Union government announced a new Metro Rail Policy in August 2017. Click here to know more
It is seen as a significant stand taken on PPP, technology, urban mobility.
What are the issues in metro rail projects?
A metro system is a complex system, areas like fare collection, station management, maintenance, security and maximisation of non-operational revenues like real estate and advertising are tedious for the government.
Metro rail is as expensive as the bullet train,the bullet train costs Rs 217 crore per km.
For instance, Phase 3 of Delhi Metro cost around Rs 221 crore/km for the overground stretch and Rs 552 crore/km for the underground stretch.
With few exceptions, most metro development has been sponsored by the Union government and state governments often backed by supportive bilateral or multilateral development finance.
With the increased pace of metro construction, continued public funding will be difficult to sustain, running them departmentally, like PSUs, may not be desirable.
Why metro rail policy is a game changer?
Private Partnership - The policy explicitly recognises the need to have the private sector involved so as to tap private resources, expertise and entrepreneurship.
Therefore, allowing for the private sector in a proactive manner brings in vision, energy, technology and funding.
Urban transit -The policy recognises that the term “metro rail” is a catch-all, which in spirit seeks to capture the full spectrum of modern urban transport systems.
The policy thus encompasses all forms stretching from BRTS (Bus Rapid Transit System) to tramways, light rail, metro rail and regional rail.
Alternative transportation - The policy comes out best where it mandates an “alternative analysis” requiring a professional evaluation of the most suitable type of sustainable solution.
This will see the over-emphasis on “metros” replaced with spiffier options like electric trolley buses and tramways.
Last mile connectivity -The need for a comprehensive mobility solution is enshrined in the policy by its requirement of a Unified Metropolitan Transport Authority before a fresh scheme is cleared.
Tariff fixation -The policy postulates an economic rate of return as distinct from a financial internal rate of return.
The policy clearly recognises the need to keep populism at bay and insists on the setting up of a Permanent Fare Fixation Authority.
Financial participation -The policy pushes the sponsor to look at creative ways of project financing through adoption of innovative mechanisms like value capture financing.
The Central government has extended a participatory handshake to states.
These include PPP with central assistance under the Viability Gap Funding scheme of the ministry of finance, grant by the government of India
Way forward
Multiple agency control, and diffused attention is not conducive to the provision and growth of urban transport along a sustainable path.
Rectification of this weakness has become all the more urgent in view of the huge investments projected to be made in this sector.
Thus massive migration expected from the rural hinterland to India’s towns and cities can only be sustained by relevant urban mass transport, quickly rolled out.
