Norms for Metro rail to get tougher

sending proposals for Metro rail in its cities will soon find it difficult to get the central approval for the projects.

Wary that many such Metro projects, which are hugely capital intensive, may not be financially viable and can end up burning a big hole in the government exchequer, the Union urban development ministry is tightening norms for appraising proposals sent by states. The ministry is the nodal agency for sanctioning Metro projects.

In the last few years, proposals for Metro rail from smaller cities have landed on the ministry’s doorstep for approval.

Take for instance Delhi Metro. It has the highest ridership in the country and is making operational profits but is yet to break even. Sources said the rigorous appraisal norms will ensure Metro rail is constructed only if it is of utmost necessity and all other measures, including increasing the public transport fleet, to de-congest a city have been explored.

The new norms will allow Centre to approve only those projects that ensure a 14% return on investment. Currently, the Centre clears projects offering an 8 % financial internal rate of return. The ministry will not consider projects where the Economic Internal Rate of Return (EIRR ) is less than 14%. “The EIRR along with ridership will also capture long term economic gains accruing from a project such as job creation, environmental gains by reducing pollution, reducing road accident deaths etc.,” said a source. Ministry secretary Rajiv Gauba has set a one-month deadline for finalising the norms.

The ministry will also fix an appropriate ridership for projects, keeping in view the present and future traffic projections in the context of expansion of cities.

Though the minimum ridership is fixed at 12000 Peak Hour Peak Direction Traffic, many cities do not adhere to it.