ae K-14011/33/2008-MRTS (Pt.) Government of India Ministry of Urban Development MRTS Cell Nirman Bhawan, New Delhi Dated the 7" January, 2013 OFFICE MEMORANDUM OFFICE MEMORANDUM Subject: Metro Railway Policy. ‘The undersigned is directed to refer to the Ministry of Finance, Department of Expenditure's OM No.30(17)/PF.1/2012 dated 11.10.2012 and to say the following on the policy being followed by Govt. of India (Go!) through Ministry of Urban Development (MoUD) in respect of sanction and implementation of Metro Rail Projects in India. 2. Selection of Metro Projects: Metro Railway is a ‘Railway’ and hence a “Central Subject”. However, since urban transport is completely intertwined with urban development, the project proposals of Metro Railways are not originated by the Central Government as a matter of policy and have to be proposed by the State Government concerned. As for as the guidelines for taking up metro rail projects are concerned, the Working Group on Urban Transport for 42" Five Year Plan, constituted by the Planning Commission, in its recommendations, has given detailed guidelines for mode choices for taking uP various modes including the metro rail projects for cities depending upon population, trip length and the peak hour per direction traffic (PHPDT) (copy enclosed). This report has been prepared by inter ministerial working grouP and has been accepted by MoUD and Planning Commission. Furthermore, MoUD has also taken a policy decision to support preparation of Detailed Project Report (DPR) for all two milion plus cities as per 2011 census The same was also announced by the Hon'ble Prime Minister during the Foundation Stone laying ceremony of Kochi Metro on 13" September, 2012.3. Financing Pattern MoUD, with the approval of the Cabinet has already brought out the National Urban Transport Policy (NUTP) in April 2006 (copy enclosed). The NUTP gives the broad guidelines on the vision, objectives, integrating land use and transport planning, priority to the use of public transport, technologies of public transport, financing, etc. for an overall development of safe, affordable, quick, comfortable, reliable and sustainable urban transport including Metro projects in the country. NUTP stipulates that the Central Government would encourage high capacity public transport systems including metro rait projects being set up r8 i vlad continuous length 2 | =<10,000 at : LRT primarily at grade 278 | >2 | Monorail =<10,000 . About 5-6 | Bus Rapid Transit >=4,000 and a >s Me Sar Upto 20,000 Organised City Bus >ilachillytowns / Service (50,000)mendations on Urban TransPoe fee ee er eA is PAC Asciied Fecal tas Beatles Piece i Fee ana eas Pelee ing eas Pesce relia Pe us Pa ad ni gs al Fenn aa for Ree nt Rot eee Pe aes eile Py er ecaddies ae Peel areata Pe Mia Pyro Pe eae iia Pear Pee al les Perel ites anc (ae ‘ Geka ee Re aad eet tual Se ad aliag FS ad provided if the en reach Cea Perea POO eas ae re ee Noma Pl iceaeaaes Preece pie oe Peed uae ie cae Se ee ta Tt gecnss et ele aha Preece eer clase peesue Ministry of Urban Development Government of India April, 2006Use National Urban Transport Policy BACKGROUND 4: India's poised for rapid economic growth. Such future growth will largely come from the secondary and tertiary sectors of the economy, .., the industrial and service sectors. ‘Since economic activities in these sectors primarily take place in urban areas, the state of fur towns and cities is crucial to India's future growth. 2, Further, India's urban population is currently around 30% of its total population. Experience across the world has been that as economies grow, rapid urbanization takes this proportion to over 60% before it begins to stabilize. As such, itis projected that India's tion would grow to about 473 million in 202% and 820 milion by 2051, as against only 285 milion in 2001. Hence, cities must net only mest the mobility needs of the current population but elso provide for the needs of those yet to join the urban popuiation. Inthis context, the Government of India has launched ths National Urban Renews! Mission {NUPM) that inter-alia seeks to bring about comprehensive improvements in urban infrastructure, commiting substantial funds for this purpose an¢ requiring a series o reforms that would make the investments sustainable urban popul 3. For urban areas to be able to support the required level of economic activity, they must provide for the easy and sustainable flow of goods and people, Unfortunately, however, such flow of goods and people has been facing several problems. Most prominent among them have been the following: «Accessing jobs, aducation, recreation and similar activities is becoming increasingly time _ consuming. Billions of man. = hours are lost with people "=F, “stuck in traffic’ The ry reasen for this hes Seen the explosive growth in the number of motor vehicles, couplec with limitations on the amount of road space that can be provided. For example, on an average, while the population of India’s sixun ‘major metropolises increased by about 1.9 times during 1981 to 2001, the number of motor vehicles went up by over 7.75 times during the same period, ‘The cost of travel, especially for the poor, has increased considerably This is largely because ine use of cheaper non-moiorised moces like cycling anc walking has become extremely risky, since these modes have to share the same right of way with motorized have made non-motorized modes impossible to use. This has made access to livelihoods, particularly for the poor, far more difficult. Travel in the city has become more risky with accident rates having gone up from 1.8 lakh in 1981 to ‘over 3.9 lakh in 2001. The number of persons killed in road accidents has also gone up from 28,400 to over 60,000 during the same period. This again has tended to impact the poor more severely as many of those killed or injured tend to be cyclists, pedestrians or pavement dwellers. Increased use of personal vohicles has led io increased air pollution. 4. Unless the above probloms are remedied, poor mobility can become @ major dampener to economic growth and cause the quality of life to deteriorate, A policy is, therefore, needed on the approach to dealing with this rapidly arowina problem as also offer a claar direction and a framowork for future action, Vision To recognize that people occupy center-stage in our cities and ail plans would be for thair common benefit anc well bsing To make our cities the most livable in the world and enable them to become the “engines of economic growth” that power India's development in the 21* century To allow our cities to evolve into an urban form that is best suited for the unique ‘geography of their locations and is best placed to support the main social and economic activities that take place in the cityOBJECTIVES 5. _ The objective of this policy is to ensure safe, affordable, quick, comfortable, reliable and sustainable access for the growing number of city residents to jobs, education, recreation ang such other needs within our cilies. This is soughi io be achieved by © incorporating urban transportation es en important paremeter at the urban planning stage rether than being a consequential requirement © Improving access of business to markets and the various factors of production © Bringing about a more equitable allocation of road space with people, rather than vehicles, as its main focus « Encourage greater use of public transport and non- motorized modes by offering Central financial assistance for this purpose ‘* Enabling the establishment of quality focused multi-modal public transport systems that are well integrated, providing seamless travel across modes © Establishing effective regulatory and enforcement mechanisms that allow a level playing field for all operators of transport services and enhanced safety for the transport system users © Establishing institutional mechanisms for enhanced coordination in the planning and management of transport systems © Introducing Intelligent Transport Systems for traffic management © Addressing concems of road safety and trauma response © Reducing pollution levels through changes in traveling practices, better enforcement, stricter norms, technological improvements, etc. 3NEED FOR A NATIONAL POLICY 6. Although the responsibilty for ‘management of urban areas (and thus urban transport) rests with the State governments, a Centra policy is considered necessary as: 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, ete Promoting ihe use of cleaner technologies esociztng the or" tappec ‘Taking up pilot projects that demonstrate the potential of possible best practices in sustainable urban transport Several key agencies that would play an important role in urban transport planning work under the Central government, with no accountability to the State government Several Acts and Rules, which have important implications in dealing with urban transport issues, are administered by the Central Government ‘Aneed exists to guide State level action plans within an overall framework. “The launching of the NURM has provided a timely platform for providing significant financial support from the Central Government for investments in urban transport infrastructure, As such, this offers an opportunity for a meaningful national policy that would guide Central financial assistance towards improving urban mobility 44 ne« Aneed exists to build capacity for urban transport planning as also develop itas a professional practice, © Aneed exists to take up coordinated capacity building, research and information dissemination to raise the overall level of awareness and skills FEALIZING THE POLICY OBJECTIVES of this policy woul be achieved through a mult-pronged approach that 7 Theodject hese are further evolve around the measurs 8 Cttiesin india vary considerably in terms oftheir population, area, urban form, topography, economic activities, income levels, growth constraints, etc. Accordingly, the design of the transport system will have to depend on these city specific features. Further, transport planning is intrinsically linked to land use planning and both need-1p, be developed together in a ‘manner that serves the entire population and yet minimizes travel needs. In short, an integrated master plan needs to intemalize the features of sustainable transport systems. In developing such plans, attention should also be paid to channel the future growth of acity around @ pre- planned transport network rather than develop a transpor system after uncontrolled spraw! has taken place. Transport plans should, therefore, enable a city to take an urban form that best suits the geographical constraints of its location and also one that best supports the key social and economic activities of is residents. Unfortunately, however, transport planning has not received the extent of attention it should have in drawing up strategic development and land use plans. 9, TheGovernment of India would, therefore, promote the development of such integrated land use andtrensport plans for all cities. To enabie this, all urban development and planning bodies in the States would be required to have in house transport planners as well as representation from transport authorities in their managements. The Government of India would extend support for the preparation of such integrated lend tise and transport plans, to the extent of 50% of the cost involved in developing such plans, provided the city also demonstrates its willingness to act in accordance with them. In order 5to create models for possible learning and replication, the Government of India would fully support pilot studies in a few sample cities of cferent characteristics and n cifferent regions of the country. As part cf this exercise, each cily would also be encouraged to idently potential coridors for future development and then establish transport system thal woule encourage growth around itself For example, racial crricors emerging from the city and extending up to 20-30 kms could be reserv2¢ for future development Such corridors woule iment by utiing up physical barriers along such reserved lements come first in order 10 9 10. Ascheme already exists under which the Central Government provides pata financial support for traffic and transport studies incites. This would be modifieg to enhance ihe extent of Central Government support and also make these studies more broad based to integrate tranepor planning with land use planning, Keepingprojected populations in mind Equitable allocation of road space 11, At present, road space gets allocated to whichever vehicle occupies it first. The focus is, therefore, the vehicle and not people. The resultis that a bus carrying 40 people is allocated only two and a half times the road space that is allocated to a car carrying only one or two persons. In this process, the lower income groups have, effectively, ended up paying, in terms of higher travel time and higher travel costs, for the disproportionate space allocated to personal vehicles. Users of non- motorized modes have tended to be ‘squeezed out of the roads on account of serious threats to their safely. ithe focus ofthe principles of ad space allocation ware {0 be the people, then much more space would need to be allocated to public transport systems than is allocated at present. 