Metro Update: Trends, challenges and opportunities in the urban rail sector

Trends, challenges and opportunities in the urban rail sector

India has an operational urban rail network of around 735 km, growing at a CAGR of 20 per cent in the past 12 years. There are 20 under-construction projects with a total length of around 1,060 km and over 25 new sancti­on­ed/planning projects with a length of about 1,052 km. A recent conference on Urban Rail in India highlighted the upcoming trends, chall­en­ges and opportunities in the sector, and discussed the new and emerging requirements for the deployment of advanced rolling stock, fare collection and signalling systems.

Indian Infrastructure presents the key takeaways from the conference…

Emerging trends

New forms of cost-effective mass transit systems such as Metro Neo and Metro Lite are expected to be predominant metro systems in the next 25 years. Open loop ticketing systems, drones, sensors, artificial intelligence (AI), vid­eo analytics and communications-based train control systems are some of the technology-driven solutions being deployed. The focus on indigenisation has increased with the Make in India and Atmanirbhar Bharat initiatives.

Unbundled public-private partnership (PPP) is an emerging trend. Integrated PPPs are possible for low capex projects such as Metro Lite, given that the risk is shared by the metro au­thority. Metro authorities are exploring innovative means of financing to mobilise re­sources for metro projects. Land value capture financing is also gaining traction and is expected to grow in the future. It is used to address some of the financial challenges. There is an emphasis on the optimisation of operations and maintenan­ce (O&M) costs. Going forward, it is expected that O&M in metro projects of Tier II and Tier III cities will be outsourced to private players.

Fare collection

There are a handful of fintech start-ups operating in the transit payment segment. The procu­rement and tendering system currently in practice acts as a barrier for start-ups. Policy decision and industry collaboration are needed to encourage start-ups to enter the space. Most of the existing players do not have sufficient fun­ds to be long-term partners in the PPP mo­del. Banks are also reluctant to fund projects befo­re the transaction system is in place.

There are around 50 million National Com­mon Mobility Cards (NCMCs) currently in circulation. The card has not gained traction for low-value payments. The uptake of the NCMC system has been quite slow as the enabling ecosystem is still weak. Hence, the costs are still high.

In Tier II cities, closed loop technology has a cost advantage. In order to transition to open loop systems, financial incentives are required for bus operators to break the closed loop monopoly.

The Covid-19 pandemic posed a number of challenges for metro operators. The ridership level will take time to reach pre-Covid-19 levels. Moreover, financial support from the government would help cover maintenance costs.

Mumbai Metro

Before the outbreak of Covid-19, hourly ridership on Mumbai Metro Line 1 was around 50,000 passengers while the load carrying ca­pacity was 60,000 passengers per hour. Post the second wave, as on September 28, 2021, hourly ridership stood at 20,000.

Mumbai Metro Line 3 is fully underground with a length of 33.5 km. It is estimated that ri­dership will reach 1.2 million trips in 2021 and 1.7 million trips by 2031. Physical prog­­ress is at around 70 per cent while financial progress is at 80 per cent.

The long-term effects of Covid-19 on transportation systems include:

  • Low levels of ridership due to a paradigm shift in the work culture and dread behaviour
  • Slowdown of ongoing projects
  • Cash crunch for operational projects due to low ridership
  • Investments likely to be muted for the next one to two years

Mumbai Metro One has built infrastructure to ensure the health and safety of its employe­es. A Metro One health committee was set up to extend support to Covid-19 patients and their families.

Operational projects are affected the most as there is a significant cash crunch. Mumbai Metro One was planning to add more coaches before the pandemic hit, but has now put those plans on hold.

Technological solutions should be adopted to reduce contact points and install smart sanitisation systems. Data could be leveraged for efficient crowd management by means of cro­wd density modelling, real-time congestion maps for commuters, etc.

The government and operators should collaborate to create ridership demand in order to fully utilise the existing capacity. Efforts should be made to coordinate multimodal projects and encourage cooperation instead of competition among firms.

Rolling stock and signalling and telecommunication

The National Capital Region Transport Cor­po­ration is implementing three corridors under Phase I. Tenders have been awarded for the Del­hi-Meerut corridor and civil works are un­derway. The other two corridors are the Delhi-Alwar regional rapid transit system (RRTS) and the Delhi-Panipat RRTS. RRTS corridors will have an operational speed of 160 km per hour, one of the fastest trains in India. Rolling stock order for the Delhi-Meerut RRTS has already been awarded to Alstom. The ETCS 2 signalling system will be deployed on all the three corridors. Currently, the DMRC has over 2,200 metro cars in service. The authority has invited bids for 288 cars under Phase IV.

Energy consumption is one of the major concerns. Electricity bills constitute 35-40 per cent of the operational cost. Thus, energy efficient designs are being looked at. Further, project execution has become difficult due to Covid-19. Support is needed from foreign companies in terms of supply of products and commissioning of cars. This has become a challenge due to travel restrictions. While there are a number of coach manufacturing facilities in the country, testing facilities are extremely limited. This poses a challenge in rolling stock com­missioning.

A modern telecommunication system is required for smart fleet management, onboard and wayside video surveillance, and onboard real-time high data rate services. To facilitate advanced railway features and signalling for high speed rails, 4G/5G communication is one of the important options.

Contractor perspective

Construction challenges and solutions ha­ve both evolved over time. The issue of land acquisition has been resolved to a large extent. Shif­ting of utilities, however, is a major roadblock in urban rail construction. There is less time for the execution of projects. Double the length is to be constructed in half the time. Further, the­re has been a growing concern regarding environmental sustainability. Furthermore, ra­pid urbanisation is increasing the magnitude of these challenges.

Construction is being mechanised. To this end, precast technology is being used. New technologies have had an impact on project cost. However, efficient construction practices are still not able to offset cost escalations. For environment conservation, dust suppression systems are being put in place. Artificial/Mini forests are also being created.

The tender price should be appropriate and commensurate with the material cost ch­an­ges. A fair and well-structured contract me­chanism is needed to mitigate the problem of un­equal risk sharing. To ensure safety and qua­lity of projects, the government needs to undertake more detailed credibility checks. Co­n­trac­tors should not be foreseen as financiers. The timely settlement of litigation is the need of the hour.

High speed rail and transport tunnels are sunrise sectors. Overall, the projects related to mobility and urbanisation offer construction opportunities to contractors.