India accounts for the world’s fastest rate of urbanisation with nearly 25 people migrating from rural to urban areas almost every minute. As a result, cities have been growing rapidly, compelling the state, municipal and central authorities to build physical and social infrastructure to accommodate the growing urbanisation needs. In this context, western cities present good benchmarks to follow, given their efficiency in managing movement and connectivity. Connectivity to workplaces is key. But with the growing urban population and limited land availability, this has become a major challenge. Proper planning, and encouraging and incentivising the use of public transport are, therefore, of paramount importance. The use of non-motorised transport and mass rapid transit systems needs to be promoted with proper land use planning in place. At a recent conference organised by India Infrastructure, Sudhendu Sinha, adviser, NITI Aayog, discussed the overall experience with metro rail projects, the impact of Gati Shakti, the key issues and challenges associated with the sector, and the scope for e-mobility. Excerpts…
The story so far
The Indian metro rail network has witnessed steady planning and execution of projects. At present, India has an operational metro rail network of more than 800 km. While the Ministry of Housing and Urban Affairs leads these projects, the state governments also have a key role in decision-making. Foreseeing major growth in ridership over the next 5-10 years, many state governments are becoming more active in expanding their metro rail networks. They take cognisance of the fact that the increasing population will increase the demand for public transportation such as metro rail systems. In order to make these projects more economical and efficient, public authorities have worked together to lower the expenditure and capital cost with the introduction of MetroLite and MetroNeo. There has been a reduction of up to 40 per cent in projects in less capital-intensive geographies. Similarly, the functional performance of the Delhi metro has been creditworthy. Despite the low financial returns, its impact and utility for the masses have been high.
A notable development has been the innovation in signalling systems in metro rails, such as the communication-based train control system. It allows faster movement of trains with larger capacities without compromising safety standards. NITI Aayog is facilitating similar improvements in three specific areas. The first is the standardisation of metro components, the second is benchmarking the unit cost across different locations and the third is creating an indexing base for assessing their performance. The performance would also include the first- and last-mile connectivity mechanism.
Impact of the Gati Shakti Plan on metro rail projects
The PM Gati Shakti Master Plan is an overall framework for projects across infrastructure sectors. Its impact is threefold – reducing the time and cost of project implementation, guiding the entire life cycle of projects, and ensuring intergovernmental synergy in projects.
The planning of urban areas will be supported by the Gati Shakti framework, which will give clarity on the demography of the projects, their spread, the density of the site, and its connection with other areas such as work locations.
Potential financial models
The high capital costs of metro rail projects are assessed with other factors such as financial and economic rate of return, environmental impact, and development impact. The funding of these projects is impacted by various factors. Although the project should be able to recover its operating costs, it is not necessary for it to be profitable in all respects. Being public projects, metro systems across Asia and Europe have not reaped profits but they have offered larger benefits to the public. To that end, Singapore, Kuala Lumpur and Germany have allowed cheap and free travel access to people at the authorities’ cost in order to promote the use of public transport.
One of the possible models that can help in ensuring the financial feasibility of these projects is that the capital cost be borne by the central exchequer, thus lowering the burden of initial costs on other stakeholders. The other is value capture financing, which relies on the potential growth of the adjoining land of the site. Regions such as South America have perfected its application for designing their metro network and other facilities around it.
PPP in urban rail
The involvement of the private sector in urban rail projects is based on the premise that they not only draw profits from the projects but also anticipate shared risks as part of the contractual agreement. It is necessary that the government involves the private sector more inclusively in the process of management of projects under the public-private partnership (PPP) mode. There is a need for a more liberal and collaborative approach to ensure sustained income and profit margins for private players. Along with this, there should be a seamless and easy mechanism for handling disputes throughout the course of the project. Private partner interest is likely to be low unless companies aiming for the project are able to transparently gauge the possible returns and complications associated with these projects.
In a bid to incentivise and encourage private sector participation, the government can standardise agreements to act as guiding tools for both parties. It needs to be transparent with their roles and responsibilities laid out.
Pain points
The idea of the metro rail is primarily to free up congestion on roads and as a result reduce pollution and its impact on human health. Although some change was seen in the beginning, it eventually started fading as the increased space resulted in a higher use of vehicles, thereby increasing pollution levels. This has become a major challenge now. The solution does not lie in creating more infrastructure alone but in bringing about a behavioural change.
Unlike Western nations, Indian citizens are likely to consider the use of public transport discomfiting. It is essential that the use of public transport is normalised in the country. Awareness regarding the successful city landscapes of London, Amsterdam or Tokyo and their belief in the increased use of public transport is imperative. Amsterdam has encouraged cycling with its high quality cycling infrastructure. In Tokyo, an individual walks 8-9 km on average whereas in India, a person walks barely 1 km. A supporting infrastructure can act as a motivation for people to adopt these modes.
Scope of e-mobility
Electric mobility has become a national mission for the country with a wide scope for the transformation of the transportation sector. The focus of expansion is currently on the two- and three-wheeler segments. Another key area is the electrification of buses. The electrification of buses is a transformational initiative as it strengthens and cleans up the public transport system with higher content visibility and impact. Simultaneously, the railway sector is focusing on becoming a net zero carbon emitter by 2030.