12, The Gentral Government would, therefore, encourage measures that allocate road space ona more equitable basis, wih people as its focus. This can be achieved by reserving lanes and corridors exclusively or public transport and non-motorized modes of travel. Similarly janes coyld be reserved for vehicles that carry more than three persons (popularly known High Occupancy Vehicle Lanes), Pas experience hes been that such reserved lanes are not.respected by motorists and therefore lose meaning. In order to facilitate better enforcement of such ane discipline, suitable provisions would be introduced inthe Motor Vehicles Act and otherinstrumentalities to enable stringent penalties fr violation, Friotiiy fo ihe use of public transport 13 tis well known that public twanspor occupies less road space auses less pollution per trenspon. The government would promote investments in public transport as well as measures that make its use more attractive than in the past. Towards this end, the Central government would encourage all State capitals as well as other cities with a population of more than one milion to start planning for high cepecity public transport systems. In doing so, they should look at various proven technologies around the world, including the use of available waterways, They should adopt a technology that would best suit the city requirements in the next 30 years. Comprehensive city wide plans should be drawn up comprising trunk and feeder corridors, {as well as good integration with personal modes, suburban traffic, etc. High cost trunk route systems should, through appropriate hub-spoke arrangements be integrated with feeder systems that enable higher ridership on such trunk systems. 14. Inorder to effectively promote such investments, the Central Government would: © Provide 50% of the cost of preparing comprehensive city transport plans and detailed project reports, © Offer equity participation and/or viability gap funding to the extent of 20% of the capital cost of public transport systems © Offer 50% of the cost of project development whenever such projects are sought to be taken up through public-private partnerships, so that a sound basis for attracting private pariners can be established. The remaining cost of such project development would have to come from the city development authority/State government and a project developer. 15. Some allied issues that need to be addressed in this context are 7Was, Quality and pricing of Public Transport 16. _Sofar, fares for public transport have been set on the premise that this mode of travel is used by the poor, who have no other means of meeting their iraval needs. As such, fares have been kept low as 2 measure of social equity. This has resulted in most oublic transpor. systems being unable to recover their operating costs. !t hes, m fact, encouraged poorly opereied sysiems thet have been financially susiainable only through serious compromises con the quali of the service they rencer In the present day context, however, public transport pose ‘thelas lily 22 NOt so much on cosi are ihe poorest sections of society and need to be given affordable prices, The cost ot providing public transport for them needs to be subsidized by other sections of society. However, there is another segment that values time saved and comfort more than price. This segment is comparatively better off and would shittto public transport if high quality systems. are available to them. The cost of providing public ransportzo them need not be subsidized and canbe met from the fare revenues. As such, the Central Government would encourage the provision of different levels of services — a basic service, with subsidized fares and @ premium service, which is of high quality but charges higher fares and involves no subsidy. 17. To facitate this, the Central Government would offer support under the NURM for premium service infrastructure such as improved bus stations and terminals, improved passenger information systems, use of intelligent transport systems for monitoring and control, restructuring of State Transport Corporations, etc. 18. To ensure that the fares charged are fair and reasonable, the Central government would require that a regulatory authority be set up by the State Government to, inter-alia, regulate the prices to be charged by different types of public transport services. Technologies for Public Transport 19. There is a wide spectrum of Public transport technologies. At one end are high capacity, but high cost, technologies like underground metro systems and at the other are low capacity bus systems running on a shared right of way. Within these extremes are a range of intermediate Possibilities, such as buses on dedicated rights of way, elevated sky bus and monorail systems, electric |trolley buses, etc. While some of them are most effective over high density trunk corridors others prove useful as feeder systems or sud- systems that serve limited sub- areas within a city. Similarly, there are examples of available waterways being taken advantage of for public | transport as also sysiems like ropeways that suit hilly terreins While the high capacity rail systems of she ‘world. Electric trolley buses have been running in San Francisco. New Bus Rapid Transit Systems (BATS) have become very popula in cites ike Bogota (Colombia) and Curitiba (Brazil. 20. Each of these technologies has its unique charactétistics and is best suited to a spect situation. Faciors such as the urban fom, terrain, availabilty of waterways, level of demand, direction and extent of sprawl, projections for future growth, extent of population ensiy ete, are major determinants of the technology that should be chosen. The table at ‘attachment | highlights the advantages and disadvantages of some ofthe avaliable pubic transport technologies also Indicating the technologies that best suit citferent local stuations, Wile ral based systems seem to suit dense cities with limited sprawl and only afew spinal corridors, bus systems seem better where urban densities are lower and the city has spread over a large area. Given the wide range of possibilities, it Is not possible to prescribe @ particular technology in a genetic policy and such a choice will have to be made as a part of city specific land use and transport plans. It would also depend on the kind of cty that would need to evolve at the particular location. The Central Government would, therefore, encourage all proven technologies and not promote any specific technology. In order to facilitate the proper 7 evaluation of all the available “= waytechnologies around the word, it would create a knowledge center that would provide the necessary information required for taking the right technological cecisions for a specific city Wherever necessary, suppor would be proviced fcr techric-economic stucies to Ds concucted by leading global consuliants Indegiaied public wansport sysiams mang allows 52: as also between systems managed by citferent operators. Such seamless interchange is possible i proper inter-change infrastructure is avaliable and users are able to use a single ticket over all such systems. This also requires that a single agency takes responsibilty for coordination so that there Is a common approach to public transport planning and management. Se 22. Accordingly, the Central government would expect that investments in public transport systems would also seek to ensure that such systems ate well integrated and offer @ seamless system to the users. Central government’ financial support would be contingent con appropriate authorties/enities being set up to ensure that a coordinated and integrated public transport system becomes available. Financing 28. The Central Government would encourage high capacity public transport systems being Setup through the mechanism of Special Purpose Vehicles (SPV) and would offer financial support ether inthe form of equity or onetime viability gap financing, subject to @celing of 20% of the capital cost of the project, after evaluating various parameters such as: « Exteit of resources mobilized by the State government through exploitation ofits land resources «Extent of resources likely from private participation «Institutional mechanisms set up by the State government fo ensure @ well coordinated public transport system «Willingness to divert funds from projects that add to road capacity towards public transit systems « Intiatives taken to promote non-motorized transport and improve safe access to public transport. 10 43¢ Wilingness to introduce premium publi? transport systems that are priced high but offer better quality with a view to limit the subsidy requirements in normal services «Willingness to involve the privaie sector in operations under the overall supervision and coordination of a public agency «Willingness to price public transport systems in such a manner 2s to be financially sustainable ai the operating stage or cepen only marginally on public busgets sstucuure bul in ernment shoul Prov" 25. The Central government's capital support would take the form of equity participation oF one time viability gap funding and would be subject to a ceiling of 20% of the capital cost of the project. Preterence willbe given to those who are able to demonstrate adcitional resources {or the project through dedicated taxes and innovative finanging methods. Role of pare-transit 26, Para transitis normally expected to fuffila need that neither public ranspor or personal vehicles are able to fulfill, They normally cater toa category of occasionattrips suchas trips to airports or ral stations with excessive baggage, or emergency trips that nave to be undertaken immediately and itis not possible to wait for public transport. Para transit would not normally be used for regular commute trips to work or school. However, when the quality of public transport deteriorates, para-transit tends to substitute for public transpor. Unfortunately, this has started happening in many Indian cities. As such, this policy would seek to restore para-transitto its normal role by persuading the improvement of public transport. Priority to non-motorized twansport 27. With increasing urban sprawl and rising income levels, non-motorized transport has lost, its earlier importance. Statistics show that the share of bicycle.trips, ut of the total trips in Delhi has declined from 17% in 1981 to 7% in 1994. The longer trip lengths have made cycling more difficult. Further, non-motorized modes are Urealso exposed to greater risk of accidents as . they share 2 common right of wey with moionzec v mode: transport eysiom of = city. The problems being faced by them would have to be mitigated. 28. First of all, the safely concems of cyclists and pedestrians have to be addressed by encouraging the ‘construction of segregated rights of way for bicycles and pedestrians. Apart from improving safety, the segregation of vehicles moving atitferent speeds would help Improve trafic low, increase the average speed of trafic and reduce emissions resulting from sub-optimal speeds. ‘Such segregated paths would be useful not only along arterials, to enable full trips using NMT but also 2s a means of improving access to major public transport stations. Such ‘access paths, coupled with safe bicycle parking places, would contribute towards increasing the use of public transport. Creative facilities ike shade giving landscaping, provision of dtrinking water and resting stations along bicycle corridors would also be encouraged as they can mitigate, to a large extent, adverse weather conditions. The use of the central verge along many roads, along with innovatively designed road crossings, seems to offer promise for being developed as cycle tracks. 29. thas been the experience that many such cycle tracks and pedestrian paths do not get used as initially envisaged. However, a view has been that this is because these facities are designed badly and without fully recognizing the limitations and problems faced by cyclists: or pedestrians. It would, therefore, be essential that such facifties be constructed after an ‘open debate on the designs with experts and the community thats expected to use them. itis expected that such public appraisal would lead to designs that enable greater use by he potential beneficiaries. Encroachment of footpaths too affects pedestrian safety adversely ‘and requires strict enforcement coupled with public participation. Pedestrian safety is also adversely affected by the lack of safe crossing facilites at busy intersections of even hich trafic coridors. 2Ure 30. The Central Government would give priority to the construction of cycle tracks and pedestrian paths in allcties, under the National Urban Renewal Mission (NUPM), to enhance {ety and thereby enhance use o non-motorized modes. Cities would ‘also be encouraged to explore the possibiliiy of @ public bicycle 31. The Central government would support the construction of safe pedestrian crossings at busy intersections and high traffic eomridors. 32. The Central Government would suppor formulation nd implementation of specific “Area Plans” in congested urban areas that propose appropriate mix of various modes of transport including exclusive zones for non-motorized transit. 33, The Central Government would also take up pilot projects, in a sample set of cities, to demonstrate the improvements that are possible through the enhanced used of cycling, for possible replication in other cities. Parking 34, Landis valuable in all urban areas, Parking places occupy large portions of such land. This fact should be recognized in determining the principles for allocation of parking space. 