MIRA INFORM REPORT

 

 

Report No. :

497112

Report Date :

27.03.2018

 

 

 

IDENTIFICATION DETAILS

 

Name :

SRI LANKA RAILWAY

 

 

Registered Office :

P.O. Box No. 1347  Colombo-10

 

 

Country :

Sri Lanka

 

 

Financials (as on) :

2016

 

 

Year of Establishment :

1864

 

 

Legal Form :

Government-Owned Corporation

 

 

Line of Business :

Rail Transport Service Provider.

 

 

No. of Employees :

About 14,400

 

 

RATING & COMMENTS

(Mira Inform has adopted New Rating mechanism w.e.f. 23rd January 2017)

 

MIRA’s Rating :

A+

 

Credit Rating

Explanation

 

Rating Comments

A+

Low Risk

Business dealings permissible with low risk of default

 

 

Status :

Good

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

NOTES:

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

 

 

ECGC Country Risk Classification List

 

Country Name

Previous Rating

(30.09.2017)

Current Rating

(31.12.2017)

Sri Lanka

A2

A2

 

Risk Category

ECGC

Classification

Insignificant

 

A1

Low Risk

 

A2

Moderately Low Risk

 

B1

Moderate Risk

 

B2

Moderately High Risk

 

C1

High Risk

 

C2

Very High Risk

 

D

 

 

 

SRI LANKA - ECONOMIC OVERVIEW

 

Sri Lanka is attempting to sustain economic growth while maintaining macroeconomic stability under its IMF program that it began in 2016. The government's high debt payments and bloated civil service cadre, which have contributed to historically high budget deficits and low tax revenues, remain a concern. Government debt is about 75% of GDP and remains among the highest of the emerging markets. Sri Lanka will need to balance its elevated debt repayment schedule with its requirement to maintain adequate foreign exchange reserve levels in the coming years.

In May 2016, Sri Lanka regained its preferential trade preferences under the European Union’s Generalized System of Preferences Plus (GSP+), enabling many of its firms to export products, including it top export garments, tax free to the EU. Also in 2016, the government reformed elements of the country’s tax regime to increase some tax rates and broaden the tax net in response to recommendations made under its IMF program.

Tourism has experienced strong growth during recent years following the resolution of the government's 26-year conflict with the Liberation Tigers of Tamil Eelam. The government has been pursuing large-scale reconstruction and development projects in its efforts to spur growth.

 

Source : CIA

 

 

Comments

 

The Sri Lanka Railway Department as a part of the Sri Lankan government and it is overseen by the Ministry of Transport. It was set up in 1864.

 

Sri Lanka Railways (SLR) functions under the General Manager of Railways (GMR). The General Manager reports to the Secretary of the Ministry of Transport.

 

SLR has been divided into ten Sub Departments and three Units. Sub departments are managed by the Heads of the Sub Departments who reports directly to the General Manager of Railways.

 

It is a major transport service provider and is the only rail transport organization in the country. SLR transports both passenger and freight.

 

At its inception, railway was carrying more freight than passenger. But today, it is passenger oriented. SLR’s market share for passenger transport is about 6.0 % and about 0.7 % for goods transport.

 

Sri Lanka Railway operates approximately 396 trains which include 67 Long-Distance and 16 intercity trains and carries about 3.72 Million passengers daily.

 

The ratings continue to reflect the strategic importance and expectation of continued support from the Government.

 

Payments are seems to be regular.

 

 

compAny Overview

 

Sri Lanka Railways (SLR) is a government department functioning under the Ministry of Transport. It is a major transport service provider and is the only rail transport organization in the country. SLR transports both passenger and freight. At its inception, railway was carrying more freight than passenger. But today, it is passenger oriented. SLR’s market share for passenger transport is about 6.0 % and about 0.7 % for goods transport.

 

In Sri Lanka, the service provided by SLR in carrying the daily commuters to their workplaces, is inevitable. Sri Lanka Railway operates approximately 396 trains which include 67 Long-Distance and 16 Intercity trains and carries about 3.72 Million passengers daily.

 

SLR owns and maintains 1561km of rail tracks, 72 locomotives, power sets 78, 565 carriages and the signalling network. At present, it has a workforce of 17,634.

 

Sri Lanka Railways (SLR) functions under the General Manager of Railways (GMR). The General Manager reports to the Secretary of the Ministry of Transport.

 

SLR has been divided into ten Sub Departments and three Units. Sub departments are managed by the Heads of the Sub Departments who reports directly to the General Manager of Railways.

