ ,5  7KLV &RPPLWWHH GRHV IHHO WKDW RSHUDWLQJ ORVVHV IRU WUDLQ
RSHUDWRUV PXVWEHERUQHE\JRYHUQPHQWV6RIDUDVWKH8QLRQJRYHUQPHQWLVFRQFHUQHG
WKLVPXVWEHUHIOHFWHGLQWKH028WKDWLVVLJQHGEHWZHHQWKH8QLRQJRYHUQPHQWDQG,5
$V DQ H[DPSOH WR VWDUW ZLWK WKH RSHUDWLQJ ORVVHV FDQ EH VKDUHG RQ D  EDVLV
+RZHYHU RQH PXVW UHDOL]H WKDW LQ WKH WHPSODWH WKLV &RPPLWWHH LV SURSRVLQJ WUDLQ
RSHUDWRUVZLOOQRWH[FOXVLYHO\EH,5DORQH7KHUHIRUHDVLPLODUFRPSHQVDWRU\PHFKDQLVP
PXVWEHHYROYHGIRUSULYDWHWUDLQRSHUDWRUVWRR


 :K\ DUH WUDLQ RSHUDWLRQV HVSHFLDOO\ SDVVHQJHU WUDIILF OLNHO\ WR EH XQYLDEOH"  7KDWV
EHFDXVHRIWKHSUHVHQWIDUHVWUXFWXUH$VLQWKHFDVHRIRWKHUXWLOLWLHVWKHUHLVQRUHDVRQ
IRU ORZ XVHU FKDUJHV DFURVV WKH ERDUG HYHQ LI WKDW LV IRU VXEXUEDQ IDUHV RU VHFRQGFODVV
WUDYHO  ,QGHHG D VXUYH\ VKRZHG WKDW IHZ RI WKRVH ZKR WUDYHO RQ VXEXUEDQ UDLOZD\V DUH
SRRUDQGIHZSD\IRUWKHLURZQIDUHV FRVWVDUHERUQHE\HPSOR\HUV 7KLV&RPPLWWHH
UHDOL]HV WKDW WKH TXHVWLRQ RI LQFUHDVLQJ IDUHV PXVW EH OLQNHG ZLWK WKH TXLG SUR TXR RI
LPSURYLQJSDVVHQJHUDPHQLWLHVDQGKDVLQGHHGHQGRUVHGWKLVYLHZLQ&KDSWHU+DYLQJ
VDLGWKLVLQRWKHUVHFWRUVLWLVUHFRJQL]HGWKDWVXEVLGLHVVKRXOGEHWDUJHWHGWRZDUGVWKRVH
ZKR QHHG WKHP  $ EHJLQQLQJ KDV EHHQ PDGH E\ XVLQJ $DGKDDU DQG HPEHGGLQJ OLVWV RI
EHQHILFLDULHV ZLWK WKHVH $DGKDDU QXPEHUV  7KHUH DUH PLQRU LVVXHV VXFK DV WKH QRQ
LQFOXVLRQRIWKRVHZKRDUHXQGHULQWKH$DGKDDUOLVW%XWDVRIQRZRXWRIWKHSOXV
SRSXODWLRQPLOOLRQSHRSOHSRVVHVV$DGKDDUQXPEHUV7KHUHIRUHWKLV&RPPLWWHHVHHV
QR UHDVRQ ZK\ $DGKDDU QXPEHUV VKRXOG QRW EH DVNHG IRU ZKHQ SDVVHQJHU WLFNHWV DUH
SXUFKDVHG HYHQ IRU WKRVH ZKR WUDYHO XQUHVHUYHG  7KLV VKRXOG QRW EH GLIILFXOW WR GR
WKRXJK,5VSUHVHQWGDWDEDVHRQO\VDWLVIDFWRULO\WUDFNVWKRVHZKRWUDYHOUHVHUYHGOHVVWKDQ
 RI WKRVH ZKR WUDYHO  %XW WKLV &RPPLWWHH KDV DOVR PDGH UHFRPPHQGDWLRQV DERXW
LPSURYLQJ,7XVDJH

47

ShashankaBhide,SaurabhBandyopadhyayandPalashBaruah,UnderstandingPassengerDemandfortheIndian
Railways:IssuesandPerceptionsinaSocioDemographicFramework,NCAER,August2012.


126


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

 8QUHPXQHUDWLYH OLQHV DQG XQUHPXQHUDWLYH WUDLQV DUH LQ WKH QDWXUH RI FROOHFWLYH JRRGV
&RQFHSWXDOO\DVXEVLG\LVDQLQGLYLGXDOJRRGDQGVKRXOGRQO\EHGLUHFWHGWRZDUGVWKRVH
ZKR DUH %3/ EHORZ WKH SRYHUW\ OLQH   $V RI QRZ WKH WUDFN UHFRUG RI HPEHGGLQJ
$DGKDDULQVXEVLG\EHQHILFLDU\GDWDEDVHVLVPL[HGZLWKWKHH[FHSWLRQRI/3*VXEVLG\LQ
VRPH6WDWHV%XWWKHVHDUHHDUO\GD\VDQGRQHVKRXOGDOVRIODJWKDWDODUJHQXPEHURI-DQ
'KDQ<RMDQDDFFRXQWVKDYHEHHQRSHQHG7KHUHIRUHVRPHZKHUHGRZQWKHOLQHLWVKRXOG
EHSRVVLEOHIRUVXEVLGLHVRQSDVVHQJHUIDUHVWREHUHLPEXUVHGGLUHFWO\LQWREDQNDFFRXQWV
IRUWKRVHZKRDUHWDUJHWHG%3/7KLV&RPPLWWHHGRHVQRWEHOLHYHWKDWWKLVLVVRPHWKLQJ
WKDW FDQ EH GRQH WRGD\  %XW LW LV FHUWDLQO\ ZRUWK FRQVLGHULQJ DV D WHUPLQDO JRDO  $V D
FRXQWHUDUJXPHQW LW LV DOVR WUXH WKDW VXEVLGLHV ZRUN EHVW ZKHQ WKH\ DUH VHOIHQIRUFLQJ
,QVWHDG RI JRLQJ YLD WKH %3/ URXWH LW PLJKW EH EHWWHU WR VXEVLGL]H RQO\ IRU XQUHVHUYHG
VHFRQGFODVVRQWKHJURXQGVWKDWWKLVPDNHVLWVHOIHQIRUFLQJ%XWWKHEDVLFSRLQWEHLQJ
PDGHLVWKHIROORZLQJ7KHUHLVQRFDOOIRUWKHVHVXEVLGLHVWREHERUQHE\,57KH\PXVW
EHERUQHE\WKH8QLRQJRYHUQPHQW,QDGGLWLRQWKHUHLVWKHTXHVWLRQRIVXEXUEDQIDUHV
WKH GRPDLQ RI UHVLVWDQFH E\ 6WDWH JRYHUQPHQWV  $V ZH KDYH DUJXHG LQ &KDSWHU 
VXEXUEDQUDLOZD\VVKRXOGLGHDOO\EHKLYHGRIIWR6WDWHJRYHUQPHQWVYLDWKHMRLQWYHQWXUH
URXWH8QWLOWKLVLVGRQHWKHFRVWRIORZVXEXUEDQIDUHVLIWKHVHIDUHVDUHQRWLQFUHDVHG
PXVW EH ERUQH E\ 6WDWH JRYHUQPHQWV RQ D  EDVLV ZLWK 028V VLJQHG ZLWK 6WDWH
JRYHUQPHQWVIRUWKLVSXUSRVH

 7ZRDGGLWLRQDOSRLQWVQHHGWREHPDGHDERXWWKHLQGLYLGXDOFRQFHVVLRQVPHQWLRQHGDERYH
)LUVW WKHUH DUH RWKHU FKDQQHOV DW WKH 8QLRQ JRYHUQPHQW IRU PHHWLQJ WKHVH SDVVHQJHU
FRQFHVVLRQV  0LQLVWU\ RI (GXFDWLRQ VWXGHQW FRQFHVVLRQV  0LQLVWU\ RI 3HUVRQQHO DQG
6RFLDO:HOIDUH VHQLRUFLWL]HQV 0LQLVWU\RI6SRUWV VSRUWVSHUVRQV 0LQLVWU\RI'HIHQFH
ZDU ZLGRZV  DQG WKH 3RVWDO 'HSDUWPHQW SRVWDO WUDIILF   ,W LV QRW FOHDU ZK\ WKLV
UHVSRQVLELOLW\ GHYROYHV RQ ,5  6HFRQG LQ WKH DUHD RI IUHLJKW ZKR GHWHUPLQHV WKH
GHILQLWLRQRIHVVHQWLDOFRPPRGLWLHV",QGHHGWKURXJKWKH*67DJHQGDWKHUHKDVEHHQDQ
DWWHPSWWRVWDQGDUGL]HDQGXQLI\LQGLUHFWWD[DWLRQEDVHGRQWKHSUHPLVHWKDWWKLVUHGXFHV
GLVFUHWLRQ DQG WUDQVDFWLRQ FRVWV  7KH VDPH ORJLF DSSOLHV WR IUHLJKW  7KLV &RPPLWWHH
VWURQJO\ IHHOV WKDW IUHLJKW UDWHV VKRXOG EH OHIW WR PDUNHW SULQFLSOHV RQFH OLEHUDOL]DWLRQ
WDNHVKROGDQGQRVXFKIUHLJKWUHODWHGVRFLDOFRVWVKRXOGEHLPSRVHGRQ,5



 7KHGHEDWHDERXW,5EHLQJDFRPPHUFLDOHQWLW\YLVjYLVFDWHULQJWRVRFLDOREMHFWLYHVJRHV
EDFNWRWKHWKFHQWXU\,5LVEHLQJH[SRVHGWRFRPSHWLWLRQDQGWKLVZLOOEHFRPHHYHQ
PRUHDFXWHLIWKHOLEHUDOL]DWLRQLGHDVRXWOLQHGE\WKLV&RPPLWWHHDUHDFFHSWHG7KHUHIRUH
,5QHHGVWREHOHIWXQIHWWHUHGWRIXQFWLRQDFFRUGLQJWRFRPPHUFLDOSULQFLSOHV7KLVGRHV
QRWPHDQWKDWWKHUHDUHQRVRFLDOREOLJDWLRQV7KHUHZLOOEHQRWMXVWIRU,5EXWDOVRIRU
SULYDWHRSHUDWRUV%XWWKRVHVRFLDOREMHFWLYHVDQGWKHLUFRVWVQHHGWREHFOHDQO\VHSDUDWHG
IURP FRPPHUFLDO FRQVLGHUDWLRQV  7KLV LV ZKDW WKLV &KDSWHU PHDQV E\ FOHDQLQJ XS
EXGJHWDU\UHODWLRQVKLSVEHWZHHQJRYHUQPHQWVDQG,5


127


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

 ,5RQRQHKDQGUHFHLYHV*URVV%XGJHWDU\6XSSRUWIRUH[SDQVLRQRILWVQHWZRUNIURPWKH
&HQWUDO *RYHUQPHQW ([FKHTXHU ZKLOH RQ WKH RWKHU KDQG LW KDV WR SD\ D GLYLGHQG WRWKH
*RYHUQPHQWRQWKHFDSLWDODWFKDUJH LQFOXVLYHRIWKH*%6RIWKHSUHYLRXV\HDUV 7KLV
OHDYHV YHU\ OLWWOH IRU ,5 DSSRUWLRQ WR LWV 'HSUHFLDWLRQ 5HVHUYHV )XQG WKHUHE\
DFFXPXODWLQJDUUHDUVLQDVVHWUHQHZDO7KLVKDVOHGWRDVLWXDWLRQZKHUH,5VDVVHWUHQHZDO
LV DOVR EHLQJ IXQGHG WR DQ H[WHQW WKURXJK PDUNHW ERUURZHUV  ,5 LV WKXV SD\LQJ LQWHUHVW
HYHQIRULWVDVVHWVUHQHZDOV7KLV&RPPLWWHHUHFRPPHQGVWKDWWKH&HQWUDO*RYHUQPHQW
UHYLHZWKHGLYLGHQGSROLF\IRU,5DQGSURYLGHLWZLWKD*%6QHWRIWKHGLYLGHQGSD\PHQW
7KLVZRXOGHQDEOHWKH,5WRDSSRUWLRQPRUHPRQH\WRLWV'5)IRUDVVHWUHQHZDODOLJQHGWR
LWVDULVLQJ7KH*URVV%XGJHWDU\6XSSRUWSURYLGHGIURPWKH&HQWUDO([FKHTXHUWR,5DQG
,5VGLYLGHQGSD\PHQWWRWKH&HQWUDO([FKHTXHULQWKHUHFHQWSDVWLVVKRZQLQ7DEOH
7DEOH


 5VLQFURUHV 
7RWDO'LYLGHQGSDLG

<HDU

*URVV%XGJHWDU\
6XSSRUW











































 %( 





 5( 





 %( 






&KDUWLQJD:D\)RUZDUG


 7KHIXQGLQJRI5DLOZD\VIURPJRYHUQPHQWFDQEHVHHQDVLQSULQFLSOHDVJRLQJWKURXJK
WKH IROORZLQJ VWDJHV ,Q WKH ILUVW VWDJH WKH JRYHUQPHQW SD\V IRU ERWK FDSLWDO DQG
RSHUDWLRQDO H[SHQGLWXUH ZKLFK LQFOXGHV SXEOLF VHUYLFH REOLJDWLRQV 362  LQ D VLWXDWLRQ
ZKHUH RSHUDWLQJ ORVVHV H[LVW  ,Q WKH VHFRQG VWDJH WKH JRYHUQPHQW RQO\ IXQGV FDSLWDO
H[SHQGLWXUH DQG 362 ,Q WKH WKLUG WKH FDSLWDO H[SHQGLWXUH LV UDLVHG DV D ORDQ IURP WKH
PDUNHW SRVVLEO\ VXSSRUWHG SDUWLDOO\ WKURXJK JRYHUQPHQW JXDUDQWHHV ,Q WKH IRXUWK VWDJH
WKHJRYHUQPHQWRQO\PHHWVWKH362REOLJDWLRQZKLFKLVGHWHUPLQHGWKURXJKDUHJXODWRU\
SURFHVV DQG ILQDOO\ LQ WKH ILIWK VWDJH WKH 362 REOLJDWLRQV DUH ELG RXW DPRQJ PXOWLSOH
VHUYLFHSURYLGHUVWRPLQLPL]HVXEVLG\&XUUHQWO\LWLVGLIILFXOWWRMXGJHZKHUH,5VWDQGV,W
KDVHOHPHQWVRIDOOWKHILUVWWKUHHVWDJHV,WDSSHDUVWREHLQVWDJHWZREXWLQWKHDEVHQFHRI
128


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

DFFRXQWLQJUHIRUPV GLVFXVVHGLQ&KDSWHU LWLVGLIILFXOWWRDVVHVVZKDWWKHWUXHILQDQFLDO


SLFWXUHLVZKHWKHU*2,LVPHHWLQJRQO\FDSLWDOH[SHQGLWXUHRUZKHWKHULWLVDOVRPHHWLQJ
DSDUWRIRSHUDWLRQDOH[SHQVHVZKLFKZRXOGQHHGLQWHUDOLDDQDSSURSULDWHDOORFDWLRQIRU
GHSUHFLDWLRQ &RQFRPLWDQWO\ LW DOVR ERUURZV PRQH\ IURP WKH PDUNHW WKURXJK ,5)& WR
PHHW LWV UROOLQJ VWRFN LQYHVWPHQWV ZKLFK LV D IHDWXUH RI VWDJH WKUHH +RZHYHU QRQH RI
WKHVH FODLPV FDQ EH PDGH ZLWK PXFK FHUWDLQW\ JLYHQ WKH DFFRXQWLQJ V\VWHP DQG FRVW
DOORFDWLRQRI,57KHUHFRPPHQGDWLRQVRIWKLV&RPPLWWHHPDGHLQ&KDSWHUZKLFKFDOO
IRUDQDFFHOHUDWHGWUDQVLWLRQWRDFFUXDODFFRXQWLQJZLWKLQDWZR\HDUWLPHIUDPHVKRXOGEH
DEOHWREULQJFODULW\WRWKLVVLWXDWLRQLQDOLPLWHGSHULRGRIWLPH$VDOUHDG\QRWHGZLWKLQ
WKHQH[WWZR\HDUVLQWKHYLHZRIWKLV&RPPLWWHHLWVKRXOGEHSRVVLEOHWRFOHDUO\VSHFLI\
WKHFRVWVWR,5RIYDULRXVDFWLYLWLHVDQGWKHUHIRUHVHSDUDWHRXWWKHIROORZLQJ D LQYHVWPHQW
RQ VSHFLILHG SURMHFWV WKLV LV DOUHDG\ DYDLODEOH  E  H[SHQGLWXUH RQ LGHQWLILHG VWUDWHJLF
RSHUDWLRQVDQG F H[SHQGLWXUHRQ362V


 $WSUHVHQWWKH5DLOZD\VGLYLGHQGZKLFKKDVWKHFKDUDFWHURILQWHUHVWRQDSHUSHWXDOORDQ
LV IURP ,5V LQWHUQDO JHQHUDWLRQ ZKLFK ZRXOG RWKHUZLVH IXQG FULWLFDO 2 0 DQG VDIHW\
QHHGV 7KH EXGJHWDU\ VXSSRUW UHFHLYHG IURP *R, RQ WKH RWKHU KDQG LV VSHQW RQ FDSLWDO
LQIUDVWUXFWXUHVXFKDVQHZOLQHVJDXJHFRQYHUVLRQVHWF7KHSD\PHQWRIGLYLGHQGDQGWKH
UHFHLSWRI*%6DUHWKHUHIRUHQRWRSHUDWLRQDOO\QHXWUDODQGDOVRVXEVWDQWLDO$V)LJXUH
VKRZVLWLVFXUUHQWO\DERXWRIWKHJURVVUHFHLSWVRI,5


 6LQFH WKH *%6 DGGV WR WKH FDSLWDODWFKDUJH WKH FXUUHQW WUDQVDFWLRQ LV VLPLODU WR ,5
ERUURZLQJPRQH\IURP*2,WRSD\WKHGLYLGHQG+RZHYHULIWKHGLYLGHQGLVRIIVHWIURP
*%6DWVRXUFHWKHQHWVXSSRUWIURPWKH0LQLVWU\RI)LQDQFHZRXOGUHPDLQWKHVDPHEXWLW
ZRXOG SURYLGH IOH[LELOLW\ WR ,5 WR XVH DQ DPRXQW HTXLYDOHQW WR WKH GLYLGHQG IRU DQ\
RSHUDWLRQDO SXUSRVH GHHPHG ILW DQG QHFHVVDU\ 1RWLRQDOO\ VXFK D FKDQJH PLJKW EH
LQWHUSUHWHGDVD]HURGLYLGHQGVFHQDULRZKLFKFDQJLYHDQHJDWLYHLPSUHVVLRQ7RDGGUHVV
WKLV*2,VKRXOG L FOHDUO\UHFRJQL]HWKHRIIVHWWLQJGLYLGHQGDPRXQWZKLOHSURYLGLQJIRU
*%6DQGFRPPXQLFDWHWKLVDV LL JLYLQJJUHDWHUDXWRQRP\WR,5DQG LLL WKHEHJLQQLQJRI
D SURFHVV WR DOLJQ *%6 IURP *R, PRUH FORVHO\ WR UHVRXUFHV QHHGHG IRU ,5V 362  7KH
RWKHUSRVVLELOLW\LVIRUDJUHHPHQWWREHUHDFKHGEHWZHHQ,5DQG*2,WKDWIURPWKH*%6DQ
DPRXQWHTXDOWRWKHGLYLGHQGEHUHIXQGHGWREH D XVHGIRU2 0DQGVDIHW\H[SHQGLWXUH
DQGFRQVHTXHQWO\ E WKHDPRXQWQRWEHDGGHGWRWKHFDSLWDODWFKDUJH

129


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

)LJXUH'LYLGHQGSDLGE\,5DVDVKDUHRI*URVV5HFHLSWV

6RXUFH,QGLDQ5DLOZD\EXGJHWGRFXPHQWV7KH\HDUVLQOLJKWHUVKDGHLQFOXGHGHIHUUHGGLYLGHQGSD\PHQWV


 $V,5SURJUHVVHVWKURXJKLWVUHVWUXFWXULQJRQHRIWKHUHFRPPHQGDWLRQVRIWKH&RPPLWWHH
LQ&KDSWHULVWRLPSOHPHQWSURMHFWVWKURXJKFRUSRUDWHHQWLWLHVWRHQVXUHWKDWILQDQFLQJLV
SUHDUUDQJHGDQGWKHUHLVDIRFXVHGFRPSOHWLRQHIIRUW7KLVWRRZLOOKDYHLPSOLFDWLRQVIRU
KRZ VXSSRUW IURP *2, LV VWUXFWXUHG ,W FDQ DV HQYLVDJHG LQ VWDJH  PRYH WR VXSSRUWLQJ
ERUURZLQJE\WKHVHSURMHFW FRUSRUDWHVLQOLQH ZLWKWKHGLVLQWHUPHGLDWLRQRIVXSSRUWIURP
*2,UDWKHUWKDQJLYHQWKHPEXGJHWDU\JUDQWV7KH&RPPLWWHHLVRIWKHRSLQLRQWKDWLVYHU\
LPSRUWDQWIRU*2,WRSURYLGHIXQGLQJIRUSURMHFWVWKDWDUHFRPPHUFLDOO\YLDEOHWR,5QRWLQ
IRUPRIJUDQWVEXWDVORDQJXDUDQWHHVVRWKDWWKHFRUSRUDWHHQWLW\LPSOHPHQWLQJWKHSURMHFW
LVPDUNHWIRFXVHGIURPLQFHSWLRQ$V)LJXUHLQGLFDWHVWKHFRQWULEXWLRQRI*2,WRWKH
FDSLWDOLQYHVWPHQWSURJUDPPHRI,5 DVPHDVXUHGE\LWV3ODQ2XWOD\ KDVEHHQRQO\SDUWLDO
GHFOLQLQJ LQ JURVV WHUPV DQG ZLWK YDULDELOLW\ RQFH LW LV QHWWHG IRU GLYLGHQG SD\PHQWV ,Q
UHFHQW\HDUVWKLVKDVEHHQDWKLUGRUHYHQOHVV,IFRQWULEXWLRQVWRHQWLWLHVOLNH')&&ZHUH
DOVR QHWWHG RXW WKLV FRQWULEXWLRQ ZRXOG GURS HYHQ IXUWKHU  7KXV WKH UHVWUXFWXULQJ RI
VXSSRUWIURP*2,ZLOOKDYHRQO\DOLPLWHGLPSDFWRQWKHFDSLWDOLQYHVWPHQWSURJUDPPHRI
,5 DQG D JUDGXDO SKDVLQJ RYHU WKH QH[W ILYH \HDUV VKRXOG QRW UHVXOW LQ DQ\ GLVUXSWLYH
VLWXDWLRQV7RWKHH[WHQWWKDW,5VWDUWVWRLPSOHPHQWQHZSURMHFWVDQGUHVWUXFWXUHH[LVWLQJ
DFWLYLWLHVDVMRLQWYHQWXUHVZLWKVWDWHJRYHUQPHQWVDQGRWKHUHQWLWLHVWKLVZLOODOVRSURYLGH
DQ RSSRUWXQLW\ WR SXW VXSSRUW IURP *2, DQG RWKHU VKDUHKROGHUV RQ DQ HTXDO IRRWLQJ DV
VXSSRUWIRUDQLGHQWLILHGFRUSRUDWHHQWLW\SURYLGLQJVHUYLFHV,WLVFUXFLDOLQWKHLQWHULPWR
ORRN DW WKH ILQDQFLDO DVVLVWDQFH IURP WKH VWDWH JRYHUQPHQWV WR ,5 RQ FHUWDLQ VSHFLILF
SURMHFWV 7KH UHFHQW LQFUHDVHG ILVFDO WUDQVIHU IURP 8QLRQ *RYHUQPHQW WR WKH 6WDWH
*RYHUQPHQWVKDVPDGHWKLVHYHQPRUHIHDVLEOH$VDOUHDG\LQGLFDWHGVRPHRIWKHSURMHFWV
LQ ZKLFK VXFK NLQG RI IXQGLQJ IURP VWDWH JRYHUQPHQWV EH ORRNHG DW LQYROYH WKH
XQHFRQRPLFEUDQFKOLQHVDQGVXEXUEDQSDVVHQJHUVHUYLFHV

130


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

)LJXUH6KDUHRI1HWDQG*URVV*2,VXSSRUWWR,5DVVKDUHRI3ODQ2XWOD\

Source:IndianRailwayBudgetStatements


 $W WKLV WLPH LW LV XVHIXO WR UHFDOO WKDW WKH ([SHUW *URXS RQ ,QGLDQ 5DLOZD\V FKDLUHG E\
'U5DNHVK0RKDQLQKDGQRWHGWKHVKDUSGHFOLQHLQWKHVKDUHRIEXGJHWDU\VXSSRUW
DQG LQWHUQDO UHVRXUFHV KDV OHG WR LQFUHDVHG PDUNHW ERUURZLQJV DQG ILQDQFLDO VWUHVV LQ ,5
/HDVLQJ DUUDQJHPHQWV WKURXJK ,5)& KDG HQDEOHG DGGLWLRQV WR UROOLQJ VWRFN WKH HIIHFW RI
VKRUWDJH RI LQWHUQDO UHVRXUFHV ZDV WKHUHIRUH DFXWHO\ IHOW RQ RWKHU UHSODFHPHQWV ILQDQFHG
WKURXJK WKH '5) LH WUDFN UHQHZDOV EULGJHV DQG RWKHU IL[HG DVVHWV UHVXOWLQJ LQ DGYHUVH
HIIHFWVRQWUDLQRSHUDWLRQV,5IDFHGJUHDWGLIILFXOWLHVLQWKHVLQUDLVLQJWKHUHVRXUFHV
UHTXLUHGHYHQIRULWVORZLQYHVWPHQWOHYHOVDQGEHLQJIRUFHGWRUDLVHWKHOHYHOVRILWVSXEOLF
ERUURZLQJWKURXJK,5)&UDLVHGLWVRYHUDOOOHYHORIUHVRXUFHFRVWV7RHQVXUHWKDWWKLVGRHV
QRWKDSSHQDJDLQWKHLQYHVWPHQWSULRULWLHVKDYHWREHUHIRFXVHGRQUHPXQHUDWLYHSURMHFWV
DVGLVFXVVHGODWHULQ&KDSWHU

 2QFHWKLVWUDQVIRUPDWLRQWRORDQVLVFRPSOHWHGDQGWKH362VGHWDLOHGDQGWKHDFFRXQWLQJ
UHIRUPV FRPSOHWHG LW VKRXOG EH SRVVLEOH WR GHWHUPLQH ZKLFK RI WKH DFWLYLWLHV DUH ORVV
PDNLQJDQGZKLFKDUHQRW$WWKDWWLPHORVVPDNLQJDFWLYLWLHVFDQHLWKHUEHUHFODVVLILHGDV
QHFHVVDU\ DQG WKHUHIRUH VKRXOG EH IXQGHG DV D 362 RU WKH\ FDQ EH GLVFRQWLQXHG LQ FDVH
WKH\ FDQQRW EH MXVWLILHG DV D 362 )LQDOO\ ZKHQ WKH VHSDUDWLRQ RI WUDFN IURP VHUYLFHV LV
FRPSOHWHG DQG PXOWLSOH WUDFN FRPSDQLHV DQG IUHLJKW DQG SDVVHQJHU VHUYLFH FRPSDQLHV
HPHUJH LW ZLOO EHFRPH SRVVLEOH WR ELG RXW WKH 362 ERWK IRU FDSLWDO LQYHVWPHQW DQG IRU
VHUYLFHSURYLVLRQRQDPLQLPXPVXEVLG\EDVLVDVHQYLVDJHGLQVWDJHDERYH,IDQ\OLQHV
DUHFXUUHQWO\EHLQJRSHUDWHGLQHIILFLHQWO\VXFKDFRPSHWLWLYHELGGLQJSURFHVVRIVXFKOLQHV
PLJKWEHDEOHWRUHGXFHWKHH[SHQGLWXUHRQ362:LWKUHIHUHQFHWRWKH362VDQXPEHURI

TheIndianRailwaysReportoftheExpertGrouponIndianRailways


131

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

SUHYLRXV &RPPLWWHHV KDYH PDGH VLPLODU UHFRPPHQGDWLRQV 6DULQ   VDZ
FRQFHVVLRQDOVXEXUEDQIDUHVDVXQVXVWDLQDEOHDQGFDOOHGIRUWKHLUUDWLRQDOL]DWLRQ,WPDUNHG
FHUWDLQ XQHFRQRPLF EUDQFK OLQHV IRU FORVXUH DQG UHFRPPHQGHG WKDW WKH ORVV LQ RWKHUV EH
VKDUHG E\ UHVSHFWLYH 6WDWH *RYHUQPHQWV /DWHO\ WKH 3ODQQLQJ &RPPLVVLRQ  
UHFRPPHQGHG WKDW VXFK SURMHFWV VKRXOG EH XQGHUWDNHQ E\ ,5 RQO\ LI  RI WKH
FRQVWUXFWLRQFRVWLVILQDQFHGE\RWKHUHQWLWLHVVXFKDVWKH6WDWH*RYHUQPHQWV&,/6$,/RU
RWKHU EXON FRQVXPHUV ,Q VXFK D VLWXDWLRQ WKHUH ZLOO EH QR QHHG WR PDNH DQ\ EXGJHWDU\
WUDQVIHUV WR WKH RSHUDWLQJ FRPSDQLHV H[FHSW VXFK SD\PHQWV IRU 362 WKDW DUH GHWHUPLQHG
WKURXJK D FRPSHWLWLYH ELG SURFHVV /LNH WKH SURSRVHG (VVHQWLDO $LU 6HUYLFHV )XQG WKLV
VXSSRUW FDQ EH WKURXJK D VHSDUDWH )XQG LI QHHG EH $V WKLV SURFHVV FRQWLQXHV LQ WKH
RSLQLRQRIWKLV&RPPLWWHHLWVKRXOGOHDGWRDSKDVHRXWRIWKHSUHVHQWV\VWHPLQYROYLQJD
GLVWLQFW 5DLOZD\ %XGJHW DV SDUW RI D EURDGHU UHGHILQLWLRQ RI WKH UHODWLRQVKLS EHWZHHQ ,5
DQG*2,

 +RZHYHU WKLV UHTXLUHV GHWDLOHG FRQVLGHUDWLRQ RI WKH SKDVLQJ WLPH IUDPH VR WKDW SUHVVLQJ
LQYHVWPHQW RSHUDWLRQV DQG PDLQWHQDQFH 2 0  QHHGV RI ,5 FRQWLQXH WR EH DGHTXDWHO\
DGGUHVVHG  $V QRWHG LQ  E\ 0RKDQ   LQ WKH GLVFXVVLRQ RI WKH 6WUDWHJLF +LJK
*URZWKVFHQDULRDPLQLPXPSHULRGRIWLPH \HDUVLQWKDWUHSRUW RIDFFHOHUDWLQJUHYHQXH
JURZWKZDVQHHGHGEHIRUH,5FRXOGEHDEOHWRVWDQGRQLWVRZQIHHWLQFRPPHUFLDOWHUPV
7KHILQDQFLQJPRGHOHQYLVDJHGWKHUHZDVDFRQGLWLRQDOLW\OLQNHGPXOWLODWHUDOORDQZLWK
SHUFHQWFRXQWHUSDUWIXQGLQJFRPLQJIURP*2,DVSUHIHUHQFHFDSLWDO7KHSULPDU\EHQHILW
RI D GXDO ORDQ FXP SUHIHUHQFH FDSLWDO SURJUDPPH LV WKDW LW SURYLGHV D PHDQV E\ ZKLFK D
UHIRUPPLQGHGJRYHUQPHQWFDQSXEOLFO\FRPPLWWRSROLF\PHDVXUHVDQGVHQGDVLJQDOWKDW
WKHUHIRUPSURJUDPPHLVFUHGLEOH7KHFRQGLWLRQDOLW\UHGXFHVWKHSRVVLELOLW\RIDUHYHUVDO
LQ WKH UHVWUXFWXULQJ SODQ DQG DOVR PLWLJDWHV DJDLQVW PDUNHW XQFHUWDLQWLHV *RYHUQPHQW
VXSSRUWZDVVHHQDVDEVROXWHO\QHFHVVDU\GXULQJWKHLQLWLDOSKDVHRIUHVWUXFWXULQJZLWKWKH
+LJK *URZWK VFHQDULR GHUDLOLQJ LQ WKH DEVHQFH RI WKLV VXSSRUW  ,Q WKH UHSRUW RI WKH
17'3&LQWHQ\HDUVODWHULWZDVHVWLPDWHGWKDWWKHVKDUHRILQWHUQDOUHYHQXHZDV
OLNHO\WRLQFUHDVHIURPRIWKHUHTXLUHGIXQGVGXULQJWRRIWKHUHTXLUHG
IXQGVWRZDUGVWKHHQGRIWKHSHULRGRIDQDO\VLVLQ


 )RU HIIHFWLYH FRPSHWLWLRQ EHWZHHQ GLIIHUHQW VHUYLFH SURYLGHUV LW LV HVVHQWLDO WKDW
LQIUDVWUXFWXUH FDSLWDO LQYHVWPHQW QHHGV DUH QRW VKRUWFKDQJHG ,Q SDUWLFXODU IRU HVVHQWLDO
VDIHW\ UHODWHG ZRUN WKLV &RPPLWWHH UHLQIRUFHV WKH UHFRPPHQGDWLRQ RI WKH .DNRGNDU
&RPPLWWHH LQ  WR HVWDEOLVK D QRQIXQJLEOH QRQODSVDEOH VDIHW\ IXQG IXQGHG DV D
VDIHW\ VXUFKDUJH ZLWK PDWFKLQJ JUDQW EXGJHWDU\ VXSSRUW  ,QGHHG WKLV LV VLPLODU WR WKH
UHFRPPHQGDWLRQRIWKH6DULQ&RPPLWWHHLQWRHVWDEOLVKD5DLOZD\6SHFLDO)XQG 56) 
RXWRIDVSHFLDOVXUFKDUJHRQSDVVHQJHUIDUHDQGIUHLJKWUDWHV





NationalTransportDevelopmentPolicyCommittee(2014).
51

HighLevelSafetyReviewCommittee,chairedbyDr.Kakodkar.

132


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG




 5HVWUXFWXULQJRIILQDQFLDOUHODWLRQVEHWZHHQ*2,DQG,5LQWRDUXOHEDVHGUHODWLRQVKLSZLOO
QRWKDSSHQRYHUQLJKW+RZHYHULWLVSRVVLEOHDQGQHFHVVDU\WROD\RXWDURDGPDSVRWKDW
SURJUHVV FDQ EH REVHUYHG ZKLFK LQ WXUQ ZLOO EXLOG FUHGLELOLW\ DERXW WKH GLUHFWLRQ RI
UHIRUP  ,Q FRQFOXGLQJ WKLV &KDSWHU LW PD\ EH XVHIXO WR SURYLGH D EURDG RXWOLQH IRU WKLV
$FFRXQWLQJUHIRUPLVWKHNH\LQSODFLQJWKLVUHODWLRQVKLSRQDWUDQVSDUHQWDQGILUPIRRWLQJ
+RZHYHU HYHQ EHIRUH DFFRXQWLQJ UHIRUP LV FRPSOHWHG VRPH SUHSDUDWRU\ DFWLRQV FDQ EH
WDNHQ


 )LUVW VWDUWLQJ ZLWK WKH QH[W EXGJHW DQ H[SODQDWRU\ VWDWHPHQW FDQ EH SUHSDUHG RQ WKH
EXGJHWDU\ VXSSRUW IURP *2, WR ,5 7KLV FRXOG IRU H[DPSOH VHSDUDWH RXW WKH IROORZLQJ
YL] D GLYLGHQGUHIXQGZKLFKFDQEHVSHQWE\,5RQ2 0LQVWHDGRIFDSLWDO E ORDQVWR
UDLOZD\368VZKLFKZRXOGEHGLVLQWHUPHGLDWHGWRWKHFRUSRUDWHV F VXSSRUWWRWKHH[WHQW
WKDW WKH GLYLGHQG LV ORZHU WKDQ *2,V ERUURZLQJ UDWH G  SD\PHQWV IRU 362V  SDUWLDOO\
OLVWHG VXFK DV WKH FRQFHVVLRQ IDUHV DQG LGHQWLILHG SURMHFWV VXFK DV -86%5/ DQG H 
UHPDLQLQJ DPRXQW IRU FDSLWDO VXSSRUW 7R WKH H[WHQW WKDW ,5 LQFUHDVLQJO\ LPSOHPHQWV WKH
FDSLWDOSURJUDPPHWKURXJKRWKHUPRGHVDVUHFRPPHQGHGLQ&KDSWHUWKLVVXSSRUWZRXOG
EHSURJUHVVLYHO\GLVLQWHUPHGLDWHG6HFRQGDVWKHDFFRXQWLQJUHIRUPLVFRPSOHWHG G FDQ
EHGHWDLOHGRXWPRUHFOHDUO\&RQFRPLWDQWO\DV55$,LVHVWDEOLVKHGWKH362REOLJDWLRQV
ZRXOG GHSHQG RQ WKHLU UHFRPPHQGDWLRQV  +HUH WKH SHQVLRQ OLDELOLWLHV DOVR QHHG WR EH
PDGHWUDQVSDUHQWDVGLVFXVVHGLQ&KDSWHU$WWKLVVWDJHDVHSDUDWH5DLOZD\%XGJHWFDQ
EH GLVFRQWLQXHG 7KLUG DV WKH UHVWUXFWXULQJ EHQHILWV VWDUW WR IORZ VXSSRUW VKRXOG EH
JUDGXDOO\ OLPLWHG WR SURYLGLQJ JXDUDQWHHV IRU ERUURZLQJ WR PHHW FDSLWDO H[SHQGLWXUH DQG
DOO VXSSRUW IRU QRQHFRQRPLF DFWLYLWLHV ZKHUH QHFHVVDU\ UDWLRQDOL]HG DV SDUW RI 362
)RXUWKDQGILQDOO\VXSSRUWZRXOGEHOLPLWHGWR362VZKLFKFDQHYHQWXDOO\EHELGRXW:H
QRZWXUQWRWKHLVVXHRIUDLVLQJUHVRXUFHVLQ&KDSWHU

133


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG













Financing

and
Generation



o f




Resources










&KDSWHU )LQDQFLQJDQG*HQHUDWLRQRI5HVRXUFHV
,QWURGXFWLRQ


 :K\ VKRXOG ILQDQFLQJ RI WKH 5DLOZD\V EH DQ LVVXH" 7KH LQYHVWPHQWV LQ WKH 5DLOZD\V
XVXDOO\ HDUQ D UHWXUQ $QHZ WUDFN ZLOO JHQHUDWH PRUH WUDIILF PRUH ZDJRQV ZLOO FDUU\
PRUH IUHLJKW EHWWHU VLJQDOOLQJ ZLOO DOORZ PRUH WUDLQV WR EH UXQ WKXV JHQHUDWLQJ PRUH
UHYHQXH7KHILQDQFLDOPDUNHWVLQ,QGLDDUHGHHSHQRXJKWRFDSLWDOLVHVXFKIXWXUHFDVK
IORZV DQG SURYLGH IXQGV IRU WKH SXUSRVH 6R ZKDW LV WKH SUREOHP" (PSLULFDOO\ WKHVH
VHHPWREHWKHIROORZLQJ
D  ,QYHVWPHQWLVPDGHLQSURMHFWV QHZOLQHVH[SDQVLRQRIROGOLQHVHOHFWULILFDWLRQRI
H[LVWLQJOLQHVHWF WKDWGRQRWKDYHWUDIILF7KLVLVDQLVVXHRISURMHFWVHOHFWLRQ
E (YHQ LI WKH OLQH KDV WUDIILF WKH PL[ RI SDVVHQJHU DQG IUHLJKW LV XQEDODQFHG LH
WKHUHLVWRROLWWOHIUHLJKWWUDIILFWRJHQHUDWHWKHQHFHVVDU\UHYHQXH7KLVFDQDOVREH
VHHQ DV D FRQVHTXHQFH RI FKDUJLQJ SDVVHQJHU WDULIIV WKDW DUH WRR ORZ ZKLFK LV
GLVFXVVHGODWHULQWKLV&KDSWHU
F  (IILFLHQF\ LPSURYHPHQWV WKDW ZHUH XVHG WR MXVWLI\ WKH SURMHFW DQG FRQFRPLWDQW
LQFUHDVH LQ UHYHQXH GRHV QRW IUXFWLI\ HJ WKH LQFUHDVH LQ FDSDFLW\ RU WKH
UHGXFWLRQLQIXHOFRVWVDIWHUHOHFWULILFDWLRQDUHQRWYLVLEOH
G 7KH SURMHFW LPSOHPHQWDWLRQ LV GHOD\HG DQG FRVW HVFDODWLRQ PDNHV WKH GLIILFXOW WR
UHFRYHUWKHLQYHVWPHQWHYHQLIWKHUHLVVXIILFLHQWWUDIILF

 $ FULWLFDO SDUW RI WKLV VLWXDWLRQ LV EHFDXVH ,5 KDV KLVWRULFDOO\ EHHQ ILQDQFHG ODUJHO\
WKURXJKLQWHUQDODFFUXDOVDQGIURPEXGJHWDU\VXSSRUWDQGQRWIURPH[WHUQDOILQDQFLQJ
7KXVWKHFULWLFDOJD]HRIWKHILQDQFLHUKDVODUJHO\EHHQDEVHQWIURPSURMHFWRYHUVLJKWLQ
,5$V7DEOHVKRZVXQWLOWKH6L[WK)LYH<HDU3ODQWKHUHZDVQRH[WHUQDOILQDQFLQJ
LQ ,5 ,W LV RQO\ ZLWK WKH HVWDEOLVKPHQW RI WKH ,QGLDQ 5DLOZD\ )LQDQFH &RUSRUDWLRQ
,5)&  LQ  WKDW H[WHUQDO UHVRXUFHV KDYH VWDUWHG WR EH D YLVLEOH SDUW RI UDLOZD\
UHVRXUFHV  6WDUWLQJ IURP DERXW  LQ WKH 6HYHQWK 3ODQ SHULRG WKH PL[ KDV QRW
LQFUHDVHG GUDPDWLFDOO\  ,Q  WKH VKDUH RI H[WUDEXGJHWDU\ UHVRXUFHV ZDV 
ZKLOH*2,FRQWLQXHGWRFRQWULEXWHDQLQFUHDVHDVFRPSDUHGWRLQWKH6HYHQWK
3ODQ  7KH RQO\ FKDQJH LQ WKH PL[ ZDV WKH UHGXFWLRQ RI LQWHUQDO FRQWULEXWLRQV WR
LQYHVWPHQWIURPWR7KHODFNRIFRUSRUDWHHQWLWLHVZKRFDQERUURZRQEHKDOI
RI,5KDVOLPLWHGPDUNHWDFFHVVIRU,5LQYHVWPHQWV


3URMHFW3HUIRUPDQFH


 7KHRQJRLQJSRUWIROLRRISURMHFWVLQ,5HYRFDWLYHO\FDOOHGWKH3LQN%RRNLVDSLFWXUHRI
GHOD\V LQ FRPSOHWLRQ  &XUUHQWO\ DV RI  D WRWDO RI  SURMHFWV WKDW KDYH
EHHQ DSSURYHG E\ WKH 5DLOZD\ %RDUG DUH LQ WKH SURFHVV RI FRPSOHWLRQ ZLWK DQ
HVWLPDWHGFRVWWRFRPSOHWLRQRI5VFURUHV 7DEOH 7KHVHFRQVWLWXWH
135


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

RIWKHFRVWWRFRPSOHWH,QDGGLWLRQDQRWKHUSURMHFWVKDYHEHHQDSSURYHGE\WKH
*HQHUDO0DQDJHUVZLWKDQDQWLFLSDWHGFRVWRIFRPSOHWLRQRIRQO\5VDQG
SURMHFWVRI '50VDGGLQJXSWR5VFURUHV7KHWRWDOFRVWWR FRPSOHWLRQIRUDOO
WKHVHSURMHFWVLVWKXV5VFURUHV7KHUHPDLQLQJRIWKHIXQGLQJLVWKHUHIRUH
GHGLFDWHGWRRIWKHSURMHFWV7KH&RPPLWWHHXQGHUWRRNDQDQDO\VLVRIWKHVWDWXVRI
WKHVHSURMHFWVZKLFKLVGHWDLOHGLQ)LJXUHVDQG
7DEOH)LQDQFLQJRI5DLOZD\V3ODQVD+LVWRULFDO3HUVSHFWLYH

3ODQ ,QWHUQDO
([WHUQDO5HVRXUFHV7RWDO
5HVRXUFHV 0DUNHW
2WKHUV
%RUURZLQJ
,5)& 
5V FU 
 DJH 5V FU DJH 5V FU
,





,,





,,,





$





,9





9





$





9,





9,,

 


9,,,

 


6RXUFH%XGJHW'RFXPHQWVYDULRXV\HDUV

5VLQ&URUHV
&DSLWDOIURP %XGJHWDU\
7RWDO
,QWHUQDO 
6XSSRUWIURP
([WHUQDO
*HQHUDO
5HVRXUFHV
([FKHTXHU
DJH 5V FU DJH 5V FU  DJH 5V FU


































































7DEOH3HQGLQJ3URMHFWV
3ODQ+HDG1DPH

1XPEHURISURMHFWV

&RVWWR&RPSOHWH
 5V 

1HZ/LQHV &RQVWUXFWLRQ 





*DXJH&RQYHUVLRQ





'RXEOLQJ





7UDIILF)DFLOLWLHV<DUG5HPRGHOOLQJ 2WKHUV





5RDG6DIHW\:RUNV/HYHO&URVVLQJV





5RDG6DIHW\:RUNV5RDG2YHU8QGHU%ULGJHV





7UDFN5HQHZDOV





%ULGJH:RUNV





6LJQDOOLQJDQG7HOHFRPPXQLFDWLRQ





(OHFWULILFDWLRQ3URMHFWV





:RUNVKRSVLQFOXGLQJ3URGXFWLRQ8QLWV





0HWURSROLWDQ7UDQVSRUW3URMHFWV





7RWDO





5ROOLQJ6WRFN





*UDQG7RWDO





136


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

 ,Q)LJXUHRQH FDQVHHWKHUHODWLRQVKLSEHWZHHQSK\VLFDODQGILQDQFLDOSURJUHVVRI


SURMHFWVZKLFKRQHZRXOGH[SHFWWREHTXLWHUHODWHG,QVWHDGWKHODFNRIDUHODWLRQVKLS
DSSHDUVTXLWHWURXEOLQJ,QPDQ\FDVHVLWZRXOGDSSHDUWKDWILQDQFLDOH[SHQGLWXUHKDV
IDUH[FHHGHGWKHVDQFWLRQHGDPRXQW7KLVPD\EHEHFDXVHWKHSURFHVVIRUVDQFWLRQLQJ
FKDQJHVLQSURMHFWFRVWVLQ,5LVFXPEHUVRPHDQGZRUNLVQRWKDOWHGZKLOHWKLVSURFHVV
LV EHLQJ JRQH WKURXJK  ,Q VRPH FDVHV LW LV EHFDXVH WKH GDWD HVSHFLDOO\ RI SK\VLFDO
SURJUHVV LV QRW XSGDWHG DFFXUDWHO\  7KHVH DUH PDMRU IDLOLQJV LQ SURFHVV VLQFH LW
SUHYHQWVDFWLYHSURMHFWPRQLWRULQJ

 6LPLODUO\ LQ )LJXUH  ZKHQ RQH ORRNV DW ILQDQFLDO SURJUHVV EDVHG RQ WKH \HDU RI
VDQFWLRQRQHZRXOGKDYHH[SHFWHGWKDWWKHUHZRXOGEHDUHJXODUQHJDWLYHUHODWLRQVKLS
2OGHU SURMHFWV ZRXOG EH FORVH WR FRPSOHWLRQ ZKLOH QHZHU SURMHFWV ZRXOG KDYH MXVW
VWDUWHG+RZHYHUDVRQHFDQVHHWKHUHDUHDQXPEHURISURMHFWVWKDWDUHROGEXWOLWWOH
SURJUHVV KDV EHHQ PDGH  ,Q SULQFLSOH RQH GHGXFWLRQ IURP WKLV REVHUYDWLRQ ZRXOG EH
WKDWSURMHFWVZKLFKKDYHPDGHYHU\VORZSURJUHVVDUHUHYHDOHGWREHORZSULRULW\LQWKH
MXGJHPHQWRI,5QRWMXVWIRURQH5DLOZD\%RDUGEXWIRUVXFFHVVLYH%RDUGV+RZHYHU
WKH ULVN LV WKDW MXVW E\ EHLQJ WKHUH IRU D ORQJ HQRXJK WLPH WKHVH SURMHFWV DWWUDFW
VXIILFLHQW LQYHVWPHQW VXFK WKDW WKH\ FURVV WKH WKUHVKROG EH\RQG ZKLFK WKH\ FDQQRW EH
GLVFRQWLQXHG
)LJXUH>7UDFN5HQHZDOV6 7:RUNV:RUNVKRSVLQFOXGLQJ38V7UDFWLRQ'LVWULEXWLRQ:RUNV(OHFWULILFDWLRQ3URMHFWV1HZ
/LQHV*DXJH&RQYHUVLRQ'RXEOLQJ7UDIILF)DFLOLWLHV5RDG6DIHW\52%58%@


137


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


138


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

)LJXUH /DVW6DQFWLRQ5DWLR>'RXEOLQJ1HZ/LQHV*DXJH&RQYHUVLRQ6 7:RUNV(OHFWULILFDWLRQ3URMHFWV


5RDG6DIHW\52%58%:RUNVKRSVLQFOXGLQJ38V7UDIILF)DFLOLWLHV7UDFN5HQHZDOV7UDFWLRQ'LVWULEXWLRQ:RUNV@

139


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

140


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG



 )LJXUHVDQGLOOXVWUDWHWKLVSKHQRPHQRQ7KH\VKRZWKHUHODWLRQVKLSEHWZHHQWKH
WLPHVLQFHLQFHSWLRQWKHH[WHQWRIILQDQFLDOSURJUHVVDQGWKHVL]HRIWKHSURMHFWLQYROYHG
IRUIRXUW\SHVRIZRUNVYL]WUDFNUHQHZDOVGRXEOLQJQHZOLQHVDQGJDXJHFRQYHUVLRQ
)RU QHZ OLQHV IRU H[DPSOH DOPRVW 5V  FURUH ZRUWK RI SURMHFWV IURP WKH VHW
DQDO\VHG ZKLFKZHUHVWDUWHGEHIRUHLHRYHUILIWHHQ\HDUVDJRLVVWLOOEHWZHHQ
DQGSHUFHQWFRPSOHWH7KLVFRXOGLQGLFDWHWKHSKHQRPHQRQWKDWLIDSURMHFWLV
DURXQG ORQJ HQRXJK LW HYHQWXDOO\ ZLOO JHW IXQGHG RYHU WLPH  +RZHYHU LW LV SRVVLEOH
WKDW VLQFH WKH\ DUH DOO PRUH WKDQ  FRPSOHWH LW ZRXOG EH GLIILFXOW WR GLVFRQWLQXH
WKHP DW WKLV WLPH  1HYHUWKHOHVV WKHVH SURMHFWV VKRXOG EH UHH[DPLQHG IRU LW LV DOVR
SRVVLEOH WKDW WKH ILQDQFLDO SURJUHVV UDWLR LV EHLQJ RYHUHVWLPDWHG VLQFH WKH FRVW WR
FRPSOHWLRQKDVQRWEHHQXSGDWHG7DNLQJWKLVORJLFIXUWKHUWKH5VFURUHZRUWK
RI SURMHFWV ZKLFK ZHUH LQLWLDWHG EHIRUH  DQG RQ ZKLFK WKH H[SHQGLWXUH KDV EHHQ
EHORZ  DUH SULPH FDQGLGDWHV IRU GLVFRQWLQXLQJ  $QRWKHU 5V  FURUH RI VXFK
SURMHFWVKDVOHVVWKDQILQDQFLDOSURJUHVV7KHVDPHSKHQRPHQRQLVVHHQIRUJDXJH
FRQYHUVLRQZKHUH5VFURUHZRUWKRISURMHFWVZKLFKZHUHVWDUWHGEHIRUHLV
\HWWREHFRPSOHWHGWKRXJKWKHH[WHQWRISURMHFWVZLWKOHVVWKDQILQDQFLDOSURJUHVV
LV OHVV WKDQ WKDW RI QHZ OLQHV  (OHFWULILFDWLRQ SURMHFWV DQG WUDFWLRQ GLVWULEXWLRQ ZRUNV
DOVR KDYH VLPLODU FKDUDFWHULVWLFV 3HU FRQWUD DQG LQ UHODWLRQ WR WKHVH W\SHV RI ZRUNV
GRXEOLQJ RU WUDFN UHQHZDO LV OHVV GLVWXUELQJ  ,Q GRXEOLQJ OHVV WKDQ 5V  FURUH RI
SURMHFWV LQLWLDWHG EHIRUH  KDYH \HW WR EH FRPSOHWHG ZKLOH WKHUH LQ QR LQFRPSOHWH
SURMHFWRIWKDWYLQWDJHLQWUDFNUHQHZDOV,QSDUWWKLVFDQDOVREHGXHWRWKHSKHQRPHQRQ
RIGHSDUWPHQWDOLVPZKHUHWKHEXGJHWLVDOORFDWHGSURSRUWLRQDWHO\WRGHSDUWPHQWV7KH
HIIHFWLVWRRSWLPLVHLIDWDOOZLWKLQW\SHVRIZRUNVUDWKHUWKDQRSWLPLVLQJDFURVVWKH
HQWLUHSRUWIROLRRISURMHFWV


 7KHILJXUHV DOVRSURYLGHD PHDVXUH RIFRVW HVFDODWLRQE\UHSRUWLQJ WZRSDUDPHWHUVIRU
WHQW\SHVRIZRUNVYL] D ODVWVDQFWLRQUDWLRZKLFKLVWKHUDWLRRIWKHODVWVDQFWLRQHG
FRVWWRWKHRULJLQDOFRVWZKLFKSURYLGHVDQHVWLPDWHRIFRVWHVFDODWLRQDQG E ILQDQFLDO
SURJUHVV UDWLR ZKLFK LV WKH UDWLR RI H[SHQGLWXUH RQ WKH SURMHFW WR WKH ODVW VDQFWLRQHG
FRVW$VFDQEHVHHQLQDQXPEHURIFDVHVWKHVHUDWLRVKDYHIDUH[FHHGHG7KLVFRXOG
WHVWLI\WRDQXPEHURILVVXHVVXFKDV L 3RRUSUDFWLFHVRISUHSDULQJRULJLQDOHVWLPDWHV
ZKLFK DUH WKHQ FRUUHFWHG ZKLOH SUHSDULQJ VDQFWLRQHG FRVW DQG DUH UHIOHFWHG LQ WKH ODVW
VDQFWLRQUDWLR LL $OWHUQDWLYHO\WKHUHODUJHH[WHQWRIFRVWHVFDODWLRQIURP WKHRULJLQDO
VDQFWLRQHGHVWLPDWHV*LYHQWKHGHOD\VGRFXPHQWHGWKLVLVTXLWHSRVVLEOH LLL 9HU\OD[
SURFHVVHV RI XSGDWLQJ WKH GDWDEDVH ZKLFK LQGLFDWHV SRRU ILQDQFLDO PDQDJHPHQW VLQFH
141


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

XSGDWHGVDQFWLRQDPRXQWVKDYHQRWEHHQSRVWHGZKLFKUHVXOWVLQWKHILQDQFLDOSURJUHVV
UDWLR H[FHHGLQJ XQLW\ LY  ([WHQVLYH H[SHQGLWXUH XQGHUWDNHQ ZLWKRXW VDQFWLRQ ZKLFK
DSSHDUVLPSUREDEOH 

)LJXUH)LQDQFLDO3URJUHVVRI3URMHFWVE\7\SHDQG<HDURI6DQFWLRQ






142

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

)LJXUH/DVW6DQFWLRQ5DWLRDQG)LQDQFLDO3URJUHVVIRUGLIIHUHQW&ODVVHVRI:RUNV




 7KLV DQDO\VLV GRHV QRW HYHQ DFFRXQW IRU WKH QHDUO\  SURMHFWV DOO WRJHWKHU
DJJUHJDWLQJ OHVV WKDQ 5V  FURUHV WKDW KDYH EHHQ VDQFWLRQHG DW OHYHOV EHORZ WKH
5DLOZD\ %RDUG 7KH YHU\ ORZ DYHUDJH VL]H RI OHVV WKDQ 5V  ODNKV SHU SURMHFW
WHVWLILHV WR WKH OLPLWHG SRZHUV DYDLODEOH IRU VDQFWLRQ DW WKHVH OHYHOV 7KLV LV DGGUHVVHG
HOVHZKHUHLQWKH5HSRUW,QWKHYLHZRIWKLV&RPPLWWHHVLQFHWKHVHSURMHFWVKDYHEHHQ
GHFLGHGRQE\RSHUDWLRQDOOHYHOVWKH\DUHOLNHO\WREHRSHUDWLRQDOO\LPSRUWDQW7KH\DUH
DOVR VPDOO DQG FDQ EH HDVLO\ FRPSOHWHG JLYHQ FXUUHQW UHVRXUFHV /HDYLQJ WKHP
XQILQLVKHGWDNHVXSSUHFLRXVPDQDJHPHQWWLPH7KHVHSURMHFWVVKRXOGEHIXOO\IXQGHG
VRDVWRILQLVKDOORIWKHPLQWZR\HDUVWLPH$Q\SURMHFWWKDWFDQQRWEHFRPSOHWHGLQ
WKDWWLPHVKRXOGQRWUHFHLYHDQ\IXUWKHUIXQGLQJ

 2QWKHSKHQRPHQRQRIGHOD\HGSURMHFWVLQJHQHUDOLQWKHYLHZRIWKLV&RPPLWWHHWKHUH
LV OLWWOH SXUSRVH LQ JHQHUDWLQJ UHVRXUFHV WR IXQG WKHVH SURMHFWV ZLWKRXW D WKRURXJK
143


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

UHYLHZIURPD]HUREDVHEXGJHWSHUVSHFWLYH(YLGHQWO\WKHEDVLVIRUVDQFWLRQLQJVRPH
RIWKHVHSURMHFWVKDVFKDQJHGVLQFHWKH\ZHUHLQLWLDWHG,IWKH\ZHUHHYHUFRPPHUFLDOO\
YLDEOH WKH H[WHQVLYH GHOD\V DUH OLNHO\ WR KDYH DOWHUHG WKDW VLWXDWLRQ  $ QXPEHU RI
SUHYLRXV FRPPLWWHHV KDYH DOVR DGGUHVVHG WKHPVHOYHV WR WKLV VLWXDWLRQ 7KH 7DQGRQ
&RPPLWWHH   GHFLSKHUHG D WHQGHQF\ ZKHUH SK\VLFDO IDFLOLWLHV DUH SUHIHUUHG RYHU
DFWXDO VHUYLFHV DQG SRSXODU SURMHFWV DUH SUHIHUUHG RYHU YLDEOH RQHV ,W IRXQG WKDW WKH
QXPEHURISURMHFWVXQGHUWDNHQZDVPXFKODUJHUWKDQMXVWLILHGE\UHVRXUFHVDQGSURMHFW
FRVWVZHUHXQGHUHVWLPDWHGWRREWDLQVDQFWLRQV0RKDQ  UHPDUNHGRQWKHWHQGHQF\
WRJLYHPRUHDWWHQWLRQWRQRQUHPXQHUDWLYHSURMHFWV,WDOVRIRXQGWKDWIURPWKHSRLQW
RI YLHZ RI LQYHVWPHQW VWUDWHJ\ WKH DQQXDO EXGJHW H[HUFLVH OHDGV WR D YHU\ VKRUWWHUP
IRFXVRQDOOLQYHVWPHQWLQLWLDWLYHV(YHQIRUWKHODUJHUSURMHFWVWKDWRXJKWWRUDQNKLJK
LQ LPSRUWDQFH DEVHQFH RI D SURMHFW ILQDQFH DSSURDFK PDNHV SURMHFW FRPSOHWLRQ
XQFHUWDLQ DQG VXEMHFW WR WKH YDU\LQJ SULRULWLHV WKDW PDNH WKHPVHOYHV HYLGHQW RYHU WKH
VWUHWFKHGRXWLPSOHPHQWDWLRQSHULRG)RUSURMHFWVIXQGHGRXWRILQWHUQDOUHVRXUFHVWKH
FRVW RI ILQDQFH LV HTXLYDOHQW WR WKH UHWXUQV RQ LQYHVWPHQWV WKHUHE\ IRUHJRQH 3URMHFWV
IXQGHGWKXVQHHGWREHVHOHFWHGWKURXJKDULJRURXVVFUHHQLQJSURFHVVDQGLGHQWLILHGDV
EHLQJ RI WKH KLJKHVW RUJDQL]DWLRQDO SULRULW\ RQ ZKLFK WKH OLPLWHG LQWHUQDO UHVRXUFHV
VKRXOGEHLQYHVWHG

,QYLHZRIWKLVWKHIROORZLQJLVUHFRPPHQGHGDVSULQFLSOHVIRU]HUREDVHEXGJHWLQJ
D  7KH SURMHFW LQIRUPDWLRQ GDWDEDVH VKRXOG EH XSGDWHG RQ D ZDU IRRWLQJ SUHIHUDEO\
EHIRUHWKHILQDOUHSRUWRIWKH&RPPLWWHHLVVXEPLWWHGODWHUWKLV\HDU
E $OO SURMHFWV WKDW ZHUH LQLWLDWHG EHIRUH  VKRXOG EH UHHYDOXDWHG ERWK IRU
VDQFWLRQHGFRVWDQGIRUFRVWWRFRPSOHWLRQ%DVHGRQWKLVDVVHVVPHQWSURMHFWVZLWKD
KLJK UDWLR RI FRVW WR FRPSOHWLRQ WR VDQFWLRQHG FRVWV VKRXOG EH H[DPLQHG IRU
GLVFRQWLQXDQFH VLQFH WKH ORJLF RI WKH SURMHFW PD\ KDYH DOWHUHG LQ WKH ODVW ILIWHHQ
\HDUV
F  $OO SURMHFWV EHIRUH  ZLWK D ILQDQFLDO SURJUHVV UDWLR RI OHVV WKDQ  VKRXOG
SULPD IDFLH EH FDQGLGDWHV IRU GLVFRQWLQXDQFH VLQFH WKH ,5 KDV UHYHDOHG WKDW LW
FRQVLGHUVWKHVHSURMHFWVWREHRIORZSULRULW\a fortioriWKHFDVHIRUQHZOLQHVDQG
JDXJHFRQYHUVLRQ
G 6LPLODUO\ SURMHFWV VDQFWLRQHG EHWZHHQ  DQG  RU VRPH VXFK GDWH WR
GHFLGHG ZKLFKKDYHOHVVWKDQILQDQFLDOSURJUHVVVKRXOGDOVREHSULPDIDFLHEH
FDQGLGDWHVIRUGLVFRQWLQXDQFH
H  )RUWKHVHWRIVHOHFWHGSURMHFWVWKDWVXUYLYHDSURFHVVRIIXQGLQJVKRXOGEHSXWLQ
SODFH 3URMHFWV HVSHFLDOO\ WKRVH DERYH D WKUHVKROG VKRXOG SURJUHVVLYHO\ EH
WUDQVIHUUHG WR D FRUSRUDWH FRQVWUXFWLRQ RUJDQLVDWLRQ VXFK DV 591/ ,5&21
.5&/HWFZLWKFOHDUIXQGLQJVWUHDPVDWWDFKHGWRHDFKSURMHFWRYHUWKHQH[WILYH
\HDUV 7KLV GHGLFDWHG IXQGLQJ VWUHDP FDQ WKHQ EH OHYHUDJHG E\ WKH FRQVWUXFWLRQ
RUJDQLVDWLRQ WR UDLVH GHEW DQG FRPSOHWH WKH SURMHFW  7KLV ZLOO HQDEOH D SURMHFW
ILQDQFHDSSURDFKWREHWDNHQWRWKHVHODUJHUSURMHFWV
144


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

6RXUFHVRI)LQDQFH


 7KLV &RPPLWWHHV UHFRPPHQGDWLRQV RQ ILQDQFH UHIOHFW RQ WKH QHHG WR ILQDQFH WKHVH
VHOHFWHG SURMHFWV DQG HQVXULQJ WKDW WKHUH DUH VXIILFLHQW UHVRXUFHV WR FRPPLW WR WKH
GHGLFDWHG IXQGLQJ VWUHDP UHIHUUHG WR DERYH  7KLV LQFOXGHV WKH UDLVLQJ RI LQWHUQDO
UHVRXUFHV IRU WKLV SXUSRVH 7KH GLVFXVVLRQ WKDW IROORZV LV WKHUHIRUH VHSDUDWHG LQWR WKH
IROORZLQJVHFWLRQVYL]
L  ,QWHUQDO5HVRXUFH*HQHUDWLRQ
LL  ([WHUQDOILQDQFLQJ ZKLFKLQFOXGHVIRUHLJQIXQGLQJ WKURXJKERUURZLQJ
LLL  ([WHUQDOILQDQFLQJWKURXJKXVHRIDVVHWV
LY  %XLOGLQJFDSDFLW\WKURXJKMRLQWYHQWXUHV
Y  %XLOGLQJFDSDFLW\WKURXJK333
YL  5HVRXUFHJHQHUDWLRQWKURXJKQRQWUDGLWLRQDOPHDQV,QWKLVDVLJQLILFDQWLVVXHWKDW
QHHGVWREHDGGUHVVHGLVWKHIXQGLQJRISHQVLRQREOLJDWLRQV

 7KLVLVDJDLQVWWKHEDFNJURXQGRIZKDWKDVDOUHDG\EHHQPHQWLRQHGLQHDUOLHU&KDSWHUV
,5 IXQGV LWV H[SDQVLRQ FDSDFLW\ FUHDWLRQ DQG DVVHW UHQHZDO WKURXJK D FHQWUDOO\
FRQWUROOHG3ODQRXWOD\ZKHUHDVLWVGD\WRGD\RSHUDWLRQVDQGUXQQLQJH[SHQVHVDUHPHW
WKURXJKWKH5HYHQXHEXGJHWODUJHO\FRQWUROOHGE\WKH*HQHUDO0DQDJHUVRIWKH=RQDO
5DLOZD\V7KH3ODQH[SHQGLWXUHLVSULPDULO\PHWIURPWKUHHPDMRUVRXUFHV L WKHJURVV
EXGJHWDU\VXSSRUWIURPWKH*RYHUQPHQW LL LQWHUQDOUHVRXUFHJHQHUDWLRQDIWHUPHHWLQJ
LWV H[SHQGLWXUH DQG RWKHU VWDWXWRU\ OLDELOLWLHV DQG LLL  H[WHUQDO ERUURZLQJV SULPDULO\
WKURXJK ,5)&   7DEOHV  DQG  LOOXVWUDWH WKH QDWXUH RI WKH SUREOHP  ,QYHVWPHQWV
KDYHEHHQILQDQFHGWKURXJKLQWHUQDOUHVRXUFHVRUEXGJHWDU\VXSSRUWDQGJURVVEXGJHWDU\
VXSSRUWWR,5KDVEHHQGHFOLQLQJDQLVVXHFRYHUHGLQGHWDLOLQ&KDSWHU%RUURZLQJV
IURP H[WHUQDO VRXUFHV KDYH LQFUHDVHG VKDUSO\ WR EULGJH WKH JDS EHWZHHQ DYDLODEOH
UHVRXUFHVDQGWKH3ODQVL]HWKRXJKPDUNHWERUURZLQJVZHUHLQLWLDOO\H[SHFWHGWRKDYH
RQO\DOLPLWHGUROH$VXEVWDQWLDOSDUWRIDQQXDOERUURZLQJVDUHQRZSORXJKHGEDFNWR
,5)&DVUHSD\PHQWV,QGHHGLQUHSD\PHQWVH[FHHGHGWKHERUURZLQJ


7DEOH6RXUFHVRI)XQGV

6RXUFHRI    DJHVKDUH 


IXQG


DJH
VKDUH




DJH
VKDUH




DJH
VKDUH

%XGJHWDU\    


6XSSRUW













5DLOZD\
6DIHW\
)XQG





















,QWHUQDO
 
5HVRXUFHV

















145


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

6RXUFHRI    DJHVKDUH 


IXQG


DJH
VKDUH




DJH
VKDUH




DJH
VKDUH

([WUD
EXGJHWDU\
UHVRXUFHV





 













,QWHUQDO
 
5HVRXUFHV















([WUD
EXGJHWDU\
UHVRXUFHV



 













7RWDO

   











,QWHUQDO5HVRXUFH*HQHUDWLRQ


 3UHYLRXV &RPPLWWHHV KDYH DOVR QRWHG VKRUWIDOOV LQ LQWHUQDO UHYHQXH JHQHUDWLRQ 7KH
5DNHVK 0RKDQ &RPPLWWHH   QRWHG WKH VKDUS GHFOLQH LQ WKH VKDUH RI EXGJHWDU\
VXSSRUW DQG LQWHUQDO UHVRXUFHV OHDGLQJ WR LQFUHDVLQJ PDUNHW ERUURZLQJV DQG ILQDQFLDO
VWUHVV LQ ,5  7KH $KOXZDOLD &RPPLWWHH   QRWHG WKDW LQ WKH UHFHQW \HDUV WKH
DPRXQW UDLVHG IURP SULYDWH LQYHVWPHQW KDV EHHQ QHJOLJLEOH GHVSLWH PDQ\
SURQRXQFHPHQWV ,Q WKH DERYH FRQWH[W WKH QHHG IRU LQFUHDVLQJ HIILFLHQF\ RI UDLOZD\
VHUYLFHVWRJHQHUDWHPRUHLQWHUQDOUHVRXUFHVDVVXPHVLPSRUWDQFH,WLVWKH&RPPLWWHHV
RSLQLRQ WKDW IRU ,5 LQFUHDVH LQ SURGXFWLYLW\ LV SRVVLEOH IURP EHWWHU XWLOL]DWLRQ RI
H[LVWLQJ FDSDFLW\ DQG DVVHWV WKURXJK LPSURYHG RSHUDWLQJ DQG VFKHGXOLQJ SUDFWLFHV
'HWDLOVRISURGXFWLYLW\GLIIHUHQFHVDFURVVGLIIHUHQW]RQHVRI,5VKRZWKDWWKHGLIIHUHQFH
EHWZHHQWKHZRUVWDQGEHVWLVTXLWHODUJH7KLVFDQUHVXOWLQVXEVWDQWLDOFRVWVDYLQJVDQG
LQFUHDVH LQWHUQDO UHVRXUFH JHQHUDWLRQ +RZHYHU WKHUH LV DQ LPSRUWDQW LVVXH WR HQVXUH
WKDW WKH RSHUDWLRQDO LPSURYHPHQWV HIIHFWHG JHW FRQYHUWHG LQWR ILQDQFLDO DFKLHYHPHQWV
DQGWKLVPXVWEHWDFNOHG:HDUHIODJJLQJDFFRXQWLQJUHIRUPVDQG0,6V\VWHPVZKLFK
VKRXOGKHOSWKHPDQDJHPHQWPRQLWRUWKHUHVXOWVEHWWHU

7DEOH8QLWFRVWYLVjYLV\LHOGSHUXQLW
&RDFKLQJ6HUYLFHV LQSDLVH 
<HDU

&RVWSHU
3.0

(DUQLQJV
SHU3.0

5DWLR

)UHLJKW6HUYLFHV LQSDLVH 
&RVWSHU
3.0

(DUQLQJV
SHU3.0

5DWLR

































 2Q WKH UHYHQXH IURQW SULPDULO\ WDULIIV DUH QRW LQ DOLJQHG WR FRYHU WKH LQFUHDVHG LQSXW
FRVWV7KHWKHQ&KDLUPDQ5DLOZD\%RDUGLQKLVSUHVHQWDWLRQLQIRUPHGWKH&RPPLWWHH
WKDWWKHFRPSRVLWHZHLJKWHGLQGH[RI,5VJURVVLQSXWFRVWVGXULQJWKHSHULRG
146


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

WRJUHZDW &$*5 EXWLQWKHFRUUHVSRQGLQJSHULRGDYHUDJHHDUQLQJV


SHU17.0,QGH[JUHZDW &$*5 DQGDYHUDJH(DUQLQJVSHU3.0,QGH[JUHZDW
 &$*5 (YHQFRQVLGHULQJWKDWDFHUWDLQSDUWRIWKHULVHLQLQSXWFRVWVZDVGXHWR
LQHIILFLHQF\ DV QRWHG DERYH WKLV LV D VLJQLILFDQW JDS  6XEMHFW WR FDYHDWV DERXW WKH
GLVWULEXWLRQRIFRVWVDQGHDUQLQJVDFURVVVHJPHQWVWKHUHKDVVSHFLDOO\EHHQVLJQLILFDQW
XQGHUUHFRYHU\RIFRVWVLQSDVVHQJHUVHJPHQWDVVKRZQLQWKHXQLWFRVWYLVjYLV\LHOG
SHU XQLW LQ 7DEOH   6RPH RI WKLV LV GXH WR UHDVRQV EH\RQG ,5V FRQWURO 7KH
LPSURYHPHQW LQ ,5V RSHUDWLQJ UDWLR EHWZHHQ  WR  E\ LQFUHDVLQJ WKH
SD\ORDG RQ ZDJRQV ZDV QHJDWHG E\ WKH WK 3D\ &RPPLVVLRQ DZDUG WKRXJK LW GLG
HQDEOH ,5 WR PHHW LWV VXEVWDQWLDOO\ LQFUHDVHG ZDJH REOLJDWLRQV IRU WKH XVLQJ LWV RZQ
UHVRXUFHV  )LJXUH  VKRZV WKH LPSDFW RI WKH WK 3D\ &RPPLVVLRQ RQ WKH ZRUNLQJ
H[SHQVHV DQG ZDJH ELOO RI ,5  7KH VKDUH RI ZDJH H[SHQVHV LQ WRWDO H[SHQGLWXUH KDV
FRQWLQXHG WR ULVH HYHQ DIWHU WKH RQHWLPH LPSDFW RI WKH 3D\ &RPPLVVLRQ  0RUH
GLVWXUELQJO\JURZWKRIJURVVUHYHQXHUHFHLSWVZKLFKZDVPRUHWKDQWKDWRIQRQZDJH
H[SHQVHVKDVIDOOHQEHKLQGZLWKWKHUHFHQWULVHLQQRQZDJHH[SHQGLWXUH:LWKDQRWKHU
URXQGRIZDJHLQFUHDVHVH[SHFWHGIURPWKHWK3D\&RPPLVVLRQWKRXJKKRSHIXOO\QRW
DVGHVWDELOL]LQJDVWKHWK3D\&RPPLVVLRQUHYHQXHJURZWKFDQEHH[SHFWHGWRIDOOTXLWH
DELWEHKLQGLQDEXVLQHVVDVXVXDOVFHQDULR7KLVLVZK\DFWLRQLVQHHGHGERWKRQWKH
H[SHQGLWXUH VLGH E\ LPSURYLQJ HIILFLHQF\ DQG RQ WKH UHYHQXH VLGH ERWK RI ZKLFK DUH
PRUHLQWKHFRQWURORI,5WKDQZDJHJURZWK


)LJXUH*URZWKRI5HYHQXHDQG([SHQVHVWR




7KLVEULQJVXVWRWKHSULFLQJRIUDLOZD\VHUYLFHV,QGHWHUPLQLQJSULFHVIRUWKHRXWSXWVRI
PXOWLSURGXFWRUJDQL]DWLRQVOLNHWKH5DLOZD\VSROLF\PDNHUVKDYHORQJIDFHGDQXPEHU
RI LVVXHV WKDW IORZ LQH[RUDEO\IURP WKH EDVLF VRFLRHFRQRPLF FKDUDFWHULVWLFV RI ,5 7KH
HQGHPLF HFRQRPLHV RI VFDOH DQG VFRSH LPSO\ WKDW VWUDLJKWIRUZDUG PHDVXUHV RI FRVWLQJ
FDQQRW EH XVHG WR GLFWDWH SULFLQJ )XUWKHU VKDUHG FRVWV WKDW DUH D FRQFRPLWDQW RI
HFRQRPLHVRIVFRSHDUHQRWXQDPELJXRXVO\LGHQWLILHGZLWKLQGLYLGXDOVHUYLFHV7KHUHLV
WKXVDQHHGWRDGRSWSULFLQJSULQFLSOHVWKDWFDQFRPELQHFRVWDQGGHPDQGIDFWRUVLQDQ
RSWLPDOPDQQHU6XFKSULQFLSOHVZRXOGOHDGWRGLIIHUHQWLDWHGSULFHVZKLFKDSSRUWLRQDOO
XQDWWULEXWDEOHIL[HGDQGFRPPRQFRVWVDPRQJVWLWVVHUYLFHVRQWKHEDVLVRIWKHYDOXHRI
WKRVH VHUYLFHV WR FRQVXPHUV  H[SUHVVHG DV WKHLU HODVWLFLWLHV RI GHPDQG (VVHQWLDOO\ WKH
147


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

SRLQW LV WKDW WKH WDULIIV HVSHFLDOO\ RQ KLJKYDOXHG LWHPV  FDQQRW EH UDLVHG EH\RQG WKH
OHYHODWZKLFKWKHHODVWLFLW\RIGHPDQGIRUUDLOZD\WUDQVSRUWZRUNVDJDLQVWWKHLQWHUHVWVRI
WKH5DLOZD\V7KDWLVWKHWDULIIVVKRXOGQRWEHVRKLJKDVWRGULYHDZD\WKHFXVWRPHUWRD
FRPSHWLQJPRGHRIWUDQVSRUW7KDWWKHUDWHPDNLQJLQ,5KDVEHHQKLJKO\LQVHQVLWLYHWR
FKDQJHV LQ WKH UHODWLYH DGYDQWDJHV RI PRGHV LV HYLGHQW IURP WKH JUDGXDO GLYHUVLRQ RI
KLJKYDOXHGDVZHOODVORZYDOXHGLWHPVIURPWKH5DLOZD\VWRDLUDQGURDGWUDQVSRUW