35. Levy of a high parking fee, that truly represents the valve of the land occupied, should be used as a means to make the use of public transport more attractive. Preference in the allocation of parking space for public transport vehicles and non-motorized modes4e4 as well as easier access of work places to and from such spaces would go a long way in encouraging the use of sustainable transport systems. Perk and ride facilities for bicycle , wiih convenient inier-chang} nother useful measure Simulteneousty, 2 graded scale of parking tee, tat eco «é used in such pail should be adopted The objective would be to persuade people to use public transpon to reach city centers 2 mandatory requirem: several high rise commercial complexes. Such complexes could even be constructed underground, including below areas declared as green belts in the master plan. Such complexes could come up through public-private partnerships in orderto limit the impact onthe public budget. All such parking complexes would be encouraged to go in for electronic metering 50 that is there is better realization of parking fees to make the investments viable and also a better recovery of the cost of using valuable urban space in the parking of personal motor vehicles. In residential areas too, appropriate changes in bye-iaws would be considered to free the public carriage way trom parked vehicles that impede the smooth flow of trafic. Proposals for parking complexes would also be given priority under the National Urban Renewal Mission. Provisions would also be made in the appropriate legislation to prevent the use of the right of way on road systems for parking purposes, Freight traffic 36. As economic activities in cities expand and city population grows, a substantial amount of freight traffic would be generated. The timely and smooth movement of such freight is. crucial to the well being ofthe people and the viabilty ofthe economic activities they undertake. However, with limited capacity of the transport system, itis essential that freight trafic and passenger tratfic are so staggered as to make optimum use of the transport infrastructure. It isa time honored and tested practice to use off-peak passenger travel times to move freight. Many cities have earmarked late night hours for the movement of freight and restricted the entry of heavy vehicles into cities during day time. Further, several cities have by-passes that enable through traffic to go around the city and not add to city traffic. These practices are sound and would be encouraged in all cities. For this purpose, cities would be encouraged to build by-passes, through innovative and viable public-private partnerships. Similarly, facilities 14{or the parking of freight vehicles outside city limits, such as truck terminals, would also be encouraged through public-private partnerships. Proposals for such facilities would be considered under the National Urban Renewal Mission. Legal and Administrative tssues 37. The current structure of governas the probleme of urban transport These structures were put in a of urban iranspon began {o surface in india and hence do not provice forthe righ co mechanisms to ceal with urban transport. The Centrat Government wil, therefore, recommenc: the setting up of Unified Metropolitan Transpo7 Authorities (UMTA's) in all million plus citie dination projecis anc sn an Frenspon Avior 1 38. The Central Government would also encourage the setting up of professional bodies that have the capacity to make scientific assessment of the demand on various routes and contract services that can be properly monitored. Towards this end; it would encourage the setting up of umbrella bodies that regulate the overall performance of the public transport system and ensure that the city has a comprehensive public transport system. Such bodies would, inter-alia, design networks and routes, assess demand, contract services, monitor performance, manage common facilities like bus stations and terminals, etc. They would have representation from all tha major operators and stakeholders. 39. Model legislation would be drafted for cities to consider and adopt, with such modifications as may be required to suit city specific requirements. Capacity building 40. ‘The responsibility for the planning and implementation of urban transport systems resis with the State governments and the municipal bodies. However, since the problems associated with urban transport are of relatively recent origin in-India, having surfaced only from the early 1990s, the ability to fully understand and deal with these problems is yet to fully mature. This calls for concerted efforts at strengthening capabilities at the State and city level to address these issues and undertake the task of developing sustainable urban transport systems. 41. Capacity building will have to be addressed at two levels ~ institutional and incividval. Institutional capacity would primarily involve creating a pool of knowledge and a knowledge ‘management center that would sustain and enhance expertise as well as facilitate more informed planning. would also sponsor regular research to help formulate the right mitigation strategies, without merely adopting what other countries have tried. The Institute of Urban 18 ubeTranspor (India), an existing institute under the purview of the Ministry of Urban Development would be suitably strengthenes to discharge this responsibilty. It would be built up to serve 2 a national level facility tc provise continuous advice end guicance on zhe principles of good urban transport planning 2s emerges trom its '2seaich. Advice on new technologies wouls also be regularly available to implementing agencies from this institute For this purpose, the institute would become a store house of information on the various public transport technologies being used in different paris of the world and would maintain the latest information anc a2 veck of a 129 irenspon statisiics has severely constrained the abilty to formulate sound urban transport plans and reliably assess the impact of the different initiatives that have been taken. The national level institute would build up a database for use in planning, research, training, etc in the fleld of urban transport. 43, The Central Government would also encourage the development of such institutional capacity at the State level through the platform of the National Urban Renewal Mission. A specific scheme would need to be formulated for this purpose. 44, _Atthe individual level, a major exercise of training and skill development of the public officials and other public functionaries would be taken up to make such officials aware of the ‘nuances of urban transport planning and the specific issues involved in managing ciy transport. This would be targeted at personnel belonging to the State transport departments, municipal corporations, metropolitan development authorities, traffic police, environmental authorities, State Transport Corporations, Public Works Departments, etc. 45, _Itis recognized that there are several proven technologies for public transport around the world that have yet to be adopted in India. In order to build up the necessary capacity to adopt such technologies within the country, the: Central Government would facilitate joint Ventures and collaboration agreements. between such technology providers and suitable Indian companies. Necessary incentives would be provided to enable such technologies to get commercialized in India. This could be by way of financing customized prototypes, development of designs to suit Indian conditions, trial operations, training of the technical personnel, etc. The objective would be to ultimately build a level playing field for all proven technologies. 16 br46. _ AS partof the exercise of skill development, academic programs in urban transport, ‘especially at the post-graduate level, would be strengthened so thet a nucieus of qualified tuban transport professionals becomes availabis in the couniry. Suitable collaborations, with leacing insttuies abroad, wouls be established to after expertise to such programs in the years An annual urban transport conference would also be institutionalized, to bring iogether the urban tiansa0-t professionels in the country to share their experiences International experts would be invitad to such a conference so that Indian professionel 47. While petroleum based fuels are by far the most commonly used today, other alternatives have been emerging, though slowly. CNG has been adopted in a big way for bus transport in Delhi. Electric trolley buses are also being proposed in the city. Electric vehicles have already entered the market for cars and auto rickshaws. Electric two wheelers are also under development. Such cleaner technologies need to be encouraged so that the problem of vehicular pollution can be more effectively dealt with. Besides, renewable sources need tobe tapped as a measure of sustainable development andi recognition of India's energy security concerns, The Central Government would, therefore, encourage the research, development and commercialization of cleaner technologies, 48. _Newtechnologies always find it difficult to enter an established market and new auto fuel technologies would also face this problem. However, in view of their many advantages, they would be offered suitable concessions and benefits that would enable them to make an entry and compete with established technologies on mors equitable terms. It is expected that such competition will also encourage established technologies to improve their performance characteristics and compete with the emerging choices, Yee49. Several vehicles on our roads tend to be poorly maintained and are overly polluting This is partly because the requirements of proper maintenance are nat stringent and are Largely criven only by the owner's motivation o Save on fuel cost. Even where such motivation exisis, the lack of 2 widespread retwork of good quelity repair facilities cis s then fo the exertion of having thei: vehicles periodically testec @ sn o°der ie ove problems, the Central Goverment woule. ley down = ciser ere ime bound schedule of progressively tighter emission norms, with adequate lead-time, to allow the auto and oll industry to make the required investments. Measures would also be introduced to incentivize the use of fuel efficient (eto pollution) and small sized vehicles that use up little road ‘space and also cause low pollution Statutory provisions would also be introduced requiring ll in-use vehioles in a city, personal motor vehicles, to undergo a periodic check up and obtain a specified certification. States would be encouraged to set up such certification facilities, in partnership with the private sector. The Central Government would also support the establishment of training centers for the staff of such certification establishments $0 that there are adequate skilled personnel, both for certification and for undertaking the required repairs. Allof these would require that an effective regulatory body be set up to prescribe, monitor and enforce the: adherence of emission and safety standards, Innovative financing mechanisms using land a8 6 resource 51. tis evident that huge capital investments will be required in dealing with the urban transport problems. Whether they are for constructing capital intensive mass transit systems or segregated rights-of-way for cycles and pedestrians, a substantial nancial burden would devolve onthe government. Most State governments and local bodies do not have the required resources and, therefore, alternative methods of financing would have tobe explored. 52. The Central Government would encourage the levy of dedicated taxes to be credited io an urban transport fund and used exclusively 1o meet urban transport needs within the Staie. Such dedicated taxes could be in the form of 2 supplement to the petrol and diesel taxes, betterment levy on land owners or even an employment tax on employers. In jac, revenues i oefrom a betterment levy along new high capacity public transport corridors would be included as a component of the financing plan for such new public transport systems. 53. The Central Government would also encourage partnerships and greater use of private capital in areas where ihe private sector can competitively an irensport servi More specifically, the crezter use cf private buses in cily atsas would be encouraced (0 recuce the dependence on public budgets The commercial uilization of land resources, lable with public renzpor cervice providers, s also recommenced io raise adciiionel resources ‘There ere several ectiv-ses in which the private Sector can be beneficially engaged, thereby saving financial resources for activities that only public agencies can best perform However, these have to be done under conditions that strike a fair balance between the Universal obligations ofthe government and the profit tive ofthe private operator. Accordingly, the Central Government would encourage a more liberal use.of the private sector, especially in activities like the operation and maintenance of parking fatilties, certification facilities, repair facilities, construction and management of terminal facilities, etc. Tillthe mid 1980s most public transport services were largely provided by publicly owned State Transport Corporations. Since then, however, some States have permitted privately run services. While public operations have tended to be high cost and most State Transport Corporations have run up heavy losses, the reliability and safety record of inadequately regulated private operators has been poor. On balance, the Central Government would encourage the State Governments to involve the private sector in providing public transport services, but under well structured procurement contracts. NEED FOR PUBLIC AWARENESS AND COOPERATION 55. _ Urban transport policies can not succeed without the fullest co-operaticn of allthe city residents. Such cooperation can be best secured if the objective of any initiative is made clearly known to them. itis, herefore, necessary to launch intensive awareness campaigns that educate people on the ill effects of the growing transport problems in urban areas - ‘especially on their health and well being. The campaigns would seek their support for initiatives like greater use of public transport and non-motorized vehicles, the proper maintenance of their vehicles, safer driving practices, etc. Such campaigns would also encourage individuals, families and communities to adopt “Green Travel Habits” that would make travel ess polluting and damaging, The Central Government would take up @ major awareness campaign in this regard and seek the support ofthe State Government ints implementation. Particular emphasis would be laid on bringing about such awareness amongst children through inputs in their school curricula. 