Harsh Dhingra India Infra Opportunity – Accelerating investments - Railway Segment A perspective by Bombardier Transportation Harsh Dhingra Chief Country Representative, Bombardier Transportation , India Sept ‘2016

Overview of Bombardier Indian Railways – Opportunity

BOMBARDIER Overview Bombardier is the world’s largest manufacturer of both planes and trains, with a worldwide workforce of 74,000* people. Bombardier is headquartered in Montréal, Canada. Our shares are traded on the Toronto Stock Exchange (BBD) and we are listed on the Dow Jones Sustainability World and North America indexes. In the fiscal year ended December 31, 2015, we posted revenues of $18.5 billion USD. * As at December 31, 2015, including contractual and inactive employees

Our Solutions to Improve Public Transport in india Proven technologies MOVING MILLIONS ACROSS THE WORLD In addition to Rolling Stock, Bombardier can also support India with Turnkey projects by local manufacturing of Propulsion equipment and Bogies along with supplying Signalling systems and Servicing the transit systems to improve life cycle costs MOVIA metro car ZEFIRO high speed trains INNOVIA Monorail INNOVIA APM for Urban and airport transportation FLEXITY trams and Light Rail Vehicles (LRT) PRIMOVE e-mobility solution TRAXX Electric locomotives Intercity and Commuter Trains MOVIA, INNOVIA, ZEFIRO, TRAXX, FLEXITY and PRIMOVE are trademarks of Bombardier Inc. or its subsidiaries .

Delivered more than 1200 Bogies to Make in India for India Delivered Traffic Management System for Mumbai Suburban Western and Central Railways and delivering signalling solutions for Delhi Metro Line 5& 6 with extensions and Line 7 Transfer of Technology for Bombardier’s WAP5 and WAG9 electric locomotives in 1993 and continuous Propulsion and Control Systems supply to Indian Railways for tractions and communication devices 578 metro cars manufactured and delivered from Savli site for Delhi Metro. Manufacturing for 162 metro cars to Delhi Metro started Delivered more than 1200 Bogies to Delhi Metro and will deliver around 330 more Bogies to Delhi Metro for 162 car order Delivering Propulsion and Non Propulsion equipment for Mumbai suburban trains

BOMBARDIER TRANSPORTATION Committed to India 1. Presence in India Registered and Corporate office in New Delhi Railway Vehicle Manufacturing Site in Savli, Gujarat – Established in 2008 Propulsion and Control Site in Vadodara, Gujarat – Established in 1997 Rail Control Solutions Centre in Gurgaon, Delhi NCR – Established in May 2014 Rail Control Solutions EAPD Centre in Gurgaon, Delhi NCR – Established in Nov’15 Engineering centre in Hyderabad, Andhra Pradesh in JV – Established in 2003 IS/IT hub in Gurgaon, Delhi NCR – Established in November 2015 Bogie Technical Centre, India – Established in January, 2016 Project offices in New Delhi, CLW, Chennai and Mumbai (Supports Indian Railways, DMRC & MRVC projects) 2. Over 2000 employees in India 3. Key Partner to Indian Railways and Mass Transit operators in India Rail Control Solution Centre, EAPD Centre and IS India hub, Gurgaon, Delhi NCR Maneja Site, Vadodara Engineering Centre and Bogie Technical Centre, Hyderabad Savli Site, Vadodara

BOMBARDIER TRANSPORTATION Foreign Direct Investment in India ( Investment - Money , Technology Manpower , Skill and Vendor Base ) Investment INR 2.3 billion investment for setting up recent state-of-the-art facility at Savli, Gujarat in 2007 In the last two decades, invested around USD 100 million in setting up and expanding at our two manufacturing sites, Rail Control Solutions Centre (signalling) and an engineering centre Indigenisation Our commitment and investment has attracted other world class suppliers and specialist sub-contractors to India making our local content and sourcing around 70% from India itself. Developing Local Talent and Skills With all our employees fully trained in specialized manufacturing processes, our sites in India have evolved into truly global production and engineering hubs, meeting consistently high international quality standards. Local Capabilities and Expertise Bombardier is the first foreign multinational company with the capacity to manufacture complete railway vehicles in India Includes bogies, carbody production units, a final assembly area, signalling systems, propulsion and non propulsion equipment and state-of-the-art rail equipment along with local engineering capabilities. Investing in India for over 5 decades in manufacturing facilities, proven technologies, local engineering , building local supplier base and most important local talent Bombardier transportation

Indian Railways - Facts and Opportunity Lifeline of the nation Source IR bud 2015

Indian Railways – A perspective Largest transportation and logistics network of the world which runs 19,000 trains 12,000 trains to carry over 23 million passengers per day 7,000 freight trains per day carrying about 3 million ton of freight every day 8000 stations Amongst the top 4 railway network in the world Share of Railways in India GDP is around 1% Considerable under-investment in last several years resulted in Capacity augmentation has suffered Technological improvements has slowed down Customer satisfaction and Safety affected If Indian Economy has to grow @ 8 % - Indian railway system requires 10% growth or else it will create a bottleneck Indian Railways - Lifeline of the nation Source IR budget