 :HZLOOQRWUHYLVLWDUJXPHQWVWKDWZHKDYHDOUHDG\KLJKOLJKWHGLQ&KDSWHUDERXWWKH
VRFLDO FRVW REOLJDWLRQV DQG WKH UROH RI WKH UHJXODWRU  +DYLQJ VDLG WKLV IDUH
GHWHUPLQDWLRQPXVWEHEDVHGRQSULQFLSOHVWKDWFDQFRPELQHFRVWDQGGHPDQGIDFWRUVLQ
DQRSWLPDOPDQQHU6XFKSULQFLSOHVZRXOGOHDGWRGLIIHUHQWLDWHGSULFHVZKLFKFDQIRU
H[DPSOH DSSRUWLRQ DOO XQDWWULEXWDEOH IL[HG DQG FRPPRQ FRVWV DPRQJVW LWV YDULRXV
VHUYLFHV RQ WKH EDVLV RI WKH YDOXH RI WKRVH VHUYLFHV WR FRQVXPHUV  H[SUHVVHG DV WKHLU
HODVWLFLWLHVRIGHPDQG5HFHQWO\the Economic Survey 2014-15SURYLGHGHVWLPDWHVRI
SULFH HODVWLFLW\ RI GHPDQG IRU GLIIHUHQW FRPSRQHQWV RI UDLO VHUYLFHV UHSRUWHG LQ 7DEOH
 7KLV VKRZV WKDW ZKLOH D  LQFUHDVH LQ IUHLJKW WDULIIV ZRXOG UHGXFH IUHLJKW
GHPDQGE\LWZRXOGUHGXFHSDVVHQJHUGHPDQGE\RQO\7KXVSDVVHQJHU
VHUYLFHV DUH PXFK OHVV SULFHHODVWLF WKDQ IUHLJKW VHUYLFHV LH WKH\ YDOXH UDLO VHUYLFHV
UHODWLYHO\PRUH(YHQWKHFURVVHODVWLFLW\RIFLYLODYLDWLRQWUDIILFZLWKUHVSHFWWRFKDQJHV
LQ 5DLOZD\ SULFHV LV HVWLPDWHG WR EH D ORZ  SHUFHQW ZKLFK LQGLFDWHV YHU\ OLPLWHG
VZLWFKLQJIURPUDLOWRDLULQUHVSRQVHWRSULFH,WZRXOGWKXVEHHFRQRPLFDOO\UDWLRQDOWR
DSSRUWLRQ XQDWWULEXWDEOH IL[HG DQG FRPPRQ FRVWV SURSRUWLRQDWHO\ PRUH WR SDVVHQJHUV
WKDQ IUHLJKW (VVHQWLDOO\ WKH SRLQW LV WKDW WKH WDULIIV HVSHFLDOO\ RQ KLJKYDOXHG LWHPV 
FDQQRWEHUDLVHGEH\RQGWKHOHYHODWZKLFKWKHHODVWLFLW\RIGHPDQGZRUNVDJDLQVWWKH
LQWHUHVWV RI WKH UDLOZD\V LH WKH WDULIIV VKRXOG QRW EH VR KLJK DV WR GULYH DZD\ WKH
FXVWRPHU WR D FRPSHWLQJ PRGH RI WUDQVSRUW $V WKH 17'3&   5HSRUW QRWHG WKH
5DLOZD\ VKDUH RI RULJLQDWLQJ WRQQDJH KDG GHFOLQHG IURP  LQ  WR DQ
HVWLPDWHGLQ


 +DYLQJ VDLG WKLV WKHUH LV DQ DGGLWLRQDO FRPPHQW WR EH PDGH DERXW IUHLJKW ,5 PXVW
FRQFHQWUDWH RQ LPSURYLQJ SURGXFWLYLW\ DQG HIILFLHQF\ HVSHFLDOO\ LQ LWV KLJKO\
UHPXQHUDWLYHIUHLJKWVHJPHQW)RUWKLV L ,QWURGXFHDQGSUROLIHUDWHKLJKHUSD\ORDGWR
WDUH ZHLJKW UDWLR ZDJRQV LL  ,PSURYH DYHUDJH VSHHG RI JRRGV WUDLQ E\ XVH RI ORQJHU
WUDLQVDQGORFRWUDZO LLL 3URJUHVVLYHO\LQWURGXFHWLPHWDEOLQJRIIUHLJKWWUDLQV
7DEOH3ULFH(ODVWLFLW\RI'HPDQG SHUFHQW 
2YHUDOOVXEXUEDQSDVVHQJHUV



2YHUDOOQRQVXEXUEDQSDVVHQJHUV



8SSHUFODVVSDVVHQJHUV



0DLODQGH[SUHVVFODVVSDVVHQJHUV



2UGLQDU\SDVVHQJHUV


148

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

7DEOH3ULFH(ODVWLFLW\RI'HPDQG SHUFHQW 
7RWDOSDVVHQJHUV



&HPHQW



&RDO



)HUWLOL]HU



,URQRUH



3HWUROHXPDQGSHWURSURGXFWV



3LJLURQRUH



7RWDO)UHLJKW




 &DWHULQJ 7KLV &RPPLWWHH IHHOV WKDW WKH GHFLVLRQ LQ  WR VZLWFK EDFN WR
GHSDUWPHQWDO FDWHULQJ IURP ,5&7& ZDV SHUKDSV D UHVWULFWLYH VWHS ,5 PXVW HQFRXUDJH
RQERDUGFDWHULQJWKURXJKODUJHIRRGFKDLQVDQGORFDOUHVWDXUDQWVRQWKHSD\PHQWRID
PRGHVW OLFHQVH IHH  7KLV FDQ EH HQDEOHG VLPSO\ WKURXJK ZHE ERRNLQJ DQG WKXV RIIHU
FXVWRPHUV D ZLGH FKRLFH RI ORFDO FXLVLQH GHOLYHUHG DW KLVKHUFKRLFH RI VWDWLRQ E\ WKH
UHVWDXUDQW ,5 FDQ WKXV FXW GRZQ GHSDUWPHQW FRVWV DQG UDLVH UHYHQXHV WKURXJK WKH
OLFHQVH IHH DSDUW IURP JDLQLQJ D KLJKHU OHYHO RI FXVWRPHU VDWLVIDFWLRQ 6RPH ORFDO
LQLWLDWLYHV E\ SULYDWH HQWUHSUHQHXUV KDYH EHHQ WKZDUWHG LQ WKH SDVW LQVWHDG RI EHLQJ
OHYHUDJHG DQG DJJUHJDWHG ,5 PXVW KDYH D FRPSUHKHQVLYH ZHEEDVHG RSWLRQ IRU
FXVWRPHUV ZKR PD\ FKRRVH IURP WKH YDULHW\ RI IRRG DYDLODEOH ORFDOO\ DQG KDYH LW
GHOLYHUHGWRWKHPDWDSDUWLFXODUVWDWLRQE\WKHORFDOUHVWDXUDQWRUHYHQDODUJHFKDLQRI
UHVWDXUDQWV 7KH UHYHQXHV WR ,5 ZRXOG VLPSO\ DFFUXH WKURXJK LWV OLFHQVH IHH DQG DOVR
SURYLGHDFFHVVWRSDVVHQJHUGDWDEDVHVDWSUDFWLFDOO\QRFRVW


 3DUFHO /HDVLQJ RI SDUFHO YDQV LQ WUDLQV WKURXJK DXFWLRQ RI FDUU\LQJ FDSDFLW\ 3ULYDWH
SDUFHOWUDLQV$KLJKO\UHPXQHUDWLYHPDUNHWIRUWUDQVSRUWDWLRQRIZKLWHJRRGVIURPWKH
HFRPPHUFHVHJPHQWLVVRIDUXQWDSSHGE\,57KHVHKDYHVSHFLDOKDQGOLQJQHHGVDQG
WKH UHTXLUHPHQW RI DQ DJJUHJDWRU ,5 PXVW OHDVH RXW LWV SDUFHOV FDSDFLW\ LQ SDVVHQJHU
WUDLQV WR SULYDWH DJJUHJDWRUV WKURXJK DXFWLRQV ,5 KDG HDUOLHU LQWURGXFHG D VFKHPH IRU
OHDVLQJRISDUFHOVSDFHLQWKH%UDNH9DQV 6/5V DQG3DUFHO9DQV 93+V RISDVVHQJHU
FDUU\LQJWUDLQV8QGHUWKLVVFKHPHSDUFHOVSDFHZDVOHDVHGRXWWRSULYDWHRSHUDWRUVE\
LQYLWLQJ ELGV WKURXJK RSHQ WHQGHUV 9LVLRQ  HQYLVDJHG Parcel services will be
managed as a separate business and run from dedicated terminals with separate parcel
trains rather than from station platforms. On major routes, this service will be run as
efficiently and professionally as air cargo services. The revenue from parcel services
would be targeted for at least a fivefold increase in ten years 7KLV &RPPLWWHH
UHFRPPHQGVWKDWDPDMRUVWHSWRDWWUDFWWKHIDVWJURZLQJJRRGVWUDIILFJHQHUDWHGE\H
FRPPHUFHZRXOGEHWRKLYHRII3DUFHO%XVLQHVVDQGH[SDQGLWE\ L /HDVLQJRXW%UDNH
9DQVLQPDLOH[SUHVVDQGSDVVHQJHUWUDLQVWRJHWDVVXUHGWUDIILFDWKLJKUDWH LL /HDVLQJ
RXW SDUFHO YDQV RQ URXQG WULS EDVLV WR FOHDU YDOXDEOH SDUFHO WUDIILF ZLWK VLJQLILFDQW
IUHLJKWSRWHQWLDO LLL ,QWURGXFLQJ0LOOHQQLXP3DUFHO([SUHVVRQIL[HGWLPHWDEOHGSDWK
LY 7RHQFRXUDJHOHDVLQJWRWKHPD[LPXPSRVVLEOHH[WHQWUHVHUYHSULFHIRUOHDVLQJRI
149


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

SDUFHO VSDFH LQ %UDNH 9DQV3DUFHO 9DQV$VVLVWDQW *XDUGV &DELQ VKRXOG EH NHSW
DWWUDFWLYH DQG UHDOLVWLF Y  %DVHG RQ WKH VDPH FRQFHSW 3DUFHO ([SUHVV WUDLQV ZLWK
PLQLPXPFRPSRVLWLRQRI3DUFHO9DQV%UDNH9DQFRXOGDOVREHOHDVHGRXWWRWKH
SULYDWHRSHUDWRUV,5QHHGVWRIXUWKHUWKHVHLQLWLDWLYHVWRFRPSOHWHWKHORJLVWLFVFKDLQE\
LQYROYHPHQW RI SULYDWH VHFWRU WR SURYLGH WRWDO ORJLVWLFV VROXWLRQ DQG YL  'HGLFDWHG
SDUFHOWHUPLQDOVWRUHGXFHLQWHUIHUHQFHZLWKSDVVHQJHUWUDIILF7KLVHOLPLQDWLRQRISDUFHO
ORDGLQJ DQG XQORDGLQJ RQ SDVVHQJHU SODWIRUPV ZRXOG UHGXFH FRPSODLQWV IURP DOO
SDVVHQJHU VHJPHQWV HVSHFLDOO\ WKH GLIIHUHQWO\ DEOHG IRU ZKRP VSDFH KDV EHHQ
HDUPDUNHGLQWKHHQGFRDFKHV

 &RQFHVVLRQLQJRIWUDLQVHUYLFHV7KLVUDLVHVWKHLVVXHRIFRQFHVVLRQLQJRIWUDLQVHUYLFHV
7KRXJK ,5 KDVQRWLILHG VHYHUDO SROLFLHV IRU SULYDWH RZQHUVKLS RI UROOLQJ VWRFN ZKLFK
ZLOO EH HQXPHUDWHG LQ &KDSWHU  WKHVH KDYH QRW EURXJKW LQ WKH GHVLUHG OHYHO RI
LQYHVWPHQWV SULPDULO\GXH WRWKH SHUFHSWLRQ RI D ODFN RI OHYHO SOD\LQJ ILHOGV 7KHVH
DWWHPSWV WR EULQJ LQ SULYDWH FDSLWDO LQ 5DLOZD\ IUHLJKW VWRFN WKURXJK 2ZQ \RXU
:DJRQ 6FKHPH 2:6  :DJRQ ,QYHVWPHQW 6FKHPHV :,6/:,6  &RQWDLQHU 7UDLQ
2SHUDWRUV &72V 3ULYDWH)UHLJKW7UDLQ2SHUDWRUV 3)72V HWFKDYHPHWZLWKOLPLWHG
VXFFHVV 7KH SUHVHQWDWLRQV DQG VXEPLVVLRQV PDGH WR WKH FRPPLWWHH E\ WKH FRQWDLQHU
WUDLQ RSHUDWRUV DQG IUHLJKWHUV DUH SODFHG DW 7DEOH  7KLV &RPPLWWHH UHFRPPHQGV
LQWHJUDWLRQ RI DOO WKHVH SROLFLHV LQWR D VLQJOH FRPSUHKHQVLYH SROLF\ IRUPXODWHG DIWHU
H[WHQVLYH VWDNHKROGHU FRQVXOWDWLRQ 7KHUH LV D QHHG WR VWUHDPOLQH WKH SURFHVV DQG
DSSURYDOV UHTXLUHG IRU PXOWL XVHU DFFHVV WR WHUPLQDOV DQG VLGLQJV SUHYHQWLQJ QRQ
GLVFULPLQDWRU\ DFFHVV WR DOO SULYDWH IUHLJKW WHUPLQDOV DQG WUDFNV LQFOXGLQJ UDLOZD\
VLGLQJV7KHFRQFHVVLRQLQJRISULYDWHSDVVHQJHUWUDLQVDUHDFWXDOO\PRUHSRVVLEOHVLQFH
WKH\KDYHFOHDUSDWKVEXWWKHUHYHQXHLPSDFWLVOLNHO\WREHVPDOOWKRXJKWKHLPDJH
LPSDFWPD\EHTXLWHKLJK7KHXVHUVRIWUDLQVOLNH5DMGKDQLDQG6KDWDEGLDUHUHODWLYHO\
OHVV IDUH VHQVLWLYH ,5 FRXOG FRQFHVVLRQ WKH FRPPHUFLDO RSHUDWLRQV RI WKHVH WUDLQV WR
SULYDWHSDUWLHVIRUDQXSIURQWDQQXDOSUHPLXP7KHSULYDWHRSHUDWRUZLOOKDYHIUHHGRP
RQSULFLQJRIWLFNHWVIRUDSRUWLRQRIWKHFDSDFLW\DQGUHWDLQRUVKDUHDOODGYHUWLVHPHQW
UHYHQXH LQ WKH WUDLQ DQG RIIHU PHDOV DQG RWKHU VHUYLFHV RQ ERDUG ZLWK D IOH[LELOLW\ WR
SULFHWKHVDPHWRR7KHRSHUDWLRQDQGPDLQWHQDQFHRIWKHWUDLQZRXOGEHZLWK,5EXW
WKLVFRXOGEHFRQWUDFWXDOO\VSHFLILHGVRWKDWFHUWDLQVWDQGDUGVDUHPDLQWDLQHG7KHVHDUH
LVVXHVWKDWZLOODOVREHFRYHUHGLQ&KDSWHU


150


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

&RQWDLQHU7UDLQ2SHUDWRU
&72 

)RXU

&DWHJRULHV
1RRIOLFHQVHHV
FRQFHVVLRQDLUHV LQFOXGLQJ
WKRVHZKRKDYHDSSOLHGIRU 

\HDUV

7HQXUHRILQLWLDOOLFHQVH

)HH /LFHQVH5HJLVWUDWLRQ 

%/&DQGLWVYDULDQWV
%//DQGLWVYDULDQWV

7\SHVRIZDJRQGHVLJQV
SHUPLWWHG

)UHLJKWPDUNHWLQJ

)UHLJKWPDUNHWLQJ





&RPPRGLWLHVRWKHUWKDQ
UHVWULFWHGFRPPRGLWLHVOLNH
FRDOFRNHRUHVDQGFHUWDLQ
SHWUROHXPSURGXFWV

2QH

1RUWKHUQ5DLOZD\V

)UHLJKWPDUNHWLQJ

0D\

$SULO

:DJRQ/HDVLQJ6FKHPH
:/6 

1,/

FURUHV

151

%/&DQGLWVYDULDQWV
%//DQGLWVYDULDQWV
6SHFLDO3XUSRVH:DJRQVDQG
6SHFLDO3XUSRVH:DJRQV
+LJK&DSDFLW\:DJRQV
63:V DQG+LJK&DSDFLW\
:DJRQV +&:V 
\HDUV
\HDUV

&RPPRGLWLHVRWKHUWKDQ
UHVWULFWHGFRPPRGLWLHVOLNH
FRDOFRNHRUHVDQGFHUWDLQ
SHWUROHXPSURGXFWV



5HVSHFWLYH=RQDO5DLOZD\V
ZKHUHWKHUDNHLVEDVHG
2QH

)UHLJKWPDUNHWLQJ



$SULO

/LEHUDOLVHG:DJRQ
,QYHVWPHQW6FKHPH

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

FURUHV

\HDUV

6SHFLDO3XUSRVH:DJRQV 63:V 
$XWRFDUULHUZDJRQV
DQG+LJK&DSDFLW\:DJRQV +&:V  %&$&%0 

&DWHJRU\%XONFHPHQW)O\DVK
DQGEXONIHUWLOLVHU
&DWHJRU\%XONFKHPLFDOVVSHFLILF
SHWURFKHPLFDOVDQGEXONDOXPLQD
$XWRPRELOHV
&DWHJRU\6WHHOSURGXFWVLQ
VSHFLDOO\GHVLJQHGZDJRQV
&DWHJRU\0RODVVHVHGLEOHRLODQG
FDXVWLFVRGD



5HVSHFWLYH=RQDO5DLOZD\ZKHUHWKH 5HVSHFWLYH=RQDO5DLOZD\
UDNHLVEDVHG
ZKHUHWKHUDNHLVEDVHG
)RXU
2QH

$SULO

6WLOOXQGHUILQDOLVDWLRQDW,5

0D\

$XWRPRELOH)UHLJKW7UDLQ
2SHUDWRU
$)72 
-XO\

Table6.6
6SHFLDO)UHLJKW7UDLQ2SHUDWRU
6)72 

\HDUV
&DWHJRU\FURUH
FURUHIRU&DWHJRU\,
&DWHJRU\FURUH
FURUHHDFKIRU&DWHJRU\
&DWHJRU\FURUH
DQG
&DWHJRU\FURUH

,62&RQWDLQHUV

7\SHVRIFRPPRGLWLHV
SHUPLWWHG



1RUWKHUQ5DLOZD\

1RGDO5DLOZD\V

<HDURISROLF\DQQRXQFHPHQW 
<HDURIVLJQLQJRIILUVW
/LFHQVH&RQFHVVLRQDLUH

$JUHHPHQW
1RGDO'LUHFWRUDWHLQ5DLOZD\
7UDIILFWUDQVSRUWDWLRQ
%RDUG

7KLUGSDUW\

$SSUR[LPDWHO\ZDJRQV 1,/

)UHLJKW+DXODJH

2ZQ7KLUG3DUW\&DUJR

1RRIZDJRQVRZQHG
SUHVHQWO\XQGHUWKHVFKHPH

$FFHVVWRWHUPLQDOV

/LEHUDOLVHG:DJRQ
,QYHVWPHQW6FKHPH

2QO\3ULYDWHWHUPLQDOVRU
WKRVH5DLOZD\WHUPLQDOV
ZKHUHVXLWDEOHKDQGOLQJ
IDFLOLW\LVDYDLODEOH


7REHGRQHE\,5
0DLQWHQDQFHFKDUJHVSDUWRI
WKHKDXODJH



7KLUGSDUW\

1RWDQRSHUDWRU7KH
KDXODJHFKDUJHVZRXOGEH
SDLGE\WKH/HVVHHWRWKH
ZDJRQVKDYHEHHQOHDVHGDV
SHUWKHLUUHVSHFWLYH
DJUHHPHQWVZLWK,5 &72
6)72$)72RU/:,6DV
WKHFDVHPD\EH 

:DJRQ/HDVLQJ6FKHPH
:/6 

([LVWLQJRUQHZSULYDWH
WHUPLQDOV

152

$VSHUWKHSROLF\RIWKH
/HVVHH

1RWDQRSHUDWRU7KH
KDXODJHFKDUJHVZRXOGEH
SDLGE\WKH/HVVHHWRWKH
ZDJRQVKDYHEHHQOHDVHGDV
2ZQ
SHUWKHLUUHVSHFWLYH
DJUHHPHQWVZLWK,5 &72
6)72$)72RU/:,6DV
WKHFDVHPD\EH 
$SSUR[LPDWHO\ZDJRQV
$SSUR[LPDWHO\ZDJRQV

0DLQWHQDQFHRIWKHZDJRQV
7REHGRQHE\,5
LVWKHUHVSRQVLEO\RIWKH
0DLQWHQDQFHFKDUJHV
/HVVHH7KHFKDUJHVZLOOEH
FKDUJHG#SHUDQQXPRI
DSSOLFDEOHDVSHUWKH
WKHH[WDQWFDSLWDOFRVWRIWKH
DUUDQJHPHQWRI/HVVHHZLW
UDNH
,5

IUHLJKWUHEDWH IRU
\UV IRU63:VRQDSSURYHG
URXWHV
+DXODJHFKDUJHVDVHSDUDWH
IUHLJKWUHEDWH IRU
WDEOHIRUWKH$XWRPRELOH
\UV IRU+&:VRQDSSURYHG
FDUU\LQJWUDLQVIRUORDGHGDQG
VSHFLILFURXWHVRI
HPSW\GLUHFWLRQV
DGGLWLRQDOIUHLJKWUHEDWH IRU
\UV IRUHDFKWRQQHRI
DGGOSD\ORDG

$XWRPRELOH)UHLJKW7UDLQ
2SHUDWRU
$)72 

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

,&'V3ULYDWH)UHLJKW
7HUPLQDOV 3)7V DQGFHUWDLQ
2QO\3ULYDWH)ULJKW7HUPLQDOV
5DLOZD\*RRGVKHGVFODVVLILHG
DV&57V

7REHGRQHE\,5
0DLQWHQDQFHFKDUJHVSDUWRI
WKHKDXODJH

0DLQWHQDQFHRIZDJRQV

7REHGRQHE\,50DLQWHQDQFH
FKDUJHVEXLOWLQWRWKHIUHLJKWEHLQJ
FKDUJHG

7KLUGSDUW\

+DXODJHFKDUJHVDVHSDUDWH
KDXODJHWDEOHIRU&RQWDLQHU
FDUU\LQJWUDLQVIRUPRYHPHQW
RIORDGHGDQGHPSW\FRQWDLQHUV
DQGHPSW\IODWVDVZHOO
GLVFRXQWRQWKHDSSOLFDEOH
)RUFHUWDLQFRPPRGLWLHVFDOOHG IUHLJKWUDWHVDVSHUDSSOLFDEOH,5
FODVVLILFDWLRQ
&RQWDLQHUFODVVFRPPRGLWLHV
GLVFRXQWRQWKHDSSOLFDEOH
IUHLJKWUDWHVDVSHU,5
FODVVLILFDWLRQ


6SHFLDO)UHLJKW7UDLQ2SHUDWRU
6)72 

&RQWDLQHU7UDLQ2SHUDWRU
&72 

&RQWDLQHU7UDLQ2SHUDWRU
&72 

6SHFLDO)UHLJKW7UDLQ2SHUDWRU
6)72 


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

153

$XWRPRELOH)UHLJKW7UDLQ
/LEHUDOLVHG:DJRQ
:DJRQ/HDVLQJ6FKHPH
2SHUDWRU
,QYHVWPHQW6FKHPH
:/6 
$)72 
7RLQFUHDVH,QGLDQ5DLOZD\V
PRGDOVKDUHRIWKH
7KHREMHFWLYHRIWKHSROLF\LVWR
WUDQVSRUWDWLRQRIDXWRPRELOHV
7KHSROLF\DLPVWR
LQFUHDVH5DLOZD\VVKDUHLQ
DQGWRSURYLGHRSSRUWXQLW\WR
7RGHYHORSDVWURQJOHDVLQJ
UDWLRQDOLVHWKHHDUOLHU
7RLQFUHDVH5DLOZD\VVKDUHRI WUDQVSRUWDWLRQRIQRQFRQYHQWLRQDO /RJLVWLFV6HUYLFH3URYLGHUDQG
PDUNHWE\HQFRXUDJLQJ
VFKHPHVOLNH:DJRQ
FRQWDLQHUWUDIILFDQGWR
WUDIILFLQKLJKFDSDFLW\DQGVSHFLDO
WRURDGWUDQVSRUWHUVWRLQYHVW
WKLUGSDUW\OHDVLQJ
6WDWHGREMHFWLYHRIWKH
,QYHVWPHQW6FKHPH :,6 
LQWURGXFHFRPSHWLWLRQLQ
SXUSRVHZDJRQVWKHUHE\LQFUHDVLQJ LQZDJRQVDQGXVHDGYDQWDJH
SDUWLFXODUO\ZLWKDYLHZWR
VFKHPH
DQG2ZQ<RXU:DJRQ
UDLOZD\FRQWDLQHUWUDQVSRUW
FRPPRGLW\EDVHRI5DLOWUDIILF7KLV RIUDLOWUDQVSRUWWRWLHXSZLWK
EULQJLQEHWWHUZDJRQ
2<: IRUSULYDWH
VHUYLFHVLQ,QGLD
ZLOOIDFLOLWDWHLQGXFWLRQRIEHWWHU
HQGXVHUVDQGPDUNHWWUDLQ
GHVLJQV
RZQHUVKLSRIZDJRQVE\HQG
GHVLJQRIZDJRQVWRLQFUHDVH
VHUYLFHWRFUHDWHDZLQZLQ

XVHUV
WKURXJKSXWSHUWUDLQ
VLWXDWLRQIRU5DLOZD\VDQG
WKHPVHOYHV


x 3OHWKRUDRISROLFLHVDOOZLWKGLIIHUHQWSURYLVLRQVWRRFRQIXVLQJIRUDQLQYHVWRU6KRXOGEHUROOHGLQWRRQHRUWZRSROLFLHVZLWKXQLIRUPSURYLVLRQV
x 7KRXJKPRVWSROLFLHVWDONDERXWHQFRXUDJLQJQHZDQGEHWWHUGHVLJQWKHSURFHGXUHIRUJHWWLQJDQHZGHVLJQFOHDUHGE\5'62LVORQJ FDQWDNHDQ\ZKHUH
XSZDUGVRIPRQWKVIRUDGHVLJQ DQGWKHSROLF\LVDPELJXRXVRQ,35DQGLQGHPQLW\
x ,QDOOWKHDERYHSROLFLHVDFFHVVKDVEHHQOLPLWHGWR3ULYDWHWHUPLQDOVWKHUHE\VHYHUHO\DIIHFWLQJWKHPRYHPHQWRIWKHVHZDJRQV,QWKHRWKHUKDQG,5KDVPHUJHG
WKH7HUPLQDODFFHVVFKDUJHVLQWRWKH)UHLJKWFKDUJHVWKHUHE\DSULYDWHSDUW\KDVWRHIIHFWLYHO\EHDUWKHWHUPLQDODFFHVVWZLFHRQFHWR,5DQGWKHQWRWKHSULYDWH
WHUPLQDORZQHU
x ([FHVVGHOD\LQSURFXULQJZDJRQVGXHWRGHOD\LQSURFHVVHVOLNHHVWLPDWLRQRI'HVLJQ/RDQFKDUJHV'UDZLQJDSSURYDOFKDUJHV,QVSHFWLRQFKDUJHVVLJQLQJRI
0R8DQGRSHQLQJRIILOHVIRUSURFXULQJPDWHULDO
&RPPRQ,VVXHVIDFHGE\WKH
x
7KRXJKZDJRQVDUHSHUPLWWHGWREHPDQXIDFWXUHGE\3ULYDWHPDQXIDFWXUHUVPDLQWHQDQFHQRWDOORZHGWREHGRQHSULYDWHO\VSHFLDOO\WKRVHOLNH32+DQG52+
OLFHQVHHFRQFHVVLRQDLUH
ZKLFKFDQHDVLO\EHGRQHLQH[LVWLQJPDQXIDFWXULQJSODQWVZLWKOHVVHUGRZQWLPH
x +LJKYDULDELOLW\LQOHDGWLPHVIRUPRYLQJWKHSULYDWHWUDLQVIURPRQHSRLQWWRDQRWKHU 2QO\LQ$)72VFKHPHDWLPHWDEOHGUXQQLQJKDVEHHQLQWURGXFHG :LWK
VXFKKLJKGHJUHHRIXQFHUWDLQW\DERXWWUDQVLWFXVWRPHUVSUHIHUWRXVH5RDG
x 9HU\KLJKVWDEOLQJFKDUJHVEHLQJOHYLHGXSRQWKHSULYDWHZDJRQRZQHUVPDNLQJWKHLUEXVLQHVVHFRQRPLFVHYHQZRUVH






6XJJHVWLRQV

x
x
x
x
x
x
x
x
x
x

6SHFLDO)UHLJKW7UDLQ2SHUDWRU
6)72 

$XWRPRELOH)UHLJKW7UDLQ
2SHUDWRU
$)72 
x'HILQLWLRQRI+LJK&DSDFLW\ZDJRQVLV
DPELJXRXVWKHUHE\PDNLQJWKRVHW\SHRI
ZDJRQVFRPSOHWHO\RXWRIVFRSHIRUWKH
LQYHVWRU
x5HVWULFWLRQRQSURFXULQJ*HQHUDO
SXUSRVH:DJRQV *3:V OHDYHVWKH
LQYHVWRUZLWKDYHU\VPDOOVOLFHRIWKH
)UHTXHQWKLNHLQWKHKDXODJH
'HILQLWLRQRI+LJK
PDUNHW
UDWHVQRUHJXODWLRQ
&DSDFLW\ZDJRQVLV
x7RRPDQ\FDWHJRULHV(DFKFDWHJRU\
DPELJXRXVWKHUHE\
,&'VFULWLFDOWRJURZWKRI
KDYLQJGLIIHUHQWOLFHQVHIHH
PDNLQJWKRVHW\SHRI
&72VYHU\ORQJGUDZQDQG
x,QGLDQ5DLOZD\ZLOOFRQWLQXHWRNHHS
ZDJRQVFRPSOHWHO\RXW
WLPHWDNLQJSURFHVVIRUJHWWLQJ
FDUU\LQJWKHVHFRPPRGLWLHVLQWKHLU
RIVFRSHIRUWKHLQYHVWRU
WKHDSSURYDOV
ZDJRQWKHUHE\EHLQJDFRPSHWLWRUDV
1RGHYHORSPHQWRI
'HVLJQZLWKKLJKHUD[OHORDG
ZHOODVWKHUHJXODWRU7KLVPDNHVWKH
$XWRWHUPLQDOVE\,5
IRUFDUU\LQJVXSHUKHDY\,62
SULYDWHLQYHVWRUZDU\
WKHUHE\UHVWULFWLQJ
FRQWDLQHUVDQGIRUEHWWHU
x$GGLWLRQDOFKDUJHVOLNHEXV\VHDVRQ
LQGXFWLRQRIPRUH
GRXEOHVWDFNLQJQRWDYDLODEOH
VXUFKDUJHGHYHORSPHQWDOVXUFKDUJH
ZDJRQVLQWKHVFKHPH

PDNHUDLOPRUHH[SHQVLYH
5HVWULFWLRQRIFRPPRGLWLHVOLNHFRDOFRNH
DQGRUHVHYHUHO\UHVWULFWVWKHLQGXFWLRQRI
ZDJRQV7KLVEXUGHQVWKH,5H[FKHTXHU
7KHVHIXQGVZLOOEHIUHHGWREHXWLOLVHGIRU
FDSDFLW\HQKDQFHPHQWDQGFRQQHFWLYLW\
ZRUNV

&RQWDLQHU7UDLQ2SHUDWRU
&72 

:DJRQ/HDVLQJ6FKHPH
:/6 

5HVWULFWLRQRQSURFXULQJ
*HQHUDOSXUSRVH:DJRQV
*3:V OHDYHVWKH
LQYHVWRUZLWKDYHU\
VPDOOVOLFHRIWKHPDUNHW



/LEHUDOLVHG:DJRQ
,QYHVWPHQW6FKHPH
'HILQLWLRQRI+LJK&DSDFLW\
ZDJRQVLVDPELJXRXVWKHUHE\
PDNLQJWKRVHW\SHRIZDJRQV
FRPSOHWHO\RXWRIVFRSHIRUWKH
LQYHVWRU
5HVWULFWLRQRQSURFXULQJ
*HQHUDOSXUSRVH:DJRQV
*3:V OHDYHVWKHLQYHVWRU
ZLWKDYHU\VPDOOVOLFHRIWKH
PDUNHW
$GGLWLRQDOFKDUJHVOLNHEXV\
VHDVRQVXUFKDUJH
GHYHORSPHQWDOVXUFKDUJHPDNH
UDLOPRUHH[SHQVLYH
5HVWULFWLRQRIFRPPRGLWLHVOLNH
FRDOFRNHDQGRUHVHYHUHO\
UHVWULFWVWKHLQGXFWLRQRI
ZDJRQV7KLVEXUGHQVWKH,5
H[FKHTXHU7KHVHIXQGVZLOOEH
IUHHGWREHXWLOLVHGIRUFDSDFLW\
HQKDQFHPHQWDQGFRQQHFWLYLW\
ZRUNV

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

154

0HUJHDOOIRXURSHUDWRUSROLF\OLNH&72$)726)72DQG/:,6XQGHURQHSROLF\ZLWKXQLIRUPSURYLVLRQV
,QFUHDVHWKHWHQXUHRIWKHDERYHSROLFLHVWRDWOHDVW\HDUV FRGDOOLIHRIZDJRQV 
2SHQRZQHUVKLSRI*HQHUDO3XUSRVHZDJRQVWRSULYDWHSDUW\2SHQFRPPRGLWLHVOLNH&RDOFRNHDQG2UH)XQGVWKXVUHOHDVHGWREHSORXJKHGLQFDSDFLW\HQKDQFHPHQWDQGFRQQHFWLYLW\SURMHFWV
+DYHDUHJXODWRU\DXWKRULW\LQSODFHIRUKDYLQJDWUDQVSDUHQWPHWKRGRIOHY\LQJFKDUJHVOLNHIUHLJKWKDXODJHVWDEOLQJDQGRWKHUVXFKFKDUJHVIRUWKHVHUYLFHVSURYLGHGE\,QGLDQ5DLOZD\V
2SHQWKH5DLOZD\JRRGVKHGVLGLQJVWRSULYDWHLQYHVWPHQWDQGPDNHWKHPDFFHVVLEOHWRSULYDWHZDJRQV
5DWLRQDOLVHDQGPDNHPRUHFXVWRPHUIULHQGO\WKHIROORZLQJSURFHVVHV
5'62SURFHVVHVUHTXLUHGIRUSURFXUHPHQWRIQHZZDJRQV
5'62SURFHVVHVIRUFOHDUDQFHRIQHZZDJRQGHVLJQV
$SSURYDOVIRUFRQVWUXFWLRQRI,&'VDQG3)7KDYHDVLQJOHZLQGRZFOHDUDQFH
$OORZSULYDWH32+DQG52+RIWKHSULYDWHO\RZQHGZDJRQV

,VVXHVVSHFLILFWRSROLFLHV

([WHUQDO)LQDQFLQJ
 ,QWKHSDVWGHFDGHVWKHUHKDVEHHQH[WHQVLYHUHVWUXFWXULQJRI5DLOZD\VDURXQGWKHZRUOG
DQG ZKLOH D IHZ FRXQWULHV VXFK DV &DQDGD 8QLWHG .LQJGRP DQG SDUWO\ -DSDQ DQG
5XVVLDKDYHH[WHQVLYHO\SULYDWL]HGUDLORSHUDWLRQVLQPRVWRWKHUFRXQWULHVWKHUHKDVEHHQ
H[WHQVLYHRUJDQL]DWLRQDOUHIRUPRIWKHSXEOLFO\RZQHG5DLOZD\VWRWKHSRLQWZKHUHWKHUH
LV QRZ PXFK PRUH H[WHQVLYH PDUNHW DQG SULYDWH SDUWLFLSDWLRQ LQ 5DLOZD\ RSHUDWLRQV
PRUH RSHQ DFFHVV WR IL[HG 5DLOZD\ LQIUDVWUXFWXUH E\ PXOWLSOH SXEOLF DQG SULYDWH
RSHUDWRUV HVSHFLDOO\ LQ UHJLRQV VXFK DV (XURSH 2I WKH WZR FRXQWULHV ZLWK FRPSDUDEOH
5DLOZD\V\VWHPVWR,QGLDWKH8QLWHG6WDWHVDQG&KLQDWKH8QLWHG6WDWHVKDVWUDGLWLRQDOO\
KDG D SULYDWHO\ RZQHG UDLO IUHLJKW RSHUDWLRQV V\VWHP EXW &KLQD ZKLFK KDV KDG D
GHSDUWPHQWDOV\VWHPKDVSURJUHVVLYHO\UHRUJDQL]HGLWVVWUXFWXUHWRWKHSRLQWZKHUHWKHUH
LV QRZ QR 0LQLVWU\ RI 5DLO ZLWK D QDWLRQDO UDLO FRUSRUDWLRQ DQG D QXPEHU RI UHJLRQDO
RSHUDWRUV DQG VSHFLDOL]HG SULYDWH UDLOZD\ RSHUDWRUV HVSHFLDOO\ LQ GHGLFDWHG IUHLJKW
KDXODJH$VDFRQVHTXHQFHWKHUHDUHDYDULHW\RIZD\VLQZKLFKH[WHUQDOLQYHVWPHQWVE\
SXEOLF DQG SULYDWH HQWLWLHV KDYH EHHQ PDGH LQWR 5DLOZD\V VHH 7DEOH   /HVV ZHOO
NQRZQ LQ WKH H[WHQW WR ZKLFK WKLV LV DOVR WUXH IRU ,QGLDQ 5DLOZD\V DV 7DEOH  DOVR
VKRZV ,W LV FOHDU IURP WKH WDEOH WKDW HYHQ WKH H[LVWLQJ OHJDO DQG UHJXODWRU\ IUDPHZRUN
DOORZVIRUH[WHQVLYHH[WHUQDODQGHYHQSULYDWHSDUWLFLSDWLRQLQ5DLOZD\VRSHUDWLRQV7KLV
LV WR EH H[SHFWHG VLQFH WKH JRYHUQLQJ OHJLVODWLYH IUDPHZRUN LQ ,QGLD GDWHV IURP D WLPH
ZKHQ WKHUH ZHUH PXOWLSOH UDLOZD\V PDQ\ SULYDWHO\ RZQHG RU RZQHG E\ SULQFHO\ VWDWHV
+RZHYHULWLVDOVRWKHFDVHWKDWZKLOHWKHUHDUHPDQ\H[DPSOHVLQ,QGLDWKHUHKDVEHHQ
YHU\ OLPLWHG VFDOHXS RI WKHVH LQLWLDWLYHV ZKLFK UHPDLQ VFDWWHUHG DQG GLVSDUDWH 7KH
FKDOOHQJH ZRXOG EH WR VWUDWHJLFDOO\ PDLQVWUHDP WKHVH DV D SDUW RI UHVWUXFWXULQJ RI WKH
,QGLDQ5DLOZD\VHFWRU


 $VPHQWLRQHGLQ7DEOHDQG)LJXUHPRUHWKDQKDOIRI,5UROOLQJVWRFNDVRI0DUFK

LVILQDQFHGDQGRZQHGE\WKH,QGLDQ5DLOZD\)LQDQFH&RUSRUDWLRQ ,5)& $OPRVW


WKHHQWLUHLQFUHPHQWDOUROOLQJVWRFNSURFXUHPHQWZKHWKHURIFRDFKHVZDJRQVRUHQJLQHV
LV GRQH WKURXJK WKLV URXWH $V RI 0DUFK  ,5)& KDG OHDVHG WR ,5  HOHFWULF
ORFRPRWLYHVGLHVHOORFRPRWLYHVFRDFKHVDQGZDJRQVDGGLQJXSWR
5V  FURUH LQ YDOXH  $SDUW IURP D IHZ RGG UDLOZD\ OLQHV ,5)& ILQDQFLQJ LV
FXUUHQWO\ ODUJHO\ OLPLWHG WR UROOLQJ VWRFN ,5)& ERQGV DUH VHUYLFHG EDVHG RQ OHDVH
SD\PHQWVIURP,5WR,5)&7KHQHWLQYHVWPHQWLQOHDVHUHFHLYDEOHV0DUFKZDV5V
FURUH,5)&VUDWHVDUHQRZTXLWHILQHZLWKVSUHDGVRYHU*2,GURSSLQJIURP
EDVLV SRLQWV DERYH *6HF WR LQ  WR  ESV LQ  6LQFH LW QRZ DOVR UDLVHV
IXQGVLQWHUQDWLRQDOO\,5)&VFRVWRIIXQGVZHUHEHORZ*VHFLQ$ERXWDTXDUWHU
RI,5)&VIXQGVDUHQRZERUURZHGRYHUVHDVPRVWRILWRQD/,%25SOXVEDVLV+RZHYHU
UHFHQWO\LWKDVDOVRSODFHGIL[HGORQJWHUPERQGVLQWHUDOLDZLWKLQWHUQDWLRQDOLQVXUDQFH
ILUPV$OPRVWDOORIWKHVHOLNHLWVGRPHVWLFERUURZLQJDUHEXOOHWUHSD\PHQWERQGV7LOO
QRZ,5)&VVKDUHRI5DLOZD\SODQRXWOD\KDVEHHQDOPRVWFRQVLVWHQWO\DURXQG

155



5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


7DEOH,QWHUQDWLRQDODQG,QGLDQ([DPSOHVRI([WHUQDO,QYHVWPHQWLQ5DLOZD\6\VWHPV


7\SHRI([WHUQDO
,QYHVWPHQWLQ
5DLOZD\V

,QWHUQDWLRQDO([DPSOH

,QGLDQ([DPSOH

 -RLQW9HQWXUH
ZLWKSURYLQFLDO
JRYHUQPHQWIRU
VXEXUEDQUDLO
WUDQVLW

0XPEDL5DLOZD\9LNDV&RUSRUDWLRQ/WG
059&/WG LVDMRLQWYHQWXUH -9 
EHWZHHQ0LQLVWU\RI5DLOZD\VDQG*RYWRI
0DKDUDVKWUD

 -RLQW9HQWXUH
ZLWKSURYLQFLDO
JRYHUQPHQWIRU
ORFDOUDLOZD\V

&KLQHVH0LQLVWU\RI5DLOZD\V ZKHQLW
H[LVWHG DQGORFDOJRYHUQPHQWV

+DVVDQ0DQJDORUH5DLO&RUSRUDWLRQLVD
MRLQWYHQWXUHEHWZHHQ*RYWRI,QGLD*RYW
RI.DUQDWDNDDQGRWKHUV

 -RLQWYHQWXUHV
ZLWKORFDO
VKLSSHUV

6KHQKXD*URXS VWDWHRZQHGHQHUJ\
FRPSDQ\ RZQVDQGRSHUDWHVQLQHFRDO
KDXOLQJUDLOZD\OLQHV HJ6KXRKDQJ
5DLOZD\ LQ&KLQD

.XWFK5DLOZD\&R/WGFRQQHFWV$GDQLV
0XQGUDSRUWLQ*XMDUDWWRWKH0XPEDL
'HOKLOLQH
-9EHWZHHQ6RXWK(DVWHUQ&RDOILHOGV
*RYWRI&KKDWWLVJDUKDQG5DLOZD\V

 /HDVLQJRI
5ROOLQJ6WRFN

8QLRQ3DFLILFLQ86$OHDVHV
 RILWVORFRPRWLYHVDQG
 RILWVIUHLJKWZDJRQV
&XUUHQWO\DERXWRIIUHLJKWZDJRQV
LQ5XVVLD DERXWPLOOLRQZDJRQV DUH
QRZRZQHGE\WKHSULYDWHVHFWRU

,QGLDQ5DLOZD\)LQDQFH&RUSRUDWLRQ
,5)& LVLQYROYHGLQOHDVLQJRIUDLODVVHWV
LQ,QGLD$OPRVWDOOQHZUROOLQJVWRFN
FRDFKHVZDJRQVDQGHQJLQHVDUHQRZ
OHDVHGWKURXJK,5)&+RZHYHUROGHU
UROOLQJVWRFNFRQWLQXHVWREHRZQHGE\
,QGLDQ5DLOZD\V

 3XEOLF3ULYDWH
3DUWQHUVKLSV
333 IRU
EXLOGLQJDQG
RSHUDWLQJHQWLUH
UDLOZD\V

7KH3HUSLJQDQ)LJXHUHV/LQH NP
KLJKVSHHGUDLOZD\OLQH EHWZHHQ)UDQFH
DQG6SDLQZDVEXLOWE\DFRQVRUWLXPRI
SULYDWHILUPVXQGHUD\HDUFRQFHVVLRQ
DJUHHPHQW
9DOH6$KDVLQYHVWHGLQVKDUHVRI
UDLOZD\FRQFHVVLRQVLQ%UD]LO
0R]DPELTXHDQG0DODZL,WSD\VD
FRQFHVVLRQIHHWRJRYHUQPHQWIRUWKH
ULJKWWRRSHUDWHWKHUDLOZD\DQGEHFRPHV
UHVSRQVLEOHIRULQYHVWLQJLQDQG
PDLQWDLQLQJWKHUDLOZD\LQIUDVWUXFWXUH
DQGUROOLQJVWRFN

7KHUHDUHDQXPEHURI333SURMHFWVRQ
,QGLDQ5DLOZD\V7KHVHLQFOXGHWKH
3LSDYDY5DLO&RUSRUDWLRQ/WG$QGWKH
%KDUXFK'DKHM5DLO&RUSRUDWLRQ/WG ERWK
FRQQHFWLQJSRUWV 
,5KDV\HWWRFRQFHVVLRQRUWUDQVIHUDQ
H[LVWLQJOLQHWRDWKLUGSDUW\ZKHWKHU
SXEOLFRUSULYDWHWKRXJKWKHUHKDYHEHHQ
VXJJHVWLRQVWRWUDQVIHUQRQUHPXQHUDWLYH
EUDQFKOLQHVWRSURYLQFLDOJRYHUQPHQWV

 333VIRU
SDVVHQJHUDQG
ORJLVWLFV
VHUYLFHV

,QWKH8QLWHG.LQJGRPSDVVHQJHU
VHUYLFHVDUHRIIHUHGE\SULYDWHILUPV
XQGHUDFRQFHVVLRQDJUHHPHQW

7KHUHDUHDQXPEHURI3ULYDWH)UHLJKW
7UDLQ2SHUDWRUVRQ,QGLDQ5DLOZD\V
WKRXJKWKH\DUHOLPLWHGE\ODFNRIGHILQHG
SDWKVDQGFOHDUUHJXODWRU\IUDPHZRUN
0XOWLPRGDOORJLVWLFSDUNV

 /HYHUDJLQJ
5DLOZD\$VVHWV
VXFKDVUDLOZD\
ULJKWRIZD\E\
FRPPXQLFDWLRQ
VFRPSDQLHV
DQGFRPPHUFLDO
GHYHORSPHQWRI
5DLOZD\V
RZQHGDFTXLUHG
UHDOHVWDWH

5LJKWRI:D\6RXWKHUQ3DFLILF5DLOURDG
,QWHUQDO1HWZRUNLQJ7HOHSKRQ\
635,17 LQWKH86LVSDUWRIWKHWKLUG
ODUJHVWZLUHOHVVQHWZRUNRSHUDWRULQWKH
86
)RUPHUUDLO\DUGVLQFHQWUDO7RN\RZHUH
WUDQVIHUUHGWRWKH-DSDQHVH1DWLRQDO
5DLOZD\6HWWOHPHQW&RUSRUDWLRQDQGWKHQ
VROGWKURXJKSXEOLFDXFWLRQ

5DLO7HOKDVDERXWNPRIRSWLFILEHU
FDEOHUXQQLQJDORQJWKHUDLOZD\ULJKWRI
ZD\ZKLFKLWVHOOVWRWHOHFRPFRPSDQLHV
LQ,QGLD
$ODUJHSDUFHORIODQGZDVRIIHUHGLQ
0XPEDLE\WKH5DLOZD\VDQGVROGRQ
DXFWLRQ

156



5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


7\SHRI([WHUQDO
,QYHVWPHQWLQ
5DLOZD\V

,QWHUQDWLRQDO([DPSOH

,QGLDQ([DPSOH

 6WDWLRQ
GHYHORSPHQW
IRUXUEDQUDLO

,Q+RQJ.RQJWKHPHWURFRPSDQ\075
&RUSRUDWLRQDVRIKDGFRPSOHWHG
GHYHORSPHQWVDWVWDWLRQVJHQHUDWLQJ
VRPHKRXVLQJXQLWVDQGPRUHWKDQ
PLOOLRQVTPRIFRPPHUFLDOVSDFH
JHQHUDWLQJDQRSHUDWLQJSURILWRI86
ELOOLRQWRVXSSRUWRSHUDWLRQV

'HOKL0HWUR5DLO&RUSRUDWLRQ '05& 
KDVDSROLF\RIUHYHQXHJHQHUDWLRQE\
VHOOLQJODQGDURXQGVWDWLRQVDVGRPHWUR
UDLOZD\VLQRWKHUFLWLHV

 0DUNHW
ILQDQFLQJRI
5DLOZD\
&RPSDQLHVE\
DWWUDFWLQJ
SULYDWH
LQYHVWRUVWREX\
ERQGVRUHTXLW\
VKDUHVLQ
UDLOZD\V

,QWKH&DQDGLDQJRYHUQPHQWVROG
VKDUHVRISXEOLFO\RZQHG&DQDGLDQ
1DWLRQDOIRU86'EQ
,QWKH86*RYHUQPHQWVROG
SHUFHQWRIJRYHUQPHQWRZQHG&RQUDLOWR
SULYDWHLQYHVWRUVIRU86'EQ

&21&25WKHFRQWDLQHUVHUYLFHVRSHUDWRU
LQ,QGLDLVSXEOLFO\OLVWHGZLWKIRUHLJQ
KROGLQJDQGDQRYHUDOOPDUNHW
FDSLWDOL]DWLRQRI86'EQ



  ,Q WKH IXWXUH KRZHYHU ,5 FRXOG EH IXQGHG WKURXJK ,5)& LQ D YDULHW\ RI ZD\V )LUVW
,5)& FDQ LVVXH VHFXUHGXQVHFXUHG ERQGV VXEMHFW WR DSSURYDO E\ WKH 5%, +RZHYHU
,5)&V OHYHUDJH ZLOO JR XS XQOHVV LW LV UHFDSLWDOL[HG DSSURSULDWHO\ 7KH FXUUHQW 1HW
:RUWK )<   LV 5V  FURUH DQG OHYHUDJH LV [ 7KLV PHDQV WKDW ,5)& ZRXOG
UHTXLUH DQ HTXLW\ LQIXVLRQ RI 5V  FURUH LI LW ZHUH WR ERUURZ DQ DGGLWLRQDO 5V
FURUH7KHHTXLW\LQIXVLRQFDQEHIDFLOLWDWHGWKURXJKWKH1DWLRQDO,QYHVWPHQWDQG
,QIUDVWUXFWXUH )XQG 1,,)  6HFRQG ,5)& FDQ XVH LQFUHPHQWDO EDODQFH VKHHW JURZWK WR
IXQG5DLOZD\VSURMHFWVZLWKORZHUYLVLELOLW\RIGLUHFWUHWXUQVORQJHUSD\EDFNSHULRGVDQG
UHSD\PHQWFDSDFLW\+RZHYHULQWKLVFDVHGHSHQGLQJRQWKHPDUNHWVFUHGLWSHUFHSWLRQ
RI ,5)& *2, ILVFDO VXSSRUW WR ,5 FRXOG EH XVHG DV D EDFN VWRS $ ODUJH FDSLWDO
HQKDQFHPHQW IRU,5)&ZLOOHQDEOH LW WR UDLVH PRUHUHVRXUFHV EXW WKHUH LV RQO\VR PXFK
WKDWFDQEHGRQHWKURXJK,5)&
7DEOH6RXUFHRI)XQGV 5VFURUHV 

6RXUFH











*URVV%XGJHWDU\6XSSRUW











,QWHUQDO5HVRXUFHV











,5)&%RUURZLQJ











,5)&5HSD\PHQWV














Italsoneedstobementionedthatallmeasures/instrumentsarenotscalable.Instrumentssuchas54ECprovidelimited
mobilizationuptoINR1,000CR.Intereston54ECis6%p.a.forathreeyeartenor,andthelimitisRs.50lakhsp.a.Thelimit
canbesoughttobeincreasedtoINR1CR.Also,investmentsbycertaincategoriesofinvestors,namelyEPFO,LIC,etc.,are
limitedbythenetworthoftheissuer.However,SovereignGuaranteescaneasethisrestriction.

157



5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

 7KLV &RPPLWWHH IHHOV WKDW WKHUH LV D QHHG WR WDS RWKHU H[WUD EXGJHWDU\ VRXUFHV OLNH WKH
PXOWLODWHUDO IXQGLQJ DJHQFLHV ,5 QHHGV WR SURYLGH IRU FDSLWDO LQYHVWPHQWV LQ FULWLFDO
SURMHFWVWKDWZRXOGLQFUHDVHLWVUHYHQXHV+RZHYHURZLQJWRWKHKLVWRULFDOEDJJDJHRID
ODUJH VKHOI RI SURMHFWV ULGGOHG ZLWK WLPH DQG FRVW RYHU UXQV DQG FRQWLQXHG SLHFH PHDO
DOORFDWLRQV,5QHHGVWR FKDQJHLWVLQYHVWPHQWVWUDWHJ\WKURXJKULQJIHQFHGLQYHVWPHQWV
LQ +LJK <LHOG 3URMHFWV  6RPH RI WKHVH FDQ EH IXQGHG WKURXJK WKH PXOWLODWHUDO IXQGLQJ
DJHQFLHV ZKRZRXOGDOVRGRWKHLURZQGXHGLOLJHQFHRIWKHSURMHFW ZLWKWKHSURYLVRRI
WDNHRXW ILQDQFLQJ WKURXJK ORQJWHUP ORZHU LQWHUHVW UDWH IXQGV IURP VD\ LQVXUDQFH
FRPSDQLHV DQG SHQVLRQ IXQGV   7KH IXQGV ERUURZHG IURP WKH PDUNHW VKRXOG EH XVHG
H[FOXVLYHO\IRUFDSDFLW\JHQHUDWLRQDQGQRWGLYHUWHGIRUDQ\DVVHWUHSODFHPHQWV 

)LJXUH,5)&V6KDUHRI7RWDO3ODQ2XWOD\RI,QGLDQ5DLOZD\V



 6HYHUDO 368V OLNH 071/ '9& )&, DQG $LU ,QGLD KDYH UDLVHG IXQGV EDFNHG E\ DQ
XQFRQGLWLRQDO DQG LUUHYRFDEOH JXDUDQWHH IRU VHUYLFLQJ ERWK LQWHUHVW DQG SULQFLSDO
SD\PHQWV7KLVGRHVQRWKDYHDGLUHFWLPSDFWRQWKHILVFDOGHILFLWDOWKRXJK*2,UHSRUWV
WKH RXWVWDQGLQJ JXDUDQWHH DPRXQWV DQG WKLV LV IDFWRUHG LQ E\ UDWLQJ DJHQFLHV LQ WKHLU
UHYLHZRIWKH6RYHUHLJQ5DWLQJ7KHLVVXHFDQEHXQVHFXUHGDQGWKHLQVWUXPHQWFDQEH
FODVVLILHGXQGHU,QIUDVWUXFWXUHDQGKHQFHFDQEHPDGHDQLQYHVWLEOHDVVHWXQGHUVHFWLRQ
 K  RI ,5'$ 7KLV FDQ DOVR EH PDGH D SHUPLWWHG LQYHVWPHQW XQGHU WKH 6WDWH /RDQ
FDWHJRU\ IRU 3URYLGHQW )XQGV  6LJQLILFDQW ),, GHPDQG FRXOG EH H[SHFWHG IRU VXFK DQ
LQVWUXPHQW VLQFH WKH UHFHQW 071/ LVVXDQFHV ZHUH DW WKLQ VSUHDGV RI ESV DQG ESV
*2,FDQLVVXHVSHFLDOUDLOERQGVLQOLHXRIFDVKVXEVLG\OLNHLWKDVLQWKHSDVWIRU)&,
RLOFRPSDQLHVDQGIHUWLOL]HUFRUSRUDWLRQV7KHVHERQGVDUHUHSRDEOHDQGFODVVLILHGXQGHU
VRYHUHLJQFDWHJRU\IRU3URYLGHQW)XQGV1HW2EOLJDWLRQVIRUVHUYLFLQJWKHVHERQGVUHVWV
ZLWK *2, KHQFH GHEW VHUYLFH LV IDFWRUHG LQ WKH *2,V DQQXDO ERUURZLQJ SURJUDPPH
158



5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

7KHVHERQGVFDQDOVRDKDYHORQJWHQRUVZKLFKZLOOVHUYHWKHSXUSRVHRIGHIHUULQJWKH
UHGHPSWLRQ LQOLQHZLWKSURMHFWSD\EDFN7\SLFDOSULFLQJIRUWKHVHERQGVLV W\SLFDOO\D
IHZ EDVLV SRLQWV KLJKHU WKDQ WKH XQGHUO\LQJ *6HF DQG VRPHWLPHV VLPLODU WR 6WDWH
*RYHUQPHQW VHFXULWLHV $ YDULDWLRQ WKDW KDV QRW EHHQ WULHG \HW FRXOG EH D WD[IUHH
VWDWXV ZLWK FRUUHVSRQGLQJO\ ORZHU SULFLQJ 7KLV PD\ HQDEOH UDLVLQJ VLJQLILFDQW DPRXQWV
IURP FRUSRUDWHV DQG +1,V %RWK WKHVH LQVWUXPHQWV FDQ EH XVHIXO LQ VPRRWKHQLQJ WKH
SURILOHRI,5VSHQVLRQSD\PHQWV%XWWKHVHERQGVPXVWPDNHFRPPHUFLDOVHQVHDQGQRW
VLPSO\ WUDGH RII IXWXUH OLDELOLWLHV DJDLQVW FXUUHQW H[SHQGLWXUH 1RU VKRXOG *2, YLRODWH
)5%0SULQFLSOHVLQWKHSURFHVV

 7D[IUHH ERQGV 7D[IUHH UDWHV KDYH GHFUHDVHG VXEVWDQWLDOO\ VR IDU LQ )< 7KH
DOORFDWLRQRIWKHVHERQGVFRXOGEHJLYHQSULPDULO\WR,5)&DQG,5ZLOOEHQHILWIURPWKLV
VXEVLG\VLQFH,5)&FKDUJHVDIL[HGVSUHDGVRIESV53*2,UHYHQXHVZLOOEHPDUJLQDOO\
DIIHFWHG WR WKH H[WHQW RI ORVV RQ ,QFRPH 7D[ RQ &RUSRUDWH+1, LQYHVWPHQW LQ WKHVH
ERQGV )XUWKHU PRELOL]DWLRQ FDQ EH HQDEOHG E\ UHOD[LQJ DSSOLFDELOLW\ RI 6HFWLRQ D RI
WKH,7$FWWR,QVWLWXWLRQDO,QYHVWRUV RQO\IRU,5)&DQG0LQLVWU\RI5DLOZD\V639V 



 =HURFRXSRQERQGV7KHVHDUHERQGVZKHUHERWKWKHLQWHUHVWDQGSULQFLSDOUHSD\PHQWDUH
LQEXOOHWIRUPHJ1$%$5'%KDYLVK\D1LUPDQ%RQGV,WLVVXLWDEOHIRUSURMHFWVZLWKD
ORQJJHVWDWLRQSHULRGDQGEDFNHQGHGFDVKLQIORZV,WSURYLGHVEHQHILWRIORZHU&DSLWDO
*DLQVHYHQIRULQVWLWXWLRQDOLQYHVWRUVLIGHILQHGE\&%'7DV&DSLWDO$VVHW$GGLWLRQDOO\
WRDWWUDFW,QVXUDQFH)XQGVLWFDQEHFODVVLILHGDV6HF K ,5'$HOLJLEOH5%,UHVWULFWLRQV
RQ LQVWLWXWLRQDO SOD\HUV LQYHVWLQJ LQ ]HUR RU ORZ FRXSRQ ERQGV FRXOG EH H[HPSWHG
VSHFLILFDOO\ IRU ,5)& LQ YLHZ RI WKH VXSSRUW IURP 0LQLVWU\ RI 5DLOZD\V 6XFK ]HUR
FRXSRQ ERQGV WRR FRXOG DOVR EH YHU\ XVHIXO LQ VPRRWKHQLQJ ,5V SHQVLRQ SD\PHQW
SURILOH

6HFXULWLVDWLRQ,5)&KDVVXEVWDQWLDODQQXDOOHDVHUHFHLYDEOHVWKDWFDQEHVHFXULWL]HGDQG
PRYHG RII WKH ,5)& EDODQFH VKHHW LQ D WUXH VDOH ,W LV SRVVLEOH WR UDLVH FDVK XSIURQW
DJDLQVWWKHVHUHFHLYDEOHVVLQFHWKHVWUXFWXUHZLOOEHUDWHG$$$ 62 VLQFHUHFHLYDEOHVDUH
VRYHUHLJQ DQG WKH SULFLQJ ZRXOG EH VLPLODU WR $$$ DVVHWV 7KLV ZRXOG HQDEOH ,5)& WR
GHOHYHUDJHRUUDLVHPRUHUHVRXUFHVZLWKRXWDQHTXLW\LQIXVLRQ+RZHYHUWKLVPD\UHVXOW
LQFDVKIORZPLVPDWFKHVIRU,5)&DJDLQVWLWVGHEWVHUYLFHLQWKHIXWXUH0DUNHWDSSHWLWH
IRUDODUJHLVVXHRIWKLVVL]HFRXOGEHFKDOOHQJLQJDQGWKHXVHRIWKLVLQVWUXPHQWZLOOKDYH
WR EH JUDGXDWHG 7KH ODUJH LQVXUDQFH DQG SHQVLRQ ILUPV DUH SRVVLEOH LQYHVWRU IRU VXFK
VWUXFWXUHV $SDUW IURP WKLV LW PD\ EH FKDOOHQJLQJ WR VHFXULWLVH IXWXUH UHFHLYDEOHV IURP
SDVVHQJHU WLFNHW VDOHV RU IUHLJKW UHYHQXH )RU FXUUHQW ERRNLQJV RXWVWDQGLQJ UHFHLYDEOHV
ZRXOG EH ORZ +RZHYHU D SDUW RI VRPH W\SHV RI UHJXODU FDVK IORZ HJ IURP FRDO
VKLSSHUV OLNH 173& DQG &,/ FRXOG EH VWDEOH DQG VHFXUH HQRXJK WR VHFXULWLVH ,5 FDQ
FKDUJHRQ(VFURZ$FFRXQWIRU)XWXUHUHFHLYDEOHVDVVXSSRUWPHFKDQLVP%DVHGRQWKLV



Issuancesoftaxfreebondsbyotherinstitutionshavenotnecessarilyledtoareductionintheirlendingrates.

159



5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

,5FDQLVVXH1&'VRQVWDQGDORQHEDVLVEDFNHGE\VWUXFWXUHGSD\PHQWPHFKDQLVPZKHUH
LQ FDVH RI D VKRUWIDOO ,5 FDQ UHSOHQLVK IXQGV LQ WKH (VFURZ DFFRXQW 7KLV ZLOO EHFRPH
HYHQ PRUH XVHIXO RQFH WKH RSHUDWLQJ UDWLR EHJLQV WR IDOO DQG VXUSOXVHV DUH JHQHUDWHG ,W
PD\DOVREHXVHIXOWRSLORWWKHVHFXULWL]DWLRQRIVDYLQJVIURPHOHFWULILFDWLRQSURMHFWVDVD
ZD\RIPRQLWRULQJWKHH[SRVWYLDELOLW\RIWKHVHSURMHFWV7KHVDYLQJVGXHWRGHFUHDVHLQ
IXHO XVH FRXOG EH SXW LQ D IXQG DV DOVR D VKDUH RI LQFUHDVHG WUDIILF UHYHQXHV RQ WKDW
VHFWLRQ:LWKUHDVRQDEOHEDFNVWRSVIURP,5WKHUHVKRXOGEHDSSHWLWHIRUVXFKDVWUXFWXUHG
SURGXFW

 ,QWHUQDWLRQDO 5XSHH %RQGV ,)& UDWHG $$$ E\ 6 3  UHFHQWO\ LVVXHG RIIVKRUH ,15
0DVDODERQGVLHUXSHHGHQRPLQDWHGERQGVVROGWRLQWHUQDWLRQDOLQYHVWRUV7KHLVVXH
VL]H ZDV 5V  FURUH IRU D  \HDU WHQRU SULFHG DW OHYHOV RI  UXSHH  VHPL
DQQXDOL]HGUDWHZKLFKLVORZHUWKDQWKHUDWHDWZKLFK*2,ERUURZVLQ,QGLD3URFHHGV
IURPLVVXDQFHRIWKHVHERQGVDUHWRILQDQFHOHQGLQJWRLQIUDVWUXFWXUHDVVHWVLQ,QGLD7KLV
DOVR PLWLJDWHV FXUUHQF\ ULVN 2IIVKRUH OLVWLQJ SRWHQWLDOO\ DOORZV IRUHLJQ LQYHVWRUV WR ELG
DJJUHVVLYHO\  $V %R[  VKRZV ,)& GRHV OHQG DQG HYHQ LQYHVW LQ 6WDWH 2ZQHG
(QWHUSULVHV HVSHFLDOO\ LQ QHWZRUN LQGXVWULHV WKDW DUH QDWXUDO PRQRSROLHV DQG LQ
RUJDQL]DWLRQV WKDW DUH WU\LQJ WR WUDQVLWLRQ IURP JRYHUQPHQW IXQGLQJ WR commercial
funding - thereby introducing it to the discipline of market based financing6REHLQJD
QHWZRUNPRQRSRO\,5FRXOGHQJDJHZLWK,)&WRH[SORUHWKHSRVVLELOLW\RIUDLVLQJIXQGV
WKURXJK LQWHUQDWLRQDO UXSHH ERQGV  $'% DOVR KDV UHFHQWO\ LVVXHG UXSHH GHQRPLQDWHG
ERQGV LQ WKH LQWHUQDWLRQDO PDUNHW DW VLPLODU UDWHV WKRXJK D VPDOOHU LVVXH IRU D VKRUWHU
WHQRU *LYHQ WKH VXFFHVV RI WKHVH LQLWLDO RIIHULQJV PRUH DUH OLNHO\ WR IROORZ WKRXJK
PDUNHWDSSHWLWHPD\HYROYHJUDGXDOO\
Box:IFCsInvestmentinStateOwnedEnterprises(SOEs)
IFC (International Finance Corporation) is usually thought of the World Bank Groups
private sector lending arm.  However, it does also finance SOEs, both at the state and
national level, and through both equity and debt. This is especially so in the case of
natural monopolies, like power transmission networks. Rail track infrastructure would
appeartobeagoodfittoo.
Recently in India, the IFC has financed the national power transmission utility through
both debt and equity support. In addition to USD 20 million in equity, it proposes to
providePOWERGRIDuptoUSD100millioninAloansandanotherUSD300millioninB
loans (syndications). It is justified by the IFC as enabling POWERGRID to progressively
reduce sovereign guarantee support and tap international commercial sources of
financingcurrentlynotavailableforlongtenorsasrequiredforinfrastructurefinancing.
IFC has also financed a statelevel SOE like Maharashtra State Electricity Transmission
Company Ltd. (MSETCL), also a power transmission utility. The proposed investments




 


160



5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

fromIFCareexpectedtohelpenhancethecommercialorientationofMSETCL,tohelpit
transition (at least partially) from sovereign guaranteed funding, including from the
World Bank, to market based financing, involving commercial due diligence, financial
covenants and security creation. IFCs financing will also send a signal that MSETCL can
attractcommercialfinancingforlongtenorsandtherebymakeitmoreattractiveforlocal
funding.
In both the above examples, there are strong similarities to the situation of IR, viz. the
network character, the transition from sovereign sources to commercial funding, the
needforlongtermfinanceandthepositivesignalingeffectsofsuchaninvestment.IFCs
willingnesstolendtoMSETCLalsobodeswell,giventhepossibilityofjointventuresofIR
withstategovernments.