19 beyPILOT PROJECTS: 56. In order to demonstrate the polential benetits trom the policy measures suggested herein, the Central Governmert wou'e take up pilot projects in 2 sample set of cities from cifierent regions and oifferent ony types $9 that iaste asiablishec for replieziion = ether ces 4e3Annex 1 Relative characteristics of sveitable public transport technologies. ve urban space fiechnclegy | Kevantages Disadvantages Some cities | Useful for where operating cevy ray | Yeryhigh carrying [Veryhighcapialcosis | Singapore, [Very highdensiy capacity igh ger uni operating | Tokyo, condors, where soad eveeme— | costsitcazacty ulzetionis | Hongtang and {SPACES very ited tel ee severalciiasin |Wellsuie¢ ior densely | Verviow saluionin | ilexble Ewope and | populated cies that [Complex interconnectvity |Atgrace systems are very good for sub- Needs less urban ‘pace than bus based sysiems ‘Needs limited urban space if elevated or underground (however capital costs goup witfeecersysiem ran systems and Relatively complex thetrings ares oa technology requiring | cy ware space is a specaied © | =| Light rat] Capitlcosisareless [Caphalcostshigherthan for! several isin , ystems | than for heavy rail |ovssytoms Nantel eee oysters ioe srstace ani uri operating costs adequate for Par unit operating. | im forbinoystera supponting elevated costs ar les than or ears an |i cpacy ulzin slow ciao Needs substan urban recs iuionlevels | space tal grade RE s Meum densty cies Carying capaciy is ower than for heavy ral systems though comparable fo high capacity bus systems Needs exensive feeder networcor dense captive atea (Compex interconnectvity with feader system Relatively complex nology requiring speciazedsklls for O2M with mite spent ai Yerber “Tavantagee Dieedvantages Some cies | Useful or tire oper Capitalcosis ower man |Capaciy notashighas | Erez, Coomba |wetum densiy lorreibasedsusiems |heavysailsystems hough | and several | corridors where \ Now cémeoss _feonperatie obra [oti ciasin [epee aval ysis adequate for j Lain amen {Higher capzciy shen 10 os Needs less exiensive {/"S2¢Simporecmiel Medium densi cies Feder network anal | Needs uiban space for with iied spa based ystems eicated coridor Easy connectvty with 5 feedersystem ‘ Relatively simple technology with easy Medium density corridors where space is limited [Sky bus | Systemisrionpotsing | Not yet proven anywhere o Needs limited urban | commercial operations space for supporting Promising for dense elevated structures. inflexible yee ‘Advantages / disadvantages of normal bus AeueRteebek lor Fens 2 sysiem but witha higher capital cost, though pussalbiah Wheee +S | non-polluting, Relatively inflexible and impacts | San Francisco local pollution has to city aesthetics due io overhead clutter. [be low Komal eryowcapiaesst] Vrylowepacty Most ies eround| Low density coridors uses on rating the world | where local pollution | shared Lov crarait coat Gru) isnota critical issue riant of | ighly flexible Low speeds cat hagas wey | bo not need feeder | Pooreoilimage reese systems L JMo, 44/1/6/95-Cab.1) GOVERNMENT OF INDIA / BHARAT SARKAR SABINET SECRETARIAT / MANTRIMANDAL SACHIVALAYA RASHTRAPATI BHAVAN New Delhi, dated the 21% July, 2009 OFFICE MEMORANDUM Subject: Issues concerning the execution of Metro Rail Projects in India. (v.F. Arora) Under Secretary Dr, M. Ramachandran, Secretary, Mio Urban Development Shri Ashok Chawla, Finance Secretary & Secretary, Dio Economic Affairs Shri Brahm Dutt, Secretary, D/o Road Transport & Highways: Shri S. S. Khurana, Chairman, Railway Board Shri G. K. Pillai, Home Secretary Shri M. Madhavan Nambiar, Secretary, Mio Civil Aviation Shri P. V. Bhide, Secretary, Dio Revenue Dr. Subas Pani, Secretary, Planning Commission Ms. Sushama Nath, Secretary, D/o Expenditure Shri Vijai Sharma, Secretary, M/o Environment & Forests Shri E. Sreedharan, Managing Director, DMRC Copy with a copy of the minutes also forwarded to Shri T.KA. Nair, Principal Secretary to Prime Minister. iA (V.P. Arora) Under Secretary INTERNAL CIRCULATION (one conv) CSiSecy (CASIJS (RK)/IDS(PA) 15 copies484 COPY NO. Nv CABINET SECRETARIAT Doc, No.67/2009-CA.I!! MINUTES OF THE MEETING OF COMMITTEE OF SECRETARIES iat Venue Committee Room, Cabinet Sec Rashtrapati Bhavan. Date of mesti 14.7.2009 Shi Ajit Seth, Secretary (C Dr. M. Ramachandran, Secretary, Mlo Urban Development Shri P. V. Bhide, Secretary, Do Revenue Shi E, Sreedharan, Managing Director, Delhi Metro Rail Corporation Shri Rakesh Chopra, Member (Engineering), Railway Board Smi. Vilasini Ramachandran, Additional Secretary, D/o Expenditure ShriB. N. Puri, Senior Consultant, Planning Commission Shri Rajive Kumar, Joint Secretary, Cabinet Secretariat Shri Dharmenda Sharma, Joint Secretary (PM), M/o Home Affairs Smt. B. Bhamathi, Joint Secretary (UT), M/o Home Affairs Shri Arun Mishra, Joint Secretary, Mio Civil Aviation Siti S. K, Das, Joint Secretary, D/o Road Transport & Highways Shri Govind Mohan, Joint Secretary, Do Economic Affairs Shri Harish Chandra, Adviser, Planning Commission Shri G. K. Pandey, Adviser, M/o Environment & Forests Shri S. K. Lohia, OSD (MRTS), lo Urban Development Smt. Mala Dutt, Director, Cabinet SecretariatSubject: legues concerning Mistro ratl projects ir ince. ‘A meeting of the Committee of Secretaries chaired by Cabinet Secretary wes hele on 147.2009 at 12.00 noon to discuss the note received from ihe Ministry of Urben Development vide their O.M. No, 140% 1/33/2008-MRTS dated 19.12.2008 on the subject mentioned above 2 During the meeting, Secretary, Urban Development (UD) made a presentation on issues concerning Metro Rail Projects raised by MD, DMRC and other related issues along with their proposal for a National Policy on Metro Rell Projects. Secretary, UD stated the major components of the draft Policy as follows: i. Mega cities with a population of 3 million plus (as per 2001 census) to have metro 7 rail systems on high demand corridors. Some other cities also may require metro rail based on other factors. However, the need for a m necessarily lished th two criteria: 2 Comprel Mobility P! 2 report on zitemative modes of trensportetion duly eporeised by M/o UD guidelines would not be eppliceble to proposals presé Kochi Met tensions of approved meiro sysiems. ari Ones the need for 2 metro rail project hes bee! UD, the process of sanction should be expedited a fest track approval mechanism es has been set up for the Metro Rell Projects of Delhi, Bangalore, Kolkata and Chennai in the form of Empowered Committes at the level of Cabinet Secretary and the Empowered Group of Ministers. This Is essenticl in view of the fact that delays in sanction will cause cost escalations, iii, All metro rail projects should be taken up under the ownership and control of an ‘SPV formed by the Government of India and the concerned State Government on 50:50 partnerships for both Government-funded 2s well as PPP-BOT projects However, the responsibility for bearing the operating losses, if any, and re-payment of external debts shall vest with the State Government concerned and not with the Central Government, if the SPV is unable to bear the same. This provision is already applicable to existing projects. iv. The real estate component in metro rail projects taken up on PPP-BOT basis should be a minor component of the total project cost, ie. 20% to 30% of total project cost so that transport projacts do not get converted into real estate projects and also to shield these projects from real estate risks. However, this would not be an essential condition as in some cases land may not be available. In such cases, State Governments may provide for extra FSI for property development. v. The marketing of property development in metro projects on PPP-BOT basis shall be pegged to the commercial operational date so as to ensure thet the transport project is delivered first and focus is not shifted to real estate development. The Gate on which the first section is opened shall be the commercial operational date, vi. Private metro initiatives like the propose! for DLF Metro in Gurgaon are to be encouraged and facilitated as per detailed guidelines enclosed as part of the policy. However, such projects will be subject to safety regulations, ete. end fare control by the Government. Vii. Since the Central and State texes comprise almost 15% to 18% of cost of the project and since public transport has fo be facilitated, M/o UD is in favour of 3os vill x xii SECRET complete tex exemption for public iransport projects, including buses. Presently in meiro projects, the Stete/Urban Local Bocy (ULB) texes ere not included in project cost end the States are obligeted to waive off or reimburse the Stete/ULB taxes, Setting up credible end efficient public transport is an urgent need. As such, 2 Dedicated Urban Transport Fund needs to be set up at the Central Government, Stats Government and city level for funding urban transport projects es envisaged in the National Urban Transport Policy 2006, in case resource constraint is an issue with Planning Commission in making available funds for urban transport projects. it is envisaged that private vehicle users should pay for externalities, $0 es to generate the fund Since meiro railway is essentially a railway which is a Central subject, ail metro reil projects in the country, whether within one municipal area or beyond, should be taken up under Central Act (s) only. inves : reforms in the field of urben trenepol nd the ULEs like setting up the Unified Metropolitan Transport Authortiy (UMT. ied urban ireneport fund, advertisement policy, perking policy with levy higher perking fee, improving existing city bus service and multi-modal integration, These neve 2lready been epproved by the Cabinet in case of tne Chennai Meiro Rail project. Safety certification of metro rail systems is of paramount importance, as they deal with the sefety of large sections of the public. The present Tramweys Act is an old ‘Act which does not provide for adequate safeguards required for taking up modern metro projects. Accordingly, safety certification of all metro rail eystems, whether within one municipal area or beyond, needs to be undertaken by the existing institution of Commission of Railway Safety under the administrative charge of i/o Civil Aviation, with appropriate strengthening. The regulation with regard to technical planning for these projects will be done by M/o Railways, 2s technical planning and safety of railway systems, including metro railways, is 2 subject allocated to M/o Railways. Capacity building needs for metro rail projects would be addressed through setting up an R&D Centre of Excellence in Bharat Earth Movers Limited (BEML), an existing PSU under the purview of Mlo Defence and; strengthening of existing organization viz. Research Design & Standardisation Organisation (RDSO) under the purview of Mlo Railways, besides setting up a Metro Training Institute. The investment in capacity building for metro rail systems shall be fully financed by the Central Government. The policy does not refer to expenditure on security. However, the Group of iinisters has already decided that security for metro rail projects is to be treated es a sovereign function. It hes also been decided that all non-recurring expenses on equipments are to be covered in the cost of metro projects and all recurring expenses are to be dealt as 2 sovereign function and met by Government. it would be unfair to load the cost of security on metro projects 2s. the latter are more in the nature of social sector projects involving huge costs and are generally not profitable It would also not be desirable to load this cost on passenger fere, 2s it would meke public transport a non-preferred option t I 'us ty SECE 3. MD, DMRC mentioned thet DMRC has been formed end funciioning on ihe same policy as has been proposed in the CoS Note. However, he expressed strong views against PPP-BOT model, stating that the global experience is thet no meiro based on this model has been successful. This is because metro projects involve huge capital cosis, whereas feres have to be kept low as @ matter of public policy and, henes, metro projects are usually not viable. If metro projects are to be made viable by granting Viability Gap Funding (VGF) up to 50-55%, then the Government, instead of following