Hyderabad Metro’s Success Shows The Way For Other Metro Projects In India

Yesterday, 30 October, Union Minister for Housing and Urban Affairs, Hardeep S Puri said that several cities in India aspire for the metro rail system. With 515 km of a metro line already operational, now building approximately 664 km more coverage is on the government’s radar. The following table gives a snapshot of the current situation.

That many more cities will get metros is good news. All our big cities are either already choked with traffic or nearing there – which means road congestion, pollution, accidents, and the attendant stress. With growing urbanisation, this is only set to get worse. Metro rail, in such circumstances, provides efficient public transport with reduced commute time and improved connectivity; the high passenger-carrying capacity, when combined with the high frequency of trains, can solve big problems of mobility.

No less is the travel experience, encompassing the clean environs, the discipline and air-conditioning. These tangible benefits – apart from the positioning of an “arrived” system, which is the mark of a world-class city – make the investments and the vast capital cost of construction, which would be around 20-30 times that of bus transport, worthwhile. Even if they cater to classes of people in the middle-to-higher income category, they make sense, because that is still a large part of the population and one that pays taxes.

In India’s metro journey, the latest entrant, Hyderabad, may have some helpful experiences to share. Hyderabad has hogged news headlines in the past few weeks, ever since its LB Nagar Metro station was inaugurated.

So, if the success of any endeavour is judged by the extent to which it fulfils intended goals or meets specific needs, Hyderabad metro would be considered a resounding success – particularly because this judging is immediately measurable. Reportedly, close to two lakh people are using the metro, against the original expectation of 60,000 daily ridership. According to a survey by Keolis International, a company that develops tailor-made mobility solutions and operates metros in 15 countries, the Hyderabad Metro Rail (HMR) has emerged at the top in passenger satisfaction, at 98.5 per cent, exceeding that of London Metro, Melbourne Metro, and several others. The survey sample included 1,000 passengers in each of these metros and asked for their feedback on 10 questions pertaining to safety measures, the technology used, innovation, passenger amenities, staff, etc.

Now, if this is the preferred way that these many people want to travel, the Metro surely has met a crucial need. With new lines coming up and especially one between Ameerpet and Hitech City by this year end, daily ridership is expected to reach five lakh next year.

The obvious deduction here is that end users will determine whether a project is successful – and determine whether financials will finally fall into place. In the case of the Hyderabad Metro, end users have clearly given it a thumbs-up. Given these numbers, breaking even is expected within the next six years.

Some History

The Hyderabad Metro, as we know, is a public-private partnership (PPP) project, implemented through a special purpose vehicle, L&T Metro Rail (Hyderabad) Limited, executed on a design, build, finance, operate and transfer (DBFOT) basis. The initial cost of the 72-km metro was Rs 14,132 crore, in 2011; as of 2017, it is Rs 18,800 crore. The government of India (GoI) only has a minority stake in the project, contributing 10 per cent of the total project cost as viability gap funding; the State Government contributed US$ 400 million towards land acquisition, shifting of utilities, etc., but this funding is not part of the project cost.

It was not smooth sailing all the way. Land acquisitions were an issue, because of which government did not provide something called “Right of Way” in several stretches, and this resulted in delays and hence cost overruns for the company. It had even had to threaten to pull out of the project and sought compensation for the delay in handing over land.

Managing Director, HMRL, NVS Reddy talked about the arduous journey that included litigations – “Every NGO operating in the country and those who filed cases against me, have vested interest against India’s development...some are financed by foreign nations.” Nevertheless, he persisted, despite resistance and loss of faith from many quarters, including from his mentor, the Metro Man himself. The driving force was achieving viability because being a private operator; he realised they did not have the ‘luxury’ of running in losses. And, viability could come from thinking-through solutions that would encourage footfalls, including last-mile connectivity, and others.

End Result? End-user Satisfaction

User perception of the Hyderabad Metro Rail was studied by TISS (Tata Institute of Social Sciences) Hyderabad’s School of Public Policy and Governance, through ground research and user surveys and they found some interesting factors that contributed to the overall well-being sense that HMR conveyed.

First, connectivity, which is expected to be a positive factor. Here, 62 per cent people said it had reduced time of travel, as apparent in the chart below.

Then, the experience itself, TISS found, was positive as HMR’s visualisation revolved around changing the way people commute. This included the concept of each station being only one kilometre apart, making the metro available at almost every doorstep; providing accessibility via skywalks, and working on making it convenient for all genders and age groups to travel. For inclusion, they also tried to work on keeping the ticket pricing as affordable as possible (the maximum fare being Rs 60). The TISS report talks about a “good inter-modal integration promised at all rail terminals, bus stations and MMTS stations, and minibus services, which will connect the nearby colonies, business establishments, and other popular places”.

Metro and gender: Interestingly, though there is no enforcement of the reserved-seats provision, or for extra empathy towards women, the report says that women interviewees “repeatedly mentioned that they feel a sense of liberation and safety on the metro, especially in the night, in comparison with other modes of transport”. Of course, part of the reason for this peaceful easy feeling is that CCTV cameras are installed at all stations and trains.