([WHUQDO)LQDQFLQJWKURXJK8VHRI$VVHWV
 /DQGDQG5(,7,5FDQOHYHUDJHRZQHUVKLSRIRQHRIWKHODUJHVWODQGEDQNVVSUHDGDFURVV
WKH FRXQWU\ DV ZHOO DVRWKHU IL[HG LPPRYDEOH SURSHUWLHV OLNH LWVKRXVLQJ FRORQLHV HWF
,GHQWLILHGLPPRYDEOHSURSHUWLHVFDQEHWUDQVIHUUHGWRDQ639ZKLFKFDQEHVWUXFWXUHGDV
D 5(,7 5HDO (VWDWH ,QYHVWPHQW 7UXVW  ZKROO\ RZQHG E\ ,5 RU LQ FRQMXQFWLRQ ZLWK
GRPHVWLFILQDQFLDOLQVWLWXWLRQV&RQFRPLWDQWO\DQLQGHSHQGHQWH[SHUWDJHQF\ZRXOGEH
LGHQWLILHG IRU YDOXDWLRQ DV ZHOO DV DVVHW PDQDJHPHQW IRU WKH 639  7KLV DJHQF\ XQGHU
JXLGDQFHRIWKH%RDUGRI7UXVWHHVZRXOGGHWHUPLQHKRZWKHVHSDUFHOVZLOOEHRIIHUHGWR
GHYHORSHUV LQ WHUPV RI VL]LQJ RI LQGLYLGXDO SDUFHOV HQGXVHV SUHVFULEHG UHVWULFWHG HWF
7KHVHFRXOGEHLQWKHIRUPRI\HDUVOHDVHV-'$RZQGHYHORSPHQWHWF7KLV639FDQ
LVVXH LQVWUXPHQWV DJDLQVW VHFXULW\ RI WKHVH DVVHWV  $SSOLFDEOH LQYHVWRU VHJPHQWV ZRXOG
WKHQGHSHQGRQUDWLQJDVVLJQHGWRWKH6397KH639ZRXOGDOVRQHHGFHUWDLQPLQLPXP
QHWZRUWKLQIXVLRQE\,5ZKLFKLVDNH\UHTXLUHPHQWIRULQYHVWRUVWRHVWDEOLVKLQYHVWPHQW
OLPLWV$OVROHJDOLVVXHVVXFKDVWKHWUDQVIHURIOHDVHGDVVHWVQHHGWREHDVFHUWDLQHG)RU
WKLV 639 WRREWDLQ DGXDO $$$ UDWLQJ ZLWK [ DVVHW FRYHU D &RPIRUW /HWWHU RU EDFN
VWRSIURP*2,PD\EHUHTXLUHGWRSURYLGHFRPIRUWLQFDVHDVVHWVDOHVORQJWHUPOHDVHV
DUH XQDEOH WR UHDOL]H UHTXLUHG DPRXQW 7KH LVVXH SULFLQJ FDQ EH VLPLODU WR $$$ UDWHG
368EHQFKPDUNV6(%,FDQEHUHTXHVWHGWRFRQVLGHUDORZHUWKUHVKROGRIRSHUDWLQJDVVHW
FULWHULD IRU WKH 5DLOZD\ 5(,7 7KLV ZLOO EURDGHQ WKH LQYHVWRU EDVH DQG SURYLGH UHWDLO
LQYHVWRUV DQRWKHU DYHQXH RI LQYHVWPHQW ,5 FDQ DOVR WUDQVIHU LPPRYDEOH DVVHWV WR D
UDLOZD\RZQHG6397KLVFDQLQFOXGHKRXVLQJFRORQLHVRIILFHVSDFHVVWDWLRQVHWF,WFDQ
WKHQUHQWWKHVHSUHPLVHVEDFNIURPWKH639ZKLFK FDQWKHQVHFXULWL]H WKHUHQWDOV LQD
5(,7VWUXFWXUH&XUUHQWO\WKHJHDULQJOLPLWIRU5(,7VLQ,QGLDLVVHWDW
 6WDWLRQ 'HYHORSPHQW 6WDWLRQ GHYHORSPHQW LV D VSHFLDO IRUP RIUHDO HVWDWH GHYHORSPHQW
2Q WKH &HQWUDO 5DLOZD\ LQ DVVRFLDWLRQ ZLWK &,'&2 WKH 6HDZRRGV VWDWLRQ LQ 1DYL
0XPEDLLVEHLQJGHYHORSHG&,'&2KDGDZDUGHGWKHFRQFHVVLRQWR/ 7LQ$SULO
EXWSHUPLVVLRQVIURPWKH&RPPLVVLRQHURI5DLOZD\6DIHW\FDPHDOPRVWIRXU\HDUVODWHU
/ 7 KDG DFTXLUHG  VT PHWUH RI ODQG IURP &,'&2 LQ FRQVLGHUDWLRQ RI D ORQJ
WHUPOHDVHSD\PHQWRI5VFURUH7KHUHLVSRWHQWLDOWRGHYHORSPLOOLRQVTIHHWRI
161



5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

XVDEOH VSDFH 7KH SURMHFW FRQVLVWV RI D PRGHUQ UDLOZD\ VWDWLRQ ODUJH IRUPDW UHWDLO DQG
HQWHUWDLQPHQW VSDFH PXOWLSOH[HV RIILFH FRPSOH[ DQG SUHPLXP FDWHJRU\ KRWHO DQG
VHUYLFHDSDUWPHQWVDQGSURMHFWUHYHQXHVDUHHVWLPDWHGDW5VFURUH,QWKLVPRGHO
/ 7ZLOOEXLOGWKHVWDWLRQKDQGLWEDFNWR&,'&2ZKLFKZLOOWKHQLQYLWH,5WROD\WKH
WUDFNV,QDUHODWHGVWUXFWXUHWKH1HZ0RWL%DJKUHVLGHQWLDOFRPSOH[LQ'HOKLZDVEXLOW
XVLQJSURFHHGVIURPWKHVDOHRIFRPPHUFLDOVSDFHLQDSDUWRIWKHDUHDWREHUHGHYHORSHG
2WKHU VXFK LQLWLDWLYHV KDYH EHHQ GRQH E\ 1%&& 7R EHJLQ ZLWK WKHVH PRGHOV FDQ EH
H[SORUHG IRU DOO QHZ VWDWLRQV HVSHFLDOO\ WKRVH LQ XUEDQ DUHDV +RZHYHU IRU WKLV WR EH
VXFFHVVIXO WKH SHUPLWWLQJ SURFHVV
QHHGV WR EH VWUHDPOLQHG $OVR DV Extractsfrom:NineLives:ThebirthofAvant
PHQWLRQHGODWHUWKHVHPD\EHEHVW gardeArtinNewChina
LPSOHPHQWHGDVMRLQWYHQWXUHVZLWK Undeterred by the lack of fruitful results the first
WKH VWDWH JRYHUQPHQW RU WKH time around, Fang LIjun approached the directors
FRPSHWHQW DXWKRULW\ IRU SODQQLQJ ofdistrictRailwayUnionwiththeideaofopeninga
SXUSRVHV,5KDG LQLWLDOO\SODQQHG Railway Advertising company. They were
WR WDNH XS UHGHYHORSPHQW RI  interestedinmyplan.TheproblemwasIwasonly
UDLOZD\ VWDWLRQV WR ZRUOGFODVV thinking in rudimentary terms, like how to set up
VWDQGDUGV WKURXJK 3XEOLF 3ULYDWH advertising boards that people would notice. He
3DUWQHUVKLSV 333  5DLOZD\ had not considered how to protect the idea and
VWDWLRQSURMHFWVZHUHWRLQFOXGH D  securethefranchise.Theintentionwastopostbill
UHGHYHORSPHQW RI WKH 5DLOZD\ boards along the Railway tracks, which was an
VWDWLRQ LQFOXGLQJ GHYHORSPHQW RI innovation for the (Chinese) times. It was funny
UHDO HVWDWH E  RSHUDWLRQ DQG thatalthoughthosedistrict(Railway)leaderswere
PDLQWHQDQFH RI WKH 5DLOZD\ completely institutionalised in their habits and
VWDWLRQ DQG F  FRQVWUXFWLRQ RI experience, for some benevolent reason they
EXLOGLQJ IRU XVH E\ WKH 5DLOZD\V appreciated initiative. So they offered money and
IRU LWV RIILFHV UHVW KRXVHV DQG negotiated the sites for the billboards when I
UHVLGHQWLDO
DFFRPPRGDWLRQ needed. I was able to focus on procuring clients
+RZHYHU WKHVH UDQ LQWR PDMRU and designingtheadvertisements. Itwentso well
KXUGOHV UHODWHG WR REWDLQLQJ thatpeoplebegantotakenotice.Thisinnovative
VWDWXWRU\ FOHDUDQFHV IURP WKH ORFDO idea was too good to be placed in the
DXWKRULWLHV DV ZHOO DV GXH WR inexperienced and powerless hands  meaning
H[WUHPH FRQJHVWLRQ LQ WKH those of someone who had no social position or
LQIUDVWUXFWXUH UHTXLUHG WR VXSSRUW network (Guanxi) to support him  of a young
WKHH[SDQVLRQ7KHVHOHFWLRQRIWKH upstart,andshutthestartupdown.ButFangLijun
VWDWLRQV QHHGV WR EH WDNHQ XS QRW had demonstrated the potential and the regional
railway unit heads wasted no time in re
XQLODWHUDOO\ E\ WKH 5DLOZD\V EXW
MRLQWO\ ZLWKWKH ORFDO VWDWHJRYHUQPHQWV ZKLFK LV FULWLFDO IRU WKH VXFFHVV RI WKH SURMHFW
7KLV &RPPLWWHH UHFRPPHQGV WKDW LQ UHVSHFW RI GHYHORSPHQW RI 5DLOZD\ 6WDWLRQV WKH
FRQFHSW RI ,5 GHYHORSLQJ PRGHOV DQG WKHLU LQYLWLQJ ELGV PD\ EH JLYHQ XS  ,QVWHDG
([SUHVVLRQRI,QWHUHVWPD\EHLQYLWHGIURPSRWHQWLDOXVHUVRIODQGDURXQGHDFKVWDWLRQDQG
D SDUWQHUVKLS DJUHHPHQW ZRUNHG RXW ZLWK VHOHFWHG ELGGHUV DIWHU IROORZLQJ D WUDQVSDUHQW
SURFHVV7KH6WDWH*RYHUQPHQWVPD\EHGUDZQLQWRWKLVSURFHVVDVDFWLYHSDUWLFLSDQWV
162



5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

 $QDFXWHSUREOHPEHLQJIDFHGE\,5LVWKHHQFURDFKPHQWWUHVSDVVLQJDQGRSHQGHIHFDWLRQ
LQWKHDUHDVDORQJWKHUDLOZD\WUDFNV7KHVHWUDFNVUXQIRUPLOHVDOWRJHWKHUZLWKRXWDQ\
SURWHFWLRQDJDLQVWWUHVSDVVLQJE\KXPDQVRUDQLPDOV&ORVHUWRFLWLHVDWWKHLURXWVNLUWV
WKHVH XQSURWHFWHG WUDFNV SRVH D ELJJHU PHQDFH DV WKHUH DUH D ODUJHU QXPEHU RI SHRSOH
UDQGRPO\ FURVVLQJ WKHP GHIHFDWLQJ DORQJ WKHP DQG HYHQ EXLOGLQJ KXWPHQWV
HQFURDFKPHQWVDORQJVLGH7KHVHLQGLYLGXDOVGRQRWUHDOLVHWKDWWKH\DUHHQGDQJHULQJWKHLU
RZQOLYHVDVZHOODVWKHOLYHVRIWKHSDVVHQJHUVLQWKHWUDLQV7KLV&RPPLWWHHWKHUHIRUH
UHFRPPHQGVWKDW,5PD\FRQVLGHUSXWWLQJXSELOOERDUGVDORQJWKHWUDFNVDIWHULGHQWLI\LQJ
WKH VHFWLRQV ZKLFK DUH SURQH WR WUHVSDVVLQJ DQG RSHQ GHIHFDWLRQ  7KLV ZLOO QRW RQO\
HQVXUH VRPH DGGLWLRQDO UHYHQXH IRU ,5 EXW DOVR DFW DV D SUHYHQWLYH IDFDGH DJDLQVW WKH
SUREOHPVGHVFULEHG7KHELOOERDUGVZRXOGDOVRKHOSEORFNH\HVRUHVSRWVDQGDWWKHVDPH
WLPHDWWUDFWWKHDWWHQWLRQRIWKHWUDLQSDVVHQJHUV


 6DOH DQG /HDVH %DFN RI 1RQ/DQG $VVHWV ,5 KDV D QXPEHU RI RWKHU DVVHWV WKDW FDQ EH
OHYHUDJHGWRUDLVHUHYHQXH7ZRVXFKH[DPSOHVEDVHGRQH[LVWLQJSUDFWLFHDUH L UROOLQJ
VWRFNDQG LL WUDFN$VQRWHGDERYHUROOLQJVWRFNWRGD\LVDOPRVWHQWLUHO\OHDVHGIURPWKH
,5)& ZKLFK LVVXHV ERQGV WR ILQDQFH WKHLU SXUFKDVH +RZHYHU WKHUH LV DQ ROGHU
FRPSOHPHQWRIUROOLQJVWRFNWKDWLVQRWOHDVHG7KLVFRPSULVHGDVRI0DUFK
GLHVHOORFRPRWLYHVHOHFWULFORFRPRWLYHVFRDFKHVDQGZDJRQV7KLV
UROOLQJ VWRFN FDQ EH VROG WR ,5)& RU RWKHU OHDVLQJ FRPSDQLHV  DQG OHDVHG EDFN IURP
WKHP7KLVZRXOGJHQHUDWHUHVRXUFHVIRULQYHVWPHQWZKLFKFDQWKHQJHQHUDWHWKHUHYHQXH
WR VHUYLFH WKH OHDVH 7UDFN FDQ DOVR EH VLPLODUO\ VROG DQG OHDVHG EDFN ,QGHHG .RQNDQ
5DLO &RUSRUDWLRQ KDV HDUOLHU GRQH VXFK D WUDQVDFWLRQ 7KLV DJDLQ JHQHUDWHV LQYHVWLEOH
UHVRXUFHV +RZHYHU WKH NH\ KHUH LV WR HQVXUH WKH LQYHVWLEOH UHVRXUFHV DUH VSHQW RQ
SURGXFWLYH DVVHWV WKDW OHDG WR LQFUHDVHG UHYHQXH LQ WKH IXWXUH *LYHQ WKH IRFXV RI WKH
H[LVWLQJ EXGJHW RQ GRXEOLQJ JDXJH FRQYHUVLRQ HOHFWULILFDWLRQ VLJQDOOLQJ DQG GH
ERWWOHQHFNLQJWKLVFRXOGEHDQRSSRUWXQHPRPHQWWRXVHVXFKVWUDWHJLHV


6DOHRI(TXLW\DQGWKH&RQVROLGDWHG)XQGRI,QGLD,5KDVWKLUWHHQXQGHUWDNLQJVLQZKLFK
LWKROGVHLWKHUWKHHQWLUHRUDVXEVWDQWLDOVWDNH2IWKHVHRQO\&21&25LVOLVWHG7RGD\
WKH PDUNHW YDOXDWLRQ RI &21&25 LV 5V  FURUHV  RI ZKLFK LV KHOG E\ WKH
JRYHUQPHQW(YHQDGLVLQYHVWPHQWZRXOGIHWFK5VFURUHV6LPLODUO\WKHUHDUH
RWKHUFRUSRUDWHHQWLWLHVLQFOXGLQJ5,7(6,5&21,5&7&HWFZKLFKFDQEHOLVWHG$V
PHQWLRQHGHDUOLHU,5)&FDQDOVRVHHNLQYHVWPHQWIURPWKHQHZO\DQQRXQFHG1,,)2I
SDUWLFXODULPSRUWDQFHLVWKHVDOHRIHTXLW\LQ')&&WRHQWLWLHVVXFKDV173&DQG&,/VR
WKDWLWLVPDGHPRUHDXWRQRPRXVDQGFXVWRPHUIRFXVHG7KHLVVXHKHUHLVZKHWKHUVXFK
SURFHHGVZLOODFFUXHWRWKH,5(YHQWKRXJKWKHLQYHVWPHQWVLQWKHVHHQWLWLHVZHUHIURP
WKH,5EXGJHWLWLVSRVVLEOHWKDWGLVLQYHVWPHQWSURFHHGVZLOODFFUXHWRWKH&RQVROLGDWHG
)XQGRI,QGLD &), 7KLVLVVXHQHHGVWREHLQYHVWLJDWHGIXUWKHU+RZHYHULQWKLVFDVHLW
LV SRVVLEOH WR DJUHH ZLWK 0LQLVWU\ RI )LQDQFH WKDW SURFHHGV RI GLVLQYHVWPHQW LQ ,5
LQYHVWHGHQWLWLHVZRXOGDFFUXHWRWKH&),EXWZRXOGEHWUDQVIHUUHGWR,5DVSDUWRIWKH
DQQXDOEXGJHWDOORFDWLRQ

163



5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

5HVRXUFHJHQHUDWLRQWKURXJKMRLQWYHQWXUHV


 -RLQW 9HQWXUHV ZLWK 6WDWH JRYHUQPHQWV IRU VXEXUEDQ UDLO  &HUWDLQ DFWLYLWLHV RI ,5 DUH
VSHFLILFWRFHUWDLQJHRJUDSKLFDODUHDV6RPHRIWKHVHPD\EHQRQUHPXQHUDWLYHLQQDWXUH
ZKLOHEHLQJRIVRFLDOYDOXHWRWKHSRSXODWLRQRIWKDWJHRJUDSKLFDODUHD7KHVHLQFOXGHIRU
H[DPSOH WKH RSHUDWLRQ RI VXEXUEDQ DQG EUDQFK OLQH VHUYLFHV +RZHYHU RWKHU VXFK
DFWLYLWLHV HJ VWDWLRQ GHYHORSPHQW ZKHWKHU RU QRW LPSOHPHQWHG ZLWK SULYDWH
SDUWLFLSDWLRQ FDQ EH UHPXQHUDWLYH 7KHVH SURMHFWV RIWHQ QHHG WR EH FDUHIXOO\ DWWXQHG WR
ORFDO FRQGLWLRQV DQG DOVR VDWLVI\ PDQ\ ORFDO UHJXODWRU\ UHTXLUHPHQWV ,I WKHVH DUH
VHSDUDWHG DV VSHFLDO SXUSRVH YHKLFOHV 639V  LQYROYLQJ MRLQW YHQWXUHV -9V  ZLWK WKH
UHVSHFWLYHVWDWHORFDOJRYHUQPHQWVLWZLOOSHUPLWJUHDWHULQYROYHPHQWE\WKHVWDWHVLQWKH
JRYHUQDQFH DQG SURYLVLRQ RI WKLV VHUYLFH DQG SHUPLW LW WR EH SULFHG PRUH DSSURSULDWHO\
7KLV ZLOO DOVR EH LQ WKH JRYHUQPHQWV RYHUDOO VSLULW RI FRRSHUDWLYH IHGHUDOLVP $OUHDG\
SXUVXDQW WR WKH 0LQLVWHU RI 5DLOZD\V VWDWHPHQWV RQ WKH VXEMHFW D FHOO KDV EHHQ
HVWDEOLVKHGLQWKH5DLOZD\%RDUGWRH[SORUHSRVVLELOLWLHVRIVXFK-9V7KLVSURFHVVZRXOG
EH HYHQ HDVLHU LI DFFRXQWV RI VSHFLILF VHFWLRQV FRXOG EH VHSDUDWHG )RU H[DPSOH
FRQFRPLWDQWO\ ZLWK WKH PRYH WR FRPPHUFLDO DFFRXQWV DFFRXQWLQJ IRU DOO VXEXUEDQ
VHUYLFHV DQG LGHQWLILHG EUDQFK OLQHV FRXOG EH VHSDUDWHG RYHU WKH QH[W WZR \HDUV LQ
SUHSDUDWLRQIRULQYLWLQJVWDWHORFDOJRYHUQPHQWVDV-9SDUWQHUVIRUVXFKDFWLYLWLHV

-RLQW9HQWXUHVZLWK6WDWHJRYHUQPHQWVIRUORFDOUDLOZD\V,Q-DSDQORZGHQVLW\UDLOZD\
OLQHV DUH RSHUDWHG E\ VR FDOOHG 7KLUG 6HFWRU UDLOZD\ FRPSDQLHV ZKLFK DUH MRLQWO\
RZQHGE\WKHSXEOLFDQGSULYDWHVHFWRUV,QFDVHVZKHUHRSHUDWLRQVGRQRWFRYHUFRVWV
WKHSXEOLFVHFWRUVXEVLGL]HVWKHVHUYLFHWRPDNHLWDWWUDFWLYHWRWKHSULYDWHVHFWRULQYHVWRU
,Q-DSDQUHIRUPHGLWVKHDYLO\ORVVPDNLQJ-DSDQHVH1DWLRQDO5DLOZD\E\GLYLGLQJ
LW LQWR UHJLRQDO UDLOZD\V FUHDWLQJ D FRPPHUFLDO HQYLURQPHQW LQ ZKLFK WKH\ ZRXOG
RSHUDWHDQGWUDQVIHUULQJDFFXPXODWHGGHEWWRDVHWWOHPHQWFRPSDQ\$WILUVWWKHVWRFN
ZDV KHOG E\ WKH SXEOLF VHFWRU EXW DIWHU WKH\ EHJDQ VKRZLQJ SRVLWLYH ILQDQFLDO UHVXOWV
VKDUHV ZHUH SURJUHVVLYHO\ VROG WR SULYDWH LQYHVWRUV 7KH SULYDWL]DWLRQ ZDV FRPSOHWHG LQ
IRU-5(DVWIRU-5:HVWDQGIRU-5&HQWUDO,5KDVDOUHDG\VWDUWHG-9V
ZLWK VWDWHV VXFK DV ZLWK .DUQDWDND RQ WKH +DVVDQ 0DQJDORUH 5DLO &RUSRUDWLRQ 6LPLODU
HIIRUWV DUH DOVR RQ ZLWK RWKHU VWDWHV +HUH LW LV SRVVLEOH WKDW VRPH RI WKH XQHFRQRPLF
EUDQFK OLQHV WKDW KDYH KLJK ORFDO VDOLHQFH IRU WKH 6WDWH FRXOG EH VSXQ RII LQWR MRLQW
YHQWXUHVZLWK6WDWHJRYHUQPHQWV

 -RLQW YHQWXUHV ZLWK /DUJH 8VHUV DQG 3RUWV  ,5 368V DUH XQGHUWDNLQJ VHYHUDO SURMHFWV
ERWK ZLWKLQ WKH FRXQWU\ IRU ,5 DQG 1RQ ,5 FXVWRPHUV DV ZHOO DV IRU UDLOZD\ V\VWHP
DEURDG 7KHVH FRPSDQLHV KDYH DFTXLUHG FRQVLGHUDEOH H[SHUWLVH LQ WXUQ NH\ (3& 
H[HFXWLRQ RI FRQWUDFWV DQG VHHP WR SHUIRUP IDU EHWWHU WKDQ WKH,5V RZQ GHSDUWPHQWDO
H[HFXWLRQ WUDFN UHFRUG 7KHVH FRPSDQLHV KDYH VXUSOXV FDVK DQG VKRXOG EH LQGXFHG WR
WDNHXSFRPPHUFLDOO\ YLDEOH SURMHFWV RQ D WXUQNH\EDVLV HYHQ LQ SDUWQHUVKLSZLWKRWKHU
164



5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

SXEOLFVHFWRUXQLWV7KH UHSD\PHQW PHFKDQLVP FRXOG YDU\ IURP DQQXLW\ UHSD\PHQWV WR


D VWUHDP RI UHYHQXHV DWWULEXWDEOH WR WKH SURMHFW SURYLGHG WKH VDPH FDQ EH REMHFWLYHO\
DQG FOHDUO\ GHWHUPLQHG LQ D WUDQVSDUHQW PDQQHU 7KLV VKRXOG EH SRVVLEOH IRU VSHFLILF
FDUJR VXFK DV FRDO FHPHQW HWF )LQDQFLQJ RI (LJKW FDSDFLW\ HQKDQFHPHQW SURMHFWV
SURYLGLQJSRUWFRQQHFWLYLW\DQGFRDO FRQQHFWLYLW\KDYH KDVEHHQ VXFFHVVIXOO\WLHGXSDQG
ILQDQFLDOFORVXUHDFKLHYHGE\WKH6397KHVHDUHVKRZQLQ7DEOH+HUHLWLVSRVVLEOH
WKDWVRPHODUJHXVHUVRUSRUWWUXVWVPD\ZLVKWRLQYHVWLQOLQHVRQWKHLURZQUDWKHUWKDQ
WKURXJK WKH GHSRVLW ZRUNV URXWH WKDW LV FXUUHQWO\ WKH SUDFWLFH ,Q WKHVH FDVHV ,5 VKRXOG
IDFLOLWDWHWKHLUFRQQHFWLYLW\WRWKH,5QHWZRUNVLQFHLWZRXOGDWWUDFWWUDIILFWR,5ZLWKRXW
DGGLWLRQDOLQYHVWPHQWIURP,5LWVHOI

 ,QWKLVFRQQHFWLRQRQHVKRXOGPHQWLRQDSRLQWDERXWZRUNFKDUJHGSRVWV7KH0LQLVWU\RI
5DLOZD\V LV FRQWLQXRXVO\ H[SDQGLQJ SRVWV WKURXJK FUHDWLRQ RI ZRUN FKDUJHG SRVWV
7KRXJK *RYHUQPHQW JXLGHOLQHV YHU\ FOHDUO\ VSHFLI\ WKDW WKH FUHDWLRQ RI DQ\ -RLQW
6HFUHWDU\ DQG $GGLWLRQDO 6HFUHWDU\ SRVW QHHGV WKH FRQFXUUHQFH RI )LQDQFH 0LQLVWU\ ,5
FRQWLQXHV WR RSHUDWH DQ DE\VPDOO\ ODUJH QXPEHU RI VXFK ZRUNFKDUJHG SRVWV 7KLV
WHQGHQF\ WR LQIODWH FDGUHV QHHGV WR EH FXUEHG LPPHGLDWHO\ 7KRXJK WKH ZRUNFKDUJHG
SRVWV DUH RVWHQVLEO\ FUHDWHG IRU SURMHFWVVSHFLILF ZRUNV WR IDFLOLWDWH VPRRWK DQG WLPHO\
H[HFXWLRQ RI VDQFWLRQHG ZRUNV VRPH RI WKHP KDYH EHHQ FRQWLQXRXVO\ LQ H[LVWHQFH IRU
GHFDGHV QRZ 7KHUH LV D SURYLVLRQ IRU 'HSDUWPHQWDO  *HQHUDO ' *  FKDUJHV IRU
HVWDEOLVKPHQW LQ VDQFWLRQHG HVWLPDWHV $V RQ  WKHUH ZDV  ZRUN FKDUJHG
*URXS$DQG%OHYHOSRVWVLQ,5LQDGGLWLRQWRWKHUHJXODUVDQFWLRQHGFDGUHRI
SRVWV  D VWDJJHULQJ PRUH WKDQ  RI WKH UHJXODU 5DLOZD\ FDGUH DXWKRUL]HG E\ '237
DQG)LQDQFH0LQLVWU\,WLVDPDWWHURIFRQFHUQWKDWVXFKODUJHQXPEHURIZRUNFKDUJHG
SRVWVFRQWLQXHWRH[LVWLQ,5DWDOOOHYHOV:KDWLVRIPRUHFRQFHUQLVWKHIDFWWKDWVRPHRI
WKHVH SRVWV DUH DOVR XWLOL]HG IRU RSHUDWLRQ DQG PDLQWHQDQFH RI QHZ DVVHWV  7KH
DEHUUDWLRQVKDYHJRWDFFHQWXDWHGPDLQO\EHFDXVHLWLVFRPPRQO\SHUFHLYHGWKDWFUHDWLRQ
RI D ZRUN FKDUJHG HVWDEOLVKPHQW LV PXFK HDVLHU DV FRPSDUHG WR FUHDWLRQ RI UHJXODU
UHYHQXHFKDUJHGSRVWVZKLFKDWWUDFWVEDQRUGHUVRIWKH*RYHUQPHQWDQGZRXOGUHTXLUH
UHOD[DWLRQIURP WKHEDQ RUGHUVDWWKHOHYHORIWKH0LQLVWU\RI)LQDQFHRUWKH&DELQHWLQ
VRPH FDVHV :H IHHO WKDW WKH SUHVHQW VLWXDWLRQ LV QRW RSWLPDO DQG QHHGV WR EH UHFWLILHG
:LWKFRQVWUXFWLRQDFWLYLWLHVPRYLQJWRSURIHVVLRQDO368VH[FOXVLYHO\FUHDWHGIRUSURMHFW
H[HFXWLRQ KDUERULQJ VXFK D ODUJH ZRUN FKDUJHG HVWDEOLVKPHQW LV QRW MXVWLILHG DQG WKLV
&RPPLWWHH UHFRPPHQGV WKDW WKLV EH SURJUHVVLYHO\ GLVEDQGHG DQG WKH EDODQFH RIILFLDOV
VHQWRQGHSXWDWLRQWRWKH368VIRUSURMHFWH[HFXWLRQ


5HVRXUFH*HQHUDWLRQWKURXJK333


 ,5 GLG DWWHPSW VRPH IRUD\V LQWR 333 SURMHFWV IRU VHWWLQJ XS WZR QHZ /RFRPRWLYH
IDFWRULHVDW0DGKHSXUDDQG0DUKRZUDVWDWLRQGHYHORSPHQWDQGVRPH3RUWFRQQHFWLYLW\
SURMHFWVEXWPHWZLWKOLPLWHGVXFFHVV%DUULQJWKHSRUWFRQQHFWLYLW\SURMHFWVRWKHUVDUH
165



5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

\HWWRHYHQWDNHRII7KLVLQGLFDWHVDODFNRILQVWLWXWLRQDOFDSDFLW\DQGDSSHWLWHIRU333
,QWKHFDVHRISURGXFWLRQIDFLOLWLHVWKHLGHQWLILFDWLRQRIVSHFLILFORFDWLRQVOLNHLQWKHFDVH
RI 0DGKHSXUD DQG 0DUKRZUD DQG VRFLDO GHPDQGV HWF LV SUREDEO\ RYHUVSHFLI\LQJ WKH
FRQGLWLRQV IRU WKH SULYDWH VHFWRU DQG ZRXOG OHDG WR GHPDQGV IRU KLJKHU FRPSHQVDWLQJ
RIIWDNH JXDUDQWHHV ,PSOHPHQWLQJ WKHVH LQ D 333 VWUXFWXUH UDWKHU WKDQ DV ORQJWHUP
SULYDWH SURFXUHPHQW LV SUREDEO\ QRW VHQVLEOH ,QVWHDG LW PD\ EH EHWWHU WR VFDOH XS
SURMHFWVHLWKHUXVLQJDYDLODELOLW\EDVHGSD\PHQWVNQRZQLQ,QGLDDV%27$QQXLW\RUWKH
/395 VWUXFWXUH %27$QQXLW\ FDQ OHDG WR ZKLWH HOHSKDQW SURMHFWV VLQFH OHQGHUV DQG
FRQFHVVLRQDLUHV QHHG QRW FRQGXFW GXH GLOLJHQFH RQ XVDJH ULVN+RZHYHU VLQFH UDLOZD\V
UHYHQXHV DUHUHODWLYHO\DFFXUDWHO\PHDVXUHG/HDVW3UHVHQW9DOXHRI 5HYHQXH /395 
FRQWUDFWV DUHDQRWKHU RSWLRQ,Q/395 FRQWUDFWV WKH ELG LV EDVHG RQ WKH ORZHVW SUHVHQW
YDOXH GLVFRXQWHG DW D SUHDQQRXQFHG UDWH  RI WRWDO JURVV  UHYHQXH UHFHLYHG E\ WKH
FRQFHVVLRQDLUH  7KH FRQFHVVLRQ FRQWLQXHV XQWLO WKLV LV UHFHLYHG 7KH FRQFHVVLRQDLUHV
WDULIIVFDQHLWKHUEHDFWXDORUVKDGRZWDULIIVZKHUHWKHUHLVDGLYHUJHQFHEHWZHHQDFWXDO
WDULIIV FROOHFWHG IURP WKH XVHU DQG SD\PHQWV PDGH WR WKH FRQFHVVLRQDLUH 7KLV DOORZV
DFWXDOWDULIIVWREHDOWHUHGHJWRWDNHPDUNHWFRQGLWLRQVLQWRDFFRXQWZLWKRXWDIIHFWLQJ
WKHFRQFHVVLRQDLUHVFDVKIORZ$PDMRUDGYDQWDJHRIWKLVLVWKDWLWFRQYHUWVXVDJHULVNWR
ULVN RI FRQWUDFW GXUDWLRQ ZKLFK FDQ EH PDQDJHG E\ ILQDQFLDO LQVWLWXWLRQV  )XUWKHU E\
OLPLWLQJWKHVFRSHIRUUHQHJRWLDWLRQWRWKHUHPDLQLQJXQFROOHFWHGYDOXHRIWKH/395LW
GLVFRXUDJHV RSSRUWXQLVWLF EHKDYLRXU E\ ELGGHUV ,Q DGGLWLRQ VLQFH WKH SUHVHQW YDOXH LV
SURWHFWHGHYHQLIWKHWHUPLVYDULDEOHWKLVLVDQDVVHWWKDWZRXOGEHDFFHSWDEOHWRSHQVLRQ
DQGLQVXUDQFHIXQGV6LQFHWKHELGLVRQJURVVUHYHQXHWKLVDOVRVHOHFWVELGGHUVZLWKD
IDYRXUDEOHPL[WXUHRIDELOLW\WRH[HFXWHDWORZFRVWDQGDFFHSWUHODWLYHO\ORZHUPDUJLQV
$OVR UDWKHU WKDQ SUHVFULELQJ PRGHO FRQFHVVLRQ DJUHHPHQWV LI VWDWHV HQWHU LQWR MRLQW
YHQWXUHVWKH\FDQEHHQFRXUDJHGWRH[SHULPHQWZLWKDOWHUQDWLYHVVXFKDVPRGLILHG%27
$QQXLW\PRGHOVZKLFKVRPHDUHXVLQJIRUURDGSURMHFWV
7DEOH1R5DLOZD\639V
35&/
3LSDYD5DLO&R/WG 
3URMHFW&RVW5VFURUH

903/
9LUDPJUDP0HKHVDQD3URMHFW
/WG 
3URMHFW&RVW5VFURUH
+05'&
+DVVDQ0DQJDORUH5DLO'HY
&R 
3URMHFW&RVW5VFURUH
.XWFK5DLO&R
3URMHFW&RVW5VFURUH

xSHUFHQWHTXLW\E\0LQLVWU\RI5DLOZD\V
xSHUFHQWHTXLW\E\639SDUWQHUVEDODQFHE\GHEWIXQGLQJ
x2SHUDWLRQVDQGPDLQWHQDQFHE\:HVWHUQ5DLOZD\DW639VFRVW
x639WRUHFHLYHVKDUHRIHDUQLQJVLQDFFRUGDQFHZLWKWKHUXOHVRILQWHUUDLOZD\DSSRUWLRQPHQWRI
HDUQLQJVIUHLJKWWDULIIFROOHFWHG
x3URMHFWZDVH[HFXWHGE\WKH6SHFLDO3XUSRVH&RPSDQ\ 63& RQ%27EDVLV
x,5LVUHTXLUHGWRSD\WKHDQQXDODFFHVVFKDUJHVRIFURUHIRU\HDUV
x2SHUDWLRQVDQGPDLQWHQDQFHZLWK:HVWHUQ5DLOZD\
x3URMHFWHDUQLQJWREHUHWDLQHGE\,5
xSHUFHQWHTXLW\E\0LQLVWU\RI5DLOZD\V
xSHUFHQWHTXLW\E\639SDUWQHUVDQGRUEDODQFHE\GHEWIXQGLQJ
x2SHUDWLRQVDQGPDLQWHQDQFHE\6RXWK:HVWHUQ5DLOZD\DW639VFRVW
x639 WR UHFHLYH VKDUH RI HDUQLQJV LQ DFFRUGDQFH ZLWK WKH UXOHV RI LQWHUUDLOZD\
DSSRUWLRQPHQWRIHDUQLQJVIUHLJKWWDULIIFROOHFWHG
xSHUFHQWHTXLW\E\0LQLVWU\RI5DLOZD\V
xSHUFHQWHTXLW\E\639SDUWQHUVDQGRUEDODQFHE\GHEWIXQGLQJ
x2SHUDWLRQVDQGPDLQWHQDQFHE\:HVWHUQ5DLOZD\DW639VFRVW
x639 WR UHFHLYH VKDUH RI HDUQLQJV LQ DFFRUGDQFH ZLWK WKH UXOHV RI LQWHUUDLOZD\
DSSRUWLRQPHQWRIHDUQLQJVIUHLJKWWDULIIFROOHFWHG


55

Engel,Fischer,andGaletovic(1998,2000).

166



5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG




7DEOH1R5DLOZD\639VFRQWG

+35&/
+DULGDVSXU3DUDGLS5DLO&R
/WG 
3URMHFW&RVW5VFURUH
.5&/
.ULVKQDSDWQDP5DLO&R/WG 
3URMHFW&RVW5VFURUH

%'5&/
%KDUXFK'DKHM5DLOZD\&R
/WG 
3URMHFW&RVW5VFURUH
$65/
$QJXO6XNLQDGD5DLOZD\/WG 
3URMHFW&RVW5VFURUH


xSHUFHQWHTXLW\E\591/
xSHUFHQWHTXLW\639SDUWQHUVDQGRUEDODQFHE\GHEWIXQGLQJ
x2SHUDWLRQVDQGPDLQWHQDQFHE\5DLOZD\DW639VFRVW
x639 WR UHFHLYH VKDUH RI HDUQLQJV LQ DFFRUGDQFH ZLWK WKH UXOHV RI LQWHUUDLOZD\
DSSRUWLRQPHQWRIHDUQLQJVIUHLJKWWDULIIFROOHFWHG
xSHUFHQWHTXLW\E\591/ 368RI,5 
xSHUFHQWHTXLW\E\639SDUWQHUVDQGRUEDODQFHE\GHEWIXQGLQJ
x2SHUDWLRQVDQGPDLQWHQDQFHE\:HVWHUQ5DLOZD\DW639VFRVW
x639WRUHFHLYHVKDUHRIHDUQLQJVLQDFFRUGDQFHZLWKWKHUXOHVRILQWHUUDLOZD\
DSSRUWLRQPHQWRIHDUQLQJVIUHLJKWWDULIIFROOHFWHG
xSHUFHQWHTXLW\E\591/ 368RI,5 
xSHUFHQWHTXLW\E\639SDUWQHUVDQGRUEDODQFHE\GHEWIXQGLQJ
x2SHUDWLRQVDQGPDLQWHQDQFHE\:HVWHUQ5DLOZD\DW639VFRVW
x639WRUHFHLYHVKDUHRIHDUQLQJVLQDFFRUGDQFHZLWKWKHUXOHVRILQWHUUDLOZD\
DSSRUWLRQPHQWRIHDUQLQJVIUHLJKWWDULIIFROOHFWHG
xSHUFHQWHTXLW\E\591/ 368RI,5 
xSHUFHQWHTXLW\E\639SDUWQHUVDQGRUEDODQFHE\GHEWIXQGLQJ
x2SHUDWLRQVDQGPDLQWHQDQFHE\:HVWHUQ5DLOZD\DW639VFRVW
x639WRUHFHLYHVKDUHRIHDUQLQJVLQDFFRUGDQFHZLWKWKHUXOHVRILQWHUUDLOZD\
DSSRUWLRQPHQWRIHDUQLQJVIUHLJKWWDULIIFROOHFWHG


 7KHUH LV D QHHG WR UHORRN DW WKH HQJDJHPHQW ZLWK WKH SULYDWH VHFWRU ERWK IRUHLJQ DQG
GRPHVWLFLQ,57KLVLVQRWVLPSO\DPDWWHURIDOORZLQJEXWRIUHGHILQLQJWKHPDQQHULQ
ZKLFKEXVLQHVVZLWKWKHSULYDWHVHFWRUZLOOEHFRQGXFWHG7KH\FDQEULQJLQWHFKQRORJ\
FDSLWDODQGSURGXFWLYHPDQDJHPHQWSUDFWLFHVWRKHOSPRGHUQL]H,5LIWKHUHODWLRQVKLSLV
VXFFHVVIXOO\ PDQDJHG 6XFFHVVIXOO\ LQYLWLQJ SULYDWH VHFWRU SDUWLFLSDWLRQ KDV PDQ\
GLPHQVLRQV7KHSURFXUHPHQWSURFHVVVKRXOGLQYROYHDQQRXQFLQJDJJUHJDWHRIIWDNHIURP
,5 RYHU WKH QH[W IHZ \HDUV DQG VZLWFK IURP RQH \HDU FRQWUDFWV WR ORQJHU GXUDWLRQ
FRQWUDFWV7KLVZLOOIDFLOLWDWHLQYHVWPHQWVE\SURYLGLQJSUHGLFWDELOLW\DQGFHUWDLQW\WRWKH
SULYDWHVHFWRUDQGHQVXUHEHWWHUTXDOLW\DQGYHQGRUGHYHORSPHQW2QFHWKHSURFHVVHVDQG
PRUHLPSRUWDQWO\WKHUHODWLRQVKLSZLWKWKHSULYDWHVHFWRULVRQDPRUHHYHQNHHOWKHUHLV
QR UHDVRQ WR EHOLHYH WKDW IDU ODUJHU LQYHVWPHQWV FDQQRW EH DWWUDFWHG WR FRYHU D PRUH
H[WHQVLYH DUUD\ RI LQYHVWPHQW LQ LQIUDVWUXFWXUH SURGXFWLRQ RI JRRGV DQG GHOLYHU\ RI
VHUYLFHVDFURVVWKHUDLOZD\VHFRV\VWHP+RZHYHUWKHUHDUHWKUHHSUHUHTXLVLWHVIRUVXFK
HQWU\ WR EHFRPH DWWUDFWLYH DQG YLDEOH IRU WKH SULYDWH VHFWRU  )LUVW LQ LWV SURFXUHPHQW
SURFHVVHV,5GRHVQRWWDNHDGHTXDWHFDUHLQGUDIWLQJWKHWHFKQLFDOVSHFLILFDWLRQV6LQFH
HYHU\WKLQJ JHWV GHWHUPLQHG E\ WKH VXEVHTXHQW FRQVLGHUDWLRQ RI / WKLV OHDGV WR DSSOHV
EHLQJFRPSDUHGZLWKRUDQJHV7KLVQHHGVWREHDGGUHVVHGWRFUHDWHFDSDELOLW\ZLWKLQWKH
RUJDQL]DWLRQZLWKRXWVLGHDVVLVWDQFHLIQHFHVVDU\WRIUDPHVSHFLILFDWLRQVLQDQHHGEDVHG
PDQQHUDQGSUHFLVHO\DQGXQDPELJXRXVO\6HFRQGWKHUHPXVWEHSXWLQSODFHDV\VWHPRI
VZLWFKLQJIURPRQH\HDUFRQWUDFWVWRORQJHUGXUDWLRQFRQWUDFWV7KLVLVWUXHQRWRQO\RI
SURFXULQJUROOLQJVWRFNEXWRISURFXULQJHYHU\WKLQJ&RQWUDFWVRIORQJHUGXUDWLRQHQVXUH
EHWWHU TXDOLW\ DQG YHQGRU GHYHORSPHQW E\ RIIHULQJ EHWWHU DVVXUDQFH RI FRVW UHFRYHU\ RQ
XSIURQW LQYHVWPHQWV RI YHQGRUV 2I FRXUVH WKH RWKHU UHODWHG DVSHFW RI QRW VWLIOLQJ
FRPSHWLWLRQLQWKHIRUPRIQHZHQWUDQWVEHLQJDGGHGWRVXSSOLHUVOLVWZLOOQHHGWREHWDNHQ
FDUH RI WRR 7KLUG PRYLQJ EDFN WR SURFXULQJ UROOLQJ VWRFN ZKLOH WKHUH LV QR QHHG WR
JXDUDQWHH DQ DVVXUHG RIIWDNH WR D VSHFLILF FRPSDQ\ NHHSLQJ LQ YLHZ WKH LQKRXVH
167



5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

SURGXFWLRQ FDSDFLW\ DQG GHPDQG UHTXLUHPHQWV WKHUH LV QR UHDVRQ ZK\ ,5 FDQQRW SUH
DQQRXQFH WKDW D FHUWDLQ QXPEHU RI UROOLQJ VWRFN ZLOO EH SXUFKDVHG RYHU WKH QH[W IHZ
\HDUV7KDWJXDUDQWHHVDQRYHUDOOPDUNHWZLWKRXWDEX\EDFNFRPPLWPHQWIURPDVSHFLILF
FRPSDQ\


&RQFOXGLQJ&RPPHQWV


 5HILQDQFLQJ 3HQVLRQ 2EOLJDWLRQV  2QH RI WKH PDMRU LWHPV RI 5DLOZD\ UHYHQXH
H[SHQGLWXUH WRGD\ LV SHQVLRQV $V VKRZQ LQ )LJXUH  DOPRVW D ILIWK RI UHYHQXH
H[SHQGLWXUH LV DFFRXQWHG IRU E\ SHQVLRQV 7KLV \HDU D EXGJHW DOORFDWLRQ RI 5V 
FURUH RU DERXW  RI ZRUNLQJ H[SHQVHV KDV EHHQ PDGH WRZDUGV DSSURSULDWLRQ WR
SHQVLRQ IXQG DOPRVW DOO RI ZKLFK ZLOO EH H[SHQGHG RQ SD\RXWV +RZHYHU RQH RI WKH
FRQVHTXHQFHV RI PRYLQJ WR D GHILQHG FRQWULEXWLRQ SHQVLRQ VFKHPH DV FRPSDUHG WR WKH
SUHH[LVWLQJ GHILQHG EHQHILW VFKHPH LV WKDW LQ WKH GLVWDQW EXW SUHGLFWDEOH IXWXUH VD\ LQ
 ,5ZLOOKDYHDVLJQLILFDQWO\UHGXFHGDQGHYHQWXDOO\]HURSHQVLRQREOLJDWLRQDVWKH
FRKRUW RI SHUVRQQHO ZKR DUH HOLJLEOH WR UHFHLYH SHQVLRQ UHGXFHV ,QGHHG LI WKH
UHVWUXFWXULQJ\LHOGVVXLWDEOHUHVXOWVWKHREOLJDWLRQDVDVKDUHRIUHYHQXHVVKRXOGGHFOLQH
VXEVWDQWLDOO\ HYHQ HDUOLHU 7KH TXHVWLRQ LV ZKHWKHU WKLV FXUUHQW KXPS RI SHQVLRQ
REOLJDWLRQVDVDVKDUHRIH[SHQGLWXUHFDQEHVPRRWKHQHGRXWZLWKILQDQFLDOHQJLQHHULQJ
WKHUHE\ UHOHDVLQJ VXEVWDQWLDO DGGLWLRQDO UHVRXUFHV IRU LQYHVWPHQW DQG RSHUDWLRQDO
UHTXLUHPHQWV7KLVLVSRVVLEOH2QHVXFKVXJJHVWLRQLVH[SORUHGLQWKHER[WKDWIROORZV

 ,5KDVQRZUHFHQWO\FKDONHGXSDQDPELWLRXVLQYHVWPHQWSODQIRUWKHQH[W\HDUV 7DEOH
  LQ ZKLFK YHU\ VXEVWDQWLDO SULYDWH LQYHVWPHQW LV HQYLVDJHG %XLOGLQJ DQ LQVWLWXWLRQDO
FDSDFLW\IRUWLPHO\H[HFXWLRQRI333SURMHFWVWKXVDVVXPHVDJUHDWHUVLJQLILFDQFH7KLV
&RPPLWWHH UHFRPPHQGV WKDW IRU UDLVLQJ UHVRXUFHV IRU LQYHVWPHQWV DQ ,QYHVWPHQW
$GYLVRU\ &RPPLWWHH PD\ EH VHW XS FRQVLVWLQJ RI H[SHUWV LQYHVWPHQW EDQNHUV DQG
UHSUHVHQWDWLYHVRI6(%,5%,,')&DQGRWKHULQVWLWXWLRQV7KHH[LVWLQJDVVHWVRI,5PD\
EH OHYHUDJHG WR UDLVH UHVRXUFHV DQG LQVWLWXWLRQV FUHDWHG OLNH ,QYL7 1%)&V  7KH
PRGDOLWLHVE\ZKLFKUHWXUQVFDQEHVHFXUHGIRUVXFKLQYHVWPHQWVVKRXOGDOVRFRPHXQGHU
WKHSXUYLHZRIWKLV,QYHVWPHQW$GYLVRU\&RPPLWWHH

168



5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


Box6.7:RefinancingPensions


Source:IndianRailwayBudgetdocuments
A number of previous Committees have recommended that this pension liability should be borne, fully or partially, by the Union
government. However, this has not been accepted in the past. While efforts to pursue this avenue should continue, it is prudent to
exploreotheroptionstoaddressthisexpenditureobligation.
At the simplest level, a longterm bullet bond or a zerocoupon bond, as discussed earlier, i.e., a bond whose repayment (including
interest and principal) is at maturity can be issued to meet a part (the exact share would need to be determined through a detailed
modellingexercise)ofthecurrentpensionobligations.Thiswouldreducetheexistingobligationwhileincreasingtheobligationatatime
whentheclaimsonrevenueareless.Inlieuofbearingthepensionliability,thesebondscouldbeguaranteedbyGOIinordertoreduce
costs, and could also be made taxfree. The exact instrument can be more sophisticated and structured than a bullet bond, but
implementationofthisstrategywouldneedafewprioractions.
First, this would require an extensive actuarial modelling to forecast the pension obligations of IR for the next thirty year in order to
structure these instruments. Second, it would also require a vehicle such as a separate Railway Pension Fund. Third, IR would need to
committotransferfundsneededtomeetapartofthepensionobligations(setatalowershareofrevenuethancurrently)totheFundfor
an extended period of time, which can then raise the remaining resources required to meet the pension obligations for that year by
issuingstructuredinstruments,asabove,towhichpensionandinsurancefundscansubscribe.


7DEOH352326(',19(670(173/$1  
$PRXQW

,WHPV

5V,QFURUH 

1HWZRUN'HFRQJHVWLRQ LQFOXGLQJ')&(OHFWULILFDWLRQ'RXEOLQJLQFOXGLQJ



HOHFWULILFDWLRQDQGWUDIILFIDFLOLWLHV 
1HWZRUN([SDQVLRQ LQFOXGLQJHOHFWULILFDWLRQ 



1DWLRQDO3URMHFWV 1RUWK(DVWHUQ .DVKPLUFRQQHFWLYLW\SURMHFWV 



6DIHW\ 7UDFNUHQHZDOEULGJHZRUNV52%58%DQG6LJQDOOLQJ 7HOHFRP 



,QIRUPDWLRQ7HFKQRORJ\5HVHDUFK



5ROOLQJ6WRFN /RFRPRWLYHVFRDFKHVZDJRQVSURGXFWLRQ PDLQWHQDQFH 



3DVVHQJHU$PHQLWLHV



+LJK6SHHG5DLO (OHYDWHGFRUULGRU



6WDWLRQUHGHYHORSPHQWDQGORJLVWLFSDUNV



2WKHUV



727$/




169



5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG







The





Case

For


An




Independent




Regulator









5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIIRU0
0DMRU5
5DLOZD\3
3URMHFWVD
DQG5
5HVWUXFWXULQJR
RI5
5DLOZD\0
0LQLVWU\DQG5DLOZD\%RDUG

&KDSWHU7KH&DVHIRUDQ,QGHSHQGHQW5HJXODWRU


7KH)RUPV3ULYDWH(QWU\&DQ7DNH


 3ULYDWHVHFWRUSDUWLFLSDWLRQFDQHQKDQFHWKHSHUIRUPDQFHRIWKH5DLOZD\VHFWRUDVZHOO
DVWKDWRI,53ULYDWHSDUWLFLSDWLRQLVXVXDOO\EDVHGRQFRQWUDFWV:HOLVWEHORZVRPHRI
WKHZD\VLQZKLFKWKHSULYDWHVHFWRUFDQSOD\DODUJHUUROH


 D  6HUYLFH &RQWUDFWV  ,5 FDQ KDYH WKH SULYDWH VHFWRU SHUIRUP PDQ\ DFWLYLWLHV RQ WKH
EDVLV RI FRPSHWLWLYH ZHOOGHVLJQHG ORQJ WHUPV FRQWUDFWV IURP WKH FRQVWUXFWLRQ RI
LQIUDVWUXFWXUH WR PDQXIDFWXULQJ RI ZDJRQV WR PDLQWHQDQFH RI ORFRPRWLYHV WR WLFNHW
VDOHVDQGLQVSHFWLRQ3DNLVWDQ5DLOZD\VFRQWUDFWVRXWWLFNHWVDOHVDQGLQVSHFWLRQDQG
RQERDUGVHUYLFHVIRUWZROLQHVRXWRI/DKRUH 7KH FRQWUDFWRUSD\VDIL[HGUDWHWRWKH
UDLOZD\DQGWKHUHIRUHKDVDQLQFHQWLYHWRFROOHFWDVPXFKDVSRVVLEOH7KLVDUUDQJHPHQW
KDVUHGXFHGWKHSUHYLRXVO\KLJKOHYHORIWLFNHWOHVVWUDYHO2WKHUFRQWUDFWHGVHUYLFHVLQ
3DNLVWDQLQFOXGHOXJJDJHKDQGOLQJDQGSDUFHOVHUYLFH


 E 0DQDJHPHQW&RQWUDFWV +HUHVHYHUDOSULYDWHILUPVELGIRU2 0 RSHUDWLRQDQG
PDLQWHQDQFH FRQWUDFWVDQGWKHFKRVHQFRQWUDFWRUDVVXPHVUHVSRQVLELOLW\IRURSHUDWLRQV
DQGPDLQWHQDQFHRIDSDUWLFXODUDFWLYLW\RUHYHQDQHQWLUH5DLOZD\7KLVFDQEHGHVLJQHG
VXFKWKDWWKHFRPSHQVDWLRQLVEDVHGDWOHDVWSDUWO\RQUHVXOWV


 F /HDVLQJWRWKH3ULYDWH6HFWRU7KLVLVDOVRGRQHRQDFRPSHWLWLYHEDVLVEXWKHUHWKH
FRQWUDFWRUSD\VDIHHIRUWKHXVHRIIL[HGDVVHWV7KHOHDVHFRQWUDFWRUW\SLFDOO\ILQDQFHV
ZRUNLQJ FDSLWDO DQG UHSODFHPHQW RI VRPH DVVHWV WKHUHE\ WDNLQJ PRUH ULVN WKDQ 2 0
FRQWUDFWRUV7KHOHDVHFRQWUDFWRUJHWVPRUHDXWRQRP\SDUWLFXODUO\LQUHVSHFWRIFRQWURO
RYHU ZRUNLQJ FDSLWDO DQG DOO DVSHFWV RI VWDIILQJ DQG PDQDJHPHQW ,Q  WKH 6WDWH
5DLOZD\V RI 7KDLODQG FRQWUDFWHG WKURXJK D OHDVH DJUHHPHQW WR SULYDWH RSHUDWRUV WKH
SURYLVLRQ RI ORQJGLVWDQFH H[SUHVV SDVVHQJHU VHUYLFHV RQ WKUHH OLQHV ZKLFK ZHUH
SUHYLRXVO\ XQSURILWDEOH 7KURXJK LPSURYHG VHUYLFH TXDOLW\ WKH QHZ RSHUDWRUV FRXOG
DWWUDFWVHYHUDOURDGXVHUVSDUWLFXODUO\KLJKLQFRPHORQJGLVWDQFHFXVWRPHUVDQGLQWZR
\HDUVEHJDQWRHDUQVXEVWDQWLDOSURILWV


 G /HDVLQJIURPWKH3ULYDWH6HFWRU,QPDQ\FRXQWULHVWKHUHDUHSULYDWHFRPSDQLHVWKDW
EX\ HTXLSPHQW DQG OHDVH WKHP WR WKH 5DLOZD\V ,5 FUHDWHG D VXEVLGLDU\ WKH ,QGLDQ
5DLOZD\V )LQDQFH &RUSRUDWLRQ ,5)&  ZKLFK LVVXHG ERQGV WR SULYDWH LQGLYLGXDOV DQG
HQWLWLHVWREX\HTXLSPHQWDQGOHDVHLWWRWKH5DLOZD\V7KRVHZKRVXEVFULEHWR,5)&

56

ESCAP,Ibid.

171

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

ERQGVDUHQRGRXEWDVRXUFHIRUSULYDWHILQDQFLQJRI5DLOZD\VEXWWKH\KDUGO\ERWKHUWR
PRQLWRU WKH ULVNV RI ,5)& D JRYHUQPHQWRZQHG HQWHUSULVH 7KHUH LV \HW DQRWKHU
ZHDNQHVV RI WKLV V\VWHP QDPHO\ WKH ULVN HPEHGGHG LQ WKH EXVLQHVV RI EX\LQJ
HTXLSPHQWDQGOHDVLQJWKHPRXWWR5DLOZD\VVKRXOGLGHDOO\UHVLGHRXWVLGHWKHUDLOZD\V
QRWZLWKD5DLOZD\368


 H &RQFHVVLRQV $FRQFHVVLRQLVDFRQWUDFWEHWZHHQDFRPSDQ\DQGDJRYHUQPHQWWKDW
JLYHV WKH FRPSDQ\ WKH ULJKW WR RSHUDWH D VSHFLILF EXVLQHVV ZLWKLQ WKH JRYHUQPHQW
V
MXULVGLFWLRQ VXEMHFW WR FHUWDLQ FRQGLWLRQV 7KH FRQFHVVLRQDLUH XVXDOO\ KDV WR SD\ WKH
JRYHUQPHQWRQJRLQJIHHVWKDWPD\HLWKHUEHDIL[HGDPRXQWRUDSHUFHQWDJHRIUHYHQXHV
&RQFHVVLRQV DUH D IRUP RI OHDVH LQ ZKLFK WKH FRQWUDFWRU DJUHHV WR PDNH FHUWDLQ IL[HG
LQYHVWPHQWVDQGUHWDLQVWKHXVHRIWKHDVVHWVIRUDORQJHUFRQWUDFWSHULRGVRPHWLPHVXS
WR  \HDUV &RQFHVVLRQDLUHV IRU D VSHFLILF EXVLQHVV DUH FKRVHQ RQ WKH EDVLV RI D
WUDQVSDUHQWDXFWLRQSURFHVV


 I  -RLQW 9HQWXUHV  7\SLFDOO\ MRLQW YHQWXUHV LQYROYH SULYDWH SDUWQHU FRPSDQLHV
FRQWULEXWLQJ WR WKH GHYHORSPHQW FDSLWDO SODQQLQJ DQG PDQDJHPHQW H[SHUWLVH LQ WKH
GHYHORSPHQW RI ODQG RU RWKHU UHDO HVWDWH RZQHG E\ D 5DLOZD\ %ULWLVK 5DLO FUHDWHG D
3URSHUW\%RDUGWRGHYHORSVWDWLRQVSDFHLQFRQFHUWZLWKWKHSULYDWHVHFWRU


 J  3ULYDWH 2ZQHUVKLS  +HUH WKH FRQWUROOLQJ LQWHUHVW OLHV ZLWK WKH SULYDWH VHFWRU
([DPSOHVFDQEHIRXQGLQ6ZHGHQDQGWKH8QLWHG.LQJGRPZKHUHWKHULJKWWRSURYLGH
VHUYLFHVKDVEHHQIUDQFKLVHGWRSULYDWHO\RZQHGDQGRSHUDWHGWUDLQRSHUDWRUV7KHPRVW
LPSRUWDQWIHDWXUHRIWKLVPHWKRGLVWKDWWKHPDUNHWULVNUHVLGHVZLWKWKHSULYDWHVHFWRU
+RZHYHUZHUHLWHUDWHWKHSRLQWWKDWWKLV&RPPLWWHHGRHVQRWUHFRPPHQGSULYDWL]DWLRQ
LQWKHVHQVHRIVDOHRIHTXLW\IRU,5


3DVW$WWHPSWVWR$WWUDFW3ULYDWH(QWU\LQWR,5

 3ULYDWHVHFWRUSDUWLFLSDWLRQLQ,5KDVEHHQPXWHGSDUWLFXODUO\ZKHQFRPSDUHGWRRWKHU
VHFWRUV OLNH SRUWV WHOHFRP HOHFWULFLW\ DLUSRUWV DQG URDGV 6HYHUDO DWWHPSWV KDYH EHHQ
PDGH LQ WKH ODVW VHYHUDO \HDUV WR LQYROYH WKH SULYDWH VHFWRU SDUWLFXODUO\ LQ ZDJRQ
SURFXUHPHQW DQG OHDVLQJ IUHLJKW WUDLQV DQG FRQWDLQHU RSHUDWLRQV WHUPLQDOV DQG
ZDUHKRXVLQJ IDFLOLWLHV FDWHULQJ VHUYLFHV DQG RWKHU UDLO LQIUDVWUXFWXUH WKURXJK VFKHPHV
IUDPHG E\ WKH 0LQLVWU\ RI 5DLOZD\V 7KHUH DUH ULFK OHVVRQV WR EH OHDUQHG IURP WKHVH
PRVWO\ IDLOHG HIIRUWV +LJK FRVWV DQG ORZHU UHWXUQV SROLF\ XQFHUWDLQW\ ODFN RI D
UHJXODWRU WR FUHDWH D OHYHO SOD\LQJ ILHOG WKH ODFN RI LQFHQWLYHV IRU LQYHVWRUV DQG
SURFHGXUDORSHUDWLRQDO LVVXHV KDYH VLJQLILFDQWO\ UHVWULFWHG SULYDWH VHFWRU SDUWLFLSDWLRQ
6RPHRIWKHVHSDVWDWWHPSWVDWLQYROYLQJWKHSULYDWHVHFWRUDUHGHWDLOHGEHORZ


172

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

 :DJRQ,QYHVWPHQW6FKHPHV 2<:6:,6/:,6:/6 7KHOwn Your Wagon


Scheme, ODXQFKHG LQ ZDV DQ HDUO\ DWWHPSW WR WDS SULYDWH VHFWRU SDUWLFLSDWLRQ IRU
DXJPHQWLQJZDJRQVXSSO\LQ,58QGHUWKLVVFKHPHSULYDWHVHFWRUILUPVFRXOGSURFXUH
ZDJRQV HLWKHU WKURXJK ,5 RU GLUHFWO\ IURP DSSURYHG ZDJRQ EXLOGHUV RZQ WKHP DQG
OHDVH WKHP WR ,5 ,Q UHWXUQ ,5 SDLG DQ DQQXDO OHDVH FKDUJH ZKLFK ZDV OLQNHG WR WKH
SURFXUHPHQWFRVW7KLVVFKHPHKDVEHHQVXFFHVVLYHO\UHYLVHGDQGUHFDVWDVWKH:DJRQ
,QYHVWPHQW6FKHPHLQDQGWKH/LEHUDOL]HG:DJRQ,QYHVWPHQW6FKHPHLQ,Q
\HW DQRWKHU VFKHPH ZDV ODXQFKHG WR LQWURGXFH WKHFRQFHSWRIOHDVLQJ RI UDLOZD\
ZDJRQV 7KH UHYLVLRQV ZHUH DLPHG DW H[SDQGLQJ WKH VFRSHRISULYDWHSDUWLFLSDWLRQ DQG
ZHUH EDVHG RQ WKH OHVVRQV OHDUQHG IURP HDUOLHU VFKHPHV 'HVSLWH VHYHUDO DPHQGPHQWV
WKHVHVFKHPHVGLGQRWDFKLHYHVXFFHVVSDUWO\EHFDXVHRIGHOD\VRQWKHSDUWRI,5LQ D 
IRUPXODWLQJ QHZ VFKHPHV DQG E  SURYLGLQJ FODULW\ RQ YDULRXV DVSHFWV RI WKHVH QHZ
VFKHPHV  0RUHRYHU ,5V VWULQJHQW FRQGLWLRQV DQG WHGLRXV SURFHGXUHV IXUWKHU UHGXFHG
LQYHVWRULQWHUHVW


 &RQWDLQHU3ROLF\/LEHUDOL]DWLRQ &RQWDLQHU7UDLQ2SHUDWRUV 6LQFHLQFHSWLRQLQ
WKH &RQWDLQHU &RUSRUDWLRQ RI ,QGLD &21&25  KDV KDG D YLUWXDO PRQRSRO\ LQ WKH
FRQWDLQHU RSHUDWLRQ VHJPHQW LQ ,QGLD 7KLV ODVWHG WLOO  ZKHQ WKH *RYHUQPHQW
UHFRJQL]LQJ WKDW WKH 5DLOZD\V ZHUH FRQWLQXLQJ WR ORVH FRQWDLQHU WUDIILF WR WKH URDG
VHFWRU GHVSLWH WKH H[LVWHQFH RI &21&25 GHFLGHG WR DOORZ SULYDWH SOD\HUV WR REWDLQ
OLFHQVHVIRUUXQQLQJFRQWDLQHUWUDLQVRQWKH,5QHWZRUN7KHLQLWLDOUHVSRQVHWRWKHSROLF\
ZDVHQFRXUDJLQJZLWKRSHUDWRUVVLJQLQJDQDJUHHPHQWZLWK,5WRUXQFRQWDLQHUWUDLQV
LQWKHILUVW\HDURIUHJLVWUDWLRQ,QWKHVXEVHTXHQW\HDUKRZHYHUWKHQXPEHUFDPHGRZQ
WR WZR DV &21&25LPSRVHG UHVWULFWLRQV RQ WKH  FRQWDLQHU WUDLQ RSHUDWRUV IURP WKH
SUHYLRXV\HDUWRGREXVLQHVVZLWKLWVH[LVWLQJFXVWRPHUVDVDSUHFRQGLWLRQIRUDFFHVVLQJ
LWV WHUPLQDOV  )XUWKHU KXJH FRVWV UHJLVWUDWLRQ DFTXLULQJ ODQG DQG GHYHORSLQJ IDFLOLW\
KDXODJHFKDUJHVIRUXVLQJ,5IDFLOLWLHVHWF DQGVSHFLDOWUHDWPHQWWR&21&25 JLYHQ
WKDW ,5 KHOG  VWDNH LQ LW  EURXJKW GRZQ LQYHVWRU LQWHUHVW HYHQ IXUWKHU  7KH UHFHQW
VKDUSKLNHLQKDXODJHFKDUJHV DVKLJKDVIRUVRPHFRPPRGLWLHV E\,5KDVEHHQD
KXJHQHJDWLYHIRUWKHVHSULYDWHFRQWDLQHUWUDLQRSHUDWRUV7KHOHVVRQKHUHLVWKDWLQWKH
DEVHQFHRIDQLQGHSHQGHQWUHJXODWRULWLVQRWSRVVLEOHWRKDYHDOHYHOSOD\LQJILHOGIRU
SULYDWH SOD\HUV HVSHFLDOO\ ZKHUH D SXEOLFO\ KHOG FRPSDQ\ XQGHU WKH 0LQLVWU\ RI
5DLOZD\VLVRQHRIWKHFRPSHWLWRUV

 6SHFLDO )UHLJKW 7UDLQ 2SHUDWRU 6FKHPH 6)72   $ORQJ WKH OLQHV RI FRQWDLQHU WUDLQ
RSHUDWRUV WKH 0LQLVWU\ RI 5DLOZD\V LQWURGXFHG WKH 6SHFLDO )UHLJKW 7UDLQ 2SHUDWRU
6FKHPHLQ-XO\IRUFRPPRGLWLHVUHTXLULQJVSHFLDOL]HGZDJRQV7KLVVFKHPHDLPV
WRLQFUHDVHWKHVKDUHRI5DLOZD\VLQQRQFRQYHQWLRQDOWUDIILFVXFKDVEXONFHPHQWEXON
IHUWLOL]HUV IO\ DVK HWF ZKLFK UHTXLUH 63:V RU 6SHFLDO 3XUSRVH :DJRQV  7KLV SROLF\
SURYLGHV DQ RSSRUWXQLW\ WR ORJLVWLF VHUYLFH SURYLGHUV RU PDQXIDFWXUHUV WR LQYHVW LQ
ZDJRQVDQGXVHDGYDQWDJHVRI5DLOZD\WUDQVSRUWWRWLHXSZLWKHQGXVHUVDQGPDUNHWWKH
WUDLQVHUYLFHVRZQHGE\WKHPIRUUDLOWUDQVSRUWDWLRQRIWKHVHFRPPRGLWLHV7KLVVFKHPH
173

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

WRRIDLOHGWRGUDZDQ\LQYHVWRULQWHUHVWSDUWO\EHFDXVHLWIDYRXUHG,5DQGSDUWO\EHFDXVH
RISRRULPSOHPHQWDWLRQDWWKH]RQDODQGGLYLVLRQDOOHYHO7KH0LQLVWU\RI5DLOZD\VODWHU
UHOD[HG VHYHUDO FRQGLWLRQV WR PDNH LW PRUH LQYHVWRU IULHQGO\ LQ -XO\  LQFOXGLQJ
LQFUHDVLQJWKHUHEDWHSHULRGWR\HDUVDQGUHGXFLQJUHJLVWUDWLRQIHHV%XWLWLVXQOLNHO\
WR VXFFHHG LQ WKH DEVHQFH RI D ODFN RI WUXVW EHWZHHQ WKH SULYDWH VHFWRU DQG ,5 2QO\ D
WUXO\LQGHSHQGHQWUHJXODWRUFDQKHOSHVWDEOLVKWUXVW


 $XWRPRELOH)UHLJKW7UDLQ2SHUDWRU6FKHPH $)72 )XUWKHUWRLQFUHDVH,5VPDUNHW
VKDUH LQ WKH WUDQVSRUWDWLRQ RI DXWRPRELOHV WZRWKUHHZKHHOHUV FDUV DQG WUDFWRUV  E\
LQYLWLQJ SULYDWH SDUWLFLSDWLRQ D QHZ VFKHPH QDPHO\ WKH $XWRPRELOH )UHLJKW 7UDLQ
2SHUDWRU 6FKHPH $)72  ZDV LQWURGXFHG LQ -XO\  $W SUHVHQW OHVV WKDQ  RI
DXWRPRELOHV PRYH E\ WUDLQV ZLWK WKH UHPDLQLQJ PRYLQJ RQ WUXFNV PXFK ORZHU WKDQ
RWKHU JHRJUDSKLHV  RI WKH PRYHPHQW LQ WKH 8QLWHG 6WDWHV LV E\ WUDLQV  7KLV QHZ
SROLF\ZLOOIDFLOLWDWHEXONPRYHPHQWRIDXWRPRELOHWUDIILFE\UDLOIURPSURGXFWLRQKXEV
WRFRQVXPSWLRQFHQWUHV*LYHQOLPLWHGWDNHUVGXHWRH[FHVVLYHO\KLJKSULFLQJWKLVSROLF\
ZDV ODWHU WZHDNHG LQ 0DUFK  WR PDNH LW PRUH LQYHVWRUIULHQGO\ E\ DGGLQJ PRUH
FDUJR WRLQFOXGHVSDUHSDUWVNQRFNHGGRZQXQLWVRIDXWRPRELOHVDQGFDUVKHOOVDSDUW
IURP ILQLVKHG YHKLFOHV  RSHQLQJ WKH VFKHPH WR FDU PDNHUV DQG VLPSOLI\LQJ WKH UDWH
VWUXFWXUH0DUXWL/RJLVWLFVDQG$3/9DVFRUDUHWKHRQO\FRPSDQLHVZKRKDYHUHJLVWHUHG
DV$)72RSHUDWRUV


 6SHFLDO 3DUFHO 7UDLQ 2SHUDWRU 6FKHPH 6372   ,Q DQRWKHU DWWHPSW WR HQFRXUDJH WKH
SULYDWH VHFWRU IRU ZDJRQ SURFXUHPHQW DQG WR UHJDLQ PDUNHW VKDUH LQ QRQEXON WUDIILF
ZKHUH,5KDVEHHQORVLQJVKDUHWRWKHURDGVHFWRU ,5UHFHQWO\LQWURGXFHGWKH6SHFLDO
3DUFHO 7UDLQ 2SHUDWRU 6FKHPH LQ 1RYHPEHU    8QGHU WKLV VFKHPH DQ\ SULYDWH
FRPSDQ\ VDWLVI\LQJ VSHFLILHG HOLJLELOLW\ FULWHULD LV HOLJLEOH WR DSSO\ WR SURFXUH 3DUFHO
9DQV    :KLOH LW LV WRR HDUO\ WR DVVHVV WKH VXFFHVV RI WKLV VFKHPH WKH ODFN RI
FRRUGLQDWLRQ EHWZHHQ WKH ]RQDO UDLOZD\V WR HOLPLQDWH RSHUDWLRQDO FRQVWUDLQWV FRXOG
SURYH WR EH D PDMRU GHWHUUHQW DV ZLWQHVVHG KLVWRULFDOO\ ZLWK RWKHU VLPLODU VFKHPHV
7KHQDWLRQWRGD\VWDQGVDWWKHFXVSRIDQHFRPPHUFHUHYROXWLRQ7KH5DLOZD\VHFWRU
FDQSOD\DPDMRUUROHLQLWDVORQJDVLWFKDQJHVLWVPLQGVHWWRHLWKHUEHFRPHDORJLVWLFV
FRPSDQ\ RU OHDVH RXW LWV IDFLOLWLHV WR D ORJLVWLFV FRPSDQ\ :LWK DQ LQGHSHQGHQW
UHJXODWRUWKLVVKRXOGEHSRVVLEOH


 3ULYDWH)UHLJKW7HUPLQDOV 3)7V) - 7RIDFLOLWDWHWKHUDSLGGHYHORSPHQWRIDQHWZRUNRI
IUHLJKWKDQGOLQJWHUPLQDOVDSROLF\NQRZQDV3ULYDWH)UHLJKW7HUPLQDOVZDVLQWURGXFHG
LQWRLQYLWHSULYDWHSDUWLFLSDWLRQDQGZDVODWHUUHYLVHGLQ7KHREMHFWLYHRIWKH
SROLF\ZDVWRSURYLGHHIILFLHQWDQGFRVWHIIHFWLYHORJLVWLFVVHUYLFHVZLWKDZDUHKRXVLQJ
VROXWLRQ WR HQGXVHUV 7KLV ZRXOG EH D QHZ EXVLQHVV RSSRUWXQLW\ IRU LQYHVWRUV WR
DXJPHQW SUHVHQFH LQ WKH ORJLVWLFV FKDLQ DQG JDLQ DFFHVV WR KDQGOLQJ WKLUG SDUW\ FDUJR
7KH 0LQLVWU\ KDV FORVH WR  SURSRVDOV IRU 3)7V IURP  FRPSDQLHV DV RI 'HFHPEHU
6HWWLQJXSD3)7UHTXLUHV5VFURUHV,QWKHUHFHQWEXGJHWWKH5DLOZD\
174

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

0LQLVWHU KDV SRLQWHG RXW WKDW FHUWDLQ LVVXHV OLNH DJUHHPHQW FRQIOLFWV DQG GHOD\V LQ
DSSURYDOV KDYH HPHUJHG ZKLFK DUH GLVFRXUDJLQJ IXUWKHU LQYHVWPHQWV LQ 3)7V 7KH
*RYHUQPHQW LQWHQGV WR DGGUHVV WKHVH XUJHQWO\ VR WKDW H[SDQVLRQ RI WKHVH WHUPLQDOV LV
QRW KDPSHUHG 7KHUH DUH RWKHU LVVXHV DV ZHOO UHODWLQJ WR WKH FRQVLGHUDWLRQ RI SULYDWH
VLGLQJV WR RSHUDWH DV 3)7V RU WR WKH DELOLW\ WR RSHUDWH 23)7V RZQ SULYDWH IUHLJKW
WHUPLQDOV  RQ ODQG MRLQWO\ RZQHG OHDVHG E\ SULYDWH SDUWLHV DQG ,5 %XW WKH ORQJWHUP
VROXWLRQDJDLQOLHVLQLQWURGXFLQJDQLQGHSHQGHQWUHJXODWRUWRUHGXFHWKHWUXVWGHILFLW


 'HGLFDWHG)UHLJKW&RUULGRUV ')&V 7KHILUVWVHHGVIRUWKH'HGLFDWHG)UHLJKW&RUULGRU
')& ZHUHVRZQLQ$SULO7KH')&SURMHFWLQYROYHVVL[IUHLJKWFRUULGRUVDORQJ
KLJK GHQVLW\ URXWHV DFURVV WKH FRXQWU\ 7KH FRUULGRUV DUH SODQQHG IRU IDVWHU IUHLJKW
PRYHPHQWE\UHGXFLQJFRQJHVWLRQDWYDULRXVMXQFWLRQVDQGWHUPLQDOV7ZR')&VLQWKH
:HVWHUQ FRQQHFWLQJ +DU\DQD DQG 0DKDUDVKWUD  DQG (DVWHUQ FRQQHFWLQJ 3XQMDE DQG
:HVW%HQJDO FRYHULQJDERXWNPKDYHDOUHDG\EHHQDSSURYHG7KHHVWLPDWHGFRVW
RIWKHSURMHFWKDVULVHQWR5VELOOLRQ IURP5VELOOLRQHVWLPDWHGLQLWLDOO\ DQG
WKH WDUJHW IRU FRPSOHWLRQ KDV EHHQ H[WHQGHG WR 0DUFK  7KH SODQ KRZHYHU KDV
HYRNHGVHULRXVLQWURVSHFWLRQDJDLQVWWKHEDFNGURSRISRRUUHVSRQVHVRIDU7KHSROLFLHV
WLOWHGJURVVO\LQIDYRXURI,5KDYHGLVFRXUDJHGSULYDWHSOD\HUVIURPLQYHVWLQJLQ')&
SURMHFWV$OWKRXJKLWZDVODXQFKHGLQWKHILUVWPDMRUFRQWUDFWIRUWKHFRQVWUXFWLRQ
RI WKH NP ORQJ WUDFN LQ WKH (DVWHUQ &RUULGRU ZDV DZDUGHG WR D 7DWD$OGHVD MRLQW
YHQWXUHLQ-DQXDU\DQGWKHVHFRQGWR/ 76RMLW]MRLQWYHQWXUHLQ-XQH2WKHU
LVVXHV LQ WKH LPSOHPHQWDWLRQ RI WKH SURMHFW LQFOXGH GHOD\V LQ IXQGLQJ DQG ODQG
DFTXLVLWLRQIUHTXHQWFKDQJHVLQPDQDJHPHQWDQGFDQFHOOHGWHQGHUVRUVORZRUGHUV7KLV
FDVHVWXG\LVW\SLFDORIWKHLOOVWKDWEHVHWDVWDWHRZQHGPRQRSRO\


7KH)UDPHZRUNIRU3ULYDWH6HFWRU(QWU\


 7KH VFKHPHV OLVWHG DERYH DUH QRW H[KDXVWLYH EXW WKH\ JLYH D FOHDU LQGLFDWLRQ RI WKH
SUREOHPV DQG SURVSHFWV RI SULYDWH SDUWLFLSDWLRQ LQ WKH 5DLOZD\ VHFWRU ,5 KDV
SURJUHVVLYHO\ GHPRQVWUDWHG LWV LQWHUHVW LQ DWWUDFWLQJ SULYDWH SDUWLFLSDWLRQ LQ DUHDV WKDW
KDYHEHHQWKHH[FOXVLYHSUHVHUYHRI,57KHVFKHPHVKDYHDFKLHYHGVXFFHVVLQYDU\LQJ
GHJUHHV EXW LW ZRXOG EH IDLU WR VD\ WKDW PRVW RI WKH VFKHPHV KDYH QRW GHOLYHUHG 7KH
UHDVRQV IRU WKH IDLOXUH GLIIHU IURP VFKHPH WR VFKHPH EXW WKHUH DUH VRPH FRPPRQ
WKHPHV


7KHILUVWUHDVRQIRUIDLOXUHLVWKDWSROLF\PDNLQJWKHUHJXODWRU\IXQFWLRQDQGRSHUDWLRQV
DUH YHVWHG ZLWKLQ WKH VDPH RUJDQL]DWLRQ 7KHUH LV D FOHDU FRQIOLFW RI LQWHUHVW ZKHQ WKH
SROLF\PDNHU DQG UHJXODWRU LV DOVR D FRPSHWLWRU $V ORQJ DV WKLV LV WKH FDVH SULYDWH
SOD\HUVZLOODOZD\VVXVSHFWWKDWWKHVFKHPHVDUHWLOWHGLQIDYRURI,5RURQHRILWV368V
$Q DWPRVSKHUH RI WUXVW LV DEVROXWHO\ HVVHQWLDO IRU SULYDWH VHFWRU HQWU\ 7KH &21&25
H[SHULHQFH GHPRQVWUDWHV WKDW D OHYHO SOD\LQJ ILHOG FDQQRW EH FUHDWHG ZLWKRXW DQ
175

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

LQGHSHQGHQW UHJXODWRU +HQFH LW LV LPSHUDWLYH WR VSOLW WKH UROHV RI SROLF\PDNLQJ
UHJXODWLRQDQGRSHUDWLRQV


6HFRQGPDQ\RIWKHVFKHPHVZHUHZHOOPHDQWDQGHYHQLQQRYDWLYHEXWWKH\WXUQHGRXW
WREHLOOFRQFHLYHGEHFDXVHWKH\ZHUHIRUPXODWHGZLWKRXWLQYROYHPHQWRIWKHXVHU$VD
VRYHUHLJQPRQRSRO\,5KDGDPLQGVHWWKDWSUHFOXGHGDGXW\WRFRQVXOWZLWKWKHSULYDWH
VHFWRU ,W WRRN PDQ\ \HDUV EHIRUH WKH VFKHPHV ZHUH ZLWKGUDZQ RU UHYLVHG ,Q WKH
PHDQWLPHLQYHVWRUFRQILGHQFHHURGHGIXUWKHU7RGD\WKHUHLVDUHDOWUXVWGHILFLWZKLFK
FDQRQO\EHRYHUFRPHZLWKWKHUDGLFDOUHVWUXFWXULQJWKDWLVSURSRVHGE\WKLV&RPPLWWHH


7KLUGWKHUHZDVDWHQGHQF\LQWKHVHVFKHPHVWRVWDUWZLWKVWLIIXVHUKRVWLOHFRQGLWLRQV
DQGWKHQORRVHQWKHPVXEVHTXHQWO\ZKHQWKHVFKHPHIDLOHGWRGHOLYHU,QIDFWWKHUHLVD
VWURQJSHUFHSWLRQLQWKHPLQGVRI,5WKDWWKHSULYDWHVHFWRUPXVWQRWHDUQXQGXHSURILWV
IURP 5DLOZD\ DVVHWV DQG VHUYLFHV 7KH IDFW RI WKH PDWWHU LV WKDW DOO VXFK LQLWLDWLYHV
LQYROYHDFRPELQDWLRQRIULVNDQGUHWXUQ,I,5EHJLQVZLWKWKHEHOLHIWKDWDOOULVNVLQDQ\
SURSRVHG VFKHPH RU SDUWQHUVKLS VKRXOG LQYROYH WKH ULVN UHVLGLQJ LQ SULYDWH SDUWLHV DQG
WKDWSURILWVVKRXOGEHPRGHVWLUUHVSHFWLYHRIWKHULVNLQYROYHGDQGFRQGLWLRQVLPSRVHG
LWVKRXOGQRWFRPHDVDVXUSULVHWKDWVXFKLQLWLDWLYHVKDYHIDLOHGWRGHOLYHUDQ\ZKHUHQHDU
H[SHFWHG RXWFRPHV 7KH $XWRPRELOH )UHLJKW 7UDLQ 2SHUDWRU 6FKHPH $)72  VFKHPH
IRU H[DPSOH ZDV WZHDNHG WKUHH \HDUV DIWHU LW ZDV ODXQFKHG WR H[SDQG LWV VFRSH E\
DOORZLQJPRUHFDUJRRSHQLQJXSWRFDUPDNHUVDQGVRRQ,WLVZRUWKSRQGHULQJDVWR
ZK\WKHVFKHPHZDVQRWGHVLJQHGVHQVLEO\IURPWKHEHJLQQLQJ+DGWKHSROLF\IXQFWLRQ
EHHQKRXVHGLQDVHSDUDWHRUJDQL]DWLRQIURPWKHRXWVHWWKHUHZRXOGKDYHEHHQDJUHDWHU
FKDQFHRIVXFFHVVWKHVFKHPHZRXOGKDYHEHHQIRUPXODWHGPRUHREMHFWLYHO\IURPWKH
RXWVHW 2YHUDOO WKLV &RPPLWWHHV DVVHVVPHQW LV WKDW VXVWDLQHG DQG ODUJH VFDOH SULYDWH
VHFWRU SDUWLFLSDWLRQ ZLOO QRW EH SRVVLEOH ZLWKRXW VHSDUDWLQJ WKH IXQFWLRQV RI SROLF\
PDNLQJ UHJXODWLRQ DQG RSHUDWLRQV DV DOVR D VHD FKDQJH LQ WKH PLQGVHW RI ,5 WRZDUGV
SULYDWHVHFWRUSDUWLFLSDWLRQ


 7KHUH DUH WKUHH EURDG ZD\V LQ ZKLFK D SULYDWH FRPSDQ\ FDQ JHW LQYROYHG LQ WKH
FRPSHWLWLRQ IRU WKH PDUNHW D SULYDWH FRPSDQ\ PD\ L  UHFHLYH D IODW IHH IRU
PDQDJHPHQWZLWKRXWDQ\UHVSRQVLELOLW\IRULQYHVWPHQW VHUYLFHFRQWUDFW  LL GR2 0
ZLWK D OLPLWHG UHVSRQVLELOLW\ IRU LQYHVWPHQW 2  0 FRQWUDFW  DQG LLL  KDYH FRPSOHWH
UHVSRQVLELOLW\IRUSURFXULQJDQGRSHUDWLQJDWUDLQRUFRQVWUXFWLQJDQGRSHUDWLQJDSK\VLFDO
LQIUDVWUXFWXUH VXFKDVWHUPLQDORUOD\LQJRIWUDFNV DQGILQDQFLQJQHFHVVDU\LQYHVWPHQW
DWLWVRZQULVN FRQFHVVLRQV 7KHSULYDWHVHFWRUKDVVKRZQIDUJUHDWHULQWHUHVWLQWKHILUVW
WZRFDWHJRULHVDVFRPSDUHGWRWKHWKLUGFDWHJRU\ZLWKLQYHVWPHQWDQGULVNWDNLQJE\WKH
SULYDWH VHFWRU ,Q WKH ILUVW WZR FDWHJRULHV JRYHUQDQFH LV W\SLFDOO\ D FKDOOHQJH 7KLV
&RPPLWWHHUHFRPPHQGVWKDW,5PRYHVSURJUHVVLYHO\WRWKHWKLUGFDWHJRU\:KLOHWKHILUVW
WZR FDQQRW EH ZLVKHG DZD\ DW OHDVW IRU WKH QH[W IHZ \HDUV DWWHPSWV PXVW EH PDGH WR
DGGUHVVWKHJRYHUQDQFHLVVXHV
176

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

 7KH&RPPLWWHHIHHOVWKDWWKHQHZWUDFNVSUHVHQWO\EHLQJEXLOWDVSDUWRIWKHWZRIUHLJKW
FRUULGRUV ')&&,/  VKRXOG JLYH QRQGLVFULPLQDWRU\ DFFHVV WR ERWK ,5 DQG WR SULYDWH
RSHUDWRUV )RU WKLV SXUSRVH ')&&,/ VKRXOG EH PDGH DXWRQRPRXV DQG VHSDUDWHG IURP
,5$Q\RQHZKRUXQVWUDLQVRQ')&&,/VKRXOGSD\GLUHFWO\WR')&,/DQGQRWWR,5 RU
YLD ,5  (TXDOO\ SULYDWHRSHUDWRUV VKRXOGEH DOORZHG WR ORDG DQGXQORDG WUDLQV RQ WKH
')&&,/QHWZRUN ZLWKRXWKDYLQJWRVHHN,5VSHUPLVVLRQ 


 &RUHDQGQRQFRUHDFWLYLWLHVRI,5KDYHEHHQSURJUHVVLYHO\RSHQHGXSWRIRUHLJQGLUHFW
LQYHVWPHQW )', EHJLQQLQJLQ0D\ZKHQ)',ZDVSHUPLWWHGXSWRYLDWKH
DXWRPDWLFURXWHIRU0DVV5DSLG7UDQVSRUW6\VWHPVLQDOOPHWURSROLWDQFLWLHV7LOOQRZ
KRZHYHU )', LQWR WKH 5DLOZD\V DV D ZKROH KDV EHHQ D SDOWU\ 86'  PLOOLRQ WLOO
'HFHPEHU 5HFRJQL]LQJWKLVLQ$XJXVWWKH*RYHUQPHQWSHUPLWWHG)',LQ
FRQVWUXFWLRQRSHUDWLRQDQGPDLQWHQDQFHRIKLJKVSHHGWUDLQSURMHFWVGHGLFDWHGIUHLJKW
OLQHVUROOLQJVWRFNLQFOXGLQJWUDLQVHWVVLJQDOLQJV\VWHPVIUHLJKWWHUPLQDOVWRQDPHD
IHZ DUHDV 7KH 0LQLVWU\ RI 5DLOZD\V KDV VLQFH LVVXHG VHFWRUDO JXLGHOLQHV IRU
GRPHVWLFIRUHLJQ GLUHFW LQYHVWPHQW LQ WKH 5DLOZD\V LQ RUGHU WR DXJPHQW FDSDFLW\
PRGHUQL]HDQGEULQJHIILFLHQF\WKURXJKWHFKQRORJ\XSJUDGDWLRQRQWKH,QGLDQ5DLOZD\V
QHWZRUN DQG WR JHQHUDWH ILQDQFHV IRU XQGHUWDNLQJ WKHVH DFWLYLWLHV IURP ERWK GRPHVWLF
DQGIRUHLJQLQYHVWRUV

