Team Panorama, in conversation with Dr E. Sreedharan Principal Adviser, Delhi Metro Rail Corporation (DMRC)

  1. It is estimated that around 50 percent of India’s population is expected to live in urban areas by 2050. Given this scenario, the metro rail can play an important role in bridging the massive urban transport infrastructure gap. What should the government do to facilitate development in urban transport infrastructure
  2. The government should take the initiative to spread the metro revolution to Tier-I and Tier-II cities, while ensuring that the fare structure remain affordable for common people. The government should extend various incentives for making metro less capital intensive, as done for Delhi Metro in the initial stages. The Government of India’s (GoI) financial participation in metro projects should increase from 20 percent to 25 percent level, and tax and duty concessions should also be extended. The Centre should facilitate soft external loans for metro projects with a guarantee, while land acquisition procedures must be made easier and faster through appropriately amending the present act. The electricity for metro should be made available at no-profit, no-loss basis, while encouraging standardisation and indigenization. After all, the metro is the most reliable, safe, fast and environmentally friendly transportation system.

  3. The Union Urban Development Ministry has decided to consider the proposal for Metro in Tier II cities like Lucknow, Kanpur, Patna, Ahmedabad, Pune, Surat, Indore, Nagpur, Coimbatore, and Kozhikode. Do you think the government has adequate resources in terms of policies and finance to facilitate metro rail in these Tier II cities. Also, is self-financing of these projects possible
  4. The metro in Tier-II cities may not become profitable, however, they can be made financially sustainable through suitable financial engineering. The public–private partnership (PPP) or self-financing model may not be a sustainable option, as these exercises have not received encouraging response in the past. The government should mobilize resources through dedicated levies to finance metro projects.

  5. What should the government do to encourage public-private partnership (PPP) model to execute metro rail projects in various Indian cities
  6. A private organization will invest in metro provided the project yields 12 to 14 percent return on investment, while no metro project can offer an internal rate of return (IRR) of more than 2 to 3 percent. As a result, contemplating on public–private partnership (PPP) model may not be a fruitful exercise. The un-bundling of certain areas to private organizations doesn’t make much sense, because only lucrative segments of metro will attract attention. However, this will make things challenging for metro authorities to service and return loans.

  7. A large number of Indian infrastructure companies are currently under financial stress, what should be initiated to revive these stressed companies, and boost urban transport infrastructure development
  8. Indian infrastructure companies are presently under severe financial stress due to under-quoting in projects, on account of stiff competition and the absence of sound project management, and this needs to be corrected for future businesses.

  9. The government has standardised specifications for rolling stock and signalling systems for metro rail so that ‘Make in India’ can be promoted. What can be further initiated to promote employment and economic growth through various metro rail projects
  10. The standardisation of specifications is not enough, there should be indigenization of technology, so that few foreign players cannot hold us for ransom. The rolling stock, signalling and AFC come under this classification, where indigenization is absolutely necessary.

  11. A number of initiatives have been taken to enhance public transport in the cities. How can the government encourage foreign investment participation in the sector and boost urban transport infrastructure development
  12. The metro is unlikely to attract large foreign investments, as the project may not yield desired returns for reasons that fare structure will be controlled to make metro travel affordable for the common man.

  13. The infrastructure companies are having a tough time in raising debt to execute infrastructure projects including PPP metro rail projects. What policies should be initiated to boost urban transport infrastructure projects
  14. A number of infrastructure companies failed because the income generated from business was often siphoned out to real estate, and when housing prices crashed these infrastructure companies also collapsed. The cut throat competition prevalent in the industry should be shunned, while it’s imperative that companies adopt professional management methods.

  15. The process of land acquisition for metro rail often delays projects, increasing cost and labour. How do you think these kind of obstacles be removed to expedite various metro rail projects
  16. The acquisition of land has become a formidable challenge in construction of metro projects. The government should bring an amendment to the act, so that land acquisition becomes easier and cheaper, essentially for highway, railway and metro projects.

  17. We understand that the Uttar Pradesh Government has requested you to take charge of three more metro rail projects. How challenging these projects are going to be; as they are expected from Tier II cities
  18. We have to necessarily go in for cheaper versions of metro such as light metro projects, which will cost only about 70 percent of normal metro. However, the capacity of light metro will be restricted to 20 – 25 percent PHPDT (Peak Hour Peak Direction Traffic).

  19. Should last mile connectivity solutions also be part of the metro project?
  20. Certainly, this has been emphasized in the new metro policy announced by the government of India.

  21. Considering our expertise in manufacturing railway coaches, do you see the metro coaches to be completely being manufactured locally supporting ‘Make in India’ initiative
  22. - No country manufactures metro coaches up to 100 percent, as several components are outsourced to other countries. We have to adopt the same methodology or practice for building metro coaches. If we can develop reliable vendors with long-term business commitments, then the cost of metro coaches will come down drastically.

 

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