the PPP-BOT route, should follow the Government funding route as private parties have the tendency to escalate project cost estimates.as in case of Hyderabad and (Mumbai. Also, the cost of capital to a private party is much higher than that to the Government. Furthermore, private party would like to front load his profit. As such, PPP-BOT route should be adopted orly if the project is highly viable, else the SPV between Government of India and concerned State Government should undertake the project themselves through EPC contracts. MD, DMRC also supported that views of M/o UD that tax concessioris are required to promote metro projects in the country, as taxes increase project cost by 15% to18% which ecessitates more loans and provision for more depreciation. However, these 4 owned projects ony Planning © already ci 2 Noie regarding the funding and the mode of implementation of the projects. Commission is of the view thet urban transport ie 2 Stete subject end sh subject for local bodies. “The Central Government funding should only be in the form of grantVGF. Funds from multilaterel institutions abroad should be routed directly to the States and not through the budget of Ceniral Government so that they do not crowd out more socially desirable projects/programmes. Planning Commission, however, is agreeable to the guidelines regarding property cevelopme! proposed in the Note also with the requirement of a credible Comprehensive Mobility Plan and an analysis of alternative modes of transportation available. In addition, only those metro projects should be taken up where short term marginal cost can be met from revenue, ie. where the metro project can meet the operational costs. hey be {they tenning 5. The representative of Department of Expenditure expressed agreement with Planning Commission that urban transport is primarily a State subject and, accordingly, metros should be either owned by the State Government or the State Government should be the major pariner. The Central Government should only give grants so as to shield the Central Government from any liabilities arising from operational losses, DoE indicated that it is not in favour of imposing a cess for generating the proposed Urban Transport Fund at the Central level. On oiher issues, Planning Commission expressed agreement with the proposed policy guidelines, including the proposal for upgradation of the Commissioner for Railway Safety 6. Secretary, UD mentioned that intervention of the Central Government as a central agency is essential for metro projects not only because it is a Central subject but also from the point of view of deriving the benefits of economies of scale as well as to facilitate uniformity, standardization and safety certification. Hence, Central Government should not simply give a grant. Its involvement can help to give the initial thrust required for the States to take up these projects. The joint ownership model like that of DMRC has tremendous advantages which facilitates sharing of experiences as well. 7. The representative of D/o Economic Affairs mentioned that they are in agreement with M/o UD regarding the need for 2 Central legislation to cover all meiro projects, whether within a municipal area or beyond, and that such projects should not be covered within the definition of Tramways any more. The safety certification of metro rail should be 5done only through @ Cenirel sefety commission. As regercs implementation, the Central Government's involvement is essential on metro projects are rere projects which are not taken up too offen and are also capital intensive. Besides, the element of grant would make the balance sheet very ihin, taking away the possibility of leverage that could be potentially aveileble. Hence, the SPV mode may be preferable. In order to ensure adequate involvement and interest of the States, the shareholding of the Stale Government in the SPV could be higher than that of the Central Government, while making provisions to enable that Central Government retains suitable controls through the share holder's agreement. As far 2s PPP-BOT in metro rail systems is concerned, ii may not be desirable to rule out this concept all together, as @ study which DEA has got conducted recently covering seven metro projects globally, indicates that PPP experiment is not 4 loss-making proposition everywhere. It hes worked well in metro rail projects in Canada and Manchester Phase-lil. As far 2s private metro initiatives are concerned, they could be taken up through @ process of fair and transparent bidding e.g. through the Swiss Challenge mode, subject to the over arching policy releting to metro projects particulerly relating to sefety expects ny of exper ady been bro: hes also of extemal debt 2 wel ‘ould be the responsibil f te Gi Further, Secretary, meeting operetion oi SPV is not able to do so, and not of the Centrel Government Secretary also observed that in the road sector, BOT —Tall is receiving bids only where the projects are profitable. The other projects are taken upon BOT-annuity mode which involves borrowing 2t high rates end therefore higher cosis and is noi 80 suitable from Government perspective. Under the circumstances, wherever projects are not viable, the EPC mode is preferably from the financial perspective. Similarly, metro projects that involve large investments should essentially be taken up through ths equity mode, the extent of which mzy vary, and the PPP mode may be considered wherever possible. Cabinet Secretary observed thet DEA may formulate suitable templates for taking up metro rail projects on PPP basis after their study is complete 9. Member Engineering, Railway Board also supported the propose! of M/o UD that metro rail projects should be covered only under Central Acts, whether within a municipal area or beyond, and that the projects must be taken up with participation of the Central Government he also agreed that safety certification for all metro rail projects needs to be done by the Commission of Railway Safety, with technical planning and safety being undertaken by Mio Railways. The RDSO could also be strengthened to support metro railway projects 10. The representative of M/o Civil Aviation mentioned that they had proposed sefety certification and regulation by the Commission of Railway Safety in view of the report of the Sefety Committee. However, if M/o Railways is agreeable to act 2s a regulator with respect to technical planning issues, the Commission of Reilway Safety could undertake only safety certification, with which the M/o Civil Aviation has no objection 14. Secretary, Dlo Revenue stated that tex.concessions ere not a desirable feature in view of their implications on domestic industry and assistance, if required, should be provided upfront through budget transfer which could be in the form of interest free subordinate debt to cover the central taxes.12. The representative of Minisiry of Environment and Foresis mentioned tt lines and stations sre exempted from environmental clearance. However, if the project involves development of real estate covering more than 20,000 sq. meters, it would require environmental clearances. Cabinet Secretary observed that all projects should be subject to compliance with regulations and obtaining requisite clearances. 13. After detailed discussions, the proposed National Policy on Metro Rail Projects was recommended for consideration of the Cabinet, subject to the following: vi vil viii, * Mega cities with a pooulation of 3 million plus (as per 2001 census) to have metro rail systems on high demand corridors. Some other cities also may require metro rail based on other factors. However, the need for a metro rail project would necessarily be established through two criteria: a Comprehensive Mobility Plan and a report on altemative modes of transportation duly appraised by M/o UD. These guidelines would not be applicable to proposals presently under consideraiion. Metro rail is a Centrat subject andl, accordingly, all metro rail projects in the country, 2 or beyond, be covered by ir leave them to fend fc opment ture growth in participant in such growth end must fai 3) 2 equity sharing mode with State Governments is essential. However, it is desirable that the States have a marginally higher share of equity than the Central Government in each such SPV. The State Governments concemed will be responsible for repayment of loans and operating losses, ifthe SPV is unable to do so, as per existing practice. The possibility of adopting PPP-2OT model for metro rail projects would be examined wherever possible. DEA will formulate templates for taking up metro rail projects on PPP basis, including for private metro initiatives Tax concessions by the Central Government may not be considered. Instead, funding could be provided for payment of central taxes as interest free subordinate debt for those projects where IRR is low. Suitable provisions may, accordingly, be built into the project model. This will be assessed on a case-to-case basis wi each project is stu Private metro initiatives could be encouraged and facilitated, subject to conditions ‘such as safety regulations and fare control by the Government and if they are in the larger interests of society. The proposed Dedicated Urban Transport Fund at the ceniral level through the mechanism of imposing cess is not desirable at this stage. Imposition of cesses on products is not good fiscal policy. Decision regarding sharing of the costs relating to security for metro rail projects would be taken up separately All projects will be subject to statutory clearances being obtained from concerned themselves in this agencies. i i i + i 1a. aik oi Dr. Sudhir Krishna Prafe saa, ve feeci—110108 MINISTRY OF URGAN DEVELOPMENT NIRMAN BHAVAN, NEW DELM!-110108 Tol, : 23082377, Fan : 29061259 roe E-mail : secjurban@nic.in aire aed WR URL: httpillurbanindia.nic.in Secretary to the Government of India D.O.No.K-14011/2/2040-MRTS Dated the 11" October, 2012 Subject: Guidelines for establishing Joint Ventures between Ceniral and State Governments. lishing Joint Venture Companies between Central anc jelines for &: State Governments, but primarily deals with the joint ownership companies the Central Government and State Governments for issue has been under set up between implementation of metro rail projects. This consideration since December, 2009 when the Planning Commission had circulated 2 draft CoS note on this subject. We heve serious differences of opinion on the note circulated by Planning Commission and these have been communicated to the then. Cabinet Secretary by the then Secretary (UD) vide D.O. letter of even No. dated 15.2.2010 (copy at Annexure-!). Now, with the approval of Urban Development Minister, we have further sent detailed comments on the Planning Commission note vide this Office O.M. of even No, dated 27" September, 2012 (copy at Annexure-I!). 2. The 50:50 joint ownership model between the Central and State Governments for implementation of metro rail projects has been functioning perfectly well since 1995 and neither any of the State Governments nor MoUD has pointed out any issues with this model. In each metro project, Le. Delhi, Bangalore, Chennai, Kolkata East West Corridor and Kochi, the 50:50 joint Contd....2een specifically approved by the Union Cabinet and as ween Central and State Governments ‘0 rail projects from the proposed should be allowed to continue ownership model has 6+ such, if at all any guidelines for JV bet are to be-issued, they should omit metr guidelines and the existing JV arrangements considered view that conversion of present Joint 3. Our Ministry is of Ownership Companies to Centi ral or State PSUs would be turning the clock a would submit, Sir, that the xcept for those that are taken up in VGF mode, which has t, may be allowed to its CoS Note, metro rail projects, ex been examined carefully on several occasions in the past be continued and Planning Commission be advised to withdraw With regards, Yours sincerely, hore — Encl. : As above. sit ( Sudhir Krishna ) o\c Shri Ajit Kumar Seth, Cabinet Secretary, Cabinet Secretariat, Rashtrapati Bhavan New Delhi-110004.7 Fann pam, ae farsi vieics MINISTRY OF URBAN DEVELOPHENT HIRMSH BHAVAN, NEW DSLHI-410102 Tel, : 23062877, Fax 25084480 ib Seoyurbangint ip pias, wa TA Secretary to the Government of Indie D.O.No.K-14011/2/2010-MRTS- 48th February, 2010. When wwe recer Gath Feoruary 5 cy an idk nm it appears that none of the OM. was marked to this Ministry 2s is cleat trom the OM dated 15.12.2009, which was circulated to all other Ministries, except Ministry of Urban Development (copy enclosed for ready reference). It is 8 matier of concern that the note, on 2 subject which is primarily concerning the Minisiry of Urban Development, was not sent to this Ministry. 