Inclusion: HMR has attempted to be inclusive and provide equal opportunity of movement for all in public spaces – like, for persons with disabilities (PwD), there are obstacle-free pathways, appropriate ramps, wide lifts, braille numbering and specially embossed tiles among others, and also lifts and escalators for senior citizens. It has followed the Access Indian campaign guidelines in making the environment barrier-free. From the experience of hindsight, one now knows that the gap between doors of coaches and platform could be reduced further, for even easier boarding for PwD.

Sustainable Mobility: Here, HMR has come up with a solution that addresses three problems at one go, traffic congestions, pollution and last-mile connectivity issues: the introduction of bicycles in association with different organisations, and commuters have the option of pedalling their way to their destinations from metro stations. HMR intends to offer 10,000 bicycles through many bike stations on all the three corridors of Hyderabad Metro. Of course, more can be done for bikers, like having dedicated roads. It would have helped to incorporate these dedicated pathways for bicyclists in the original rail plans, and that is possible learning from the Hyderabad experience.

Adding to the overall experience are planned commercial centres inside stations, to provide citizens with more services than just travel.

Several innovative measures are being used for user satisfaction. One such, for improving the commuter experience, is a STAMP challenge (Station Access and Mobility Programme), for start-ups to offer technical solutions and sustainable business models for first- and last-mile connectivity. Then, Bangkok-modelled skywalks (viaducts below Metro station) plan to connect metro stations with major commercial complexes.

Improving last-mile and first-mile connectivity would encourage travel for convenience sake, and also impact time of travel. Here, the TISS study had found that currently, the total travel time increases when feeder travel time is included along with metro time.

From the graph above, it is clear that time spent only on the metro is lesser than the time spent on the complete journey, which includes feeder.

It follows that to improve the impact of metro, feeder travel facilities need to be improved. In the long run, this would include buses, minibuses and e-rickshaws; in the short run, bikes may be encouraged and provided.

The Bigger Question

Clearly, having a private concessionaire executing the project has its advantages. Even though the PPP model has been criticised as unnecessary and an expensive way to do it – Metro Man E Sreedharan was also against it, saying that no private company will come forward for construction of metro rail as it is not a profitable investment – we feel it might be the best way to achieve efficiency, quality and user satisfaction. The rider, of course, is that the concessionaire must carry the project out expeditiously, judiciously and cleverly.

The following are the funding models of various metro projects taken from a report UNEP report on Low Carbon Transport: “Case Study of Metro rails in Indian Cities” Those not carried out as PPPs, have a huge debt component from JICA, even though it is serviced over a more extended period and at a lower interest rate, as compared to other international aid.

Financing of Metro Projects

Just for comparison, we take a look at the Bangalore Metro experience: It took over 12 years to get up and running at the same level. One conclusion that can be drawn is that when a government finances projects, time and cost overruns have little significance and there are no efforts to save either.

The long and tiring of the Namma Metro project starts with DMRC (Delhi Metro) submitting a detailed project for the first phase to the BMRCL (Bangalore Metro Rail Corporation Limited) in May 2003. BMRCL was the Special Purpose Vehicle, a joint venture of the Government of India and the Government of Karnataka, to implement it. Phase 1 of the project was scheduled to start in 2005 but was delayed because of a change of government in Karnataka. After several arguments about the feasibility of the project, the construction began in April 2007. The original deadline to complete Phase 1 was March 2010 – it missed nine deadlines because of delays in awarding tenders, non-completion of work and so on, and its total cost was revised four times. Finally, the entire Phase 1 was opened to the public in June 2017.

A poor public response followed, with the operations in small reaches, and in bits and pieces. This resulted in small revenue generated, and coupled with high costs of operation, meant that the company incurred huge losses – Rs 26.13 crore loss in 2013-14, Rs 33.12 crore in 2014-15, and Rs 60.35 crore in 2015-16.

To be fair to it, that after the completion of the full corridors, the number of passengers has jumped significantly in Namma Metro and currently, average ridership is about 4 lakh daily yielding revenue of Rs 1 crore. This makes breaking even a tangible possibility soon.

BMRCL has had a slow and painful learning process, even about general issues like user-friendliness – for instance, earlier, it didn’t have even toilets on stations, nor avenues for last-mile connectivity. Only recently, it tied up with cab aggregators and made interventions such as foot over-bridges connecting stations with bus terminals have enhanced commuter convenience, thus adding 7,000-8,000 daily commuters.

Contrast this with L&T Metro Rail Limited (LTMRHL), which, in 2012, had awarded a contract to Keolis Hyderabad Mass Rapid Transit System Private Limited to operate and maintain the HMR services. This included recruiting loco pilots, station controllers, training, operation and maintenance of trains, stations, depots, tracks and the entire system.

Last year, the Union Cabinet had made mandatory the PPP component mandatory: “Private participation either for complete provisioning of Metro rail or for some unbundled components (like automatic fare collection, operation and maintenance of services, etc.) will form an essential requirement for all Metro rail projects seeking Central financial assistance,” the new policy said, while stressing on a rigorous assessment of new proposals.

PPPs, apart from lessening the burden of the central government, bring with them speed, efficiency and cost-effective delivery. The accountability and risk is with the private player and the return on investment is often a question mark on these capital-intensive projects. Yet, with increased volumes of passenger traffic, the break-even point can be made to appear sooner on the horizon – as expected in the Hyderabad case.

To the extent that the state government’s funds were saved, they could be used to bolster the feeder system of buses and three-wheelers at the stations. The enabling expenditure could still be the government’s, in making this public good viable.