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Siemens-“Bullet Train”

Team members:• SYED USMAN WAZIR• SYED ALI NAQI• ANILA MUHAMMUD• QURAT-UL-AIN RAUF• ANUM SAFDAR KHAN• SADAF MANSOOR

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ANUM SAFDARINTRODUCTION

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Siemens AG (Berlin and Munich) is a global powerhouse in electronics and electrical engineering, operating in the industry, energy and healthcare sectors.

 The company has around 400,000 employees (in continuing operations) ◦ working to develop and manufacture products,◦ design and install complex systems and projects, ◦ and tailor a wide range of solutions for individual

requirements

INTRODUCTION:

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Our stakeholders – customers, shareholders, employees, suppliers and the societies in which we operate – expect the highest performance and the highest ethical standards. Meeting these requirements is the ultimate determinant of our success.

Our Values and Vision: a guide to our business conduct

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Reaching this goal requires a new balance in which values, business operations and the pursuit of our vision co-exist harmoniously

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Our success depends on the success of our customers.

Innovation is our life blood.

Our employees are the key to our success

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Our ideas, technologies and activities help create a better world.

We generate profitable growth to ensure sustainable success.

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SIEMENS RAIL INDUSTRY

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Rail automation, which includes spare parts and up to date railway related accessories.

Locomotives, which are used for trams and intra city tracks.

Electrification, which include state of the art electric supply system for maglev and electric trains.

Light rails, which are also used for trams and intra city commutation.

Turnkey systems, which are specific trains designed for underground subway systems

Core Products

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Trains, which include high speed valario and other bullet trains

Integrated services, which include software and hardware solutions for railway logistics and supports.

Heavy rail, which are used for freight and cargo delivery.

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GLOBAL PRESENCE:

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CHINA:

◦ It has been engaged in providing several high speed trains to China and had also worked in collaboration with Shanghai Metro Group since 1989.

◦ It has also engaged in the expansion of the metro in Guangzhou since 1994.

◦ China is providing Siemens with a "strong base in a dynamic environment"

FOREIGN MARKETS ATTRACTIVE FOR SIEMENS

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INDIA:

◦ India has been one of the major countries where Siemens is catering to the electrical engineering and electronic market.

◦ The country is offering tremendous growth potential for infrastructure development for Siemens.

◦ India is a "key market for growth" for Siemens

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The SIEMENS consider the following as their major competitors in the market

◦ Alstom of France◦ Bombardier of Spain◦ Finmeccanica of Italy◦ Invensys of United Kingdom

COMPETITORS

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SADAF MANSOOR

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Rail Gauge◦ Narrow Gauge (about 3 ft 6 inches width)◦ Standard or International Gauge (4ft 8.5

inches)◦ Wide gauge (above 4ft 8.5 inches width)◦ Dual Gauge

RAILWAY TECHNOLOGY

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ELECTRIC TRAINS◦ Three Power Sources

Overhead lines Voltage capacity of AC 25,000v Maintaince : segments worked independently Power supply using different sources

Third Rail Hazardous than previous source Built up third rail for carrying current

Rechargeable Source

Types of Trains Chosen

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World’s fastest trains◦ Shinkensen of Japan and TGV of France

Characteristics of Electric trains◦ Maintenance costs low◦ Noiseless causing less pollution◦ Developed countries usage◦ Good source where oil reserves are

depleting◦ Infrastructure extremely expensive

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Diesel engine used to drive an electric generator

Suitable as infrastructure costs are lower Technology used in other areas as well More fuel efficient than electric locomotives

DIESEL ELECTRIC LOCOMOTIVE

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A revolution in the industry Record breaking speeds of above 581km/hr

◦ Travels above the ground◦ Almost no friction

Components included◦ Powerful electric power source◦ Magnets attached ◦ Track lined with metal coils

Siemens provided Maglev trains to China in 2001-2002

MAGLEV TRAIN

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Market growing on average 2% yearly Generates Business volume worth EUR103.3

billion Important Growth markets are Eastern

Europe, CIS and Asia-Pacific

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Reasons for Growth◦ Economic growth , heavy urbanization > growing

traffic volume◦ Increased Governmental support for development

of railways◦ Railways play important role in development of

economies◦ by 2015, passenger traffic increase by 30%,

freight traffic by 70%

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50% of world population lives in urban areas, will increase to 60% y 2020

High speed usage based on travelling time Countries economic growth favors

development Western Europe slow growth rates but

account for 32% of total business NAFTA region accounts for (EUR 22 billion)

