Metro rail systems are not just limited to managing urban traffic congestion in large Indian cities. In fact, metro systems are now considered an important tool for planned urban development around which mobility policies are being formulated to make cities more liveable and sustainable. At present, the total operational metro network in the country is spread across 490 km in 10 cities. Delhi, Bengaluru and Chennai account for 80 per cent of the total operational network. Another 600 km of metro rail network is under construction in 13 cities. The Ministry of Housing and Urban Affairs (MoHUA) has also called for planning metro rail projects in cities with a population in excess of 2 million. The numbers of cities with metro rail systems are thus expected to go up to 30 in the next five years.
Metro rail projects are capital intensive. Cost optimisation during construction and adequate revenue generation during operations are, therefore, crucial to make them financially sustainable. So far, most of the metro rail projects have been financed by the central government in partnership with state governments, while some (such as Jaipur and Hyderabad) have been funded by the state governments either on their own or in private partnership.
The expansion of metro rail systems to a greater number of cities would mean a higher requirement for key components and subsystems such as rolling stock, electrical and mechanical systems, and signalling and telecommunication systems. The cost of these subsystems varies significantly across projects. A number of reasons can be attributed to this. Among these are length of the underground section, the capacity of rolling stock, layout of metro stations, and the land requirement (and whether it is available free of cost).
In terms of cost, station costs account for about 25 per cent of the overall project cost. Underground stations cost four times as much as ground-level stations while elevated stations are twice as expensive. Civil works for guideways too account for about 25 per cent of the project cost, while rolling stock accounts for 15-20 per cent, depending on the number of cars procured. Other key subsystems such as track, power, signalling, telecom and automatic fare collection systems, each account for 3-6 per cent of the total project cost.
The MoHUA, in a bid to promote the Make in India programme, has set guidelines for the standardisation and indigenisation of upcoming metro rail projects in the country. It has prepared a definitive plan for phased indigenisation which specifies the minimum local content in various subsystems of metro rail projects. For instance, the indigenisation target for rolling stock has been fixed at 40 per cent, and this could be raised to as much as 50 per cent from 2019 onwards. In addition, indigenous manufacturing of a minimum 75 per cent of the total number of cars and indigenous manufacturing of identified equipment for at least 25 per cent of the tendered number of cars has been made mandatory if over 100 metro cars are to be procured.
The indigenisation target for telecom and signalling systems has been fixed at 40 per cent and 30 per cent respectively, and this could be increased to 50 per cent and 40 per cent, respectively, from 2019. The target for civil works has been fixed at 80 per cent and for electrical works at 50 per cent. Local suppliers will get a margin of preference to the extent of 10 per cent.
Currently, major metro subsystems such as rolling stock, signalling, telecom, traction and track works are financed through sovereign loans from multilateral sources and bilateral financial institutions. However, these agencies lay down a number of restrictions in the tender conditions which adversely affect the indigenisation objective of the Make in India programme.
To address this issue, the MoHUA, in its recent guidelines, has advised all the metro corporations to fund rolling stock, signalling and other system components through equity, counterpart funding or domestic funding and not secure sovereign loans from multilateral or bilateral institutions. This guideline will ensure that the interest of the local supplier is protected, and will also provide a boost to indigenisation-related initiatives.
In another major initiative to encourage the indigenisation of key subsystems of metro rail projects, the MoHUA has standardised broad parameters for rolling stock, signalling systems and electrical systems for all future projects. To look into the standardisation of other critical components such as the layout of metro stations, platforms, signage and displays, size of tunnels, fire protection systems, disaster management systems, waste management systems, solar panel installations at stations, etc., the MoHUA has constituted a nine-member committee under the leadership of Dr E. Sreedharan, former managing director, Delhi Metro Rail Corporation (DMRC).
The standardisation of products and systems will ensure that metro rail subsystems for all new metro projects conform to the prescribed standards thus incentivising manufacturers to plan for long-term investments and set up manufacturing units in the country. This will also bring down the cost of metro rail construction and operations.
At present, the extent of indigenisation in rolling stock for metro rail depends upon the suppliers and varies significantly. The range is as much as 20-75 per cent. This is mainly because until now there were no mandatory tender requirements for indigenisation. With the mandatory requirement coming into force, the extent of indigenisation is expected to scale up to 40-80 per cent. One of the major concerns in indigenising components of rolling stock is the import of software and hardware of electronic equipment comprising train control management systems, converters/inverters, brake systems, auxiliary converters, etc.
Rolling stock manufacturers such as Alstom, Bombardier and BEML have manufacturing facilities in the country. Titagarh Wagons India Limited is also planning to set up a manufacturing facility with its Italian partner Firema Trasporti to manufacture coaches domestically. Other foreign manufacturers such as CRRC, CAF, Hitachi and Kawasaki are also in the process of setting up manufacturing facilities in collaboration with Indian manufacturers.
Likewise, the extent of indigenisation in signalling systems varies from 20 per cent to 60 per cent depending upon the supplier. The scale of indigenisation is expected to remain in this range in the near future as well. Key signalling components that are imported include zone controller hardware and software and point machines. These components are likely to be imported in the near future as well due to technical complexities in their local production.
Major signalling equipment manufacturers such as Siemens, Alstom, Bombardier and Ansaldo have set up manufacturing facilities in India. However, critical hardware and software continue to be imported. Electrical traction equipment manufacturers such as ABB, Siemens and L&T have also established manufacturing units in the country and most traction equipment is being manufactured locally. Civil construction too is almost 100 per cent indigenous. Local manufacturing of automatic fare collection systems and platform screen doors are yet to pick up pace.
There are, however, limitations to indigenisation-related initiatives. Electrical components, which account for a significant share of the cost, are imported and then assembled locally. Indian suppliers do not have the know-how to design, control and manufacture quality electronic systems and the cost of establishing manufacturing facilities for electronic systems is huge. While it is acceptable that not all metro rail-related components can be manufactured indigenously (the cost economics are not feasible for all components), a definitive mechanism which provides an assured domestic market and provides incentives for exporting metro rail-related components will encourage Indian suppliers to invest in and scale up local production incrementally.
Another important area of focus should be on reducing the design cost of subsystems (which ranges from 6 to 8 per cent of the project cost). The MoHUA’s initiative of standardising the specifications for systems/subsystems for all metros will reduce the design cost, increase volumes and encourage Indian suppliers to create standard facilities for manufacturing. Industry-academic partnerships as in the case of the DMRC and Indian Institute of Technology, Delhi, have to be promoted to conduct research on metro design, technology, planning and construction. Such initiatives will help in evolving cost-effective new standards and specifications suited for Indian metro rail systems.
To conclude, the focus on indigenisation has had promising results. Key rolling stock manufacturers have established local manufacturing units in the country. This has meant that metro rail corporations have access to state-of-the-art critical and subcritical systems at a competitive cost. The government’s recent initiative of establishing rolling stock standardisation norms and mandatory conditions for indigenisation of rolling stock will further provide a fillip to these initiatives.