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Lessons from Mumbai Metro

Group-5

Outline

Introduction
to Metros in
India

Mumbai
Metro
Intro &
History

Mumbai
Metro Line-1

Mumbai
Metro Line-2

Key Lessons
Learnt

About Metro project


Models of Governance and Ownership of metros
50:50 joint venture
ownership between the
central and State
Government

A mixture of funding from


both the Central and State
Governments

Equity and debt Loans


from multilateral and
domestic financial
institutions tend to be
facilitated through
Government guarantee

Eg. Metro rail projects like


Bangalore, Chennai, Delhi,
Kochi and Kolkata (EastWest, and are currently
following this structure

Government of India
100% by Ministry of
Railways, Government of
India
Kolkata Metro Railway North
and South corridor and other
metro projects in Kolkata
have been taken up by the
Ministry of Railways
State Government Projects
100% by the State
Government
For example, AhmedabadGandhinagar metro project
Private sector projects
100% Private sector
Eg. Rapid Metrorail Gurgaon,
Hyderabad Metro - L&T
Metro Rail Hyderabad Ltd

Lifecycle stages in Metro project


Planning and
conceptualization
Funding

Construction

Operation

Need for
Metro

Project Approvals

Testing

Expansion

Increasing Urbanization
Limited road space
Road Safety issues
Road Traffic congestion
issues

Metro in India
Government initiatives
National Urban Transport Policy

build capacity to plan for


sustainable development

ensure integrated land use


and transport planning

people focused and


equitable allocation of road
space

To invest in public transport


and non motorized modes

Identifying innovative
financing methods to raise
resources

Jawaharlal Nehru Urban


Renewal Mission (JNNURM)

Incorporating urban
transportation as a key
parameter at the urban
planning stage

Encouraging integrated
land use and transport
planning to minimize travel
distance

To take up urban renewal


programme to reduce
congestion

Criteria for selecting metro


Mode
Choice

Peak Hour
Direction
Traffic
(2021)

Populati
on
census
(2011)
in
million

Average
trip
length in
motor in
km

Metro
Rail

>=15000
for 5 km

>=2

>7-8

Light
Rail
Transit

<=10000

>1

>7-8

Monorail

<=10000

>2

5-6

Need for Mumbai Metro

Population of 20 million with a modal share of 88% in


public transport

Mumbai suburban railway & BEST carry over 7 million


passengers/day

MRTS scheme suggested to connect those parts


which are not connected under sub-urban railway

Currently, one line is operational (Ghatkopar-Versova


11.4 km) is operational; recorded average ridership
of 277,00

Mumbai Metro - Introduction

First Metro line in the country to be developed under


PPP model

Extended to have a track length of 63 km with final


network potentially growing to 160 km

Line 1 is fully elevated; Remaining lines are planned to


be elevated

Change in ownership for Line 2 since Reliance had


pulled out due to differences over timely grant of
clearances

Estimated cost: Rs. 67,618 crore, a significant


amount to be funded by JICA

Mumbai Metro Line 1

Mumbai Metro Line-1 - Overview


Facts:
11.4 km elevated line built between Versova and
Ghatkopar

Built at a cost INR 4300 crore over 6 years by a


consortium of Reliance Infrastructure Limited through a
PPP model; inaugurated for public use in June 2014

SPV called Mumbai Metro One Private Limited (MMOPL)


administers the project Reliance Infrastructure holds
69%, MMRDA holds 26%, and French Headquartered
company Veolia Transport holds 5%

Line 1 has served over 150 million passengers till date


and sees an average daily ridership of 2,60,000

Issues:
Project saw significant delays in commissioning, initial timeline of 2011
operational start got delayed until 2014.
Project also saw legal issues pertaining to fare hikes - finally being
settled in MMOPLs favour.

Delays in commissioning
Facts:

MMRDA supposed to handover acquired land and 100%


Right of Way (RoW) by 2008, but as of August 2008 only
20% was complete.

