Delhi Metro Submits Revised DPR For Second Corridor Of Lucknow Metro

The Delhi Metro Rail Corporation (DMRC) has submitted the revised Detailed Project Report (DPR) of the Second corridor of the Lucknow Metro. The Uttar Pradesh Metro Rail Corporation (UPMRC), which operates Lucknow Metro, will submit the DPR to the Uttar Pradesh government for approval and further clearance from Public Investment Board (PIB).

The DPR of the second corridor was prepared by Rail India Technical and Economic Service Limited (RITES) around 2011, but it never saw the light of the day. The 11.8 Km long East-West corridor with 12 stations, including seven underground stations, will connect Vasant Kunj to Charbagh via heavily congested Old Lucknow areas and bring huge relief to residents.

According to a report in the Economic Times, the revised DPR has hiked the project's total cost by Rs 1,000 crore due to the increase in the prices of raw materials such as steel, iron, and cement.

The project's total cost has been estimated to be Rs 5,800 crore. While 50 per cent of the fund will come from the Central and State in the ratio of 60:40, the remaining 50 per cent is likely to be borrowed from European Investment Bank (EIB), which has expressed its desire to fund metro projects in the State earlier this year.

First Phase

Lucknow Metro is an urban Mass Rapid Transit System (MRTS) being built in Lucknow, the capital of Uttar Pradesh, by UPMRCL, a 50:50 joint venture of the Government of India and the Government of Uttar Pradesh.

Phase 1 of the project consists of 2 corridors totalling 33.976 km. Out of this, Corridor -1 (22.88 km) is operational, while Corridor -2 is in the DPR stage.

UPMRCL commissioned the services of on entire 22.88 km long North-South Corridor -1 from Munshi Pulia to Amausi airport (22 stations) on 8 March 2019. The priority section of the North-South Corridor from Transport Nagar to Charbagh was made operational for the public with effect from 5 September 2017.

The first corridor of the Lucknow Metro Rail Project was commissioned 36 days before the deadline, a rare feat in completing the projects in the urban transport infrastructure sector, thereby avoiding any cost overrun.

Funding

Phase 1 of the project was completed at the cost of Rs. 6,880 crores. Out of this, more than 50 per cent (Rs 3502 crore or 450 million EURO) was in the form of debt by the EIB, and the rest was shared equally between the Centre and the State.

Loans from EIB are repayable over a period of 20 years after the expiry of moratorium period. The moratorium period is four years in respect of the EIB loan from the date of signing of the loan agreement.

Debt Servicing

Lucknow Metro suffered a significant decline in revenue generation in FY 2020-21 and FY 2021-22 as the metro rail services were suspended for about six months in FY 2020-21 and about two months in FY 2021-22 due to the pandemic. Post resumption of metro rail services in FY 2021-22, low ridership was reported due to the imposition of Covid-related restrictions and non-functioning of various sectors, private companies, educational institutions etc.

According to a written reply in the Rajya Sabha on 25 July 2022, the revenue earned from operations of Lucknow Metro by UPMRCL was 67.52 crore in FY19-20; 25.64 crore in FY 20-21; 43.74 Crore in FY21-22 and18.79 in FY 22-23 (till 30 June).

Additionally, the Actual Average Daily Ridership (AADR) for Lucknow Metro was 0.537 and 0.258 lakhs only in 2019-20 and 2020-21, respectively, against the Average Daily Ridership required for breakeven of 0.943 lakhs for all these years. Thus, Lucknow metro also does not have sufficient ridership for breakeven.

The poor revenue means the UPMRC has not been able to meet its financial obligations (i.e. repay the EIB), even after the four-year moratorium period.

The finance contract between the Government of India and EIB for Tranche A of the funding of €200 million was signed on 30 March 2016. The finance contract for Tranche B of €250 Million was also signed on 31 March 2017 for Lucknow Metro Project. As per the disbursement notification, the first repayment of the instalment was due on 29 January 2021 and the second instalment was due on 30 July 2021.

The report claimed that the State government is eager to bring the second corridor in Lucknow, as it will increase the commuter traffic in the metro, thus increasing the chances of generating more revenue.

"The second corridor is passing via railway station, old markets and more importantly KGMU which has huge traffic movement. Therefore, the second corridor is expected to be cleared from all levels by January 2023," said the report.