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“Urban Rail-based Transit Systems”:

Key Trends and Outlook

Rohit Chaturvedi

Director, Transport & Logistics, CRISIL Infrastructure Advisory

February 18, 2016

1

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1. Current Scenario

2. Current Trends and Key Problems

3. Future Outlook

2

Agenda

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1. Current Scenario

3

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In 2001, 27.8% (286 million) of

Indians lived in urban areas which

increased to 31.2% (377 million) in

2011

Urban population is estimated to

grow to 600 million by 2031

However, very few new settlements

are being added. Existing

settlements are getting larger, some

as urban agglomerations

4

Urbanisation in India: Huge growth in urban population

expected without addition of new settlement….

38

42

47

52

62

70

30

35

40

45

50

55

60

65

70

75

1971 1981 1994 2000 2010 2030

5 712

35

53

100

0

20

40

60

80

100

120

1951 1961 1981 2001 2011 2051

Urban Share of GDP (per cent)

Number of cities with more than 1

million population

Source: Report of Working Group for 12th five year plan, National Transport

Development Policy Committee Report on Urban Transport, 2013

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Share of Public Transport in India is low and declining….

Only 65 of the 96 Indian cities with a

population of over 500,000 have some

kind of a city bus service (an increase

from 20 in 85 cities in 2006)

While cars and two wheelers have

seen rapid growth, governments have

not invested significantly to increase

the quality and availability of public

transport, especially through buses

Coverage of local commuter rail

services in seven metropolitan cities –

Delhi, Mumbai, Kolkata, Bangalore,

Pune, Hyderabad and Chennai

5

City Population Range in lacShare of Public Transport in Urban Transport ( In %)

WSA, 2007* (%) RITES, 1994 (%)*

< 5.0 0.0 - 15.6 14.9 – 22.7

5.0-10.0 0.0 - 22.5 22.7 – 29.1

10.0 -20.0 0.0 – 50.8 28.1 – 35.6

20.0-40.0 0.2 - 22.2 35.6 – 45.8

40.0 – 80.0 11.2 - 32.1 45.8 – 59.7

Above 80.0 35.2 - 54.0 59.7 – 78.7

Year

(end

March)

Two

wheel

ers

Cars,

jeeps

and

taxis

Bus Goods

vehicle

Other

vehicle

Total

% Million

1951 8.8 52.0 11.1 26.8 1.3 0.3

1961 13.2 46.6 8.6 25.3 6.4 0.6

1971 30.9 36.6 5.0 18.4 9.1 1.8

1981 48.6 21.5 3.0 10.3 16.6 5.4

1991 66.4 13.8 1.5 6.3 11.9 21.4

2001 70.1 12.8 1.2 5.4 10.5 55.0

2011 71.8 13.6 1.1 5.0 8.5 141.8

Source: Report of Working Group for 12th five year plan, National Transport Development Policy Committee Report on Urban Transport, 2013

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Higher Dependence on Personal Modes of

Transportation

However, a substantial part of the population relies on private vehicles to

meet their daily transport needs which has led to increase in private vehicles

Personal vehicle demand is going up in an environment where there is the

absence of adequate and efficient public transport systems. At the same time

rising incomes makes cars and motorcycle ownership increasingly affordable.

70% of vehicles sold in India were two wheelers; second highest in the world

6

Vehicular penetration (Per 1,000 population)

13

313

34

16576

325

72

68

28

37

13

42

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

0

100

200

300

400

500

600

700

800

India Malaysia China Brazil

Passenger cars Two wheelers Others Gross National Income Per capita (US$)

Source: Report of Working Group for 12th five year plan, National Transport Development Policy Committee Report on Urban Transport, 2013

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Huge Growth in Private Vehicles Ownership is

Expected

7

0

50

100

150

200

250

2005 2008 2015 2025 2035

Two- wheelers Thee-wheelers Cars/SUV

Forecast of Vehicle Population in India ( million units)

The 2-wheeler ownership rate in Class I cities is expected to increase

from 102 to 393 per 1000 population by 2021 and for car from 14 to 48

per 1000 population by the same year

Two-wheeler population is expected to grow by over 6 times between

2005 and 2035, while cars and SUVs will increase by over 13 times

*Source: PwC forecast

*Source: Report of Working Group for 12th five year plan, PwC report on Urban transportation financing

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2 Current Trends and Key Problems

8

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Lack of Mass Rapid Transit System (MRTS) in India

compared to developed countries….