90-95% RoW handed over to MMOPL in late 2011, a delay


of 3 years

Even in December 2013, civil works were only 95%


complete some approach roads and stations hadnt been
fully completed

Lack of underground utility maps further hampered


construction

The completion date of the project was pushed from 2010


to 2014

Questions Raised:

Why was the responsibility of acquiring land handed over to


MMRDA?
If MMRDA was anyhow contractually obligated to do so, why was
there no penalty clause for delaying the project?

The Fare Conundrum


Facts:
The State government had in mid-2013 notified that fares must
remain in INR 9-13 range

The state had the power to do so, because Mumbai Metro Area
was notified under the Indian Tramways Act, 1886

In late 2013, the Mumbai Metro got notified under the Metro
(Construction of Works) Act, 1978, which gave initial fare setting
power MMOPL.

MMOPL wanted a fare hike to new range of INR 10-40 for the
project as an initial setting.

MMOPL claimed it had the right to do so since the earlier fares set
by the government were now null and void under the new act

Even though MMRDA went to court over this hike, the Bombay
High Court, and later the Supreme Court ruled in MMOPLs favour.

The Curious Acts


Facts:
All metro systems (except Kolkata metro) in India have
been constructed under Metro Railways (Construction
Works) , 1978.

When construction of Mumbai Metro was started, it was


notified under the Indian Tramways Act, 1886.

The switch to Metro Railways Act was done when 80% of


the project was already complete.

This was done ostensibly to ensure safety certification


from the appropriate railway regulators.

However, the side-effect for this was that MMOPL


suddenly got the power to set initial fares
Question Raised:
Why was the project not implemented under the Metro Act since
initiation itself?

Fare Fixation Committee (FFC)


Facts:

While passing the 2015 fare hike ruling in favour of MMOPL,


the Supreme Court also urged Center to set up the FFC in a
time-bound manner

The FFC delivered a shocker in July 2015 when it suggested a


hike in maximum fares from existing INR 40 to INR 110

Even though MMRDA took MMOPL to court over this issue,


the Supreme Court upheld the decision of the FFC to allow
MMOPL to hike maximum fares to INR 110

MMOPL wanted to increase fares gradually till INR 110,


starting with a hike of INR 5 in Dec 2015. However, the
Bombay High Court stayed the hike.

Questions Raised:

Why did the FFC suggest a hike to maximum fare of INR 110?

If the system of FFC is implemented, why should the Bombay High


Court question the competence of a Supreme-Court mandated FFC?

Ancillary Revenue Generation


Facts:

Mumbai Metro had earned 8% of their revenues from


non-fare sources in the previous year.

Primary source of non-fare revenue is leasing out of


station space to stalls.

However, the sources can be further diversified by


looking at other sources of revenue such as
1. Station and rolling stock branding
2. Commercial Development of built up station
space

Success Story

Gurgaon Rapid Metro embarked on a station branding


exercise - e.g. Vodafone Belvedere,
Micromax Moulsari etc.

Mumbai Metro Line 2

Mumbai Metro Line-2 - Overview


Facts:
Charkop-Mankhurd-Bandra Route
32 km long, 27 stations

Open competitive bidding: Consortium of Reliance Infra,


SNC Lavalin, Reliance Communication selected
Project launched in Aug-2009
Expected time of commencement of construction:
August 2010
Issues that caused delays:
Bid Processing time > 2 years
Only one bidder submitted the Bid

Question Raised:
Despite only one bidder submitting the bid, no revisions
were made in restructuring to allow more bids

Mumbai Metro Line-2 - Issues


Land acquisition issues:
Land was supposed to be handed over by MMRDA
Coastal regulation zone (CRZ) laws disallowed use of land for carsheds
MoEF also declined to grant clearances for depot land
Right-of-way issues: Lack of coordination with Municipal bodies like
Sewage, water supply, electricity, etc.
Blame-Game
The construction did not start even by September 2012
MMRDA threatened Reliance of legal action for not commencing the construction
Reliance blamed government and MMRDA for not handing over land on time
MMRDA failed in its contract obligations to obtain clearances, and right-of-way permits
Termination of PPP agreement in December 2012

Questions Raised:
While selecting land locations for such critical areas,
are inter-agency factors taken into account?