 7KH H[SHULHQFH VR IDU LQ DWWUDFWLQJ )', KDV EHHQ ORZHU WKDQ H[SHFWDWLRQV EHFDXVH RI D
QXPEHURIUHDVRQVHPDQDWLQJIURPWKHZD\,5KDVGHDOWZLWKSRWHQWLDO)',LQYHVWRUV
7KHUH KDYH EHHQ QXPHURXV LQFLGHQWV RI FKDQJLQJ JRDO SRVWV PLGZD\ DOWHULQJ JURXQG
FRQGLWLRQVVXEVHTXHQWWRWKH5)4V UHTXHVWIRUTXRWDWLRQV DQGGHOD\VRUFRPSOHWHODFN
RIGHOLYHU\E\,5RILWVFRPPLWPHQWV7KHFODVVLFH[DPSOHRIWKLVLVWKHDWWHPSWWREULQJ
)',LQWKHPDQXIDFWXUHRIORFRPRWLYHVYLDWKHWZRORFRPRWLYHIDFWRULHVLQ0DGKHSXUD
DQG0DUKRZUDWKDWZHUHVWLOOODQJXLVKLQJ\HDUVDIWHUWKHLQLWLDWLRQRIWKHSURMHFWV7KH
ELGGLQJ SURFHVV HYHQ DIWHU XQGHUJRLQJ VHYHUDO URXQGV RI DOWHUDWLRQ DQG LWHUDWLRQV GLG
QRW UHDFK FRQFOXVLRQ 7KLV ZKHQ OHDGLQJ JOREDO SOD\HUV LQ WKH ORFRPRWLYH WHFKQRORJ\
KDG HYLQFHG LQWHUHVW DQG ZHUH VKRUWOLVWHG DQG WKH SURFHVV ZDV EHLQJ PRQLWRUHG DW WKH
KLJKHVWOHYHO


7KH*RYHUQPHQWLVULJKWIXOO\RSWLPLVWLFDERXWEULQJLQJIRUHLJQGLUHFWLQYHVWPHQWLQWRWKH
5DLOZD\VHFWRUDVWKHEHQHILWVDUHVLJQLILFDQWWKHLQGXFWLRQRIFXWWLQJHGJHWHFKQRORJ\
DQG LQWHUQDWLRQDO PDQDJHPHQW SUDFWLFHV WKDW FDQ GUDPDWLFDOO\ KHOS WR PRGHUQL]H ,5
+RZHYHUIRUHLJQLQYHVWPHQWZLOOQRWFRPHXQGHUWKHSUHVHQWVFHQDULR,WZLOOFRPHRQO\
LIWKH5DLOZD\VHFWRULVUHIRUPHGDORQJWKHOLQHVGLVFXVVHGLQWKLV5HSRUWDQGWKHFKDQJH
LQ LQFHQWLYHV DQG VWUXFWXUH DV SURSRVHG LQ WKLV 5HSRUW DUH SXW LQ SODFH 7KH 5DLOZD\
VHFWRU ZLOO WKHQ EHFRPH ZRUWK\ RI IRUHLJQ LQYHVWPHQW LQ DQFLOODU\ SURGXFWLRQ XQLWV
177

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

WHUPLQDOVVLJQDOLQJORJLVWLFVDQGWKHRSHUDWLRQRIWUDLQV%XWIRUDWWUDFWLQJLQYHVWPHQWV
WKHUH QHHGV WR EH JUHDWHU DXWRQRP\ IRU ,5 RUJDQL]DWLRQV DQG WKHUH QHHGV WR EH DQ
LQGHSHQGHQWUHJXODWRU


&UHDWLQJ$XWRQRP\


 /LNHFKRLFHDQGFRPSHWLWLRQDXWRQRP\LVRQHRIWKHIXQGDPHQWDOSULQFLSOHVRIVXFFHVV
LQ WKH PDUNHW SODFH ,W LPSURYHV HIILFLHQF\ OHDGV WR DFFRXQWDELOLW\ DQG LPSURYHV WKH
PRWLYDWLRQ RI HPSOR\HHV ,5 KDV PDGH VHYHUDO VXFFHVVIXO DWWHPSWV WR FUHDWH DXWRQRP\
DQGWKHVHKDYHOHVVRQV:LWKWKHDLPRIRUJDQL]LQJVHYHUDOSDUWVRILWVDFWLYLWLHVXQGHUDQ
DXWRQRPRXVVHWWLQJ,5KDVIURPWLPHWRWLPHFUHDWHGDQXPEHURI368VIRUH[DPSOH
&21&25 ZDV FUHDWHG WR PDQDJH FRQWDLQHU WUDIILF 5,7(6 IRU FRQVXOWDQF\ ,5)& WR
UDLVHIXQGVIURPWKHPDUNHWDQG,5&7&IRUFDWHULQJHWLFNHWLQJHWF7KHUHDUHVXFK
RUJDQL]DWLRQV XQGHU SXEOLF RZQHUVKLS DOWKRXJK &21&25 ZDV WKH RQO\ RQH SXEOLFO\
OLVWHG DQGPRVWRIWKHPRSHUDWHDVPRQRSROLHV7KHDLPRIFUHDWLQJWKHVHRUJDQL]DWLRQV
ZDV WR HQKDQFH RUJDQL]DWLRQDO IRFXV 7KHLU %RDUGV ZHUH JLYHQ DXWRQRP\ DQG PDGH
DFFRXQWDEOH%XWDOORIWKHPHQMR\HGWKHSDWURQDJHRI,5$OWKRXJKWKH\KDYHPHWZLWK
YDU\LQJGHJUHHVRIVXFFHVVLWZRXOGEHIDLUWRVD\WKDWJUDQWLQJDGHJUHHRIDXWRQRP\WR
WKHVH RUJDQL]DWLRQV KDV KHOSHG ,5 WR FDUU\ RXW VRPH RI LWV DFWLYLWLHV PRUH HIILFLHQWO\
WKDQRWKHUZLVH(YHQVRWKHIXOOEHQHILWVRIDXWRQRP\KDYHQRWEHHQDFKLHYHGSULPDULO\
EHFDXVHWKHVHRUJDQL]DWLRQVKDYHEHHQSURWHFWHGIURPSULYDWHFRPSHWLWLRQDQGDOORZHG
WR DFW DV PRQRSROLHV ,5 KDV LQ IDFW JUDQWHG DXWRQRP\ WR VRPH RI LWV WUDGLWLRQDO
DFWLYLWLHV ZLWKLQ D FRUSRUDWH VHWWLQJ IRU H[DPSOH &21&25 ZDV FUHDWHG WR PDQDJH
FRQWDLQHU WUDIILF 5,7(6 IRU FRQVXOWDQF\ ,5)& WR UDLVH IXQGV IURP WKH PDUNHW DQG
,5&7& IRU FDWHULQJ HWLFNHWLQJ HWF  7KHUH DUH  VXFK RUJDQL]DWLRQV XQGHU SXEOLF
RZQHUVKLS DQG PRVW RI WKHP RSHUDWH DV PRQRSROLHV 7KH DLP RI FUHDWLQJ WKHVH
RUJDQL]DWLRQVZDVWRHQKDQFHRUJDQL]DWLRQDOIRFXV7KHLUERDUGVZHUHJLYHQDXWRQRP\
DQGPDGHDFFRXQWDEOH DOWKRXJK&21&25ZDVWKHRQO\RQHSXEOLFO\OLVWHG %XWDOORI
WKHP HQMR\HG WKH SDWURQDJH RI ,5  $OWKRXJK WKH\ KDYH PHW ZLWK YDU\LQJ GHJUHHV RI
VXFFHVV LW ZRXOG EH IDLU WR VD\ WKDW JUDQWLQJ D GHJUHH RI DXWRQRP\ WR WKHVH
RUJDQL]DWLRQV KDV KHOSHG ,5 WR FDUU\ RXW VRPH RI LWV DFWLYLWLHV PRUH HIILFLHQWO\ WKDQ
RWKHUZLVH7KLVQHHGVWREHH[WHQGHGWRSURGXFWLRQXQLWVDQGFRQVWUXFWLRQRUJDQL]DWLRQV
7KHRYHUDOOOHVVRQIURPWKHVHHIIRUWVRI,5LVWKDWDXWRQRP\GRHVLQGHHGKHOSLQFUHDWLQJ
IRFXVDQGHIILFLHQF\$XWRQRPRXVERGLHV VXFKDV368VDQG639V DUHRUJDQL]DWLRQDOO\
EHWWHUVXLWHGWRFUHDWHIRFXVWKDQGHSDUWPHQWDOVWUXFWXUH


&RQWDLQHU&RUSRUDWLRQRI,QGLD/WG &21&25 - $1DYUDWQD3XEOLFVHFWRUXQGHUWDNLQJ
&21&25 FRPPHQFHG RSHUDWLRQV LQ WDNLQJ RYHU VHYHQ LQODQG FRQWDLQHU GHSRWV
IURP,5,WZDVOLVWHGRQ,QGLDQVWRFNH[FKDQJHVZLWKWKHFXUUHQWSXEOLFKROGLQJRI
7KHUDLOFRQWDLQHUEXVLQHVVJUHZUDSLGO\DQG&21&25HQMR\HGJUHDWVXFFHVVDVDUHVXOW
RIFXVWRPHUIRFXVDQGUHOLDELOLW\LQSURYLGLQJFRQWDLQHUWUDQVSRUWIURPLQODQGGHSRWVWR
178

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

WKH SRUWV ,WV GHSRWV DQG WHUPLQDOV KDYH JURZQ WR  DQG LWV VKDUH SULFH LQFUHDVHG
UHIOHFWLQJ LWV VXFFHVV &21&25V VXFFHVV SURYHV WKDW DXWRQRP\ PDWWHUV $OWKRXJK LW
ZDV PDQDJHG E\ SHUVRQV WUDLQHG E\ ,5 LW KDV UXQ LQGHSHQGHQWO\ ZLWK RXWVLGH
VKDUHKROGLQJUHLQIRUFLQJDXWRQRP\,WKDVIRFXVHGRQLWV PDLQEXVLQHVVDQGUHVSRQGHG
WRFXVWRPHUQHHGVDQGKDVKHOGLWVRZQLQFRPSHWLWLRQDJDLQVWURDGFRQWDLQHUVHUYLFHV
+RZHYHULWKDG WKH DGYDQWDJHRI EHLQJDILUVW PRYHUDQG RIEHLQJD PRQRSRO\IRU
\HDUV%\WKHWLPHWKDWFRQWDLQHUUDLOVHUYLFHZDVRSHQHGWRWKHSULYDWHVHFWRU&21&25
ZDV GHHSO\ HQWUHQFKHG DQG LW ZDV GLIILFXOW IRU QHZ HQWUDQWV WR PDNH KHDGZD\ +DG
FRPSHWLWLRQFRPHDWWKHEHJLQQLQJWKHFRXQWU\PLJKWSRVVLEO\KDYHEHQHILWWHGPRUH


 3RUWEDVHG SURMHFWV H[HFXWHG ZLWK SULYDWH IXQGV WKURXJK DXWRQRPRXV 6SHFLDO 3XUSRVH
9HKLFOHV 639V ,QDGGLWLRQWRWKH368VVWDWHGDERYH,5KDVDOVRFUHDWHGDXWRQRP\
WKURXJK WKH 639 URXWH ZKLFK LQYROYH ERWK SXEOLF DQG SULYDWH LQYHVWPHQWV 7KH SRUW
FRQQHFWLYLW\SURMHFWVFUHDWHGWKLVZD\KDYHDFKLHYHGDJUHDWGHDORIVXFFHVV)RXUSRUW
FRQQHFWLYLW\SURMHFWVDUHRSHUDWLRQDODQGWKUHHPRUHDUHLQSURJUHVV:KDWLVQRWHZRUWK\
LV QRW VR PXFK WKH VL]H DQG H[WHQW RI SULYDWH HTXLW\ FRQWULEXWLRQ EXW WKH DXWRQRP\
HQMR\HGE\WKH639VZKLFKSDUWLDOO\KHOSHGLQWKHVLQJOHPLQGHGDQGIRFXVHGSXUVXLWRI
SURMHFWZRUNE\PDQDJHPHQW$VQDSVKRWRIWKHRSHUDWLRQDOSURMHFWVLVVKRZQLQ7DEOH



7DEOH3RUWEDVHGSURMHFWVWKURXJK639V
3LSDYDY5DLOZD\ .XWFK 5DLOZD\ %KDUXFK 'DKHM .ULVKQDSDWQDP
&RUSRUDWLRQ
&RPSDQ\/WG 5DLOZD\
5DLOZD\
/WG
&RPSDQ\/WG &RPSDQ\/WG

5RXWH/HQJWK NP 
'DWHRI&RPPLVVLRQLQJ






 3K 
,  
3K,, 


-XO

3URMHFW&RVW 5V&URUH 







7RWDO (TXLW\ &RQWULEXWLRQ


RI3URPRWHUV 5V&URUH 
7RWDO'HEW 5V&URUH 
,QYHVWPHQW E\ 0R5 RU LWV
368 V  5V&URUH 
 RI FRVW LQYHVWHG E\
0R5LWV368 V 
$QQXDO 7UDIILF 
0LOOLRQ7RQQHV 
([SHFWHG $QQXDO 7UDIILF
 0LOOLRQ7RQQHV 
639
V 6KDUH LQ (DUQLQJV
 5V&URUH 
,5
VVKDUHLQ(DUQLQJV
 5V&URUH 







 LQFOXGLQJ
3K,,DQG,,, 






























 XSWR
)HEUXDU\ 
 XSWR
)HEUXDU\ 














 XSWR'HF
 
 XSWR'HF
 
 XSWR'HF
 


179

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

 7KLV OHDYHV WKH TXHVWLRQ RI WKH UHJXODWRU WKH 5DLOZD\ 5HJXODWRU\ $XWKRULW\ RI ,QGLD
55$,  $IWHU D GHFLVLRQ E\ WKH &DELQHW LQ $XJXVW  DQG DIWHU WKH YLHZV RI WKH
0LQLVWU\ RI /DZ DQG -XVWLFH ZHUH DVFHUWDLQHG WKH 0LQLVWU\ RI 5DLOZD\V SURSRVHG WKH
VHWWLQJ XS RI D 5DLO 7DULII $XWKRULW\ 57$   3HQGLQJ DQ DPHQGPHQW LQ WKH 5DLOZD\V
$FWWKH5DLOZD\%RDUGLQD5HVROXWLRQGDWHGWK-DQXDU\SURSRVHGWKHVHWWLQJXS
RIDQLQWHULP57$1RZWKHUHIRUHWKH*RYHUQPHQWRI,QGLDGRKHUHE\FRQVWLWXWHWKH
interim 5DLO 7DULII $XWKRULW\ 57$  XQGHU WKH RYHUDOO DGPLQLVWUDWLYH FRQWURO RI WKH
0LQLVWU\ RI 5DLOZD\V DV IROORZV 7KH SULPDU\ IXQFWLRQ RI WKLV $XWKRULW\ ZRXOG EH WR
GHYHORSDQLQWHJUDWHGWUDQVSDUHQWDQGG\QDPLFSULFLQJPHFKDQLVPIRUWKHGHWHUPLQDWLRQ
RI WDULIIV RI ,QGLDQ 5DLOZD\V DQG SHQGLQJ HQDFWPHQW RI WKH UHTXLVLWH OHJLVODWLRQ WR
DGYLVHWKH&HQWUDO*RYHUQPHQWRQIL[DWLRQRIWDULIIVIRU,QGLDQ5DLOZD\VEDVHGRQFRVW
RIRSHUDWLRQVDQGIDFWRUVLPSLQJLQJRQLWZLWKDYLHZWRQRWRQO\DFKLHYHLWVUHFRYHU\
EXWDOVRJHQHUDWHUHTXLVLWHVXUSOXVHVIRUKHDOWK\JURZWKLQWLPHVDKHDG7KH57$LV
SDUWRIWKH725RIWKLV&RPPLWWHHEXWKDVEHHQRYHUWDNHQE\HYHQWV3DUDJUDSKRI
WKH 5DLOZD\ %XGJHW 6SHHFK IRU  VWDWHV ,QGLDQ 5DLOZD\V FXUUHQWO\ LV WKH RQO\
UDLOEDVHGWUDQVFLW\LQIUDVWUXFWXUHSURYLGHUDQGRSHUDWRULQWKHFRXQWU\7KHUHIRUHIRU
WKHSXUSRVHRIRUGHUO\GHYHORSPHQWRILQIUDVWUXFWXUHVHUYLFHVHQDEOLQJFRPSHWLWLRQDQG
SURWHFWLRQ RI FXVWRPHU LQWHUHVWV LW LV LPSRUWDQW WR KDYH D UHJXODWLRQ PHFKDQLVP
LQGHSHQGHQWRIWKHVHUYLFHSURYLGHU,QLWLDOO\LWZDVFRQWHPSODWHGWRVHWXSRQO\D7DULII
5HJXODWRUKRZHYHULWLVQRZSURSRVHGWRVHWXSDPHFKDQLVPZKLFKZLOOEHHQWUXVWHG
ZLWKPDNLQJUHJXODWLRQVVHWWLQJSHUIRUPDQFHVWDQGDUGVDQGGHWHUPLQLQJWDULIIV,WZLOO
DOVRDGMXGLFDWHRQGLVSXWHVDPRQJOLFHQVHHVSULYDWHSDUWQHUVDQGWKH0LQLVWU\VXEMHFWWR
UHYLHZLQDSSHDO


 6HYHUDOTXHVWLRQVDULVH)LUVWFDQWDULIIVEHFRPSOHWHO\IUHHGRUVKRXOGWKH\EHVXEMHFW
WR VRPH UHJXODWLRQ"  ,QWHUQDWLRQDOO\ WKHUH LV OLPLWHG WDULII UHJXODWLRQ RI IUHLJKW ZKHUH
UHJXODWLRQ KDV PRUH WR GR ZLWK DFFHVV WR WUDFNV WHUPLQDOV DQG RWKHU PXOWLXVHU
LQIUDVWUXFWXUH,QRUGHUWRSURPRWHHIILFLHQF\LQWUDQVSRUWDQGORJLVWLFVPRVWFRXQWULHV
KDYHDOORZHGPXOWLSOHRSHUDWRUVWRHQWHULQWRWKHIUHLJKWPDUNHWLQYDULRXVUROHV)UHLJKW
WUDQVSRUWE\UDLODOVRKDVWRFRPSHWHZLWKRWKHUPRGHVRIWUDQVSRUWURDGEHLQJWKHPRVW
SURPLQHQW  7KH LQWHUPRGDO FRPSHWLWLRQ DQG PXOWLSOLFLW\ RI RSHUDWRUV LQ UDLO IUHLJKW
VHUYLFHV OLPLWV WKH UHTXLUHPHQW RI WKH UHJXODWRU WR HQWHU LQWR LVVXHV RI WDULII
GHWHUPLQDWLRQ  7KLV &RPPLWWHH GRHV QRW IHHO WKDW WKH ,QGLDQ UHJXODWRU QHHGV WR HQWHU
LQWR LVVXHV RI WDULII IL[DWLRQ IRU IUHLJKW RQFH WKH UXOHV RI FRPSHWLWLRQ KDYH EHHQ ODLG
GRZQLQWKHSROLF\HQXQFLDWHGE\WKH0LQLVWU\RI5DLOZD\V7KHUHJXODWRURQO\FRPHV
LQWR SOD\ LI WKRVH UXOHV RI FRPSHWLWLRQ DUH YLRODWHG  3DVVHQJHU WDULIIV DUH D GLIIHUHQW
PDWWHU  6RPH GHYHORSHG FRXQWULHV UHIUDLQ IURP KHDY\KDQGHG GHWHUPLQDWLRQ RI
SDVVHQJHU WDULIIV  %XW VXFK PLQLPDO RYHUVLJKW LV RQO\ SRVVLEOH ZKHQ FRPSHWLWLRQ KDV
VXIILFLHQWO\ GHYHORSHG  :KLOH WKDW PLQLPDO RYHUVLJKW FDQ EH D WHUPLQDO JRDO WKLV
&RPPLWWHH GRHV QRW EHOLHYH WKDW SDVVHQJHU WDULII IL[DWLRQ FDQ EH OHIW WR WKH PDUNHW
7KHUHIRUHSDVVHQJHUWDULIIVVKRXOGEHUHFRPPHQGHGE\WKHUHJXODWRU6LQFHWKHPDUNHW
LV LQVXIILFLHQWO\ GHYHORSHG DQG VLQFH WKLV LVVXH LV OLQNHG WR WKH SDVVHQJHU VHUYLFH
180

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

VWDQGDUGVVHWE\WKH0LQLVWU\RI5DLOZD\VDSSURSULDWHO\FRVWHGIRUE\D36&%NLQGRI
H[HUFLVH ZH GR QRW EHOLHYH WKH UHJXODWRUV UHFRPPHQGDWLRQV VKRXOG EH ELQGLQJ  7KH
0LQLVWU\ RI 5DLOZD\V VKRXOG WDNH WKH ILQDO GHFLVLRQ RQ WKH UHFRPPHQGHG SDVVHQJHU
WDULIIV


 6HFRQG WKH &RPSHWLWLRQ &RPPLVVLRQ RI ,QGLD &&,  ZDV HVWDEOLVKHG WKURXJK WKH
&RPSHWLWLRQ $FW RI  VXEVHTXHQWO\ DPHQGHG WKURXJK WKH &RPSHWLWLRQ
$PHQGPHQW  $FW RI    7KLV LV DQ LQGHSHQGHQW UHJXODWRU\ ERG\ ZLWK WKH
UHVSRQVLELOLW\WRHOLPLQDWHSUDFWLFHVKDYLQJDGYHUVHHIIHFWRQFRPSHWLWLRQSURPRWHDQG
VXVWDLQ FRPSHWLWLRQ SURWHFW WKH LQWHUHVWV RI FRQVXPHUV DQG HQVXUH IUHHGRP RI WUDGH LQ
WKHPDUNHWVRI,QGLD7KH&&,KDVDOUHDG\EHHQLQYROYHGLQVHWWOLQJDGLVSXWHEHWZHHQ
WZR SULYDWH IUHLJKW WUDLQ RSHUDWRUV RQ RQH VLGH DQG WKH &RQWDLQHU &RUSRUDWLRQ RI ,QGLD
/LPLWHG &21&25  DQG WKH 0LQLVWU\ RI 5DLOZD\V RQ WKH RWKHU  7ZR VHSDUDWH
LQIRUPDQWV  $UVKL\D 5DLO ,QIUDVWUXFWXUH /LPLWHG DQG .ULEKNR 5DLO ,QIUDVWUXFWXUH
/LPLWHG ILOHG WKUHH VHSDUDWH FRPSODLQWV ZLWK &&, XQGHU 6HFWLRQ  L D  RI WKH
&RPSHWLWLRQ $FW IRU DOOHJHG DEXVH RI GRPLQDQW SRVLWLRQ E\ WKH RSSRVLWH SDUWLHV 
0LQLVWU\ RI 5DLOZD\V DQG &21&25  $PRQJ WKH DOOHJDWLRQV ZHUH WKH IROORZLQJ D 
'LVFULPLQDWLRQ DJDLQVW SULYDWH FRQWDLQHU WUDLQ RSHUDWRUV 3&72V  E\ SURKLELWLQJ
WUDQVSRUWDWLRQ RI JRRGV VXFK DV RUHV PLQHUDOV FRNH DQG FRDO ZKLFK FRQVWLWXWH DOPRVW
 RI IUHLJKW WUDIILF E  $UELWUDU\ LQFUHDVH RI KDXODJH DQG VWDEOLQJ FKDUJHV IRU WKH
3&72V F 8QIDLUDGYDQWDJHWR&21&25E\SURYLGLQJODQGWRLWDWIDYRXUDEOHWHUPV
G 'HQLDORIWHUPLQDOVDQGVLGLQJVRZQHGDQGH[FOXVLYHO\XVHGE\&21&25WR3&72V
WKXV LQFUHDVLQJ FRVWV IRU 3&72V DQG PDNLQJ WKHP OHVV YLDEOH DQG H  5HVWULFWLRQ RI
FRPSHWLWLRQ LQ WKH GHULYDWLYH DIWHUPDUNHW RI PDLQWHQDQFH VHUYLFHV  7KLV FDVH LV
LPSRUWDQWEHFDXVHWKH&&,WRRNWKLVRSSRUWXQLW\WRFOHDUO\HVWDEOLVKLWVMXULVGLFWLRQRYHU
PDWWHUV RI FRPPHUFLDO QDWXUH DV RSSRVHG WR VRYHUHLJQ IXQFWLRQV RI WKH 0LQLVWU\ RI
5DLOZD\V  7KH 0LQLVWU\ KDG FODLPHG WKDW WKHVH LVVXHV ZHUH SDUW RI WKH VRYHUHLJQ
IXQFWLRQDQGZHUHRXWVLGHWKHMXULVGLFWLRQRIWKH&&,7KH&&,UHMHFWHGWKLVYLHZ,QD
VHSDUDWHFDVHWKH&&,KDVDOVRORRNHGDWWKHSUHIHUHQFHIRU6$,/LQUDLOSURFXUHPHQWE\
,5  :KLOH WKLV VSHFLILF FDVH ZDV DERXW DFFHVV LVVXHV IRU SULYDWH FRQWDLQHU WUDLQ
RSHUDWRUV LQ SULQFLSOH VXFK DFFHVV LVVXHV ZLOO DULVH IRU DOO SULYDWH IUHLJKW WUDLQV DQG
SULYDWH SDVVHQJHU WUDLQV  )RU LQVWDQFH LQ FROODERUDWLRQ ZLWK ,5&7& 6WDWH 7RXULVP
'HYHORSPHQW &RUSRUDWLRQV DQG WKH JRYHUQPHQW RI 0DKDUDVKWUD ,5 UXQV OX[XU\ WUDLQV
OLNH3DODFHRQ:KHHOV*ROGHQ&KDULRW5R\DO5DMDVWKDQRQ:KHHOV0DKDUDMD([SUHVV
DQG 'HFFDQ 2G\VVH\  7KHUH LV D %XGGKLVW 6SHFLDO 7UDLQ  7KHUH DUH %KDUDW 'DUVKDQ
7UDLQV DQG VSHFLDO WRXULVW WUDLQV IRU 3LOJULP &LUFXLWV  :LWK WKH HPSKDVLV RQ WRXULVP
WKHUHZLOOEHPRUHVXFKWUDLQVRSHUDWHGQRWRQO\LQFROODERUDWLRQZLWK6WDWHJRYHUQPHQWV
DQG ,5&7& EXW DOVR UXQ FRPSOHWHO\ E\ SULYDWH WRXU RSHUDWRUV  :KLOH WKHUH PD\ QRW
KDYHDOHJDOFDVH\HWLQIRUPDOO\WKHRSHUDWRUVFRPSODLQDERXWDFFHVVSUREOHPVERWKIRU
WKHWUDFNDQGIRURWKHUDFFHVVLVVXHV7KHLVVXHEHIRUHWKLV&RPPLWWHHZDVZKHWKHUWKH
&&,ZDVHTXLSSHGWRKDQGOHVXFKDQWLFRPSHWLWLYHGLVSXWHVRUZKHWKHUDVHSDUDWH55$,
ZDVZDUUDQWHG+DYLQJFRQVLGHUHGWKHSURVDQGFRQVWKLV&RPPLWWHHLVRIWKHYLHZWKDW
181

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

JLYHQ WKH WHFKQLFDO DQG VSHFLDOL]HG QDWXUH RI WKH UDLOZD\ VHFWRU D VHSDUDWH 55$, ZDV
ZDUUDQWHG  2QFH WKH 55$, KDV EHHQ VHW XS WKH &RPSHWLWLRQ $FW FDQ EH VXLWDEO\
DPHQGHGWRHOXFLGDWHWKH&&,VMXULVGLFWLRQ$UHSRUWWKDWH[DPLQHGWKHLVVXHKDGWKH
IROORZLQJ WR VD\ ,Q PRVW MXULVGLFWLRQV WKLV LVVXH RI RYHUODS KDV DULVHQ DQG EHHQ
VDWLVIDFWRULO\ GHDOW ZLWK HYHQ ZLWKRXW VWDWXWRU\ SURYLVLRQV WR DGGUHVV WKH LQWHUIDFH
EHWZHHQ WKH VHFWRU UHJXODWRU DQG WKH &RPSHWLWLRQ $XWKRULW\  'LIIHUHQW PRGHOV KDYH
EHHQDGRSWHGE\GLIIHUHQWFRXQWULHV6HFWLRQRIWKHDPHQGHG&RPSHWLWLRQ$FW
HQDEOHV D VHFWRUDO UHJXODWRU WR UHIHU FRPSHWLWLRQ PDWWHUV HLWKHU VXR PRWR RU DW WKH
LQVWDQFH RI DQ\ RI WKH SDUWLHV WR WKH &&, 6HFWLRQ $ LQ WXUQ HQDEOHV WKH FRPSHWLWLRQ
DXWKRULW\ WR UHIHU DQ\ PDWWHU ZKLFK IDOOV ZLWKLQ DPELW RI WKH VHFWRUDO ODZ WR WKH VHFWRU
UHJXODWRU$OWKRXJKLQHLWKHUFDVHWKHUHIHUHQFHLVYROXQWDU\WKHVHFWRUUHJXODWRURUWKH
&&, DV WKH FDVH PD\ EH DUH UHTXLUHG WR VWDWH WKH UHDVRQV IRU WKHLU GHFLVLRQV RQ WKH
DGYLFH ,W ZRXOG EH GHVLUDEOH WR PDNH SURYLVLRQV LQ ERWK FRPSHWLWLRQ ODZ DQG VHFWRUDO
ODZV WR PDNH UHIHUHQFHV WR WKH &&, RU WKH VHFWRUDO UHJXODWRUV DV WKH FDVH PD\ EH
REOLJDWRU\

 7KLUGWKLV&RPPLWWHHIHHOVWKDWWKHSURSRVHG55$,VKRXOGEHVHWXSVWDWXWRULO\ZLWKDQ
LQGHSHQGHQWEXGJHWVRWKDWLWLVWUXO\LQGHSHQGHQWRIWKH0LQLVWU\RI5DLOZD\V,WVKRXOG
EH DFFRXQWDEOH WR 3DUOLDPHQW  7KH 55$, ZLOO KDYH WKH SRZHUV DQG REMHFWLYHV RI
HFRQRPLF UHJXODWLRQ LQFOXGLQJ ZKHUHYHU QHFHVVDU\ WDULII UHJXODWLRQ IDLU DFFHVV
UHJXODWLRQ LQFOXGLQJ DFFHVV WR UDLOZD\ LQIUDVWUXFWXUH IRU SULYDWH RSHUDWRUV VHUYLFH
VWDQGDUG UHJXODWLRQ OLFHQVLQJ DQG HQKDQFLQJ FRPSHWLWLRQ DQG VHWWLQJ WHFKQLFDO
VWDQGDUGV  ,W ZLOO SRVVHVV TXDVLMXGLFLDO SRZHUV ZLWK DSSRLQWPHQW DQG UHPRYDO RI
0HPEHUV GLVWDQFHG IURP WKH 0LQLVWU\ RI 5DLOZD\V  *LYHQ WKH YDFDQF\ DQG EDFNORJ
SUREOHPV DVVRFLDWHG ZLWK WKH 5DLOZD\ &ODLPV 7ULEXQDOV WKLV &RPPLWWHH GRHV QRW IHHO
WKDWFRQVXPHUFRPSODLQWVLQFOXGLQJFODVVDFWLRQFRPSODLQWVVKRXOGEHDGGUHVVHGWRWKH
55$,7KH&RQVXPHU3URWHFWLRQ$FWLVDGHTXDWHIRUWKDWSXUSRVH+HQFHWKHUHLVQRD
SULRULQHHGIRUEHQFKHVRXWVLGH'HOKL7KHUHVKRXOGEHDQ$SSHOODWH7ULEXQDOWKDWZLOO
KHDU DSSHDOV DJDLQVW WKH RUGHUV RI 55$, DQG IXUWKHU DSSHDOV DJDLQVW WKH RUGHUV RI WKH
$SSHOODWH 7ULEXQDO FDQ EH GLUHFWHG WR WKH 6XSUHPH &RXUW   ,W LV LPSRUWDQW WKDW WKH
OLFHQVLQJ IXQFWLRQ UHPDLQV ZLWK 55$, UDWKHU WKDQ WKH 0LQLVWU\ RI 5DLOZD\V RQFH WKH
SROLF\KDVEHHQVHWE\WKH0LQLVWU\/LFHQVLQJFDQEHDFRPSHWLWLRQHQKDQFLQJGHYLFH
DV LW FDQ EH XVHG WR GHWHU FRPSHWLWLRQ   7KHUHIRUH RQH QHHGVWR DYRLG DQ\ FRQIOLFW RI
LQWHUHVW,QDSSURSULDWHVWDQGDUGVFDQDOVREHXVHGWRUHVWULFWFRPSHWLWLRQ&RPSHWLWLRQ
LQWKHUDLOZD\PDUNHWLVQRWVXIILFLHQWO\GHYHORSHGWRDOORZWKHVHWWLQJRIVWDQGDUGVWREH
GHYHORSHGE\WKHPDUNHWWKURXJKSURGXFHUDQGXVHUDVVRFLDWLRQV7KHUHIRUHWKHVHWWLQJ
RI WHFKQLFDO VWDQGDUGV VKRXOG FRPH XQGHU WKH DPELW RI WKH 55$,  7KLV PHDQV D
ELIXUFDWLRQ RI WKH GXDO UROH SOD\HG E\ 5'62 5HVHDUFK 'HVLJQ DQG 6WDQGDUGV
2UJDQL]DWLRQ  DV 5 ' RUJDQL]DWLRQ RI ,5 DQG WHFKQLFDO DGYLVRU WR WKH 5DLOZD\ %RDUG
DQG DV D VWDQGDUGVHWWLQJ RUJDQL]DWLRQ  3ULRU WR  5'62 ZDV ELIXUFDWHG LQWR D

57

CompetitionandRegulationinIndia,CUTsInternational,2013.Chapter5ofthisreportisonregulatoryissues
intheRailwayssector.

182

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

&HQWUDO 6WDQGDUGV 2IILFH &62  DQG D 5DLOZD\ 7HVWLQJ DQG 5HVHDUFK &HQWUH 575& 
&RQVHTXHQWO\WKLV&RPPLWWHHVHHVQRSUREOHPVZLWKVXFKDELIXUFDWLRQ7KHWHFKQLFDO
VWDQGDUGVHWWLQJ UROH VKRXOG FRPH XQGHU WKH DPELW RI WKH 55$,  5'62V WHFKQRORJ\
UROHIRU,5FDQUHPDLQZLWK,5RUDOWHUQDWLYHO\EHFOXEEHGZLWKWKH5DLOZD\5HVHDUFK
&HQWUHVWKDWZLOOQRZEHVHWXSLQVHOHFWHGXQLYHUVLWLHV,WLVDOVRQHFHVVDU\WRPHQWLRQ
DQRWKHU DVSHFW H[SOLFLWO\ 55$, VKRXOG DOVR EH JLYHQ WKH WDVN RI RYHUVHHLQJ UXOHV DQG
QRUPV WKDW HQVXUH IDLU FRPSHWLWLRQ IRU 639V WKDW KDYH EHHQ FUHDWHG WKURXJK UDLOZD\
FRQQHFWLYLW\ SURMHFWV 35&/ 3LSDYDY 5DLOZD\ &RUSRUDWLRQ /LPLWHG   %'5&/
%KDUXFK'DKHM5DLOZD\&RPSDQ\/WG DUHH[DPSOHV
























183

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG





The




Initial




Five




Years


and




the




Terminal




Goal



5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIIRU0
0DMRU5
5DLOZD\3
3URMHFWVD
DQG5
5HVWUXFWXULQJR
RI5
5DLOZD\0
0LQLVWU\DQG5DLOZD\%RDUG

&KDSWHU7LPHOLQHVWKH,QLWLDO<HDUVDQGWKH7HUPLQDO*RDO

7KH)LUVW<HDUV


 7KH RUJDQL]DWLRQDO UHVWUXFWXULQJ RI ,5 ZLOO EH D PDPPRWK WDVN LPSDFWLQJ WKH HQWLUH
RUJDQL]DWLRQ $V VXFK VXFFHVVIXO UHVWUXFWXULQJ RI ,5 ZLOO UHTXLUH DV D SUHUHTXLVLWH
FRQWLQXHGDQGFRPPLWWHGVXSSRUWDWDSH[OHYHOVXVHRIHIIHFWLYHFKDQJHPDQDJHPHQW
DQG LQWHUQDO FRPPXQLFDWLRQ VWUDWHJLHV LQYROYHPHQW DQG EX\ LQ IURP YDULRXV
VWDNHKROGHUVDQGVWUHQJWKHQLQJRIWKHKXPDQUHVRXUFHIXQFWLRQWRHQDEOHLWDGHTXDWHO\
VXSSRUW WKH PDQDJHPHQW ,W LV DOVR VWURQJO\ UHFRPPHQGHG WKDW LPSOHPHQWDWLRQ VKRXOG
QRWEHOHIWWRWKHH[LVWLQJGLUHFWRUDWHVRI5DLOZD\%RDUG2WKHUZLVHWKLVUHSRUWLVERXQG
WRFRQIURQWDIDWHVLPLODUWRLWVSUHGHFHVVRUV:HZRXOGVXJJHVWWKDWWKHLPSOHPHQWDWLRQ
RZQHUVKLS RI WKLV 5HSRUW VKRXOG YHVW LQ WKH 0LQLVWHU RI 5DLOZD\V DORQH ZLWK DQ
DSSURSULDWHUHSRUWLQJPHFKDQLVPWRWKH302,WKDVWREHHQVXUHGWKDWRQFHGHFLVLRQV
DUH WDNHQ DW WKH DSH[ OHYHO WKHVH PXVW EH HDUQHVWO\ LPSOHPHQWHG ZLWKRXW GHOD\V DQG
ZLWKLQSUHGHILQHGWDUJHWHGWLPHOLQHV


 :H DOVR UHFRPPHQG VHWWLQJ XS RI D VWURQJ IRUPDO LPSOHPHQWDWLRQ DQG PRQLWRULQJ
PHFKDQLVP*LYHQWKHODUJHVFRSHRIWKHFKDQJHVEHLQJSURSRVHGWKHVKHHUVL]HRIWKH
RUJDQL]DWLRQDQGWKHIDFWWKDWLPSOHPHQWDWLRQRIWKHUHFRPPHQGDWLRQVZRXOGQHHGWREH
DSSURSULDWHO\ SKDVHG RYHU D SHULRG RI WLPH LW LV DOVR VXJJHVWHG WKDW D GHGLFDWHG FURVV
IXQFWLRQDO PRQLWRULQJ WHDP EH VHW XS LQ WKH 0LQLVWU\ GLUHFWO\ XQGHU WKH 0LQLVWHUV
RIILFH E\ LQFOXVLRQ RI RIILFHUV ZLWK H[SHUWLVH LQ WKLV DUHD DQG IXQFWLRQDO GRPDLQ
NQRZOHGJH 6LQFH WKHUH DUH DUHDV ZKHUH ,5 PD\ QRW KDYH DOO WKH GRPDLQ NQRZOHGJH
UHTXLUHGFRRSWLQJH[SHUWVIURPRXWVLGHWKH5DLOZD\V\VWHPVKRXOGEHHQFRXUDJHG7KLV
WHDP VKRXOG EH WDVNHG ZLWK QRW RQO\ WKH GD\ WR GD\ PRQLWRULQJ RI SURJUHVV RI
LPSOHPHQWDWLRQ EXW DOVR IRU UHVROYLQJ DQ\ GRXEWV GLVSXWHV FURVV IXQFWLRQDO
FRRUGLQDWLRQ DQDO\]LQJ DQG SURSRVLQJ DQ\ FKDQJHV WKDW PD\ EH ZDUUDQWHG DQG IRU
LQWHUDFWLRQ ZLWK RWKHU 0LQLVWULHV )XUWKHU LI QHFHVVDU\ D ERG\ RI LQGHSHQGHQW RXWVLGH
H[SHUWVVKRXOGDOVREHVHWXSWRJXLGHDQGKHOSLQWKHLPSOHPHQWDWLRQH[HUFLVH


 ,Q WHUPV RI VFKHGXOLQJ DQG WLPHOLQHV WKLV &RPPLWWHH LV SULPDULO\ FRQFHUQHG ZLWK WKH
ILUVW  \HDUV DQGWKH WKUHH EXLOGLQJ EORFNV RI WUDQVLWLRQ WR FRPPHUFLDO DFFRXQWLQJ +5
FKDQJHV DQG WKH VHWWLQJ XS RI DQ LQGHSHQGHQW UHJXODWRU  %XW WKLV GRHV QRW PHDQ WKDW
HYHU\WKLQJ KDV WR ZDLW IRU  \HDUV  ,Q WKH ILUVW  \HDUV WKHUH VKRXOG EH WUDQVLWLRQ WR
FRPPHUFLDO DFFRXQWLQJ DQG JUHDWHU GHFHQWUDOL]DWLRQ WR ]RQHVGLYLVLRQV DQG SURGXFWLRQ
XQLWVDQGWKHFOHDQLQJXSRIILQDQFHVEHWZHHQWKH8QLRQJRYHUQPHQWDQG,5%HFDXVH
RXU VXJJHVWLRQ LV RI VHWWLQJ XS WKH 55$, OHJLVODWLYHO\ UDWKHU WKDQ H[HFXWLYHO\ ZH
FRQWHPSODWH WKDW WKH 55$, ZLOO WDNH DW OHDVW  \HDUV WR EH IRUPDOO\ IXQFWLRQDO ZLWK
QHFHVVDU\FKDQJHVDOVREHLQJEURXJKWDERXWLQWKH5DLOZD\V$FWDQGWKH5DLOZD\%RDUG
$FW  ,Q VLPLODU YHLQ IRU SURVSHFWLYH HQWUDQWV DQG XQLILHG HQWU\ LQWR WKH 5DLOZD\
VHUYLFHV LW LV XQOLNHO\ WKDW WKLV FDQ EH DFFRPSOLVKHG LQVWDQWO\ DQG LV OLNHO\ WR WDNH DW
OHDVW\HDUV7KHWKDQGWKHWK\HDUFDQEHXVHGWRH[DPLQHPHDQVRIILWWLQJLQH[LVWLQJ
HPSOR\HHV LQWR WKH QHZ +5 VWUXFWXUH  7KH WK DQG WK \HDU VKRXOG DOVR EH XVHG WR
UHVROYHVRFLDOFRVWVLVVXHVWKDWDUHEH\RQGUHODWLRQVKLSVEHWZHHQWKH0LQLVWU\RI)LQDQFH
DQG,5
185

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

3ODQQHG$SSURDFKWR,PSOHPHQWDWLRQGXULQJWKHILUVWILYH\HDUV


 5HFRPPHQGDWLRQV RI WKH FRPPLWWHH VSDQ D ZLGH VSHFWUXP LQYROYLQJ LQWHUYHQWLRQV
UHODWLQJ WR WKH RUJDQL]DWLRQDO PLVVLRQ UROH VWUDWHJ\ PDQDJHPHQW GHFLVLRQ PDNLQJ 
VWUXFWXUH RUJDQL]DWLRQ VWUXFWXUH UHRUJDQL]DWLRQ DQG UHRULHQWDWLRQ RI GHSDUWPHQWV
UHSRUWLQJ SDWWHUQV GHOHJDWLRQGHFHQWUDOL]DWLRQ IRUPDOL]DWLRQ HWF  PDQDJHPHQW
SUDFWLFHV V\VWHPV SROLFLHV  SURFHGXUHV  VWUHQJWKHQLQJ RI NH\ IXQFWLRQDO DUHDV +5
$FFRXQWLQJ 0DUNHWLQJHWF  RSHUDWLRQV HWF7KH FKDQJHV EHLQJ UHFRPPHQGHG DUHERWK
WUDQVDFWLRQDO FKDQJHV WR VWUXFWXUH PDQDJHPHQW SUDFWLFHV DQG V\VWHPV  DQG
WUDQVIRUPDWLRQDO FKDQJHVWRPLVVLRQVWUDWHJ\OHDGHUVKLSHWF LQQDWXUH


 ,W LV VHHQ WKDW D QXPEHU RI WKHVH UHFRPPHQGDWLRQV KDG DOVR EHHQ VXJJHVWHG HDUOLHU E\
PDQ\ H[SHUW FRPPLWWHHV VRPH PRUH WKDQ RQFH +RZHYHU PRVW UHPDLQHG
XQLPSOHPHQWHG$QDQDO\VLVRIWKHUHDVRQVIRUWKHLQDELOLW\RIWKH0LQLVWU\RI5DLOZD\V
WR XQGHUWDNH DQG LPSOHPHQW WKHVH UHFRPPHQGDWLRQV PRVW RI ZKLFK DUH VR REYLRXVO\
HVVHQWLDOIRUWKHZHOOEHLQJRIWKHRUJDQL]DWLRQ ZRXOGSHUKDSVEHDJRRGFDVHVWXG\LQ
LWVHOIDERXWUHVLVWDQFHWRFKDQJH$JDLQVWWKLVEDFNJURXQGWKH&RPPLWWHHVWURQJO\IHHOV
QHHGIRUDVWUXFWXUHGDSSURDFKWRLPSOHPHQWDWLRQ$FFRUGLQJO\EURDGUHFRPPHQGDWLRQV
RQ WKH SULRULWL]DWLRQ SKDVLQJ SRVVLEOH WLPHOLQHV DQG LPSOHPHQWDWLRQ VWUXFWXUH DQG
VWUDWHJLHV DUH EHLQJ PDGH 7KH &RPPLWWHH KDV WDNHQ GXH QRWH RI YLHZV H[SUHVVHG E\
VRPHRIWKHVWDNHKROGHUVWKDWIRUHDVHRILPSOHPHQWDWLRQRILWVUHFRPPHQGDWLRQVPLFUR
GHWDLOLQJVKRXOGEHEHVWOHIWWRWKH5DLOZD\V:HWKHUHIRUHSURSRVHWRSURYLGHDEURDG
URDGPDSVSHFLI\LQJYDULRXVDVSHFWVWKDWZRXOGQHHGWREHLQFRUSRUDWHGLQWKHDSSURDFK
WRLPSOHPHQWDWLRQ


 $SSURDFK DQG HWKRV IRU LPSOHPHQWDWLRQ ,Q NHHSLQJ ZLWK WKH ZLGH JDPXW RI FKDQJHV
UHFRPPHQGHGDQGWKHOLNHO\ORQJHUWLPHIUDPHUHTXLUHGIRUVRPHRIWKHFKDQJHVWRWDNH
HIIHFWWKH&RPPLWWHHLVRIWKHYLHZWKDWVWURQJFRQWLQXHGFRPPLWWHGRZQHUVKLSDQG
VXSSRUW WR WKH RUJDQL]DWLRQDO UHVWUXFWXULQJ IURP WKH SROLWLFDO OHDGHUVKLS DQG WRS
PDQDJHPHQWZRXOGEHDQHVVHQWLDOSULPDU\SUHUHTXLVLWHIRUWKHVXFFHVVIXOWUDQVLWLRQRI
,5 WR D ILQDQFLDOO\ YLDEOH YLEUDQW RUJDQL]DWLRQ WKDW LV DEOH WR PHHW WKH WUDQVSRUWDWLRQ
QHHGVRIDIDVWJURZLQJHFRQRP\7KHUHZLOOEHHVVHQWLDOO\WZRVWDJHVLQYROYHGLQWKLV
SURFHVV )LUVW WKH 5DLOZD\V PXVW REMHFWLYHO\ HYDOXDWH UHFRPPHQGDWLRQV RI WKLV
&RPPLWWHHDQGGHFLGHDVWRZKLFKRQHVZLOOEHLPSOHPHQWHGDQGZKLFKVKDOOEHNHSW
RQ KROG RU VKHOYHG 7KLV PXVW EH GRQH WKURXJK DQ REMHFWLYHO\ GHVLJQHG H[KDXVWLYH
PHWKRGRORJ\ LQYROYLQJ WKH 0LQLVWHU RI 5DLOZD\V DSH[ OHYHO PDQDJHPHQW RI 5DLOZD\V
DQG WKH 3ULPH 0LQLVWHUV 2IILFH ,W PXVW EH PDGH DEXQGDQWO\ FOHDU DW WKH RXWVHW WR DOO
FRQFHUQHG WKDW RQFH WKH ODUJHU GHFLVLRQ DERXW UHFRPPHQGDWLRQV WR EH IROORZHG XS LV
WDNHQQRUHRSHQLQJ RI VHWWOHG LVVXHV ZLOO EHSHUPLWWHG DV KDV EHHQWKH SUDFWLFH LQ WKH
SDVW 7KLV ZRXOG EH WKH NH\ WR LPSOHPHQWDWLRQ DFFRUGLQJ WR GUDZQ XS WLPHOLQHV
,QFLGHQFHRIGHOLQTXHQF\VKRXOGEHYLHZHGVHULRXVO\6HFRQGIRUWKHUHFRPPHQGDWLRQV
DFFHSWHGDQHIIHFWLYHLPSOHPHQWDWLRQPHFKDQLVPVKDOOQHHGWREHVHWXS,WZRXOGKHOS
LIWKH0LQLVWU\RI5DLOZD\VZHUHWRVHWXSDQHODERUDWHPXOWLWLHUFRPSHWHQWGHGLFDWHG
DQG\HWLQGHSHQGHQWPDFKLQHU\IRULPSOHPHQWDWLRQRIYDULRXVUHFRPPHQGDWLRQV6XFKD
VWUXFWXUHVKRXOGEHFDUYHGRXWE\UHDOORFDWLRQRIH[LVWLQJUHVRXUFHV RIILFHUVVWDIIHWF 
0LQLVWU\RI5DLOZD\VVKRXOGDOVRPDNHHIIHFWLYHXVHRIFKDQJHPDQDJHPHQWLQWHUQDO
FRPPXQLFDWLRQDQGSURMHFWLPSOHPHQWDWLRQVWUDWHJLHVDORQJZLWKVWUHQJWKHQLQJRIWKH
186

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

+5IXQFWLRQ$SSURSULDWHLQGXFWLRQDQGXVHRIRXWVLGHWDOHQWZRXOGQRWRQO\EHUHTXLUHG
EXWZLOOEHFULWLFDO

Political
Leadership
Apexlevel
RailwayBd

 $SH[OHYHORZQHUVKLS 7KHFRPPLWWHH


ZRXOGOLNHWRDJDLQHPSKDVL]HWKDWRZQHUVKLS
RI LPSOHPHQWDWLRQ RI WKH UHSRUW VKRXOG YHVW
ZLWK WKH 0LQLVWHU RI 5DLOZD\V DORQH $Q
DSSURSULDWHUHSRUWLQJPHFKDQLVPWRWKH302
VKRXOG DOVR EH SXW LQ SODFH 7KLV ZLOO HQVXUH
WKDW RQFH GHFLVLRQV DUH WDNHQ DW WKH DSH[
OHYHOWKH\DUHLPSOHPHQWHGHDUQHVWO\ZLWKRXW
GHOD\VDQGZLWKLQSUHGHILQHGWLPHOLQHV


'UDZLQJXSRIWKHLPSOHPHQWDWLRQEOXH
SULQW 9DULRXV UHFRPPHQGDWLRQV DQG
LQWHUYHQWLRQV VSDQ D EURDG VSHFWUXP LQ WHUPV
RI WKHLU LPSRUWDQFH SULRULW\ VHTXHQFLQJ
UHTXLUHPHQWVHDVHRILPSOHPHQWDWLRQOHYHO VFRSHRIWKHLULPSDFW GRPDLQVSHFLILFWR
JHQHUDO LQ QDWXUH  FKDOOHQJHV DQG DJHQFLHV LQYROYHG LQWHUPLQLVWHULDO YHUVXV 5DLOZD\
VSHFLILF HWF$VDILUVWVWHSLWZRXOGEHORJLFDOWKDWWKHVHDUHEURDGO\FDWHJRUL]HGWRKHOS
FUHDWH WKH LQLWLDO LPSOHPHQWDWLRQ SODQ EOXHSULQW 5HFRPPHQGDWLRQV IDOOLQJ LQ GLIIHUHQW
VHJPHQWV RI WKH PDWUL[ ZLOO UHTXLUH YDU\LQJ DSSURDFK LQ LPSOHPHQWDWLRQ JLYHQ WKH
GLYHUVH FKDOOHQJHV LQYROYHG GLIIHUHQW VWUXFWXUHV WR LPSOHPHQW WKHP DQG GLIIHUHQW WLPH
IUDPHVRILPSOHPHQWDWLRQ$VVXFKWKH&RPPLWWHHVXJJHVWVWKDWWKHIROORZLQJSURFHVVEH
XVHGIRUGUDZLQJXSRIWKHLPSOHPHQWDWLRQEOXHSULQWSODQ

Othersenior
management



 &DWHJRUL]DWLRQ RI WKH UHFRPPHQGDWLRQV %URDG FDWHJRUL]DWLRQ RI YDULRXV


UHFRPPHQGDWLRQV FRXOG EH FDUULHG RXW LQWR KRPRJHQRXV JURXSLQJV JLYHQ LQ WKH ILJXUH
EHORZ

187

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


Broad categorization of the recommendations


%URDG FDWHJRUL]DWLRQ DV LQGLFDWHG DERYH ZRXOG QRW RQO\ HQVXUH ORJLFDO JURXSLQJ RI
YDULRXVUHFRPPHQGDWLRQVEXWZRXOGDOVROHQGLWVHOIWRLPSDUWLQJSURSHUSHUVSHFWLYHIRU
DFKLHYLQJWKHULJKWVHTXHQFLQJHIIHFWLQJSULRULWL]DWLRQDQGVHOHFWLQJWKHPRVWDSSURSULDWH
LPSOHPHQWDWLRQ VWUXFWXUHIUDPHZRUN IRU YDULRXV UHFRPPHQGDWLRQV )XUWKHU ZKLOH
LPSOHPHQWDWLRQ RI VHYHUDO JURXSV RI UHFRPPHQGDWLRQV FDQ EH LQLWLDWHG VLPXOWDQHRXVO\
WKHUHZLOOEHPDQ\RWKHUVZKHUHVHTXHQWLDORUGHULQJZLOOEHQHFHVVDU\0LFURGHWDLOLQJRI
188

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

WKH LPSOHPHQWDWLRQ VWUDWHJ\ IRU HDFK VSHFLILF UHFRPPHQGDWLRQ ZLOO KRZHYHU EH
UHVSRQVLELOLW\RIWKHJURXSDJHQF\DOORFDWHGIRULPSOHPHQWDWLRQ


 3ULRULWL]DWLRQ RI WKH UHFRPPHQGDWLRQV 9DULRXV UHFRPPHQGDWLRQV FDQ EH SULRULWL]HG
EDVHG RQ SDUDPHWHUV VXFK DV D  LWV LPSRUWDQFH GHSHQGLQJ XSRQ WKH OLNHO\ LPSDFW
XUJHQF\RIQHHGHWF E  VHTXHQFLQJSKDVLQJUHTXLUHPHQW WREHWDNHQXSLPPHGLDWHO\RU
VXEVHTXHQWO\  F  HDVH RI LPSOHPHQWDWLRQ DQG G  H[SHFWHG WLPH UHTXLUHG IRU
LPSOHPHQWDWLRQ HWF6LQFH DVVHVVPHQW RI PRVW RI WKHVH SDUDPHWHUV ZRXOG EHSHUFHSWLRQ
EDVHG QR PDWKHPDWLFDO PRGHO FDQ EH SUHVFULEHG IRU SULRULWL]DWLRQ H[HUFLVH 7KH
FRPPLWWHH KDV UHOLHG RQ HODERUDWH LQWHUDFWLRQ FRQGXFWHG ZLWK YDULHG VWDNHKROGHUV
DYDLODEOH GDWD YLHZV RI SUHGHFHVVRU H[SHUW FRPPLWWHHV DQG DOVR RQ WKH IHHGEDFN
UHFHLYHGLQUHVSRQVHWRLWV,QWHULP5HSRUW


 ,PSOHPHQWDWLRQ SODQ 7KLV &RPPLWWHH LV RI WKH YLHZ WKDW ZKLOH D ODUJH QXPEHU RI
UHFRPPHQGDWLRQV FDQ EH LPSOHPHQWHG E\ 0LQLVWU\ RI 5DLOZD\V WKHPVHOYHV WKHUH DUH
VRPH WKDW PD\ UHTXLUH LQWHUPLQLVWHULDO  LQWHUGHSDUWPHQWDO FRQVXOWDWLRQV &RQVXOWDWLRQ
ZLWK 6WDWH *RYHUQPHQWV ZLOO DOVR EH QHFHVVDU\ LQ VRPH FDVHV 7KH LPSOHPHQWDWLRQ
VWUDWHJ\ZLOOQHHGWREHGLIIHUHQWIRUGLIIHUHQWW\SHRILQWHUYHQWLRQVGHSHQGLQJXSRQWKLV
DVSHFW )XUWKHU LQ RUGHU WR LPSOHPHQW WKH UHFRPPHQGDWLRQVLQWHUYHQWLRQV ZLWKLQ D
UHDVRQDEOH WLPHIUDPH LW LV FOHDU WKDW QRUPDO SURFHVVHV RI GHFLVLRQ PDNLQJ DQG
LPSOHPHQWDWLRQ ZLOO QRW ZRUN :H WKHUHIRUH UHFRPPHQG WKDW LQ RUGHU WR H[SHGLWH
LPSOHPHQWDWLRQ RI LVVXHV WKDW LQYROYH RXWVLGH DJHQFLHV &HQWUDO *RYHUQPHQW
'HSDUWPHQWV 6WDWH *RYHUQPHQWV RWKHU DJHQFLHV HWF  HPSRZHUHG JURXSV OLNH ,QWHU
0LQLVWHULDO *URXSV ,0*V &RRUGLQDWLRQ 6WUXFWXUHV*URXSV &6  VKRXOG EH FUHDWHG
FRPSULVLQJ UHSUHVHQWDWLYHV RI YDULRXV VWDNHKROGHU DJHQFLHV IRU IDVWHU GHFLVLRQ PDNLQJ
DQG LPSOHPHQWDWLRQ 7R LOOXVWUDWH LPSOHPHQWDWLRQ RI WKH UHFRPPHQGDWLRQ IRU
UHRUJDQL]DWLRQRIYDULRXV*URXS$RUJDQL]HG5DLOZD\VHUYLFHVLQWRWZRVXEJURXSVZLOO
UHTXLUH SDUWLFLSDWLRQ RI DQG DSSURYDOV IURP RWKHU GHSDUWPHQWV OLNH WKH 'R37 836&
0LQLVWU\ RI /DZ HWF &UHDWLRQ RI DQ HPSRZHUHG ,0* FRPSULVLQJ RI WKH FRQFHUQHG
GLUHFWRUDWHVRIILFLDOV RI WKHVH DJHQFLHV ZLOO RIIHU D PXFK IDVWHU DQG VPRRWKHU PRGDOLW\
WKDQ WKH QRUPDO SURFHVV RI PRYLQJ SURSRVDOV IURP RQH 0LQLVWU\ WR RWKHU 6XFK ,0*V
VKRXOG QRW RQO\ EH HPSRZHUHG EXW DOVR JLYHQ D VSHFLILF WLPHIUDPH WR FOHDUILQDOL]H WKH
LVVXHV EHIRUH WKHP 6LPLODU VWDQGLQJ JURXSV FDQ DOVR EH FUHDWHG IRU LVVXHV WKDW LQYROYH
VWDWH*RYHUQPHQWV7KHFRRUGLQDWLRQDQGVHFUHWDULDWRIWKHVHHPSRZHUHGJURXSVZLOOEH
ZLWKWKHOHDGLPSOHPHQWDWLRQDJHQF\GHSDUWPHQWZLWKLQWKH5DLOZD\%RDUG


 0RQLWRULQJ IUDPHZRUNVWUXFWXUH IRU LPSOHPHQWDWLRQ 7KH FRPPLWWHH LV RI WKH YLHZ WKDW
IRU VPRRWK DQG H[SHGLWLRXV LPSOHPHQWDWLRQ RI WKH UHFRPPHQGDWLRQV D  OD\HUHG
LPSOHPHQWDWLRQIUDPHZRUNVWUXFWXUHQHHGVWREHFUHDWHG7KHIUDPHZRUNZLOOKDYHZHOO
GHILQHGUHVSRQVLELOLWLHVDWYDULRXVOHYHOVZLOOEHWKLQLQVL]HDQGPDQQHGE\SHUVRQVZLWK
UHOHYDQWVNLOOVDQGFRPSHWHQFLHV7KLVVWUXFWXUHZLOOFRPSULVH'HGLFDWHG,PSOHPHQWDWLRQ
*URXSV ',*V  ZLWKLQ WKH RIILFH RI WKH 5DLOZD\ %RDUG 7KHVH ',*V VKRXOG FRPSULVH
FURVVIXQFWLRQDOWHDPVDWDVHQLRUOHYHO PLQLPXP('OHYHO UHSUHVHQWLQJDOOFRQFHUQHG
GLUHFWRUDWHV )RU LPSOHPHQWDWLRQ SXUSRVHV WKHVH ',*V ZLOO EH KHDGHG E\ D VHQLRU
RIILFLDOV VSHFLILFDOO\ LGHQWLILHG ,Q DGGLWLRQ IRU HIIHFWLYH PRQLWRULQJ DQG FRRUGLQDWLRQ
WKHUHZLOOEHQHHGIRUFUHDWLRQRIDFHQWUDOL]HG'HGLFDWHG(PSRZHUHG*URXS '(* 7KLV
'(* EHVLGHV PRQLWRULQJ DQG RYHUVHHLQJ WKH LPSOHPHQWDWLRQ HIIRUW ZLOO DOVR EH
UHVSRQVLEOH IRU UHVROYLQJ DQ\ GLVSXWHVLVVXLQJ FODULILFDWLRQV UHFRPPHQGLQJ FKDQJHV RU
189

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

FRXUVH FRUUHFWLRQV LI UHTXLUHG )RU WKLV SXUSRVH YDULRXV ',*V LQ 5DLOZD\ %RDUG ZLOO
UHSRUWWRWKH'(*7KHHQWLUHH[HUFLVHRI5DLOZD\5HVWUXFWXULQJHIIRUWVKRXOGEHXQGHU
WKH DHJLV RI WKH *RYHUQPHQW DW WKH KLJKHVW OHYHO ZKLFK ZLOO DOVR UHVROYH DQ\ LQWHU
GHSDUWPHQWDO  LQWHUPLQLVWHULDO GLVSXWHV H[DPLQH  VDQFWLRQ DQ\ PDMRU FKDQJHV WR WKH
DSSURYHG UHFRPPHQGDWLRQV GHDO ZLWK ODUJHU SROLF\ LVVXHV KDYLQJ ZLGHU UDPLILFDWLRQV
HWF 7KH PDQQLQJ RI WKH '(* ZLOO UHTXLUH YHU\ VSHFLDOL]HG FRPSHWHQFLHV DQG VNLOOV
EHVLGHV GRPDLQ NQRZOHGJH RI 5DLOZD\V )XUWKHU WKH FRPPLWWHH DOVR VWURQJO\
UHFRPPHQGV D V\VWHP RI FRRSWLQJ RXWVLGH H[SHUWLVH ERWK IURP ZLWKLQ DQG RXWVLGH WKH
*RYHUQPHQWLQWRWKH'(*DWWKH5DLOZD\%RDUG


 6XJJHVWHG ,PSOHPHQWDWLRQ 3ODQ $V DOUHDG\ VWDWHG WKLV &RPPLWWHH ZRXOG UHIUDLQ IURP
PLFURGHWDLOLQJRIWKH,PSOHPHQWDWLRQ3ODQ<HWLWLVRXUYLHZWKDWLPSOHPHQWDWLRQPXVW
EHGRQHLQWLJKWWLPHIUDPHIRUEHVWEHQHILWVWRDFFUXH:HDFFRUGLQJO\VHWRXWEHORZRXU
DVVHVVPHQW RI UHDOLVWLF WLPHOLQHV WKDW EURDGO\ QHHG WR EH IROORZHG IRU PDMRU
UHFRPPHQGDWLRQVWKDWZHKDYHPDGH



0DMRUUHFRPPHQGDWLRQV 


'HFLVLRQPDNLQJVWUXFWXUHRI,QGLDQ5DLOZD\V

7LPHOLQH

x 5DWLRQDOL]DWLRQRIFRUHDFWLYLWLHVDQG

LQWHJUDWLRQRI,7LQLWLDWLYHVDVVXJJHVWHGLQ
SDUDWR

\HDUV

x 5HRUJDQL]DWLRQRI5DLOZD\%RDUGDQG=RQHV


\HDUV
'HFHQWUDOL]DWLRQDQGHPSRZHUPHQWDVVXJJHVWHG
LQSDUDWR

x $FFRXQWLQJ5HIRUPVDVVXJJHVWHGLQ&KDSWHU 

\HDUV

+XPDQ5HVRXUFH0DQDJHPHQW

x 5HRUJDQL]DWLRQRI*URXS$5DLOZD\6HUYLFHVZLWK

\HDUV
SURVSHFWLYHHIIHFW




 UHFUXLWPHQWF\FOH 

x 5HRUJDQL]DWLRQRI*URXS$5DLOZD\6HUYLFHVIRUH[LVWLQJ
HPSOR\HHVEDVHGRQLQWHUPLQLVWHULDOFRQVXOWDWLRQV836&
DQGOHJDORSLQLRQ
x 5HRUJDQL]DWLRQRIH[LVWLQJGHSDUWPHQWVDVVXJJHVWHG

LQSDUD

%XGJHWDU\UHODWLRQVKLSEHWZHHQWKH*RYHUQPHQWDQG,5

\HDUV

x 5HYLVLRQRIGLYLGHQGSROLF\IRU,5 

\HDU

\HDUV

\HDUV





x )XQGLQJRISXEOLFVHUYLFHREOLJDWLRQDIWHUDFFRXQWLQJ
UHIRUPVDUHFRPSOHWHG



190

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

)LQDQFLQJDQGJHQHUDWLRQRIUHYHQXHV


x &DWHULQJSDUFHOOHDVLQJFRQFHVVLRQLQJRIWUDLQVHUYLFHV
DVRXWOLQHGLQSDUDWR

\HDUV

x ([WHUQDOILQDQFLQJWKURXJKXVHRIDVVHWVODQG

DQG5(,7VWDWLRQGHYHORSPHQWHWFDVRXWOLQHGLQ
SDUDWR

\HDUV

x 5HVRXUFHJHQHUDWLRQWKURXJK-9VDVRXWOLQHGLQ
SDUDWR

\HDUV

\HDUV

\HDUV

\HDUV





x 5HVRXUFHJHQHUDWLRQWKURXJK333DVRXWOLQHGLQ 
SDUDWR

x 6HWWLQJXSRILQGHSHQGHQW5HJXODWRU


LQFOXGLQJPRGLILFDWLRQRI5DLOZD\$FWIRUPDOL]LQJWKH
6WUXFWXUHGXWLHVUHVSRQVLELOLWLHVDQGSRZHUVRIWKH
5HJXODWRU 

x &UHDWLQJDXWRQRP\DVVXJJHVWHGLQSDUDWR



%H\RQGWKH)LUVW<HDUV

 $VZDVH[SODLQHGLQ&KDSWHUVDQGRQFHWKHVHFKDQJHVWDNHKROGLWLVLPSRVVLEOHWR
SUHGLFW WKH IXWXUH EH\RQG WKH ILUVW  \HDUV  1HYHUWKHOHVV WKH &RPPLWWHH KDV WKUHH
WKRXJKWVRQWKHIXWXUH


 )LUVW,5KDVVL[SURGXFWLRQXQLWV7KHGHWDLOVDUHVKRZQLQ7DEOH7KHVHXQLWVQRW
RQO\SURGXFHIRU,5EXWDOVRH[SRUWRYHUVHDVDQGDOVRVHOOWRGRPHVWLFFXVWRPHUVZKR
DUH QRW SDUW RI ,5  7KHVH XQLWV DUH KHDGHG E\ *0V DQG WKLV IORZV XSZDUGV WR WKH
5DLOZD\ %RDUG DQG WKH 5DLOZD\ 0LQLVWU\  $QQXDO SURGXFWLRQ SURJUDPPHV DUH
DSSURYHG E\ WKH %RDUG  $W WKH OHYHO RI WKH 5DLOZD\ %RDUG WKHUH DUH GHOD\V LQ WKH
ILQDOL]DWLRQ RI WHQGHUV DQG GHVLJQV  7KHUH LV LQVXIILFLHQW ILQDQFLDO IUHHGRP LQ
SURFXUHPHQW ZRUNV DQG UHDSSURSULDWLRQ RI IXQGV  *0V ODFN IUHHGRP LQ YHQGRU
GHYHORSPHQW4XRWHVLQWKHH[SRUWPDUNHWDUHSRVVLEOHRQO\LIWKH\DUHURXWHGWKURXJK
5,7(6,5&21  7KH SURGXFWLRQ XQLWV DUH LQRUGLQDWHO\ FRQWUROOHG E\ ,5  ,QGHHG WKH
*0VDUHDOVRELUGVRISDVVDJHIURPWKH,5V\VWHPZLWKVKRUWWHQXUHVDQGQRSDUWLFXODU
LQWHUHVWLQWKHORQJHUWHUPGHYHORSPHQWRIWKHSURGXFWLRQXQLWV1HZSURGXFWLRQXQLWV
H[SHFWHG DUH  IRUJHG ZKHHOV LQ 5DH %DUHOL 0(08V 0DLQOLQH (OHFWULFDO 0XOWLSOH
8QLWV LQ%KLOZDUDFRDFKHVLQ6RQHSDWZKHHOVLQ&KKDSUDD[OHVLQ-DOSDLJXUL0(08V
LQ.DQFKUDSDUDDQGFRDFKHVLQ.HUDOD)',SURSRVDOVKDYHEHHQLQYLWHGIRUDQHOHFWULF
ORFRPRWLYH SODQW LQ 0DGKHSXUD DQG D GLHVHO ORFRPRWLYH SODQW LQ 0DUKRZUD D
FRQVHTXHQFHRI)',KDYLQJEHHQDOORZHGLQWKH5DLOZD\V,QRWKHUZRUGVWKHVH
191

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

H[LVWLQJ ,5 SURGXFWLRQ XQLWV ZLOO EH H[SRVHG WR FRPSHWLWLRQ IURP WKH SULYDWH VHFWRU
IRUHLJQRUGRPHVWLF:DJRQVDUHDOUHDG\SURGXFHGE\WKHSULYDWHVHFWRU&RDFKHVDQG
ORFRPRWLYHV FRXOG IROORZ  8QOHVV WKH\ DUH IUHHG IURP WKHLU FRQVWUDLQWV WKH H[LVWLQJ
SURGXFWLRQXQLWVZLOOEHXQDEOHWRIDFHWKLVFRPSHWLWLRQ,QWKHIXWXUHWRHQDEOHWKHPWR
KDQGOHFRPSHWLWLRQDOOWKHVHH[LVWLQJSURGXFWLRQXQLWVPD\YHU\ZHOOEHSODFHGXQGHUD
JRYHUQPHQW 639 NQRZQ DV WKH ,QGLDQ 5DLOZD\ 0DQXIDFWXULQJ &RPSDQ\ ,50& 
:KLOHWKLVUHPDLQVDJRYHUQPHQW639DWOHDVWLQLWLDOO\XQGHUWKHDGPLQLVWUDWLYHFRQWURO
RIWKH0LQLVWU\RI5DLOZD\VPDNLQJLWDJRYHUQPHQW639PDNHVLWLQGHSHQGHQWRIWKH
0LQLVWU\ RI 5DLOZD\V DQG WKH JRYHUQPHQW LQFOXGLQJ LQ WKH GHWHUPLQDWLRQ RI VDODU\
VWUXFWXUHVDQGDOORZVLWWRERUURZ7KH,QGHSHQGHQW'LUHFWRUVRQWKH,50&%RDUGZLOO
EHFKRVHQE\WKH3XEOLF(QWHUSULVHV6HOHFWLRQ%RDUG 3(6% 1RSULYDWL]DWLRQQHHGEH
FRQWHPSODWHGDWOHDVWLQLWLDOO\7KDWZRXOGEHSUHPDWXUH+RZHYHUVRPHGLOXWLRQRI
HTXLW\ WKURXJK ,32V LV LQGHHG SRVVLEOH 7KLV ZRXOG UDLVH FDSLWDO IRU PRGHUQL]DWLRQ RI
WKHVHXQLWV3ULYDWL]DWLRQLVWREHLQWHUSUHWHGDVOLEHUDOL]DWLRQ2QFHWKH,50&LVWDNHQ
RXWVLGHWKH,5V\VWHPWKHUHLVRQHPLQRUGLVDGYDQWDJH)RUUROOLQJVWRFNZKHHOVDQG
D[OHVERXJKW E\ ,5IURP ,50& LQGLUHFW WD[HV ZLOO KDYH WR EHSDLG  +RZHYHU WKLV LV
PRUHWKDQQHXWUDOL]HGE\WKHEHQHILWV7KH,50& PRGHODOVRHQDEOHVRQHWRGHYLVHD
EHWWHULQFHQWLYHVWUXFWXUHIRUQHZHPSOR\HHV,5KDVDQLQFHQWLYHERQXVV\VWHPZKHUH
ERQXVHV DUH FDOFXODWHG RQ EDVHOLQH SURGXFWLYLW\ RXWSXWV ZLWK OLWWOH LQFHQWLYH IRU
LQGLYLGXDOSURGXFWLYLW\LPSURYHPHQWV,GHDOO\DQLQFHQWLYHV\VWHPZRUNVEHVWZKHQLW
LQFHQWLYL]HV LQGLYLGXDOEDVHG SURGXFWLYLW\ OLQNHG WR D EHWWHU ILQDO RXWSXW  $GPLWWHGO\
LQFHQWLYH V\VWHPV WKDW XQDPELJXRXVO\ LQFHQWLYL]H DQ LQGLYLGXDO WR LPSURYH KLVKHU
SURGXFWLYLW\ DUH VRPHWLPHV GLIILFXOW WR LPSOHPHQW DQG RQH IDOOV EDFN RQ EDVHOLQH
LQFHQWLYHVVXFKDVLQWKHSUHVHQW,5V\VWHP)RU,50&DJURXSLQFHQWLYHVFKHPHFDQ
EHZRUNHGRXWZKLFKZRUNVDWWKHSURGXFWLRQXQLWOHYHO,QDGGLWLRQWREHLQJEDVHGRQ
SK\VLFDOLQGLFDWRUVRISHUIRUPDQFH RXWSXW WKHLQFHQWLYHVFDQIDFWRULQLQGLFDWRUVEDVHG
RQWKHILQDQFLDOSHUIRUPDQFHRIWKHSURGXFWLRQXQLWDOVR$OOQHZHPSOR\PHQWLQ,50&
FDQ EH EDVHG RQ WKLV V\VWHP  ([LVWLQJ HPSOR\HHV LQ WKH SURGXFWLRQ XQLWV ZKR QRZ
PLJUDWH WR ,50& FDQ EH JLYHQ WKH RSWLRQ RI FKRRVLQJ EHWZHHQ WKH H[LVWLQJ ERQXV
VFKHPH DQG WKH QHZ RQH  3URJUHVVLYHO\ HYHU\RQH FDQ EH EURXJKW XQGHU WKH QHZ
V\VWHP $OO WKH SHUNV EHQHILWV RI WKH H[LVWLQJ HPSOR\HHV PXVW EH SURWHFWHG LQ WKH
WUDQVLWLRQHYHQLIDRQHWLPHH[HPSWLRQLVWREHVRXJKWIRUWKHVDPH

7DEOH3URGXFWLRQ8QLWV
8QLW

&/:&KLWWDUDQMDQ
'/:9DUDQDVL
'0:3DWLDOD

<HDU
HVWDEOLVKHG






5:)%DQJDORUH



,&)&KHQQDL
5&).DSXUWKDOD

,WHP
&RDFKHV
&RDFKHV
(OHFWULFORFRV
'LHVHOORFRV
'LHVHO
UHEXLOGLQJ
:KHHOVDQG
D[OHV


SURGXFWLRQ




 UHEXLOGLQJ 
PDQXIDFWXUH 
 ZKHHOV 
 D[OHV 

WDUJHW




 UHEXLOGLQJ 
PDQXIDFWXUH 
 ZKHHOV 
 D[OHV 

192

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

6HFRQGRQFHWKHFKDQJHVRIWKHILUVW\HDUVDUHLPSOHPHQWHGLQFOXGLQJWKHUHVROXWLRQ
RI WKH VRFLDO FRVWV LVVXH WKH 5DLOZD\ %XGJHW VKRXOG EH SKDVHG RXW ZLWK *%6 WR ,5
PHQWLRQHGDVDSDUDJUDSKLQWKH8QLRQ%XGJHWDQGQRPRUH


 7KLUGZKHQWKH55$,EHJLQVWRIXQFWLRQDQGUHVROYHVDFFHVVWRWUDFNLVVXHVQRWRQO\IRU
SULYDWHWUDLQRSHUDWRUVEXWDOVRIRU,5]RQHVWKDWFRPSHWHZLWKHDFKRWKHULWPLJKWYHU\
ZHOO EH WKH FDVH WKDW WKHUH LV D FDVH IRU D ELIXUFDWLRQ EHWZHHQ DQ ,QGLDQ 5DLOZD\
,QIUDVWUXFWXUH&RUSRUDWLRQ ,5,& DQGUHVWRI,5DVWUDLQRSHUDWRUV:HUHWKLVWRKDSSHQ
ZKLOH ,5,& ZRXOG EH GHOLQNHG IURP WKDW SDUW RI ,5 WKDW RSHUDWHV WUDLQV LW ZRXOG
FRQWLQXH WR EH D JRYHUQPHQW 639  7KH LGHD EHKLQG ,5,& LV WR PDNH WKH PDUNHW IRU
WUDFNV URXWHV DQG SDWKV FRQWHVWDEOH  +RZHYHU WKDW FDQ DOVR EH DFKLHYHG WKURXJK WKH
55$,  &RQVHTXHQWO\ RQH VKRXOG ZDLW WR VHH ZKDW WKH 55$, VXFFHHGV LQ DFKLHYLQJ
EHIRUHGHFLGLQJWKDWVRPHWKLQJOLNHWKH,5,&LVQHFHVVDU\

