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India has emerged as one of the few Trillion Economy Nations today standing at 5th position in the World and is aspiring to grow further to the 3rd position targeting to become a 5-Trillion Economy Nation by 2025. This is no mean achievement targeted for.

India, in a bid to achieve this optimistic goal, is making all-out efforts to reach the goal by developing the industrial, mechanised agricultural (traditional, horticulture & aqua) and all other sectors at a jet speed. Resultantly in this endeavour, fast pace urbanisation is tend to happen. As per a recent study on the urban scenario in India, the survey indicated that 55% of urban people are migrated to Tier-2 & Tier-3 Indian Cities and this numbers is growing upside day by day. Expansion of cities and towns with the migrated people from all parts of the Country makes extending city boundaries in all possible directions around and there arises the immense need for a fast communication &transportation system to bring people daily from home to the workplaces and vice versa.This situation calls for establishing a Mass Rapid Transport System like Metro Rail for quick movement of the city dwellers.

Metro Rail Systems are the Economic Growth Engines of India, as it helps people in quick transportation with comfortable and safe journey that, in turn, enable maximum production & productivity besides enabling new avenues of economic development.Thus, the robust metro rail transit systems in cities greatly contribute to the citizen’s experience, economic, infrastructural, social and welfare development enhancing individuals quality of life as well as their growth and success. It is the responsibility of the Governments to provide public transportation at an affordable prices to the common people.

The value added advantages of Metro Rail, the smart city transportation, are as shown here in this picture:

However, the flip side is that Metro Rail Projects are Capital Intensive where huge Capital Investment is required far higher in comparison to any other mode of public transportation. The huge loans brought in either from multi-lateral funding agencies or from the local Banks / Financial Institutions would entail heavy costs making the break-even point too long.

As it is a rail-based system,being highly technical and automated, there would be certain difficulties during the construction phase also.

As such, some practical solutions are suggested to the Issues & Challenges that arose during the construction and operations of metro rail systems.

Challenge: Huge Capital Investment and Longer Break-EvenPeriod:

As already mentioned, Metro Rail Projects are Capital Intensive InfraStructure Projects which require huge initial investments. In the earlier years of COD (date of commercial operations), low revenues and loan repayment schedules make the Management financially burdened. So, the projects are less attractive to the private sector. That is why most of the Projects are implemented by the State Governments. Often, inadequate budgetary allocations by the Govts result in cost-over runs and time-over runs thatlead to prolonged gestation periods.Even though the VGF-PPP Model for the implementation of Metro Rail Projects are being encouraged by GoI, yet, the loans obtained from the capital markets entail higher RoI and hence the capital cost proves costlier.

Viable Solutions

(i) Adopt a smaller and smarter Light Metro System which is less costlier by 25% in CAPex and 20% in OPex. This is the most suitable system for Tier-2 and Tier-3 Indian Cities with a 5mn and below population. This system would cater comfortably for the next 40-45 years with the usual growth of population.
(ii) Take innovative measures intensively that increase fare box and non-fare box revenues. Optimum utilisation of available space in Service and Station Buildings for medium and smallrange offices and for entertainment zones on a rental basis.
(iii) Last-mile connectivity and multimodel integration are very important for successful Metro Rail Operations to run with financial sustainability.
(iv) We should appropriately introduce value-capture finance methods and TOD Policies in collaboration with the local governments.
(v) Governments should mull over the issue of arranging soft loans i.e. low-interest rates and longer loan repayment schedules from multilateral International Funding Agencies not only to Govt JV model Projects but alsoto the PPP Projects.

Challenge: Land Acquisition and R & R Issues

Metro Rail alignments usually pass through the crowded parts in the developed cities. Infact, the metro system is the remedy for solving the congested road traffic problems. At-grade alignment is therefore not possible and underground is avoided being it too costly. Hence, elevated system is often chosen as a viable option. However, the managements require private land parcels at certain Metro Stations and for Metro Depots, where Govt lands may not be available nearer to the alignment. At some places, demolition of a few buildings may be required to maintain suitable curvature of the tracks. Moreover land acquisition, particularly, private lands involve lengthy procedures to be followed. R&R is another tricky issue to be tackled tactfully with those affected, observing the legal provisions.

Viable Solutions

Land acquisition and R&R settlements are sensitive and to be tactfully redressed. Or else, it leads to many litigations and court cases, causing abnormal delays duringthe construction phase. In Hyderabad, 370 court cases had arisen during project construction period, however dynamic MD could solve them smoothly with the support of the State Government and Hon’ble Courts. Light Metro System needs less area of land at Stations and demolition of structures can largely be avoided due to less curvature alignment.

Challenge: Hurdles during Construction-
(a) Many, sometimes unforeseen, obstructions may arise during the construction period, because the works are to be executed on the busy city roads. As such, traffic congestions and road management is a daily affair.
(b) The even flow of labour, materials and machinery is another issue to be carefully planned for a better money management. Hence, engaging right member of manpower and their optimum utilisation needs to be perfectly planned.
(c) Mandatory approvals from Government and other regulatory authorities are to be obtained well in advance.
(d) Adequate funds flow is also equally important for an uninterrupted work environment and for savings on the expenditure.