9

Mass rapid transit is the backbone of

city transport in large cities as it is the

mode that carries a very large number

of commuters using minimum space.

Rail-based intra-city MRTS include:

e.g. Metro rail, Monorail and skybus

Choice of MRT depends on urban

form, costs and benefit, demand level

on a corridor, available ROW, capacity

of mode, land use along the corridor,

location of building lines and

financing options available

However, in India, because of paucity

of funds, planning and implementation

of rail-based MRTS has lagged

requirements

Some experts also feel that in India

there is a requirement for affordable,

dense and safe MRT networks that

should be financially sustainable

based on city resources

1301.3

3181.309

790.7

446.4 522.4392.7

USA China Japan UK Russia India

Comparison of metro network across

countries: Length in KM

12

24

10

2

7 7

USA China Japan UK Russia India

Comparison of metro network across

countries: No of cities

Source: Annual report of individual metro projects (as on 2015)

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Several MRTS planned across various cities in India…

According to erstwhile Planning Commission, every city with a population

exceeding 4 million should have MRTS. About 35 cities qualify this criterion

Currently, MRTS is operational in Bangalore, Kolkata, Delhi, Gurgaon, Jaipur

and Mumbai

10

Kolkata Metro Ph 1

Delhi Ph 1

Delhi Ph 2

Bengaluru Ph 1 (part)

Chennai Ph 1 (part)

Mumbai Mono Line 1

Jaipur Metro Ph 1A

Bengaluru Ph 1 (part)

Chennai Ph 1 (part)

Kolkata Ph 2

Jaipur Metro Ph 1B

Kochi Metro Ph 1

Delhi Ph 3

Nagpur Metro

Lucknow Metro

Ahmedabad Metro

Delhi Ph 3

Navi Mumbai Metro

Pune Metro

Bhopal Metro

Patna Metro

Indore Metro

Kanpur Metro

Chandigarh Metro

Pune Metro

Ludhiana Metro

Bengaluru Ph 2

Mumbai Ph 1 R2,3

Mumbai Ph 2

Mumbai Ph 3

Delhi Ph 4

Jaipur Metro Ph 2

Mumbai Mono Line 2

Kolkata Monorail

Bengaluru Mono

Delhi Mono

Jaipur Mono

Ahmedabad Mono

Hyderabad Metro

Gurgaon Rapid Metro

Ph 2

Completed ProposedUnder construction Planned

MRTS Projects in IndiaGovt. Owned PPP

*Source: CRISIL Research; Privately owned

Gurgaon Rapid Metro

Ph 1^

Mumbai Ph 1 R1

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Some development on policy front happened in the

recent past

The National Urban Transport Policy, 2014 with an aim to:

– Incorporating urban transportation as an important parameter at the urban

planning stage rather than being a consequential requirement.

– Bringing about a more equitable allocation of road space with people, rather than

vehicles, as its main focus

– PT should be citywide, safe, seamless, user friendly, reliable and should provide

good ambience with well-behaved drivers and conductors.

– Walk and cycle should become safe modes of UT.

– Introducing Intelligent Transport Systems for traffic management

– Addressing concerns of road safety and trauma response

– Raising finances, through innovative mechanisms

– Establishing institutional mechanisms for enhanced coordination in the planning

and management of transport systems.

– Building capacity (institutional and manpower) to plan for sustainable urban

transport and establishing knowledge management system that would service the

needs of all urban transport professionals, such as planners, researchers,

teachers, students, etc.