193

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

$QQH[XUHD5HFRPPHQGDWLRQVRI(DUOLHU&RPPLWWHHV


























&RPSHQVDWLRQIURP8QLRQDQGRU6WDWHJRYHUQPHQWVIRU
VXEXUEDQOLQHVWUDQVSRUWDWLRQFHVVLQPHWURSROLWDQDUHDV
1RXQUHPXQHUDWLYHOLQHVRUEUDQFKOLQHVXQOHVV6WDWH
JRYHUQPHQWV RUUHOHYDQWRUJDQL]DWLRQV SD\+DQGWKHVH
RYHUDW]HURFRVWWR6WDWHJRYHUQPHQWV
,QFUHDVHDSSURSULDWLRQWR'HSUHFLDWLRQ5HVHUYH)XQGEDVHG
RQFRPPHUFLDOSUDFWLFHV
&RQYHUWLQWHUHVWEHDULQJOLDELOLWLHVLQWRHTXLW\
$PRUWL]DWLRQRIFDSLWDOQRWEDFNHGE\DVVHWVRUZKHUH
UHPXQHUDWLRQLVORZ
2SHUDWLQJUDWLRVKRXOGEHFRPSXWHGDIWHUGLYLGHQGVDQG
DSSURSULDWLRQWR5HVHUYH)XQGV
6HWXSDVLQNLQJIXQGIRUH[WLQJXLVKLQJGHEWZULWHRII
FDSLWDORQUHGXQGDQWDQGQRQSURGXFWLYHDVVHWV
,PSOHPHQWDSURSHUV\VWHPRIWUDIILFFRVWLQJZLWKREMHFWLYH
DSSRUWLRQLQJRIGLUHFWFRVWV
&RUSRUDWL]DWLRQLVQRWUHFRPPHQGHGH[FHSWIRUDQFLOODU\
IXQFWLRQV
)RUPRELOL]LQJDGHTXDWHLQWHUQDOUHVRXUFHVDURXQGSHU
FHQWUDWHRIUHWXUQRQFDSLWDODWFKDUJHDIWHUSD\PHQWRI
GLYLGHQG
6WUHDPOLQHLQYHVWPHQWSODQQLQJ
-9EHWZHHQ,5DQGSULYDWHSDUWLHVLQDFTXLULQJSDVVHQJHU
FRDFKHVDQGRSHUDWLQJKLJKVSHHGSDVVHQJHUWUDLQVEHWZHHQ
VHOHFWSDLUVRIVWDWLRQVILQDQFLQJRIWKHUHODWHGUROOLQJVWRFN
UHTXLUHPHQWV
-9VZLWK6WDWHJRYHUQPHQWV368VZLWKORVVHVERUQHE\
6WDWHJRYHUQPHQWV368V
5HYLVH-9ZLWK6WDWH368V3RUWFRPSDQLHVSULYDWHVHFWRUV
ZLWKPD[LPXPVKDUHRIHTXLW\ZLWKWKH6WDWH368V
,QFUHDVHSD\ORDGWDUHUDWLRRQZDJRQV
&UHDWHDV\VWHPRIYDULDEOHSD\OLQNHGWRLQFUHPHQWDO
VXUSOXV
,QFUHDVHWKHUDWHRIGLYLGHQGSD\DEOHE\368V
&UHDWH3URMHFW$SSUDLVDODQG0RQLWRULQJ*URXSIRU
SULRULWL]LQJQHHGHG,QYHVWPHQW
5ROOLQJ6WRFNLQYHVWPHQWWREHPHWWKURXJK333RUE\OHDVH
3URMHFW)XQGLQJWKURXJK368V),V
$GGLWLRQDO*URVV%XGJHWDU\6XSSRUW

.XQ]UX  7DQGRQ  


5DNHVK0RKDQ  
.XQ]UX  7DQGRQ  
6DULQ  
6DULQ  3RXORVH  
([SHUW*URXS  VWDWHGDELW
GLIIHUHQWO\LQ7DQGRQ  VWDWHG
GLIIHUHQWO\LQ5DNHVK0RKDQ  
.XQ]UX  
6DULQ  
3RXORVH  VWDWHGDELW
GLIIHUHQWO\LQ7DQGRQ  
6DULQ  
3DUWO\LQ([SHUW*URXS  
6DULQ  
1DQMXQGDSSD  
7DQGRQ  5DNHVK0RKDQ
 3LWURGD  
5DNHVK0RKDQ  

$OKXZDOLD  
$OKXZDOLD  
3LWURGD  
3LWURGD  
'.0LWWDO  
'.0LWWDO  

'.0LWWDO  
'.0LWWDO  
1DQMDQGDSSD  $OKXZDOLD
 '.0LWWDO  
RIWKH*%6HDUPDUNHGIRU1(6WDWHVDQG6SHFLDO6WDWHV $OKXZDOLD  
- .DQG+LPDFKDO3UDGHVK 'LYLGHQGSURSRVHGWREH
H[HPSWHGRUWKHVDPH
*%6IRUORVVPDNLQJUDLOZD\OLQHVDVJUDQWH[HPSWHGIURP $OKXZDOLD  
GLYLGHQGSD\PHQWV
,QFUHDVH0DUNHWERUURZLQJVWKURXJK,5)&368V
$OKXZDOLD  '.0LWWDO
 

194

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG























,5)&ERUURZLQJUHVWULFWHGWRILQDQFLDOO\YLDEOHSURMHFWVRQ
WXUQNH\EDVLVULQJIHQFLQJRISURMHFWVWKDWKDYH,5PRUH
WKDQ
'LYHVWQRQFRUHDFWLYLWLHVOLNHSURGXFWLRQXQLWVE\
FRUSRUDWL]LQJWKHPZLWKLQDKROGLQJFRPSDQ\VWUXFWXUH
2XWVRXUFHVRPHDFWLYLWLHV
'LVLQYHVWPHQWRI5DLOZD\368V
333VIRUUDLOZD\VWDWLRQVSRUWFRQQHFWLYLW\')&VIUHLJKW
WHUPLQDOVKLJKVSHHGFRUULGRUVORFR FRDFK
PDQXIDFWXULQJKRVSLWDOVVFKRROV
333 DQQXLW\PRGH IRUOLQHVZKHUH,55LVOHVVWKDQ
1DWLRQDO5DLOZD\&RQVWUXFWLRQ$XWKRULW\IRUZRUNDERYHD
WKUHVKROG
([WHUQDOORDQVGLUHFWO\WR5DLOZD\368VLQVWHDGRIEHLQJ
LQWHUPHGLDWHGE\5DLOZD\V
3HQVLRQIXQGPXVWEHVHOIVXVWDLQLQJ
6XEVLG\IRUSHQVLRQV XQUHPXQHUDWLYHOLQHVIURP8QLRQ
JRYHUQPHQW
6ZLWFKLQDFFRXQWLQJWR,QGLDQ*$$3

0LQLVWU\RI5DLOZD\VVKRXOGQRWDQVZHUTXHVWLRQVRQODZ
DQGRUGHURQUDLOZD\V7KDWLVWKHUHVSRQVLELOLW\RI0LQLVWU\
RI+RPH$IIDLUV
&RGLI\FRRUGLQDWLRQEHWZHHQ53)DQG*53PDNH*53D
SDUWRIGLVWULFWSROLFH%RWKDGPLQLVWUDWLYHO\DQGILQDQFLDOO\
*53VKRXOGEHWKHUHVSRQVLELOLW\RIWKH6WDWHVDQG,5VKRXOG
QRWFRQWULEXWHDVKDUH
6HWXSRIWDVNIRUFHWRLQWURGXFHRIFRVWDQGUHVSRQVLELOLW\
FHQWUHVWRZRUNRQSHUIRUPDQFHEXGJHW
)RUP'LUHFWRUDWHVIRULQYHVWPHQWSODQQLQJSXUFKDVH
6HWXS5DLOZD\5HJXODWRU\$XWKRULW\
$VVHW0RQHWL]DWLRQ

7LPHWDEOLQJVFKHGXOLQJRIJRRGVWUDLQV
,QFUHDVHIUHLJKWUHYHQXHVE\LPSURYLQJFXVWRPHU
FRRUGLQDWLRQ
 -RLQW9HQWXUHZLWK&DUJR2SHUDWRUV
 &RQVWUXFWLRQRI6LGLQJVLQSDUWQHUVKLSZLWKSXEOLFDQG
SULYDWHVHFWRU
 5DLOZD\VLQSDUWQHUVKLSZLWK6WDWH3ULYDWHVHFWRU
*RYHUQPHQWWRIRUP6SHFLDO3XUSRVH9HKLFOH
 ,PSOHPHQWIUHLJKWUHODWHGPDQDJHPHQWDQGLQIRUPDWLRQ
V\VWHPVVXFKDV:DJRQDQG&UHZ0DQDJHPHQWV\VWHP
3DUFHO0DQDJHPHQW6\VWHPDQG,QODQGWUDIILFPDQDJHPHQW
V\VWHP
 &RPPRGLW\VSHFLILFIUHLJKWVWUDWHJLHV
61R
6ROXWLRQV
 1R6DIHW\VXUFKDUJHRQIUHLJKWUDWH
 0RQHWLVH$LUVSDFH

$OKXZDOLD  
7DQGRQ  5DNHVK0RKDQ
 1DWLRQDO7UDQVSRUW
'HYHORSPHQW&RPPLWWHH  
3LWURGD  
5DNHVK0RKDQ  0LWUD
 3LWURGD  $KOXZDOLD
 
$KOXZDOLD  
1DWLRQDO7UDQVSRUW'HYHORSPHQW
&RPPLWWHH  
$KOXZDOLD  
6DULQ  
5DNHVK0RKDQ  
5DNHVK0RKDQ  3LWURGD
 1DWLRQDO7UDQVSRUW
'HYHORSPHQW&RPPLWWHH  
$KOXZDOLD  
6DULQ  
6DULQ  

7DQGRQ  
7DQGRQ  
5DNHVK0RKDQ  
5DNHVK0RKDQ  3LWURGD
 '.0LWWDO  
.XQ]UX  
5DNHVK0RKDQ  9LVLRQ
 '.0LWWDO  
5DNHVK0RKDQ  
5DNHVK0RKDQ  
5DNHVK0RKDQ  
5DNHVK0RKDQ  
5DNHVK0RKDQ  
&RPPLWWHH
.DNRGNDU  
5DNHVK0RKDQ  3LWURGD
 

195

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG















([SORUHDQGGHYHORSWRXULVPURXWHVOLNH3DODFHRQ:KHHO
0RGDO
&RPPHUFLDOXVDJHRIODQGWKURXJK5DLOZD\/DQG
'HYHORSPHQW$XWKRULW\*,6PDSSLQJRIODQGUHVRXUFHVDQG
GLJLWL]DWLRQRIODQGUHFRUGV
$GYDQFHGVLJQDOOLQJV\VWHP
3LWURGD$GYDQFHGVLJQDOOLQJRQWUXQNURXWHVRI
URXWHNPWKURXJKLQGHSHQGHQW639PRGHUQL]HNP
RI WUDFNV
(OLPLQDWLRQRIOHYHOFURVVLQJVWKURXJK639VSURYLGH
IHQFLQJDORQJWUDFNV


0HFKDQL]HWUDFNPDLQWHQDQFH3LWURGDVWDWHGRQURXWHV$
%
6WUHQJWKHQEULGJHV
0RGHUQL]DWLRQVXUFKDUJH
'HGLFDWHGIUHLJKWFRUULGRUVDQGKLJKVSHHGSDVVHQJHU
FRUULGRUV

,QFUHDVHDYHUDJHVSHHGUHGXFHVSHHGGLIIHUHQWLDORQHDFK
URXWH
 3ULYDWHLQWHUFLW\WUDLQVDQGIUHLJKW(08VDWWDFKHGWR
PDLOH[SUHVVWUDLQV
 0RGHUQL]HSURFXUHPHQW
 5HYDPS3URFXUHPHQW3ROLF\
 (OHFWURQLFWUDFNLQJRIILOHV
 6,05$1EDVHGUHDOWLPHLQIRUPDWLRQV\VWHPDWVWDWLRQV
DQGRQWUDLQV5),'WUDFNLQJIRUFRDFKHVZDJRQV 
ORFRPRWLYHVLQWHUQHWDFFHVVDWUDLOZD\VWDWLRQV
 6ZLWFKIURP,&)WR/+%FRDFKHV
 *UHHQWRLOHWVRQSDVVHQJHUWUDLQV
 ,QWURGXFH
$LUOLQH/LNH0RGHO

 2XWVRXUFLQJRIVHUYLFHVWUDFNDQGZDJRQPDLQWHQDQFH
VWDWLRQFOHDQLQJEHGGLQJFDWHULQJEXLOGLQJPDLQWHQDQFH
 $GYDQFHGVFLHQWLILFPHDVXUHPHQWLQVSHFWLRQDQG
PDLQWHQDQFHRIWUDFNVDQGEULGJHV
 7KHUHVKRXOGEHDQHIILFLHQWLQVXUDQFHVFKHPHIRUDFFLGHQW
FRPSHQVDWLRQ
 &UHDWHQRQIXQJLEOHQRQODSVDEOHVDIHW\IXQGJHQHUDWHG
WKURXJKVDIHW\FHVV
 6SHFLDO5DLOZD\6DIHW\IXQGWREHFUHDWHG
 &UHDWH+LJKOHYHO7DVN)RUFHWRUHFRPPHQGFRQVWUXFWLYH
PHDVXUHVZKLFKZLOODOOHYLDWHRUHOLPLQDWHFDVXDOWLHVGXHWR
UDLOZD\LQIUDVWUXFWXUH
 &UHDWHQRQODSVDEOH3URMHFW'HYHORSPHQW)XQG
 &UHDWHKHDGIRUDVFKHPHIRUPRGHUQL]DWLRQRI,5
61R
6ROXWLRQV
 5DLOZD\%RDUGWRIDFLOLWDWH)',DQGUHDOLVH0DNHLQ,QGLD
FDPSDLJQ
 5DLOZD\VVKRXOGRSWRXWRIVHFWLRQDODQGEUDQFKOLQH
SDVVHQJHUWUDLQV

5DNHVK0RKDQ  '.0LWWDO


 
0LWUD  3LWURGD  
1DWLRQDO7UDQVSRUW'HYHORSPHQW
&RPPLWWHH  
,59LVLRQ  5DNHVK
0RKDQ  .DNRGNDU  
3LWURGD  
5DNHVK0RKDQ  ,59LVLRQ
  .DNRGNDU  
3LWURGD  
3LWURGD  .DNRGNDU  
3LWURGD  
3LWURGD  
5DNHVK0RKDQ  ,59LVLRQ
  3LWURGD  
1DWLRQDO7UDQVSRUW'HYHORSPHQW
&RPPLWWHH  
'.0LWWDO  
3LWURGD  
3LWURGD  
.DNRGNDU  
3LWURGD  
3LWURGD  
3LWURGD  .DNRGNDU  
3LWURGD  
'.0LWWDO  
'.0LWWDO  
.DNRGNDU  3LWURGD  
6DULQ  
.DNRGNDU  
'.0LWWDO  
.DNRGNDU  
'.0LWWDO  
'.0LWWDO  
&RPPLWWHH
6KUHHGKDUDQ  
6DULQ  

196

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG






























&URVVVXEVLGLVDWLRQZLWKLQWKHUDLOZD\UHVRXUFHVKDVWREH
ZLWKGUDZ
3DVVHQJHUEXVLQHVVVKRXOGQRWEHFURVVVXEVLGL]HGE\
IUHLJKWV
5HEDODQFHSDVVHQJHUWDULIIV
5HFDOLEUDWHSDVVHQJHU IUHLJKWWDULIIVH[DPLQH
FRQFHVVLRQDOSDVVHQJHUWUDYHOLQWHUQDOWR,5
5DWLRQDOL]HSDVVHQJHUWDULIIDFURVVHDFKFODVV
5DNHVK0RKDQORZHUWKHWDULIIIRUXSSHUFODVV,QFUHDVH
JUDGXDOO\IRU/&
(VWDEOLVK,QGHSHQGHQW5DLO7DULII$XWKRULW\
5DWLRQDOL]HSDVVHQJHUWDULIIDFURVVHDFKFODVV
:KLWH3DSHUVDQG5DNHVK0RKDQORZHUWKHWDULIIIRUXSSHU
FODVV,QFUHDVHJUDGXDOO\IRU/&
,QWURGXFHG\QDPLFSULFLQJIRUORQJGLVWDQFHUHVHUYHG
FDWHJRU\WLFNHWV
'\QDPLFSULFLQJV\VWHPIRUIUHLJKWWRXWLOL]HHPSWLQHVVLQ
HPSW\IORZ
7DULIIVKRXOGEHLQFUHDVHGE\SDLVH3.0IRUVHFRQGFODVV
WLFNHWVHYHU\PRQWKV LQFOXGLQJVXEXUEDQDQGLQWHUFLW\
WUDLQV 
'HOLQNUHFUXLWPHQWWRUDLOZD\FDGUHVIURPFLYLOVHUYLFHVDQG
FHQWUDOHQJLQHHULQJVHUYLFHVH[DPLQDWLRQ8SJUDGH6SHFLDO
&ODVV5DLOZD\$SSUHQWLFH([DPLQWRWZRJUDGXDWHVWUHDPV
RI,QGLDQ5DLOZD\7HFKQLFDO6HUYLFHDQG,QGLDQ5DLOZD\
/RJLVWLFV6HUYLFH3RVWJUDGXDWLRQWKURXJK5DLOZD\
,QVWLWXWH8QLYHUVLW\
5HVWUXFWXUH5DLOZD\6HUYLFH&RPPLVVLRQVZLWKGLUHFW
ODWHUDOUHFUXLWPHQW
*LYHJUHDWHUZHLJKWDJHWRPHULWLQSURPRWLRQV
([FKDQJHRIILFHUVEHWZHHQ,5DQGRWKHUJRYHUQPHQW
GHSDUWPHQWVDQG368V
+HDGVRIGHSDUWPHQWVVKRXOGEHFRQVXOWHGEHIRUHD
YLJLODQFHHQTXLU\
6HOHFWLRQJUDGHLQWK\HDURIVHUYLFHWKURXJK836&
)L[PLQLPXPWHQXUHVIRUWRSPDQDJHPHQW \HDUV 
8QLILHGFDGUHDQGUHFUXLWPHQWWKURXJK836&QRW
UHFRPPHQGHG
&KDQJHHQWU\DJHIRU6&5$H[DPIURPWR
&KDQJHGDWHRIMRLQLQJEDVHGVHQLRULW\WRPHULWEDVHG
VHQLRULW\
1RVHSDUDWHPDQDJHPHQWFDGUH
8QLILHG5DLOZD\6HUYLFHFDGUH
&UHDWH7DVNIRUFHWRH[DPLQHGLUHFWUHFUXLWPHQWRI
VSHFLDOLVWV
5HGXFWLRQLQ0DQSRZHULVQHHGHGLQ,5LQQH[W\HDUV
/DWHUDOHQWU\RIVSHFLDOLVWV
0RYHZRUNIRUFHXSWKHVNLOOVODGGHU

1DQMXQGDSSD )
5DNHVK0RKDQ  ,5:KLWH
3DSHUV  .DNRGNDU  
'.0LWWDO  
5DNHVK0RKDQ  
5DNHVK0RKDQ  
5DNHVK0RKDQ  ,5:KLWH
3DSHUV  .DNRGNDU  
'.0LWWDO  
1DWLRQDO7UDQVSRUW'HYHORSPHQW
&RPPLWWHH  
5DNHVK0RKDQ  ,5:KLWH
3DSHUV  .DNRGNDU  
'.0LWWDO  
'.0LWWDO  
'.0LWWDO  
'.0LWWDO  
1DWLRQDO7UDQVSRUW'HYHORSPHQW
&RPPLWWHH  

6DULQ  
6DULQ  
6DULQ  ODWHUDOHQWU\RI
VSHFLDOLVWVLQ7DQGRQ 
.XQ]UX  
,PSOLFLWO\LQ7DQGRQ  
1DWLRQDO7UDQVSRUW'HYHORSPHQW
&RPPLWWHH  
7DQGRQ  
*XSWD1DUDLQ  
*XSWD1DUDLQ  
*XSWD1DUDLQ  
*XSWD1DUDLQ  
7DQGRQ  
7DQGRQ  
5DNHVK0RKDQ  
3LWURGD  
7DQGRQ  3LWURGD  

197

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG























(QKDQFHWKHSRZHUVRI'*5'62
*0VVKRXOGEHVHOHFWHGIURPRSHQOLQH*0V
'HYROYHIXOOSRZHUVWR*0
)LQDQFLDOSRZHUVVKRXOGEHGHOHJDWHGWRWKH*0VLQUHVSHFW
RIKDQGOLQJWHQGHUV
(QVXUHQRSRVWRI*0RUPHPEHUUHPDLQVYDFDQW
6HOHFWLRQSURFHGXUHDQGFULWHULDRI*0VQHHGVUHYDPSLQJ
%URDGJXLGHOLQHVIRU*0VWRH[SORUHFRPPHUFLDO
GHYHORSPHQWRIODQG
&KDLUPDQ5DLOZD\%RDUGVKRXOGEHIUHHGIURPIXQFWLRQDO
UHVSRQVLELOLWLHVDQGVKRXOGQRWEHDSSRLQWHGRQWKHEDVLVRI
VHQLRULW\&KDLUPDQVKRXOGKDYHSRZHUVWRRYHUUXOHRWKHU
0HPEHUV
5DLOZD\%RDUGVKRXOGEHJLYHQIXOOIUHHGRPWRGHWHUPLQH
WKHLUSULFLQJDQGLQYHVWPHQWSROLFLHV
5HVWUXFWXUHWKH5DLOZD\%RDUGIXQFWLRQDOO\
)UHH5DLOZD\%RDUGIURP3DUOLDPHQWDU\IXQFWLRQV
&RQYHUW5DLOZD\%RDUGWR5DLOZD\([HFXWLYH%RDUGDVD
SUHSDUDWRU\VWHSWRZDUGVFRUSRUDWL]DWLRQ
5HVWUXFWXUH,5DVDVWDWXWRU\FRUSRUDWLRQEXWQRWXQGHUWKH
&RPSDQLHV$FW5HSODFH5DLOZD\%RDUGDV,QGLDQ5DLOZD\V
([HFXWLYH%RDUGZLWK&KDLUPDQDV&(2
&KDUWHUIRU,5ZLWKDFOHDUILQDQFLDOREMHFWLYH
'HFHQWUDOLVDWLRQRIWKHGHFLVLRQPDNLQJSURFHVVZLWK
DSSURSULDWHFKDQJHVLQWKHPDQDJHPHQWV\VWHP
'HFHQWUDOL]HQRQSROLF\GHFLVLRQVWR]RQHVUHYLVHWKH
QHJDWLYHOLVW:LWKLQ]RQHVGHFHQWUDOL]HWRGLYLVLRQV
(PSRZHUPHQWRI5/'$%RDUGWKURXJKVXLWDEOHGHOHJDWLRQ
RISRZHU9DFDQWSRVLWLRQWREHILOOHG(QJDJHH[WHUQDO
FRQVXOWDQWV0DQSRZHUQHHGWREHVWUHQJWKHQHG
5/'$WRKDYHSRZHUWRXVHQRQRSHUDWLRQDOODQGIRU
FRPPHUFLDOXVHWRPD[LPL]HUHYHQXHZLWKRXWWKHDSSURYDO
RI5DLOZD\%RDUG
5HVWUXFWXUHWKHIXQFWLRQRI5'626WUHQJWKHQLQJWKH5'62




RI\HDUO\UHYHQXHHDUPDUNHGIRUUHVHDUFK
(VWDEOLVKUDLOZD\UHVHDUFKFHQWUHVDQGWRFROODERUDWHZLWK
SUHPLHULQVWLWXWHV



(VWDEOLVK5DLOZD\5HVHDUFK 'HYHORSPHQW&RXQFLO
55'& XQGHUWKHJRYHUQPHQW



(VWDEOLVKUDLOZD\UHVHDUFKFHQWUHVDQGWRFROODERUDWHZLWK
SUHPLHULQVWLWXWHV



(VWDEOLVKLQGLJHQRXVUDLOZD\HTXLSPHQWLQGXVWU\

6DULQ  
6DULQ  
6KUHHGKDUDQ  
6KUHHGKDUDQ  
6KUHHGKDUDQ  
6KUHHGKDUDQ  
6KUHHGKDUDQ  
.XQ]UX  6DULQ  
SDUWO\LQ*XSWD1DUDLQ  
VWDWHGGLIIHUHQWO\LQ3LWURGD  
1DQMXQGDSSD  
7DQGRQ  3LWURGD  
3LWURGD  
5DNHVK0RKDQ  
3DUWO\LQ:DQFKRR  1DWLRQDO
7UDQVSRUW'HYHORSPHQW&RPPLWWHH
 
3RXORVH  VWDWHGDELW
GLIIHUHQWO\LQ7DQGRQ 
1DQMXQGDSSD  
.XQ]UX  7DQGRQ  
3LWURGD  1DWLRQDO7UDQVSRUW
'HYHORSPHQW&RPPLWWHH  
'.0LWWDO  
'.0LWWDO  
5DNHVK0RKDQ  ,59LVLRQ
  3LWURGD  
1DWLRQDO7UDQVSRUW'HYHORSPHQW
&RPPLWWHH  
.DNRGNDU  
,59LVLRQ  .DNRGNDU
 3LWURGD  1DWLRQDO
7UDQVSRUW'HYHORSPHQW&RPPLWWHH
 
.DNRGNDU  1DWLRQDO
7UDQVSRUW'HYHORSPHQW&RPPLWWHH

,59LVLRQ  .DNRGNDU
 3LWURGD  1DWLRQDO
7UDQVSRUW'HYHORSPHQW&RPPLWWHH

,59LVLRQ  3LWURGD
 
198


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG






















(VWDEOLVK1DWLRQDO%RDUGIRU5DLOZD\6DIHW\
5DLOZD\6DIHW\3ROLF\ZLWKPHDVXUDEOHLQGLFDWRUVIRU
HYDOXDWLRQRIILYH\HDUDQG\HDUSHULRGPXVWEH
DQQRXQFHGEHIRUHWKHHQGRI
&UHDWLRQRIDQLQGHSHQGHQWVDIHW\PHFKDQLVP5DLOZD\
6DIHW\$XWKRULW\ 56$ 
(VWDEOLVK1DWLRQDO5DLOZD\&RQVWUXFWLRQ$XWKRULW\IRU
3URMHFW([HFXWLRQ

.DNRGNDU  1DWLRQDO


7UDQVSRUW'HYHORSPHQW&RPPLWWHH
 

5DNHVK0RKDQ  .DNRGNDU


 
5DNHVK0RKDQ  6WDWHG
GLIIHUHQWO\LQ,59LVLRQ  
LHPDQDJHULDODQGRUJDQL]DWLRQDO
LVVXHVWKDWQHHGWREHDGGUHVVHGWR
IDVWWUDFNSURMHFWH[HFXWLRQ
(VWDEOLVK,QGLDQ5DLOZD\V&RUSRUDWLRQ
5DNHVK0RKDQ  
&UHDWH0HPEHU 333 
3LWURGD  $KOXZDOLD 
&UHDWH0HPEHU 6DIHW\ 5HVHDUFK 
.DNRGNDU  3LWURGD  
&UHDWH0HPEHU )UHLJKW 0HPEHU 3DVVHQJHU6HUYLFHV
3LWURGD  
&UHDWH(PSRZHUHG*URXSIRU333SROLFLHV
'.0LWWDO  
&UHDWH0HPEHURU$GYLVRU %XVLQHVV'HYHORSPHQW 
'.0LWWDO  
6WUHQJWKHQSXEOLFUHODWLRQVGHSDUWPHQW
.XQ]UX  
&UHDWH7DVN)RUFHWRVWXG\WKHIHDVLELOLW\RIFRPPXQLFDWLRQ .DNRGNDU  
EDFNERQHIRU,5
8VHUDLOZD\ZHEVLWHV VRFLDOPHGLDIRUFXVWRPHUIHHGEDFN 3LWURGD  
FRQVXPHUHGXFDWLRQDQGVRFLDOPHVVDJHV
&UHDWH3ROLF\'RFXPHQWIRU$GYHUWLVLQJDQG0DUNHWLQJLQ
'.0LWWDO  
,5$GYHUWLVLQJZRUNVKRXOGFRPHXQGHU,5
3UHSDUHORQJWHUP,&73ODQ,QWHJUDWLRQDQG
5DNHVK0RKDQ  9LVLRQ
FRPSXWHUL]DWLRQRIV\VWHPV
 3LWURGD  '.0LWWDO
 
7KHUHPXVWEHDQHQWHUSULVHZLVHSODQIRU,&7DSSOLFDWLRQ 1DWLRQDO7UDQVSRUW'HYHORSPHQW
&5,6 &HQWUHIRU5DLOZD\,QIRUPDWLRQ6\VWHPV VKRXOG
&RPPLWWHH  
EHFRPHDQRQSURILWFRPSDQ\
(3&DQG066 0DQXDORI6WDQGDUGV 6SHFLILFDWLRQV 
$OKXZDOLD  
FRQVWUXFWLRQFRQWUDFWVLQVWHDGRILWHPUDWH
5HGXFHWKH,5V&DUERQ)RRWSULQW
,QGLD9LVLRQ  



199

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

$QQH[XUHE6WDWXVRI5HFRPPHQGDWLRQVRI(DUOLHU&RPPLWWHHVDV
UHSRUWHGE\WKH5DLOZD\V
6DP3LWURGD,&7&RPPLWWHH
6U
1R


&KDSWHU
61R



















5HFRPPHQGDWLRQ LWVGHWDLOV

$FFHSWHG1RWDFFHSWHGZLWKUHDVRQV

6,05$1 EDVHG 5HDO7LPH 5HFRPPHQGDWLRQVDFFHSWHG


LQIRUPDWLRQ6\VWHP 57,6 
$ ZRUN RQ 5HDOWLPH 7UDLQ ,QIRUPDWLRQ V\VWHP 57,6 
LQFOXGHGLQWKH3LQN%RRNDWDQHVWLPDWHGFRVWRI
5V FURUH FRYHULQJ DOO SDVVHQJHU DQG IUHLJKW WUDLQV
([HFXWLRQZLOOVWDUWDIWHU,652DOORWVEDQGZLGWK
7LFNHWLQJWKURXJK0RELOHSKRQH 5HFRPPHQGDWLRQVDFFHSWHG
D  5HVHUYHG7LFNHWV,5&7&KDVODXQFKHG:LQGRZ3KRQH
(WLFNHWLQJPRELOH DSSOLFDWLRQIRUERRNLQJUHVHUYHG WLFNHWV
 WLFNHWV ZHUH ERRNHG WKURXJK IDFLOLW\ GXULQJ $SULO

E  %RRNLQJ RI UHVHUYHG WLFNHWV WKURXJK 606 5HVHUYHG
WLFNHWV FDQ DOVR EH ERRNHG WKURXJK 606 8QVWUXFWXUHG
6XSSOHPHQWDU\ 6HUYLFH 'DWD 866'  IURP EDVLF PRELOH
SKRQHV ZLWKRXW XVH RI LQWHUQHW   WLFNHWV ZHUH ERRNHG
WKURXJKIDFLOLW\GXULQJ$SULO
F   8QUHVHUYHG  3ODWIRUP 7LFNHWV $ SLORW SURMHFW DW
0XPEDL DQG &KHQQDL 6XEXUEDQ DUHDV  LV SODQQHG IRU
SURYLGLQJ XQUHVHUYHG WLFNHWV  3ODWIRUP WLFNHWV RQ PRELOH
SKRQHV7KHGHWDLOHGHVWLPDWHDWWKHFRVWRIFURUHKDV
EHHQ VDQFWLRQHG  ,Q 3KDVH, 876 WLFNHWLQJ RYHU 0RELOH
SKRQHZLOOEHHQDEOHGWKURXJK8QVWUXFWXUHG6XSSOHPHQWDU\
6HUYLFH'DWD 866' 7KHSDVVHQJHUZLOOERRNDQGSD\IRU
WKH WLFNHW WKURXJK 0RELOH SKRQH DQG ZLOO SULQW WKH WLFNHW
WKURXJK$790.LRVNRUDQ\RWKHUSULQWLQJNLRVNSURYLGLQJ
IRU WKLV SXUSRVH  7KH VW SKDVH ZLOO EH FRPSOHWHG E\ 'HF


8QLILHG  :HE 3RUWDO IRU ,QGLDQ 5HFRPPHQGDWLRQVDFFHSWHG
5DLOZD\V
$OOZHEVLWHVRI,QGLDQ5DLOZD\VKDYHEHHQPLJUDWHGWRD
FRPPRQSODWIRUP VWDQGDUGL]HGDQGJLYHQXQLIRUPORRNDQG
IHHO DQGPDGHRQOLQH
1HZWHQGHUXSORDGXWLOLW\KDVEHHQGHYHORSHGIRUXSORDGLQJ
7HQGHULQIRUPDWLRQRQWKHZHEVLWHKRVWHGRQ,5SRUWDOWKLV
LQIRUPDWLRQ LV DXWRPDWLFDOO\ XSORDGHG WR &HQWUDO 3XEOLF
3URFXUHPHQW3RUWDO

%URDGEDQG FRQQHFWLYLW\ WR 5HFRPPHQGDWLRQV DFFHSWHG LQ SULQFLSOH 5DLO7HO
3DQFKD\DWV
&RUSRUDWLRQ RI ,QGLD MRLQWO\ ZLWK %KDUDW 6DQFKDU 1LJDP
/LPLWHG %61/  DQG 3RZHU *ULG &RUSRUDWLRQ RI ,QGLD
3*&,/  DUH H[HFXWLQJ WKH ZRUN RI 1DWLRQDO 2SWLFDO )LEUH
1HWZRUN 12)1 SURMHFWRI'HSWW2I7HOHFRPPXQLFDWLRQV
LQ WKH UDWLR  UHVSHFWLYHO\ WR SURYLGH %URDGEDQG
FRQQHFWLYLW\ WR 3DQFKD\DWV 7RWDO IXQG DOORFDWHG IRU WKLV
SXUSRVH LV  5V  FURUH ZLWK 5DLO7HOV VKDUH DV C 
FURUH5DLO7HOKDVEHHQDOORWWHGVWDWHV SDQFKD\DWV
DSSUR[LPDWHO\  7KH SLORW E\ 5DLO7HO KDV EHHQ VXFFHVVIXOO\
FRPSOHWHG DQG ODXQFKHG LQ DOO  3DQFKD\DWV LQ 3DQLVDJDU
%ORFNLQ1RUWK7ULSXUD'LVWULFWRI7ULSXUDVWDWH
)XUWKHU H[HFXWLRQ WHQGHUV IRU  GLVWULFWV FRYHULQJ 
*UDP3DQFKD\DWVLVLQDGYDQFHGVWDJHRIILQDOL]DWLRQ
5DLO7HO WR H[SORUH %URDGEDQG 5HFRPPHQGDWLRQV DFFHSWHG LQ SULQFLSOH 3ODQQLQJ
VHUYLFHVRQ333%DVLV
&RPPLVVLRQLQLWV2IILFHPHPRUDQGXPGDWHGLV

200

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


6U
1R

&KDSWHU
61R










5HFRPPHQGDWLRQ LWVGHWDLOV

$FFHSWHG1RWDFFHSWHGZLWKUHDVRQV

RI WKH YLHZ WKDW WKH SURSRVDO HQWDLOV RQO\ OHDVLQJ RI
SURSHUWLHV DQG DVVHW RI ,QGLDQ 5DLOZD\V DQG 5DLO7HO ZKLFK
GRHV QRW FRQILUP WR WKH JXLGHOLQHV RI WKH 9LDELOLW\  *DS
)XQGLQJ 9*) VFKHPHDQGFDQQRWEHFRQVLGHUHGDVD333
SURMHFW 0RUHRYHU QRZ 5DLO7HO KDV JRQH ZLWK LWV SODQ IRU
EURDGEDQG WKURXJK 5DLOZLUH PRGHO ZKLFK KDV QRZ EHHQ
LPSOHPHQWHGRQFRXQWU\ZLGHEDVLV
,Q YLHZ RI WKH DERYH 5DLOZD\ %RDUGV )LQDQFH KDV DOVR
VXJJHVWHGWRGURSWKHZRUNLQSUHVHQWIRUP
2)&QHWZRUNRQEDODQFH 5HFRPPHQGDWLRQV DFFHSWHG LQ SULQFLSOH 5DLO7HO KDV EHHQ
5.0 RI ,QGLDQ 5DLOZD\V RQ DVNHGWRVXEPLW5HTXHVWIRU4XDOLILFDWLRQ 5)4 DVSHUWKH
333EDVLV
H[LVWLQJJXLGHOLQHVRIPRGHO5)4LVVXHGE\WKH0LQLVWU\RI
)LQDQFH VR WKDW LQ SULQFLSOH DSSURYDO RI 333 $SSUDLVDO
&RPPLWWHH 333$& FDQEHSURFHVVHG
5DLO79FKDQQHO
5HFRPPHQGDWLRQVDFFHSWHGLQSULQFLSOH
$ ZRUNLQJ JURXS FRQVLVWLQJ RI &RPPHUFLDO 35 DQG
7HOHFRP 'WHV WR VKRZ KRZ WKH EURDGFDVW RI SURJUDPV
IODVKLQJ RI XSGDWHV IRU SDVVHQJHU UHODWHG LQIRUPDWLRQ LQ
PXOWLSOHODQJXDJHVVSHFLILFWRFLWLHVUHJLRQVWKURXJKDVLQJOH
FKDQQHO FDQ EH GRQH ZLWKRXW UHVWRULQJ WR WLPH VORWWLQJ
PHWKRGLV\HWWRVXEPLWLWVUHSRUW

201

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

$PLW0LWUD&RPPLWWHHRQ333-9V

6U
1R

&KDSW
HU6U
1R


5HFRPPHQGDWLRQ LWVGHWDLOV

$FFHSWHG1RWDFFHSWHGZLWKUHDVRQV





5HGHYHORSPHQWRI6WDWLRQV





'HYHORSPHQW
2I
0XOWL
)XQFWLRQDO&RPSOH[HV 0IFV 





6HWWLQJ XS RI (OHFWULF


/RFRPRWLYH $VVHPEO\ DQG
$QFLOODU\8QLWRI&KLWWDUDQMDQ
/RFRPRWLYH :RUNV &/:  
&RPPLWWHH
UHFRPPHQGHG
VHWWLQJ XS WKLV IDFWRU\ E\
DZDUGLQJ DQ $VVXUHG 2IIWDNH
FRQWUDFW E\ LQYLWLQJ 3ULYDWH
3OD\HUV FRQWULEXWLQJ SULYDWH
(TXLW\

$FFHSWHG
7KH UHGHYHORSPHQW RI VWDWLRQV WR LQWHUQDWLRQDO
VWDQGDUGVLVHQYLVDJHGDWQRFRVWWR5DLOZD\V([FHSW
IRU5DLOZD\VHTXLW\FRQWULEXWLRQRI5VFURUHWR
,QGLDQ 5DLOZD\ 6WDWLRQV 'HYHORSPHQW &RUSRUDWLRQ
ZLWK $XWKRUL]HG FDSLWDO RI 5V  FU DQG SUHVHQW
SDLG XS FDSLWDO RI 5V  FURUH  DQG DQ DGGLWLRQDO
RXWOD\RI5VFURUHIRU=RQDO5DLOZD\VZKLFKLV
SULPDULO\EHLQJXWLOL]HGIRUFRQVXOWDQF\VWXGLHVWKHUH
LV QR ILQDQFLDO LPSOLFDWLRQ UHJDUGLQJ VWDWLRQ
UHGHYHORSPHQW 7KH H[SHQGLWXUH RQ VWDWLRQ
UHGHYHORSPHQW LV SURSRVHG WR EH PHW WKURXJK
OHYHUDJLQJUHDOHVWDWHSRWHQWLDORIUDLOZD\ODQGDURXQG
DQG DLU VSDFH DERYH WKH UDLOZD\ VWDWLRQV 7KH
5DLOZD\VPD\EHDEOHWRJHQHUDWHVXUSOXVLQVRPHRI
WKHPDMRUVWDWLRQVHJ0HWURVHWF+RZHYHULWZRXOG
EH SUHPDWXUH WR LQGLFDWH DQ DPRXQW UHJDUGLQJ WKH
VDPHDWWKLVVWDJH
$FFHSWHG
VWDWLRQVDUHLGHQWLILHGIRUGHYHORSPHQWRI0)&V
ZKLFKKDYHEHHQDVVLJQHGWR5/'$,5&215,7(6
591/ =RQDO5DLOZD\V
0)&V QRV DVVLJQHGWR=RQDO5DLOZD\VDUHEHLQJ
FRQVWUXFWHG E\ VDQFWLRQLQJ ZRUNV XQGHU 3ODQ +HDG
3DVVHQJHU $PHQLWLHV 7KH DSSUR[ FRVW RI VXFK
ZRUNVLV5VFURUH
0)&V DVVLJQHG WR 368V YL] ,5&21 5,7(6 591/
EHLQJ FRQVWUXFWHG ZLWK WKHLU RZQ IXQGV ZKLOH 5/'$
GHYHORSLQJ 0)&V WKURXJK SULYDWH VHFWRU SDUWLFLSDWLRQ
OHDVLQJ RI ODQG IRU  \HDUV 5/'$ H[SHFWV WR HDU
WRWDO UHYHQXH RI 5V  FURUHV DV XSIURQW SD\PHQW1$
RI DQQXDO OHDVH UHQW IURP GHYHORSHUV DQG DV ODQG OH
FKDUJHV IURP ,5&215,7(6591/ RI ZKLFK D VXP
5V  FURUHV KDV EHHQ UHFHLYHG E\ 5/'$ XS
6HSWHPEHU
$FFHSWHG
7KH XQLW KDV EHHQ FRQVWUXFWHG DW 'DQNXQL 7KH XQLW
ZLOO DVVHPEOH 7KUHH 3KDVH (OHFWULF /RFRPRWLYHV DQG
ZRXOG DOVR DVVHPEOH WKH  +3 ORFRPRWLYHV WR EH
SURFXUHGIRUWKH:HVWHUQ')&SURMHFW

202

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


6U
1R

&KDSW
HU6U
1R










5HFRPPHQGDWLRQ LWVGHWDLOV

$FFHSWHG1RWDFFHSWHGZLWKUHDVRQV

6HWWLQJ XS RI 5DLO &RDFK


)DFWRU\ DW .DQFKUDSDUD 
&RPPLWWHH UHFRPPHQGHG WKDW
WKHZRUNRIIDFWRU\EHVHWXSE\
0R5 DV D -RLQW 9HQWXUH ZLWK
HTXLW\RI,5DQGWKHUHVWE\
WKH WHFKQRORJ\ SDUWQHU VHOHFWHG
WKURXJK
,QWHUQDWLRQDO
&RPSHWLWLYH%LGGLQJ
6HWWLQJ XS RI 'LHVHO FRPSRQHQW
IDFWRU\
,WHP , WR 9 

$FFHSWHG
7KHXQLWZRXOGEHDEOHWRPDQXIDFWXUHPRGHUQHQHUJ\
HIILFLHQW (080(08 &RDFKHV WR PHHW WKH GHPDQG
RI,5

$FFHSWHGRQGHSDUWPHQWDOPRGHDQGQRWRQ333
7KLVIDFWRU\ZDVSODQQHGWREHVHWXSWRPDQXIDFWXUH
VXE DVVHPEOLHV RI ++3 ORFRV 2Q DFFRXQW RI OHJDO
LPSOLFDWLRQVRIWUDQVIHURIWHFKQRORJ\ 727 RI(0'
ORFRV WKH WKLUG SDUW\ FRXOG QRW EH FRQVLGHUHG IRU
VHWWLQJXSWKLVIDFWRU\
7KH IDFWRU\ KDV DOUHDG\ EHHQ VHW XS DV
'HSDUWPHQWDOXQLWRI,QGLDQ5DLOZD\VDQGSURGXFWLRQ
FRPPHQFHG





203

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

$QLO.DNRGNDU&RPPLWWHH


1RRIUHFRPPHQGDWLRQVGLVFXVVHGE\WKH%RDUG
1RRIUHPDLQLQJUHFRPPHQGDWLRQ
7RWDOUHFRPPHQGDWLRQV






6U
1R

$FFHSWHG1RWDFFHSWHGZLWKUHDVRQV

&KDSWH 5HFRPPHQGDWLRQ LWVGHWDLOV


U6U1R





































,7 V\VWHP EDVHG RQ HPDLO  606 VKRXOG EH $FFHSWHG


LQWURGXFHGWRUHSRUWVDIHW\UHODWHGPDWWHUVE\UDLOZD\
DQGQRQUDLOZD\SHUVRQV 3DUD 

5HGXQGDQFLHV VKRXOG EH EXLOW LQ WKH V\VWHP VXFK DV 5HGXQGDQFLHVLQWKHVLJQDOOLQJV\VWHPDW
WUDFNFLUFXLWLQJE\WZRGLYHUVHPHDQVDWYXOQHUDEOH YXOQHUDEOH ORFDWLRQV DOUHDG\ H[LVW
ORFDWLRQV VR WKDW QRUPDO RSHUDWLRQV DUH OHDVW ZKHUHYHUUHTXLUHG
KDPSHUHGGXHWRVLQJOHSRLQWIDLOXUH 3DUD
,7EDVHGV\VWHPVKRXOGEHVHWXSZLWKLQPRQWKVWR $FFHSWHG
FROOHFW DQG FROODWH DOO WUDLQ DFFLGHQWV ZKHWKHU
FRQVHTXHQWLDO RU RI OLWWOH VLJQLILFDQFH QHDU PLVVHV
VDIHW\UHODWHGDVVHWIDLOXUHVHWF 3DUD 
3URMHFWV IRU DXJPHQWDWLRQ RI OLQH FDSDFLW\ RQ EXV\ 1RW\HWGLVFXVVHG
URXWHV DQG PDLQWHQDQFH IDFLOLWLHV IRU FRDFKHV DQG
ZDJRQVLQRSHQOLQHDQGZRUNVKRSVVKRXOGEHIXQGHG
DQG H[HFXWHG RQ WRS SULRULW\ LQ PLVVLRQ PRGH 3DUD
 
1R QHZ WUDLQV VKRXOG EH LQWURGXFHG ZLWKRXW 3ULQFLSDOO\$FFHSWHG
DGHTXDWH FDSDFLW\ IRU RSHUDWLRQ DQG PDLQWHQDQFH 5HSHUFXVVLRQV WR EH SXW XS WR +RQEOH
3DUD 
05
5HVWUXFWXULQJRI,5VKRXOGEHH[DPLQHGDQGVWXGLHG 1RWDFFHSWHG
E\D6HSDUDWH([SHUW*URXS 3DUD 
7KH H[LVWLQJ GHSDUWPHQWV DUH WKH UHVXOW RI
VSHFLDOL]DWLRQ UHTXLUHG E\ ,5 EXW WKHUH LV
LQWHJUDWLRQ DW WKH WRS  7KH VWUHQJWKV RI ,5
KDYH QRW EHHQ SURMHFWHG E\ WKH &RPPLWWHH
VXLWDEO\ 7KH PHUH H[LVWHQFH RI
GHSDUWPHQWDOLVP
GRHV
LPSO\
WKDW
GHSDUWPHQWVVKRXOGFHDVHWRH[LVW%XWVRPH
NLQGUHDGMXVWPHQWLVUHTXLUHGIRUZKLFKZH
QHHG WR UHYLVLW WKH LQWHUQDO ZRUNLQJ
SURFHVVHVWRPDNHWKHPGHOLYHU\RULHQWHG
(DUOLHU V\VWHP RI RQO\ 2SHUDWLQJ DQG 7HFKQLFDO 1RWDFFHSWHG
RIILFHUV EHLQJ FRQVLGHUHG IRU JHQHUDO SRVWV RI *0V 3UHVHQWO\ SRVWV RI *0 DUH ILOOHG E\ D
DQG'50VVKRXOGEHUHVWRUHG2QO\FDSDEOHRIILFHUV VHOHFWLRQ SURFHVV E\ $&& +RZHYHU
VKRXOG EH VHOHFWHG DV '50V DQG SRVWHG LQ GLYLVLRQV QHHGIRUUHYLVLWLQJFULWHULDIRUSRVWLQJRI
ZLWKDPLQLPXPWHQXUHRI\HDUV 3DUD 
'50V LV DFFHSWHG $ VHSDUDWH VHOHFWLRQ
SURFHVV IRU '50V ZKLFK LQFOXGHV D
SHUVRQDOLW\WHVWLVRQHRIWKHRSWLRQV$Q
RIILFHU ZLWK DGHTXDWH H[SRVXUH RI
GLYLVLRQDO ZRUNLQJ VKRXOG RQO\ EH
FRQVLGHUHG IRU SRVWLQJ DV '50 7KLV
LVVXHZLOOEHIXUWKHUGHOLEHUDWHGXSRQLQD
VHSDUDWH%RDUGPHHWLQJ

DFFHSWHG
IRU
(QKDQFHGSRZHUVVKRXOGEHGHOHJDWHGWR *0VDQG 5HFRPPHQGDWLRQ
'50V LQ UHJDUG WR VDIHW\ PDWWHUV DV XQGHU 3DUD HQKDQFLQJSRZHUVRI*0VDQG'50VE\

204

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


6U
1R

&KDSWH 5HFRPPHQGDWLRQ LWVGHWDLOV


U6U1R


 



 



 



 
 3RZHUV RI *HQHUDO 0DQDJHUV WR EH HQKDQFHG WR 
WLPHV IRU VDQFWLRQ RI ZRUNV XQGHU DOO 3ODQ +HDGV
H[FHSW 1HZ /LQHV DQG 0  3 LWHPV 7KHVH VKRXOG
DOVREHDSSOLFDEOHXQGHURXWRIWXUQEDVLVGHSHQGLQJ
RQ WKH XUJHQF\ 3RZHUV RI '50V DOVR WR EH
DFFRUGLQJO\HQKDQFHGWRWLPHV
 *HQHUDO 0DQDJHUV WR EH JLYHQ IXOO SRZHUV IRU UH
DSSURSULDWLRQ RI IXQGV IURP RQH ZRUN WR DQRWKHU
XQGHUWKHVDPH3ODQ+HDGDQGVRXUFHRIIXQGVXQGHU
DOOWKH3ODQ+HDGVH[FHSW1HZ/LQHV
 *HQHUDO 0DQDJHUV WR KDYH IXOO SRZHUV WR UH
DSSURSULDWH IXQGV XQGHU 5HYHQXH XQGHU WKH VDPH
'HPDQG IURP RQH 38 WR DQRWKHU ZLWKLQ WKH RYHUDOO
EXGJHWDOORWPHQW
 '50V WR EH IXOO\ HPSRZHUHG WR GHFLGH WKH
SURFHVVSURFHGXUHVXFKDV6SRW3XUFKDVH&RPPLWWHH
6LQJOH/LPLWHG7HQGHUVHWF

'50V
WR
KDYH
IXOO
SRZHUV
L 7R DFFHSW WHQGHUV IORDWHG E\ WKH GLYLVLRQ
LL 7R HQWHU LQWR UHSDLU RU $QQXDO 0DLQWHQDQFH
&RQWUDFWV $0&  WKURXJK 2(0 RU RWKHUZLVH
LLL7RSXUFKDVHVWRFNLWHPVLQFDVHRIVKRUWDJHVDQG
QRQVWRFN LWHPV XS WR 5V  /DNKV SHU FDVH EXW
ZLWKRXWDQ\PRQWKO\FHLOLQJ
 '50V WR EH HPSRZHUHG WR DZDUG ZRUNV RI
HVVHQWLDOQDWXUHUHODWHGWRRSHUDWLRQDQGPDLQWHQDQFH
DVVHWVRQTXRWDWLRQ EDVLVIRU  PRQWKVDVD VWRS JDS
DUUDQJHPHQW
'50VWRKDYHIXOOSRZHUVIRUKLULQJRIUHVRXUFHV
LQFOXGLQJXWLOLW\YHKLFOHV
'50VWRKDYHIXOOSRZHUVWRVDQFWLRQFRQVWUXFWLRQ
RI 58%V OLPLWHG KHLJKW VXEZD\V DQG 52% XQGHU
5RDG6DIHW\ZRUNV
3RZHUVWKRVHYHVWHGZLWK'50VRIWKH'LYLVLRQWR
EHHQMR\HGE\WKH&KLHI:RUNVKRS0DQDJHUV &:0 
LQUHVSHFWRIWKHLUZRUNVKRSV

3RZHUV WR VDQFWLRQ FDVK DZDUGV IRU JRRG
SHUIRUPDQFH LQ VDIHW\ UHODWHG PDWWHUV VKRXOG EH
HQKDQFHGWRWKUHHWLPHV 3DUD 

(QKDQFHG GHOHJDWLRQ RI SRZHUV WR WKH GLYLVLRQV
VKRXOGEHGLUHFWO\PDQGDWHGE\WKH5DLOZD\%RDUGDV
DRQHWLPHPHDVXUH 3DUD 

&RUH 6DIHW\ *URXSV VKRXOG EH IRUPHG XQGHU WKH
FRQYHQRUVKLS RI WKH $GGLWLRQDO *HQHUDO
0DQDJHU6DIHW\ D QHZ SRVW FDUYHG LQ ]RQDO
KHDGTXDUWHUDVSDUWRIWKHQHZVDIHW\DUFKLWHFWXUH DW
KHDGTXDUWHUOHYHODQG6U'LYLVLRQDO6DIHW\2IILFHUDW
GLYLVLRQDO OHYHO 3ULQFLSDO +HDGV RI 'HSDUWPHQWV DW
+4 OHYHO DQG EUDQFK RIILFHUV DW GLYLVLRQDO OHYHO RI
&LYLO 0HFKDQLFDO (OHFWULFDO 6LJQDOLQJ 2SHUDWLQJ
DQG)LQDQFHVKRXOGEHWKHPHPEHUV 3DUD 


$FFHSWHG1RWDFFHSWHGZLWKUHDVRQV

 WLPHV H[FHSW IRU ZRUNV RI *& QHZ


OLQHV DQG 5( ZLWKLQ RYHUDOO EXGJHW
DOORWPHQW
5HFRPPHQGDWLRQ ZLOO EH FRQVLGHUHG
IRU GHOHJDWLQJ IXOO SRZHUV IRU UH
DSSURSULDWLRQ RI IXQGV H[FHSW ZRUNV RI
QHZ OLQHV *& DQG 5( XQGHU VDPH SODQ
KHDG DQG VRXUFH RI IXQG ZLWKLQ WKH
RYHUDOOEXGJHWDOORWPHQW
5HFRPPHQGDWLRQZLOOEHH[DPLQHGIRU
GHOHJDWLRQ RI IXOO SRZHUV IRU UH
DSSURSULDWLRQRIIXQGVH[FHSWIURPVDODU\
WR QRQVDODU\ KHDG ZLWKLQ WKH RYHUDOO
EXGJHWDOORWPHQW
 5HFRPPHQGDWLRQZLOOEHH[DPLQHG

 '50VWRKDYHIXOOSRZHUV
L5HFRPPHQGDWLRQZLOOEHH[DPLQHG
LL5HFRPPHQGDWLRQZLOOEHH[DPLQHG
LLL 5HFRPPHQGDWLRQ DFFHSWHG DV VXFK
SRZHUVDOUHDG\H[LVW
5HFRPPHQGDWLRQ DFFHSWHG 3RZHUV RI
'50V DOUHDG\ H[LVW IRU DZDUGLQJ ZRUNV
RQ TXRWDWLRQ EDVLV IRU ZRUNV RI
HPHUJHQF\QDWXUHXSWRODNK
 5HFRPPHQGDWLRQ DFFHSWHG 3RZHUV
DOUHDG\H[LVWIRUKLULQJXWLOLW\YHKLFOHVRQ
]RQDOUDLOZD\V
5HFRPPHQGDWLRQDFFHSWHG*0VWREH
GHOHJDWHG ZLWK IXOO SRZHUV WR VDQFWLRQ
52% ZRUNV DQG WR '50V IRU 58%
ZRUNV
 5HFRPPHQGDWLRQ IRU GHOHJDWLQJ
SRZHUVRI'50VWR&:0VLQ6$*ZLOO
EHSURFHVVHG

$FFHSWHG

$FFHSWHG EXW GHWDLOV KDYH WR EH ZRUNHG


RXW
5HFRPPHQGDWLRQSDUWLDOO\DFFHSWHG
2IILFHUV ZRUNLQJ LQ VDIHW\ DVVLJQPHQWV
VKRXOG KDYH DGHTXDWH H[SRVXUH RI ILHOG
ZRUNLQJDWGLYLVLRQDOOHYHODQGDOVRKDYH
DSWLWXGHIRUVDIHW\MREV

205

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


6U
1R

&KDSWH 5HFRPPHQGDWLRQ LWVGHWDLOV


U6U1R


 



 



 



 




 



 



 



 




 



*URXSRI2IILFHUVKHDGHGE\ $*0VDQG$'50VDW
WKH +HDGTXDUWHU DQG GLYLVLRQDO OHYHOV UHVSHFWLYHO\
VKRXOGFRQYHQHPHHWLQJVRQFHHYHU\ZHHNWRFOHDUDOO
WKH SHQGLQJ (QJLQHHULQJ DQG 6LJQDOOLQJ 3ODQV 3DUD
 
$OO WKH YDFDQFLHV RI VXSHUYLVRUV DQG VWDII LQ VDIHW\
FDWHJRU\VKRXOGEHILOOHGXSLQDWLPHERXQGPDQQHU
VD\ ZLWKLQ  PRQWKV E\ OHYHUDJLQJ ,7 EDVHG
UHFUXLWPHQW V\VWHPV  &RQFHUQHG RIILFHU LQ 5DLOZD\
%RDUG VKRXOGEHJLYHQWKLVUHVSRQVLELOLW\DORQJ ZLWK
FRPPHQVXUDWHHPSRZHUPHQW
0XOWL GLVFLSOLQDU\ WHDPV RI  RIILFHUV RQH HDFK
IURP3HUVRQDOILQDQFHDQGWKHFRQFHUQHGGHSDUWPHQW
VKRXOG LGHQWLI\ VXUSOXV SRVWV DW WKH 'LYLVLRQDO +G
4UV DQG SURGXFWLRQ XQLW OHYHOV IRU VXUUHQGHULQJ WR
EXLOGXSDVXUSOXVEDQN7KHVHWHDPVVKRXOGLGHQWLI\
WKHQHHGIRUDGGLWLRQDOSRVWVXQGHUVDIHW\FDWHJRULHV
*0VVKRXOGHQVXUHWKDWFUHDWLRQRIDGGLWLRQDOSRVWVLV
ULJKWIXOO\ GRQH LQ WKH GHVHUYLQJ VDIHW\ FDWHJRULHV
ZLWKLQPRQWKV 3DUD 
*0V VKRXOG EH HPSRZHUHG WR FUHDWH DGGLWLRQDO
SRVWV ZLWK ILQDQFH FRQFXUUHQFH XQGHU 6DIHW\
FDWHJRULHV LI QR PDWFKLQJ VXUUHQGHUV DUH DYDLODEOH
3DUD 

$FFHSWHG1RWDFFHSWHGZLWKUHDVRQV

$FFHSWHG

5HFRPPHQGDWLRQDFFHSWHG
5XQQLQJ VWDII FDGUH UHYLHZ WR EH GRQH
UHDOLVWLFDOO\ DQG VKRXOG QRW UHVXOW LQ
LQFUHDVH RI YDFDQFLHV ,7 EDVHG
UHFUXLWPHQWV\VWHPVDFFHSWHG
5HFRPPHQGDWLRQ DFFHSWHG DQG DOUHDG\
LQSODFH

5HFRPPHQGDWLRQQRWDFFHSWHG
)ROORZLQJVWHSVQHHGWREHWDNHQ
 )LQDQFLDO YDOXH RI YDFDQF\ EDQN
VKRXOGEHXSGDWHGDWWKHHQGRIHDFK
ILQDQFLDO\HDU
 1RQVDIHW\
SRVWV
PXVW
EH
VXUUHQGHUHGDIWHUUHVWUXFWXULQJZLWKLQ
DWLPHIUDPHRIPRQWKV
 0DQSRZHU \DUGVWLFNV IRU DOO
DFWLYLWLHVVKRXOGEHUHYLHZHG
7KH H[LVWLQJ VWDII \DUGVWLFN WR EH ORRNHG DIUHVK LQ D $FFHSWHG
GLVSDVVLRQDWHIDVKLRQDQGWKHVDPHVKRXOGEHLVVXHGWR (PSKDVLV VKRXOG EH RQ GRZQVL]LQJ RU
WKH]RQDOUDLOZD\VZLWKLQPWKV 3DUD 
ULJKWVL]LQJRI\DUGVWLFNV

5DLOZD\ %RDUG VKRXOG LVVXH RXWVRXUFLQJ SROLF\ WR $FFHSWHG
JHWH[SHUWVHUYLFHDQGVDYHFRVW 3DUD 
+RZHYHUFDUHVKRXOGEHWDNHQWKDWWKHUH
LV QR GXSOLFDWLRQ RI PDQSRZHU IRU WKH
RXWVRXUFHG DFWLYLW\ E\ WKH DSSURYLQJ
DXWKRULW\
&RQFHUQHGGLUHFWRUDWHVVKRXOGLVVXHDGHILQHGOLVWRI $FFHSWHG
VDIHW\LWHPVWR]RQDO5DLOZD\VIRUXQLIRUPLW\ 3DUD
 

5'62 VKRXOG WDNH IXOO UHVSRQVLELOLW\ RI DOO WKRVH 5HFRPPHQGDWLRQSDUWLDOO\DFFHSWHG
VDIHW\LWHPVIRUZKLFKGUDZLQJVSHFLILFDWLRQYHQGRU 5'62 VKRXOG WDNH IXOO UHVSRQVLELOLW\ RI
DSSURYDOHWFDUHLVVXHGE\5'627KH\VKRXOGHQWHU DOOWKRVHVDIHW\LWHPVIRUZKLFKGUDZLQJ
LQWR ORQJ WHUP UDWH FRQWUDFW ZLWK WKHLU DSSURYHG VSHFLILFDWLRQ YHQGRU DSSURYDO HWF DUH
YHQGRUVIRUWR\HDUVDIWHUQHJRWLDWLQJUDWHVEDVHG LVVXHG E\ 5'62 5DLOZD\V VKRXOG HQWHU
RQ WKH YDOXH RI WKH LWHP ZKLFK FDQ EH EHVW DVVHVVHG LQWR D ORQJ WHUP UDWH FRQWUDFW ZLWK WKH
E\5'62 3DUD 
DSSURYHG YHQGRUV SUHIHUDEO\ E\
SURGXFWLRQ XQLWV 5'62 VKRXOG GLVSOD\
YHQGRUSROLF\DIWHUGXHGLOLJHQFH
$ VLPSOH EXW HIIHFWLYH YHQGRU TXDOLILFDWLRQ DQG $FFHSWHG
DSSURYDOSURFHVVVKRXOGEHIROORZHGIRUQRQ5'62
VDIHW\LWHPVDW=RQDOUDLOZD\OHYHO 3DUD 


206

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


6U
1R

&KDSWH 5HFRPPHQGDWLRQ LWVGHWDLOV


U6U1R


 



 



 



 



 



 



 



 



 



 



 



$WKRURXJKUHYLHZRIWKHTXDOLW\V\VWHPIRUPDWHULDO
SURFXUHPHQW SURFHVV E\ DQ H[WHUQDO SURIHVVLRQDO
DJHQF\DQGUHYDPSLQJRIWKHV\VWHPVKRXOGEHGRQH
DVQHFHVVDU\ 3DUD 
&RQYHQWLRQDO PHWKRG RI WHFKQLFDO LQVSHFWLRQ VKRXOG
EH UHSODFHG ZLWK PRGHUQ 4XDOLW\ 0DQDJHPHQW
6\VWHP IRU ZKLFK QHFHVVDU\ FKHFN VKHHWV VKRXOG EH
GHYHORSHG E\ WKH UHVSHFWLYH GHSDUWPHQWV GLUHFWO\
DVVRFLDWHGZLWKVDIHW\7KHVHFKHFNVKHHWVVKRXOGEH
EDVHG RQ SUHVHQW UXOHV UHJXODWLRQV PDQXDOV
LQVWUXFWLRQV HWF DQG VKRXOG IRUP SDUW RI WKH VDIHW\
PDQXDORIWKH5DLOZD\ 3DUD 

5HPRYDO RI DOO HQFURDFKPHQWV LQ WKH YLFLQLW\ RI
UDLOZD\ WUDFN VKRXOG EH DGGUHVVHG DW WKH SROLWLFDO
OHYHOLQWKHLQWHUHVWRIVDIHW\ 3DUD 
33($ 3XEOLF 3UHPLVHV (YLFWLRQ $FW  VKRXOG EH
VXLWDEO\ DPHQGHG VR WKDW HYLFWLRQ RI HQFURDFKHUV LV
HDVLO\SRVVLEOHZLWKWKHKHOSRIORFDOSROLFH5DLOZD\
3URWHFWLRQ )RUFH  6XLWDEOH DPHQGPHQW LQ WKH
5DLOZD\ $FW VKRXOG DOVR EH PDGH E\ ZKLFK
HQFURDFKHUVFDQEHVHYHUHO\SHQDOL]HG 3DUD 
%HWWHU FRRUGLQDWLRQ EHWZHHQ ,QGLDQ 5DLOZD\V DQG
WKH SROLFLQJ DXWKRULWLHV VKRXOG EH HVWDEOLVKHG WR
VWUHQJWKHQ WKH LQWHOOLJHQFH QHWZRUN WR SUHHPSW
VDERWDJHRQWKH5DLOZD\V 3DUD 
7KH 5DLOZD\ $FW VKRXOG EH VXLWDEO\ DPHQGHG WR
LPSRVHVWULQJHQWSXQLVKPHQWRQSHUVRQVIRXQGJXLOW\
RIVDERWDJH 3DUD 
%LJ UDLOZD\ VWDWLRQV VKRXOG KDYH ,QWHOOLJHQW
6HFXULW\ ODUJHO\ EDVHG RQ &&79 FDPHUD ZLWK
SURSHUPRQLWRULQJLQWKHFRQWUROURRP 3DUD 

$FFHSWHG1RWDFFHSWHGZLWKUHDVRQV

$FFHSWHG

$FFHSWHG

$FFHSWHG
5HFRPPHQGDWLRQ DFFHSWHG DV UHOHYDQW
SURYLVLRQVDOUHDG\H[LVW

5HFRPPHQGDWLRQDFFHSWHG
)LQDQFLDOLPSOLFDWLRQVWREHZRUNHGRXW
3URYLVLRQ DOUHDG\ H[LVWV +HQFH QR
DPHQGPHQWLVUHTXLUHG

5HFRPPHQGDWLRQDFFHSWHG
)LQDQFLDOLPSOLFDWLRQVWREHZRUNHG RXW
,QWHOOLJHQW6HFXULW\6\VWHPVWREHVWXGLHG
IXUWKHU
7KH XSSHU OLPLW VHW IRU UHFUXLWPHQW RI ([ 1RW DFFHSWHG DV UHFUXLWPHQW DOUHDG\
6HUYLFHPHQ DV SHU VWLSXODWHG VWDQGDUGV DJDLQVW FRPSOHWH
YDFDQW SRVWV LQ 53) FDGUH VKRXOG EH UHPRYHG WR
H[SHGLWHILOOLQJXSRIYDFDQFLHV 3DUD 
5DLOZD\V VKRXOG DOVR WDNH XS GLVUXSWLRQV DQG 'HWDLOV RI WKH FDVH WR EH SXW XS WR &5%
YDQGDOLVP WR WKHLU DVVHWV WR WKH FRXUWV IRU E\ 6HFXULW\ 'LUHFWRUDWH DORQJ ZLWK
FRPSHQVDWLRQ DQG UHPHGLDO PHDVXUHV  ,W VKRXOG EH UHOHYDQW SURYLVLRQV RI WKH 5DLOZD\V $FW
H[DPLQHG ZKHWKHU VXLWDEOH SURYLVLRQV FDQ EH  'HWDLOV RI SHQGLQJ FRXUW FDVHV WR
LQFRUSRUDWHG LQ WKH 5DLOZD\ $FW IRU WKLV SXUSRVH EHDOVROLQNHG
3DUD 
$ +LJK /HYHO 7DVN )RUFH LQYROYLQJ 6WDWH $ 7DVN )RUFH RI 5DLOZD\V 6WDWH
*RYHUQPHQW=58&&DQG1*2VVKRXOGEHVHWXSWR *RYHUQPHQW DQG RQH 0HPEHU RI
UHFRPPHQG FRQVWUXFWLYH PHDVXUHV ZKLFK ZLOO =58&& WREHIRUPHG 7KH\PD\ FRRSW
DOOHYLDWH RU HOLPLQDWH FDVXDOWLHV GXH WR UDLOZD\ RWKHU DJHQFLHV GHSHQGLQJ RQ QHHG
LQIUDVWUXFWXUHLQWKHQHDUIXWXUH 3DUD 
LQFOXGLQJ1*2VLIUHTXLUHG
6WDWHRIWKHDUWVLJQDOOLQJDQGSURWHFWLRQV\VWHPDW 5HFRPPHQGDWLRQ
DFFHSWHG
IRU
OHDVW HTXLYDOHQW WR WKH IXQFWLRQDOLWLHV RI (7&6 / LPSOHPHQWDWLRQ RI (7&6 / RQ OLPLWHG
VKRXOG EH GHSOR\HG WKURXJKRXW ,5 VWDUWLQJ ZLWK WKH VHFWLRQRI DXWRPDWLFVLJQDOWHUULWRU\ DVD
EXV\URXWHV .PV LPPHGLDWHO\$VXEJURXS SLORW SURMHFW +RZHYHU H[LVWLQJ
RI WKH &RPPLWWHH VKDOO H[DPLQH VRPH RI WKH FULWLFDO DXWRPDWLFVLJQDOOLQJZRUNVWRFRQWLQXH
DVSHFWVGXULQJYLVLWWRVRPHRIWKH(XURSHDQUDLOZD\
V\VWHPDQGVXEPLWLWVUHSRUW 3DUD 


207

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


6U
1R

&KDSWH 5HFRPPHQGDWLRQ LWVGHWDLOV


U6U1R


 



 



 



 



 



 



 



 



 



 



 



 



'LYHUVHDQGUHGXQGDQWPHDQVRI6DWHOOLWHEDVHGWUDLQ
SRVLWLRQ VHQVLQJ DV XVHG LQ $&'  VKRXOG EH
LQFRUSRUDWHGDQGPHUJHGLQ$73IXQFWLRQV 3DUD 
$ GHGLFDWHG 6SHFLDO 3XUSRVH 9HKLFOH 639  VKRXOG
EH IRUPHG KDYLQJ IXOO SRZHUV DQG WKH PDQGDWH WR
IRUPXODWHDQGH[HFXWHWKHVDQFWLRQHGSURMHFWVRI$73
LQDWLPHERXQGPDQQHU <HDUV  3DUD 
$KLJKSRZHUVWDQGLQJWHFKQLFDOUHYLHZFRPPLWWHH
VKRXOGEHVHWXSWRJXLGHWKH639RQWHFKQLFDOLVVXHV
7KLV &RPPLWWHH VKRXOG FRQWLQXH WLOO WKH
LPSOHPHQWDWLRQ RI WKH SURMHFW RI $73 DQG VKRXOG
KDYHH[SHUWVIURP5DLOZD\VDVZHOODVIURPRXWVLGH
3DUD 
&RPPXQLFDWLRQ %DVHG 7UDLQ &RQWURO &%7& 
V\VWHP VKRXOG EH XVHG LQ 0HWURV DQG GHGLFDWHG
FRUULGRUVHFWLRQVOLNH0XPEDLVXEXUEDQWRPHHWWKH
UHTXLUHPHQWVRIKHDGZD\OHVVWKDQPLQXWHVDIWHU
VWXG\RIGHVLJQPDUJLQV 3DUD 

$ 7DVN )RUFH VKRXOG EH VHW XS WR VWXG\ WKH
IHDVLELOLW\ RI FRPPXQLFDWLRQ EDFN ERQH IRU ,5
XWLOL]LQJGLYHUVHDQG UHGXQGDQWWHFKQRORJ\WRHQVXUH
KLJKHVWOHYHORIDYDLODELOLW\RIWKHQHWZRUNVIRUVDIHW\
DQGRSHUDWLRQDOUHTXLUHPHQWV 3DUD 

5'62 VLJQDOLQJ GLUHFWRUDWH VKRXOG EH DXJPHQWHG
ZLWK FRPSUHKHQVLYH UHVHDUFK IUDPHZRUN LQ RUGHU WR
LQFOXGH ZRUN RQ IRUHFDVWLQJ QHZHU VLJQDOLQJ DQG
WHOHFRPWHFKQRORJLHV 3DUD 
,5 VKRXOG VZLWFK RYHU WR WKH PDQXIDFWXUH RI /+%
GHVLJQ FRDFKHV LQ DOO WKH FRDFK PDQXIDFWXULQJ XQLWV
DQG PDQXIDFWXUH RI ,&) GHVLJQ FRDFKHV VKRXOG EH
VWRSSHGLPPHGLDWHO\ 3DUD 
3UREOHP RI MHUN RQ /+% GHVLJQ FRDFK VKRXOG EH
UHVROYHG E\ DGRSWLQJ D QHZ GHVLJQ RI GUDIW JHDU
VXEMHFW WR LWV VDWLVIDFWRU\ SHUIRUPDQFH 7KH H[LVWLQJ
/+%FRDFKHVVKRXOGDOVREHUHWURILWWHG 3DUD 
2WKHUPDLQWHQDQFHUHODWHGSUREOHPVIDFHGRQ/+%
FRDFKHV VXFK DV FRQVHTXHQWLDO IDLOXUH WR UROOHU
EHDULQJV ZKHHO VKHOOLQJ HWF VKRXOG EH DGGUHVVHG DW
WKHHDUOLHVW 3DUD 
6RPHDGDSWDWLRQVKRXOGEHGHVLJQHGDQGSURYLGHGRQ
DOO WKH H[LVWLQJ ,&) GHVLJQ FRDFKHV LQ D 0LVVLRQ
PRGH IRU IDFLOLWDWLQJ HQHUJ\ DEVRUSWLRQ DQG DQWL
FOLPELQJ GXULQJ FUDVK RU VXGGHQ GHFHOHUDWLRQ 3DUD
 
,5 PXVW VWUDWHJL]H WR XWLOL]H RQO\ /+% FRDFKHV DW
 .PSK DQG DERYH VSHHGV ZLWK  DQG DERYH
FRDFK IRUPDWLRQV RQ WKH WUXQN URXWHV ,&) GHVLJQ
FRDFKHV VKRXOG EH UHOHJDWHG WR OHVVHU VSHHGV ZLWK
VKRUWHUFRPSRVLWLRQV 3DUD 
$ VLPSOH ORZ FRVW GHYLFH VXFK DV ELPHWDOOLF VHQVRU
WR RSHQ RU FORVH D FLUFXLW DW DURXQG  WR  GHJUHH
&HOVLXVRQHDFKD[OHZLWKDGLVSOD\RIUHGOLJKWVDQG
DODUP EHOO VKRXOG EH ILWWHG LQ FRDFKHV WKDW UXQ RQ
VHUYLFHVKDYLQJHVFRUWLQJWHFKQLFLDQV 3DUD 

$FFHSWHG1RWDFFHSWHGZLWKUHDVRQV

1RW\HWGLVFXVVHG
1RW\HWGLVFXVVHG

1HHG LV DJUHHG WR EXW D WHFKQLFDO JURXS


RI $GGLWLRQDO 0HPEHUV $GYLVRUV WR EH
IRUPHGWRH[DPLQHWKHLPSOHPHQWDWLRQRI
WKLV UHFRPPHQGDWLRQ DORQJ ZLWK LWV
URDGPDS
1RW\HWGLVFXVVHG

6DPHDVLWHP

6DPHDVLWHP

1RW\HWGLVFXVVHG

5HFRPPHQGDWLRQDFFHSWHG
5'62WRIRUPXODWHDQHZGHVLJQDQGGR
IXUWKHUVWXGLHVLIQHFHVVDU\
5HFRPPHQGDWLRQDFFHSWHG

1RW\HWGLVFXVVHG

5HFRPPHQGDWLRQDFFHSWHG
7REHLPSOHPHQWHGLQDSKDVHGPDQQHU

5HFRPPHQGDWLRQ DFFHSWHG LQ SULQFLSOH


6WDQGDUG WUDFN VLGH KRW ER[ GHWHFWRUV
VKRXOGEHGHSOR\HG

208

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


6U
1R

&KDSWH 5HFRPPHQGDWLRQ LWVGHWDLOV


U6U1R


 



 



 



 



 




 




 



 



 



 



 



 



 




/+% FRDFKHV PXVW EH JURXQGHG DW WKH 0DLQWHQDQFH
\DUGV DQG VXEVWDQGDUG 0 )DVWHQHUV RI VSHHG
VHQVRU VKRXOG EH UHSODFHG ZLWK KLJK WHQVLOH EROWV RI
WKHVSHFLILHGTXDOLW\RIUHSXWHGPDNH 3DUD 
7RLOHWV HLWKHU ZLWK QR GLVFKDUJH RU ZLWK KDUPOHVV
GLVFKDUJH VKRXOG EH LQWURGXFHG LQ DOO WKH 
FRDFKHVZLWKLQQH[WILYH\HDUV 3DUD 
)ODPH GHWHFWLRQ V\VWHP VKRXOG EH SURYLGHG LQ
FRDFKHVZKLFKVKRXOGVRXQGKRRWHUDWPDQ\SODFHVLQ
WKH FRDFK WR ZDUQ WKH SDVVHQJHUV ,WV LQWHUIDFH ZLWK
$&3 V\VWHP VKRXOG EH FRQVLGHUHG EDVHG RQ ILHOG
WULDOV 3DUD 
$ VLPSOH ODGGHU RU HTXLYDOHQW IHDWXUH ZLWK D
SHUPDQHQW ILWPHQW RU IROGDEOH DQG GHSOR\DEOH
SURYLVLRQVKRXOGEHDYDLODEOHIRUDVVLVWLQJSDVVHQJHUV
WR JHW GRZQ IURP FRDFKHV LQ WKH HYHQW RI DFFLGHQW
3DUD 
([LVWLQJLQVWUXFWLRQV SURKLELWLQJFRRNLQJLQ3DQWU\
&DUV VKRXOG EH VWULFWO\ HQIRUFHG  /LFHQVH RI
YLRODWLQJ FRQWUDFWRUV VKRXOG EH FDQFHOOHG DQG WKH\
VKRXOG EH VHYHUHO\ SHQDOL]HG LI IRXQG FRRNLQJ
1HFHVVDU\ SURYLVLRQV LQ WKLV UHJDUG VKRXOG EH PDGH
LQWKH5DLOZD\$FW 3DUD 
9LGHR &DPHUD EDVHG GDWD ORJJLQJ VWRUDJH DQG
GLVSOD\ LQ PRQLWRULQJ URRP RI 7UDLQ ([DPLQHUV
&DELQVKRXOGEHLQWURGXFHG 3DUD 
+RW ER[ GHWHFWRUV :KHHO LPSDFW ORDG GHWHFWRU
:,/'  DQG 7UDFN VLGH ERJLH PRQLWRULQJ V\VWHP
VKRXOGEHH[WHQVLYHO\GHSOR\HG 3DUD 
5DGLR WDJV RQ DOO W\SHV RI UROOLQJ VWRFN DQG D
FRPPXQLFDWLRQ EDFNERQH VKRXOG EH SURYLGHG DORQJ
WKH UDLOZD\ QHWZRUN ZLWK ODVW PLOH FRQQHFWLYLW\ IRU
WUDQVIHU RI FRQGLWLRQ GDWD IRUP WUDFN VLGH WR WKH
FRQWURO FHQWUH DV ZHOO DV PDLQWHQDQFH GHSRWV 3DUD
 
