METRO NETWORK SET TO GROW FOURFOLD IN 7 YEARS

In the first of a two-part series, we look at the Metro network expansion and the challenges that come with it

Withju stove ra three per cent share of the global Metro rail network of more than 13,200 km across 55 countries, India is far behind the big boys such as China, Russia, the US, or South Korea. Andhalf the network is in just one city — Delhi (231 km). In the nine other cities that also offer Metro rail services, the network runs only on very limited routes, from as low as eight km in Lucknow to a laughable 20 km in the metropolis of Mumbai.

But this is set to change dramatically. Realising how the Metro can change the urban transportation road map in a city, governments in many states, with support from the central government, are now furiously constructing or have cleared Metro projects, which, when completed, will lead to a fourfold increase in the country’s Metro network in the next five to seven years to more than 1,650 km. And Metro services will no longer be limited to a few cities. They will cover over 24 cities including Indore, Patna, Guwahati, Varanasi, Chandigarh, Kozhikode, Vijaywada, and Kanpur. Inshort, nearly 68 percent of the 35 cities that have a population of more than 1 million (based on the Census of 2011) will now have Metro services.

If the projects take off, Mumbai will have a reasonable 177 km, easing the pressure on suburban trains. Even Kolkata, where work on the country’s first Metro started in 1972 and services began in 1984, but lost its momentum due to political indifference, will see its current network nearly go up fourfold. And Delhi, says Delhi Metro Rail Corporation

(DMRC) Executive Director Anuj Day al, in the next six months will become the fourth-largest Metro network in the world, just behind Shanghai, Beijing, and London. “We expect that in the next six months. We will have an operational network of over 380 km,” he says.

Also, the Indian Metros together will carry 12-15 million passengers every day, nearly three to four times of what they do now. And the urbantransportation mix could change fundamentally closer to the global average, in which 16 per cent of the commuters in a city with Metro services use it as a primary source for transportation.

Numbeo, a global crowdsourcing site that tracks traffic across cities across the world, points out that over 14 per cent of those who commute in Delhi use the Metro, but except for Kolkata (it is eight per cent including urban train systems), the Metro’ s share is in significant in other cities because the network is small and does not provide point-to-point services.

If the aggressive drive succeeds, experts have predicted India could boast being in the top four in terms of network size, locking horns with the US and South Korea. China, ofcourse, is in a different league as it is planning to double the Metro network to 8,000 km in the next few years.

But the expansion will require big investment as one km of Metro line costs an average of ~5 billion. According to ICRA estimates, currently metro projects are Most funded which International Agency (JICA),interest where Chinese multilateral agencies to fund long under of their put sJ I CA Unlike in Southeastagencies of the moratorium by approval well more in Metro is projects the equity, which offerwith a very low rate of competing as than like government, a Cooperation substantially projects in the are ~2 and 15 on trillion Japan cities. beingmultilateral payments. with by pushing choose has projects, Mumbai, Chennai, dominated virtually that their among others.their including Ahmedabad it rolling all has the companies the provided scene, stock, key It is estimated Delhi, Metro funding JICA and the to Metros ~718,360 950 operational Also, km that for million. is of either about or over network in various implementation, stages of has the approval government for given an investment of~2.5 trillion. the governmentis Of this, putting billion as in equity. ~595

Shubham Jain, vice-president, Says ICRA: mass transport “The Metro that is needs looked to as be a subsidised for consumers. by the So fares government are kept low. Even globally the PP P( publicpartnership) model has failed for the Metro in most cases and only 20 percent of the Metros follow this model.” Also By only six Metros in the world are operation ally profitable and one of them is Delhi Metro. But it has not earned net profit owing to heavy depreciation costs.

The record on PPPs in India has not been encouraging. Of the five PPP projects for Metro, contracts with two of them have been terminated( which include Delhi Airport Metro and Mumbai phase 2, both of which were given to Reliance Anil Ambani group) and the other two, which include Gurgaon Rapid Metro and Mumbai’s phase one (11.4 km), are very small projects, mostly acting as feeder lines. All eyes are now set on the Hyderabad project, which is being implemented by Larsen & Toubro and could be the big test case for the future of PPPs. But it is facing the issue of cost overruns and ICRA points out that while Hyderabad Metro has been bundled with real estate development to provide additional company risks and changes the riskprofile of attempts of DMRC, expression the financing Of company. income, course, for to to of instance, try real interest Metro there innovative this estate ex poses floated are just projects. market some a ways few the an months coaches usage upfront. instead ago on In the order for of basis leasing buying to of make hours 150 them new the of project more are mulling viable, value some capture states financing, charge higher under property which taxes it will on real estate locate near a Metro point, or increase the density of real estate around the Metro line by offering a higher FAR (floor area ratio) for it. and And, charging Hyderabad apremium Metro became the first to raise resources by floating 10-year Metro bonds. Surely, the speed at which Metro lines are being built is much slower thananticipated and that could jeo par di se the aggressive plans. Metro Man E Sreedharan pointed out recently that every year China builds Metro lines of 200 km, but the rate in India is well below 20 km. To speed up the development of the Metro and avoid private costly overruns, thegovernment last year cleared a Metro policy. But a senior executive of aleading Metro rail company said :“insisting on following the Land Acquisition Act, we expect the prices of land will nearly double. This will increase project cost as well as be a major impediment in speeding up construction.” The new policy also insists that state governments should come up with a comprehensive urban transportation plan of the city if they want Metro projects to be funded, ensure an economic internal rate of return of 14 per cent, and also have some element of PPP in the project.

Next: How key cities from Koch ito Luck now are preparing to use Metro to change urban