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Role of Smart Mobility in Smart Cities

Smart mobility is at the core of smart city. Under the 'Smart Cities Mission‘ of India,

application of urban mobility considered as one of the important aspects in providing

the smart solutions It includes

– Opting the right public transport,

– Multi-modal integration,

– Parking management,

– Non-motorized transport modes

– Implementing transit oriented development measures

– Technology enabled environment; intelligent traffic management

In the first phase, a list of 20 smart cities out of the 98 shortlisted for the 'Smart Cities

Mission' was released in January 2016. These 20 cities will be the first to receive

funds to start the process of developing them into smart cities:

– Bhubaneswar, Pune, Jaipur, Surat, Kochi, Ahmedabad, Jabalpur, Visakhapatnam,

Solapur, Davangere, Indore, New Delhi (NDMC), Coimbatore, Kakinada, Belgaum,

Udaipur Guwahati, Chennai, Ludhiana, Bhopal

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Schemes like SUTP formed under NUTP 2006 has

financed green initiatives in UT (mainly BRTS)

Sustainable Urban Transport Project (SUTP) – an initiative of MoUD with

support of: Global Environment Facility (GEF); United Nations Development

Programme (UNDP); World Bank (WB); Participating States and Cities

– Current demonstration projects – Naya Raipur BRTS, Intelligent Transport System (ITS)

for Indore BRTS,ITS at public places in Mysore, Pimpri-Chichwad BRTS and Hubli

Dharwad BRTS

13

SUTP Funding

INR 1761.75 Cr

GEF Grant

INR 109.09 Cr

Government Funding

INR 1123.88 Cr

World Bank Loan

INR 528.77 Cr

UNDP Component

INR 19.44 Cr

WB Component

INR 89.65 Cr

Component 1A

INR 42.77 Cr

Center

INR 284.34 CrState

INR 494.72 Cr

IA

INR 344.83 Cr

Component 1B

INR 37.44 Cr

Component 2

INR 1671.06 Cr

Component 3

INR 10.48 Cr

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Need for a Central Policy in Urban Transport

The NUTP 2014 also states that though the primary responsibility for

management of urban areas rests with state govts., a central policy for

Urban Transport (UT) would be useful as:

– Several key agencies such as Town & Country Planning Organization (TCPO),

Central Public Works Department (CPWD), Central Pollution Control Board

(CPCB), Indian Roads Congress (IRC), Institute of Urban Transport (India), etc.

that would play an important role in UT operate under the Central government,

with no accountability to the State government

– Several Acts, Rules and Programs like Motor Vehicle Act, Metro Construction Act,

Jawaharlal Nehru National Urban Renewal Mission, Viability Gap Funding, Urban

Infrastructure Development Scheme for Small and Medium Towns, etc. which have

important implications in dealing with UT issues, are administered by the Central

Government

– A need exists to guide State level action plans within an overall National

framework.

– A need exists to guide Central financial assistance towards improving urban

mobility

– A need exists to build capacity for UT planning and management, as also develop

it as a professional practice

– A need exists to take up research and development in UT

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States with Urban Transport Policy

Maharashtra: CIDCO Urban Transport Policy- focuses on the need to integrate land use

planning with transport plan.

– The main objective of the urban transport policy is to reduce private car trips, improve

public transport like mass transit system with improved level of services for people

– Implemented it in Navi Mumbai – Transit Oriented Development (TOD) which a mixed

use residential or commercial area designed to maximize access to public transport, and

often incorporates features to encourage transit utility

– TOD neighbourhood typically has a centre with a train station, metro station, bus stop

surrounded by relatively high-density development with progressively lower-density

development spreading outwards from the centre

Kerala: Transport Policy Kerala- achieving safe, economical and fast transport system for

moving people and goods in the state by integrating different modes of transport according

to their economic advantages with respect to cost, speed, low carbon emission and travel

comforts’

– To revamp public transportation system to increase its share from existing 33% of total

passenger traffic to 80 % in 2025

– Reduce dependency on personal transport and increase share of railways in interstate

and inter-city transport and that of buses in intra-state and intra-city transport.

– As per recent study conducted by ASSOCHAM, the policy needs re-orientation to fit the

modern transportation requirements

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Trends emerging in MRTS space…

16

Delhi Metro entire project on EPC with cost being shared by centre and state

Mumbai metro Phase 1 Line 1 only taken up by Reliance Energy on PPP; rest on EPC

Delhi metro Airport line (part of Phase II)the 22 km underground tunnel constructed on EPC & PPP for running metro on route