(YHU\ WUDLQ VKRXOG EH FKHFNHG IRU IRUPDWLRQ /HDN
UDWHGXULQJ PDLQWHQDQFH LQDGGLWLRQ WR%UDNH 3RZHU
&HUWLILFDWLRQ 3DUD 
:HLJKEULGJHV VKRXOG EH LQVWDOOHG DW DOO PDMRU
ORDGLQJGHSRWVDQGDWRWKHUSODFHVLQDZD\WKDWHYHU\
ORDGHGZDJRQLVZHLJKHGZLWKLQWRNLORPHWHUV
$ XQLIRUP RSHUDWLQJ SURWRFRO WR GHDO ZLWK
RYHUORDGHG ZDJRQ VKRXOG EH SUHVFULEHG E\ 5DLOZD\
%RDUG 3DUD 
:DJRQVZLWKWUDFNIULHQGO\ERJLHVKRXOGEHGHSOR\HG
RQ,QGLDQ5DLOZD\VRQSULRULW\ 3DUD 

&RQFHSWRIGLVWULEXWHGSRZHULQIUHLJKWRSHUDWLRQVWR
UHGXFH FRXSOHU IRUFHV DQG UDLO ZHDU VKRXOG EH
GHYHORSHG  
$ QDWLRQDO OHYHO H[SHUW FRPPLWWHH VKRXOG EH
FRQVWLWXWHGWRHVWDEOLVKWKHURRWFDXVHRIUDLOIDLOXUHV
DQGLGHQWLI\WKHPHWDOOXUJLFDODQGFKHPLFDOVROXWLRQV
LQFOXGLQJ HQKDQFHG TXDOLW\ DVVXUDQFH DQG FRQWURO
SURWRFROVIURPVWHHOPHOWLQJWROD\LQJRIUDLORQDZDU

$FFHSWHG1RWDFFHSWHGZLWKUHDVRQV

5HFRPPHQGDWLRQDFFHSWHG
7REHLPSOHPHQWHGLQDSKDVHGPDQQHU
1RW\HWGLVFXVVHG
5HFRPPHQGDWLRQ3DUWLDOO\DFFHSWHG
5HOLDEOHVPRNHEDVHGGHWHFWLRQV\VWHPLV
XQGHU WULDO ZLWK VLPLODU IHDWXUHV LQ $&
FRDFKHV
1RW\HWGLVFXVVHG

5HFRPPHQGDWLRQDFFHSWHG
3UHFRRNHG IRRG VKRXOG EH VHUYHG IURP
PRGLILHGSDQWULHVLQHDFKFRDFK3DQWULHV
WR EH SURYLGHG LQ HDFK FRDFK IRU ZKLFK
WKHGHVLJQKDVWREHILQDOL]HGE\38V
5HFRPPHQGDWLRQDFFHSWHG
5HFRPPHQGDWLRQDFFHSWHG
,PSOHPHQWDWLRQGHWDLOVWREHZRUNHGRXW
VXEMHFWWRIXQGDYDLODELOLW\
5HFRPPHQGDWLRQDFFHSWHG

&RPPHQWVRI'*5'62WREHFDOOHGIRU
5HFRPPHQGDWLRQDFFHSWHG
:HLJKPHQWLVEHLQJGRQHLQDOOFDVHV

1RW\HWGLVFXVVHG
1RW\HWGLVFXVVHG
5HFRPPHQGDWLRQDFFHSWHG
&RPPLWWHHDOUHDG\IRUPHG

209

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


6U
1R

&KDSWH 5HFRPPHQGDWLRQ LWVGHWDLOV


U6U1R


 



 



 



 



 



 



 



 




 



IRRWLQJ ZLWKLQ WKH QH[W WKUHH PRQWKV 7KLV H[SHUW


WHDP VKRXOG DOVR UHYLHZ 5DLO :HOGLQJ WHFKQRORJ\
3DUD 
$ 6HQLRU $GPLQLVWUDWLYH *UDGH RIILFHU RI KLJK
LQWHJULW\ DQG VWURQJ EDFNJURXQG LQ 0DWHULDO 6FLHQFH
 &KHPLVWU\ VKRXOG EH SRVWHG IXOO WLPH WR PRQLWRU
DQG FRQWURO 5DLO SURGXFWLRQ SURFHVV DW %KLOODL 6WHHO
3ODQW 3DUD 
3URGXFWLRQRINJUDLOVKRXOGEHVWRSSHGDQGNJ
36&VOHHSHUVVKRXOGQRORQJHUEHSURGXFHG2QO\
NJ0 KHDG KDUGHQHG UDLOV VKRXOG EH XVHG RQ FXUYHV
VKDUSHUWKDQPHWHUUDGLXVRIFXUYDWXUH 3DUD 
0RGHUQ WHFKQRORJLFDOO\ GULYHQ YHKLFOH ERUQH
XOWUDVRQLF WHVWLQJ PDFKLQH VKRXOG EH LQWURGXFHG IRU
IDVWHU DQG UHOLDEOH GHWHFWLRQ RI UDLO DQG ZHOG IODZV
3DUD 

5DLO JULQGLQJ DW UHTXLUHG LQWHUYDOV VKRXOG EH
PDQGDWRU\ WR LQFUHDVHWKH OLIH RIUDLOV DQGZKHHOV RI
UROOLQJVWRFN 3DUD 

$ V\VWHPDWLF $7 ZHOGLQJ LPSURYHPHQW SURJUDPPH
VKRXOG EH LQWURGXFHG FRQIRUPLQJ WR (XURSHDQ
VWDQGDUGV 3URFXUHPHQW RI ODWHVW DQG SURYHQ UDZ
PDWHULDOV DQG TXDOLW\ ZHOGLQJ SURFHGXUHV PXVW EH
LQWURGXFHG WR HOLPLQDWH $7 ZHOGLQJ IDLOXUH 3DUD
 

'LUHFWRUDWH GHDOLQJ ZLWK WUDFN IRUPDWLRQ LQ 5'62
VKRXOG EH VWUHQJWKHQHG VWUHWFKHV RI ZHDN IRUPDWLRQ
LGHQWLILHGDQGDQDFWLRQSODQIRUPXODWHGWRWUHDWZHDN
IRUPDWLRQV LQ D VFLHQWLILF PDQQHU ZLWK D YLHZ WR
HOLPLQDWH VXFK ZHDN VSRWV SHUPDQHQWO\ LQFOXGLQJ
LPSURYHPHQW WR GUDLQDJH ZLWKLQ WKH QH[W  \HDUV
3DUD 

)RU UHFRUGLQJ DQG PRQLWRULQJ WKH FRQGLWLRQ RI
GLVWUHVVHGEULGJHVSKRWRJUDSKVVKRXOGEHWDNHQXVLQJ
PRGHUQ KDQG KHOG HOHFWURQLF FDPHUDV DQG VKRXOG
EH SRVWHG RQ 0,6 VHQW WKURXJK ,QWHUQHW WR DOO
FRQFHUQHG H[SHUW HQJLQHHUV KDYLQJ YDVW H[SHULHQFH
3DUD 

9XOQHUDEOHEULGJHVVKRXOGEHILWWHGZLWK ZDWHUOHYHO
JDXJHV DQG WXUELQH IORZ PHWHUV WR PHDVXUH IORZ
ZKLFK VKRXOG EH LQWHUORFNHG LQ D ZD\ WR ZDUQ WKH
GULYHURIWKHDSSURDFKLQJWUDLQ 3DUD 
'LVWUHVVHG DQG YXOQHUDEOH EULGJHV VKRXOG EH
LQVWUXPHQWHG LQ WHUPV RI GHIOHFWLRQVGLVSODFHPHQWV
ZDWHU OHYHO DQG IORZ YHORFLW\ RQ D FRQWLQXRXV EDVLV
DQGGDWDVKRXOGEHFRPPXQLFDWHGWRWKHRIILFHRIWKH
FRQFHUQHG &KLHI %ULGJH (QJLQHHU IRU PRQLWRULQJ
$GYDQFHG VFLHQWLILF PHDVXUHPHQW DQG LQVSHFWLRQ IRU
WKH FRQGLWLRQ DVVHVVPHQW RI WKH XQGHUVLGH RI WKH
EULGJHV XVLQJ PRELOH DQG DUWLFXODWLQJ SODWIRUP LV
HVVHQWLDO 3DUD 

$FFHSWHG1RWDFFHSWHGZLWKUHDVRQV

5HFRPPHQGDWLRQDFFHSWHG
5,7(6 WR SRVW SHUVRQ ZLWK VXLWDEOH
EDFNJURXQG

7REHGLVFXVVHGDJDLQ
1RW\HWGLVFXVVHG

1RW\HWGLVFXVVHG

1RW\HWGLVFXVVHG

1RW\HWGLVFXVVHG

5HFRPPHQGDWLRQDFFHSWHG

5HFRPPHQGDWLRQSDUWLDOO\DFFHSWHG
:DWHUOHYHOJDXJHVVKRXOGEHSURYLGHG
5HFRPPHQGDWLRQSDUWLDOO\DFFHSWHG
6XLWDEOH DUUDQJHPHQWV IRU PHDVXULQJ
LPSRUWDQW SDUDPHWHUV RI VHOHFWHG
GLVWUHVVHGYXOQHUDEOH EULGJHV ZRXOG EH
SURYLGHG

210

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


6U
1R

&KDSWH 5HFRPPHQGDWLRQ LWVGHWDLOV


U6U1R


 



 



 



 



 



 



 



 



 




 





$OO /HYHO &URVVLQJV ZKHWKHU PDQQHG ZLWK RU


ZLWKRXWVLJQDOV RUXQPDQQHGVKRXOGEHHOLPLQDWHGLQ
QH[W\HDUV7KLVLVJLJDQWLFWDVNIRUZKLFKGHGLFDWHG
639VVKRXOGEHIRUPHGLQHDFKRIWKH]RQDOUDLOZD\
IXOO\ HPSRZHUHG DQG PDQGDWHG WR FRPSOHWH WKH
SURMHFWLQDWLPHIUDPHRI\HDUV 3DUD 
/HYHO &URVVLQJV KDYLQJ OLWWOH URDG WUDIILF VKRXOG EH
FORVHG 0HUJHU RI QHDUE\ /&V E\ FRQVWUXFWLQJ
FRQQHFWLQJ URDGV DW UDLOZD\V FRVW HYHQ RQ QRQ
UDLOZD\ODQGVKRXOGEHWDNHQXS 3DUD 
&RQVWUXFWLRQRIOLPLWHGKHLJKWVXEZD\V5RDGXQGHU
%ULGJH 58%  DQG 5RDG RYHU %ULGJH 52%  VKRXOG
EH WDNHQ XS LQ PLVVLRQ PRGH DQG WUDIILF EORFNV
VKRXOGEHJHQHURXVO\JUDQWHG 3DUD 

1R /& VKRXOG EH QHZO\ LQWURGXFHG XQGHU DQ\
FLUFXPVWDQFHV RQ WKH H[LVWLQJ V\VWHP DV ZHOO DV
GXULQJ JDXJH FRQYHUVLRQ GRXEOLQJ DQG FRQVWUXFWLRQ
RIQHZUDLOZD\OLQHV 3DUD
1R /& JDWH VKRXOG KHQFHIRUWK EH PDQQHG RU
LQWHUORFNHG 3DUD 

$FFHSWHG1RWDFFHSWHGZLWKUHDVRQV

1RW\HWGLVFXVVHG

1RW\HWGLVFXVVHG

1RW\HWGLVFXVVHG

5HFRPPHQGDWLRQDFFHSWHG

5HFRPPHQGDWLRQSDUWLDOO\DFFHSWHG
,5 KDV D WLPH ERXQG SURJUDPPH IRU
HOLPLQDWLRQRI80/&V
7KH SUHVHQW SROLF\ RI VKDULQJ WKH FRVW RI 58% RU 1RW\HWGLVFXVVHG
52% ZLWK WKH 6WDWH *RYHUQPHQWV VKRXOG EH
GLVSHQVHG ZLWK DQG WKH IXOO UHVSRQVLELOLW\ DQG HQWLUH
FRVW RI FRQVWUXFWLRQ VKRXOG EH WDNHQ RYHU E\ WKH
5DLOZD\V  )RU WKLV SXUSRVH WKH SUHVHQW 5DLOZD\
SROLF\QHHGVWREHFKDQJHGDQGVHFWLRQRI5DLOZD\
$FW QHHGV WR EH DPHQGHG  )XUWKHU WR DXJPHQW WKH
5RDG6DIHW\)XQGDODUJHVKDUHRIGLHVHOFHVVVKRXOG
FRPHWRWKH5DLOZD\VIRUZKLFK*RYHUQPHQWRI,QGLD
VKRXOGEHDSSURDFKHG 3DUD 
7R H[SHGLWH WKH FRQVWUXFWLRQ RI OLPLWHG KHLJKW VXE $FFHSWHG
ZD\V 58%V DQG 52%V WKH &56V UROH VKRXOG EH
WDNHQDZD\DQGUHOHYDQWSODQVDQGGRFXPHQWVVKRXOG
EHDSSURYHGDQGVLJQHGDWWKHOHYHORIWKHFRQFHUQHG
3ULQFLSDO +HDG RI WKH 'HSDUWPHQWV 3+2'V 
LQVWHDG RI VHQGLQJ WKHP WR WKH &RPPLVVLRQHU RI
5DLOZD\ 6DIHW\ &56  IRU VDQFWLRQ XQOHVV WKHUH LV
VRPHFKDQJHLQWKHWUDFN\DUGOD\RXW 3DUD 

5HJXODU PHHWLQJV DQG FRRUGLQDWLRQ EHWZHHQ 5HFRPPHQGDWLRQDFFHSWHG
5DLOZD\ DQG FLYLO DGPLQLVWUDWLRQ DW WKH KLJKHVW WR
WKH ORFDO OHYHOV VKRXOG EH KHOG WR H[SHGLWH WKH
H[HFXWLRQ
$ ODUJH QXPEHU RI SURMHFWV RI LPSRUWDQFH WR 5HFRPPHQGDWLRQDFFHSWHG
5DLOZD\VVKRXOGEHUHJXODUO\DZDUGHGWRVRPHVHOHFW
HQJLQHHULQJDFDGHPLFLQVWLWXWLRQVLQZKLFKVWXGHQWV
FDQ SDUWLFLSDWH &RXUVHV PLQRU VWUHDP DQG PDMRU
VSHFLDOL]DWLRQV LQ WKH DUHD RI UDLOZD\ HQJLQHHULQJ
VKRXOG EH LQWURGXFHG LQ WKH ,QGLDQ HQJLQHHULQJ
DFDGHPLFSURJUDPV 3DUD 
$OORIILFHUVVKRXOGEHSHULRGLFDOO\LPSDUWHG WUDLQLQJ 5HFRPPHQGDWLRQDFFHSWHG
LQ VDIHW\ HQJLQHHULQJ IRU EXLOGLQJ D VDIHW\ FXOWXUH )RFXVRQVDIHW\LQ&7,VWREHLQFUHDVHG
3DUD 

211

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


6U
1R

&KDSWH 5HFRPPHQGDWLRQ LWVGHWDLOV


U6U1R


 




 




 



 




 



 



 




 




 




 



 




 



2QH WUDLQLQJ LQVWLWXWH DW WKH GLYLVLRQDO OHYHO VKRXOG


EH QRPLQDWHG DQG XSJUDGHG IRU WUDLQLQJ WR VWDII RQ
VDIHW\ HQYLURQPHQW LQ WKH 5DLOZD\V  7KLV LQVWLWXWH
VKRXOG KDYH DQLPDWLRQ ILOPV JHQHUDO HTXLSPHQW
WRROVDQGJDGJHWVXVHGRQ,QGLDQ5DLOZD\VHWF 3DUD
 

'HSDUWPHQWDO VWDII VKRXOG EH HQFRXUDJHG DQG
H[WHQGHG UHVRXUFHV WR XSJUDGH WKHLU SURIHVVLRQDO
TXDOLILFDWLRQVDQGVNLOOVWREHILWIRUSURPRWLRQWRWKH
KLJKHUOHYHO 3DUD 
$OOWKHQHZO\UHFUXLWHG $VVLVWDQW/RFR 3LORWV VKRXOG
EH 'LSORPD KROGHUV LQVWHDG RI SUHVHQW 0DWULFXODWH
,7, KROGHUV  $OO WKH 0DLQWHQDQFH 7HFKQLFLDQV LQ DOO
7HFKQLFDO'HSDUWPHQWVVKRXOGDWOHDVWEH,7,KROGHUV
DQG VXSHUYLVRUV VKRXOG EH DWOHDVW 'LSORPD KROGHUV
SUHIHUDEO\(QJLQHHULQJ*UDGXDWHV 3DUD 
&DGUHRI HOHFWULFDQGGLHVHOUXQQLQJVWDIIVKRXOGEH
VHSDUDWHG LQ WKH SUHVHQW RSHUDWLQJ HQYLURQPHQW
KDYLQJ ODUJH QXPEHU RI ORFR YDULDQWV RI ERWK W\SHV
3DUD 
6XFKUXQQLQJVWDIIVZKRIDLOLQDQ\RIWKHPDQGDWRU\
UHIUHVKHU FRXUVH VKRXOG EH JLYHQ RQO\ RQH H[WUD
FKDQFHWRUHSHDWWKHFRXUVHDQGWHVWVKRXOGEHWDNHQ
DW WKH FRQFHUQHG %UDQFK 2IILFHU OHYHO  ,Q FDVH WKH
UXQQLQJVWDIIIDLOVDJDLQKHVKRXOGEHGHEDUUHGIURP
UXQQLQJ GXW\ DQG SRVWHG RQ RWKHU QRQVDIHW\ UHODWHG
DVVLJQPHQWV RU JLYHQ YROXQWDU\ UHWLUHPHQW IROORZLQJ
WKHSUHVFULEHGUXOHVDQGSURFHVV 3DUD 
6RPH SRUWDEOH FKHDSHU YHUVLRQ RI ORFR VLPXODWRUV
VKRXOG EH SURFXUHG DQG ORFDWHG LQ GULYHUV UXQQLQJ
URRPVZKHUHUXQQLQJVWDIIFDQEUXVKXSWKHLUGULYLQJ
VNLOOVDWWKHLUFRQYHQLHQFH 3DUD 

&XVWRPL]HG VLJQDOOLQJ 3DQHOV VKRXOG EH LQWURGXFHG
DW WKH HDUOLHVW LQ =RQDO 5DLOZD\ 7UDLQLQJ ,QVWLWXWHV
=57,V  IRU WKH WUDLQLQJ RI VWDWLRQ RSHUDWLQJ VWDII
3DUD 
6HSDUDWH KDQGERRNV VKRXOG EH SUHSDUHG IRU WKH
RSHUDWLQJ VWDII VXFK DV ORFR SLORWV VWDWLRQ PDVWHUV
HWF ZKLFK VKRXOG FRQWDLQ DOO WKH QHFHVVDU\
LQVWUXFWLRQVWREHIROORZHGE\WKHPZKLOHSHUIRUPLQJ
WKHLUGXW\ 3DUD 

(DFK 'LYLVLRQ VKRXOG KDYH *ULHYDQFH 5HGUHVVDO
0DFKLQHU\ ZKLFK VKRXOG GHDO ZLWK VWDII JULHYDQFHV
LQWLPHERXQGPDQQHU 3DUD 
6SHFLDO DOORZDQFH HTXLYDOHQW WR  RI WKH VDODU\
DQGJUDGHSD\VKRXOGEHJLYHQWRWKHVWDIIZKRZRUN
DV UHJXODU*DWHPHQDV D VSHFLDOLQFHQWLYHGXULQJWKH
LQWHUYHQLQJSHULRGWLOO/&JDWHVDUHFORVHG 3DUD 

$OO VDQFWLRQHG FDSDFLW\ HQKDQFHPHQW ZRUNV RI
&7,V =57,V DQG 676V VKRXOG EH IXOO\ IXQGHG DQG
H[HFXWHGZLWKLQQH[WWZR\HDUV 3DUD 
3RVWLQJ DV D WUDLQHU LQ &HQWUDOL]HG 7UDLQLQJ

$FFHSWHG1RWDFFHSWHGZLWKUHDVRQV

5HFRPPHQGDWLRQDFFHSWHG

7REHGLVFXVVHGDJDLQ

1RW\HWGLVFXVVHG

5HFRPPHQGDWLRQQRWDFFHSWHG
3UHVHQWDUUDQJHPHQWVDUHVDWLVIDFWRU\
$FFHSWHG

1RW\HWGLVFXVVHG

5HFRPPHQGDWLRQDFFHSWHG
&XVWRPL]HGSDQHOVKDYHDOUHDG\EHHQEH
SURYLGHGLQDOO=57,V
5HFRPPHQGDWLRQDFFHSWHG
(ERRNV VKRXOG DOVR EH H[DPLQHG DV DQ
DOWHUQDWLYH

5HFRPPHQGDWLRQ DFFHSWHG DV VXFK


UHGUHVVDOPDFKLQHU\DOUHDG\LQH[LVWHQFH
1RW\HWGLVFXVVHG

5HFRPPHQGDWLRQDFFHSWHG
1RW\HWGLVFXVVHG

212

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


6U
1R

&KDSWH 5HFRPPHQGDWLRQ LWVGHWDLOV


U6U1R


 




 




 




 



 



 



 



 



,QVWLWXWLRQV &7,V  VKRXOG EH EDVHG RQ WKH


UHFRPPHQGDWLRQ RI D FRPPLWWHH RI ZKLFK WKH +HDG
RIWKHLQVWLWXWHFRQFHUQHGPXVWEHDPHPEHU7HQXUH
RI GHVHUYLQJ RIILFHUV PD\ EH H[WHQGHG RQ WKH
UHFRPPHQGDWLRQ RI WKH +HDG RI WKH &7, HYHQ LI LW
LQYROYHVWUDQVIHURIHOHPHQWVRISRVWVLIVXFKDWUDLQHU
LVGXHSURPRWLRQVRWKDWKHVKHFDQEHSURPRWHGLQ
WKHWUDLQLQJLQVWLWXWHLWVHOI 3DUD 

+HDGVRI&7,VVKRXOGEHJLYHQIXOOSRZHUVWRLQYLWH
DFDGHPLFLDQV LQGXVWU\ OHDGHUV WHFKQRFUDWV HWF DV
YLVLWLQJIDFXOW\ZLWKLQWKHDOORFDWHGEXGJHWJUDQW,Q
FDVH RI 5DLOZD\ 6WDII &ROOHJH ZKHUH 0DQDJHPHQW
WUDLQLQJ LV LPSDUWHG WR RIILFHUV RI DOO UDLOZD\
GLVFLSOLQHVDUUDQJHPHQWVVKRXOGEHPDGHWRKDYHRQH
RU WZR SURIHVVLRQDO DFDGHPLFLDQV RQ ORDQ IURP
PDQDJHPHQWLQVWLWXWHVRIUHSXWHIRUDIHZ\HDUVIL[HG
WHQXUH 3DUD 

)XQGV IRU &7,V =RQDO 5DLOZD\ 7UDLQLQJ ,QVWLWXWHV
=57,V  DQG 6XSHUYLVRUV 7UDLQLQJ 6FKRROV 676V 
VKRXOG EH DOORFDWHG VHSDUDWHO\ ERWK XQGHU :RUNV DV
ZHOO DV 5HYHQXH ,QFXUUHQFH RI H[SHQGLWXUH XQGHU
WKHVH IXQGDOORFDWLRQV VKRXOG EH IXOO\ XQGHU WKH
FRQWURO RI +HDGV RI WKH LQVWLWXWH &RQVLGHULQJ WKH
LPSRUWDQFH DQG VL]H RI &7,V WKH\ VKRXOG KDYH WKHLU
RZQPDLQWHQDQFHLQIUDVWUXFWXUH 3DUD 

7HUPV RI 3ULQFLSDOV RI =57,V DQG 676V VKRXOG EH
IL[HGIRUDWOHDVW\HDUV 3DUD 

7HDFKLQJ DOORZDQFH RI WUDLQHUV RI =57,V DQG 676V
VKRXOG EH LQFUHDVHG IURP  WR  WR EULQJ LW DW
SDUZLWKWUDLQHUVLQ&7,V 3DUD 

$Q DSH[ ERG\ FDOOHG 5DLOZD\ 5HVHDUFK 
'HYHORSPHQW &RXQFLO 55'&  VKRXOG EH
HVWDEOLVKHG ,W VKRXOG EH FKDLUHG E\ DQ HPLQHQW
WHFKQRORJLVWVFLHQWLVWRIWKHFRXQWU\UHSRUWLQJWRWKH
5DLOZD\0LQLVWHU 3DUD 
)LQDQFLDO VXSSRUW XS WR   RI \HDUO\ UHYHQXH RI
,QGLDQ 5DLOZD\V VKRXOG EH DYDLODEOH WR VXSSRUW WKH
HQWLUHUHVHDUFKHFRV\VWHPRIUDLOZD\VLQ,QGLD 3DUD
 

$GYDQFHG5DLOZD\5HVHDUFK,QVWLWXWH $55, VKRXOG
EH HVWDEOLVKHG ZKLFK VKRXOG EH D KLJKHQG UHVHDUFK
RUJDQL]DWLRQ IRFXVLQJ RQ HQJLQHHULQJ FKDOOHQJHV LQ
UDLOZD\VSHFLILFDUHDV 3DUD 

$ VWULQJ RI ILYH RU VR 5DLOZD\ 5HVHDUFK &HQWUHV
VKRXOGEHHVWDEOLVKHGZKLFKVKRXOGEHFRORFDWHGRQ
WKH FDPSXVHV RI ,QGLDQ WHFKQRORJLFDO DFDGHPLF
LQVWLWXWLRQV RI QDWLRQDO LPSRUWDQFH (DFK FHQWUH
VKRXOG VSHFLDOL]H LQ VSHFLILF DUHDV OLNH VLJQDOOLQJ
UROOLQJ VWRFN PRWLYH SRZHU WUDFN DQG EULGJHV

$FFHSWHG1RWDFFHSWHGZLWKUHDVRQV

5HFRPPHQGDWLRQDFFHSWHG
'HWDLOVWREHZRUNHGRXW

5HFRPPHQGDWLRQDFFHSWHG

5HFRPPHQGDWLRQ DFFHSWHG DV VXFK


LQVWUXFWLRQVDOUHDG\H[LVW
1RW\HWGLVFXVVHG

1RW\HWGLVFXVVHG

1RW\HWGLVFXVVHG

1RW\HWGLVFXVVHG

1RW\HWGLVFXVVHG

213

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


6U
1R

&KDSWH 5HFRPPHQGDWLRQ LWVGHWDLOV


U6U1R


 



 



 



 



 



 



 



RSHUDWLRQVPDQDJHPHQWHWF 3DUD 
3UHVHQW V\VWHP RI RQO\ KDYLQJ UDLOZD\ RIILFHUV RQ
GHSXWDWLRQ DW VHQLRU SRVLWLRQV LQ 5'62 VKRXOG EH
GRQHDZD\ZLWKDQGSURIHVVLRQDOVDQGVFLHQWLVWVIURP
UHSXWHGWHFKQLFDOLQVWLWXWLRQVVKRXOGDOVREHLQGXFWHG
DWKLJKHUOHYHOVRQWKHSHUPDQHQWFDGUH7KHLUFDUHHU
SURJUHVVLRQVKRXOGEHRQWKHVLPLODUOLQHVDVIROORZHG
LQRWKHUUHVHDUFKLQVWLWXWLRQVRI*RYHUQPHQWRI,QGLD
3DUD 
3RZHURI'*5'62VKRXOGEHHQKDQFHGDVXQGHU
 )XOODXWRQRP\ZLWKILQDQFLDOSRZHUVWRIXQFWLRQ
ZLWKLQWKHVDQFWLRQHGEXGJHW
 7R DZDUG FRQVXOWDQF\ FRQWUDFWV RI HQKDQFHG
YDOXH XSWR 5V  &U ,Q HDFK FDVH DJDLQVW WKH
SUHVHQW GHOHJDWLRQRI 5V  ODNKV LQ HDFK FDVH
3RZHUV IRU DZDUGLQJ 028&RQVXOWDQF\
&RQWUDFW VKRXOG DOVR EH H[WHQGHG WR
EHQFKPDUNHG RUJDQL]DWLRQV LQ ,QGLD DQG DEURDG
OLNH$$577&,8,&HWF
 )XOOSRZHUVWRDZDUG&RQVXOWDQF\&RQWUDFWRQFH
VDQFWLRQHG E\ WKH %RDUG IRU YDOXHV PRUH WKDQ
5V  &U HDFK DQG WKHUH VKRXOG QRW EH DQ\
IXUWKHU QHHG RI VHQGLQJ WKH SURSRVDO WR WKH
%RDUG 3DUD 
 )XOO SRZHUV IRU SODFHPHQW RI GHYHORSPHQWDO
RUGHU ZLWKLQ OXPS VXP %XGJHW *UDQW RI 5'62
LUUHVSHFWLYHRIFRVW7KLVZLOOH[SHGLWHSURWRW\SH
DQGILHOGYDOLGDWLRQIRUZKLFK5'62LVSUHVHQWO\
GHSHQGLQJRQ38VDQG5DLOZD\%RDUG
$ 5DLOZD\ 6DIHW\ $XWKRULW\ 56$ VKRXOGEH VHWXS
DV D VWDWXWRU\ ERG\ LQGHSHQGHQW RI ,QGLDQ 5DLOZD\
%RDUG XQGHU WKH *RYHUQPHQW 7KH $XWKRULW\ VKDOO
KDYH D VHSDUDWH EXGJHW IXOO\ IXQGHG E\ WKH 0LQLVWU\
RI 5DLOZD\V DQG VKDOO EH EDFNHG E\ D IXOOIOHGJHG
6HFUHWDULDW 3DUD 

1HZ SRVW RI 0HPEHU 6DIHW\ DQG 5HVHDUFK  LQ
5DLOZD\%RDUGVKRXOGEHFUHDWHGZKRZLOOEHWKHOLQN
EHWZHHQ 5DLOZD\ %RDUG 5DLOZD\ 6DIHW\ $XWKRULW\
56$  DQG 5DLOZD\ 5HVHDUFK DQG 'HYHORSPHQW
&RXQFLO 55'& DWWKHDSH[OHYHO 3DUD 
([LVWLQJ SRVWV RI &KLHI 6DIHW\ 2IILFHUV RQ ]RQDO
UDLOZD\V VKRXOG EH XSJUDGHG WR $GGLWLRQDO *HQHUDO
0DQDJHU 6DIHW\  DV SDUW RI WKH QHZ 6DIHW\
$UFKLWHFWXUH 3DUD 
7KH ,QVWLWXWLRQ RI &RPPLVVLRQHU RI 5DLOZD\ 6DIHW\
VKRXOGEHPHUJHGZLWK5DLOZD\6DIHW\$XWKRULW\DQG
VKRXOGEHVWUHQJWKHQHGDQGHPSRZHUHG7KHUHVKRXOG
EH&56IRUHDFK]RQDOUDLOZD\DQGHDFK&56VKRXOG
KDYH D 5HJXODWRU\ ,QVSHFWLRQ 7HDP FRQVLVWLQJ RI
+2'VRIWKHFRQFHUQHGWHFKQLFDOGHSDUWPHQWV 3DUD
 
5ROH RI &RPPLVVLRQHU RI 5DLOZD\ VDIHW\ VKRXOG EH
ZLWKGUDZQ IURP WKH URXWLQH FOHDUDQFH RI SURSRVDOV
IURPWKHUDLOZD\VVXFKDVFKDQJHVLQ3ODQV:RUNLQJ
5XOHV HWF ZKLFK FRQVXPH ORWV RI KLV WLPH 7KHVH

$FFHSWHG1RWDFFHSWHGZLWKUHDVRQV

1RW\HWGLVFXVVHG

1RW\HWGLVFXVVHG

1RW\HWGLVFXVVHG

1RW$FFHSWHG

1RW\HWGLVFXVVHG

1RW\HWGLVFXVVHG

1RW\HWGLVFXVVHG

214

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


6U
1R

&KDSWH 5HFRPPHQGDWLRQ LWVGHWDLOV


U6U1R


















VKRXOG EH GHDOW DQG ILQDOL]HG E\ WKH FRQFHUQHG


3ULQFLSDO +HDG RI WKH GHSDUWPHQW ZKR VKRXOG IXOO
UHVSRQVLELOLW\RIWKHFKDQJHV 3DUD 
$ QRQIXQJLEOH QRQODSVDEOH VDIHW\ IXQG JHQHUDWHG
WKURXJKVDIHW\FHVVRQSDVVHQJHUVRIGLIIHUHQWFODVVHV
LQJUDGHGPDQQHUVKRXOGEHFUHDWHGWRUDLVHIXQGVWR
WKHWXQHRI5V&URUHVSHUDQQXP 3DUD 

3D\PHQW RI GLYLGHQG WR WKH WXQH RI 5V  &URUH
SHU DQQXP VKRXOG EH GHIHUUHG LQ YLHZ RI VRFLDO
VHUYLFHREOLJDWLRQEHLQJERUQHE\5DLOZD\VZKLFKLV
DVVHVVHGDV5V&URUHVHYHU\\HDU 3DUD 
$QHPSRZHUHGJURXSRIRIILFHUV LQFOXGLQJDQRIILFHU
IURP ILQDQFH  LQ 5DLOZD\ %RDUG VKRXOG SLORW WKH
LPSOHPHQWDWLRQ
RI
VDIHW\
HQKDQFHPHQW
UHFRPPHQGDWLRQV DQG SURMHFWV DV DFFHSWHG E\ WKH
0LQLVWU\ RI 5DLOZD\V LQ D WLPH ERXQG PDQQHU ZLWK
IXOO IXQGLQJ 2WKHU SURMHFWV VKRXOG EH DSSURSULDWHO\
SHQGHG RU VORZHG GRZQ IRU WKH WLPH EHLQJ WR
DFFRPPRGDWH IXQGLQJ RI WKHVH NH\ SURMHFWV 3DUD
 
1HZO\ FRQVWLWXWHG 5DLOZD\ 6DIHW\ $XWKRULW\ XQGHU
WKH *RYW RI ,QGLD VKRXOG DOVR UHYLHZ WKH
LPSOHPHQWDWLRQ RI DFFHSWHG 5HFRPPHQGDWLRQV DW D
SUHVFULEHG SHULRGLFLW\ VD\ RQFH HYHU\  PRQWKV IRU
WKHQH[WWR\HDUV 3DUD 

$FFHSWHG1RWDFFHSWHGZLWKUHDVRQV

1RW\HWGLVFXVVHG

1RW\HWGLVFXVVHG

1RW\HWGLVFXVVHG

1RW\HWGLVFXVVHG

215

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


5DNHVK0RKDQ&RPPLWWHH3ROLF\,PSHUDWLYHVIRUUHLQYHQWLRQDQGJURZWK
7KHUHSRUWRIWKH&RPPLWWHHGRHVQRWLQGLFDWHWKHILQDQFLDOLPSOLFDWLRQVRILPSOHPHQWDWLRQRI
DOO WKH UHFRPPHQGDWLRQV PDQ\ RI ZKLFK DUH TXDOLWDWLYH LQ QDWXUH +RZHYHU WKH FRPPLWWHH KDV
DVVHVVHG DQ LQYHVWPHQW UHTXLUHPHQW RI  FURUHV IRU D VWUDWHJLF KLJK JURZWK VFHQDULR IRU WKH
SHULRG7KHLQYHVWPHQWSURJUDPPHHQYLVDJHGLQWKHVWUDWHJLFKLJKJURZWKVFHQDULRUHTXLUHV
DQDQQXDOLQYHVWPHQWRIDERXW5VWRFURUHSHU\HDUIURPDERXW5V
FURUH SHU \HDU IURP  DQG DERXW 5V  FURUH SHU \HDU IURP  ,Q ILYH \HDU
WUDQFKHVWKLVLQYHVWPHQWSURJUDPPHDPRXQWVWR5VFURUHIURP5VFURUH
IURPDQG5VFURUHIURPPDNLQJIRUDWRWDORIDERXW5VFURUH
RYHUILIWHHQ\HDUV


&ODVVLILFDWLRQRI5HFRPPHQGDWLRQV


$&&(37(' 



3$57,$//<$&&(37(' 

127$&&(37('




6U1R

&KDSWHU61R
1RGDO'WH 

5HFRPPHQGDWLRQ LWVGHWDLOV

$FFHSWHG1RWDFFHSWHGZLWKUHDVRQV






&RPPHUFLDO
7UDIILF%XGJHW





&RPPHUFLDO
77
7 &





&RPPHUFLDO






,QGLDQ 5DLOZD\V PXVW ORZHU IUHLJKW $FFHSWHG


WDULII GHYHORS FDSDELOLWLHV WR SLFN XS L  %RDUGQRWHGWKDW5DLOZD\VKDGDOUHDG\FKRVHQWKHSDWK
VPDOO ORDGV DQ DWWUDFWLYH ORJLVWLF
RIUDWLRQDOL]DWLRQRIIUHLJKWWDULII)XWXUHIUHLJKWWDULII
SDFNDJH LQFUHDVH VKDUH RI RWKHU
SROLFLHVZLOOKDYHWREHPDUNHWGULYHQ
FRPPRGLWLHV HWF IRU UHYHUVLQJ WKH

WUHQG RI VXVWDLQHG GHFOLQH LQ WKH LL  :LWKUHVSHFWWRFOHDUDQFHRIVPDOOORDGVDQGOHVVWKDQ
PDUNHWVKDUH
WUDLQ ORDG WUDIILF DSSURSULDWH SROLFLHV IRU ORDGLQJ RI
WZRSRLQWUDNHVOHDYLQJDILOOLSWRGRPHVWLFPRYHPHQW
RI FRQWDLQHUV E\ &21&25 DQG DVVRFLDWLQJ ZLWK
&HQWUDO:DUHKRXVLQJ&RUSRUDWLRQLQWKLVUHJDUGZRXOG
DFKLHYHWKLVREMHFWLYH%RDUGQRWHGWKDWWKH5DLOZD\V
DUH DOUHDG\ RIIHULQJ DWWUDFWLYH ORJLVWLF SDFNDJH WRXU
PDMRU FXVWRPHUV VXFK DV LQ WKH FDVH RI FRDO SRZHU
KRXVHVDQGVWHHOHWF3ODQWVZKHUHDYLWDOGRRUWRGRRU
VHUYLFHLVEHLQJSURYLGHG
,QWURGXFWLRQ RI SULYDWH PDQDJHPHQW $FFHSWHG
RI FRPPHUFLDO RSHUDWLRQV RI L  ,5 LV DOUHDG\ FRQVLGHULQJ VWHSV IRU LPSURYHPHQW LQ
VSHFLDOL]HG VHUYLFHV  DQ RSWLRQ WKDW
UHVSRQVLYHQHVV WR WKH PDUNHW E\ DVVRFLDWLQJ IRU
QHHGVVHULRXVFRQVLGHUDWLRQ
H[DPSOH &HQWUDO :DUHKRXVLQJ &RUSRUDWLRQ LQ
PDQDJHPHQW RI IUHLJKW WHUPLQDO VHUYLFHV OHDVLQJ RI
6/5VHQJDJLQJ)UHLJKW)RUZDUGHUVHWF
LL  &21&25 DV ZHOO DV ,5&7& DUH WZR &RUSRUDWLRQV
ZKLFKKDYHEHHQVHWXSWRRIIHUVSHFLDOL]HGVHUYLFHVLQ
WKHDUHDRIFRPPHUFLDORSHUDWLRQVDOUHDG\

(PHUJLQJ FRPSHWLWLYH SUHVVXUHV LQ $FFHSWHG
WKH SDVVHQJHU VHJPHQW SRLQW WR WKH $V DOUHDG\ PHQWLRQHG LQ LWHP 1RO DERYH  ,5 KDV DOUHDG\
QHHG IRU IOH[LELOLW\ LQ IL[LQJ IDUHV E\ DFFHSWHG WKH FRQFHSW RI IOH[LELOLW\ LQ IL[LQJ IDUHV IRU
IDFWRUV OLNH VHDVRQ FRQYHQLHQFH RI FDWHULQJWRVHDVRQDOGDLO\SHDNLQSDVVHQJHUGHPDQG
WLPH RI GHSDUWXUHDUULYDO HWF LQ
DGGLWLRQWRIDFWRUVOLNHFODVVRIWUDYHO
DQGWUDLQVSHHG

,QFUHDVH VSHHGV RI JRRGV WUDLQV $FFHSWHG
UHGXFH VSHHG GLIIHUHQWLDO KLJK VSHHG %RDUG QRWHG WKDW WKH DERYH UHFRPPHQGDWLRQ LV DOUHDG\

216

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


6U1R

&KDSWHU61R
1RGDO'WH 
7UDIILF
&RPPHUFLDO
( 5















5HFRPPHQGDWLRQ LWVGHWDLOV

SDVVHQJHU VHUYLFHV FRPPRGLW\


VSHFLILFIUHLJKWVWUDWHJLHVLQWURGXFWLRQ
RI QHZ WHFKQRORJLHV DGHTXDWH
DWWHQWLRQ IRU UHVHDUFK GHYHORSPHQW
DQG
KDUQHVVLQJ
LQIRUPDWLRQ
WHFKQRORJ\

7KHUH LV QHHG WR EULQJ LQ FXVWRPHU

RULHQWDWLRQ DW WKH SURMHFW IUDPLQJ
:RUNV
VWDJH LWVHOI  $ SURMHFW ILQDQFH
DSSURDFK
LV
UHTXLUHG
IRU
LPSOHPHQWDWLRQ ZLWKLQ D SUHVHW
WLPHIUDPH

2YHUODSSLQJ IDFLOLWLHV ZKLFK SUHVHQW

UHDOL]DWLRQ RI VDYLQJV LQ UHFXUULQJ
:RUNV
FRVWV DIWHU QHZ LQYHVWPHQWV
(OHFWULFDO
SDUWLFXODUO\ LQ WKH FDVH RI JDXJH
FRQYHUVLRQ DQG HOHFWULILFDWLRQ 7KHVH
IDFLOLWLHV VKRXOG EH LPPHGLDWHO\
UHYLHZHGIRUFORVXUH

,5 VKRXOG DWWUDFW SULYDWH LQYHVWPHQWV

LQ ILQDQFLQJ DQG OHDVLQJ RI UROOLQJ
3ODQQLQJ
VWRFN MRLQW YHQWXUHV WR DFTXLUH WKH
38
ODWHVW GHVLJQ RI UROOLQJ VWRFN
0(
ILQDQFLQJ RI FRQWDLQHU WHUPLQDOV
7(/(
IUHLJKW
E\SDVV
LPSURYHG
:RUNV
FRPPXQLFDWLRQV\VWHPDQGIRUIUHLJKW
VHUYLFHV

,QYHVWPHQWQHHGVWREHFKDQQHOHGLQWR
 SULRULW\ DUHDV WKDW JHQHUDWH DGGLWLRQDO
:RUNV
FDSDFLW\
WKURXJK
LPSURYHG
3ODQQLQJ
RSHUDWLRQDO HIILFLHQF\ DQG EHWWHU
VSHHGVDQGPRGHUQL]DWLRQ

/RQJ5DQJH'HFLVLRQ6XSSRUW6\VWHP

/5'66 VWXG\KDGLQGLFDWHGWKHORVV
(QJLQHHULQJ
RI FDSDFLW\ RQ DFFRXQW RI EUHDN
0HFKDQLFDO
GRZQVWREHWR7KHSUREOHP
(OHFWULFDO
QHHGV WR EH DGGUHVVHG LQ D
6LJQDO
FRRUGLQDWHG ZD\ E\ XSJUDGLQJ
7HOHFRPP
PDLQWHQDQFH IDFLOLWLHV DQG SUDFWLFHV
UDLVLQJVWDIIVNLOOVLPSURYLQJGHVLJQV
RI UROOLQJ VWRFNV DQG WUDFN VWUXFWXUHV
DQG LQGXFWLRQ RI QHZ WHFKQRORJ\ IRU
HQKDQFLQJ WKH OLIH RI DVVHWV XQGHU
XVDJHFRQGLWLRQ

([SHUW *URXS ZKLOH UHFRPPHQGLQJ

GRLQJ DZD\ ZLWK 3ODQ +HDG
%XGJHW
$SSURDFK RI LQYHVWPHQW KDG
:RUNV
UHFRPPHQGHG LQYHVWPHQW XQGHU
3ODQQLQJ
IROORZLQJ KHDGV 6\VWHP ([SDQVLRQ
5HQHZDOV&DSDFLW\$GGLQJ6FKHPHV
5DLOZD\ (OHFWULILFDWLRQ 5ROOLQJ
6WRFN 6DIHW\ :RUNV 7HFKQRORJLFDO
8SJUDGDWLRQDQGRWKHUV




$FFHSWHG1RWDFFHSWHGZLWKUHDVRQV
EHLQJLPSOHPHQWHG

$FFHSWHG
7KH %RDUG DFFHSWHG WKLV UHFRPPHQGDWLRQ DQG WKH FRQFHSW
ZRXOGEHNHSWLQPLQGZKLOHIUDPLQJIXWXUHSURJUDPPHV

$FFHSWHG
7KH%RDUGDFFHSWHGWKLVUHFRPPHQGDWLRQ

$FFHSWHG
,5 LV DOUHDG\ XVLQJ DOO WKH DERYH PHDQV RI JHQHUDWLQJ
DGGLWLRQDO UHVRXUFHV H[FHSWLQJ WKH FRQVWUXFWLRQ RI IUHLJKW
E\SDVV RQ WROO EDVLV  6XFK E\SDVVHV FDQ KRZHYHU EH
FRQVWUXFWHGXQGHUWKHUHYLVHG%27VFKHPH

$FFHSWHG
7KH%RDUGDFFHSWHGWKLVUHFRPPHQGDWLRQ

$FFHSWHG

$FFHSWHG
7KHSRVVLEOHSODQKHDGFRXOGEHDVXQGHU

1HZ/LQHV
*DXJH&RQYHUVLRQ
&RUULGRU $SSURDFK IRU &DSDFLW\ H[SDQVLRQ DQG
WHFKQRORJLFDO XSJUDGDWLRQ HQFRPSDVVLQJ WUDIILF
IDFLOLW\ ZRUNV ZRUNVKRSV DQG VKHGV UROOLQJ VWRFN
2(:HOHFWULILFDWLRQHWF
5HQHZDOVDQG5HSODFHPHQWV
3DVVHQJHU,QWHU)DFH,PSURYHPHQWV
6DIHW\
2WKHUV
D 6WDII:HOIDUH
E 6WDII4XDUWHUV
F 5HVHDUFKDQG'HYHORSPHQW
+RZHYHUWKLVPD\EHH[DPLQHGLQGHWDLOE\D&RPPLWWHH
&UHDWH D &KLHI ,QIRUPDWLRQ 2IILFHU $FFHSWHG

UHSRUWLQJ WR WKH &(2 WKH &,2 LV

217

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


6U1R

&KDSWHU61R
1RGDO'WH 

6HFUHWDU\





,7






%XGJHW





3ODQQLQJ






6HFUHWDU\





)LQDQFH
3ODQQLQJ





&RPPHUFLDO

5HFRPPHQGDWLRQ LWVGHWDLOV
FULWLFDO WR ILUVW LQWHJUDWH WKH ,7
DFWLYLWLHVVSUHDGDFURVVWKH]RQHVDQG
VHFRQGLQFUHDVH,7VLPSRUWDQFHLQWKH
RYHUDOOGHFLVLRQPDNLQJSURFHVV7KH
&,2 ZLOO EH DVVLVWHG E\ D GHGLFDWHG
7DVN)RUFH

,5 VKRXOG XQGHUWDNH DQ RSHUDWLRQDO
H[SHQGLWXUH RI 5V FURUHV RQ
,7 DQG 5V FURUHV RI &DSLWDO
([SHQGLWXUHRQ7HFKQRORJ\DQQXDOO\

&OHDU GLIIHUHQWLDWLRQ EHWZHHQ VRFLDO
REOLJDWLRQV
DQG
SHUIRUPDQFH
LPSHUDWLYHV
LV
QHFHVVDU\
*RYHUQPHQW VKRXOG DJUHH WR SURYLGH
WKHFDSLWDOVXEVLG\IRUVRFLDOSURMHFWV
DQG IXQG WKH RSHUDWLQJ ORVVHV  7KH
*RYHUQPHQW RQ LWV SDUW FRXOG
PDQGDWH WKDW ,5 RSHUDWH WKHVH
VHUYLFHV DW VRPH EHQFKPDUN OHYHO RI
RSHUDWLQJHIILFLHQF\

,5 VKRXOG EH HQJDJHG LQ RQO\ WKRVH
EXVLQHVVHV GLUHFWO\ UHODWHG WR LWV FRUH
DFWLYLW\RIUDLOORJLVWLFVDQGSDVVHQJHU
WUDQVSRUW  1RQFRUH EXVLQHVV VKRXOG
EHVSXQRIIRQDQDUPVOHQJWKEDVLV

7HQXUH EDVHG SURPRWLRQV GR QRW


UHVXOWLQIRUPDWLRQRIDSRZHUIXOWHDP
RIOHDGHUV6KRUWWHQXUHVGRQRWDOORZ
WKHLQFXPEHQWVWRXQGHUWDNHVWUDWHJLF
SODQQLQJIRUIRUPXODWHRUVHHWKURXJK
WKH LPSOHPHQWDWLRQ RI RSHUDWLRQDO
VWUDWHJLHV QHLWKHU GR WKH\ HQFRXUDJH
DFFRXQWDELOLW\

5HVWUXFWXUH WKH LQWHUQDO RUJDQL]DWLRQ
RU ,5 WR FUHDWH DQ RXWZDUG ORRNLQJ
EXVLQHVVRULHQWHG
FXVWRPHUGULYHQ
LQVWLWXWLRQ  7KLV ZLOO LQYROYH
UHRUJDQL]LQJ WKH FRUH WUDQVSRUWDWLRQ
QHWZRUN LQWR LWV NH\ FRPSRQHQW SDUW
IUHLJKW SDVVHQJHU VXEXUEDQ VKDUHG
LQIUDVWUXFWXUH IL[HG DQG VKDUHG
LQIUDVWUXFWXUH RWKHU  7KHVH EXVLQHVV
XQLWVZLOORSHUDWHZLWKDODUJHGHJUHH
RI DXWRQRP\ \HW EH KHOG DFFRXQWDEOH
IRU D EDODQFHG VFRUHFDUG RI
FRPPHUFLDOSHUIRUPDQFHPHDVXUHV


$V D WDULII UHEDODQFLQJ H[HUFLVH ,5
VKRXOG EH DOORZHG WR DQQXDO
DGMXVWPHQWRIDERXWLQFUHDVHLQ

$FFHSWHG1RWDFFHSWHGZLWKUHDVRQV

$FFHSWHG

+RZHYHUWKHH[DFWTXDQWXPRIH[SHQGLWXUHZRXOGEHQHHG
EDVHG
$FFHSWHG

5DLOZD\VZLOOFRQWLQXHWRGLVFKDUJHWKHGXDOUROHDQG%RDUG
DJUHHV ZLWK WKH SURSRVDO WKDW WKH *RYHUQPHQW VKRXOG
SURYLGH VXEVLG\ IRU LWV 3XEOLF 6HUYLFH 2EOLJDWLRQV
5HFRPPHQGDWLRQV RI WKH LQWHUPLQLVWHULDO JURXS DUH EHLQJ
SXUVXHG E\ WKH 0LQLVWU\ ZLWK WKH *RYHUQPHQW  :LWK WKH
DFFRXQWLQJ LPSURYHPHQW FRQWHPSODWHG DQG FRVWLQJ
UHILQHPHQWWKHH[WHQWRIVXFKOLDELOLW\ZLOOJHWGHPDUFDWHG

$FFHSWHG

+RZHYHU LW LV HVVHQWLDO WR LGHQWLI\ FOHDU DUHDV RI FRUH DQG
QRQFRUHEXVLQHVV6RPHDUHDVOLNH0HGLFDO6HFXULW\HWF
UHDOO\ GR QRW FRPH XQGHU QRQFRUH DFWLYLW\ DV IDU DV
5DLOZD\V ZRUNLQJ LV FRQFHUQHG  $FWLRQ KDV DOUHDG\ EHHQ
WDNHQ IRU VHWWLQJ XS IRFXVHG EXVLQHVV RUJDQL]DWLRQV OLNH
,5&7& 5$,/7(/ 591/ &21&25 HWF  ,Q DGGLWLRQ
DUHDV RI RXWVRXUFLQJ KDYH DOVR  EHHQ LGHQWLILHG E\ WKH
0LQLVWU\ZKLFKLQFOXGHRXWVRXUFLQJRIHQJLQHHULQJVXUYH\V
IRUPDWLRQ RI 5DLO /DQG 'HYHORSPHQW $XWKRULW\
PDLQWHQDQFH RI ,956 XQVFKHGXOHG UHSDLU RI ORFRPRWLYHV
FDWHULQJVHUYLFHVOHDVLQJRI6/5HWF

$FFHSWHG

7HQXUHEDVHGV\VWHPDOUHDG\H[LVWIRUWKHWRSPDQDJHPHQW
SRVLWLRQZKHUHE\WHQXUHVDUHDOUHDG\SUHVFULEHGIRU*HQHUDO
0DQDJHUV %RDUG 0HPEHUV DV ZHOO DV &5% DQG DOVR IRU
'50V$'50V

$FFHSWHG

7KH 2UJDQL]DWLRQ VWUXFWXUH VKRXOG IRFXV RQ WKH FXVWRPHU
+RZHYHUDQ\FKDQJHVLQWKHV\VWHPLIZDUUDQWHGFDQRQO\
EH FRQVLGHUHG DIWHU WKH $FFRXQWLQJ 5HIRUPV 6WXG\ ZKLFK
LVXQGHUZD\LVFRPSOHWHG

3DUWLDOO\$FFHSWHG
,  %RDUGDJUHHGZLWKWKHFRQFHSWRISHDNDQGRIISHDN
SULFLQJ PHFKDQLVP LQRUGHU WR FDWHU WR VHDVRQDO DQG

218

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


6U1R

 


&KDSWHU61R
1RGDO'WH 

 


&RPPHUFLDO
%XGJHW









0DQDJHPHQW
6HUYLFHV






)LQDQFH

5HFRPPHQGDWLRQ LWVGHWDLOV

$FFHSWHG1RWDFFHSWHGZLWKUHDVRQV

VHFRQG FODVV VOHHSHU IDUHV DQG  LQ


GDLO\SHDNV7KLVFRQFHSWVKDOOEHH[WHQGHGWRPRUH
VHFRQGFODVV RUGLQDU\ IUHLJKW RQ D
QXPEHURIWUDLQV
FRQWLQXRXV EDVLV IRU DERXW  \HDUV ,,  %RDUGQRWHGWKDWLWPD\QRWEHQHFHVVDU\WRLQFUHDVH
6LPLODUO\ ,5 QHHG WR UDLVH WDULII IRU
,,FODVVVOHHSHUIDUHVE\RU,,FODVVRUGLQDU\IDUH
PRQWKO\ VHDVRQ WLFNHW IRU VXEXUEDQ
E\7KHOHYHORILQFUHDVHZLOOKDYHWREHGHFLGHG
WUDYHO IURP FXUUHQWO\ ORZ OHYHO RI
RQDQDQQXDOEDVLVEDVHGRQWUHQGLQYROXPHJURZWK
RQO\VLQJOHMRXUQH\V
DQG PDUNHW UHODWHG FRQVLGHUDWLRQV  0RQWKO\ 6HDVRQ
7LFNHW UDWHV LQ 0XPEDL DUHD KDYH DOUHDG\ EHHQ
LQFUHDVHG IURP  VLQJOH MRXUQH\V WR  VLQJOH
MRXUQH\VDVDVWHSLQWKLVGLUHFWLRQ
,5 QHHG WR UHEDODQFH SDVVHQJHU WDULII 3DUWLDOO\$FFHSWHG
LQ RUGHU WR GR DZD\ ZLWK FURVV
, 5HPDUNVDJDLQVWLWHP1RDERYHDUHUHOHYDQW
VXEVLG\
,, 5DWLRQDOL]DWLRQ RI IUHLJKW WDULII WKURXJK UHGXFWLRQ RI

QXPEHURIFODVVHVDVZHOODVUHGXFWLRQLQWKHKLJKHVW
,5QHHGVWRUHEDODQFHSDVVHQJHUWDULII
FODVV ZDV LQLWLDWHG LQ  DQG IXUWKHU FRQWLQXHG
LQ RUGHU WR GR DZD\ ZLWK FURVV
LQWRZDUGVWKLVHQG)XUWKHULQFHQWLYHVKDYH
VXEVLG\ DQG HQVXUH D SDVVHQJHU
DOVR EHHQ SURYLGHG WR FXVWRPHUV IRU PDNLQJ UDLO
JURZWKRIRYHUSHU\HDUV
WUDQVSRUWDWWUDFWLYH
,,, 7KHUHKDVEHHQDVLPLODUH[HUFLVHLQUDWLRQDOL]DWLRQRI
SDVVHQJHU IDUHV DV ZHOO DV LQGH[LQJ RI KLJKHU FODVV
IDUHV WR WKH ,,FODVV IDUH LQLWLDWHG LQ  DQG
FRQWLQXHGLQZKLFKKDVUHVXOWHGLQUHGXFWLRQ
RIFHUWDLQKLJKHUFODVVIDUHV
,9 7KH H[HUFLVH RI UDWLRQDOL]DWLRQ ERWK LQ IUHLJKW DQG
SDVVHQJHUZRXOGEHFRQWLQXHGWRWKHH[WHQWSRVVLEOH
NHHSLQJLQPLQGWKHPDUNHWIRUFHVIURP\HDUWR\HDU
+RZHYHULWVKRXOGEHERUQHLQPLQGWKDWNHHSLQJLQ
YLHZ WKH SDVVHQJHU UHTXLUHPHQWV IXOO UHGXFWLRQ RI
VXEVLG\ZRXOGQRWEHSRVVLEOH
7KH LQYHVWPHQWV WKDW GR QRW UHVXOW LQ 3DUWLDOO\$FFHSWHG
DGGLWLRQDOUHYHQXHPXVWEHHVFKHZHG 
,QYHVWPHQWLQXQLJDXJHDQGQHZOLQH ,QVRIDUDVWKHFXUUHQWVKHOIRIWKHSURMHFWLVFRQFHUQHGWKH
DQG HOHFWULILFDWLRQ SURMHFWV PXVW EH %RDUG IHHOV WKH QHHG IRU SULRULWL]LQJ DQG H[HFXWLQJ WKH
UHYLHZHG  7KHUH LV D QHHG IRU PRUH SURMHFWV DW WKH HDUOLHVW  7KH %RDUG DJUHHG WKDW IRU IXWXUH
IRFXVHG LQYHVWPHQW SURJUDPPH LQYHVWPHQWVWKHFRQFHSWUHFRPPHQGHGZLOOEHNHSWLQPLQG
ZKLFKVKRXOGLPSURYHSURGXFWLYLW\WR ZKLOHILQDOL]LQJWKH$QQXDO3ODQV
FRSHXSZLWKWUDIILFGHPDQGV
,QGLDQ 5DLOZD\V QHHGV WR UHGXFH WKH 3DUWLDOO\$FFHSWHG
VWDII FRVW E\  ZLWKLQ QH[W  WR  ,QGLDQ 5DLOZD\ KDVSODQQHG WR ULJKWVL]HWKH VWDII VWUHQJWK
\HDUV  7KLV ZLOO UHTXLUH UHGXFWLRQV LQ WKH RUJDQL]DWLRQ E\ FRQWUROOLQJ IUHVK UHFUXLWPHQW LQ WKH
WKURXJK QRUPDO UHWLUHPHQWV VSLQQLQJ YDFDQF\ FDXVHG E\ WKH QRUPDO SURFHVV RI VXSHUDQQXDWLRQ
RI DQFLOODU\ DFWLYLWLHV 956 DQGQDWXUDODWWULWLRQ,QGLDQ5DLOZD\VULJKWVL]LQJDFWLYLWLHV
LGHQWLI\LQJ VXUSOXV IURP QRQFRUH DUH LQ DFFRUGDQFH ZLWK WKH LQLWLDWLYH WDNHQ E\ WKH
DFWLYLWLHV
*RYHUQPHQWWRULJKWVL]HWKHPDQSRZHU:LWKDQHVWLPDWHG
RIVWDIIUHWLULQJHYHU\\HDUDQGE\UHVWULFWLQJWKHLQWDNH
WR  SHU DQQXP WKH VWDII VWUHQJWK LV SODQQHG WR EH
UHGXFHG E\ DERXW  SHU DQQXP H[FHSW VDIHW\ FDWHJRULHV
QHHGVIXUWKHUVFUXWLQ\DQGGHOLEHUDWLRQVQRWDJUHHGWRVRIDU
ZKHUHLQQRULJKWVL]LQJLVSODQQHG7KHQXPEHURIVWDIIKDV
UHGXFHGIURPODNKVDVRQVW0DUFKWR
ODNKV 3URYLVLRQDO DVRQVW0DUFK
2Q ,QGLDQ 5DLOZD\V D JHQHUDO 956 6FKHPH IRU DOO
HPSOR\HHV DIWHU  \HDUV RI TXDOLI\LQJ VHUYLFH DV
LQWURGXFHG LQ WKH \HDU  LV DYDLODEOH  ,Q DGGLWLRQ D
6DIHW\ UHODWHG 5HWLUHPHQW 6FKHPH IRU WZR FDWHJRULHV YL]
'ULYHUV DQG *DQJPDQ KDV DOVR EHHQ LQWURGXFHG VLQFH
-DQXDU\)XUWKHUDVSHFLDO9566FKHPHWRGHDOZLWK
VXUSOXV VWDII RQ 5DLOZD\V DQG PHGLFDOO\ GHFDWHJRUL]HG
VWDII KDV DOVR EHHQ ODXQFKHG LQ $XJXVW  VLPLODU WR
VFKHPHLQWURGXFHGE\'R3 7LQ\HDURQ&LYLO6LGH
7RDFKLHYHWKHRQO\IHDVLEOHRSWLRQRI 3DUWLDOO\$FFHSWHG
6WUDWHJLF +LJK *URZWK 5DLOZD\ 7KH ([SHUW *URXS KDV ZRUNHGRXW D FDSLWDO VWUXFWXUH ZLWK
ILQDQFHVQHHGWREHUHVWUXFWXUHGDORQJ HTXLW\ SUHIHUHQFH FDSLWDO DQG GHEW LQ WKH UDWLR  IURP
ZLWK RUJDQL]DWLRQDO UHVWUXFWXULQJ WKHJURVVEORFNRI,5DVRQDIWHUSURYLGLQJIRU

219

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


6U1R

&KDSWHU61R
1RGDO'WH 

5HFRPPHQGDWLRQ LWVGHWDLOV

$FFHSWHG1RWDFFHSWHGZLWKUHDVRQV

%XGJHW

7KH H[LVWLQJ ILQDQFLDO VWUXFWXUH DQG


DFFRXQWVDVUHYHDOHGWKURXJKLWV3 /
DFFRXQW DQG EDODQFH VKHHW ODFN
VXIILFLHQW ILQDQFLDO WUDQVSDUHQF\ DQG
SURSHUDFFRXQWLQJSURFHGXUH&DSLWDO
EDVLVRI,5VKRXOGEHUHVWUXFWXUHGDQG
LWV DFFRXQWV UHFDVW XQGHU WKH ,QGLDQ
*$$3 WR UHIOHFW ,5V RSHUDWLRQV LQ
WKH QDWXUH RI FRPPHUFLDO JRLQJ
FRQFHUQDQGLWVYLDELOLW\






%XGJHW


7KH PDQQHU RI RSHUDWLRQ RI


GHSUHFLDWLRQ IXQG VKRXOG ILW LQWR WKH
VWDQGDUG GHSUHFLDWLRQ QRUPV ODLG
GRZQ LQ WKH &RPSDQLHV $FW DQG WKH
DPRXQWV DOORWWHG WR '5)QRW IL[HG LQ
DQDGKRFPDQQHU





6HFUHWDU\

FXPXODWLYH GHSUHFLDWLRQ DQG PHUJLQJ WKH VDPH ZLWK WKH


ILQDQFLDOVRI,5)&7KHH[LVWLQJDFFRXQWVDQGWKH%DODQFH
6KHHW KDYH EHHQ UHFDVW DV DSSOLFDEOH WR &RPSDQLHV XQGHU
WKH ,QGLDQ &RPSDQLHV $FW  7KH FDSLWDO VWUXFWXUH WKDW KDV
EHHQ ZRUNHG RXW ZLOO JHQHUDWH UHSD\PHQW OLDELOLW\ IRU WKH
5DLOZD\V WR WKH *HQHUDO ([FKHTXHU WR WKH H[WHQW RI
5V FURUH LQ DGGLWLRQ WR WKH GHEW OLDELOLW\ RI DERXW
5VFURUHRQ,5)&ERUURZLQJ7RGD\WKHUHLVQR
UHSD\PHQW OLDELOLW\ RI FDSLWDO WR WKH *HQHUDO ([FKHTXHU
)XUWKHU WKH UHFRPPHQGDWLRQ SURYLGHV IRU EXGJHWDU\
VXSSRUW LQ WKH IRUP RI SUHIHUHQFH FDSLWDO WLOO  RQO\
WKHUHDIWHU WKLV ZRXOG EH UHGHHPHG LQ LQVWDOOPHQWV LQ
VXEVHTXHQW \HDUV DQG HIIHFWLYHO\ WKH EXGJHWDU\ VXSSRUW
PHFKDQLVP DV H[LVWLQJ QRZ ZLOO FHDVH WR H[LVW IURP WKH
\HDU  6XFK D ILQDQFLQJ PRGHO LQ DQ LQIUDVWUXFWXUH
VHFWRUOLNH5DLOZD\VLVQRWVXVWDLQDEOH

7KH $FFRXQWLQJ SURFHGXUH LV FXUUHQWO\ GHWDLOHG WR
FDSWXUH WKH YDULRXV DVSHFWV RI ILQDQFLDO WUDQVDFWLRQ  7KH
JRYHUQPHQWDFFRXQWLQJLVFDVKEDVHGDJDLQVWWKHFRPSDQ\
DFFRXQWLQJEDVHGRQDFFUXDOEDVLVEXWRSHUDWLRQRIFHUWDLQ
VXVSHQVHKHDGVPDNHVDQDO\VLVIHDVLEOH

$*RYHUQPHQW$FFRXQWLQJ6WDQGDUGV$GYLVRU\%RDUG
KDVEHHQHQWUXVWHGZLWKWKHWDVNRIIRUPXODWLQJDFFRXQWLQJ
VWDQGDUGV IRU *RYHUQPHQW (QWLWLHV LQ ,QGLD  0V ,&5$
$GYLVRU\ 6HUYLFHV KDYH DOVR EHHQ HQJDJHG WR SURYLGH
LQSXWV  ,Q YLHZ RI WKLV $GYLVRU\ %RDUG EHLQJ VHW XS WKH
UHFRPPHQGDWLRQ LV SDUWLDOO\ DFFHSWHG DQG FKDQJHV LQ
DFFRXQWLQJSURFHGXUHLIDQ\ZRXOGGHSHQGRQWKHGHFLVLRQ
RI WKH$GYLVRU\ %RDUGV UHFRPPHQGDWLRQV DQG DFFHSWDQFH
WKHUHRIE\WKH3UHVLGHQW LQFRQVXOWDWLRQZLWK& $*

3DUWLDOO\$FFHSWHG
,Q WKH H[LVWLQJ V\VWHP DSSURSULDWLRQ WR '5) KDV EHHQ
DURXQGGXULQJWKHODVW\HDUVZKLFKFRPSDUHVEHWWHU
WKDQ ZKDW WKH &RPSDQ\ $FW PDQGDWHV  %DVHG RQ WKH
UHFRPPHQGDWLRQVE\WKH6WDQGLQJ&RPPLWWHHRQ5DLOZD\V
DQ H[HUFLVH RI XSGDWLQJ RI DVVHW UHJLVWHUV KDV EHHQ
XQGHUWDNHQ  2Q FRPSOHWLRQ RI WKLV H[HUFLVH QHHGEDVHG
HVWLPDWLRQ RI UHSODFHPHQW UHTXLUHPHQW ZRXOG EH PRUH
DFFXUDWHDQGFRQVLGHUHGWKHUHDIWHU

3DUWLDOO\$FFHSWHG
$VIDUDVSDUWUHFRPPHQGDWLRQRI,5(%LVFRQFHUQHGWKLV
ZDV YDOLG RQO\ ZLWK FRUSRUDWL]DWLRQ RI 5DLOZD\V ZKLFK LV
QRW DFFHSWHG  +RZHYHU LQFOXVLRQ RI RXWVLGH WDOHQW LV
DFFHSWHG IRU VSHFLILF DFWLYLW\ UHODWHG WR ILQDQFLDO DQG
FRPPHUFLDODFWLYLWLHV





&RPPHUFLDO
7UDIILF





( 5

(PSKDVLV RQ LQFOXVLRQ RI RXWVLGH


WDOHQW LV RQ FRPPHUFLDO PDQDJHUV
7KH &(2 93 )LQDQFH  DQG
932 +5'  RI WKH ,5(% FRXOG EH
VHOHFWHG IURP WKH *RYHUQPHQW WKH
5DLOZD\V WKH 3ULYDWH 6HFWRU RU
$FDGHPLD

$GRSW PHDVXUHV WR HQVXUH IUHLJKW 1RW$FFHSWHG
UHYHQXHJURZWKRI
%RDUG DIWHU GHWDLOHG GLVFXVVLRQ DJUHHG WKDW LQYHVWPHQW
SODQQLQJVKRXOGEHIRUWKHPHGLXPJURZWKSDWKNHHSLQJLQ
YLHZ WKH JHQHUDO JURZWK RI *'3 DV ZHOO DV SURGXFWLRQ
JURZWKRILQIUDVWUXFWXUHFRUHSURGXFWV


7KLV LV KDUGO\ DSSURSULDWH WLPH WR 1RW$FFHSWHG
RSHQXSQHZIRQWVOLNHUHRUJDQL]DWLRQ 7KH %RDUG DIWHU GXH GHOLEHUDWLRQV GLG QRW DFFHSW WKLV
RI]RQHVWKDWKDVQRUHOHYDQFHWRDQ\ SURSRVDO  5HRUJDQL]DWLRQ RI =RQHV LV XQGHUWDNHQ WR
LPPHGLDWHIRUORQJWHUPREMHFWLYHV
UDWLRQDOL]H WKH H[LVWLQJ JHRJUDSKLFDO VSUDZOV DQG
DFFHVVLELOLW\SDWWHUQRIWUDIILFIORZVDQGHFRQRPLFYLDELOLW\
LQ WKH RYHUDOO FRQWH[W RI GHYHORSLQJ D EDODQFHG UDLO

220

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


6U1R

&KDSWHU61R
1RGDO'WH 

5HFRPPHQGDWLRQ LWVGHWDLOV





:RUNV

$ FRPSOHWH FKDQJH RI DSSURDFK LV


QHHGHG WR UHSODFH LQFUHPHQWDO DQQXDO
LQYHVWPHQW E\ D SURMHFW RULHQWHG
LQYHVWPHQWSURJUDPPH([LVWHQFHRI
VHSDUDWH
SURMHFW
RUJDQL]DWLRQV
LQIOXHQFHV WKH SULRULW\ IRU WDNLQJ XS
QHZ SURMHFWV LQ RUGHU WR SURYLGH
FRQWLQXLW\ RI ZRUNORDG  7KH (* KDV
PDGHVSHFLILFPHQWLRQDERXW5DLOZD\
(OHFWULILFDWLRQ
DQG
DOVR
WKH
3URGXFWLRQ8QLWV
,QYHVWPHQW GXULQJ WK DQG WK 3ODQ
FRQWLQXHG WKURXJK KHDY\ ERUURZLQJV
LQ
UROOLQJ
VWRFN
IRU
DGGLWLRQUHSODFHPHQW WKURXJK KHDY\
ERUURZLQJV WKURXJK ,5)& ZKLFK
SDUWO\ FRQWULEXWHG WR SURYLGH
ZRUNORDGWRSURGXFWLRQXQLWVIRUWKHLU
FDSDFLW\
XWLOL]DWLRQ

6XFK
LQYHVWPHQWV VKRXOG EH UHYLHZHG LQ
IXWXUH
([SHUW *URXS KDV UHFRPPHQGHG
LPSOHPHQWDWLRQ RI VWUDWHJLF KLJK
JURZWK VFHQDULR ZLWK LQYHVWPHQW RI
5V  FURUH EHWZHHQ SHULRG






38
0HFKDQLFDO
(OHFWULFDO





3ODQQLQJ






%XGJHW

7KHSUHVHQWDWLRQ2)5DLOZD\%XGJHW
WR3DUOLDPHQWHDFK\HDUKDVDGHFLVLYH
LPSDFW RQ 5DLOZD\V LQYHVWPHQW
SULFLQJ VWDIILQJ DQG RUJDQL]DWLRQDO
SROLFLHV7KLVLPSDFWKDVFHDVHGWREH
EHQHILFLDO WR WKH RUJDQL]DWLRQ  7KH
LVVXH QRZ LV ZKHWKHU WKH 5DLOZD\
%XGJHW LQ LWV SUHVHQW IRUP VKRXOG
FRQWLQXHDWDOO






%XGJHW

*2, ,5VKRXOGDLPWRFUHDWHDIXOO\
IXQGHG VFKHPH IRU 3HQVLRQ )XQG
ZKLFK VKRXOG EH PDQDJHG E\ DQ
LQGHSHQGHQW%RDUGRI7UXVWHHV

$FFHSWHG1RWDFFHSWHGZLWKUHDVRQV
LQIUDVWUXFWXUH WR VHUYH WKH QHHGV RI WKH QDWLRQDO HFRQRP\
DGHTXDWHO\DQGHIILFLHQWO\
5DLOZD\RQHVDUHVHWXSNHHSLQJLQYLHZWKHIDFWRUV
OLNHVL]HZRUNORDGJHRJUDSKLFDOVSUDZOVDQGDFFHVVLELOLW\
SDWWHUQRIWUDIILFIORZVDQGHFRQRPLFYLDELOLW\LQWKHRYHUDOO
FRQWH[WRIGHYHORSLQJDEDODQFHUDLOLQIUDVWUXFWXUHWRVHUYH
WKH QHHGV RI WKH QDWLRQDO HFRQRP\ DGHTXDWHO\ DQG
HIILFLHQWO\
%DVHG RQ WKH DERYH WKH *RYHUQPHQW KDV FUHDWHG
VHYHQ QHZ 5DLOZD\ =RQHV DQG DW SUHVHQW VL[WHHQ 5DLOZD\
=RQHVDUHRSHUDWLRQDO
:LWK WKH FUHDWLRQ RI VPDOOHU DGPLQLVWUDWLYH UDLOZD\
]RQHV LW KDV EHHQ SRVVLEOH WR DFKLHYH DQ DOOURXQG
LPSURYHPHQW LQ WKH IXQFWLRQLQJ RI WKH 5DLOZD\V GXH WR
EHWWHU VXSHUYLVLRQ DQG PRQLWRULQJ  6LQFH DOO =RQHV
FRQWULEXWH WR WKH SHUIRUPDQFH RI ,QGLDQ 5DLOZD\V DV D
ZKROH WKH LPSURYHPHQW LQ RYHUDOO SHUIRUPDQFH RI WKH
,QGLDQ 5DLOZD\V LQGLFDWHV D VLJQLILFDQW FRQWULEXWLRQ RI WKH
QHZ=RQHV
1RW$FFHSWHG
$IWHU GHWDLOHG GLVFXVVLRQV WKH %RDUG ZDV RI WKH YLHZ WKDW
WKH H[LVWLQJ VHWXS VKRXOG FRQWLQXH  (DFK SURMHFW RU
SURGXFWLRQUHTXLUHPHQWJRHVWKURXJKULJRURXVH[DPLQDWLRQ
DQGILQDOO\DFFHSWHGDIWHUVFUXWLQ\DWWKHDSSURSULDWHOHYHO

1RW$FFHSWHG
$IWHU GHWDLOHG GLVFXVVLRQ %RDUG QRWHG WKDW FXUUHQW
UHTXLUHPHQWV IRU UROOLQJ VWRFN DUH QHHGEDVHG DQG QRW
OLQNHG WR XWLOL]DWLRQ RI H[LVWLQJ FDSDFLWLHV LQ 3XV  7KH
UHFRPPHQGDWLRQWKHUHIRUHLVQRWDFFHSWDEOH

1RW$FFHSWHG
%RDUG DJDLQVW ,WHP 1R  +DYH DOUHDG\ GHFLGHG WKDW
LQYHVWPHQW SODQQLQJ VKRXOG EH IRU 0HGLXP *URZWK 3DWK
WDNLQJ LQWR DFFRXQW WKH QHHG EDVHG UHTXLUHPHQW IRU UDLO
WUDQVSRUW JHQHUDO JURZWK RI *'3 DV ZHOO DV SURGXFWLRQ
JURZWKRILQIUDVWUXFWXUHFRUHSURGXFWV
1RW$FFHSWHG

,QGLDQ 5DLOZD\ KDV D GLVWULFW FRPPHUFLDO ELDV DV ZHOO DV
VHUYHV VRFLDO DQG GHYHORSPHQW QHHGV RI WKH HFRQRP\
&RQVLGHULQJWKHVFDOHRILWVRSHUDWLRQDQGVHQVLWLYLW\WRWKH
HFRQRP\ RI WKH FRXQWU\ LW UHTXLUHV IRFXVHG DWWHQWLRQ
WKURXJK D VHSDUDWH EXGJHW  0LQLVWU\ RI 5DLOZD\V LV DQ
2SHUDWLRQDO 0LQLVWU\ XQOLNH RWKHU *RYHUQPHQW 0LQLVWULHV
DQGDVHSDUDWH%XGJHWSURYLGHVRSHUDWLRQDOIOH[LELOLW\DQG
DXWRQRP\ZLWK DFFRXQWDELOLW\ IRUHIILFLHQW PDQDJHPHQW RI
WKLVODUJHVFDOHLQIUDVWUXFWXUDORUJDQL]DWLRQ
1RW$FFHSWHG
,QGLDQ 5DLOZD\V DUH IROORZLQJ WKH*RYHUQPHQWSROLF\ DQG
QR GHFLVLRQ FDQ EH WDNHQ XQLODWHUDOO\  $W SUHVHQW SHQVLRQ
OLDELOLWLHVRQ,QGLDQ5DLOZD\VDUHPHWZLWKE\DSSURSULDWLQJ
WKH UHTXLUHG IXQGV RQ \HDU WR \HDU EDVLV IURP UHYHQXH
7KHV\VWHPDWSUHVHQWLVZRUNLQJVDWLVIDFWRULO\+RZHYHU
DFWXDULDO VWXG\ LV DOVR SURSRVHG WR EH XQGHUWDNHQ WR