Aftermath
Mumbai Metro Line-2:
Subsequent development of Line-2 would be done under Public-Public-Partnership
Mumbai Metro Rail Corporation (MMRC) incorporated for subsequent lines of Mumbai Metro
Charkop - Mankhurd route, originally constituted Line-2 of Mumbai metro, was extended to
Dahisar
Cost of Line-2 per km stretch under this MMRC model is expected to be 2.5 times under PPP
agreement
Still, tussle faced between State Home Ministry and MMRDA over the land for Metro Car-shed
in Mankhurd
Mumbai Metro Line-3:
Colaba-Bandra-SEEPZ corridor
First corridor to have a section of it to be constructed underground
Line-3 will be implemented by MMRC. Will be implemented under EPC
The project will be financed by primarily State and Central Government,
and the Japanese International Cooperation Agency (JICA).
Further, the construction of 3 metro stations in proximity to International
airport will receive contribution from Mumbai International Airport Limited.

Mumbai Metro: Key Takeaways

Mumbai Metro: Key Takeaways

Bidding Process
Assessment

Public Support

The process to choose successful bidder took


considerable time
Delays in developing clarifications to queries by potential
bidders
High time in evaluating the bids.
Led to delays in commencement of projects
Reduced the number of bidders.
Led to delays in commencement of projects
Public support critically important to streamline land
acquisition
Inter-agency coordination is necessary for road
expansion and RoW
Departmental Credibility

Mumbai Metro: Key Takeaways


Approval delays
and Inter-agency
coordination
problems

Asset transfer
Specification

The lack of inter-agency coordination led to significant delays


in land acquisition and finalization of alignment
Typical problems faced with Railways, Water Supply,
Electricity and Sewage departments
It is paramount to have authorities aware of such inter-agency
coordination issues and that they have guided frameworks in
place to resolve such issues
At the time of expiry of concession agreement, a survey of
assets should be made by independent agency
The survey should be structured along clear specifications
laid out in concession agreement
This shall obviate difference of opinion between
concessionaire and government at the time of handing over
of assets during PPP expiry period

Multi modal integration

Last mile connectivity needs to be


provided to encourage the usage of metro;
absence induces transfer penalty on the
users

MMOPL had not given due consideration


for multi modal connectivity in line 1

Station Area Traffic Improvement


Scheme (SATIS) initiated to integrate
Metro rail with BEST buses

Success: BEST and Indian Railways


could provide good feeder services to
metro stations on Line-1

Long horizon planning

MMOPL pro-active in implementing new


changes to initial network design; plan
diligently to adapt

Construction of Navi Mumbai airport and


urbanization of Panvel and Thane region;
footfall is expected to increase in the
Metro

Increased network efficiency and


contribute to increased ridership due to
last mile connectivity provided

Issue to consider: Master plans dont


currently include cross-connection
between Mumbai and Navi Mumbai
metro

Cost-effective connectivity with Airport

Going forward there would be two major


airport hubs in Mumbai; CSIA airport and
Navi Mumbai airport

Mankhurd Metro station on line 2 to


provide connectivity between the two
airports

It must be ensured that customer


interface, technology and gauge are
consistent

Example: Delhi Metro had planned


Connaught Place to be the centre; but
the development of Gurgaon region
has shifted the traffic away

Efficient risk sharing mechanism

Government to bear the following risk:


Land Acquisition (Pre-operation)

MMOPL to bear the following risks:


Financing, Planning (Pre-operation),
Design, Construction & Financing
(Construction risk), O&M, Market and
Performance (Operational risk)

The O&M risk can be transferred to


sub-contractor; can have adversarial
effects leading to poor quality

Right of Way: Due to non availability


of maps from Govt. the foundation
design was increased by a multiple of
20