Chennai and Bangalore metro entirely on EPC

Hyderabad metro on PPP by L&T led consortium

Cost of execution of

underground metro being three

times cost of elevated metro –

led to the development of hybrid

of EPC and PPP

EPC funding is

the prevalent

mechanism in

MRTS

Majority of

upcoming

projects in

MRTS are

developed on

EPC mode

(with some %

contribution

by central

and state

govt. and rest

by

multilateral

agencies

such as JICA,

KfW) In PPP, the Indian construction companies are

present mostly in the civil construction portion

The technology and engineering segments are

dominated by foreign players

Indian companies, hence, form consortiums with

foreign players to access related technology and

capabilities

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No credible effort while fixing up of alignment and transport integration at

the stage of master planning

Multiplicity of institutions for urban transport often working in isolation and

unwilling to cooperate (esp. to private players), leading to enormous delays

in project execution

MRTS an expensive proposition where no party wants to take ownership –

Centre, State, Municipal body

The investment focus is on supply side alone without any serious efforts

towards transport demand management

Lack of adequate number of transport professionals in the country

17

Several problems in MRTS in India…

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Concerns for mobilising private investments to MRTS

18

Developer

Completely cash crunched (under

huge debts)

Long Gestation period

Non-availability of attractive PPP

models

Stricter and Lengthier scrutiny by

financial institutions while

assessing the viability

Financial Institution

Reluctant and selective to fund

large projects

Lenders expect higher equity

contribution

Concerns on contractual

provisions to protect lenders

interest

MRTS being large capital intensive

projects

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A case of Delhi and Mumbai Metro Rail Project

Mumbai Metro project: Dispute between the PPP partners due to hike in fare

proposed by the private partner

– Due to many changes in route, design and planning of the metro project, lack of

approvals caused delay in commencement of the project.

– Delays leading to increase in project cost from INR 2,356 crore to INR 4,321 crore

– As a result of increased project cost the private developer (Reliance Infrastructure) was

seeking in hike in tariff

– This caused dispute between the private developer and the government body (MMRDA)

leading the matter to court

Delhi Metro Project: Termination of concession agreement and exit of the private

partner (Reliance Infra) from PPP

– The termination was invoked as DAMEPL (a SPV of Rinfra formed for Delhi airport

metro line), claiming that DMRC persistently failed to cure the substantial defects in the

civil structure designed and built by DMRC, within the period prescribed under the

Concession Agreement

– There is also a view that DAMEPL terminated the contract as the traffic turned out to be

much lower than expected and hence, returns were not as per projected

– DMRC is operating the line; The arbitration matter is currently in court

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3 Future Outlook

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Huge Investment required in MRTS

As per the Working Group on Urban Transport (WGUT) recommendations under

National Transport Development Policy Committee Report on Urban

Transport, 2013 on MRTS (by the year 2032):

– Metro rail projects to be planned based on the findings of a comprehensive mobility plan

for the city. Initially, to be restricted to cities with 5 million plus population if required.

Principle should be the ability of the city to cover all costs through user charges or fiscal

costs

Outlay of Rs. 23 Trillion for development of Urban Transport by 2032

– Rs. 5 Trillion for Rail transit development

The recommendations are closer to the High powered expert committee

(commissioned by Ministry of Urban Development Government of India)

estimate of total expenditure of Rs 23 Trillion on urban transport (roads and

transit) together than McKinsey Report which had estimated an investment

of Rs. 27 trillion by 2031

– Share for transit development (road and rail combined) - 65% as per McKinsey, 20% as

per High powered committee, 27.11% as per WGUT

21

Source: National Transport Development Policy Committee Report on Urban Transport, 2013

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Recommendations

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Careful approach towards planning is required

– Demand level on the corridor

– Urban form - land use along the corridor, location of building lines, available ROW

– Provision for Last mile connectivity from metro stations

– Costs and benefit – both commercial and socio economic

State govt. should pass special resolutions so that such important urban

transport projects get executed faster and less time gets wasted in

approvals etc. which ultimately affect the project cost

To make the MRTS model sustainable, government can undertake hybrid

models where the development of infrastructure can be done by govt. and

operations and maintenance be done by private player

While on the supply side, the government needs to take measures such as

increasing the coverage and frequency of MRTS, making the system

passenger friendly and improving the transit facilities; on the demand side,

measures should be taken so that more and more people use the public

transport (such as MRTS)