221

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


6U1R

&KDSWHU61R
1RGDO'WH 





%XGJHW









5HFRPPHQGDWLRQ LWVGHWDLOV

*RYHUQPHQWIXQGLQJVKRXOGEHOLQNHG
W D UHVWUXFWXULQJ SODQ DQG ZLOO EH LQ
WKH IRUP RI SUHIHUHQFH FDSLWDO
*RYHUQPHQWZLOORQO\SURYLGHDQQXDO
VXEVLG\ RI DERXW 5V FU IRU XQ
UHPXQHUDWLYH VHUYLFHV WKDW ,5
FXUUHQWO\SURYLGHV,IVLPLODUVHUYLFHV
DUHUHTXLUHGE\WKH*RYHUQPHQWLQWKH
IXWXUH WKH\ ZRXOG EH ILQDQFHG E\ WKH
*RYHUQPHQW IRU ERWK LQYHVWPHQW DQG
FXUUHQW H[SHQGLWXUH   SHQVLRQ
OLDELOLW\ ZLOO GHYROYH RQ WKH *2,
SHUSHWXDOO\  7KH UHGHPSWLRQ RI
SUHIHUHQFH FDSLWDO DQG WKH GLYLGHQGV
WR EH SDLG E\ ,5 WR WKH *RYHUQPHQW
RQ SUHIHUHQFH FDSLWDO ZRXOG EH VXFK
WKDW WKHUH ZRXOG EH QR QHW GLVEXUVDO
IURPWKH*RYHUQPHQWWRWKH5DLOZD\V
DIWHU\HDU
*RYHUQPHQW VXSSRUW VKRXOG EH
SKDVHG RXW DQG ,QGLDQ 5DLOZD\V
VKRXOGVWDUWERUURZLQJULJKW IURPWKH
ILUVW \HDU RI UHVWUXFWXULQJ SODQ  7KH
IXQGLQJ VXSSRUW SURYLGHG E\ WKH
*RYHUQPHQW VKRXOG EH OLQNHG WR D
UHVWUXFWXULQJSODQ

,QVWLWXWLRQDO VHSDUDWLRQ RI UROHV LQWR


SROLF\ UHJXODWRU\ DQG PDQDJHPHQW
IXQFWLRQV QHHG WR EH HQVXUHG  7KH
HVVHQWLDO
IHDWXUHV
RI
PDMRU
UHVWUXFWXULQJ RI ,5 DV VXJJHVWHG E\
WKH
([SHUW
*URXS
DUH

&RUSRUDWL]DWLRQ RI ,QGLDQ 5DLOZD\V
'LYLVLRQ RI UHVSRQVLELOLW\ RI
IXQFWLRQLQJRIUDLOZD\V LQWRWKHWKUHH
LQVWLWXWLRQV  ,QGLDQ 5DLOZD\
&RUSRUDWLRQ
,QGLDQ
5DLOZD\
5HJXODWRU\$XWKRULW\*RYHUQPHQWRI
,QGLD 0LQLVWU\RI5DLOZD\V 

$FFHSWHG1RWDFFHSWHGZLWKUHDVRQV
SUHFLVHO\DVVHVVWKHVL]HRISHQVLRQOLDELOLWLHVIRUWKHIXWXUH
,W PD\ DOVR EH PHQWLRQHG WKDW *RYHUQPHQW KDV DOUHDG\
LQWURGXFHGDQHZFRQWULEXWRU\SHQVLRQVFKHPHIRUWKHQHZ
HQWUDQWVZHI7KHUHIRUHWKHIXQGVUHTXLUHPHQWIRU
WKHSUHYDLOLQJVFKHPHLVOLNHO\WRGHFUHDVHLQGXHFRXUVH
1RW$FFHSWHG
7KLVUHFRPPHQGDWLRQLVQRWSUDFWLFDO7KHH[LVWLQJOHYHORI
*RYHUQPHQWVXSSRUWVKRXOGQRWEHUHGXFHGDVWKHLVVXHRI
FRPSHQVDWLRQ IRU ,5V VRFLDO VHUYLFH REOLJDWLRQV LV EHLQJ
SXUVXHGVHSDUDWHO\ZLWKWKH*RYHUQPHQW

1RW$FFHSWHG
*RYHUQPHQWVXSSRUWLVQHFHVVDU\WRFRYHUH[LVWLQJVKHOIRI
SURMHFWVDVZHOODVWRILQDQFHORZ\LHOGEXWVRFLDOO\UHOHYDQW
SURMHFWVFRYHUHGE\WKH5HPRWH$UHD&RQQHFWLYLW\6FKHPH
591/ KDV DOVR EHHQ FUHDWHG WR XQGHUWDNH EDQNDEOH
SURMHFWV ZKLOH 0LQLVWU\ RI )LQDQFH KDV LQLWLDWHG DFWLRQ WR
UHVRUW WR YLDELOLW\ JDS IXQGLQJ IXUWKHU SURPRWLQJ SXEOLF
SULYDWHSDUWLFLSDWLRQLQWKH5DLOZD\SURMHFWV7KHVHZRXOG
LPSDFW WKH ILQDQFLDO KHDOWK RI WKH 5DLOZD\V LQ D SRVLWLYH
PDQQHU
1RW$FFHSWHG
&RUSRUDWL]DWLRQ ZLOO QRW VROYH SUREOHPV RI ,QGLDQ
5DLOZD\V  0RUH DSSURSULDWHO\ UHYLHZ RI EXVLQHVV
SURFHVVHV JUHDWHU GHOHJDWLRQ DXWKRULW\ DQG SRZHUV DW
YDULRXV OHYHOV ZRXOG EH PRUH EHQHILFLDO  ,Q UHFHQW \HDUV
VXEVWDQWLDO GHYROXWLRQ RI SRZHUV KDV EHHQ PDGH =RQDO
5DLOZD\V HVSHFLDOO\ LQ WKH DUHDV RI VDIHW\ ZRUNV DQG
SURFXUHPHQW RI PDWHULDO  5HVWUXFWXULQJ LV WKHUHIRUH QRW
UHTXLUHG DV JUHDWHU GHOHJDWLRQ RI SRZHU DQG DXWKRULW\ WR
=RQDO 5DLOZD\V DV ZHOO DV LQ WKH 0LQLVWU\ LV FRQWLQXLQJ
SURFHVV
8QGHUWKH5DLOZD\V$FWIXOOSRZHUVKDYHEHHQ
FRQIHUUHGRQWKH0LQLVWU\RI5DLOZD\V 5DLOZD\%RDUG WR
IL[ WKH WDULII UDWHV  +RZHYHU DV D UHJXODU $QQXDO %XGJHW
H[HUFLVHWKHSURSRVDOVIRUDGMXVWPHQWVLQIDUHVDQGIUHLJKW
UDWHV DUH GHEDWHG DQG DSSURYHG E\ WKH 3DUOLDPHQW ZKLFK
DFWVDVD5HJXODWRU\$XWKRULW\5DLOWDULIIVDUHDOVRVXEMHFW
WR FRQWLQXRXV VFUXWLQ\ E\ WKH YDULRXV 3DUOLDPHQWDU\
&RPPLWWHHV  0LQLVWU\ RU 5DLOZD\ LV RI WKH RSLQLRQ WKDW
5DLO 7DULII 5HJXODWRU\ $XWKRULW\ LV QRW UHTXLUHG  $ 1RWH
IRUFRQVLGHUDWLRQRI&DELQHWKDVDOUHDG\EHHQVHQW




222

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

6DP3LWURGD&RPPLWWHH ([SHUW*URXSIRU0RGHUQL]DWLRQRI,QGLDQ5DLOZD\V 

D  $UHDV RI 5HFRPPHQGDWLRQV7KH *URXS PDGH WRWDO  UHFRPPHQGDWLRQV RQ  IRFXV DUHDV
ZKLFKDUHOLVWHGDVXQGHU 1R*LYHQLQEUDFNHWLV1R2IUHFRPPHQGDWLRQVLQWKDWIRFXVDUHD 
7UDFN  %ULGJHV   6LJQDOOLQJ   5ROOLQJ 6WRFN   6WDWLRQV  7HUPLQDOV   333 ,QLWLDWLYHV  
/DQG  $LUVSDFHV   'HGLFDWHG )UHLJKW &RUULGRU   +LJK 6SHHG 3DVVHQJHU 7UDLQ &RUULGRU  
5HYLHZRI3URMHFWV  ,QIRUPDWLRQ &RPPXQLFDWLRQ7HFKQRORJ\  ,QGLJHQRXV'HYHORSPHQW  
6DIHW\  )XQGLQJ  +XPDQ5HVRXUFH  2UJDQLVDWLRQ  
6U
1R

5HF
1R

$UHD

5HFRPPHQGDWLRQ'HWDLOV








7UDFNDQG
EULGJHV


0RGHUQL]H  NPV RI H[LVWLQJ WUDFNV RI URXWHV $ %  '
VSHFLDO  IRU KHDYLHU IUHLJKW WUDLQV DW  WRQQH D[OH ORDG DQG WR
DFKLHYH KLJKHU VSHHGV RI  NPSK 7KH WUDFNV RQ $  %
URXWHVVKRXOGEHILWIRUSDVVHQJHUVSHHGVRINPSK















































7UDFWLRQ GHYHORSPHQW IRU LPSURYHPHQW LQ IXHO HIILFLHQF\


HPLVVLRQDQGUHOLDELOLW\
+LJKVSHHGSRWHQWLDO/+%FRDFKHV NPSK 
8SJUDGHGVXEXUEDQFRDFKHV







7UDLQVHWVIRUKLJKVSHHGLQWHUFLW\WUDYHO
0RGHUQKLJKSD\WRWDUHUDWLRZDJRQV

(OLPLQDWHOHYHOFURVVLQJVDQGSURYLGHIHQFLQJDORQJVLGHWUDFNV$V
D SDUW RI ')& (OLPLQDWLRQ RI OHYHO FURVVLQJV RQ SDUDOOHO
DOLJQPHQW LH 9DGRGDUD WR 0XPEDL DQG .KXUMD WR .RONDWD LV
DOUHDG\SODQQHG 7KHUHIRUHIRU PRGHUQL]DWLRQ ,5 RQO\QHHGVWR
IRFXVRQ'HOKL9DGRGDUDDQG'HOKL.KXUMDVHFWLRQV$VDURXJK
HVWLPDWH5VFURUHVZRXOGEHUHTXLUHGWREXLOG52%VOLPLWHG
KHLJKW VXEZD\V DQG PDQQLQJ RI WKH XQPDQQHG OHYHO FURVVLQJV
7KHWRWDOFRVWRIWKHIHQFLQJZLOOEHDERXW5VFURUHV
6WUHQJWKHQEULGJHVRQ$% 'VSHFLDOURXWHV

6LJQDOOLQJ

3URYLGH0HFKDQL]HGWUDFNPDLQWHQDQFHRQ5RXWHV$ %

,PSOHPHQWDXWRPDWLFEORFNVLJQDOOLQJRQ$ %URXWHVZLWK7UDLQ
PDQDJHPHQWV\VWHP
3URYLGH FRPPXQLFDWLRQ EDVHG WUDLQ FRQWURO OLNH 0RYLQJ EORFN
V\VWHPRQ&FODVVURXWHVRI&HQWUDODQG:HVWHUQ5DLOZD\V
'HSOR\2QERDUGWUDLQSURWHFWLRQV\VWHPZLWKFDEVLJQDOOLQJRQ
$ %URXWHV

,QWURGXFH*60EDVHGPRELOHWUDLQFRQWUROFRPPXQLFDWLRQV\VWHP
RQ$% &URXWHV
(VWDEOLVKFHQWUDOLVHGPDLQWHQDQFHFRQWUROFHQWUHV


5ROOLQJ6WRFN ,QWURGXFWLRQRIQHZJHQHUDWLRQORFRPRWLYHV
x (OHFWULFORFRPRWLYHV DQG+3 
x 'LHVHO/RFRPRWLYHV +3 

223

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


6U
1R

5HF
1R

$UHD

5HFRPPHQGDWLRQ'HWDLOV

6U
1R

5HF
1R

$UHD

5HFRPPHQGDWLRQ'HWDLOV


























 


























































6WDWLRQDQG
7HUPLQDOV


333
,QLWLDWLYHV

*UHHQWRLOHWVRQDOOSDVVHQJHUWUDLQV
+HDY\KDXOIUHLJKWERJLHV

0RGHUQL]H  PDMRU VWDWLRQV RXW RI WKH WRWDO  VWDWLRQV
LPPHGLDWHO\ $ WRWDO RI  VWDWLRQV VKRXOG EH WDUJHWHG IRU UH
GHYHORSPHQWLQQH[W\HDUV
'HYHORS  PXOWLPRGHO ORJLVWLF SDUNV DW LGHQWLILHG ORFDWLRQV WR
SURYLGHLQWHJUDWHGWUDQVSRUWLQIUDVWUXFWXUHIDFLOLWLHVIRUXVHUV
0RGHUQL]H H[LVWLQJ 5DLOZD\ )UHLJKW 7HUPLQDOV7DNH XS WRS 
WHUPLQDOV
(QKDQFHFXVWRPHUDPHQLWLHVDQGVHUYLFHVDWVWDWLRQVDQGRQWUDLQV
ZLWKVSHFLDOSURYLVLRQVIRUSK\VLFDOO\FKDOOHQJHGSDVVHQJHUV

'HYHORS 333 PRGHOV LQ WKH YDULRXV DUHDV RI 5DLOZD\V WR DWWUDFW
SULYDWHLQYHVWPHQWWRDXJPHQWRYHUFDSDELOLWLHVUHODWHGWR
6WDWLRQVDQG7HUPLQDOV
+LJK6SHHG5DLO&RUULGRUV
(OHYDWHG5DLO&RUULGRU
3ULYDWH)UHLJKW7HUPLQDOV
/HDVLQJRI:DJRQV
/RFRDQG&RDFK0DQXIDFWXULQJ8QLWV
&DSWLYH3RZHU*HQHUDWLRQ
5HQHZDO(QHUJ\3URMHFW 6RODU:LQGHWF
5DLOZD\+RVSLWDOV

5DLOZD\6FKRROV
0HUFKDQGLVLQJ


/DQGDQG$LU &RQGXFW *,6 0DSSLQJ RI ODQG UHVRXUFHV DYDLODEOH ZLWK ,5
H[SHGLWLRXVO\
VSDFH
/HYHUDJHDQG &RPSOHWH GLJLWL]DWLRQ RI ODQG UHFRUGV DQG SHUIHFWLRQ RI WLOWLQJ DW
PRQHWL]H/DQG WKHHDUOLHVW
DQG$LUVSDFH 2EWDLQ SROLF\ FRQFHVVLRQV IURP *RYW RI ,QGLD *2,   )RU ORQJ
WHUPOHDVHDQGOLFHQVLQJ E\5DLOZD\VODQGULJKWVPXVWEHORQJWR
WKHP
*DUQHUVWDWHJRYHUQPHQWVXSSRUWIRUODQGXVHDQGKLJKHU)6,
0RQHWL]H/DQGDVVHWVWKURXJKFUHDWLYH333LQLWLDWLYHV
0RQHWL]H DLU VSDFH DERYH WKH SODWIRUPV  UDLO WUDFNV $ SLORW
SURMHFW FRXOG EH LPPHGLDWHO\ WDNHQ XS LQ WKH 0XPEDL VXEXUEDQ
5DLOZD\V\VWHPWRPRQHWL]HWKHDLUVSDFH
6HW XS 639 LI UHTXLUHG PRUH WKDQ RQH WR KDQGOH ODQG DQG DLU
VSDFH


&RQVWUXFW(DVWHUQDQG:HVWHUQGHGLFDWHGIUHLJKWFRUULGRUV 
'HGLFDWHG
NPV LQWKHQH[WILYH\HDUV
)UHLJKW

224

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


6U
1R

5HF
1R

$UHD

5HFRPPHQGDWLRQ'HWDLOV





&RUULGRUV

6U
1R

5HF
1R

$UHD

&RQVWUXFW 1RUWK6RXWK (DVW:HVW (DVW&RDVW DQG 6RXWKHUQ


'HGLFDWHG)UHLJKW&RUULGRUV NPV LQWKHQH[WWHQ\HDUV
5HFRPPHQGDWLRQ'HWDLOV
















+LJK6SHHG
3DVVHQJHU
7UDLQ
&RUULGRUV


















































5HYLHZRI
3URMHFWV

8SJUDGHIHHGHUURXWHVWR')&V NPV IRUWRQQHD[OHORDG


WUDLQUXQQLQJ

&RQVWUXFW D +LJK 6SHHG UDLOZD\ OLQH EHWZHHQ $KPHGDEDG DQG
0XPEDLZLWKVSHHGRINPSK
8QGHUWDNH GHWDLOHG VWXGLHV IRU  RWKHU +LJK 6SHHG UDLO FRUULGRUV
DOUHDG\LGHQWLILHG
7KHVHLQFOXGH
 'HOKL&KDQGLJDUK$PULWVDU NPV 
 +\GHUDEDG'RUQDNDO9LMD\ZDGD&KHQQDL NPV 
 +RZUDK+DOGLD NPV 
 &KHQQDL%DQJDORUH&RLPEWRUH(UQDNXODP NPV 
 'HOKL$JUD/XFNQRZ9DUDQDVL3DWQD NPV  
 (UQDNXODP7ULYDQGUXP NPV 

([SHGLWHLPSOHPHQWDWLRQRIWKHIROORZLQJSULRULW\SURMHFWV
x  3URMHFWV LQ DGYDQFH VWDJH RI FRPSOHWLRQ ZKHUH 
WRRIWKHLQYHVWPHQWVKDYHDOUHDG\EHHQPDGH
x 3URMHFWVDOUHDG\VDQFWLRQHG5DLOWUDFNVRXWRIWKHWRWDORI
 UDLO WUDFN SURMHFWV >QHZ OLQH  JDXJH FRQYHUVLRQ
  DQG GRXEOLQJ   SURMHFWV@ RI WRWDO WUDFN OHQJWK
 NPV WKH IROORZLQJ ZRXOG EH WDNHQ XS D SULRULW\
SURMHFWV
x  GRXEOLQJ SURMHFWV FRYHULQJ D OHQJWK  NPV
VDQFWLRQHG 
x  QHZ OLQHJDXJH FRQYHUVLRQ SURMHFWV FRYHULQJ D OHQJWK
NPV VDQFWLRQHG 

6DQFWLRQ SURMHFW IRU UDLO WUDFNV  QHZ OLQHGRXEOLQJ SURMHFWV


FRYHULQJDOHQJWKNPV QRWVDQFWLRQHG 

,PSOHPHQWHOHFWULILFDWLRQRI5.0LQWKHQH[WILYH\HDUV
$GG NPV RIQHZOLQHVLQWKHQH[WILYH\HDUV 7KHVHQHZ
OLQHV DUH WR ODUJHO\ $FKLHYH VRFLDO LQFOXVLRQ DQG ZRXOG QRW EH
UHPXQHUDWLYH

3URYLGH IXQGV IRU QRQYLDEOH SURMHFWV EHLQJ LPSOHPHQWHG SXUHO\
IRU VRFLDO LQFOXVLRQ IRU VSHFLDO IXQG VHW XS E\ *2, IRU WKLV
SXUSRVH5HLPEXUVH2 0GHILFLWGHWHUPLQHGWKURXJKWUDQVSDUHQW
DFFRXQWLQJDQGDJUHHGWRE\WKHUHJXODWRU
3URYLGH WKH ILUVW DQG ODVW PLOH FRQQHFWLYLW\ E\ FUHDWLQJ
DSSURSULDWHSROLF\IUDPHZRUN

225

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


6U
1R

5HF
1R

$UHD

5HFRPPHQGDWLRQ'HWDLOV




5HF
1R

$UHD

,GHQWLI\ DQG FRPPLVVLRQ LQ D PLQL PLVVLRQ PRGH E\SDVVHV DW


MXQFWLRQVWDWLRQVDQGUDLOIO\RYHUVIRUJUDGHVHSDUDWLRQ

5HFRPPHQGDWLRQ'HWDLOV

6U
1R















,QIRUPDWLRQ
DQG
&RPPXQLFD
WLRQ
7HFKQRORJ\
,&7 























 






























6HWXS5HDO7LPH,QIRUPDWLRQ6\VWHP 57,6 WRSURYLGHUHDOWLPH
LQIRUPDWLRQDWVWDWLRQVDQGRQUXQQLQJWUDLQV
6HWXS5DGLR)UHTXHQF\,GHQWLILFDWLRQ 5),' WUDFNLQJV\VWHPIRU
ZDJRQVFRDFKHVDQGORFRPRWLYHVWRHQKDQFHZDJRQPDQDJHPHQW
DQGUHDOWLPHPRQLWRULQJ
3URYLGHLQWHUQHWDFFHVVDW5DLOZD\6WDWLRQV $FODVVDQG
$&ODVV LPPHGLDWHO\
(VWDEOLVK XQLILHG ,3EDVHG ,&7 SODWIRUP IRU  5DLOZD\
6WDWLRQV
5HYLHZ&5,6DQGLQWHJUDWHLQWR,3EDVHG,&7DJHQGD
/HYHUDJHDQGH[SDQG5DLOWHORSWLFDOILEUHQHWZRUN
8VH,&7WRPRGHUQL]H2UJDQLVDWLRQ0DQDJHPHQW'HYHORSPHQW
)LQDQFH 3URMHFW 0DQDJHPHQW 5HVHDUFK 3URFXUHPHQW 3D\PHQW
HWF
,QWURGXFH HILOH WR FRPSXWHUL]H 5DLOZD\ ILOHV DQG H[SHGLWH
GHFLVLRQPDNLQJ
,QWURGXFH0RELOHWLFNHWLQJ FRPPHUFHIRUDYDULHW\RI5DLOZD\
DSSOLFDWLRQV
8SJUDGH DQG LQWHJUDWH 5DLOZD\ ZHEVLWHV DQG XVH VRFLDO PHGLD
FUHDWLYHO\ IRU FXVWRPHU IHHGEDFN FRQVXPHU HGXFDWLRQ DQG VRFLDO
PHVVDJHV



,QGLJHQRXV 'HYHORS VXEVWDQWLDO LQGLJHQRXV FDSDELOLWLHV WR EH D JOREDO OHDGHU
'HYHORSPHQW LQ
x 6WDWHRIWKHDUW5DLOZD\WHFKQRORJLHV
x 5DLOZD\FRPSRQHQWVDQGHTXLSPHQWVIRUJOREDOPDUNHWV
(VWDEOLVK ,QGLDQ ,QVWLWXWH RI 5DLOZD\ 5HVHDUFK ZLWK &HQWUH RI
([FHOOHQFHLQ
x 6DIHW\
x :DJRQSURWRW\SLQJ
x 0HFKDWURQLFV
x *UHHQWRLOHWVHWF
8SJUDGHH[LVWLQJUDLOZD\5 'IDFLOLWLHV
6WUHQJWKHQ5'62WREXLOGORFDOFDSDELOLWLHV
8SJUDGH LQGLJHQRXV PDQXIDFWXULQJ IRXQGU\ IDFLOLWLHV IRU KLJKHU
D[OHORDGERJLHV 
'HYHORS ,QGLDQ 6WDQGDUGV FULWLFDO YHQGRUV DQG SURWRFROV IRU
5DLOZD\V
(QKDQFH 8QLYHUVLW\ ,QWHUIDFH ZLWK 5DLOZD\ /DERUDWRULHV LQ
$FDGHPLF,QVWLWXWLRQV


226

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


6U
1R

5HF
1R

$UHD





6DIHW\

6U
1R

5HF
1R

$UHD





,QVWDOOZKHHOLPSDFWORDGGHWHFWRUV






















0RGHUQL]HDQGUHQRYDWHUDLOZD\ZRUNVKRSV
(TXLSWUDLQVZLWK7UDLQ3URWHFWLRQ:DUQLQJ6\VWHP 73:6 
,QVWDOO YHKLFOH ERUQH GLJLWL]HG DQG UHFRUGDEOH XOWUDVRQLF IODZ
GHWHFWRUVWRFRYHUWKHHQWLUH5DLOZD\V\VWHP
(OLPLQDWHXQPDQQHGOHYHOFURVVLQJVE\PDQQLQJFORVXUHPHUJHU
FRQVWUXFWLRQRIRYHUEULGJHVDQGXQGHUSDVVHV
8SJUDGHFRDFKLQJGHSRWV
8SJUDGHGLVDVWHUPDQDJHPHQWIDFLOLWLHV UHODWHGVHUYLFHV

 
 

5HFRPPHQGDWLRQ'HWDLOV

'HSOR\ ODWHVW WUDFN PDFKLQHV IRU PHFKDQL]HG PDLQWHQDQFH RI
WUDFN
5HFRPPHQGDWLRQ'HWDLOV

8SJUDGH1HWZRUN0DQDJHPHQW&HQWUHV
8VH 6RFLDO 1HWZRUNV FDPHUDV YLGHRV DQG RWKHU QHZ WRROV DQG
WHFKQRORJLHVH[WHQVLYHO\IRUVDIHW\DQGVHFXULW\










)XQGLQJ
























0RELOL]HWRWDOLQYHVWPHQWUHTXLUHPHQWVRI5VFURUHVIRU
WKHSURSRVHGPRGHUQL]DWLRQLQLWLDWLYHV
2XWOLQH DQ LQYHVWPHQW RI 5V FURUHV GXULQJ WKH ;,,WK
)<3 ZKLFK LQFOXGHV 5V   FURUHV RI PRGHUQL]DWLRQ SODQ
LQYHVWPHQW UHFRPPHQGHG E\ XV  ,W LV D TXDQWXP MXPS IURP
LQYHVWPHQW OHYHOV RI 5V  FURUHV LQ ;,WK 3ODQ DQG 5V
FURUHVLQ;WK3ODQ
)ROORZ WKH IROORZLQJ IXQGLQJ SDWWHUQ DQG EULGJH WKH JDS RI 5V
FURUHVIURPWKHIROORZLQJVRXUFHV
D 'LVLQYHVWPHQWLQ5DLOZD\368V
E 5HGHQVLILFDWLRQ FRPPHUFLDOL]DWLRQ RI VXUSOXV ODQG LQ
H[LVWLQJ5DLOZD\&RORQLHVLQGLIIHUHQWORFDWLRQV$IHZSLORW
SURMHFWVFRXOGEHLPPHGLDWHO\H[SORUHG
F   &RPPHUFLDO H[SORLWDWLRQ RI 5DLOZD\ 6FKRROV DQG +RVSLWDOV
ZLWKRXWGLVSODFLQJDQ\RIWKHSULRULWLHVIURPWKHSRLQWRIYLHZRI
,5 HPSOR\HHV  0DQDJHPHQW FRQWUDFWV RQ WKH EDVLV RI UHYHQXH
VKDULQJ  FRXOG EH WULHG IRU VRPH RI WKH ODUJHU KRVSLWDOVVFKRROV
ZLWKDYLHZWRDFKLHYHVLJQLILFDQWXSJUDGDWLRQRIVWDQGDUGV
G 0RGHUQL]DWLRQ VXUFKDUJH IURP SDVVHQJHUV RQ D SHU SDVVHQJHU
NPEDVLV
6RXUFH WKURXJK 333 WKH EDODQFH UHTXLUHPHQW RI 5V 
FURUHVRIWKHPRGHUQL]DWLRQSODQWREHLQFOXGHGLQWKH;,,,WKSODQ
&UHDWHDVHSDUDWH0RGHUQL]DWLRQ)XQGRQWKHOLQHVRI656)WR
IXQGWKHVHLQLWLDWLYHVLQDVXVWDLQDEOHPDQQHU


227

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


6U
1R

5HF
1R

$UHD

5HFRPPHQGDWLRQ'HWDLOV





+XPDQ
5HVRXUFH






$UHD

,QVWDOO DQG RSHUDWLRQDOL]H LPPHGLDWHO\ PRGHUQ &RPSXWHUL]HG


+XPDQ 5HVRXUFH 0DQDJHPHQW V\VWHP ZLWK GDWD EDVH DQG
LQYHQWRU\5HVXPHRIDOOSUHVHQWHPSOR\HHV
5HGXFHDQGJUDGXDOO\HOLPLQDWHLQGXFWLRQRIXQVNLOOHGVWDII







5HF
1R





/DXQFKDVHULHVRILQVHUYLFHWUDLQLQJSURJUDPVLPPHGLDWHO\
















5DWLRQDOL]H DQG FRQVROLGDWH PXOWLSOH VHUYLFHV DQG FDGUHV ZLWKRXW


VDFULILFLQJWKHEHQHILWRIVSHFLDOL]DWLRQDQGEXVLQHVVFDSDELOLWLHV
2IIHU JUDGXDWH SURJUDP LQ 5DLOZD\ 7HFKQRORJ\ DW ,,7V DQG
5DLOZD\PDQDJHPHQWDW,,0V
(QDEOHODWHUDOUHFUXLWPHQWIURPPDUNHWIRUVSHFLDOLVWIXQFWLRQV









 
 
























&UHDWH DQG LPSDUW VSHFLDOLVHG FRXUVHV LQ SDUWQHUVKLS ZLWK


DFDGHPLFLQVWLWXWLRQV
5HFRPPHQGDWLRQ'HWDLOV

8SJUDGH ,&7 VNLOOV RI SUHVHQW RIILFHUV DQG HPSOR\HHV


VXEVWDQWLDOO\
5HYLHZ DQG 5HVWUXFWXUH H[LVWLQJ WUDLQLQJ LQVWLWXWLRQV IRU
LPSURYLQJHFRV\VWHPDQGPRGHUQL]DWLRQ
5HYLHZ 5DLOZD\ KHDOWK V\VWHP VHSDUDWHO\ WR PHHW DVSLUDWLRQ RI
5DLOZD\IDPLOLHVDQG0RGHUQL]DWLRQSODQ
&UHDWHDV\VWHPRIUHZDUGIRUFROOHFWLYHSHUIRUPDQFHDQGYDULDEOH
SD\OLQNHGWRLQFUHPHQWDOVXUSOXVJHQHUDWHGE\YDULRXVXQLWV

2UJDQLVDWLRQ 5HRUJDQLVH 5DLOZD\ %RDUG DORQJ EXVLQHVV GLVFLSOLQH WR UHIOHFW
&KDLUPDQDV&KLHI([HFXWLYH2IILFHUDQG0HPEHUVIRU
x 6DIHW\
x %XVLQHVVGHYHORSPHQWFRPPHUFLDO
x 7HFKQRORJ\,&7 6LJQDOLQJ
x )UHLJKW
x 3DVVHQJHU6HUYLFHV
x ,QIUDVWUXFWXUH
x )LQDQFH
x +5
x 333

&UHDWH FRPPRGLW\ ZLVH .H\ $FFRXQW 'LUHFWRUV XQGHU 0HPEHU
$UHD
)UHLJKWIRUPDMRUFRPPRGLWLHV
&UHDWH .H\ $FFRXQW 'LUHFWRUV RI VXEXUEDQ ORQJ GLVWDQFH
SDVVHQJHUHWFXQGHU0HPEHU3DVVHQJHU
(QVXUHDXWRQRP\IOH[LELOLW\DQG DFFRXQWDELOLW\ DWDOOOHYHOV ZLWK
FOHDU3 /UHVSRQVLELOLWLHV
0DNHSURYLVLRQVIRUKDQGOLQJRIDOOSDUOLDPHQWDU\IXQFWLRQVE\D
-RLQW6HFUHWDU\OHYHO2IILFHULQWKH0LQLVWU\ZKLFKZRXOGVHWWKH
5%IUHHWRIRFXVH[FOXVLYHO\RQEXVLQHVVLVVXHV

228

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


6U
1R

5HF
1R















5HF
1R


0RGHUQL]H SURFXUHPHQW SURFHVVHV DQG EHQFKPDUN SURGXFWV DQG


VXSSOLHUV

 

5HYLHZWKHH[LVWLQJ3333ROLF\IUDPHZRUNLQWKHOLJKWRIKLWKHUWR
SRRUUHVSRQVHDQG333H[SHULHQFH
&UHDWH D SRVW RI 0HPEHU 333  UHVSRQVLEOH IRU SURMHFW
GHYHORSPHQW DQG SURFHVVLQJ DOO 333 SURMHFWV WR IDFLOLWDWH WKHLU
VSHHG\ VDQFWLRQ E\ WKH *RYHUQPHQW DQG DZDUG RI FRQFHVVLRQ
7KH 0HPEHU VKRXOG KDYH D PXOWLGLVFLSOLQDU\ WHDP RI RIILFHUV
LQFOXGLQJ)LQDQFHWRGHDOZLWKYDULRXV5DLOZD\3URMHFWV
(VWDEOLVKD&RPPLWWHHIRUDSSURYDORI333SURMHFWVWREHKHDGHG
E\ &KDLUPDQ 5DLOZD\ %RDUG ZLWK )LQDQFLDO &RPPLVVLRQHU
0HPEHU 333  DQG WKH FRQFHUQHG PHPEHU WR ZKRVH DUHD RI
UHVSRQVLELOLW\ WKH SURMHFW EHORQJV 7KH SURFHVV DQG SURFHGXUH
IROORZHGVKRXOGEHVLPLODUWRWKDWRI333$&IROORZHGLQ*2,
$SSRLQW D 333 2PEXGVPDQ WR UHVROYH DQ\ GLVSXWHV WKDW PD\
DULVHEHWZHHQWKH3ULYDWH6HFWRUDQG*RYHUQPHQWLQLQWHUSUHWDWLRQ
DQGHQIRUFHPHQWRISURYLVLRQVRIWKHDJUHHPHQWV
&RQVWLWXWH D 5DLOZD\V 7DULII 5HJXODWRU\ $XWKRULW\ LQ RUGHU WR
SURYLGHDOHYHOSOD\LQJILHOGWRDOOVWDNHKROGHUV



 

 

 
 

 
 

 
 

$UHD

5HFRPPHQGDWLRQ'HWDLOV
(PSRZHU=RQDO5DLOZD\VDORQJZLWKDFFRXQWDELOLW\
x 0RUH GHFHQWUDOL]HG GHFLVLRQ PDNLQJ LQ FULWLFDO DUHDV OLNH
VDIHW\WUDIILFIDFLOLW\SDVVHQJHUDPHQLW\HWF
*0V RI =RQDO 5DLOZD\V WR EH HPSRZHUHG WR WDNH GHFLVLRQV
ZLWKLQDIUDPHZRUNRIUXOHVDQGLQYHVWPHQWOLPLWV
x 5HYDPSDFFRXQWLQJV\VWHPVVRWKDWVHSDUDWLRQEHWZHHQWKH
FRVWRILQIUDVWUXFWXUHVHUYLFHVDQGRSHUDWLRQDODFWLYLWLHVDQG
UDWLRQDO SULFLQJ LV DFKLHYHG DQG WUDLQZLVH URXWHZLVH
SURILWDELOLW\DQDO\VLVLVDYDLODEOH
5HHQJLQHHU EXVLQHVV SURFHVVHV WR VWUHDPOLQH WKH GHFLVLRQ PDNLQJ
SURFHVV WR EULQJ DERXW DFFRXQWDELOLW\ UHVXOW RULHQWDWLRQ DQG
UHVSRQVLYHQHVVDWDOOOHYHOVDQGGHYHORS,7WRROVZLWKWKLVREMHFWLYH
LQPLQG
5HFRPPHQGDWLRQ'HWDLOV

(VWDEOLVK D VHSDUDWH $XWKRULW\6392UJDQL]DWLRQ IRU


LPSOHPHQWDWLRQ RI 0DMRU 3URMHFWV  VXFK DV GHYHORSPHQW RI KLJK
VSHHGFRUULGRUVUHGHYHORSPHQWRIUDLOZD\VWDWLRQVHWF
%XLOG FDSDFLW\ IRU WKH RIILFHUV DW WKH =RQDO 5DLOZD\V WR PDQDJH
333 SURMHFWV  $ 333 FHOO VKRXOG EH FRQVWLWXWHG LQ HDFK ]RQH WR
LGHQWLI\ GHYHORS LPSOHPHQW DQG PRQLWRU SURMHFWV DW WKH =RQDO
OHYHO
&RPSXWHUL]H DOO 5DLOZD\ EXVLQHVV RSHUDWLRQV LQFOXGLQJ ILQDQFLDO
PDQDJHPHQWLQYHQWRU\HWF
,PSOHPHQW 0LVVLRQ 0RGH DSSURDFK IRU DOO  IRFXV DUHDV ZLWK
FOHDUREMHFWLYHVPHDVXUDEOHPLOHVWRQHVWDQJLEOHGHOLYHUDEOHVDQG
ZHOOGHILQHGWLPHOLQHV
x (DFK RI WKH  PLVVLRQV VKRXOG EH KHDGHG E\ D 0LVVLRQ
'LUHFWRUIRUDWKUHH\HDUWHUPZLWKDXWRQRP\WRWDNHGHFLVLRQ

229

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


6U
1R

5HF
1R

$UHD

5HFRPPHQGDWLRQ'HWDLOV
LQWKHLUUHVSHFWLYHDUHDV
x $OOWKHPLVVLRQGLUHFWRUVDQGDVVRFLDWHWHDPVVKRXOGUHSRUWWR
WKH5DLOZD\%RDUG
x (DFKPLVVLRQVKRXOGEHSURYLGHGZLWKDSSURSULDWHEXGJHWDQG
RSHUDWLRQDODXWRQRP\WRLPSOHPHQW
(DFK PLVVLRQ GLUHFWRU VKRXOG XVH VWDQGDUG SURMHFW PDQDJHPHQW
WRROVWRPDQDJHDQGPRQLWRU
x 6HW XS D +LJK /HYHO &RPPLWWHH WR IDFLOLWDWH FRRUGLQDWLRQ
DPRQJVW WKH  PLVVLRQV IDVW WUDFN LPSOHPHQWDWLRQ DQG
DGGUHVVERWWOHQHFNVFRPLQJLQWKHZD\RILPSOHPHQWDWLRQ

 





230

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


)XQGLQJ IRU WKH LQLWLDWLYHVRWKHU UHFRPPHQGDWLRQV SURSRVHG E\ 6DP 3LWURGD &RPPLWWHH RQ
0RGHUQL]DWLRQ
x 7RWDOLQYHVWPHQWUHTXLUHPHQWVIRUPRGHUQLVDWLRQLQLWLDWLYHVDVVHVVHGDV5VFURUH
x 7KH &RPPLWWHH LQGLFDWHG DGGLWLRQDO UHTXLUHPHQW RI 5V  FURUH IRU YDULRXV RWKHU
LQYHVWPHQWVSURSRVHG RWKHUWKDQPRGHUQLVDWLRQLQLWLDWLYHV 
x 7KXV WRWDO HVWLPDWHG UHTXLUHPHQW RI IXQGV IRU 0RGHUQLVDWLRQ DQG IRU RWKHU FDSDFLW\
DXJPHQWDWLRQLQLWLDWLYHVZDV5VFURUH$VSHUWKH&RPPLWWHH5VFURUH
WREHLQYHVWHGGXULQJWKHWK)LYH<HDU3ODQDQG5VFURUHGXULQJWKHWK3ODQ
x 6RXUFLQJRIIXQGVUHFRPPHQGHGE\WKH&RPPLWWHH


6285&(2))81',1*29(51(;7<($56
6RXUFHRI)XQGV
*URVV%XGJHWDU\6XSSRUW
,QWHUQDO*HQHUDWLRQ
/HDVLQJ%RUURZLQJV
333V
'LYLGHQG5HEDWH
5RDG6DIHW\)XQG
368'LVLQYHVWPHQW&RPPHUFLDO([SORLWDWLRQ0RGHUQLVDWLRQ6XUFKDUJH
727$/

5V,Q&URUH









7KH &RPPLWWHH UHFRPPHQGHG D VHSDUDWH 0RGHUQL]DWLRQ )XQG  )XUWKHU IRU WKH OHYHO RI
IXQGLQJSURSRVHGWKHJURVVEXGJHWDU\VXSSRUW *%6 QHHGVWRJRXSWLPHVDQGWKHLQWHUQDO
JHQHUDWLRQWLPHVUHVSHFWLYHO\IURPWKHSUHVHQWOHYHO


6WDWXVRI,PSOHPHQWDWLRQRI5HFRPPHQGDWLRQV


L

LL

5DLOZD\VKDYHDOUHDG\LQLWLDWHGDFWLRQIRULPSOHPHQWDWLRQRIUHFRPPHQGDWLRQRIWKH([SHUW
*URXS SHUWDLQLQJ WR HOLPLQDWLRQ RI OHYHO FURVVLQJV  XQPDQQHG OHYHO FURVVLQJV PHFKDQLVHG
PDLQWHQDQFH RI WUDFN LQWURGXFWLRQ RI QHZ JHQHUDWLRQ ORFRPRWLYHV WUDFWLRQ GHYHORSPHQW IRU
LPSURYHPHQW LQ IXHO HIILFLHQF\ HPLVVLRQ DQG UHOLDELOLW\ KLJK VSHHG SRWHQWLDO /+% FRDFKHV
XSJUDGDWLRQRIVXEXUEDQFRDFKHVJUHHQWRLOHWVRQDOOSDVVHQJHUWUDLQVGHYHORSPHQWRIPRGHUQ
KLJK SD\ WR WDUH UDWLR ZDJRQV HQKDQFHPHQW RI FXVWRPHU DPHQLWLHV DW VWDWLRQV DQG RQ WUDLQV
GHYHORSPHQW RI YDULRXV 333 PRGHOV WR DWWUDFW SULYDWH LQYHVWPHQW IHDVLELOLW\ VWXGLHV RI  KLJK
VSHHG DQG VHPL KLJK VSHHG FRUULGRUV HVWDEOLVKPHQW RI ORFR DQG FRDFK PDQXIDFWXULQJ XQLWV
LQVWDOODWLRQ RI FDSWLYH SRZHU JHQHUDWLRQ DQG UHQHZDO HQHUJ\ SURMHFWV  VRODU ZLQG HWF 
PRQHWL]DWLRQ RI ODQG DVVHWV DQG DLU VSDFH DERYH WKH SODWIRUPV DQG UDLO WUDFNV FRQVWUXFWLRQ RI
GHGLFDWHGIUHLJKWFRUULGRUVLPSOHPHQWDWLRQRIHOHFWULILFDWLRQLQWURGXFWLRQRIPRELOHWLFNHWLQJ
WULDOVRIWUDLQSURWHFWLRQZDUQLQJV\VWHPHOLPLQDWLRQRILQGXFWLRQRIXQVNLOOHGVWDIIDQGVHWWLQJ
XSRI5DLO7DULII$XWKRULW\
7KHIXQGLQJUHTXLUHPHQWIRUPRGHUQLVDWLRQDQGRWKHULQLWLDWLYHVVXJJHVWHGE\WKH&RPPLWWHHLV
DFKDOOHQJHIRUWKH5DLOZD\V7KH VXJJHVWLRQVWKDWJURVVEXGJHWDU\VXSSRUWVKRXOGJRXS
WLPHV DQG LQWHUQDO JHQHUDWLRQ  WLPHV IURP SUHVHQW OHYHOV DUH LQ WKH FXUUHQW FRQWH[W WRWDOO\
XQUHDOLVWLF&RPSDUHGWRWKHDSSURYHGSODQVL]HRIWKH5DLOZD\VGXULQJWKHWK)LYH<HDU3ODQ
RI5VFURUHWKHDFWXDOVLQWKHILUVW\HDUVLVPXFKOHVVWKDQWKHSURSRUWLRQDWHILJXUHV
DQGWKHUHIRUHWKHRYHUDOODFWXDOIRUWKHWK3ODQSHULRGLVOLNHO\WREHDURXQG5VWRODNK
FURUHDVDJDLQVWWKH&RPPLWWHHVSURMHFWLRQRI5VODNKFURUH:KLOHPRVWRIWKHWHFKQLFDO
UHFRPPHQGDWLRQV RI WKH &RPPLWWHH KDYH EHHQ DFWHG XSRQ WKH VFDOH RI LPSOHPHQWDWLRQ LV
OLPLWHGGXHWRUHVRXUFHFRQVWUDLQWV

231

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

$QQH[XUH,5'DWDDQG7DEOHV



25,*,1$7,1*3$66(1*(56 $9(5$*(/($'

3$66(1*(5625,*,1$7,1*
0LOOLRQV 
<HDU

6XEXUEDQ











1RQ6XEXUEDQ






7RWDO












232

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


$9(5$*(',67$1&(75$9(//('3(53$66(1*(5 .PV 
<HDU

6XEXUEDQ

1RQ6XEXUEDQ

7RWDO

198081

20.5

103.9

57.7

199091

26.4

147.6

76.6

201213

32.5

241.5

130.4

201314

37

257.5

138.0









233

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

3$66(1*(5.06 0LOOLRQV 
<HDU

6XEXUEDQ

1RQ6XEXUEDQ

7RWDO










































234


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

3$66(1*(56(59,&(6

Year

Suburban(Millions)

NonSuburban
(Millions)

TrainKms. VehicleKms.

TrainKms. VehicleKms.

TrainKms.Per
runningtrackkm.
suburban

non
suburban

198081

35.55

601.5

258

5,582

36.6

9.7

199091

48.37

840.7

316

7,739

40.0

11.5

201213

78.53

1651.8

626

20,595

42.7

20.4

201314

81.77

1824.0

652

23,542

44.6

21.0






235

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

PASSENGER REVENUE
( in millions)
Year

Suburban

Nonsuburban

Total

198081

905.20

7,369.50

8,274.70

199091

3,569.80

27,877.40

31,447.20

201213

20,104.40

2,93,124.00

3,13,228.40

201314

22606.60

342,715.90

365,322.50









236


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

)5(,*+723(5$7,21
25,*,1$7,1*7211$*( 0LOOLRQWRQQHV 
Year

Revenueearningtraffic*

Totaltraffic

198081

195.90

220.00

199091

318.40

341.40

201213
201314

1,008.09
1051.64
*ExcludingloadingofKonkanRailway.

1,014.15
1058.81




237

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

)5(,*+723(5$7,21
1HW7RQQH.PV PLOOLRQV 
Year

RevenueEarningtraffic

Totaltraffic

198081
199091
201213
201314

147,652
235,785
649,645
665,810

158,474
242,699
650,625
666,728



238

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

)5(,*+723(5$7,21
COMMODITYWISEORIGINATINGTONNAGE(MILLIONS)
BULKCOMMODITIES

201314

Coal

508.06

IronOres

124.27

Cement

109.80

MineralOils

41.16

FoodGrains

55.09

Other

213.26

Total

1051.64





239

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG




FREIGHTOPERATION
COMMODITYWISENTKms.(Billions)
BULKCOMMODITIES
Coal
IronOres
Cement
MineralOils
FoodGrains
Other
Total

201314
271.92
37.22
60.50
29.74
70.54
195.89
665.81




240

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

FREIGHTOPERATION
AVERAGELEAD
Year

AverageLeadofrevenue
earningfreighttraffic(Kms.)

Index(198081=100)

198081
199091
201213
201314

754
741
644
633

100
98.3
85.4
84.0






241

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

FREIGHTOPERATION
REVENUE
Year

Revenue*(inmillions)

Revenuepertonnekm.(Paise)

198081
199091
201213
201314

15,509
82,470
834,788
915709

10.50
35.00
128.50
137.53






242

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

FREIGHTOPERATION
COMMODITYWISEREVENUEEARNINGS(inmillions)
BULKCOMMODITIES
Coal
IronOres
Cement
MineralOils
FoodGrains
other
total

201314
3,91,444
76,887
85,074
53,440
79,975
2,28,889
9,15,709




243

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

)5(,*+723(5$7,21




244

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

52//,1*672&.
/2&2027,9(6
180%(52)/2&2027,9(6

Year

198081
199091
201213
201314

BroadGauge
Steam Diesel Elec.

4361
1295



1866
2893
4939
5232

1016
1723
4568
4823

MetreGauge
Steam Diesel
Elec.

2763
1482
30
30

470
731
267
262

20
20



TOTAL(includingNG)
Steam
Diesel
Elec.

7469
2915
43
43

2403
3759
5345
5633

1036
1743
4568
4823




245

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

)5(,*+7&$56:$*216
180%(52))5,(*+7&$56 ,181,76 
Year

BroadGauge

MetreGauge

TOTAL(incl.N.G.)

198081
199091
201213
201314

309194
284362
240923
241577

86839
58576
3731
3531

400946
346102
244818
245267







246

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

75$&.5287(.,/20(75(6

727$/5287(.,/20(75(6
Year
198081
199091
201213
201314

BG
31827
34880
57140
58177

MG
25167
23419
5999
5334


NG
4246
4068
2297
2297

Total

61240
62367
65436
65808





247

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

DOUBLE/MULTIPLETRACK
Year

198081

199091

201213

201314


RouteKms.

%ofTotalRouteKms.

13040

21.30

14331

23.00

19843

30.32

19989

30.37





248

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

3$66(1*(5.0 7UDFWLRQZLVHUDWLR 
<HDU

6WHDP

'LHVHO

(OHFWULF

(OHFWULF
ORFR(08 

Loco

EMU

198081

41.2

33.0

17.2

8.6

199091

15.1

47.1

29.5

8.3

201213

48.7

44.0

7.3

201314

48.7

43.9

7.3

25.8

37.8

51.3

51.2









249


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

)5(,*+7 7UDFWLRQZLVHUDWLR 
*52667211(.,/20(75(6
Year
198081

199091

201213

201314


Steam
9.0

Diesel
67

Electric
24.0

0.8

57.8

41.4

33.3

64.7

36.6

65.4







250

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

(/(&75,),&$7,21
Year

TotalRoute
Kms.

RouteKms.
Electrified

%ageofelectrifiedto
totalrouteKms.

198081

199091

201213

201314


61,240

5,345

8.73

62,367

9,968

15.98

65,436

20,884

31.92

65808

21614

32.84




251

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

6,*1$//,1*


(INUNITS)
Ason31.3.2014

Installation

LEDLitSignals(no.ofStations)

5446

DataLoggers(No.ofStations)

5292

ColourLightSignalling(No.ofStations)

5658

TrackCircuiting(No.ofLocations)

30509

InterlockedLevelCrossingGates(Nos.)

10493

Others

17669



252

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

3(56211(/
Year

No.ofStaff(000)

WageBill(in
millions)

Averageannual
wage()per
employee#

Trafficunitper
employee(000)@

198081
1572.2
13167
8435
244
199091
1651.8
51663
31864
346
201213
1307.1
670044
527295
1432
201314
1334.0
762418
588523
1462
#Onthebasisofaveragenumberofstaffemployedintheyear.
@Trafficunitrepresentspassengerkilometresandnettonnekilometres(Takingintoaccount
openlinestaffonly)


253

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

254

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

5HYHQXH LQPLOOLRQV 
Year

198081
199091
201213
201314

Passenger

8274.7
31475
313228.4
365322.5

Parcelsand
other
Freight
Coaching
1157.1
16175.2
3363.8
84078.7
30542.3 852625.8
36785.2 939056.3


Misc.

820.8
2417.6
42613.6
57212.9

Suspense
(Bills
Receivable)
()187.6
()370.2
()1684.2
()2795.3

Gross
Traffic
Receipts
26240.2
120964.9
1237325.9
1395581.8

NetRevenueinRs.Cr.
DividendinRs.Cr.

255

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

(;3(16(6
3DUWLFXODUV
*HQO6XSHULQWHQGHQFH
5HSDLUV 0DLQWHQDQFH
2SHUDWLQJ([SHQVHV
6WDII:HOIDUH
&RQWULEXWLRQWRIXQGV
2WKHU([SHQVHV

















NETREVENUEANDEXCESS/SHORTFALL
Year
GrossTrafficReceipts

201314
1395581.8

TotalWorkingExpenses

1303207.5

NetMisc.Receipts

25116.4

NetRevenue

117,490.70

Dividend
Expenses(+)/Shortage()


800867.7
(+)37404


256

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

$66(76

)L[HG$VVHWV
,QYHVWPHQW
,QYHVWPHQWLQRWKHUXQGHU
WDNLQJV
)XQGVZLWK&HQWUDO*RYW
&XUUHQW$VVHWV























257

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

/,$%,/,7,(6


201314

Percentage

LoanCapital
Investmentfromfunds
Reserves
Depositsfromothersources
Misc.Liabilities

1796.82

47.78
38.56
1.60
10.79
1.27

1449.81
60.25
405.62
47.81



258

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

$VVHW8WLOLVDWLRQ

Wagonkms.Perwagonperday(+)
Nettonnekms.(millions)perroutekm.

198081
73.4
4.34

199091
110.5
6.3

201213
265.5
11.38

201314
266.5
11.45

NTKms.Perwagonperday(+)

386

1407

8453

8471

PassengerKms.(millions)perrouteKm.

5.15

7.12

18.10

18.80

NTKms.Perenginehour

6295

10393

19468

18908

(+)intermsof8wheelers




17.063(5$11803(55287(.0



259

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG




260

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

EngineKilometresPerDayPerEngineInUse
Goods
Year

198081
199091
201213
201314

Steam
89
52



BroadGauge
Diesel
Electric
303
274
445
398
432
464
429
473


Steam
107
88




MetreGauge
Diesel
276
399
121
129

Electric
206
224







261

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

EngineKilometresPerDayPerEngineInUse
Passenger
Year

198081
199091
201213
201314

Steam
210
189



BroadGauge
Diesel
Electric
610
453
673
482
641
687
631
697


Steam
199
185

30
29

MetreGauge
Diesel
541
569
371
377

Electric
405
382







262

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

6DIHW\
<HDU






&ROOLVL
RQV






'HUDLOPHQWV /HYHO
)LUH 0LVF
7RWDO  7UDLQ
&URVVLQJ LQ
$FFLGHQWV
DFFLGHQWV
$FFLGHQWV WUDLQV
SHU
PLOOLRQ
WUDLQ
.PV































263

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

0DWHULDOV0DQDJHPHQW



264

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

265

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

(QJLQH8VDJHIRU
5DLOZD\
%URDG*DXJH

$YHUDJHQRRI(QJLQHV

$YHUDJH1XPEHU

$XWKRULVHG
VWRFN

2Q
/LQH

8QGHURU
DZDLWLQJ
UHSDLUV

$YDLODEOH
IRUXVH

3DVVHQJHU
6HUYLFH

*RRGV
6HUYLFH

&HQWUDO
'LHVHO(OHFWULF













320

312

38

262

75

129

(OHFWULF'&

85

45

14

31

21

2

(OHFWULF$&

478

501

22

479

160

202

(DVWHUQ
'LHVHO(OHFWULF

348

346

30

302

111

38

(OHFWULF

240

240

20

219

68

112

(DVW&HQWUDO
'LHVHO(OHFWULF

269

263

22

241

96

111

(OHFWULF

361

260

1

359

76

233

(DVW&RDVW
'LHVHO(OHFWULF

205

205

12

183

49

100

(OHFWULF

293

293

15

265

60

192

1RUWKHUQ
'LHVHO(OHFWULF

527

494

48

440

260

176

'LHVHO+\G 0HFK

66

65

6

53

(OHFWULF

349

349

36

309

101

105

1RUWK&HQWUDO
'LHVHO(OHFWULF

126

122

89

27

75

(OHFWULF

398

397

12

356

107

240

1RUWK(DVWHUQ
'LHVHO(OHFWULF

195

198

20

179

68

45

343

340

27

313

154

73

'LHVHO+\G 0HFK

1RUWKHDVW)URQWLHU
'LHVHO(OHFWULF


1RUWK:HVWHUQ

266

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


5DLOZD\
%URDG*DXJH

$YHUDJHQRRI(QJLQHV

$YHUDJH1XPEHU

$XWKRULVHG
VWRFN

2Q
/LQH

8QGHURU
DZDLWLQJ
UHSDLUV

$YDLODEOH
IRUXVH

3DVVHQJHU
6HUYLFH

*RRGV
6HUYLFH

'LHVHO(OHFWULF

216

217

18

199

94

94

6RXWKHUQ
'LHVHO(OHFWULF

401

342

27

297

119

60

'LHVHO+\G 0HFK

15

12

1

9

(OHFWULF

421

403

33

362

111

95

6RXWK&HQWUDO
'LHVHO(OHFWULF

538

536

30

492

134

146

(OHFWULF

518

518

32

472

80

263

6RXWK(DVWHUQ
'LHVHO(OHFWULF

299

299

32

267

39

(OHFWULF

523

523

45

460

96

297

6RXWK:HVW&HQWUDO
'LHVHO(OHFWULF

128

128

15

113

20

68

(OHFWULF

204

204

18

170

44

314

6RXWK:HVWHUQ
'LHVHO(OHFWULF

325

308

15

272

92

162

21

:HVWHUQ
'LHVHO(OHFWULF

238

374

32

332

84

98

'LHVHO+\G 0HFK

96

28

24

(OHFWULF

233

318

16

287

82

143

:HVW&HQWUDO
'LHVHO(OHFWULF

362

362

36

297

82

133

(OHFWULF

558

558

34

514

108

406

(OHFWULF

267

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

5DLOZD\
InUseDailyon

(DVW&RDVW

349

189



188

2

279



386

27

255



Total



7



18



Spare

571

617



618

406



618

242

795



349

149



614

469



614

236

426



372

326



601

279



614

241

501



per
engine
inuse

EngineKilometresperDay
PerPassenger Pergoods
Engineinuse enginein
use

326

326



551

284



551

123

381



per
engine
online

396,984

252,971



319,492

126,703



543,283

154,235

177,350



352,653

303,887



573,227

150,257



473,226

282,060

221,216



pergoods
locomotiveday
inuse

NetTonneKilometres
pergoods
locomotiveday
ontime

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG



(OHFWULF

15

(OHFWULF

2

'LHVHO
+\G 
0HFK

130

'LHVHO
(OHFWULF

4

'LHVHO
(OHFWULF







(DVWHUQ

16

(DVW&HQWUDO

5

(OHFWULF
$&

65

3





DepartmentalService Shunting
including
siding

(OHFWULF
'&

&HQWUDO
'LHVHO
(OHFWULF

%URDG
*DXJH

(QJLQH8VDJHIRU FRQWG 

268

15.0

22.0



21.5

20.7



24.0

24.0

24.8



hoursworkedper
dayperengine
availableforuse

InUseDailyon

238

112



324

112

183

53

484



358

219

Total





Spare

363

733



1038

1152

402

703



473

592

371

432



438

196

554

510



482

579

PerPassenger Pergoods
Engineinuse enginein
use

359

623



626

548

473

9

587



461

573

per
engine
inuse

EngineKilometresperDay

333

315



642

534

385

7

448



358

344

per
engine
online

341,936

402,490



590,642

257,490

356,033

1,192,822



370,660

368,497

pergoods
locomotiveday
ontime

474,200

437,273



1,073,017

384,019

550,297

818,521



327,873

329,089

pergoods
locomotiveday
inuse

NetTonneKilometres

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

18

'LHVHO
(OHFWULF



1RUWKHDVW)URQWLHU

10

'LHVHO
(OHFWULF



1RUWK(DVWHUQ

1

(OHFWULF

3

(OHFWULF

47

17

2

'LHVHO
+\G 
0HFK

52

1

3

'LHVHO
(OHFWULF



'LHVHO
(OHFWULF



1RUWKHUQ

126



2

(OHFWULF

66

1RUWK&HQWUDO

8

DepartmentalService Shunting
including
siding

'LHVHO
(OHFWULF

%URDG
*DXJH

5DLOZD\

269

15.7

16.0



18.5

26.5

19.4

1.16

23.4



23.4

20.6

hoursworkedper
dayperengine
availableforuse

19

1



16

'LHVHO
(OHFWULF

6RXWKHUQ

'LHVHO
(OHFWULF

'LHVHO
+\G 
0HFK

(OHFWULF

37

24

3

'LHVHO
(OHFWULF

(OHFWULF

2

(OHFWULF

6RXWK:HVW&HQWUDO

87

3

'LHVHO
(OHFWULF



470

137



377

319

187

13

221



204

Total





34

4



Spare



548

184



1066

685

679

536



812



359

504



527

602

350

290



546

PerPassenger Pergoods
Engineinuse enginein
use



377

201



580

592

536

62

399



645

per
engine
inuse

EngineKilometresperDay



324

278



455

383

412

48

349



529

per
engine
online



343,997

23,299



392,750

444,466

109,804

107,766



784,934

pergoods
locomotiveday
ontime



362,006

50,254



416,611

443,364

223,033

136,217



798,473

pergoods
locomotiveday
inuse

NetTonneKilometres

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG



87



6RXWK(DVWHUQ

80



6RXWK&HQWUDO

13

52





DepartmentalService Shunting
including
siding

InUseDailyon

1RUWK:HVWHUQ

%URDG
*DXJH

5DLOZD\

270



17.3

15.61



18.84

17.42

15.9

5.26

15.1



20.9

hoursworkedper
dayperengine
availableforuse

InUseDailyon



2

1

(OHFWULF

:HVWHUQ

'LHVHO
(OHFWULF

'LHVHO
+\G 
0HFK

(OHFWULF

513

996

1003



817

596

337

635



1004

330

660

428



597

431

336

283



365

194

PerPassenger Pergoods
Engineinuse enginein
use

618

513



673

241

463

337

410



389

171

per
engine
inuse

EngineKilometresperDay

569

386



433

205

369

358



384

297

per
engine
online

299,048

126,225



564,722

237,797

328,653



480,297

100,071

pergoods
locomotiveday
ontime

432,631

305,278



456,710

472,302

288,450

251,426



440,528

148,015

pergoods
locomotiveday
inuse

NetTonneKilometres

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

(OHFWULF

268

24

57

'LHVHO
(OHFWULF

36

7

3



Spare



225

24

218

26

261



396

108

Total

:HVW&HQWUDO

5

24

41



17

2

'LHVHO
(OHFWULF

72


(OHFWULF

23

6RXWK:HVWHUQ

DepartmentalService Shunting
including
siding

'LHVHO
(OHFWULF

%URDG
*DXJH

5DLOZD\

271

22.1

19.7



15.6

20.1

17.2

15.2



18.3

15.3

hoursworkedper
dayperengine
availableforuse
































&HQWUDO
'LHVHO(OHFWULF
(OHFWULF'&
(OHFWULF$&
$OOWUDFWLRQ
(DVWHUQ
'LHVHO(OHFWULF
(OHFWULF
$OOWUDFWLRQ
(DVW&HQWUDO
'LHVHO(OHFWULF
(OHFWULF
$OOWUDFWLRQ
(DVW&RDVW
'LHVHO(OHFWULF















$YHUDJH
1R2I
3DVVHQJHU
FDUULHG
SHUWUDLQ

7RWDO
:DJRQVSHU
WUDLQ































LQWHUPVRI LQWHUPVRI
ZKHHOHUV
ZKHHOHUV 

/RDGHG
ZDJRQV
SHUWUDLQ
















7RQQHV
















7RQQHV

1HWRUIUHLJKW *URVVZHLJKW
ZHLJKW
LQFOXGLQJ
ZHLJKWRI
HQJLQH

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

*URVV:HLJKW
LQFOXGLQJ
ZHLJKWRI
HQJLQHWRQQHV

1RRI
YHKLFOHV LQ
WHUPVRI
ZKHHOHUV 

%URDG*DXJH

3DVVHQJHU
LQFOXGLQJ
SURSRUWLRQRU
PL[HG

3DVVHQJHU
7UDLQV

5DLOZD\V

$YHUDJH/RDG3HU7UDLQ ([FOXGLQJ'HSDUWPHQWDO7UDLQV 

LoadsofTrainsfor201314
















7RQQHV

*URVVZHLJKW
H[FOXGLQJ
ZHLJKWRI
HQJLQH

272

1RRI
YHKLFOHV LQ
WHUPVRI
ZKHHOHUV 






%URDG*DXJH














(OHFWULF
$OOWUDFWLRQ
1RUWK&HQWUDO
'LHVHO(OHFWULF

(OHFWULF
$OOWUDFWLRQ
1RUWK(DVWHUQ
'LHVHO(OHFWULF
$OOWUDFWLRQ

'LHVHO(OHFWULF

(OHFWULF
$OOWUDFWLRQ
1RUWKHUQ
'LHVHO(OHFWULF
'LHVHO+\G 
0HFK

3DVVHQJHU
7UDLQV

5DLOZD\V












$YHUDJH
1R2I
3DVVHQJHU
FDUULHG
SHUWUDLQ

7RWDO
:DJRQVSHU
WUDLQ







































LQWHUPVRI LQWHUPVRI
ZKHHOHUV
ZKHHOHUV 

/RDGHG
ZDJRQV
SHUWUDLQ




















7RQQHV




















7RQQHV

1HWRUIUHLJKW *URVVZHLJKW
ZHLJKW
LQFOXGLQJ
ZHLJKWRI
HQJLQH

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG











1RUWKHDVW)URQWLHU








*URVV:HLJKW
LQFOXGLQJ
ZHLJKWRI
HQJLQHWRQQHV






3DVVHQJHU
LQFOXGLQJ
SURSRUWLRQRU
PL[HG

$YHUDJH/RDG3HU7UDLQ ([FOXGLQJ'HSDUWPHQWDO7UDLQV 




















7RQQHV

*URVVZHLJKW
H[FOXGLQJ
ZHLJKWRI
HQJLQH

273

3DVVHQJHU
7UDLQV

1RRI
YHKLFOHV LQ
WHUPVRI
ZKHHOHUV 






















5DLOZD\V

%URDG*DXJH

$OOWUDFWLRQ
1RUWK:HVWHUQ
'LHVHO(OHFWULF

$OOWUDFWLRQ
6RXWKHUQ
'LHVHO(OHFWULF

'LHVHO+\G 
0HFK

(OHFWULF
$OOWUDFWLRQ
6RXWK&HQWUDO
'LHVHO(OHFWULF

(OHFWULF
$OOWUDFWLRQ
6RXWK(DVWHUQ
'LHVHO(OHFWULF

(OHFWULF






















$YHUDJH
1R2I
3DVVHQJHU
FDUULHG
SHUWUDLQ

7RWDO
:DJRQVSHU
WUDLQ













































LQWHUPVRI LQWHUPVRI
ZKHHOHUV
ZKHHOHUV 

/RDGHG
ZDJRQV
SHUWUDLQ























7RQQHV























7RQQHV

1HWRUIUHLJKW *URVVZHLJKW
ZHLJKW
LQFOXGLQJ
ZHLJKWRI
HQJLQH

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG



















*URVV:HLJKW
LQFOXGLQJ
ZHLJKWRI
HQJLQHWRQQHV




3DVVHQJHU
LQFOXGLQJ
SURSRUWLRQRU
PL[HG

$YHUDJH/RDG3HU7UDLQ ([FOXGLQJ'HSDUWPHQWDO7UDLQV 























7RQQHV

*URVVZHLJKW
H[FOXGLQJ
ZHLJKWRI
HQJLQH

274

1RRI
YHKLFOHV LQ
WHUPVRI
ZKHHOHUV 




















%URDG*DXJH

'LHVHO(OHFWULF
(OHFWULF
$OOWUDFWLRQ
6RXWK:HVWHUQ
'LHVHO(OHFWULF
(OHFWULF
$OOWUDFWLRQ
:HVWHUQ
'LHVHO(OHFWULF

(OHFWULF
$OOWUDFWLRQ
:HVW&HQWUDO
'LHVHO(OHFWULF

(OHFWULF
$OOWUDFWLRQ

$OOWUDFWLRQ

3DVVHQJHU
7UDLQV

5DLOZD\V





















$YHUDJH
1R2I
3DVVHQJHU
FDUULHG
SHUWUDLQ

7RWDO
:DJRQVSHU
WUDLQ










6RXWK(DVW&HQWUDO






























LQWHUPVRI LQWHUPVRI
ZKHHOHUV
ZKHHOHUV 

/RDGHG
ZDJRQV
SHUWUDLQ





















7RQQHV





















7RQQHV

1HWRUIUHLJKW *URVVZHLJKW
ZHLJKW
LQFOXGLQJ
ZHLJKWRI
HQJLQH

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG



















*URVV:HLJKW
LQFOXGLQJ
ZHLJKWRI
HQJLQHWRQQHV


3DVVHQJHU
LQFOXGLQJ
SURSRUWLRQRU
PL[HG

$YHUDJH/RDG3HU7UDLQ ([FOXGLQJ'HSDUWPHQWDO7UDLQV 





















7RQQHV

*URVVZHLJKW
H[FOXGLQJ
ZHLJKWRI
HQJLQH

275

1RRI
YHKLFOHV LQ
WHUPVRI
ZKHHOHUV 






%URDG*DXJH

'LHVHO(OHFWULF
7RWDO'LHVHO
(OHFWULF
$OO7UDFWLRQ

3DVVHQJHU
7UDLQV

5DLOZD\V

7RWDO
:DJRQVSHU
WUDLQ

LQWHUPVRI LQWHUPVRI
ZKHHOHUV
ZKHHOHUV 

/RDGHG
ZDJRQV
SHUWUDLQ











7RWDO$YHUDJH%URDG*DXJH





$YHUDJH
1R2I
3DVVHQJHU
FDUULHG
SHUWUDLQ






7RQQHV






7RQQHV

1HWRUIUHLJKW *URVVZHLJKW
ZHLJKW
LQFOXGLQJ
ZHLJKWRI
HQJLQH

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG






*URVV:HLJKW
LQFOXGLQJ
ZHLJKWRI
HQJLQHWRQQHV

3DVVHQJHU
LQFOXGLQJ
SURSRUWLRQRU
PL[HG

$YHUDJH/RDG3HU7UDLQ ([FOXGLQJ'HSDUWPHQWDO7UDLQV 






7RQQHV

*URVVZHLJKW
H[FOXGLQJ
ZHLJKWRI
HQJLQH

276




















































,Q8QLWV


















,QWHUPV
RI
:KHHOHUV

,Q8QLWV




















































,Q7HUPVRI
:KHHOHUV

,Q7HUPVRI 3DVVHQJHU
:KHHOHUV 9HKLFOHV



277


















2WKHU
&RDFKLQJ
9HKLFOHV



9HKLFOH.LORPHWUHVSHU
YHKLFOHGD\

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

&HQWUDO
(DVWHUQ
(DVW&HQWUDO
)DVW&RDVW
1RUWKHUQ
1RUWK&HQWUDO
1RUWK(DVWHUQ
1RUWKHUQ)URQWLHU
1RUWKHUQ:HVWHUQ
6RXWKHUQ
6RXWK&HQWUDO
6RXWK(DVWHUQ
6RXWK(DVW&HQWUDO
6RXWK:HVWHUQ
:HVWHUQ
:HVW&HQWUDO

2WKHU
&RDFKLQJ
9HKLFOHV

2WKHU
&RDFKLQJ
9HKLFOHV

3DVVHQJHU
&DUULDJHV





3DVVHQJHU
&DUULDJHV

LQ
8QLWV 

5DLOZD\


&RDFKLQJ6WRFN
$YHUDJHDXWKRULVHGVWRFN $YHUDJH1XPEHURQOLQH




9(+,&/(6$1':$*216180%(5$1'7+(,586$*()25
%URDG*DXJH 

&HQWUDO
(DVWHUQ
(DVW&HQWUDO
(DVW&RDVW
1RUWKHUQ
1RUWK&HQWUDO
1RUWK(DVWHUQ
1RUWKHUQ)URQWLHU
1RUWKHUQ:HVWHUQ
6RXWKHUQ
6RXWK&HQWUDO
6RXWK(DVWHUQ
6RXWK(DVW&HQWUDO
6RXWK:HVWHUQ
:HVWHUQ
:HVW&HQWUDO















































,QWHUPVRI
:KHHOHUV



















,QWHUPVRI
:KHHOHUV




































$OOWUDIILF
,QWHUPVRI
LQWRQQHV 
:KHHOHUV
,QWHUPVRI
:KHHOHUV 

/RDGHG


















:DJRQV
.LORPHWUHVSHU
ZDJRQGDLQ
XVH

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

















,QXQLWV

LQ8QLWV 



:DJRQ
NLORPHWUHV
SHUZDJRQ
GD\RQOLQH

$YHUDJH
:DJRQ
/RDG
GXULQJWKH
UXQ

$YHUDJH
1XPEHURI
ZDJRQVRQOLQH
GDLO\SRROHGDQG
QRQSRROHG

*RRGV6WRFN


5DLOZD\

$YHUDJH
1XPEHURI
:DJRQV
RZQHG

$YHUDJH
$XWKRULVHG
6WRFN




















(PSW\



9(+,&/(6$1':$*216180%(5$1'7+(,586$*()25
%URDG*DXJH  FRQWG 

278


















,QWHUPVRI
:KHHOHUV

1HWWRQQH
NLORPHWUHV
SHUZDJRQ

&HQWUDO
(DVWHUQ
(DVW&HQWUDO
(DVW&RDVW
1RUWKHUQ
1RUWK&HQWUDO
1RUWK(DVWHUQ
1RUWKHUQ)URQWLHU
1RUWKHUQ:HVWHUQ
6RXWKHUQ
6RXWK&HQWUDO
6RXWK(DVWHUQ
6RXWK(DVW&HQWUDO
6RXWK:HVWHUQ
:HVWHUQ
:HVW&HQWUDO
0HWUR
$YHUDJHIRU%URDG
*DXJH

3HU
UXQQLQJ
WUDFN
NLORPHWUH

































































































*URVV7RQQHNLORPHWUHV
SHUDQQXP LQFOXGLQJ
'HSDUWPHQWDODQGZHLJKW
RIHQJLQH 
3HUUXQQLQJ SHUURXWH
WUDFN
NLORPHWUH
NLORPHWUH



















LQFOXGLQJ
'HSDUWPHQWDO 

7UDLQNLORPHWUHVSHU
UXQQLQJWUDFN
NLORPHWUHSHUGD\

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG




















SHUURXWH
NLORPHWUH

1HWWRQQHNLORPHWUHVSHU
DQQXP LQFOXGLQJ
'HSDUWPHQWDO 

SHUURXWH 3HUUXQQLQJ
NLORPHWUH WUDFN
NLORPHWUH

3DVVHQJHU.LORPHWUHV
SHUDQQXP

5DLOZD\

'(16,7<2)75$)),&  

279

CSTM
DR
KYN
LTT
NGP
PA
SUR
TNA
BGP
HWH
SDAH
DBG
DHN
GYA
MGS
MFP
PNBE
BBS
PURI
VSKP

Stn
Code

BB
BB
BB
BB
NGP
PA
SUR
BB
MLDT
HWH
SDAH
SPJ
DHN
MGS
MGS
SEE
DNR
KUR
KUR
WAT

Division

Maharashtra
Maharashtra
Maharashtra
Maharashtra
Maharashtra
Maharashtra
Maharashtra
Maharashtra
Bihar
WestBengal
WestBengal
Bihar
Jharkhand
Bihar
UttarPradesh
Bihar
Bihar
Odisha
Odisha
AndhraPradesh

State

A1
A1
A1
A1
A1
A1
A
A1
A
A1
A1
A1
A
A
A
A1
A1
A1
A
A1

Earlier
catg.
Basedon
Pass.
Earning
0607
A1
A1
A1
A1
A1
A1
A1
A1
A1
A1
A1
A1
AI
A1
A1
A1
A1
A1
A1
A1

Catg.
Basedon
Pass
Earning
of2011
12
4882305226
1348037364
1840522433
3610280113
1893254821
3444356000
737781166
1054647656
642448700
3806168985
2106067022
789456960
685635568
777516196
748530160
1015735546
3237530550
1719833093
773354721
1837261872

Annual
Earningsof
201112

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

CR
CR
CR
CR
CR
CR
CR
ER
ER
ER
ECR
ECR
ECR
ECR
ECR
ECR
ECR
ECoR
ECoR
ECoR

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.

CSTMumbai
Dadar
Kalyan
LokmanyaTilak(T)
Nagpur
Pune
Solapur
Thane
Bhagalpur
Howrah
Sealdah
DarbhangaJn.
Dhanbad
GayaJn.
MughalsaraiJn.
MuzaffarpurJn.
PatnaJn.
Bhubaneswar
Puri
Visakhapatnam

Railway

S.No. NameofStation

93242644
29136568
66136513
8103081
11394435
23606728
7134445
92213317
6729781
41800493
44790446
7759459
10779827
9727235
6368450
9521659
30572815
10161487
4430247
12748685

Annual
Pass.
during
201112

280

255459
79826
181196
22200
31218
64676
19493
252639
18438
114522
122714
21259
29534
26650
17448
26087
83761
27764
12105
34928

DailyAverage
No.OfPass.
booked
during1112

6WDWHPHQW6KRZLQJ&DWHJRU\ZLVH1RRI6WDWLRQVLQ,QGLDQ5DLOZD\$ORQJZLWK3DVVHQJHUVDQG$FWXDO
(DUQLQJGXULQJ

NR
NR
NR
NR

AmbalaCantt.Jn.
Amritsar
AnandViharTerminal
Bareilly

Chandigarh

Dehradun
DelhiJn.
H.Nizamuddin
Haridwar
JammuTawi

Lucknow

Ludhiana
NewDelhi
Varanasi

AgraCantt
Allahabad
Gwalior
Jhansi
KanpurCentral
MathuraJn.
ChappraJn.

21.
22.
23.
24.

25.

26.
27.
28.
29.
30

31.

32.
33.
34.

35.
36.
37.
38.
39.
40.
41.

AGC
ALD
GWL
JHS
CNB
MTJ
CPR

LDH
NDLS
BSB

LKO

DDN
DLI
HNZM
HWH
JAT

CDG

UMB
ASR
ANVT
BE

Stn
Code

AGC
ALD
JHS
JHS
ALD
AGC
Varanasi

FZR
DLI
LKO

LKO

MB
DLI
DLI
MB
FZR

UMB

UMB
FZR
DLI
MB

Division

UP
UP
MP
UP
UP
UP
Bihar

Punjab
Delhi
UttarPradesh

Uttaranchal
Delhi
Delhi
Uttaranchal
Jammu&
Kashmir
UttarPradesh

UTChandigarh

Haryana
Punjab
Delhi
UttarPradesh

State

A
A1
A1
A1
A1
A
A

A1
A1
A1

A1

A
A1
A1
A1
A1

A

A1
A1
A
A

Earlier
catg.
Basedon
Pass.
Earning
0607

A1
A1
A1
A1
A1
A1
A1'

A1

A1
A1
A1

A1

A1
A1
A1
A1

A1

A1
A1
A1
A1

Catg.
Basedon
Pass
Earning
of2011
12

960300000
2075000000
1090600000
1141700000
1925300000
772000000
600693108

1328474836
1502158530
2099155047

2453445905

653674332
16885779257
726415746
1029253986
3128106577

862021434

1134222381
1437424434
656854663
656144416

Annual
Earningsof
201112

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

NCR
NCR
NCR
NCR
NCR
NCR
NER

NR
NR
NR

NR

NR
NR
NR
NR
NR

NR

Railway

S.No. NameofStation

6847023
11648181
9452040
10056915
18714900
9125938
5624556

12114705
13515931
12598339

18524731

3047676
14481378
7273583
6471218
9089300

4075540

11134675
11008628
3182165
9949233

Annual
Pass.
during
201112

281

18759
31423
25896
27471
51274
25003
15410

33191
37030
34422

50614

8350
39675
19928
17729
24902

2394504

3150618
30161
8718
27258

DailyAverage
No.OfPass.
booked
during1112

Tirupati

Vijayawada
Kharagpur
Tatanagar

60.