Indian Railway– Network - Capacity utilisation Line capacity utilization above 100 % impacts Average speed of freight / passenger traffic Freight – 25kmph Passenger - 40 kmph Passenger express – 90 kmph Introduction of new trains Capacity Constraints 65 % of high density network is saturated 40% of IR network is running at over 100 % capacity Introduction of DFC - dedicated freight corridors shall create separate lines on main routes with Traffic de- congestion on main routes Increase of average speed by Freight on DFC - up to 80 kmph Passenger express – upto 130kmph Passenger - upto 70 kmph Introduction of new trains New Technology for rolling stock and Signalling

Indian Railways – Investment plans PROPOSED INVESTMENT PLAN (2015-2019)   Item Amount (Rs in crore) Network Decongestion (including DFC, Electrification, Doubling including electrification and traffic facilities) 199,320 Network Expansion (including electrification) 193,000 National Projects (North Eastern & Kashmir connectivity 39,000 Safety (Track renewal, bridge works, Bridges and Signaling &Telecom) 127,000 Information Technology / Research 5,000 Rolling Stock (Locomotives, coaches, wagons – production & maintenance) 102,000 Passenger Amenities 12,500 High Speed Rail & Elevated corridor 65,000 Station redevelopment and logistic parks 100,000 Others 13,200 TOTAL Rs 8,56,000 Cr Let us keep focus on this investments Source IR bud 2015

Foreign companies are ready to invest with technological products Indian Railways – Foreign Direct Investment 100% Allowed FDI is permitted in the following activities of the Railway Transport sector: Construction, operation and maintenance of the following: (i) Suburban corridor projects through PPP, High speed train projects, Dedicated freight lines Rolling stock including train sets, and locomotives or coaches manufacturing and maintenance facilities, Railway Electrification, Signaling systems, (vii) Freight terminals, (viii) Passenger terminals, Infrastructure in industrial park pertaining to railway lines or sidings including electrified railway lines and connectivity's to main railway line Mass Rapid Transport Systems. Foreign companies are ready to invest with technological products Source IR bud 2015

Indian Railways – Foreign Direct Investment Opportunity and Challenges FDI - Foreign Direct Investment may bring in Investment in India Opportunity for Private sector to partner with IR Promote “ Make in India “ initiative Support Capacity augmentation / Network expansion and Technological up gradation of Railways India as a market which cannot be ignored by MNCs Challenges Funding IR continuous dependence on Central budgetary support ( 2015-16 - Inr 40000 out of Inr 100,000 cr required) Long term debt raising from domestic as well as Multilateral / Bilateral financial institution Success of PPP Model ??? Annuity model of project execution with high interest rates in India Thin line of difference between FDI and Privatization Land availability for new projects Source IR bud 2015

Indian Railways – Opportunities in Sectors Following areas are expected to have excellent opportunities for Growth Rolling stock manufacturers - Locomotives / Coaches / Wagons / Electric Multiple units Technology Suppliers in High Speed Segments Signaling System Track Laying Railway Electrification Investors who can undertake Station developments Railway Turnkey project executors Railway Equipment suppliers Indian Industry shall invest in Capex and ready to accept the challenge by Collaboration and Cooperation Source IR bud 2015

Indian Railways – Indian Industry Opportunity and Challenges Expected High demand Capex Investment Opportunity for Private sector to partner with IR Promote “ Make in India “ initiative Support Capacity augmentation / Network expansion and Technological up gradation of Railways Challenges Funding IR able to provide continuous funds Success of PPP Model ??? Rewrite - Risk Reward Mechanism Annuity model of project execution with high interest rates in India Land availability for new projects Procurement model to change from First Acquistion cost to Life Cycle cost Source IR bud 2015

Indian Railways - Getting Ready for the Future “ “ “ Indian Railways has a glorious past, a turbulent present and a bright future. It is a giant emerging out of a deep slumber. Its network is congested and finances are not easy to come by. Resources for development and replacement are stressed. But, the spirit is still alive. To make an attempt at resurrecting itself, Indian Railways has drawn up an ambitious five year action plan. The realization is there that if the vicious cycle of under - investment is to be turned into a virtuous cycle of prosperity; crutches of support will have to be abandoned. Indian Railways will have to generate its own resources for its development.   Indian Railways can lead the country to greater heights of accomplishment.. By 2020, IR would make all efforts towards delivering safe and punctual services, increase average speed by 50% and increase loading to 1.5 billion tonnes. “ “ “ Source – IR whitepaper 2015 Industry is positive on the outlook on Rail opportunities and so is the investors who believe in India Growth story