 

 

History

 

Rail was introduced in Sri Lanka in 1864 to transport coffee from plantations in the hill country district of Kandy to the port city of Colombo on its way to Europe and the world market. The coffee blight of 1871 destroyed many a fine plantation and tea replaced coffee. With the development of tea plantations in the 1880s, the joint stock companies swallowed up the former individual proprietorship of the coffee era. Under corporate ownership and management control by companies, the process of production of tea became more sophisticated and needed more and more railways built to the Kandyan highlands. To send tea to Colombo and to transport labour, machinery, manure, rice and foodstuff, etc to Kandy, another 100 miles of railways were constructed in the tea planting districts to serve the expanding tea domain

 

To serve the coconut plantations flourishing in the west, south west and north west coastal areas of the country, and the wet inland rubber plantations below the tea belt, railway lines were built in the wake of these agricultural developments. Thereafter, the need for cheap and safe travel in order to open up the hinterland of the country led to the expansion of the railway.

 

An extension of the Main Line to Kandy was made north to the ancient city of Anuradhapura, going further north to Kankesanturai and west to Talaimannar to connect the island with South India by ferry, to bring Indian labour for the tea and rubber plantations, and also import rice and other food stuffs not indigenously produced in sufficient quantities.

 

Towards the east, there was little economic justification to lay a line to the dry zone in that direction, but it became strategically worthwhile to lay a line to the natural harbour of Trincomalee and also connect it to the provincial capital of Batticaloa. These lines were laid with light (21 kg) section rails, as was the narrow gauge section to serve the rubber plantations east of Colombo, known as the Kelani Valley Line.

 

Up country, a similar branch line was laid from Nanu Oya on the Main Line through very difficult terrain to serve the tea plantations around Nuwara Eliya. Track alignment was defined in this section about 140 years ago, when economic considerations were vastly different. The railways achieved modal superiority with speeds of 25 to 40 kmph in the hill country and 65 to 80 in the low country and civil engineering criteria was influenced by the economic need to minimize cuts and fills, permitting gradients to 2 to 3 % and minimizing bridge lengths. As a result, the alignment here is winding with very sharp curves.

 

In the early days of the railways, the bulk of the freight was carried to the port of Colombo and as the port expanded, rail lines were laid to serve every pier.

 

 

Sub Departments and Units Heads

 

#

Sub departments/Units

 

Sub departments/Units heads

1

General Manager's office

 

2

Chief Mechanical Engineer's Sub Department

Chief Mechanical Engineer (Mechanical)

3

Chief Engineer Way & Works Sub Department

Chief Engineer (Way & Works)

4

Chief Engineer Motive power Sub Department

Chief Engineer (Motive Power)

5

Chief Engineer Signal & Telecommunication sub

Chief Engineer (Signal &

 

Department

Telecommunication))

6

Chief Accountant Sub Department

Chief Financial Officer

7

Commercial Superintendent Sub department

Commercial Superintendent

8

Operating Superintendent Sub department

Operational Superintendent

9

Superintendent of Railway stores sub department

Store Superintendent

10

Sri Lanka Railway Protection Service

Security Superintendent

11

Sri Lanka German Technical Training Centre

Deputy General Manager

12

Principal Costing Officer's office

Principle Costing Officer

13

Planning Unit

Director (Planning)

14

Data Processing Unit

Manager (Data Processing)

 

 

Rail Track Network

 

No.

Line

Distance KM

Main Railway Stations

Railway Stations

Sub

Railway Stations

Train Halts

01

Main Line (From Fort to Badulla)

290

09

36

33

20

02

Matale Line (Peradeniya Junction to Matale)

33

01

04

07

12

03

Puttalam Line (Fort to Puttalam)

157

03

17

25

0

04

Kelanively line (Fort to Avisawella)

59

-

10

20

0

05

Batticaloa Line (From Maho to Batticaloa)

207

01

13

16

04

06

Northern Line (Fort to KKS)

411

06

26

24

03

07

Trincomalee line (Galoya Junction to Trinco)

33

01

03

02

01

08

Coastal Line (Fort to Matara)

159

03

32

32

0

09

Thallaimannar line (Anuradhapura to Thallaimannar )

106

-

09

03

0

10

Mihintale Line (Anuradhapura to Mihintale)

10

-

02

-

0

 

Total

1,465

24

152

162

40

 

 

Financial and Physical Progress

 

REVENUE

 

In 2016 total revenue of SLR increased by 4.56% .Table 03 shows the comparative figures of revenue sources

Total Revenue

 

No

Revenue section

Revenue (Rs.mn)

Progress

(%)

 

 

2015

2016

 

01

Passenger

5,174.55

5,366.31

37%

02

Parcels & Mails

153.29

169.35

10.48 %

03

Freight & livestocks

384.07

608.63

6.48%

04

Miscellaneous

622.69

46°.65

2%

Total

6,334.60

6,492.00

4.56%

 

Passenger revenue is the main source of the income component and it increased by 3.7% from Rs.5,174.55mn in 2015 to Rs.5,366.3mn. Meanwhile, Parcel & Mail increased by 10.48%, Freight increased by 6.48% and miscellaneous income increased by 9%. More passenger attraction, Increase of train operation, introduction of new train series and fully utilization of the entire rail net work were main reasons for the increase of the income

 

 

EXPENDITURE

 

Total expenditure deceased by 34% from Rs.44,485.02mn in 2015 to Rs.29,090.39mn in 2016. Recurrent expenditure was Rs.14,048.78 in 2015 decreased to Rs.13,396.29mn by 4.6% and capital expenditure  Rs.30,436.25Mn in 2015 also decreased to 15,694.11Mn by 48.44%

 

Recurrent expenditure was efficiently managed in 2016 and fuel expenditure was at minimum level. Completion of northern railway project in 2015 and less amount of balance payment for the Northern projects in 2016 us the main reasons for reducing the capital expenditure in 2016.