61.
62.
63.

BZA
KGP
TATA

TPTY

HYB
KCG
SC

GKP
LJN
GHY
NJP
ALL
JP
JUCT
MAS
MS
CBE
ERS
CLT
MDU
TCR
TVC

Stn
Code

BZA
KGP
CKP

GTL

SC
HYB
SC

Lucknow
Lucknow
LMG
KIR
Ajmer
Jaipur
Jodhpur
MAS
MAS
SA
TVC
PGT
MDU
TVC
TVC

Division

AndhraPradesh
WestBengal
Jharkhand

AndhraPradesh

AndhraPradesh
AndhraPradesh
AndhraPradesh

UP
UP
Assam
WestBengal
Rajasthan
Rajasthan
Rajasthan
TN
TN
TN
KL
KL
TN
KL
KL

State

A1
A
A1

A1

A1
A
A1

A1'
A1'
A1
A1
A
A1
A1
A1
A1
A1
A1
A
A1
A
A1

Earlier
catg.
Basedon
Pass.
Earning
0607

A1
A1
A1
A1

A1
A1
A1

A1

A1'
A1'
A1
A1
A1
A1
A1
A1
A1
A1
A1
A1
A1
A1

Catg.
Basedon
Pass
Earning
of2011
12

1562531084
669211341
956047768

1510413776

1452069135
854331352
4454355763

2197789552
1171010394
810160477
603948620
1102848885
2475719976
1165003659
6017600162
2654624935
1311177139
1084044345
635708083
784234339
677421680
1199118518

Annual
Earningsof
201112

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

SCR
SER
SER

SCR

SCR
SCR
SCR

NER
NER
NFR
NFR
NWR
NWR
NWR
SR
SR
SR
SR
SR
SR
SR
SR

GorakhpurJn.
LucknowJn.
Guwahati
NewJalpaiguri
Ajmer
Jaipur
JodhpurCantt
ChennaiCentral
ChennaiEgmore
CoimbatureJn.
EmakulamJn.
Kozhikkode
MaduraiJn.
Thrisur
Thiruvananthapuram
Central
Hyderabad
Kacheguda
SecunderabadJn.

42.
43.
44.
45.
46.
47.
48.
49.
50.
51.
52.
53.
54.
55.
56.

57.
58.
59.

Railway

S.No. NameofStation

16339895
61620042
7730116

10823018

7820670
670927
25970201

14300594
7937862
5364577
3320301
7073532
14456811
6560065
21097228
17809946
10078896
9779396
10190015
7728858
7098452
14200697

Annual
Pass.
during
201112

282

44767
168361
21178

29652

21426
1838
71151

39180
21748
14697
9097
19380
40158
17973
57801
48794
27613
26793
27918
21175
19448
38906

DailyAverage
No.OfPass.
booked
during1112

SECR
SECR
SWR
SWR
WR

BilaspurJn.
Raipur
BangaloreCity
Yesvantpur
Ahmedabad

BandraTerminus

MumbaiCentralMain WR

Rajkot
Surat

Vadodara

Bhopal
Jabalpur

64.
65.
66.
67.
68.

69.

70.

71.
72.

73.

74.
75.

BPL
JBP

BRC

RJT
ST

BCT

BDTS

BSP
R
SBC
YPR
ADI

Stn
Code

BPL
JBP

Rajkot
Mumbai
Central
Vadodara

Mumbai
Central

Mumbai
Central

BSP
R
SBC
SBC
Ahmedabad

Division

Gujarat
MP
MP

Gujarat

Gujarat

Maharashtra

Maharashtra

Chhattisgarh
Chhattisgarh
Karnataka
Karnataka
Gujarat

State

A1
A1

A1

A
A1

A1

A1

A1
A1
A1
A1
A1

Earlier
catg.
Basedon
Pass.
Earning
0607

A1
A1
A1

A1

A1

A1

A1

A1
A1
A1
A1
A1

Catg.
Basedon
Pass
Earning
of2011
12

1800080046
1231495901

1539060158

653784770
2447027845

2822533478

2477638189

798750089
868225418
4446100708
2141387687
3765936744

Annual
Earningsof
201112

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

WCR
WCR

WR

WR
WR

WR

Railway

S.No. NameofStation

11292927
9031923

17033440

4382948
24561331

6321490

7101237

9286198
11098015
24757839
7842615
19965509

Annual
Pass.
during
201112

283

30940
24745

46666

12008
67107

17272

19402

25372
30406
67644
21428
54551

DailyAverage
No.OfPass.
booked
during1112

()),&,(1&<67$7,67,&6  
5DLOZD\


&HQWUDO
(DVWHUQ

1HW7RQQH.LORPHWUHV
*URVV7RQQH.LORPHWUH
3HU
3HU7UDLQ 3HU(QJLQH
3HU7UDLQHQJLQH
:DJRQ
(QJLQH HQJLQH
KRXU
KRXU H[FOXGLQJ
7XUQ5RXQG
+RXU
KRXU
LQFOXGLQJ
ZHLJKWRI(QJLQH
ZHLJKWRI
DQGGHSDUWPHQWDO 
HQJLQHDQG
GHSDUWPHQWDO 















(DVW&HQWUDO











(DVW&RDVW











1RUWKHUQ











1RUWK&HQWUDO











1RUWK(DVWHUQ











1RUWKHUQ
)URQWLHU
1RUWKHUQ
:HVWHUQ
6RXWKHUQ































6RXWK&HQWUDO











6RXWK(DVWHUQ











6RXWK(DVW
&HQWUDO
6RXWK
:HVWHUQ
:HVWHUQ































:HVW&HQWUDO











$YHUDJHIRU
%URDG*DXJH














284

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

/XEH2LO&RQVXPSWLRQ  


/XEULFDWLQJRLOXVHGLQHQJLQHV H[FOXGLQJ
VKXQWLQJVLGLQJDQGGHSDUWPHQWDO 




5DLOZD\


7RWDO/LWUHV

&HQWUDO

/XEULFDWLQJRLOXVHGRQ
&RDFKLQJJRRGVDQG
'HSDUWPHQWDO9HKLFOHV

/LWUHVSHUHQJLQH
NLORPHWUHV

7RWDO
3DVVHQJHU *RRGV
3DVVHQJHU *RRGV /LWUHV
DQG
VHUYLFHV
DQG0L[HG 6HUYLFHV
0L[HG
6HUYLFHV
VHUYLFHV





/LWUHVSHU
YHKLFOH
.LORPHWUHV
LQWHUPVRI
:KHHOHUV 


(DVWHUQ











(DVW&HQWUDO













(DVW&RDVW























1RUWK&HQWUDO













1RUWK(DVWHUQ











1RUWKHUQ)URQWLHU













1RUWKHUQ:HVWHUQ













6RXWKHUQ









6RXWK&HQWUDO













6RXWK(DVWHUQ











6RXWK(DVW
&HQWUDO
6RXWK:HVWHUQ

































:HVW&HQWUDO











7RWDO%URDG
*DXJH













1RUWKHUQ

:HVWHUQ

285

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

&HQWUDO
(DVWHUQ
(DVW&HQWUDO
(DVW&RDVW
1RUWKHUQ
1RUWK&HQWUDO
1RUWK(DVWHUQ
1RUWKHUQ)URQWLHU
1RUWKHUQ:HVWHUQ
6RXWKHUQ
6RXWK&HQWUDO
6RXWK(DVWHUQ
6RXWK(DVW&HQWUDO
6RXWK:HVWHUQ
:HVWHUQ
:HVW&HQWUDO
0HWUR5DLOZD\
7RWDO

5DLOZD\


 
 
 


 
 
 
 


 


 




 




 

&RQWLQJHQFLHV 7RWDO




















7RWDO&RVWWR
WKH5DLOZD\




















&RVW
3HU5RXWH
.LORPHWUH LQ
5XSHHV 

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG




















5DLOZD\3URWHFWLRQ)RUFH
5O\
5O\3URWHFWLRQ
3URWHFWLRQ 6SO)RUFH
IRUFH

 
 
 


 
 
 
 


 


 




 




 

&RQWULEXWLRQWR
6WDWH*RYHUQPHQW
IRU3XEOLF

286




















3HU7UDLQ
.LORPHWUH
,Q5XSHHV 

&RVWRIWKH3ROLFH)RUFHDQG5DLOZD\3URWHFWLRQ)RUFH(PSOR\HGRQ5DLOZD\V  





$

%

&

'



















 











 












1&5 1(5























1)5 1:5

















65















6&5















6(5

























6(&5 6:5



5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

   



7RWDO
%URDG

 

 









(&5 (&2 15















(5



(





5RXWH

'6SFO

&5





%URDG
*DXJH

5RXWH.PRQ5DLOZD\VDVRQ













:5











287

 

 



 

 



:&5 7RWDO



75$&7,21



288

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

),1$1&(





289

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

(1*,1((5,1*




290

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

$QQH[XUH*OREDO5DLOZD\5HVWUXFWXULQJ([SHULHQFH


-DSDQ

x 3ULRU WR 5HVWUXFWXULQJ -DSDQV 1DWLRQDO 5DLOZD\ -15  ZDV RUJDQL]HG DV D SXEOLF
FRUSRUDWLRQ D 6WDWH RZQHG UDLOZD\ 7KHUH ZDV FRQVWDQW JRYHUQPHQW LQWHUYHQWLRQ DW
HYHU\ OHYHO 7KHJRYHUQPHQW DSSURYHG WKH PDWWHUV UHODWHG WR DOORFDWLRQ RI EXGJHWLQJ
RSHUDWLRQ SODQV IDUHV HWF -15V XQLILHG QDWLRQZLGH PDQDJHPHQW ZDV LQHIIHFWLYH WR
XQGHUVWDQG UHVSRQG WR WKH ORFDO QHHGV 7KH ODERXU XQLRQ IDLOHG WR VHH WKH ZRUVHQLQJ
ILQDQFHVDQGUHIXVHGWRFRRSHUDWHZLWKWKHPDQDJHPHQW

x -15
VVKDUHLQSDVVHQJHUWUDQVSRUWYROXPHGURSSHGVKDUSO\IURPLQWR
LQ7KHVKDUHRIIUHLJKWWUDQVSRUWYROXPHGURSSHGPRUHGUDVWLFDOO\IURPWR
RYHUWKLVVDPHSHULRG$EQRUPDOO\KLJKSHUVRQQHOH[SHQVHV DPRXQWLQJWRRI
WRWDOUHYHQXHVDWWKHLUSHDNFRPSDUHGZLWKDERXWIRUSULYDWHUDLOZD\V DQG-15
V
FRQVLVWHQWSROLF\ZDVWRFRQWLQXHWRFRYHULWVGHILFLWVE\ERUURZLQJOHGWRDQQXDOORVV
LQ

x 7KH -DSDQHVH 5DLOZD\ SULYDWL]DWLRQ RI  OHG WR WKH 5HJLRQDO VXEGLYLVLRQ E\
JHRJUDSKLFDO GHPDQG XSRQ VL[ UHJLRQDO SDVVHQJHU UDLOZD\ FRPSDQLHV DQG HDFK
FRPSDQ\ ZRXOG JDLQ FRQWURO RYHU GHFLVLRQV DERXW ZKLFK OLQHV WR RSHUDWH DQG ZKLFK
OLQHV WR FORVH 7KH -DSDQHVH 5DLOZD\ SULYDWL]DWLRQ GLYLGHG -15 LQWR VL[ SULYDWH
UHJLRQDOSDVVHQJHUFRPSDQLHV -5V DQGDQDWLRQZLGHIUHLJKWFDUULHU-5)UHLJKW

x -DSDQHVH5HVWUXFWXULQJRI5DLOZD\VKDYHIROORZLQJIHDWXUHV

  +RUL]RQWDO VHSDUDWLRQ RU UHJLRQDO VXEGLYLVLRQ  7KUHH RQ WKH PDLQ LVODQG RI
+RQVKXDQGRQHHDFKRQWKHWKUHHLVODQGVRI+RNNDLGR6KLNRNXDQG.\XVKX
 

)XQFWLRQDO GLVWLQFWLRQ RU SDVVHQJHUIUHLJKW GLVWLQFWLRQ  IXQFWLRQDO GLVWLQFWLRQ RI


IUHLJKWDQGSDVVHQJHUPDUNHWZDVPDGH7KH-5IUHLJKWZDVVHSDUDWHGIURPWKH-5
SDVVHQJHUDQGDOORZHGWRERUURZWUDFNVIURPLQIUDVWUXFWXUHKROGLQJSDVVHQJHU-5V
LQVWHDGRIKROGLQJWKHLQIUDVWUXFWXUHLWVHOI

 

9HUWLFDOLQWHJUDWLRQ RURSHUDWLRQDQGLQIUDVWUXFWXUHLQWHJUDWLRQ (DFK-5FRPSDQ\


RZQVWKHUROOLQJVWRFNDQGLQIUDVWUXFWXUH,IDUDLORSHUDWRUQHHGVDFFHVVWRDQRWKHU
FRPSDQ\V WUDFNV IRU RSHUDWLRQ LV DOORZHG EDVHG RQ QHJRWLDWLRQ EHWZHHQ
LQIUDVWUXFWXUHVSURYLGLQJFRPSDQ\DQGWKHRSHUDWRU

 

OXPSVXPVXEVLGLHVIRUORZGHQVLW\-5V0DQDJHPHQW6WDELOLW\)XQG 06) ZDV


HVWDEOLVKHG IRU SDVVHQJHU WUDLQV LQ +RNNDLGR 6KLNRNX DQG .\XVKX LVODQGV ZKHUH
WKHSRSXODWLRQZDVORZ
291


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

 

(VWDEOLVKPHQWRIDQLQWHUPHGLDU\LQVWLWXWLRQ-DSDQ1DWLRQDO5DLOZD\6HWWOHPHQW
&RUSRUDWLRQ -156& DWHPSRUDU\KROGLQJFRPSDQ\ZDVVHWXSWRUHSD\WKHGHEWV
RI WKH -15 DQG WR ILQG QHZ MREV IRU LWV UHGXQGDQW HPSOR\HHV )RU WUDQVIHU RI
HPSOR\HHVVSHFLDOODZIRUUHHPSOR\PHQWRIIRUPHU-15ZRUNHUVZDVHQDFWHG

 

$OORZDQFH RI QRQUDLO VHUYLFH 7KH -5 FRPSDQLHV H[SORUHG YDULRXV QRQUDLO
VHUYLFHVVXFKDVKRXVLQJWRXULVPHWF

 

<DUGVWLFNFRPSHWLWLRQ7KH0LQLVWU\KDVDSSOLHG D\DUGVWLFN FRPSHWLWLRQVFKHPH


IRUWKHDVVHVVPHQWRIIDUHUHYLVLRQ,QWKLVVFKHPHWKHSHUIRUPDQFHRIWKHRSHUDWRU
LVFRPSDUHGZLWKRWKHURSHUDWRUVDQGLILWLVDVVHVVHGDVORZSHUIRUPHUWKHQWKHIDUH
UHYLVLRQLVQRWDSSURYHG
BBBBBBBBBB


&KLQD

x
8QWLOWKH0LQLVWU\RI5DLOZD\V 0R5 FRQWUROOHGPRVWRIWKHFRXQWU\VUDLOZD\
PDQXIDFWXULQJ DQG VXSSO\ LQGXVWULHV YLD ILYH FRUSRUDWLRQV 7KH 0R5 FRQWUROV 
JHRJUDSKLFDOO\  EDVHG UDLOZD\ EXUHDX[ DQG UDLOZD\ JURXS FRPSDQLHV  7KH 
UDLOZD\EXUHDX[DUHFHQWUHGRQ%HLMLQJ&KHQJGX+DUELQ+RKKRW/DQ]KRX-LQDQ
.XQPLQJ 1DQFKDQJ 1DQQLQJ 6KDQJKDL 6KHQ\DQJ 7DL\XDQ 8UXPTL :XKDQ
;LDQ DQG =KHQJ]KRX  7KH WZR JURXS FRPSDQLHV DUH WKH *XDQJ]KRX 5DLOZD\
*URXS&RPSDQ\DQGWKH4LQJKDL7LEHW 5DLOZD\*URXS&RPSDQ\7KHVHEXUHDX[
DQGFRPSDQLHVFRQWURODQGRYHUVHHWKHQDWLRQDOUDLOZD\QHWZRUNIRUPLQJWKHPDMRU
SDUWRI&KLQDVSXEOLFUDLOZD\V\VWHP

x
$V SDUW RI WKLV UHVWUXFWXULQJ WKH VLQJOH ORFRPRWLYH DQG UROOLQJ VWRFN LQGXVWU\
FRUSRUDWLRQZDVVSLOWLQWRWZRDXWRQRPRXVRUJDQL]DWLRQVQRZNQRZQDVWKH&KLQD
1RUWK /RFRPRWLYH DQG 5ROOLQJ 6WRFN &RUS /WG &15  DQG WKH &KLQD 6RXWK
/RFRPRWLYHDQG5ROOLQJ6WRFN&RUS/WG &65 7KHUHIRUPVXQGHUWDNHQVLQFH
KDYHLQFOXGHGWKHVSOLWWLQJRIWKHIUHLJKWEXVLQHVVSDVVHQJHUEXVLQHVVDQGQHWZRUN
PDQDJHPHQW LQWR LQGHSHQGHQW GLYLVLRQV  $ QXPEHU RI SDVVHQJHU DQG IUHLJKW
WUDQVSRUWFRPSDQLHVKDYHEHHQFUHDWHGLQFOXGLQJWKUHHVSHFLDOLVWIUHLJKWFRPSDQLHV
GHDOLQJUHVSHFWLYHO\ZLWKFRQWDLQHUH[SUHVVFDUJRDQGVSHFLDOFDUJR

x
6LQFHVPDQ\UDLOZD\VUHIRUPVKDYHEHHQLQLWLDWHG7KH0LQLVWU\RI5DLOZD\V
KDVRUJDQLVHGWKUHHODUJHVFDOHFDPSDLJQVWRLQFUHDVHWUDLQVSHHGVRQWUXQNUDLOZD\
OLQHVLQDQGDQG2FWREHUUHVSHFWLYHO\0XFKKDVEHHQGRQHWR
LPSURYH VHUYLFH VWUHDPOLQH EXVLQHVV RSHUDWLRQ DQG RSWLPLVH WUDLQ GLVSDWFK
WLPHWDEOHV$QHIIRUWIRU0DQDJHULDOGHFHQWUDOLVDWLRQLQ&KLQDKDVEHHQPDGH7KH
LQWURGXFWLRQRI$VVHWV2SHUDWLRQ/LDELOLW\6\VWHPV $2/6 LQZDVDNH\VWHS
LQPDQDJHULDOGHFHQWUDOL]DWLRQE\PDNLQJ5HJLRQDO5DLOZD\$GPLQLVWUDWLRQ 55$ 
292

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

PDQDJHPHQW UHVSRQVLEOH IRU PDQDJLQJ DQG LQFUHDVLQJ WKH YDOXH RI WKH DVVHWV
DVVLJQHGWRWKHP

x

7KH &KLQHVH 5DLOZD\ KDV GRQH DZD\ ZLWK EHORZ FRVW SURYLVLRQ RI SDVVHQJHU
VHUYLFHV ,W KDV VHSDUDWHG QRQFRUH DFWLYLWLHV VXFK DV HQWHUSULVHV GHDOLQJ ZLWK
FRQVWUXFWLRQPDQXIDFWXUHWHOHFRPGHVLJQHGXFDWLRQDQGVRFLDODFWLYLWLHV0DQ\RI
WKHVHHQWHUSULVHVQRZSURYLGHVHUYLFHVWR&KLQD5DLOZD\VRQFRPSHWLWLYHO\WHQGHUHG
EDVLV ,Q WKH DUHD RI UROOLQJ VWRFN WKLV KDV UHVXOWHG LQ UDSLG PRGHUQL]DWLRQ RI
SURGXFWV DV D UHVXOW RI VHYHUDO -9V ZLWK IRUHLJQ ILUPV WKDW EHFDPH SRVVLEOH GXH WR
VHSDUDWLRQRISURGXFWXQLWV


x


x

0DQDJHPHQW ZDV FRQVROLGDWHG DW WKH OHYHO RI WKH  UHJLRQDO DGPLQLVWUDWLRQV DQG
VRPH  VWDII SRVLWLRQV ZHUH UHPRYHG $OO VWDWLRQV DQG GHSRWV QRZ UHSRUW
GLUHFWO\WR55$VDQGWUDLQFRQWUROFHQWUHVZHUHDOVRFRQVROLGDWHGDW55$OHYHO7KLV
FKDQJH EURXJKW WRJHWKHU PDQDJHPHQW UHVSRQVLELOLW\ DQG DFFRXQWDELOLW\ DW WKH
UHJLRQDOOHYHO
&KLQDVUDLOZD\FRQVWUXFWLRQLQGXVWU\ZDVSDUWRI025ZKLFKZDVVHSDUDWHGLQ\HDU
 DV SDUW RI UDLOZD\ UHIRUPV &RQVWUXFWLRQ DFWLYLWLHV ZHUH WUDQVIHUUHG WR WZR
ODUJH KROGLQJ FRPSDQLHV &KLQD 5DLOZD\ &RQVWUXFWLRQ &R &5&&  DQG &KLQD
5DLOZD\(QJLQHHULQJ&RUSRUDWLRQ &5(& (DFKFRQWUROVWRVXEVLGLDULHVWKDW
VSHFLDOLVH LQ SDUWLFXODU DVSHFWV RI UDLOZD\ FRQVWUXFWLRQ,Q &KLQD DGRSWHG WKH
0LG DQG /RQJ7HUP 3ODQ 0/73  ,W FXUUHQWO\ DLPV E\  WR LQFUHDVH WKH WRWDO
UDLO QHWZRUN IURP  WR  URXWHNP ,W LQFOXGHV FRQVWUXFWLRQ RI 
NPRIKLJKVSHHGURXWHVWKUHHQHZUHJLRQDOLQWHUFLW\QHWZRUNVQHZGHGLFDWHGFRDO
OLQHVDQGVXEVWDQWLDOGRXEOHWUDFNLQJDQGHOHFWULILFDWLRQ


x


x


x

,Q  &KLQD DGRSWHG -RLQW 9HQWXUH -9  PRGHO ZKLFK LV IXQGHG  E\ GHEW
IURP ORFDO EDQNV DQG HTXLW\ IURP 025 DQG WKLUG SDUWLHV W\SLFDOO\ SURYLQFHV DQG
SRWHQWLDOFXVWRPHUV 
,Q &KLQD WKH 0LQLVWU\ RI 5DLOZD\V 025  ZDV DEROLVKHG LQ 0DUFK  7KXV
VHSDUDWHG UDLOZD\ SROLF\ DQG UHJXODWLRQ IURP FRPPHUFLDO RSHUDWLRQ 7KH 6WDWH
5DLOZD\ $GPLQLVWUDWLRQ 65$  WR RYHUVHH WKH UDLOZD\ DGPLQLVWUDWLRQ IXQFWLRQV
XQGHU WKH0LQLVWU\RI7UDQVSRUW 027 ZDVHVWDEOLVKHG 0HDQZKLOH D QHZ &KLQD
5DLOZD\ &RUSRUDWLRQ &5&  LV EHLQJ HVWDEOLVKHG WR WDNH RYHU WKH FRPPHUFLDO
IXQFWLRQVSUHYLRXVO\SHUIRUPHGE\WKH025$VDUHVXOW0R5VSODQQLQJDQGSROLF\
PDNLQJIXQFWLRQVKDYHEHHQDVVLJQHGWRWKH0R7&5&LVIXOO\RZQHGE\0LQLVWU\
RI)LQDQFH
7KH QHZ VWDWH UHIRUPV PDLQO\ DLP WR VHSDUDWH JRYHUQPHQW IURP HQWHUSULVH VKLIW
IURPFRQWUROWRUHJXODWLRQDQGVXSHUYLVLRQUHGXFHUHGWDSHDQGERRVWDGPLQLVWUDWLYH
293


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

HIILFLHQF\ VWUHQJWKHQ VXSHUYLVLRQ RI UDLO WUDQVSRUW VDIHW\ DQG WDFNOH UDPSDQW
FRUUXSWLRQ

BBBBBBBBB



5XVVLD

x
7KH 5XVVLDQ SDVVHQJHU UDLOZD\ VHFWRU KDV H[SHULHQFHG FUXFLDO UHIRUPV VLQFH 
ZKLFK WUDQVIRUPHG WKH YHUWLFDOO\ DQG KRUL]RQWDOO\ LQWHJUDWHG VWUXFWXUH WR
FRPPHUFLDO FRUSRUDWL]HG VWUXFWXUH IRFXVHG RQ VSHFLILF EXVLQHVV DFWLYLWLHV DQG
SULYDWHVHFWRUSDUWLFLSDWLRQLQWUDLQRSHUDWLRQV

x
7KH 3UH  UHIRUP SHULRG SULPDULO\ ORRNHG DW HVWDEOLVKLQJ OHJDO EDVLV IRU
UHIRUPVWUDQVIHURIVRFLDOVHUYLFHVWRDSSURSULDWHPLQLVWULHVDQGHQFRXUDJHGSULYDWH
VHFWRU SDUWLFLSDWLRQ LQ VXSSO\ LQGXVWU\ ,Q  WKH )HGHUDO 5DLOZD\ /DZ ZDV
UDWLILHGZKLFKPHDQWQRQWUDQVSRUWUHODWHGIDFLOLWLHVZLOOEHSULYDWLVHGWKHRSHUDWLQJ
UDLOZD\ ZDV QRW OLDEOH WR GHQDWLRQDOL]DWLRQ 6RPH DQFLOODU\ HQWHUSULVHV OLNH
HTXLSPHQWVXSSO\ZRUNVDQGWUDLQDQGVWDWLRQFDWHULQJVHUYLFHVZHUHSULYDWL]HG

x
,Q WKH)HGHUDO/DZRQ5DLOZD\7UDQVSRUWLQWKH5XVVLDQ)HGHUDWLRQFDPH
LQWR HIIHFW 7KLV ODZ VHSDUDWHG WKH 0LQLVWU\ RI 5DLOZD\V LQWR WKH )HGHUDO 5DLOZD\
7UDQVSRUW$JHQF\ )57$ DQG5XVVLDQ5DLOZD\V 5=K' 7KH)57$LVD0LQLVWU\
RI 7UDQVSRUW DJHQF\ WKDW UHJXODWHV UDLO WUDQVSRUW DQG 5=K' LV D VWDWH RZQHG
FRPSDQ\ LQ FKDUJH RI UDLOZD\ LQIUDVWUXFWXUH DQG WUDLQ RSHUDWLRQV IRU IUHLJKW DQG
SDVVHQJHUV


x


x

7KH  )HGHUDO ODZ FUHDWHG D OHJDO EDVLV IRU UDLOZD\ RSHUDWRUV PDQDJHUV RI
ZDJRQV DQGUDLOZD\FDUULHUV PDQDJHUVRIZDJRQVDQGORFRPRWLYHV DQGUHTXLUHG
5=K'WRSURYLGHRSHQDFFHVVWRUDLOZD\LQIUDVWUXFWXUHIRUFDUULHUVDQGRSHUDWRUV$V
WKH VHUYLFHV JRW VHSDUDWHG 5=K' WDULIIV VHSDUDWHG LQIUDVWUXFWXUH FKDUJHV IURP
ZDJRQ DQG ORFRPRWLYH FKDUJHV 7KH  )HGHUDO &KDUWHU RI 5DLOZD\ 7UDQVSRUW
VSHFLILHG EXVLQHVV PRGHOV DQG OHJDO UHVSRQVLELOLWLHV IRU UDLO LQIUDVWUXFWXUH VHUYLFH
SURYLGHUV
8QGHU WKH QHZ OHJDO VWUXFWXUH LQGHSHQGHQW FDUJR FRPSDQLHV FRXOG PDQDJH WKHLU
RZQ FDUJR +RZHYHU 5=K' UHPDLQHG WKH VROH FDUULHU  5DLO RSHUDWRUV DQG
UROOLQJ VWRFN OHDVLQJ FRPSDQLHV HPHUJHG DV SULYDWH EXVLQHVVHV UDLO RSHUDWRUV
IXQFWLRQHGDVIUHLJKWIRUZDUGHUVWKDWHLWKHURZQHGRUUHQWHGZDJRQVDQGKDQGOHGDOO
FXVWRPHU UDLO ORJLVWLFV DQG UROOLQJ VWRFN OHDVLQJ FRPSDQLHV SXUFKDVHG DQG OHDVHG
ZDJRQV7KH5=K'PDGHVHSDUDWHGPDQDJHPHQWIXQFWLRQVIURPDFFRXQWLQJLQHDFK
EXVLQHVVOLQHZLWKLQ5=K'WKXVFUHDWLQJWUDQVSDUHQWRSHUDWLRQVLQHDFKGLYLVLRQ
294


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

x


x


x


x


x

x

,Q  WKH ODZ IXUWKHU HQDEOHG WKH HVWDEOLVKPHQW RI 5=K' DV D MRLQW VWRFN
KROGLQJ FRPSDQ\ DQG VHSDUDWHG PDQ\ LQVWLWXWLRQDO DFWLYLWLHV 5=K' FUHDWHG 
VXEVLGLDU\ FRPSDQLHV VXFK DV -6& 7UDQV&RQWDLQHU 5DLO7UDQ$XWR 5DLO 3DVVHQJHU
'LUHFWRUDWH5XVVLDQ7URLND7UDQV*URXSDQG5HIVHUYLV
6LQFH  UHIRUPV KDYH LQFOXGHG SDVVHQJHU WUDQVSRUWDWLRQ 7KH 5DLO 3DVVHQJHU
'LUHFWRUDWHZDVIRUPHG WRIRFXVRQPDQDJLQJORQJGLVWDQFHSDVVHQJHUVHUYLFHVDV
D EXVLQHVV HQWLW\ 6XEVLGLDULHV MRLQWO\ RZQHG E\ 5=K' DQG ORFDO JRYHUQPHQWV DUH
EHLQJ IRUPHG IRU ORFDO SDVVHQJHU VHUYLFH ZKLFK DOORZV 5=K' DFFHVV WR ORFDO
JRYHUQPHQWILQDQFLDOVXSSRUWIRUORVVPDNLQJVXEXUEDQSDVVHQJHUVHUYLFHV3ULYDWH
FRPSDQLHVKDYHHPHUJHGWRRIIHUVSHFLDOL]HGSDVVHQJHUVHUYLFHVPRVWO\RQWKH6W
3HWHUVEXUJ0RVFRZ  OLQH 7KH FRPSDQLHV RZQ DQG RSHUDWH SDVVHQJHU FRDFKHV VHW
SULFHVVHOOWLFNHWVDQGSURYLGHRQERDUGDQGRQVWDWLRQVWDIILQJ5=K'ORFRPRWLYHV
DQGGULYHUVKDXOWKHVHFRDFKHV&-6&7&*UDQG6HUYLFH([SUHVVDQG//&7YHUVNR\
([SUHVVDUHWKHPRVWSURPLQHQWSULYDWHFRPSDQLHV
%HWZHHQ  WKH UHIRUPV IRFXVHG RQ GHYHORSLQJ FRPSHWLWLRQ DQG LQFUHDVH
SULYDWH VHFWRU SDUWLFLSDWLRQ  5=K' IRUPHG )LUVW )UHLJKW &RPSDQ\ ))&  DQG
FDSLWDOL]HG LW ZLWK  ZDJRQV DQG IRUPHG 6HFRQG )UHLJKW &RPSDQ\ 6)& 
FDSLWDOL]HGZLWKZDJRQV%RWKFRPSDQLHVLQWHQGWRVHOOVKDUHVWRWKHSXEOLF
ERWK IDFH FRPSHWLWLRQ IURP LQGHSHQGHQW RSHUDWRUV VXFK DV *OREDO7UDQV DQG
RSHUDWLQJ FRPSDQLHV VHW XS E\ PDMRU QDWXUDO UHVRXUFHV FRPSDQLHV VXFK DV
*D]SURWUDQV %\ HQG LQGHSHQGHQW SULYDWH RZQHUV KDG  SHUFHQW RI WKH
5XVVLDQUDLOZD\IOHHW
6LQFHWKH5=K'WUDQVIHUUHGVWDIIDQGDVVHWVWRWKHQHZO\IRUPHG)HGHUDO
3DVVHQJHU&RPSDQ\ZKLFKLVUHVSRQVLEOHIRUORQJGLVWDQFHUDLOSDVVHQJHU
BBBBBBBBBB

8QLWHG.LQJGRP
,Q  XQGHU WKH 7UDQVSRUW $FW WKH %ULWLVK 5DLOZD\V ZDV IRUPHG WKURXJK
QDWLRQDOL]DWLRQRIIRXUELJ%ULWLVKUDLOZD\VFRPSDQLHV7KHSHULRGRIVNQRZQ
DVHUDRIPRGHUQL]DWLRQDQGUDWLRQDOL]DWLRQRI%ULWLVKUDLOZD\VWRRNRIIWRHOLPLQDWH
ILQDQFLDO GHILFLW (OHFWULILFDWLRQ RI PDQ\ OLQHV GLHVHOL]DWLRQ WR UHSODFH VWHDP
ORFRPRWLYHV UHVLJQDOOLQJ DQG WUDFN UHQHZDOV ZDV LQLWLDWHG 7KH V SHULRG LV
NQRZQ DV HUD RI UDWLRQDOL]DWLRQ WKH %HHFKLQJV UHSRUW SXW IRUWK WKH SODQ IRU
UHVKDSLQJ WKH UDLOZD\V WR UHIOHFW WKH GHFOLQLQJ XVH RI PDQ\ OLQHV VWDWLRQV DQG
IUHLJKWIDFLOLWLHVDQGDOVROHGWRDFORVXUHDQGVKULQNDJHRIUDLOZD\V
7KH%ULWDLQVUDLOZD\VKDYHEHHQRSHUDWHGDVDVLQJOHYHUWLFDOO\LQWHJUDWHGEXVLQHVV
LQFOXGLQJ WUDFN PDLQWHQDQFH DV ZHOO DV WUDLQ RSHUDWLRQV SDVVHQJHU DQG IUHLJKW
295


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

VHUYLFHV  7KH SDVVHQJHU LQIUDVWUXFWXUH WKH EXON RI WKH UDLOZD\ QHWZRUN  ZDV
DVVLJQHG WR WKH SDVVHQJHU EXVLQHVV ZKLFK ZDV LWV SULQFLSDO XVHU ZKLOH IUHLJKW
VSHFLILF LQIUDVWUXFWXUH ZDV WKH UHVSRQVLELOLW\ RI 7UDLQORDG )UHLJKW )UHLJKWOLQHU
VHUYLFHVRSHUDWHG PDLQO\RYHUSDVVHQJHUOLQHV7KHERDUGDOVRRSHUDWHGWZRSDUFHO
EXVLQHVVHV

x








x


x


x

7KH 3ULYDWL]DWLRQ RI WKH UDLOZD\V ZDV UROOHG RXW ZLWK WKH 5DLOZD\ $FW RI 
ZKLFKHQDEOHGEURDGUHIRUPV
+RUL]RQWDOVHSDUDWLRQWKHUDLOZD\VZDVVHSDUDWHGLQWRWUDLQRSHUDWLRQXQLWZKLFK
ZDVFDOOHGDVWUDLQRSHUDWLQJFRPSDQLHV 72& DQGZHUHSULYDWLVHGYLDDIUDQFKLVLQJ
SURFHVVFRQGXFWHGE\WKHRIILFHRI3DVVHQJHU5DLO)UDQFKLVLQJ 235) %\IDUWKH
PDMRULW\ RI VHUYLFHV DUH IUDQFKLVHV 7KH ULJKWV DQG REOLJDWLRQV DUH VSHFLILHG LQ D
)UDQFKLVH$JUHHPHQWEHWZHHQWKHIUDQFKLVLQJDXWKRULW\ LQSUDFWLFHWKH'HSDUWPHQW
IRU7UDQVSRUW DQGWKH72&
9HUWLFDO VHSDUDWLRQ EHWZHHQ WKH RZQHUVKLS RI LQIUDVWUXFWXUH DQG RI RSHUDWLRQV
5DLOWUDFN FRPSDQ\WRRN RYHU RZQHUVKLS RI DOO WUDFN VLJQDOOLQJ DQG VWDWLRQV $OO
WKRXJKLQWKH5DLOWUDFNZDVUHSODFHGE\1HWZRUNUDLO
7KH UDLO UHJXODWRU ZDV DSSRLQWHG ZLWK SRZHUV WR JUDQW RSHUDWLQJ OLFHQVHV DQG WR
HQIRUFH FRPSOLDQFH ZLWK WKRVH OLFHQVHV DQG DXWKRULW\ WR UHJXODWH DFFHVV WR WUDFN
VWDWLRQVDQGGHSRW
5LJKWV RI DFFHVV ZHUH PDGH DYDLODEOH WR SULYDWH IUHLJKW RSHUDWRUV ZLWKRXW D
IUDQFKLVH
$GGLWLRQDOFUHDWLRQDQGSULYDWLVDWLRQRIRYHUDQFLOODU\EXVLQHVVHV

7KUHHUROOLQJVWRFNOHDVLQJFRPSDQLHV526&2VDQGVL[IUHLJKWRSHUDWLQJFRPSDQLHV
)2&V ZHUHFUHDWHG2WKHUFRPSDQLHVZHUHFUHDWHGWRFDUU\RXWVSHFLILFIXQFWLRQV
7KH (XURSHDQ SDVVHQJHU VHUYLFH WKH (XURVWDU ,QWHUQDWLRQDO IRUPHG LQ  DV WKH
GLYLVLRQ RI %ULWLVK 5DLOZD\V LWV RZQHUVKLS ZDV WUDQVIHUUHG WR /RQGRQ DQG
&RQWLQHQWDO5DLOZD\VLQ,WZDVUHQDPHGDV(XURVWDU8.OLPLWHG
:LWK WKH 7UDQVSRUW $FW  WKH 'LUHFWRU RI 3DVVHQJHU 5DLO )UDQFKLVLQJDQG
WKH%ULWLVK 5DLOZD\V %RDUGZHUH DEROLVKHG DQG LQVWHDG WKH 6WUDWHJLF 5DLOZD\
$XWKRULW\ 65$  ZDV HVWDEOLVKHG ,Q DGGLWLRQ LQ  5DLOWUDFN ZDV UHSODFHG E\
1HWZRUNUDLO 1HWZRUN 5DLO LV QRZ UHVSRQVLEOH IRU WKH RSHUDWLRQ PDLQWHQDQFH DQG
LPSURYHPHQWRIUDLOZD\LQIUDVWUXFWXUH LHWKHWUDFNVLJQDOVEULGJHVDQGVWDWLRQV 
+RZHYHU WKH 5DLOZD\ $FW  D  GLVVROYHG 65$ DQG E  VRPH RI LWV IXQFWLRQV
VXFKDV)UDQFKLVH ZHUHWUDQVIHUUHGWR'HSDUWPHQWIRU7UDQVSRUWDQGYHVWLQJRWKHUV
LQ1HWZRUN5DLOWKHQDWLRQDOUDLOLQIUDVWUXFWXUHFRPSDQ\ F UHVSRQVLELOLW\IRUUDLO
VDIHW\ ZDV WR PRYH IURP WKH +HDOWK  6DIHW\ ([HFXWLYH WR WKH 2IILFH RI 5DLO
5HJXODWLRQWKHLQGXVWU\VUHJXODWRU\ERG\
BBBBBBBBB
296


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

*HUPDQ\

x ,Q  WKH *HUPDQ FRQVWLWXWLRQ VWDWHG WKDW UDLOZD\V KDG WR EH SDUW RI WKH IHGHUDO
DGPLQLVWUDWLRQ ZKLFK PHDQV LW GRHVQW KDYH DQ\ OHJDO EDVLV 7KH 'HXWVFKH
%XQGHVEDKQ '% *HUPDQ)HGHUDO5DLOZD\ZDVVWDWHRZQHGDQGKLJKO\FHQWUDOL]HG
JRYHUQDQFH VWUXFWXUH 7KH VWDWHV FRXOG H[HUFLVH FRQWUROOLQJ IXQFWLRQV LQ DQ
DGPLQLVWUDWLYHERDUG7KH'%FRXOGQRWEHSUHYHQWHGIURPORVLQJPDUNHWVKDUHVDQG
IURP ILQDQFLDO GHFOLQH 6LQFH WKH PLGGOH RI WKH V 'HXWVFKH %XQGHVEDKQ ORVW D
VXEVWDQWLDO SDUW RI LWV PDUNHW VKDUH IURP  WR  LW GHFUHDVHG IURP   LQ
SDVVHQJHUWUDQVSRUWWRDQGIURPLQIUHLJKWWUDQVSRUWWR

x
,Q  WKH *HUPDQ *RYHUQPHQW LQLWLDWHG 5HJLHUXQJVNRPLVVLRQ %DKQ 5HJ%  WR
SXUVXH UHIRUPV IRU *HUPDQ 5DLOZD\V :LWK WKH *HUPDQ UHXQLILFDWLRQ WKH
*RYHUQPHQW ZDV XQGHU SUHVVXUH WR UHIRUP '% ,Q  WKH 5HJ%V VXJJHVWLRQV
ZHUH GUDIWHG DV ODZVIRU ZKLFKWKH *HUPDQ FRQVWLWXWLRQ KDGWR EH FKDQJHG DIWHU D
WHGLRXV QHJRWLDWLRQ SURFHVV EHWZHHQ WKH IHGHUDO DQG WKH VWDWHV DQG EHWZHHQ DOO
SROLWLFDO SDUWLHV DQG WKHLU VXSSRUWHUV 7KH VWDWHV GHPDQGHG D FRPSHQVDWLRQ IRU
JLYLQJ XS WKHLU LQIOXHQFH RQ WKH '% 6XEVHTXHQWO\ WKH VWDWHV UHFHLYHG PDVVLYH
WUDQVIHUV WR ILQDQFH SXEOLF WUDQVSRUW $GGLWLRQDOO\ WKH VWDWHV HQIRUFHG WKH
FRGLILFDWLRQ RI SXEOLF RZQHUVKLS RI WKH UDLO LQIUDVWUXFWXUH DW OHDVW    LQ WKH
FRQVWLWXWLRQ

x
7KH(LVHQEDKQQHXRUGQXQJVJHVHW] ODZRQWKHUHVWUXFWXULQJRIWKHUDLOZD\V 
ZDV HQDFWHG DW WKH HQG RI  ,W FRQWDLQV L  WKH $OOJHPHLQH (LVHQEDKQJHVHW]
JHQHUDO UDLOZD\ ODZ  ZKLFK ZDV VXEVHTXHQWO\ FKDQJHG DQG DPHQGHG DQG LL  WKH
'HXWVFKH%DKQ*UQGXQJVJHVHW] 'HXWVFKH%DKQIRXQGDWLRQODZ 7KHIHGHUDOUDLO
QHWZRUN H[WHQVLRQ ODZ %XQGHVVFKLHQHQZHJHDXVEDXJHVHW]  %6FKZ$*  ZDV
HQDFWHGLQ,WVWLSXODWHVWKHUHVSRQVLELOLW\RIWKHSXEOLFKDQGIRUFRQVWUXFWLRQ
XSJUDGLQJDQGUHSODFHPHQWLQYHVWPHQWVRIWKHUDLOQHWZRUN

x
'HXWVFKH%XQGHVEDKQDQG'HXWVFKH5HLFKVEDKQPHUJHGDQGZHUHWUDQVIRUPHGLQWR
'HXWVFKH %DKQ$* '%$* DSXEOLF OLPLWHGFRPSDQ\LQSXEOLFRZQHUVKLS7KH
IHGHUDO VWDWH ZDV VWLOO WKH RZQHU WKH '* %DKQ ZRXOG EH OHVV GHSHQGHQW RQ WKH
JRYHUQPHQW EHFDXVH RI WKH QHZ PDQDJHPHQW FRQVLVWLQJ RI D PDQDJHPHQW ERDUG
VXSHUYLVRU\ERDUGDQGVKDUHKROGHUV

7KHUHIRUPVWLSXODWHGDQHQWHUSULVHUHVWUXFWXULQJLH
  '% $* ZDV VXEGLYLGHG LQWR IRXU GLYLVLRQV /RFDO DQG UHJLRQDO SDVVHQJHU
WUDQVSRUW/RQJGLVWDQFHSDVVHQJHUWUDQVSRUW)UHLJKWWUDQVSRUWDQG,QIUDVWUXFWXUH
  ,QWKHIRXUGLYLVLRQVZHUHWXUQHGLQWRILYHFRPSDQLHVXQGHU'%$*/RFDO
DQG UHJLRQDO SDVVHQJHU WUDQVSRUW '% 5HJLR $* /RQJ GLVWDQFH SDVVHQJHU
WUDQVSRUW '%5HLVHXQG7RXULVWLN$*)UHLJKWWUDQVSRUW '%&DUJR$*5DLO
QHWZRUN '%1HW]$*)RUSDVVHQJHUWUDLQVWDWLRQV'%6WDWLRQDQG6HUYLFH$*
297

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

ZDVQHZO\FUHDWHGDGGLWLRQDOO\WRWKHOHJDOUHTXLUHPHQWV$OOUROOLQJVWRFNWUDFN
SHUVRQQHODQGUHDODVVHWVZHUHGLYLGHGDPRQJWKHKROGLQJFRPSDQ\

x

x


x

,Q'HFHPEHU '% ZDV UHRUJDQLVHG ,WEURXJKW DOO SDVVHQJHUVHUYLFHV LQWR


LWV'% %DKQDUP ORJLVWLFV XQGHU'% 6FKHQNHUDQG LQIUDVWUXFWXUH DQG
RSHUDWLRQV XQGHU'% 1HW]H 7KH '% LV RZQHG E\ WKH )HGHUDO 5HSXEOLF %\
WKH&RQVWLWXWLRQWKH)HGHUDO5HSXEOLFLVUHTXLUHGWRUHWDLQ GLUHFWO\RULQGLUHFWO\ D
PDMRULW\RIWKHLQIUDVWUXFWXUH WKHSUHVHQW'%1HW]H VWRFNV
7KH '% JURXS 'HXWVFKH %DKQ $*  LV GLYLGHG LQWR ILYH PDLQ RSHUDWLRQV
JURXSV$UULYD'% %DKQ'% 'LHQVWOHLVWXQJHQ'% 1HW]H DQG'% 6FKHQNHU
7KHVH VXEVLGLDULHV DUH FRPSDQLHV LQ WKHLU RZQ ULJKW DOWKRXJK PRVW RI WKHP DUH
RZQHGE\'%$*
*HUPDQ\V  6WDWH RZQHG SDVVHQJHU WUDLQV '% /RQJGLVWDQFH DQG '% 5HJLRQDO
ERWK EHQHILW IURP JRYHUQPHQW ILQDQFLDO VXSSRUW '% DQG LWV VXEVLGLDU\ SDVVHQJHU
DQG LQIUDVWUXFWXUH FRPSDQLHV DUH UHVSRQVLEOH IRU ILQDQFLQJ WKHLU RSHUDWLRQV
PDQDJHPHQWDQGPDLQWHQDQFHH[SHQVHVHQWLUHO\IURPUHYHQXHV
BBBBBBBBB


6RXWK.RUHD

x
,Q  5DLOURDG $GPLQLVWUDWLRQ %RDUG RI WKH 0LQLVWU\ RI 7UDQVSRUWDWLRQ ZDV
UHSODFHG E\ .RUHDQ 1DWLRQDO 5DLO URDG .15  LQ 6RXWK .RUHD 7KH .15 WKH
RSHUDWRURIWKHUDLOZD\VZDVUHVSRQVLEOHIRUWKHLQIUDVWUXFWXUHDQGSDVVHQJHUIUHLJKW
RSHUDWLRQ $V D UHVXOW WKHUH ZDV QR FOHDU GLYLVLRQ RI UHVSRQVLELOLW\ EHWZHHQ WKH
0LQLVWU\ RI &RQVWUXFWLRQ DQG 7UDQVSRUWDWLRQ 02&7  DQG WKH .15 7KH UDLOZD\
V\VWHPKDGEHHQORVLQJPDUNHWVKDUHLQFRPSHWLWLRQZLWKDXWRPRELOHVDQGDLUOLQHV
DQGWKHUHWXUQRQLQYHVWPHQWLQWKHUDLOZD\LQGXVWU\KDVEHHQGHFOLQLQJ7KH.15
ZDVVXIIHULQJDFKURQLFGHILFLWDQGLVLQFXUULQJDQHQRUPRXVGHEW

x
,Q  .15 ZDV VSOLW LQWR .RUHD 5DLOURDG &RUSRUDWLRQ DQG .RUHD 5DLO
1HWZRUN $XWKRULW\ ZKLFK VXFFHHGHG PDLQWDLQLQJ WUDFNV7KH .RUHD 5DLOURDG
&RUSRUDWLRQSURPRWHG DV.RUDLO ,WLV WKH QDWLRQDO UDLOURDG RSHUDWRU LQ6RXWK
.RUHD.RUDLORSHUDWHVPHWURVSDVVHQJHUDQGIUHLJKWWUDLQVWKURXJKRXW6RXWK.RUHD
%HIRUH WKH  UHIRUPV WKH QDWLRQZLGH UDLOZD\ QHWZRUN KDG EHHQ RSHUDWHG E\
VWDWHRZQHG UDLOZD\V LQFOXGLQJ WKH LQIUDVWUXFWXUH PDQDJHPHQW FRPSRQHQW
5HIRUPV LQ  WUDQVIRUPHG WKH UDLOZD\V LQWR D SXEOLF FRUSRUDWLRQ DQG WKH
LQIUDVWUXFWXUHZDVWUDQVIHUUHGWRWKH.RUHD5DLO1HWZRUN$XWKRULW\ .51$ 

x
.RUHDQUDLOUHIRUPVKDYHEHHQH[HFXWHGVLQFHDQGWKH.RUHDQ&RQJUHVVSDVVHG
WKUHH UDLO UHIRUP $FWV 7KH %DVLF $FW RI 5DLO ,QGXVWU\ 'HYHORSPHQW 7KH 3XEOLF
(QWLW\$FWRI.RUHDQ5DLO)DFLOLW\DQG7KH3XEOLF&RUSRUDWLRQ$FWRI.RUHDQ5DLO
298

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

2SHUDWLRQLQ6LQFHWKHJRYHUQPHQWFKRVHSULYDWL]DWLRQDVDZD\
WR UHIRUP WKH PRQRSRO\ .RUHDQ 1DWLRQDO 5DLOURDG .15  +RZHYHU WKH QHZ
*RYHUQPHQWLQLQVWHDGFKDQJHGWKHUDLOUHIRUPSROLF\IURPSULYDWL]DWLRQWR
DSXEOLFFRUSRUDWLRQV\VWHP,WVDLPZDVWRWUDQVIRUPWKHJRYHUQPHQW PRQRSRO\
V\VWHPWRDSXEOLFFRUSRUDWLRQV\VWHPLQZKLFKWKHJRYHUQPHQWRZQHGUDLOIDFLOLWLHV
DQGDSXEOLFFRUSRUDWLRQQHZO\FUHDWHGRSHUDWHGWKHP

x


x

,Q-DQXDU\WKHLQGXVWU\XQGHUZHQWDVWUXFWXUDOUHIRUP8QGHUWKH.RUDLO
$FW RI  .RUDLO ZDV HVWDEOLVKHG DV D SXEOLF FRUSRUDWLRQ RZQHG E\ WKH
JRYHUQPHQWDQG PDQGDWHGE\02&7WRRSHUDWHERWKFRQYHQWLRQDODQGKLJKVSHHG
UDLOZD\V $W WKH VDPH WLPH WKH .RUHD 5DLO 1HWZRUN $XWKRULW\ .51$  ZDV
HVWDEOLVKHG WR FRQVWUXFW UDLOZD\ IDFLOLWLHV .RUHD LPSOHPHQWHG UDLOZD\ UHIRUP LQ
WKURXJKYHUWLFDOVHSDUDWLRQ$WSUHVHQWDVWDWHRZQHGUDLOZD\.RUDLORSHUDWHV
WUDLQVE\DFFHVVLQJWKHQDWLRQZLGHUDLOZD\QHWZRUNRZQHGE\.RUHD5DLO1HWZRUN
$XWKRULW\ .51$ 
.RUDLOZDVHVWDEOLVKHGXQGHUWKH)UDPHZRUN$FWRQ5DLO,QGXVWU\'HYHORSPHQWDQG
.RUDLO$FW,WLVJRYHUQHGE\WKH5DLOURDG%XVLQHVV$FW5DLOURDG6DIHW\$FWDQGWKH
5DLOURDG &RQVWUXFWLRQ $FW 8QGHU WKHVH $FWV .RUDLO FDUULHV RXW QDWLRQDO UDLOURDG
SROLFLHV DQG LV UHVSRQVLEOH IRU HVWDEOLVKLQJ D VXVWDLQDEOH DQG HIILFLHQW UDLOURDG
RSHUDWLRQ V\VWHP XQGHU GLUHFW VXSHUYLVLRQ RI WKH 02&7 7KH )UDPHZRUN $FW RQ
5DLO,QGXVWU\'HYHORSPHQWFDOOVIRUFRRSHUDWLRQEHWZHHQ.RUDLODQG.51$DVERWK
LV LQWHUGHSHQGHQW DQG FRPSOHPHQWDU\ WR HDFK RWKHU $FFRUGLQJ WR WKH .RUHD
5DLOURDG &RUSRUDWLRQ $FW WKH JRYHUQPHQW RIIHUV ILQDQFLDO VXSSRUW DQG SURYLGHV
JXLGDQFH RQ SROLFLHV DQG RSHUDWLRQV .RUDLO RSHUDWHV DOO WKH ORQJ GLVWDQFH OLQHV LQ
6RXWK.RUHDDVZHOODVORFDOOLQHV
BBBBBBBBBB

8QLWHG6WDWHVRI$PHULFD


x

5DLO WUDQVSRUWDWLRQ LQ WKH 8QLWHG 6WDWHVWRGD\ FRQVLVWV SULPDULO\


RIIUHLJKWVKLSPHQWV 3DVVHQJHU VHUYLFH RQFH D ODUJH DQG YLWDO SDUW RI WKH QDWLRQ
V
SDVVHQJHU WUDQVSRUWDWLRQ QHWZRUN QRZ SOD\V D OLPLWHG UROH )HGHUDO UHJXODWLRQ RI
UDLOURDGV LV PDLQO\ WKURXJK WKH8QLWHG 6WDWHV 'HSDUWPHQW RI 7UDQVSRUWDWLRQ
HVSHFLDOO\ WKH)HGHUDO 5DLOURDG $GPLQLVWUDWLRQZKLFK UHJXODWHV VDIHW\ DQG WKH
6XUIDFH 7UDQVSRUWDWLRQ %RDUGZKLFK UHJXODWHV UDWHV VHUYLFH WKH FRQVWUXFWLRQ
DFTXLVLWLRQDQGDEDQGRQPHQWRIUDLOOLQHVFDUULHUPHUJHUVDQGLQWHUFKDQJHRIWUDIILF
DPRQJ FDUULHUV 5DLOURDGV DUH DOVR UHJXODWHG E\ WKH LQGLYLGXDO VWDWHV 7KHUH DUH
DERXW UDLOURDGVZKLFK RSHUDWHFRPPRQ FDUULHUIUHLJKW VHUYLFHLQ WKH8QLWHG
6WDWHV

x

86UDLOURDGVDUHVHSDUDWHGLQWRWKUHHFODVVHVEDVHGRQDQQXDOUHYHQXHV
299


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

D 
E 
F 

&ODVV,IRUIUHLJKWUDLOURDGVZLWKDQQXDORSHUDWLQJUHYHQXHVDERYH
PLOOLRQ GROODUV 
&ODVV,,IRUIUHLJKWUDLOURDGVZLWKUHYHQXHVEHWZHHQPLOOLRQDQG
PLOOLRQLQGROODUV
&ODVV,,,IRUDOORWKHUIUHLJKWUHYHQXHV

x

8QGHU WKH5DLO 3DVVHQJHU 6HUYLFH $FWRI  &RQJUHVV FUHDWHG WKH1DWLRQDO


5DLOURDG 3DVVHQJHU &RUSRUDWLRQ 153& WRVXEVLGL]H DQG RYHUVHHWKH RSHUDWLRQ
RI LQWHUFLW\ SDVVHQJHU WUDLQV ,Q  WKH$PWUDN 1DWLRQDO 5DLOURDG 3DVVHQJHU
&RUSRUDWLRQ  IHGHUDO RUJDQL]DWLRQ EHJDQ LWV RSHUDWLRQ DV D SXEOLFO\ IXQGHG
UDLOURDG VHUYLFH RSHUDWHG DQG PDQDJHG DV D IRUSURILW FRUSRUDWLRQ WR
SURYLGHLQWHUFLW\SDVVHQJHUWUDLQVHUYLFHLQWKH8QLWHG6WDWHV$PWUDNLVRUJDQLVHGDV
D FRUSRUDWLRQ EXW LWVERDUG PHPEHUV DUH DSSRLQWHG E\ WKH SUHVLGHQW RI WKH8QLWHG
6WDWHVDQGDOPRVWDOOLWVVWRFNLVRZQHGE\WKHIHGHUDOJRYHUQPHQW

x

7R SUHVHUYH D GHFOLQLQJ IUHLJKW UDLO LQGXVWU\ &RQJUHVV SDVVHG WKH 5HJLRQDO 5DLO
5HRUJDQL]DWLRQ $FW RI  VRPHWLPHV FDOOHG WKH 5 $FW 7KH DFW ZDV DQ
DWWHPSWWRVDYHYLDEOHIUHLJKWRSHUDWLRQVIURPWKHEDQNUXSW3HQQ&HQWUDODQGRWKHU
OLQHV7KH ODZ FUHDWHG WKH&RQVROLGDWHG 5DLO &RUSRUDWLRQ &RQUDLO  D
JRYHUQPHQWRZQHG FRUSRUDWLRQ ZKLFK EHJDQ RSHUDWLRQV LQ  $QRWKHU ODZ
WKH5DLOURDG 5HYLWDOL]DWLRQ DQG 5HJXODWRU\ 5HIRUP $FW RI  WKH 5
$FW  SURYLGHG PRUH VSHFLILFV IRU WKH &RQUDLO DFTXLVLWLRQV DQG VHW WKH VWDJH IRU
PRUH FRPSUHKHQVLYH GHUHJXODWLRQ RI WKH UDLOURDG LQGXVWU\ 3RUWLRQV RI WKH3HQQ
&HQWUDO(ULH/DFNDZDQQD5HDGLQJ5DLOURDG$QQ$UERU5DLOURDG&HQWUDO5DLOURDG
RI 1HZ -HUVH\/HKLJK 9DOOH\ DQG/HKLJK DQG +XGVRQ 5LYHUZHUH PHUJHG LQWR
&RQUDLO

x

7KH&DUWHUDGPLQLVWUDWLRQLQHQDFWHGWKH6WDJJHUV5DLO$FWIROORZLQJWKH
EDQNUXSWF\ RI 3HQ &HQWUDO DQG RWKHU OLQHV 7KH ODZ GHUHJXODWHG WKH UDLO LQGXVWU\
ZKLFK KHOSHG LPPHQVHO\ LQ DOORZLQJ DOO UDLOURDGV WR PRUH HDVLO\ DEDQGRQ
XQSURILWDEOHUDLOOLQHVDQGVHWLWVRZQIUHLJKWUDWH6LQFHWKHQ86IUHLJKWUDLOURDGV
KDYHUHRUJDQL]HGGLVFRQWLQXHGWKHLUOLJKWO\XVHGURXWHVDQGUHWXUQHGWRSURILWDELOLW\
,QWKH&RQUDLO3ULYDWL]DWLRQ$FWRIZDVHQDFWHGDVDODZDQGE\LWV
VWRFN ZDV VROG RXW WR MRLQWO\ RZQHG SULYDWH LQYHVWRUV WKH &6;
7UDQVSRUWDWLRQDQG1RUIRON6RXWKHUQ5DLOZD\

x

,QWKH$PWUDN5HIRUPDQG$FFRXQWDELOLW\$FWRIZDVHQDFWHG7KLV
$FWSURYLGHGWKDW$PWUDN D ZRXOGQRORQJHUEHDJRYHUQPHQWFRUSRUDWLRQRUKROG
D UDLO SDVVHQJHU PRQRSRO\ E  ZRXOG EH DOORZHG WR DGG QHZ URXWHV DQG FORVH
PRQH\ORVLQJ URXWHV F  ZRXOG UHFHLYH DSSUR[LPDWHO\  ELOOLRQ LQ 7D[SD\HU
5HOLHI$FWIXQGVDQG G ZRXOGKDYHWRDFKLHYHRSHUDWLRQDOVHOIVXIILFLHQF\ LHQR
ORQJHUUHFHLYHIHGHUDORSHUDWLQJJUDQWV ILYH\HDUVDIWHUWKHHQDFWPHQWRIWKH$FW


300

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

x

7KH $FW FUHDWHG $PWUDN 5HIRUP &RXQFLO DQ LQGHSHQGHQW RYHUVLJKW


FRPPLVVLRQZDV IRUPHG ZLWK D JRDO WR  D  PDNH UHFRPPHQGDWLRQV WR $PWUDN WR
KHOS LW UHDFK RSHUDWLRQDO VHOIVXIILFLHQF\ E  UHSRUW DQQXDOO\ WR &RQJUHVV RQ
$PWUDNVSHUIRUPDQFHLQVHYHUDODUHDV F LIWKH&RXQFLOZHUHWRILQGWKDW$PWUDN
ZRXOGEHXQDEOHWRDFKLHYHLWVJRDORIRSHUDWLRQDOVHOIVXIILFLHQF\E\'HFHPEHU
WKHQVXEPLWWR&RQJUHVVDSODQIRUDUDWLRQDOL]HGDQGUHVWUXFWXUHGQDWLRQDOUDLO
SDVVHQJHU V\VWHP DQG G  LI VXFK D ILQGLQJ ZHUH PDGH E\ WKH &RXQFLO $PWUDN
ZRXOGVXEPLWDSODQIRU$PWUDNVOLTXLGDWLRQWRWKH&RQJUHVV$IWHUUHSRUWVDQG
VHYHUDO URXQGV RI VXJJHVWLRQV DQG KHDULQJV LQ  WKH $FWLRQ 3ODQ IRU WKH
5HVWUXFWXULQJ DQG 5DWLRQDOL]DWLRQ RI WKH 1DWLRQDO ,QWHUFLW\ 5DLO 3DVVHQJHU
6\VWHPZDVGUDZQ

x

$FFHVVE\SULYDWHFRQWUDFWLVSUHGRPLQDQWIHDWXUHLQWKHIUHLJKWPDUNHWLQWKH86$
$OO WKH &ODVV , UDLOZD\V DQG DURXQG  RI WKH UHVW DUH SULYDWHO\ RZQHG 86 ODZ
GRHV QRW JLYH DQ\ OHJDO ULJKWV RI DFFHVV RI RQH IUHLJKW UDLOZD\ FRPSDQ\ RYHU WKH
WUDFNV RI DQRWKHU IUHLJKW UDLOZD\ FRPSDQ\ %XW XQGHU 86 &RPSHWLWLRQ /DZ
UDLOZD\VKDYHFRPPRQFDUULHUREOLJDWLRQVWIUHLJKWFXVWRPHUV7KH\PXVWSURYLGH
WRFXVWRPHUURXWHVDQGWDULIIVWRPRYHWUDIILFIURPDQ\RULJLQWRDQ\GHVWLQDWLRQRQ
WKHUDLOZD\QHWZRUN$QGLILWQHFHVVDU\IRUPRUHWKDQRQHUDLOZD\WRSDUWLFLSDWHWR
FRPSOHWH WKH WUDIILF PRYHPHQW WKH UDLOZD\ WR PXVW LQWHUFKDQJH KH WUDIILF DQG
HVWDEOLVKWDULIIIRUWKHWRWDOPRYHPHQW$OVRDUDLOZD\FDQFRPSOHWHWKHPRYHPHQW
ZLWK LWV RZQ WUDLQV E\ HQWHULQJ LQWR WUDFN DJUHHPHQW ZLWK RQH RU PRUH RWKHU
UDLOZD\V

301

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

302

303

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

304


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

305







306

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

307

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

308

$QQH[XUH&RPSDUDWLYH,QGLFDWRUV,QGLDDQGWKH8QLWHG6WDWHV




309

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG




310

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

311

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

312

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG




313

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

$QQH[XUH7KH&RPPLWWHHKHOGPHHWLQJVZLWKWKHIROORZLQJ6WDNHKROGHUV:
S.No.
Officers/stakeholders
1.
ShriArunendraKumar,Chairman,RailwayBoard
2.
ShriP.C.Gajbhiye,Secretary,RailwayBoard
3.
ShriP.S.Mishra,ExecutiveDirector/CorporateCoordination

4.
ShriA.MadhuKumarReddy,EDPM/Rly.Board
5.
Smt.AchlaSinha,ED(S&E)/Rly.Board

ShriRakhalDasGupta,President,AllIndiaRailwaymensFederation,AIRF
6.
ShriShivaGopalMishra,Gen.Secretary,AllIndiaRailwaymensFederation
7.
/AIRF

ShriGumanSingh,President,NationalFederationofIndianRailwaymen,NFIR
8.
Dr.M.Raghavaiah,Gen.Secretary/NationalFederationofIndianRailwaymen,
9.

NFIR
10.
ShriDeepakShelly,President,IndianRailwayPromoteeOfficersFederation,

IRPOF
11.
ShriRamanKumarSharma,Secy.Genl,IRPOF
12.
ShriR.K.Bhatnagar,Adv.(Elect.)/RB,President,FederationofRailwayOfficers

Associaiton,FROA
13.
Sh.R.N.Singh,ED/Track(M)VicePresident/FROA
14.
ShriR.R.Prasad,ED/T(MPP),SecretaryGeneral,FROA
15.
ShriA.K.Panda,GM(Mech)/RVNL,Secretary,FROA

ShriAmitabhKant,Secretary,DepartmentofIndustrialPolicyandPromotion
16.
17.
ShriV.K.Agarwal,retiredChairman,RailwayBoard

Date
17.10.14

27.10.14

29.10.14

30.10.14

18.

ShriR.C.Acharya,retiredMemberMechanical,RailwayBoard

19.

ShriK.B.Verma,RetiredRailwayOfficer

20.

ShriYashPalKedia,RetiredRailwayOfficer

21.

ShriDineshTrivedi,MP&Chairman,StandingCommitteeonRailways

22.

VisittoMumbaiandmeetingwithShriHemantKumar,GeneralManager,
WesternRailway,alongwithPHoDsofWesternRailwayinMumbai
(PHoDs:AGM,SDGM,FA&CAO,CSO,CSC,CMD,CPO,CEE,CME,COM,CCM,
CSTE,CPRO)

23.

MeetingwithMrVivekSahaiformerChairmanRailwayBoard




1.11.14

7.11.14

24.

ShriShailendraKumar,DivisionalRailwayManager,WesternRailway,along
withdivisionalofficersofMumbaiDivision,followedbymeetingwith
stakeholderslike,ZRUCC/DRUCC/RailwayUsers,etc.(DivisionalOfficers:
ADRM,Sr.DME,Sr.DEE,Sr.DFM,Sr.DAuO,Sr.DMM,Sr.DCM,Sr.DEN,Sr.
DOM,Sr.DPO,Sr.DSC/RPF,Sr.DSO,Sr.DSTE,CMS)
314


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

S.No.
Officers/stakeholders
25.
VisittoMumbaiandmeetingwithShriSunilKumarSood,GeneralManager,

CentralRailway,alongwithPHoDsofCentralRailwayinMumbai

Date
8.11.14




(PHoDs:AGM,SDGM,FA&CAO,CSO,CSC,CMD,CPO,CEE,CME,COM,CCM,
CSTE,CPRO)

26.

DivisionalRailwayManager,CentralRailway,MumbaialongwithDivisional
OfficersofMumbaiDivisionCentralRailways)
(DivisionalOfficers:ADRM,Sr.DME,Sr.DEE,Sr.DFM,Sr.DMM,Sr.DCM,Sr.
DEN,Sr.DOM,Sr.DPO,Sr.DSC/RPF,Sr.DSO,Sr.DSTE,CMS)

27.




ShriGirishPillai,Adviser(Infra),RailwayBoard,alongwithEDsCommitteeon
FDI.

10.11.14

(ED/Traffic/PPP,ED/Civil(Infra),ED(Finance)/PPP,ED/ME(Projects),
ED/Signal(Development),ED/Elect.Engg.(Development),

28.

RepresentativesofNFIRandAIRF

29.

MrsR.RaviKumar,FinancialCommissioner,Railways.

14.11.14

30.

NITTMAN,anOrganisationforthedifferentlyabled.

31.


VisittoKolkataandmeetingwithShriRadheyShyam,GeneralManager,
SouthEasternRailway,alongwithPHoDsofSouthEasternRailwayinKolkata




16.11.14

(PHoDs:AGM,SDGM,FA&CAO,CSO,CSC,CMD,CPO,CEE,CME,COM,CCM,
CSTE,CPRO)




32.

PresentationbyShriRadheyShyam,lookingafterasGM/MetroRailwayalong
withPHoDsofMetroRailway.

33.


VisittoKolkataandmeetingwithShriR.K.Gupta,GeneralManager,Eastern
Railway,alongwithPhoDsofEasternRailwayinKolkata

17.11.14

(PHoDs:AGM,SDGM,FA&CAO,CSO,CSC,CMD,CPO,CEE,CME,COM,CCM,
CSTE,CPRO)




34.

PresentationbyDivisionalRailwayManagers,HowrahandSealdahDivisions
alongwiththeirdivisionalOfficers
(DivisionalOfficers:ADRM,Sr.DME,Sr.DEE,Sr.DFM,Sr.DMM,Sr.DCM,Sr.
DEN,Sr.DOM,Sr.DPO,Sr.DSC/RPF,Sr.DSO,Sr.DSTE,CMS)

35.

VisittoNewDelhiPRSCentreandmeetingwithChiefCommercial
Manager/NorthernRailway,CCM(PM)NRandGeneralManager
(PRS)/CentreforRailwayInformationSystem

18.11.14

315

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

S.No.
Officers/stakeholders
36.
VisittoDLW,VaranasiandGeneralManager,DieselLocomotiveWorksalong

withHODsinVaranasi

Date
25.11.14

ShopFloorvisitoftheFactory
RepresentativesofUnionofDLWworkers.
37.

CommitteeofEDsonFDI,consistingofEDEE(Dev.),EDME(Proj.),EDF(PPP)
andAM(PU),AME(Proj.)

27.11.14

38.



S.P.Mahi&Team(CEO,I.R.StationsDevelopmentCorporationLtd.

3.12.14

39.


MrsRaviKumar,F.C.,Railways,MrsSarojRajwade,AdditionalMember
(Budget)&MrsDakshitaDas,ExecutiveDirector(Budget)

40.

VisittoDelhiCantt.RailwayStationforcleanlinessdriveunderSwachhBharat 8.12.14
AbhiyanandmeetingwithShriAKSachan,DRMandBranchOfficersofDelhi
Division.





41.

42.

TheCommitteehelddiscussionswithHonbleMR,ShriSureshKPrabhu,in
CommitteeRoomat1430hrs.inCommitteeRoom,RailBhavan
DirectorGeneral/RailwayHealthServices

9.12.14

43.

DirectorGeneral/RailwayProtectionForce

44.



















IndustryRepresentativesCII,FICCI,PHD&ASSOCHAM
CONFEDERATIONOFINDIANINDUSTRY(CII):
1.

ShriTilakrajSeth

ViceChairman,RailTransportation&
EquipmentDivision,CIIandExecutive
VicePresident,Infrastructure&Cities,
SiemensLimited

2.

ShriCPSharma

Chairman&ManagingDirector,
DaulatramEngineeringServicesPvt.Ltd

3.

ShriVishwasMoktali

RegionalDirector(SubSaharanAfrica&
India),EMDLocomotives

4.

ShriNalinJain

President&CEO,GETransportation

5.

ShriBabuKhan

SeniorDirector,CII

6.

ShriTuhinChatterji

Director,CII
316


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG





































FEDERATIONOFINDIANCHAMBERSOFCOMMERCE&INDUSTRY(FICCI):
1.

ShriSanjivRai

2.

ShriManjeetNarwan

3.
4.

ShriSachinBhanushali
ShriSaurabhSood

5.

ShriHarshDhingra

6.

Dr.L.R.Thapar

7.

ShriAbdulSalam

ManagingDirectorandChiefExecutive
Officer,IL&FSRailLimited
VicePresident,TexmacoRail&
EngineeringLimited
President,GatewayRail&FreightLtd.
ManagingDirector&CountryHead,
GATXIndiaPrivateLimited
ChiefCountryRepresentative,
BombardierTransportation
ManagingDirector RailOperations,
HindTerminalsPvt.Ltd.
DeputyDirector, FICCI

PHDCHAMBEROFCOMMERCE&INDUSTRY(PHD):
1.

ShriSandeepAggarwal

Chairman,PHDRailwaysCommittee

2.

ShriYogeshSriastav

Director,PHDChamber

THEASSOCIATEDCHAMBERSOFCOMMERCE&INDUSTRYOFINDIA
(ASSOCHAM):



45.

1.

Dr.A.K.Agarwal

Chairman,ASSOCHAMRailTransport
Committee

2.

ShriAjaySinha

CoChairman,ASSOCHAMRailTransport
Committee

3.

ShriSajalGupta

Sr.Member,ASSOCHAMRailTransport
Committee

4.

ShriAshwaniKumar

Sr.Member,ASSOCHAMRailTransport
Committee

5.

ShriTusharPandey

Sr.Member,ASSOCHAMRailTransport
Committee


ShriSandeepSilas,CCM(Ctg.),NorthernRailway

46.

ShriArvindGupta,AdviserIT(MoR)

47.

Adviser(Staff),ED(T&MPP)&ED(E&R),Rly.Board

10.12.14

48.

VisittoBangaloreMeetingwithMrAggarwalDRM&divisionalOfficersof

18.12.204
317


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

BangaloreDivision(DivisionalOfficers:ADRM,Sr.DME,Sr.DEE,Sr.DFM,Sr.
DMM,Sr.DCM,Sr.DEN,Sr.DOM,Sr.DPO,Sr.DSC/RPF,Sr.DSO,Sr.DSTE,
CMS)
MeetingWithallHoDs(ChiefEngineers,CSTECEEandFA&CAO)of
ConstructionOrganisationBangalore
VisittoBangaloreRailwayStationanfdmeetingwithStationManagersand
supervisors
VisittoRailWheelFactory,YelahankashopFloor
49.

MeetingwiththeIndustryrepresentatives:

23.12.14

ShriKunalBehl,CEO,Snapdeal
ShriSaurabhSood,CMDGATXIndia
Dr.L.R.Thapar,MDRailOperationsHindTerminals
ShriSachinBhanushali,President,GatewayRail&FreightLtd.
ShriAjayS.Mittal,CMDArshiyaLtd.
ShriKKAgarwal,CMD,DarclLogisticsLtd.
ShriRamakrishnaNagabhirava,GM,ContainerRailRoadServicePvt.Ltd.
ShriVivekSharma,COO,AdaniLogisticsLtd.
50.

AudioteleconferencingwithMr.JohnSwift,London,BritainsfirstRail
Regulator

3.1.15

51.

MeetingwithAKKathpalDRMandDivisionalOfficersofAmbalaDivision;

6&7.1.15


AndwithPrivateRailwayTourOperators.
52.

MeetingwithMr.MasafumiShukuri,ChairmanofInternationalHighSpeed
RailAssociation,Japan

3.2.15

53.

MeetinginSEBIwithInstitutionalFinancingInstitutions

10.3.15

54.






55.

CommitteemetDivisionalRailwayManagersofDhanbad,Alipurduar,Ratlam,
Bhavnagar,Bangalore,Adra,Howrah,ThiruvananthapuramandChennai.
DRMPunejoinedthroughvideoconferencing.

7.5.15

SHRIKMCHANDRASEKHARANDSHRIRAJENDRAKASHYAPJOINEDTHROUGH
VIDEOCONFERENCINGFROMTHIRUVANANTHAPURAM.

Prof.D.M.Bhatia,PuneUniversitymadeapresentationthroughvideo
318


5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

conferencingfromPune
56.

CommitteemetrepresentativesofAIRFandNFIR:

14.5.15

ShriShivGopalMisra,AIRFandShriRaghavaiah,NFIR
57.

SubCommittee(ShriRajendraKashyap)andShriChandrasekhar(through
videoconferencingfromThiruvananthapuram)metFROArepresentativeShri
R.N.SinghinCommitteeRoom,RailBhavan

21.5.15

58.

CommitteevisitedDHRandmetvariousstakeholdersincludingState
Governmentofficials.

21.5.15to
25.5.15

ShriRaviInderSingh,PrincipalSecretary,GTA,Darjeeling
ShriAnuragSrivastava,DistrictMagistrate,Darjeeling
ShriAkhileshChaturvedi,SuperintendentofPolice,Darjeeling
ShriSamirDeepBion,Chairman,KurseongMunicipality
ShriAmarRai,Chairman,DarjeelingMunicipality
ShriAjaySingh,ExecutiveEngineer,NHIXPWD,WestBengal
ShriKKGurung,ManagingDirector,HimalayanTravels,Darjeeling
ShriSonamBhutia,ExecutiveDirector,TourismGTA,Darjeeling
ShriVivekVaid,President,DHRSIndiaGroup,CenderellaHotel,Siliguri
ShriRajBasu,Convenor,HeritageConservationConvenor,Heritage
Conservation&RuralTourism&SecretaryGeneral,DHRIndiasupportGroup
ShriDawaLepcha,MemberonDutyonTourismGTA,Darjeeling
ShriSumitPeriwal,Director,ClubsideTours&TravelsPvt.Ltd.,Darjeeling
ShriJeetuGiri,President,AdventureOrg.Kurseong

ShriC.Zangpo,SecretaryTourism,Govt.ofSikkim
ShriBhaduria,SecretaryTransport,Sikkim
AdditionalSecretary&JointSecretary,Transport,Sikkim
President,HotelAssociation,Gangtok
President,Tours&Travels,Gangtok




319

5HSRUWRIWKH&RPPLWWHHIRU0RELOL]DWLRQRI5HVRXUFHVIRU0DMRU5DLOZD\3URMHFWVDQG5HVWUXFWXULQJRI5DLOZD\0LQLVWU\DQG5DLOZD\%RDUG

Vous aimerez peut-être aussi