2. From the note, it is apparent that it concems only the joint ownership Companies set up between the Central and State Governments for implementing Metro Rail Sysiems, The note circulated by Planning Commission is deficient in respect of various facts and as such does not present the correct perspective This being 2 subject rnatter allocated to the Ministry of Urban Development it would, therefore, be in the fitness of things that if required note in this regard is moved by the Ministry of Urban Development bringing out al the relevant facts in correct perspective welopment has very clearly brought out the positives of the joint ownership arrangement in the CoS note for National Falcy ._ on Metro, Rail Projects. The Committee of Secretaries, in ts meeting held on ist | q44.07.2009 on this subject, have already decided that it would not be of advantage to merely pass on grant to the State Governments and to leave them tend Tor themselves in the major areas of urban transport planning and Gevelopment, which constitutes an important sector of infrastructure growin it india. ‘The Central Government must be an active participant in such growth and iret facilitate Know how and transfer experience Hence, an equity sharing model with State Governments is essential 4. Furthermore, the Committee of Secretaries had also decided that the Metro Rail ig a Central subject and accordingly all metro rail projects in the country, whether within one municipal area or beyond, would be covered by over arching Ceniral legistation(s) and safety certification by the Commissioner of Railway Safety. 3. Infect the Ministry of Urban De Contd = 2bse 5. _ in view of the above, if at all required, a note regarding guidelines for Establishing Joint Venture Companies beiween the Central and State Governments should-be-brought out by the Ministry of Urban Development and not by the Planning Commission whose role as per the Allocation of Business Rules is responsibility to Parliament in regard to the subjects of National planning With regards, Yours sincerely. andrashetchar, Shei Ku, © Secretary, Cabinet Secretariat, Rashtrepati Bhawan, New Delhi. Copy to: Secretary, Planning Commission, Yojana Bhawan, New Delhi Renny (Mf. Ramachandran) elesNo.K-14011/2/2010-MRTS ‘Government of india Ministry of Urban Development (MRTS Cell) Nirman Bhawan, New Delhi, Dated the 27" September, 2012 Office Memorandum Subject: Guidelines for establishing Joint Ventures between Central and State Govts. The undersigned is directed to refer to Cabinet Secretariat's O.M No 5) 1/22/2008- Cab ml dt 8" September. 2012 a ming Commission’s 0.M No N-14070/6/2008-Infra dt 0" September, 2012 on the abov 1 This subject has been under co yD) 0 the then Cecicet §: E ‘culated by Planning Commission is deficient in respect of vanou: hot present correct perspective. This being a subject matter ellocated to the Ministry of Unb Development, it would be in the fitness of thing thet if required, a note in this regard is moved by Ministry of Urban Development bringing out all he relevant facts in the correct perspechVé. 1% note ci 2, Based on the above request of this Ministry, the meeting of Committee of Secretaries (CoS) was not ealled on this issue so far based on the Planning Commission's note | The nett how citculated by Planning Commission is exactly the same which they had circulated on - June, 2010 3." On the issue of establishing JV compani Secretary(UD) has already explained the stand_of Ministry of Urban Development to the then Monnber Secretary, Planning Commission and Member, Planning Commission vide letters No. of wer No: dated 27.10.10 and 11.3.2031 (copy enclosed). Detailed para-wise comments have tise been prepared onthe note of Planning Commission which are enclosed as Annexure-1 ‘es between Central and State Govts. the then ‘ue model of JV for metro rail projects with Centre and State concemed 4. The unig contributing equity in the ratio of 50:50 has been working well since 1995. In fact. fone of the State Govt has pointed out any issues with this model. Rather the State Govs are preferring this, model and insisting on 50:50 equity participation by Central Govt. Making them either State PSU ot Central PSU would be ageinst the interest of these projects. Moreover, each such case has been specifically approved by the Cabinet (Delhi, Bangalore, Chennei, Kochi etc.). Hence, wwe mpy advise Cabinet Sectt omit metto rail projects from the proposed guidelines and let the existing JV arrangements continue. Cont 2 |due This issues with the approval of Hon’ble UDM. Encl: As above, i 7 Cabinet Secretariat Joint Secretary, (Shri Alok Chaturvedi), Rashtrapati Bhawan, New Delhi Copy to : Secretary. Planning Commission, Yojana Bhawan, New Delhi ” : ce (8.K. Doni vr \ Officer on Special Duty (UT) & ex-offivio Joint Secretary oeU4 Annexure Comments of Ministry of Urban Development on Committee of Secretaries note circulated by Planning Commission vide O.M.No.N-14070/6/2008-Infra clated O8t! June, 2010 and O.No.N-14070/6/2008-Infra dated 20th September, 2012. The cities are engines of economic growth and contribute to about 60% of the gross GDP. Accordingly, in view of the importance of the cities in over all economic development of the country, the concept of Jawaharlal Nehru Urban Renewal Mission was approved by the Union Cabinet wherein the Central Government is investing considerable funds as Additional Central Assistance even for State sector projects of water supply, severage, drainage, etc Urban trensport is currently infrastructure bottleneck in most of the cities which is thre slow down lous manhours on roads and adverse impaci on itis in the larger interest of Government of India to invest in public transport like Metro rail, Bus Rapid Transit System, modern city bus service etc. as envisaged in the National Urban Transport Policy. Furthermore, Metro rail projects are social sector projects and need to be taken up in the larger social interest with funding from Government of India. 3. Metro Railway is a "Railway" end hence a Central subject in terms of the List | Entry 22 of the Constitution and orly a Tramway within a Municipal area is 2 State subject as per List Il, Entry 13 of the Constitution. Accordingly, through the Metro Railways Amendment Act, 2009 overarching Central legislations have been provided for construction, operation and maintenance of Metro Railways through the Metro Railways (Construction of Works) Act, 1978 and the Metro Railways (Operation and Maintenance) Act, 2002 having a jurisdiction all over India for all million plus cities and National Capital Region. It has already been informed to all States vide MoUD letter dated 07.09.2009 (copy enclosed) that all Metro Rail Projects, whether within one Municipal area or beyond shall be covered under these Central legislations. 4, The "urban transport" does not exist as a subject in the Constitution. The responsibility is split between Centre and State mode-wise with modes like Railways Airways, airports, National Highways etc. in the Central Sector and Tramway! ropeways, State Highways etc. in the State Sector. However, since urban transpor completely inter-twined with urban development (which is a State subject), even though Metro Railway is a Central subject, the proposals have to emanate from the Stete Government so as to integrate land use and transport and the implementation is also to be done jointly so as to combine strengths of both the Central Government and State Governmentfant e 5. The latest opinion of the Attorney General of India dated 12th July, 2008 (copy enclosed) also clearly states that Central Government should make laws for Metro. Railway and that only a Central Safety Commission should be used for safety certification. Opinion of Attorney General dated 14th July, 2005 @s enclosed in the CoS Note has already been Superseded by latest opinion and hence quoting old Opinion misrepresents the facts © ey sie OXCeTPtS given from the decisions of Committee of Secretaries on metro rail policy and observations of CAG on the Performance Auelt ct Phase-I of Delhi Metro in the CoS note are only partial truths and selective reproduction which is distorting the complete meaning and content 7. __The Committee of Secretaries advantags to me fend categorically decided that "it would not be of PASE On & grant io Siaie & Starred Questions @ and Rajya Sabha, Urban inistsr whils strongly favouring thie model, hee brought to the te oe OF the Parliament the profound praise heaped by CAG in thay report on this unique administrative model for implementation of etre re) projects, Be atrene Unique model of JV for metro rail projects with Centre and State concerned rontributing equity in the ratio of 50:50 has been working well since teGe nx fact, Govte arn®, State Govt has pointed out any issues with this model, Rather the Save Govts are preferring this model and insisting on 50:50 equity participation by Central Govt. Making them either State PSU or Central PSU would be against the interest Of these projects. Moreover, each such case has been specifically approved by the Cabinet (Delhi, Bangalore, Chennai, Kochi ete). Hence me may advise Cabinet Sectt omit metro rail projects from the proposed guidelines and the existing JV arrangements continue. 8. __ Regarding the unique administrative model evolved by Government of India, the CAG has only made certain observations to facilitate the management to further improve its systems and bring it at par with the best practices. While it may be argued that the DMRC model is not perfect in all respects, its to be Noted that taking on the innovative model which is worth emulating in other projects. Under the (commendations Chapter it has only stated that there is 2 need for developing a suitable mechanism at the national level for projects of this nature so that accountability peues @f& not placed at unreasonable risks in the interest of the expediency, Furthermore, it has also recommended thet considering the importance of the Board of Directors in the unique administrative structure, the Government of India may take alead and work out an arrengement with the Government of National Capital Territory o Delhi for appointing independent Directors on the Board of Directors of the Company It has further recommended that the Compeny should adopt the guidelines of the Department of Public Enterprises, the Department of Economic Affairs and the Centra Vigilance Commission to strengthen the Corporate Governance. As such, 2 complete reading of the CAG report, instead of selective reading or reproduction as done in the note circulated by Planning Commission, it may be concluded that CAG has alsc appreciated this unique administrative model and has only made certain suggestions regarding improvement of the same. Urban Development Minister has alse consistently taken this stand in the Parliament regarding the report of the CAG. As such, there is a need to take up all metro rail projects in the country on the 50:50 ownership pattern of the Central Government and the concerned Stete Government in order to combine the strengths of both for successful implementation and operationalisation of the metro rail projects even though Vi. As airesey brought ou oy n ard policy (which has elreedy been approved by the CoS), the first priority is to metro rail projects on PPP and the second priority is to take up the Metro rail projec with complete Government funding on the model of Delhi Metro. this Ministry in t 12, As far as the accountability issues are concerned, these Companies are accountable to both Parliament and the State legislature and hence have to be doubly sure of all its actions. They are following the guidelines of Public Enterprises as far as investments are concerned and CVC guidelines as far as tenders and contracts are concerned, The Audit oversight is by CAG as they are Government Company under Article 617 of the Companies Act, 1956. The reporis of CAG are being laid both before the Parliament and the State legislature. As such, they, are completely accountable to Parliament as well as State legislature and the CAG. However, being a 50:50 Company and hence not strictly a Central PSU or State PSU provides certain flexibility in the overall management which would not be available if they are converted to Central or State’ PSUs. Conversion of present Joint Ownership Companies to Central or State PSUs would be turning the clock back which may not only scuttle the metro rail development in the country but also fritter away the experionce gained in successful implementation of Delhi Metro Phase | & {i and other metro rail projects taken up on similar model. 13, Equity vs grant It has already been decided by CoS that it would not be of advantage to merely pass on a grant to State Governments and leave them to fend for themselves in this major area of urban transport planning and development, which constitutes en important segment of infrastructure growth in India. The Central Government must de an active participant in such growth and must facilitate transfer of knowhow and4ay experience Hence an equity sharing model with State Governments is essential. As such, there is no case for only giving outright grant by Central Government to the State Governments for implementing retro rail projects. The Central Government has to be equity partner. Furthermore, these Projects being in Central Sector, Central Government cannot completely absolve itself from its responsibilities. 14, Recovery of central loans As already pointed out above though the external debt is raised on the strength of sovereign guarantee, the liability to repay the debt falls on the State Goverman G2se the SPV is unable to do so as per the conditions of sanction. ‘These vorditiane cp sanction ere further reinforced through the tripartite Memorandum of Understanding signed between the State Government, Central Government and Metro Rail Corporation li is further mentioned that ‘the Delhi Metre. Rei Corporation Lid is JICA losin oy Stencing » the major portion of the allocation of Metro rail project Tough assistance to the Metro rail corporations. 