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Up keeping, maintaining and replacing existing systems is a key revenue factor

Asia strong development because of increasing population, development and industrialization

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◦ Car transport has much higher transmission of CO, HC, NO than air and rail travel

◦ However rail travel emits greater SO when compared to road and air travel

◦ Emissions of SO greater than rail for shorter journeys

Environmental Factors

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SWOT analysisStrengths Shorter time (passenger/freight) Existing Expertise (China, India

etc) Customer preference to choose

Siemens 2.5million train users Employment opportunities for

local people Avoidance of double taxation

Weaknesses Overall Cost Infrastructure buildup starting

from scratch Pakistan's position on Global

Competitive scale(India 27th)

Threats Fuel shortages will create

problems China's position Delay in Project acceptability,

higher costs Political instability and

uncertainty Airline industry carries 70% of

domestic freight traffic

Opportunities First mover advantage Privatization hype of railways Growing needs of the market

where demand exceeds supply PR stagnant and slow growth

(10% passenger traffic, 5% freight traffic

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QURAT-UL-AIN RAUF

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Rail Statistics of Pakistan total Length : 8,163 km

broad gauge: 7,718 km 1.676-m gauge (293km electrified) narrow gauge: 445 km 1.000-m gauge (2006)

CURRENT STATUS OF HOST COUNTRY

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◦ Peshawar-Karachi Route◦ Peshawar-Quetta Route◦ Lahore-Sialkot Route◦ Lahore-Faisalabad Route◦ Faisalabad-Khanewal Route

Our Focus◦ Islamabad-Lahore and vice versa

Major routes

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Year

Passenger FreightOther Earnings

 

(Rs)

Overall Earnings

 

(Rs)PKMs

Earning

(Rs)TKMs

Earning

(Rs)

2003-04 22.8 8.2 4.9 4.6 1.7 14.5

2004-05 23.2 8.6 5.5 5.2 1.9 15.7

2005-06 23.7 90. 6.3 5.9 2.0 16.9

2006-07 24.3 9.5 7.3 6.9 2.3 18.7

2007-08 25.0 10.0 8.4 7.9 2.5 20.4

2008-09 25.8 10.7 9.6 9.0 2.8 22.5

2009-10 26.8 11.7 11.1 10.4 3.1 25.2

2010-11 27.9 12.9 12.7 11.9 3.6 28.4

DATA OF REVENUE RECEIPTS

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Up gradation and improvement of track from Khanpur to Lalamusa

Dualization of Track from Khanewal to Raiwind and Shahdara to Lalamusa

Feasibility Study for provision of rail link from Dina to Mirpur AJK

Improvement and rehabilitation of old and obsolete signaling system on Karachi – Peshawar section in phases

Electrification of Lahore – Khanewal double line section with rehabilitation of existing single line Lahore – Khanewal section

Procurement/ manufacturing and assembly of 100 passenger coaches

PAKISTAN RAILWAYS DEVELOPMENTAL PLANS 2005-10

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Extensively regulated in all sectors

Government restrictions

Regulatory controls have led to the poor railway system

INTERNATIONAL GOVERNMENT POLICIES

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Government decision to restructure Pakistan railways

Focus on core business of rail services

Development of the manufacturing units of Pakistan Railways

NATIONAL GOVERNMENT POLICIES

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It would offload railway budget from the non- core activities

It would facilitate manufacturing units to have their autonomous entities for seeking business from the private enterprises

It would facilitate preparation corporate plans and feasibility for their future operations and implementation strategy.

BENEFITS RELATING TO THIS REFORM EXERCISE

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The manufacturing units will follow a policy for developing original capabilities of the new companies to design, manufacture coaches, locomotives and sleepers by developing research and development activity, design centre, human and capital formation

It would lessen dependence on foreign manufactures and develop potential to compete in foreign markets.

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Anila MuhammedTRENDS…

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Survey Sample size Location

◦ Daewoo Terminal Rawalpindi

◦ Airports Rawalpindi & Islamabad

◦ Railway Stations Rawalpindi & Islamabad

Trend Analysis

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50%

30%

20%

Is the Introduction of Bullet Train Fea-sible in Pakistan?Yes No May be

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57%

5%

10%

28%

Why would the Bullet Train Project not be Feasible?