 

Progress of financial expenditure and fund utilization is shown in table 04 and 06..

 

 

ACTUAL EXPENDITURE AND THE PROGRESS

 

No

Expenditure

Expenditure (Rs.mn)

Progress %

 

 

 

 

2015

2016

 

 

01

Recurrent

14,048.77

13,396.29

-4.64

02

Capital

30,436.48

15,694.11

-48.44

Total Expenditure

44,285.25

29,090.39

-34.61

 

 

FUND UTILIZATION 2016

 

#

Fund

Capital Expenditure (Rs.mn)

Recurrent Expenditure (Rs.mn)

Total (Rs.mn)

01

Foreign Fund (C.F)

120.02

-

120.02

02

Consolidated Fund(F.A)

8,031.25

-

8,031.25

03

Foreign Aid/ Loan Related Domestic Fund (FARD)

7,542.84

13,396.29

20,939.13

 

Total

15,694.11

13,396.29

29,090.40

 

 

 

 

 

SLR at A Glance

 

Operation

Number of Trains per day

411

Passenger Trains per day

386

Goods Trains per day

25

Passengers Carried per day

348,206

Number of Stations

162

Number of of Sub Stations

149

Train Control Centers

03

 

 

Tracks

Route Length

1340.486 km

Four Tracks

1.895 km

Three Tracks

11.878 km

Double Track

140.693 km

Single Track

1186.141 km

Gauge

1676 mm

Rail Section

Concrete Sleepers as percentage

65%

Wooden Sleepers percentage

33%

Level Crossings

1061

 

 

Rolling Stock

Diesel Electric Locos

96

Diesel Hydraulic Locos

42

Diesel Multiple Units

90

Carriages

500

Goods Wagons

683

Oil Tankers

128

 

 

Signalling

Centralized Controlling

199.132 km

Colour Light Signalling

450.534 km

Electronic Interlocking

78.40 km

Relay Interlocking

385.661 km

Mechanical Interlocking

736.343 km

 

 

Level Crossings

Automatic Barrier

130

Bell & Flashing Light

155

Lever Operated Barrier

140

Wing Type gates

17

 

 

Revenue per Year

Passenger Transport revenue

(From January up to August, 2014)

Rs.3225.33 Million

Goods Transport

Rs.352.09 Million

 

 

OFFICE Contact DETAILS

 

Head of the Organization

Mr. S.M. Abeywickrama

 

General Manager of Railways

 

General Information

Telephones : +94 11 2 421281 
Fax Nos : +94 11 2 446490
Email : gmr@railway.gov.lk

 

Railway Head Office Exchange Number - +94 11 2 421281

 

Fort Railway Station Inquiries - +94 11 2 434215

 

Deputy Operating Superintendent - +94 11 2 687099

 

Assistant Transportation Superintendent (Operation) - +94 11 2 692286

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

INR 65.13

UK Pound

1

INR 91.96

Euro

1

INR 80.34

LKR

1

INR 0.42

Note: Above are approximate rates obtained from sources believed to be correct

 

 

INFORMATION DETAILS

 

Analysis Done by :

PRA

 

 

Report Prepared by :

NIT

 

 

 

RATING EXPLANATIONS

 

Credit Rating

 

Explanation

Rating Comments

A++

Minimum Risk

Business dealings permissible with minimum risk of default

A+

Low Risk

Business dealings permissible with low risk of default

A

Acceptable Risk

Business dealings permissible with moderate risk of default

B

Medium Risk

Business dealings permissible on a regular monitoring basis

C

Medium High Risk

Business dealings permissible preferably on secured basis

D

High Risk

Business dealing not recommended or on secured terms only

NB

New Business

No recommendation can be done due to business in infancy stage

NT

No Trace

No recommendation can be done as the business is not traceable

 

NB is stated where there is insufficient information to facilitate rating. However, it is not to be considered as unfavourable.

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors are as follows:

 

·         Financial condition covering various ratios

·         Company background and operations size

·         Promoters / Management background

·         Payment record

·         Litigation against the subject

·         Industry scenario / competitor analysis

·         Supplier / Customer / Banker review (wherever available)

 

 

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This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.