16. External loans to be provided to State budget. Since Metro Raiway is @ Central subject, this suggestion of the Planning Commission is devoid of any logic and the recommendations made in the nots Tegarding conversion of the 50:50 JVs to State PSUs and conversion of Central Government equity to grant are not in line with the Constitutional provisions jurthermore, since these are Central sector projects, the question of passing external loan through State budget does not arise. UDM is of firm view that there is no case for ary change in this 60:50 ownership model is time tested one for successful delivery and needs to be emulated further. Furthermore, if these loans are to be passed through the State Budget, there might be further issues regarding debt sustainability Clearance of the States which may become a bottleneck in taking up these important urban transport initiatives in some of the States. 17. As far the issue of posting of Independent Directors on the DMRC model JVs is concemed, it is mentioned that this is applicable only after-project completion where the line has become operational end the Company is no longer in the construction phase. View s of MoUD 'n view of ail of the above and the fact that the metro railway is 2 "Railway" and hence the Central subject, the following are the firm views of this Ministry: 2) All the metro rail projects in the country need to be implemented only through Joint ownership companies of the Central Government and the concemed StateGovernment with 50.50 ownership on pattern of DMRC. Even the projects taken up PPP like Mumbai and Hyderabad Metro should also be managed/governed by su joint ownership companies of Central and State Government with 50:50 partnership b) For the existing 50:50 JVs as well as future such JVs for implementation of me: rail projects, the following guidelines are to be included in the conditions of t sanction: i) The investment guidelines of Department of Public Enterprises to be followed | such companies for investments. il) CVC guidelines to be followed in the matter of tender and contracts, CVO tot appointed by the Company with the concurrence of CVC the guidelines of Deparimeni of Public Enterprises xtemnel loans io DS the present practice The above would be in line with the recommendations of CAG as well as the experience gained in implementation of these projects. This Ministry has already incorporated these guidelines in the conditions of sanction for Kochi Metro Rail Project.Wo.-14041/60/2003-MRTSMetro Government of India Mintstry of Urban Development (Whetro Rall Celt) Nirman Bhawan, New Delhi : Dated: 07:h September, 2009, The All Chief Secretaries sir, ‘The Parliament hes recently passed the Metro Railways (Amendment) Bil, 2009 which provides for extension of the Metro Raiweys (Conciruction af Ware} Act, 1278 and the Dethi Metro Raley (Operation end Maintenance) Act, 2002 which fier emendment is renamed 5 the Meira (Opsretions end Maint 2002} ‘0 National Capital Recion, Metropolitan ties (which mesns Metrapotian ‘iy. of Mumbai, Kotketz, Delhi or Chennai end Metropolien area (2s defined in Aricie 243 > of tne Constitution} | Ths Bill has become an Act 2s pst the notification in the Offical Gazetie deted 27th Augusi, 2609. The Meiro Railway (Construction of Warks) Ac, 1978 's already applicable fo Kolkata ang National Captis! Teriory of Delhi with provisions for exlensicn io Mumbai ang Cnsfnai through notiiestion while the Delhi Metro (Operstion and Maintenance) Act, 2002 is turrently applicable to only National Capital Teviory of Delhi, “The extension of these Acts lo other ciies/Metropoltan areas will be done through notification 2 Saiety certification of metro rail projects 1s of paramount importance and the Attorney General had also opined thal only 3 Central Safety Commission can uniformly Provide the samo for all metto rail projects, With this amendment, there will be uniform legistatve cover for all Metro projects in the country whether Within one Municipal area, of beyond which will provide uniformity of standards as well as safety certification by Commission of Reilwey Sefety. As such all metro rail projects in the country would be covered under the above amended Acts. Copy of the Melro Railways (Amendment) Act, 2009 is attached for ready relerence ‘This issues with the approval of the Competent Authosty, Yours fail,» f cw (SK. Lobia) Officer on Special Outy (RTS) 3061114 FAX:23061102 Encl: As aboveSRE RS emposonsrnacs—ay REGISTERED WO. Dt—eeaosyn00—09 SEES erpoownrnaes ay SEERED NO, PE iNytan09772005—09 we 2 auelbe of pea ome 7 eet tee 2 ar PUBLISHED BY AUTHORITY ——————— = a © 35) FE Reet, Toteer, aa 27, 200000 5, 1091 Ko.26] NEW DELL, THURSDAY, AUGUST27, 2000/BHEADRAS, 951 —————— re orm et Fos wen &t er & Pere fr ane views eH rer eras Sepeute nage ie give eta Pet in nde ha ay De Td 3 septa compan, ee eee a Pee comet. MINISTRY OF LAW AND JUSTICE, (Legislative Department) [New Delhi the 27th August, 2009/Bhadra 5, 183%(Saka) The following Act of Parliament reccived the assent of the President on the 26th August, 2009, and is hereby published for general informations ‘THE METRO RAILWAYS (AMENDMENT) ACT, 2009 No. 34 or 2000 (26h Aut, 2009.) ‘AnAct farther to amend the Meo Railways (Constuction of Works) ‘Act, 1978 and to amend the Delhi Metro Reilwey (Operation and Maintenance) Act, 2002. Be i wvossed by reaianent IN the Sixtieth Veer of the Repu of facia ao tows: CHAPTER 1 Prsomnany 1. (1) This Actmay be called the Mero Railways (Amendment) Act, 2009, Shan leone (2) Itshall come into foree on such date asthe Central Government my, by notifiation oe Inthe Ontcial Gazette, appoint.eof 1989 seet] ‘THE GAZETTE OF INDIA EXTRAORDINARY 4 city of Caleuna, and with effec from such date ex may be specified in that notification ‘nd thereupon the provisions ofthis Act shell apply to that metropolitan area or metropolitan city according 7.{n section? of the Delhi Mero Railivay tn sub-section (1).— (0 for clause (a), the following clauses shall be eubstinuted, namely: — “(e) "Central Government”, relation to technical planning and safety of smeto railways, means the Ministry of the Government of India dealing with Railways; (20) "Csi (09 for cleuce 0,2 (4) "met opolitn area shal have the meaning sssigne to tin cleuse e) of anicle263P of the Constitsion; (ua}"*meicopofita city” means the mecropolitan city of Bombay, Caleu Dali or Madras i after clause (2), dhe following claus shell be insered,nemely:— "(tay "National Capita! Region” means the National Capital Region es 4etined in clause () of section 2 ofthe National Cepitel Region Panning Board ‘ct 19t5 8. In section 6 of the Dethi Metro Reway Act, in sub-section (2) aflr clause (6), the following clauses shall be inseree, namely: (ba) develop any metro railway lan for commercial use: (bb) provide for carriaye of passengers by inmegratedteansport services or any ‘other mode of transport. 9. Section 7 ofthe Delhi Metro Railway Act shall be renuribered as sub-section (J) ‘hereof and after sub-section (1) 2540 renumbered, he following sub-section salle inserted, namely:— ss Commissioner" meant ¢ Cizime Cormmissioner appoinneé lowing be subsites, camely — “(2) The Commissioner shall function under the administrative control of the Chief Commissioner of Railway Safety appointed under cection S of the Railways ‘Act, 1989." 10. For section 12 ofthe Deli Nitro Railway Act, the following ection shall be substituted, namely:— "2, The Chief Commissioner of Railway Safety shall, for each financial yea, prepare in such form, and within such time, 2s may be preserted, an annual report, Biving 3 fll account ofthe activities ofthe Commissioners during the nancial yeae Jmmeetitaly preceding the nancial yet in which such por is prepared end forward copies thereof to the Central Government” 11, tn zeetion 13 of the Delhi Mero Railway Act forthe word "Commissioner, the words “Chief Commissioner of Railway Safer" shall be substnuted. 12: In section 23 of the Delhi Metro Ruilway Act, in sub-section (1), forthe words “tnd ond Engl lish and officiel enguage ofthe State in which such sation if lorat 13. In section 26 of the Delhi Metro Railway Act, in sub-azetion (J), the words “a small shall be omited. 14, In section 34 of the Delhi Metro Railway Act, for sub-tection (4), the following sub-section shall be substituted, namely=— mendes of section 2 Sutsuaton af sew ston Gr teaien 12. anes of fein 1 mentineat of Amendet of eon 20THE GAZETTE OF INDIA EXTRAORDIVARY. (CHAPTER IL ‘Astacxeet 10-1 Wier Runways (ConsTaucrion oF Wonss) ACT, (978 ‘Amendment of 2, Inthe Metro Railways (Construction of Warts) Act, 1978 (hereafter in his Chapter vssion 1 refered t0 a8 the Metro Railways Act) in section J, in sub-section (2), far the portion beginning with the words “such other metropolitan city” and ending with the words “a that city accordingly", the folowing shall be substtited, camely.— “ihe National Capital Region, such other metropolitan city and metropolitan ares, after consultation with the Site Government, and with effect fom sich dae as may be specified in that notification end thereupon the provisione ofthe Bet chall ‘al Region, such mewopoiian city oF metropolitan sree sbsion 013. Tn the Wera allways et, forthe words "metopeslen city" acourrng in elev (0) Te en ofsubesetion (1) lute (c) of sub-section (1) af section 4 and clause (a) of metropolis syh-section (J) of section 32, he words newopolitan city, metropolitan ares andthe National SReeepalan Capit Region” shell be subatntes retvopion apie Regine" ‘Amendment of 4. In section 2 ofthe Metro Railways Act, in sub-section (1), (0 afte clause (fh the following clause shall be inserted, narnly.—— “(ho "mtropoitan area shal have de meaning assigned tin clase () of article 2437 ofthe Constuton;; (4 after clause (0, the following clause shall be inserted, namely — ‘(oa) "National Capita! Region” means the National Cupital Region as GeCined in claute (ff ection 2 ofthe National Capital Region Planing Bosrd ‘Act 1985; CHAPTER I ‘Aveomoet 70 THe Deus Mereo Raley (Orensriow avo Manermuance) Act, 2002 5. Throughout the Delhi Metro Railway (Operstion end Mtineenance) Act, 2002 (hereafier in thie Chapter refered to asthe Delhi Metro Railway Act), for the words “metropolitan city of Delhi” wherever they occur, te words “the National Capital Region, mezopoliten city and metopolitan area" shall be substituted. chy of Dein" by references 6. Im section | of the Dethi Matto Railway Act for sub-seotions (1) and (2), the following sub-ssctions shall be substituted, namely.-— (1) This Act may be calle the Metro Railways (Operation and Maintenance) ‘Act 2002, (2) extends inthe firsnstance to the National Capital Region and he Central Government may, by notification, afer consultation wit the State Goverament extend this Actto such ather metropolitan area and metropolitan city, except the metropolitan sof come, 60 of 002THE GAZETTE OF INDIA EXTRAORDINARY _ (Parte. 1) "(The Centrel Government and the State Gavernnent shall vortnate one ‘member each tothe Fae Fixation Commitee: Provided thet a person who is or has been an Additiondl Secretary to the ‘Government of india or holds or has held an equivalent pos inthe Cental Government or the Ste Government shll be qualified to be nominated asa member", iro Reilwey Ast, in sub-section (2), for the words ovemmentof the National Capital Tertory of Delh”, the Worde "State Governneat* shalt usted f 86. In section 85 of the Delhi Meso Reiley Act, — "Cavern of he National Spill Tentary Amendment of 18, In seesion 38 of the Delhi Me seston 38 (i fa sut-secion (1), of Deli. the wards “inte Qoves (i) in sub-section (2), for che words “Governmencof ne Nesiocl Capital Tervory (of Delia the Delhi Ge is "Se Government” shel be sabetiuted, TX. VISWANATHAN, Seeretary tothe Govt. of nia PRINTED BY THE GEWERAL MANAGER GOVT OF WOIA PERE, TO ROAD, NEW DELHI ‘AKO PURLGHED BY Te CONTROLLER oF PuaLlAtion Ou, ton. uctPuRNo—see2sKes}—2e2 2008Copy No.4 No.2 vCMi2012, CABINET SECRETARIAT EXTRACTS FROM THE MINUTES OF THE MEETING OF THE CABINET HELD AT 1730 HOURS, ON TUESDAY, 3° JULY, 2012, IN PANCHVATI, 7, RACE COURSE ROAD, NEW DELHI tem 7 Case No.187/24/2012 tro Rail Project. , [Approval for Kochi Me 1d 11.06.2012 from the Ministry of ‘The Cabinet considered the note date: aya) and approved the proposal [Urban Development (Shahar Vikes Mantra Contained in paragraph 16 thereat SECRET fee 12 Copies oO ith the Rules of Procedure in Regard to Proceedings of jement the decision may be formation of the Members of ln accordance wit the!Cabinet (Rule 10), progress of action to impl included in the Ministry's Monthly Summary for the in the council of Ministers. decision may be communicated to the Action taken to implement the 'e Implementation Schedule ettached to Cabinet Secretariat with reference to th the agenda nete, oe eeNo.K-14011/37/2005-Metro Government of India Ministry of Urban Development Metro Rail Cell Copy No._~ New Delhi, dated 11" June, 2012 NOTE FOR THE CABINET Metro Rail Project. oval 1, The objective of the project is 10 19 bolic transport system in the city The project 2ims at seting of Kochi, ihe fast growing urben agglomeration In Ke up of a world-class stete-of-the-2t metro rail system on the pattem of Delhi Metro, covering a total length of 25.612 km ({ully elevated). The alignment as Per the Detailed Project Report (DPR) prepared by Delhi Metro Rell Corporation Ltd (DMRC) is from Alwaye to Petta with 23 metro stations. The total completion cost of the project is estimated at Rs. 5181.79 crore (including escalation and estimated Central and State Taxes). The construction as well as operation and maintenance of the system are proposed to be implemented through 0:50 joint ownership company of Government of India (Gol) and Government of Kerala (Gok). BACKGROUND 2. Kochi, the commercial and industrial capital of Kerala is a fast growing city. The area of Kochi city is 730 sa. km, having 8 population of around 21.18 lakh (2s per 2011 census), average travel speed on melor roads is 25 km per hour 2nd volume capacity ratio is 1.5 to 3.0 on most roads, ie. rnost of the roads are congested. The road length is 614 km and average maximum width is 20m (generally, very narrow). ‘The vehicles added per day are 165 (as per Year 2008 data), with annual growth of SECRET 1of 35No.K-1461 1/37/2005-Metro Government of India Ministry of Urban Development Metro Rail Ceil ot PROPOSAL 18. The following proposel is, therefore, submitied for consideration and approval cf the Cabinet:- 2 brded financing ()) To accord approval for the Kochi Maire Ral Pr plan given in para 6 above, (i) To convert the existing State level Special Purpose Vehicle (SPV) - Kochi Metro Rall Lid. (KMRL) Into 2 Joint Venturé"Company of GO! and Gok with: equity participation on 50:50 basis. (ii) The institutional arrangement end Legal Framework 2s proposed in para 14 to 12 above. 