Operations Management

The Delhi Metro Project
Effective Project Management in the Indian Public Sector

- A Case Study

Compiled by: Baldeep Singh Charu Pundir Prachi Dongre Prasoon Garg Sneha Kumari Vandana Bharti Yogesh Mundra

A motivated team of professionals was selected by him. and the citizens of Delhi. The DMRC successfully managed the various stake holders in the project like the general public. It also explains how the DMRC managed the various stakeholders like the central and state governments. More importantly. it was able to overcome all these hurdles. The organizational culture was based on punctuality. government bodies. and how these can be overcome. However with the effective project design and a we-mean business culture. LEARNINGS y y y y y Understand the preliminary activities to be taken up before a large infrastructure project can be started Appreciate the significance of the role of a project manager in project execution Understand the importance of the right work culture in successful project management Recognize the importance of managing the various stakeholders in a project Appreciate the difficulties involved in the execution of large infrastructure projects in developing countries. . FACTORS FOR SUCCESS The Delhi Metro Rail Corporation Ltd (DMRC) faced many problems and challenges during the construction of the metro. The case describes the organization and planning of the project and highlights the steps taken by the DMRC to ensure the successful completion of the project. During his service he had earned a reputation for completing major projects on time and within the budget. the contractors. it stood out from most other public sector projects in India in that it was completed on schedule and within the budgeted cost. to ensure that the project was implemented smoothly. Sreedharan was appointed as a project manager and managing director of the DMRC. He was a technocrat and had a long stint in the Indian railways.THE DELHI METRO PROJECT INTRODUCTION TO THE CASE: The Delhi Metro project gave Delhi a world-class mass rapid transit system. etc. The case ends with a brief discussion on the future plans of the DMRC. and also ensured that the project was environmentally safe. honesty and a strict adherence to deadlines.

. DMRC employed only 45 persons per kilometer of track. to ensure quality in construction.project organizations. so GOI enacted the Delhi Metro Act. The act which spelt out the rules for the local authorities superseded the local municipal laws of Delhi and also lower courts were barred from issuing stay orders.DMRC opened its own µMetro Training School¶ in New Delhi. To source power for the project at a very low rate.manpower. The candidates selected for the project. In order to control costs. and operation and maintenance. FUNDING OF THE PROJECT The GOI and GNCTD formed the DMRC under the companies act to construct the Delhi Metro. a number that was close to the international norm. It had just two departments. The rest was contributed by GOI and GNCTD through equity. Several Multinational engineering corporations from France. Funding was not an issue in the case of the Delhi Metro project because it was settled even before the project commenced. Germany. which was expected to be 5 percent of the total project cost.[ DMRC appointed a special quality assurance team independent of the field executives. subscribed to equally by the GOI and GNTCD.0 for project planning and monitoring. To keep down energy cost. DMRC used Primavera Project Planner 3. and Spain etc worked on the project to secure the best technology available globally. like other major infrastructure projects in India do. To control manpower costs. was sent abroad for training by DMRC. The resource planning module of the software alerted users if there was an excess or shortage of resources and the cost planning module provided a complete cost break up for the project. through Japan Bank International Corporation (JBIC). energy and materials including maintenance.Unlike other public sector organizations in India. the DMRC opted for a lean structure. DMRC entered into a special agreement with the Delhi Transco ltd.64 percent project cost was to be provided by the Overseas Economic cooperation fund(OECF) which later became JBIC. The significant portion of the project cost was funded through a soft loan provided by the Japanese Govt. Of the project cost. the total expenditure of the Delhi Metro was split into three broad heads. To ensure that DMRC does not face any property disputes. 28 percent was financed by the equity. The two agreed to give interest free subordinate loans to cover the cost of land acquisition.

About 400 cases were filed against the DMRC on this issue. .Sreedharan selected a motivated team of professionals whom he regarded as fundamental to the success of the project.PROJECT IMPLEMENTATION Construction work on the project commenced on October1. The DMRC also faced the difficult task of relocating the people evicted from properties acquired for the project. telephone and electric cables. The corporation aimed to project an image of efficiency. it faced political pressure not only in the recruitment process. Further these lines were divided into sections. PARTICULARS LENGTH SHAHDARA-RITHALA 22. and operation & maintenance. to facilitate the construction work. courtesy and ³we mean business´ attitude. DMRC also had to ensure that the project did not cause much inconvenience to the general public. The entire project was divided into three lines. processes.1 DWARKA SUBCITY PROJECT TEAM Sreedharan was appointed as the project manager and MD of DMRC in 1997.06 VISHWA 11 VIDYALAYACENTRAL SECRETARIAT BARAKHAMBA32. The training to the team was provided by the Hong Kongµs Mass Transit Railway Corporation (MTRC) and later DMRC open a µMetro Training School¶ at Shastri Park. the DMRC faced few legal problems in acquiring properties. DMRC was able to recruit only 100 people. around 70% of the senior staff was on deputation from IR. 1998 . and contract awarding but also in land acquisition. The entire corporate culture was based on integrity STATIONS 18 10 31 PROBLEMS Despite assurances that the DMRC would enjoy autonomy. out of which only 100 were pending as of 2006.by 1998. It faced challenges like relocating a large number of utilities like water pipes. With the Delhi Metro Act coming into force. The team consists of experts in the field of civil. electrical. It had to built temporary accommodations for the people who were to be relocated. namely ±Project organization. communications engineering. promotions. sewerage lines. The DMRC opted for a lean structure and had two departments.

1. It earned additional income by providing consultancy services to organizations and cities. OUTLOOK The delhi metro project had provided a stimulus to the GOI and the state governments to improve the public transport infrastructure in other cities in India. special efforts were made to minimize construction noise and pollution.720 million earned in the previous year. DMRC had to ensure that the construction sites were entirely covered.In order to lessen the difficulties for the common people by the construction work. DMRC also ensured that it paid the contractors. whom it called ´associates´ on time. It made it a point to invite JBIC officials to the inauguration events of various metro sections. The DMRC earned revenues of Rs. both in India and overseas. contractors. MANAGING THE STAKEHOLDERS The stakeholders included the governments. it now has the capability to build and manage projects in other Indian cities. Many of its parking lots were full and in some areas. the funding agencies and the general public. During the construction stage. the municipal authority that owned the Land around the metro stations did not allot it sufficient space for parking facilities.It was able to complete most of the project within the budget mostly by limiting corruption. with no soil or dirt being allowed to spread outside. Street level traffic fell by as much as 50% in the areas where the metro operated. DMRC used silent generators at work sites and also used light shields to reduce glare from work lights at night. Considering that the Delhi Metro was constructed mostly with the Japanese funds. The Delhi Metro project was successful in reducing pollutions levels and vehicular traffic. DMRC put in special effort to maintain good relations with the JBIC officials.50 billion in the financial year ended march 2006. With the DMRC assimilating the metro technology from its international partners. Another challenge that the DMRC faced was the severe dearth of parking facilities at its metro stations. alternate traffic plans for the road was constructed in advance. The project was finished ahead of schedule on certain sections given by the contractors on utility diversion and surface road traffic management. . in comparison to the Rs.

consultancy) EXPENDITURE LOSS after adding depreciation.OPERATIONAL ASPECTS OF THE DMRC PARTICULARS Revenues( income from operations. interest and other cost 2004-05(Rs IN MILLION) 720 520 760 2003-04(Rs IN MILLION) 320 .

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