India’s urban rail system is expanding due to rapid urbanisation and the demand for sustainable transportation. Metro systems have become integral to the transportation ecosystem in urban areas. However, despite the overall progress in the metro sector, several challenges remain. Contractors encounter hurdles throughout project execution, ranging from litigation to escalating costs and unfavourable contract obligations. As a result, these lead to time overruns. In order to reach an ideal scenario where projects are completed on schedule while maintaining the highest standards of quality and safety, the issues being faced by the contractors must be addressed.
Need for strengthening DPR standards
To ensure the timely completion of metro projects, it is essential to begin adequate preparations at the very outset of the project life cycle, during the preparation of the detailed project report (DPR). The DPR must be of high quality, accurately reflecting on-the-ground conditions, fixing feasible alignments, and addressing right-of-way (RoW) issues in advance. Ideally, the DPR should be structured in such a manner that when the contract is being implemented, only minor adjustments to the scope of work are required.
In metro projects, during the project approval stage, there are often discussions regarding land acquisition, and multimodal and intermodal connectivity. However, these components are usually not included in the DPRs, as they are frequently prepared without sufficient time and adequate investigation. This oversight leads to challenges in project implementation.
The regional rapid transit system (RRTS) is a notable example of effective DPR preparation. With the project being sanctioned in 2019, contracting began at the end of 2020 and was finalised in 2021. Within three years, the project was commissioned, and one of the contributing factors for the quick commissioning was a well-prepared DPR. All necessary alignments were planned prior to project implementation, including road widening, utility relocation and tree cutting, ensuring a smooth transition into the main construction phase. Thus, a thorough DPR is crucial for the successful execution of the project.
Call for standardisation
The metro sector faces a significant lack of standardisation as each metro authority enforces its own construction standards and qualification criteria. This contrast creates a challenging and unpredictable environment for contractors. Contractors that provide services for one metro project often find themselves ineligible for another one.
Industry experts should be consulted while drafting specifications, as they can recommend newer technologies, such as prefabricated components, which, in turn, can facilitate smooth construction, as well as ensure project quality, safety and timely completion. Metro authorities should take steps towards standardisation, similar to Indian Railways, which has successfully established the Research Development and Standard Organisation to develop operational standards. This approach can improve efficiency and consistency across metro projects, ultimately benefiting all stakeholders involved.
Additionally, contractors can set up training and research institutes to upskill the workforce, explore foreign technologies and standardise specifications for future use.
Inconsistent contract packaging
Remarkably, metro projects are now being awarded on turnkey basis, on the lines of the Bengaluru and Hyderabad metros. However, across states, projects still continue to be awarded in different packages, resulting in varied package designs across metro systems.
For example, the mechanical, electrical and plumbing engineering aspect is clubbed with civil engineering at times and with electrical engineering at other times. Similarly, track, electrification and signalling are sometimes considered as a system package and sometimes separate. This disparity hinders the project from being visualised on a turnkey basis. Consequently, this delays the project commissioning as a whole, causing cost overruns of 25-40 per cent.
To this end, global best practices should be made key considerations. Going forward, India would benefit from adopting a comprehensive turnkey approach, similar to that employed in Dubai’s metro expansion. This strategy, implemented in Dubai’s second phase, encompasses all aspects of project delivery, including construction, civil engineering and rolling stock procurement. By systematically analysing past experiences, implementing learnings and valuable insights, the Indian metro sector can refine its project management methodologies and implementation strategies. This is crucial for enhancing the efficacy of upcoming projects, minimising cost overruns and adhering to timelines.
In the long run, a move towards turnkey projects can be adopted, while a special provision for specialist subcontractors can be made. However, efforts should be made to carry out packaging systematically and consistently.
Intervention needed
Over the years, the eligibility criteria in the sector have become liberal, leading to a more competitive environment. The average number of bidders for a project has risen to over 15, allowing new entrants with adequate financial wherewithal and civil engineering experience from other sectors to participate. As a result, competition has intensified, and the lowest bidders from other sectors who wish to enter the market win the contracts by quoting low bids. This trend may have long-term consequences.
While authorities may successfully award projects at a lower cost, the execution of these projects could be compromised due to a lack of expertise among the winning bidders, leading to time overruns.
Talent shortfall
The sector is currently facing acute shortage of a skilled workforce. With 900 km of the metro network already completed, over 660 km under construction and around 1,350 km planned, the issue of insufficient skilled workers is critical. There is an estimated shortfall of nearly 30 million individuals to implement these projects effectively. It is imperative to address this bottleneck to ensure safety and maintain quality throughout the project implementation process.
Contractual hurdles
The contract arrangements are found to be unfavourable from the contractors’ perspective. For instance, compensation for a rigid overhead conductor system (ROCS) is calculated using a present value formula that consists of a 30 per cent fixed component and a 70 per cent variable component linked to the wholesale price index (WPI). However, the ROCS includes components made from aluminium, copper and transformers, the prices of which do not necessarily align with WPI fluctuations. This discrepancy puts pressure on the contractors’ profitability and compresses their margins.
Further, often it is the contractor’s responsibility to identify and conduct utility shifting and tree cutting, and seek permission for the same from the authorities; this delays the project. These kind of variations, and alignment and utility challenges are considered the contractors’ responsibility, making the contracts not evenly balanced in the contractors’ favour.
In sum
There is significant room for improvement in the metro construction sector in India. This ranges from the preparation of comprehensive DPRs to skill development. Improvements in these segments can significantly improve project efficiency and ensure the successful and timely completion of projects, ultimately helping the country establish an urban rail system ready for the future.
In a recent development, the Ministry of Housing and Urban Affairs has taken the initiative towards standardisation by engaging with various metro heads of state governments.
Based on a panel discussion among Aniruddha Kumar, Senior Vice President, Railways and Metro, Kalpataru Projects International Limited; N.S. Sridharan, Head, Elevated Metros & HSR (UT SBG), Larsen & Toubro ECC; and Vinod Kumar Yadav, Director, Transport, NCC, at a recent India Infrastructure conference