The network of rail-based urban transportation systems has been developing rapidly, and the growth is expected to be maintained over the next few years, given the speed of urbanisation in the country. Provision of efficient urban transport has become a focus area of governments both at the central and state levels. Besides metro rail projects, a number of bus rapid transit (BRT) projects have been conceptualised and implemented. City bus services too are being extended to remote and unserved areas.
Over the course of the past few years, the government has been actively supporting the implementation of rail-based and BRT projects in different cities. The pace of uptake of new projects in the urban transport sector has picked up visibly. The demand for modern coaches and buses has increased. Advanced systems are being deployed for fare collection, signalling and telecommunications. New policies such as the Metro Rail Policy, 2017, have also been put in place to stimulate private sector participation.
Despite these efforts, there is still a huge backlog in the provisioning of urban transportation services, particularly in metropolitan cities. Issues relating to acquisition of land, shifting of utilities, high capital cost requirements, involvement of multiple agencies, etc., continue to impede timely completion and expansion of projects.
A snapshot of the noteworthy trends over the past year and the outlook for the urban transport sector…
- The country’s current operational network of urban rail systems is over 655 km. Metro rail projects are operational in Delhi, Bengaluru, Kolkata, Gurugram, Jaipur, Chennai, Hyderabad, Lucknow, Ahmedabad, Gandhinagar, Noida, Greater Noida, Kochi and Mumbai. The average daily ridership on rail-based systems has been rising consistently, keeping pace with the growth in the operational network. There are several metro rail projects under implementation as well. These include those in Kanpur, Vijayawada, Varanasi, Chennai, Patna, Kozhikode, Bhopal, Ahmedabad, Nagpur, Navi Mumbai, Guwahati, Pune and Indore. Between January 2018 and March 2019, a metro rail network of about 245 km was commissioned or completed. The highest addition of 125 km was on account of the commissioning of six stretches under Phase III of the Delhi metro.
- Given the large upfront capital requirements, the government provides financial support in the form of grants to the states of up to 10 per cent of the project cost, in the form of 50:50 equity sharing with the state governments, or viability gap funding to the extent of 20 per cent of the capital cost of public transport projects (under the public-private partnership [PPP] model). In 2017-18 and 2018-19 (till February 2019), the Ministry of Housing and Urban Affairs released a total of Rs 280 billion to various metro rail projects.
- Alternative mass transit systems such as regional rapid transit (RRT), monorail and light rail transit (LRT) systems are being explored by the government. While there is no operational LRT system so far, there are a total of five such projects, spanning a length of 200 km, that are planned to be developed at an estimated investment of Rs 645.81 billion. These systems will be developed in the cities of Kozhikode and Thiruvananthapuram in Kerala, Vijayawada in Andhra Pradesh, Pune in Maharashtra, and Ranchi in Jharkhand. Besides, there are also plans to develop three RRT systems with a total network length of about 350 km.
- With regard to BRT systems, 11 cities have operational BRT networks covering a total length of over 344 km. The first BRT system, spanning a total length of 14.8 km, was operationalised in 2006 in Pune. Since then, BRT networks of about 325 km have been operationalised in Ahmedabad, Amritsar, Bhopal, Indore, Jaipur, Naya Raipur, Pimpri-Chinchwad, Rajkot, Surat and Vijayawada.
- New and innovative technologies and intelligent transportation systems are being experimented with for fare collection, and signalling and telecommunications (S&T). Metro systems are moving from semi-automatic to unattended/driverless train operations. Metro rail systems in Delhi, Chennai, Hyderabad, Jaipur, Kolkata (East-West), Lucknow, Mumbai, Nagpur and Navi Mumbai are either using or are planning to deploy advanced communication-based train control systems for S&T. The introduction of online smart card recharge services, common mobility cards for different modes of transport, advanced near-field communication systems, and metro-cum-debit cards are some of the other new initiatives being taken to automate fare collection processes. Further, metro cars/coaches are being deployed with advanced solutions such as passenger information systems, mobile/laptop charging points and CCTV cameras. Advanced technologies for tunnelling and constructing elevated structures are also being used to keep up with the increased pace of project approvals without compromising on safety.
- BRT systems too are using new technologies to improve the passenger travel experience. Automated fare collection systems, global positioning system (GPS)-based fleet monitoring, vehicle scheduling and dispatch, and passenger information systems are some of the solutions being inducted.
- Private sector participation in the sector has been limited so far due to high construction costs, and long gestation and payback periods. The preferred mode remains central and state government funds as well as financing from multilateral agencies. In the metro rail segment, till now, three projects have been taken up on the PPP mode – the Hyderabad metro, Mumbai metro, Line 1, and Delhi Airport Express Line (initially). The success of PPP-based projects in the urban rail segment is still being debated. On the one hand, there are failed PPP examples such as the Delhi Metro Airport Express Line and the Mumbai metro, Line 1, where the developer withdrew from the contract. On the other hand, the Hyderabad metro project, which is yet to fully commence commercial operations, is believed to have changed the perception of PPP being a failed model of operation.
- Among BRT projects, only a few cities such as Ahmedabad, Bhopal, Indore, Rajkot, Surat and Visakhapatnam have been able to mobilise private funds. However, the private sector’s share is minuscule, at 5-6 per cent of the total cost of the projects.
Sector outlook: Metro rail segment offers a lucrative pipeline of projects
- Given the accelerating pace of urbanisation, opportunities in the urban transport segment will continue to expand. Innovative policies have to be designed to ensure that development is not impeded due to the inherent economic challenges. The operational urban mass transit systems are currently being expanded and new systems are on the anvil too. The sector offers a lucrative pipeline of about 43 projects (124 stretches). These projects cover more than 2,500 km and entail an investment of over Rs 6 trillion. Besides, six new BRT systems covering a total length of 220 km are planned to be operationalised in the next five to six years.
- With the rising number of towns and the rapidly growing population, the urban transport sector will remain in the spotlight. Advanced technologies and digital solutions need to be deployed to improve the customer experience and reduce/optimise operations and maintenance costs. Greater investments will be needed to fund the development of metro rail projects, procurement of rolling stock (bus and rail) and development of BRTS- and bus-related infrastructure. New non-fare revenue sources such as property development, branding of stations, train wrapping, advertisements, semi-naming rights, etc., need to be explored. Equally important will be the need to increase private participation. The private sector can be brought on board only if there are suitable incentives to perform, impartial contract enforcement and a supportive business environment.
- Going forward, the uptake and expansion of metro rail and BRT projects will offer multiple business opportunities across different segments – rolling stock, civil construction, electrical work, tracks, signalling and intelligent transportation systems, fare systems, etc. The enthusiastic response of private players and successful execution of projects in each of these segments indicate a strong business case. As the markets expand, global as well as local players will participate in projects across different segments with greater drive and purpose, thus ensuring the uptake of modern and advanced technology solutions.