– Levying higher parking charges, restriction on the movement of private vehicles on

certain stretches

23

Special initiatives by govt. required

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CRISIL Risk & Infrastructure Solutions LimitedA Subsidiary of CRISIL Limited, a Standard & Poor’s Company

www.crisil.com

LinkedIn YouTube FacebookStay Connected | | | |Twitter

Classification: INTERNAL

Classification: INTERNAL

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Expected commercial operations timeline for metro

projects

Phase PPP/EPC Status Expected date of operations

Kochi I EPC Under Construction Nov-16

Jaipur 1B EPC Under Construction 2018

Lucknow I,II EPC Under Construction Mar-17

Nagpur I EPC Under Construction 2018

Delhi III EPC Under Construction End 2016

Gurgaon Rapid II PPP Under Construction Mar-16

Hyderabad All PPP Under Construction July 2017

Navi Mumbai I EPC Under Construction May-17

Bengaluru I (part) EPC Under Construction 2016

Kolkata Line 2 EPC Under Construction 2018

Chennai I (part) EPC Under construction End of 2016

Source: Secondary sources; Authority websites

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Mumbai Metro Project Details (1 of 3)

26

Line Name of Corridor Length

(In Km)

Estimated

Cost

(INR Cr)

Stations Status

(Implementati

on Period)

Implementing Agency

1 Versova – Andheri

– Ghatkopar

11.4 2,356 12 Operational Mumbai Metro One

Private Limited (PPP)

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Mumbai Metro Project Details (2 of 3)

27

Line Name of Corridor Length

(In Km)

Estimated

Cost

(INR Cr)

Stations Status

(Implementati

on Period)

Implementing Agency

2 Dahisar – Charkop

– Bandra -

Mankhurd

40 (Fully

Undergr

ound)

25,605 36 Planning

(2017-2023)

Mumbai Metro Rail

Corporation Limited

(EPC)

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Mumbai Metro Project Details (3 of 3)

28

Line Name of Corridor Length

(In Km)

Estimated

Cost

(INR Cr)

Stations Status

(Implementati

on Period)

Implementing Agency

4 Wadala -

Ghatkopar - Teen

Hath Naka (Thane)

- Kasarwadavli

32 19,097 30 Planning

(2017-2023)

Mumbai Metro Rail

Corporation Limited

(EPC)

Other Proposed Corridors for Phase I, II, III

are:

• Colaba (Backbay)-Mahim-Charkop

(36Km)

• Ghatkopar-Mulund (12.4Km)

• Bandra-Kurla Complex-Kanjur Marg via

Airport (19.5Km)

• Andheri (East)-Dahisar (East) (18Km)

• Hutatma Chowk - Ghatkopar (21.8Km)

• Sewri-Prabhadevi (3.5Km)

Source: Mumbai Metro Region

Development Authority

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Chennai Metro Project

29

Source: Chennai Metro Rail Limited

Implementing

Agency

Chennai Metro Rail Limited

on EPC basis

Estimated Cost INR 14,600 Cr

Phase 1

Corridor I Washermanpet to Airport

Length 23.1Km

Corridor II Chennai Central to St.

Thomas Mount (Koyambedu

to Alandur operational)

Length 22 Km

Expected Completion By end of 2016

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Kochi Metro Project

30

Source: Kochi Metro Rail Limited

Implementing

Agency

Kochi Metro

Rail Ltd. On

EPC basis

Phase I –

Aluva – Petta

station (25.612

km)

Under

construction;

expected to be

operational by

Nov 2016

Estimated

Completion

Cost

INR 5,181.79

Cr

Other phases under planning

Phase II Metro

Alignment-1

JLN Stadium

(Kaloor) to Info

Park

(Kakkanad)

Phase II Metro

Alignment-2

Petta to

Thripoonithura Kochi Metro Phase I Map

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Lucknow Metro Project

31

Source: Lucknow Metro Rail Corporation, Business Standard

Implementing

Agency

Lucknow Metro Rail

Corporation on EPC

basis

Estimated

Completion Cost

INR 6,928 Cr

Status Under Construction

Expected

Operations

March 2017

North South Corridor

Route Amausi to Munshi

Pulia (23Km)

Stations 22

East West Corridor

Route Charbagh Railway

Station to Vasant Kunj

(11Km)

Stations 12