Metro Rail News January 2018

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Constraints The major issues, related to PPP in metro projects in India are commercial viability and procurement of Right of Way (RoW) and land. Metro projects are high capital intensive. Private players look for a return of around 12-15 per cent, while no metro project has yielded an investment return of more than 3 per cent. Metro projects are also long-haul projects and will take long time to breakeven. The returns can only be generated by steep hike in their fares, but this is a problematic prospect for various reasons. The collection of revenues is highly uncertain in most of public transportation projects. The private investment has not been successful in Airport Metro Express Line because the usually unstable revenues which make them commercially unviable. A trade-off is then often present in the case when the financial rate of return is below the market rate for private funds; some form of public support is required to make the project feasible (viability gap funding). The financial rate of return may be improved by way of additional user charges then economic rate of return may be affected negatively. Another issue is the procurement Right of Ways (RoW) and Land. The responsibility of procuring RoW and land rests with the concerned state government. Private acquisition is very difficult with lengthy procedures and social considerations also need to be addressed, which is a challenging assignment. In Mumbai Metro Line 1, Reliance Infrastructure took almost 7 years to complete 11 km of the relatively easier elevated line. This is due to delay in receipt of unencumbered Right of Way (RoW) / land by Government & Mumbai Metropolitan Region Development Authority (MMRDA). So delay of procurement of RoW and land is another obstacle for PPP projects. In India, it is seen that political and bureaucratic constraints, such as fragmented decision making due to the involvement of multiple public agencies, the prevalent emphasis on administrative procedures rather than on strategies and results and lengthy tendering process (normally split in three or four phases, from planning to final operation) lead the problems for implementation of PPP projects in public transportation. Opportunities But there are also reasons in favour of PPP in metro projects. The PPP structure will help speedy, efficient and cost effective delivery of projects apart from better value of money and high performance incentives. The accountability and risk is with the private sector. But the success of the project will depend on the contract agreement (PPP framework) that the owners enters into with the construction company. Way Forward As cities are growing at a fast pace, metro will be an important constituent of the transport mix. Metro is more capital-intensive as it requires everything from land acquisition to civil works, signalling, and rolling stock. The capitalintensive nature of such projects does not allow private players to get a return on their investments easily. The metro has several externalities that make it imperative for the government to subsidize it. From enhanced mobility, to its relatively low carbon footprint, metro usage has benefits that cannot be measured through the purely commercial yardstick of profit and loss. So instead of PPP, state governments should give more emphasis for adopting innovative financing mechanisms like Value Capture Financing tools to mobilize resources for financing metro projects by capturing a share of increase in the asset values through ‘Betterment Levy’. The government has also to ensure affordable public transport and hence it must invest in it. To ensure that least cost mass transit mode is selected for public transport, the New Metro policy mandates Alternate Analysis, requiring evaluation of other modes of mass transit like BRTS (Bus Rapid Transit System), Light Rail Transit, Tramways, Metro Rail and Regional Rail in terms of demand, capacity, cost and ease of implementation. *** © METRO RAIL NEWS | JANUARY 2018 | WWW.METRORAILNEWS.IN 33
Make in India: Metro coaches being made in India for some of world’s biggest metro rail projects M etro is emerging as key solutions to fulfil demand for urban transportation in India. As per Ministry of Urban Development (MoUD), about 425 kilometres of Metro rail is under operation and more than 500 kms of Metro rail is under construction across the country. It is expected that 3 new systems will become operation by 2018, mainly Noida, Nagpur and Navi Mumbai. Some of the metro lines, like Pune, Kanpur, Kolkata and Ahmedabad are under construction. I tell the world, ‘Make in India’. Sell anywhere but manufacture here. We have the skill and talent for it. We have to increase manufacturing and at the same time ensure that the benefits reach the youth of our nation. - Prime Minister Narendra Modi _____________________ 34 © METRO RAIL NEWS | JANUARY 2018 | WWW.METRORAILNEWS.IN
Page 1: January 2018 / Monthly / Vol. I / I
Page 4 and 5: CONTENTS 13 Delhi Metro celebrating
Page 6 and 7: EDITORIAL BOARD (January 2018) Vol.
Page 9 and 10: NEWS HIGHLIGHTS NATIONAL DEC 2, 201
Page 11 and 12: DEC 7, 2017 • Gurugram Metropolit
Page 13 and 14: T he Delhi Metro was not India's fi
Page 15 and 16: Airport line Then: It was opened in
Page 17: pillars, mobile connectivity contin
Page 20: The discussion from this point forw
Page 24 and 25: Exclusive Interview: Dr. Mangu Sing
Page 26: May till now, our average revenue h
Page 29 and 30: Solving problems… …to achieve G
Page 31: What important changes have you in
Page 36 and 37: The capital costs of Metro coaches
Page 38 and 39: Exclusive Interview: Dr. E. Sreedha
Page 40 and 41: Future within better Public Transpo
Page 42 and 43: Digital Transformation: Decoding Tr
Page 44 and 45: Collaboration is the key to busines
Page 46 and 47: Metro Rail Metro Rail is a Mass Rap
Page 48 and 49: I once had a good chat with a coupl
Page 50 and 51: Company Name & Location Description
Page 52 and 53: Metro & Railway Job Openings Organi
Page 54: Subscribe METRO RAIL NEWS An exclus

Metro Rail News January 2018

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