Viable Solutions

(i) A High Power Steering Committee comprising of Secretary level and City top Officials concerned should be constituted to monitor and sort out the hurdles, if any, arising out of metro rail construction works, instantly on a time bound manner.
(ii) Faster completion and opening of part corridors for public service would earn some revenues to mitigate and ease the financial hardship during construction period.

Challenge: Ridership Projections Vs Actuals

Transport Planners make assessment of ridership figures scientifically and methodically based on various factors as per the prescribed norms right from year one of the COD. The projected numbers are arithmetically accurate and can’t be denied. But the actual ridership is always below the assessed ridership figures in the initial years. The gap between projected traffic and the realised traffic depends on the mode shift which is related to people’s psychology to a great extent that varies from region to region. The commuters take some time, may be years, to shift from their present mode of transport to the new mode of transport system.That is why, Indian Railways consider 11th year and Productivity test / Review is conducted in the 11th year after opening of a new line for traffic. Metro Railways consider 6th year as the realistic year of achieving the estimated ridership. It is however certain that the commuters who shift to metro travel will never revert to earlier mode of transport due to many value added advantages.

In my opinion, 40 km or more is the ideal length for Metro Rail System in a City. Shorter distance Metros are tend to face acute financial position due to a difficult situation of balancing the revenues and O&M expenses out of metro operations. However, Railways and Metro Railways are of long sustained transport systems,which would serve through generations and soin the longer run, travel by rail/metro rail prove to be the cheapest transportation of all modes.

Viable Solutions
It is therefore explained that

(a) Metro rail systems are financially viable on the long run and ultimately they would remain to be the most affordable public transport.
(b) Ridership promotional programmes – Seamless Travel solutions like creating multi model integrated transportation hubs and providing last mile connectivity by metro managements – Metro Stations as work places and community meeting center set care some of the ideas to achieve increased ridership revenues.

Challenge: Difficulties in O & M Operations

Metro Rail Systems are being implemented with the most modern technological designs and of course, those are towards time/space/cost saving improvements. The Third-Rail Traction System, the CBTC signalling system, the GoA4 driverless operations and the Centralised Command Control Systems etc – all are cost-effective innovations in the metro rail system. The spares and replacements are often imported and requires sufficient stocks to be kept ready. Unskilled and untrained staff face problems in case of break downs and takes longer time for restoration of operations.

Viable Solutions

In India, today about 60 Metro Rail Projects in 28 Cities, are either operational or under construction or in planning & designing stage. Hence, there is a huge demand for all types of metro rail products in ourcountry itself. The vision “Make-In-India” is a must that many metro related manufacturing Industries are coming up and no need for importing machinery on a larger scale.

Staff recruited should be well trained before deployment. In this regard, DMRC has taken the lead in starting a Training Institute at Delhi imparting training to the employees in all trades of Metro Rails Organisations.

Challenge: Financial Viability

The first question that comes in many minds is – whether such a big Project is Profitable, frankly speaking, only a few Metro Rails Systems are profit making and rest are running with Govt’s support world over. It is for the Governments to provide its citizens with the survival essentials like food, education, health and good transport at affordable prices, said to be the four pillars of Good Governance. Here, we should not look for profits in providing a robust Public Transportation System, much superior to all other public transports. Govt of India took suitable forward steps in this aspectby formulating the progressive guidelines in the Metro Rail Policy – 2017, interalia, the eligibility criteria to be the EIRR (Economic Internal Rate of Return) @14% but not the FIRR (Financial Internal Rate of Return) to establish Metro System in any city. Some research studies held world wide on ‘before Metro & after Metro’ proved that the GDP growth in those cities multiplied faster over years, after establishing Metro as the main means of transport. We should always see the Socio-Economic benefits accrue to the Society. Metro Rail Systems are economically viable ! viable !! viable !!!

What is a Light Metro Rail System?

Light Metro Rail System is almost similar to those Metro Rail Systems operational in Indian cities, but it’s a smaller & smarter version, most suitable to Tier-2 and Tier-3 Cities with Moderate Ridership. This is similar to LRT Systems functional in many european cities, but on an elevated track, since most of the Indian cities are congested and so, needs a grade separated RoW.

It is acost effective Metro System with about 25% less costlier than the other Metros and lesser by20% in recurring O&M expenses. The great advantage is that this system could be upgraded to a higher version after 40-45 years when the traffic demand abnormally rises.

The techno-economic features and the differences between Heavy (conventional) metro rail system and the Light Metro Rail System will be explained in detail by the Writer in one of our upcoming monthly issues.

Views expressed by: U J M RAO, IRAS, Managing Director, Andhra Pradesh Metro Rail Corporation Ltd.

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