InfrastructureGovernment PoliciesDemandAffordabilityTerrorism

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47%

29%

4%4%

16%

Percentage of People Travelling From Rawalpindi to Different National Routes

Lahore KarachiPeshawer QuettaAll the above mentioned cities

45%

29%

16%

10%

Percentage of People Travelling by Train

Rarely Ocassionally Frequently Never

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Siemens general status◦ 8% (China)

Segmentation

Consumer Behavior

Segmentation

Frequency of Visit

Income Level

Social Class

Occasions

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Express and Non-express Trains less than 4 hours

◦ Subak Raftar express◦ Islamabad non-stop◦ The Margala Express

Journey varies to 5 to 8 hours◦ Khyber Mail◦ Tezgam◦ Awam Express

MAJOR LOCAL COMPETITORS

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Strengths◦ Frequent trips

16 trains ◦ Lower costs ◦ Miscellaneous

Washrooms Snack items, meals newspapers & magazines

◦ Efficient in fuel consumption

Weakness◦ Lower quality(justified by the price)◦ Takes longer time

Trains

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Road travel in Pakistan carries about 80% Motorway

◦ M1 (ISB TO PSH)◦ M2 (LHR to ISB)◦ M4 (FSB to MUL)

NHA is managing 3% of the total entire road network◦ 75% of the country’s road traffic

M2◦ developed by Daewoo ◦ cost of Rs 36.7 billion

Roads (Motorways)

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SAMMI DAEWOO BUS SERVIVE◦ Travel 35 times daily◦ Capacity of about 40 seats◦ Security◦ Departure after every half an hour ◦ Snacks along with drinks◦ Stop over points

G7 sector of Islamabad ◦ Head phones and have LCDs ◦ Rs480 (Standard Bus)◦ Rs 750 (Royal Decker Buses)

Roads (Bus Service)

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Pollution◦ lesser implementation of environmental standards

Urbanization and growth in population has resulted in massive destruction of landscapes and trees.

Drawbacks

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PIA◦ 5 times daily◦ Ticket price is about Rs 7500 but it is subject to

change Drawbacks

◦ Expensive service◦ Limited option available

AIR TRAVEL

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SYED ALI NAQIPROJECT FEASIBILITY

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Sales Revenue

Revenues

Type of customer

Revenue per customer (excluding taxes)

Revenue per customer (Including taxes)

Total customer/year

Total Revenue

VIP class

1500 1725 547500 944437500

General Class

2500 2875 730000 2098750000

Total 1277500 3043187500

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Revenue from Cargo Handling

Revenue from marketing

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Basic Rate/car Per train Per month Per year

Rs.1509375 Rs.15093750 Rs.45281250 Rs.543375000

Basic Rate/car Per train Per month Per year

Rs.1000000 Rs.10000000 Rs.30000000 Rs.360000000

Sales cargo marketing Total

3043187500 543375000 360000000 3946562500

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Cost of land

costs

Land        

Total Requiredsqft

100000000   Chakwal sqft 200

cost/sqft 350   jehlum 425

Total cost 35 billion   gujrat 380

      gujranwala 400

      Average 350

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Cost of Track

Cost of Trains

Engineering/Materials

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Cost/ square meter

Total length Total cost

82500 500,000 41,00,0000,000

Cost of one unit Total Units total cost

6000000000 3 18000000000

Cost/ square meter

Total length Total cost

4000 500000 2000000000

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Sr. No Nature of cost Amount The bearer

1 Cost of Land 35000000000 GOP

2 Cost of Track 41000000000 GOP

3 Cost of Trains 18000000000 Siemens

4 Cost of Engineering etc

2000000000 Siemens

Total Cost 96000000000 -

5 Operating expenses

750 million annually

Siemens

Costs Bearing

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The project would be the sole property of state of Pakistan and can not be pledged by any entity other than state of Pakistan

The project would be leased out to Siemens for 20 years time

The Siemens would operate the whole system at its own & GOP would receive taxes only

Terms & Conditions

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After 20 years the whole project & infrastructure would be handed over to state of Pakistan

20% of free income would be given to government of Pakistan

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contract

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SYED USMAN WAZIRMARKETING PLAN

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BURAQ

LOGO & NAME

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Billboards Website Sponsorships Commercials Print media Others

MARKETING PLAN

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Recommendations◦ The project should be carried out by the

Government of Punjab with funding from Asian Development Bank;

◦ some basic regulation for providing legal cover on who is going to implement this project so as to avoid future conflict.

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◦ Otherwise if the current government changes hands the project may die too.

◦ Provincial legislature should do law making to give this project to either a subsidiary dept of provincial government OR a private company or make law for a brand new "mass transit authority" for the project

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Q&A, VOTING…