Centre to promote light rail transit system in smaller cities

OUR BUREAU THE HINDU BUSINESS LINE

KOLKATA. MARCH 13

In view of the rising concern over the viability of costly metro rail projects, especially in smaller cities, the Centre is planning to promote Light Rail as an alternative mass rapid transport system (MRTS) in urban areas.

Thirteen cities in the country are currently pursuing metro projects. The plan is to introduce MRTS solutions in 50 cities in the next few years.

LRTS standards

“In the next three to four months, we will come up with LRTS (light rail transit system) standards,” said Mukund Kumar Sinha, officer on special duty (urban transport) and ex-officio Joint Secretary in the Union Ministry of Housing and Urban Affairs.

Sinha was speaking at a seminar in Kolkata on Tuesday on ‘MRTS for urban areas’ as part of the lead up event to the forthcoming annual meet of the Asian Infrastructure Investment Bank (AIIB). The seminar was organised by Assocham on behalf of the Union Finance Ministry in collaboration with the External Affairs Ministry sponsored RIS, Delhi.

Sinha said two cities in Andhra Pradesh, Vijayawada and Visakhapatnam, are considering Light Rail projects. However, the lack of a standard design as available in the case of metro rail is a major hindrance in project planning.

Notwithstanding its high costs, India’s metro rail projects are way cheaper than similar initiatives in many countries in South Asia. It was possible because India could develop standard design and ecosystem, which is absent in the case of light rail.

No monorail

Sinha ruled out the expansion of monorail projects in India. Monorail projects are not finding many takers globally due to limited number of suppliers.

“I don’t see much prospect for monorail. Across the world, there are only three suppliers of monorail and each of them follows a different design,” he said.

In India, only Mumbai developed a monorail project. However, according to latest media reports the first phase of the project, between Chembur and Wadala has not been operational since November 2017. The passenger interest is also low.

West Bengal government is pursuing a monorail project in New Town satellite township for the last two years. But the project is not firmed up as yet. There was no representative of the State government in Tuesday’s conference.

‘Metro expensive’

Earlier, Kumar Vinay Pratap, Joint Secretary (infrastructure, policy and finance) in the Ministry of Finance pointed out that while MRTS is necessary for a variety of reasons, metro should not be considered a default option.

The cost of metro construction is reaching close to ₹300 crore a km, higher than high-speed rail. Such expenses may be justified in cities such as Mumbai or Delhi with very high footfall, he said.

Citing the example of Hong Kong metro that generates $1 billion in profits, Pratap said it was possible to make the services profitable (in big cities) with due care.

Anjul Mehrotra, Associate Director – Strategy and Operations of consulting firm KPMG pointed out that 35-40 per cent of HK metro’s EBIDTA is contributed by non-fare revenues.

According to him, India invested $10 billion in building 425 km of metro line and is slated to invest $20 billion more in 580 km line length in next five years. It means metro projects must earn to avoid the debt-trap and raising the share of non-fare revenues will be a welcome strategy.

DMRC experience

Mangu Singh, Managing Director of Delhi Metro Rail Corporation (DMRC), agreed that costs are high – ₹250 crore a km for overhead lines and ₹500 crore a km for underground sections. However, he contested the premise that the returns should be measured only in terms of the economic gains.

DMRC makes operational profits with high contribution from non fare-box revenue. However, barring some exceptional years, net profit largely eluded it. The economic return of Delhi metro is estimated at 23 per cent.

DMRC currently owns nearly 250 km line, which will increase to 350 km by end of this year, catapulting Delhi Metro among the world’s top five, he added.