2 ible end revolving Urbah Trefisport (iv) To include setting up of dedicates & neh Fund by GoK at State and City level in consultation with MoUD, 2s ‘one of the additional conditions of sanction in view of para 14 above. {y) __ Additionat conditions, keeping in. view those recommended by PIB (Annexure 1) and MoF (Annexure Ill) which are fo be included im MOU to be signed by Gok MoUD are placer! at Annexure: |. SECRET 10.0835No.K-1401 137/2005-Metro Government of India Ministry of Urban Development : Metro Rail Cell APPROVAL SOUGHT 16. Approval of the Cabinet is sought fo the proposal contained In pare 15 above. 17. Implementation schedule and statement on equity, public accountability and sappencix-| & 11) od by the Minister of Uirban Develo: 18. This note has been seen and approw' Pogsm— (sucmirKrenna) Dated 11" June 2012. Secretary te the Govt. of India Tel 23062377 Place: New Delhi SECRET 11 of 35Metro Nok-14011/37 . Governme ' \Ainistey of Urban Development Metro Pail Ceil IMPLEMENTATION PERIGED 0. The project is scheduled to be completed is four years from the date of start of work Retum (EIRR) and worked out at 14.2% and 2.99%, nai Rate of Goth the values are comparable for such projacis word over. The above values of financial returns have Deer worked out with the following fare stfucture:~ a Distance in km DMRC's existing fare Proposed fare for _ from 2009 (Rs.) Kochi Metro (Rs) | 8,00 70.00, | 2-4 10.00. i 13.00 { _ 48 12.00. 15.00 t 5-9 15.00 19.00 32 16.00 21.00 ‘ 42-15 18.00 23.00 Lo 15-18 49.00 24.00 18-21 Zid eal 27.00 21-24 22.00 28.00 24-27 23.00 30.00) u \NSTITUTIONAL ARRANGEMENTS implern into @ joint ownership (50:50) SPV of the project. namely the Kochi +11 The evisting State level SPV f Metro Rail Limited (KMRL) shall, Pe converted Gol and Gok, on similar pattern 2s for Dethi Metro, Bangalore Metro, Kolkata Mets 5 of 3No.K-14011/37/2005-Metro Government of India Ministry of Urban Development Metro Rail Cell tee and Chennai Metro. The joint ownership company will continue to be named es KMRL. The promoters, the Got and the Gok, shall nominate five Dirootors each fo the Board of Directors (BoD) of the SPV, which shell have 10 nominee Directers. The lary, Minisiry of Urban Development, Goi will be ihe ex-officio Chairman of the ime Managing Diecior wii oe the nominee s* Beard, The ful 1@ BoD only with the prior consent of Got her/additional assignment by the Gok without the: Q : MoUD. The BoD shall proceed to have Funetional Directors, in addition to the 10 nee Directors, forthwith, as per guidelines issued by MoUD. Romi HIGH POWER COMMITTEE 11.2 During implementation of the project, a High Powered Committee under the chairman: ip of the Chief Secretary to the Government of Kerala, with other Secretaries ete. concerned, as members, will be set up by the State Goverment to take expeditious decisions on land acquisition matiers, diversion of utilities, shitting of Structures in the project alignment, rehabilitation of Project Affected Persons multimodal integration and such other matters where the State Government has to tate quick action. EMPOWERED COMMITTEE 14.3 Government of India vide O.M. No K-14011/59/88-UD.II(PtHIll) dated 9 June 1985 had approved the constitution of the Empowsred Committee (EC) under the SECRET 6 of 35,Hq Ke LOL 37/2005: Govemrnent of Ins au isa of Urban Development Metro Rail Cell ary to consider and izke decision chairmanship of Cabine modal Mass Rapid Transit System jon of the Mult to funding and implemer to be extended to cover Kochi il), The role af the EC is eropore: Provests (Annex! ag one of its memoers, 23 has been 150, by including the Chief Secretary. Gok nd Chennai Metro Projects. The galore, Kolkata ‘East West sarrid cover ail the future metro fall EMPOWERED GROUP OF MINISTERS tid The role of the Empowered Group of Ministers (EGoM) set up to take all policy decisions and review the progress of MRTS project in Delhi and, other Metro Rail Metro Rail Project also. by including the Projects is proposed to be extended ( Koc! Chief Minister Kerala as one of its nvitees when matters relating fo this metro are considered. The role of this =GOM is also proposed to cover all he future metro Rail projects in India LEGAL FRAMEWORK 42, Legal cover for the proposed Kochi Metro Rail Project. Kochi shall be under the Works) Act 1978, the Railway A‘ Metro Raltweys (Amendment) Act Metro Raiways (Construction of ct 1989 and the Metro Railways (O&M) Act, 2002 45 arnended through 2009.his instance of che Ministry OPinian Subs Safety Regulation] Certification of Metro Rachvays. i The Minisuy of Law & Justice, Department of Legal Affairs av the sj of Civil Aviation (MoCA) has sought my legal opinion segarding the following queries i) Whether the Central Government through MoCA, is competent legislate in respect of safety regulation/ safety certification of metre sailways transcending one municipal area? Whether the Central Government has authority to legislate in Tesvect of saéety regulacion/safety ceriification of metzo railways confined to one runicipal ares, in terme of Entry 35 of List-t!) 0 uve Seventi Schedule of che Canstitucion? ii) jis) tm ease answer to (ti) above is in the negative, the modality awailsble to the Central Government to ensuze the implementation of the aforesaid decision of the Union Cabinet mav be advised: and iv) Generally The need for my opinion has arisen in the following facts:- |A number of Stares ate proposing (0 set up Metro Railway in ciurs bike Bangalove, etc. A question arose as 10 the legislative competence of Parliament/Scace legislatures 10 make laws with regard to construction, operition and management of such Metso Railways, Ac this stage, we ate not considering the Metro Railways already ser up under existing legislauons, which one vagecstands (0 be Delhi and Kolkata. ‘The mater was earlier ceferred to me. for my opinion. I examined the ix anc 105, marter in some detail and having regard to che factual ma Constitutional provisions, in my eatlier opinion dated 14 July, opined as follows:- “In view of the above, the Metro Railway, as proposed, would be covered within the definition of tramway as understood ir Common parlance. However, only if Metro Railways is confined tc a municipal area, the State Legislature will have legislative competence under Entry 13 of List-l, otherwise the competence9 “ts os Government 3. As per the would rest with Parliament in view of Entry 22 of Listt, unless po tjamont passes a law to the effect that Metro Railway, even even moniipa lists. isnot a railway, Therefore, | agree with aero’ ol the Ministry of Law and Justice, Department of Legal Affairs. ‘e Starement of Case, prepared by Shri M.K, Shana, Addl «Counsel on 16.03.2008, che Central Government took the following decisions: 4) ui) 4 As per the Si g State Subject, legisladon for operation Urtae Tinemance of meto rail systems falling within the javisdietion of s municipal area could be enacted by the State Govemment concemed. However, the Minisuy of Urban Development would, in due course draft a model legislauon and cnreulace ic among the Scares; Urban Transport being Foolproof safery systems must be ensured, Te view of the Mreportance of afery and ensure uniformiy im afer Caricarion, che insGnasion of che Commissioner of Rulwas Safety should be used 1c may have to be appropriately Trengihened and provided the tastiutional backup néceassiy <0 tmabie ic 19 discharge this responsibility State _legslauon cerngoned im sub-part @) above may include an enabling provision for entrusting the responsbily of safety cerufcauon vo the Commussionet for Railway Safery: The chaice of gauge being & techno-economic parameter iti left to the concemned State Government to decide, rement of Case, it appenss that the miter at Senal No.l) above was examined by the Central Government at various levels and was decided would act a3 Commission would be an autonomous body at the would cestify the safery of the paramount consideration that a Safer Commission would be established which Salery che safety regulator for Mewo Raibways. The Central level, which of the Metro Railways, which was in furtherance of public safery. The Safety Commission, as per the Statement of Cate; s proposed to be set up through « Parliamentary legislation. However, the Empowered Group of Secretaries, in paragraph 26 of che Minutes of the Meeting, has required the iMinistry of Civil Aviation ro1 2 Sethe Comapeence of Partamene que Tie Teamnine the Toga sue Fegaedl cad proposed Bill and the papers have been sent t@ me for ray opinion T have not seen the proposed Bill. In chis view of che mates, itis difficuh o give an opinion as co whether a Bill, which, I assume is! at conceptual stage, would be upheld consirvtionally. “The question broadly is who has legislative competence co make & law for safety certification of Metro Railways in different States. In the Statement of Case for opinion, reference has been made to Enuy ) of the Seventh Schedule of the 35 of List-JI1 (Concurrent Lis Consinidon t argue that the proposed Bill on Safery Commission may be suseaned vader Enuy 35 of Last-IIl, Entry 35 ceads as under 35 Mechanically piepelled vehicles including the principles on winich taxes on such vehicles are to be levied." In my opininn/the expression "mechamcally propelled vehicles” is « gener) expression which could also inchide Railways or Tramways Since Railways and Tramways are speciBcally inchded in other provisions of the Consueudon fie Entry 22 of Lise], Enury 13 of Lisl ete), by necessary implication Meteo Railways may be excluded fom che definition of ‘mechanically propelled vehicle’ since normally a special provision would exclude a general one. However, thar is not definitely t0 soy that Pariament has no legislative competence to make a law on the subject. If Pacliament proposes to se! up a Safery Commission for different Mewos now coming up in different States, Parliament could have legislative competence «9 do so One may requice nacional and international technical expertise ty make Commission can Meteos safe and, ia my opinion, only a Centeal Sa uniformly provide che same. Further, as per Clause @) of the Cental Government decision [quoted hheteinabove|, if the State legisladons incorporate a provision in their law eegarding safery certification of municipal Menus by 2 Cental' Safety Commission, there should be no difficulty in Patliamen, enae a law on Safety Commission for Metco Railways. ' However, I should add that with a purposive and/or constnice inverprecstion of Enuy 22 of List 1, Entry 13 of List 1] and Entry List IT] and ceading all the enuies under the principles of surround circumstances, where mettos are now being built all over the cou tuanscending municipal limis, it may be possible for the Pasliament i tnact a law covering all aspects of Metro Railways generally PEI Asilon K Banes) Atouney Geneval for Ine: | New Dat 12" July, 2008vet frere aaa fraiy wad, 4g feeeticii01 MINISTRY OF URBAN DEVELOPMENT NIRMAN BHAVAN, NEW DELHI-1101 Tel, : 23062977, Fax : 23081452 na -mail ; seoyurban@nic.in afra IRI WOR URL ; http:llurbanindia.nic.in Secrstary to the Government of India D.O.No.K-1.4044/49/2012-MRTS-4 Dated the 18" December, 2042. Dear Shri Pleas Novern refer to your D.O.leiter No.30(11)PF-11/2006(Volli) dated 15th 2 regauding ihe orocedure ft 01 indi background note inisiry alongwith the pros: followed in all future Metro view t Commission, for your kind information and necessary action. 3. Since the Cabinet while sanctioning Phase-| of Delhi Metro has empowered the Empowered Committee to grant all necessary Government sanctions, including financial sanctions, any deviation from the above would require Cabinet sanction. Accordingly, it is suggested to follow the well established procedure of Empowered Committee and EGoM for all metro rail projects. However, as suggested by Planning Commission, the PIB format shall be followed for seeking appraisal and comments of Planning Commission, MoF as well as other Ministries. The note for Empowered Commitise would thereafter, be placed for consideration duly incorporating the comments of various Ministries. This issues with the approval of Minister of Urban Development. With regards, Yours sincerely, es (Sudhir Krishna) Encl: As above. ShriR.S. Gujral, Finence Secretary, Ministry of Finance, Depariment of Expenditure, North Block, New Delhi-110 001