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Case Study on The Delhi Metro Project Phase I
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 The Delhi Metro Project: Saga of an Effective Project
Management

Introduction:
“Everyone who has traveled by the Delhi Metro wants one in his or her city. Today, there is a
national resurgence in public interest in urban public transport”

- Dr. Manmohan Singh, Prime Minister of India, in 2006

The need for a reliable public transportation was felt in Delhi for a long time. The first step to
build a metro system in city was taken in the early 1990s. In 1995, The Government of India
(GoI) and The Government of the National Capital Territory of Delhi (GNCTD), a 50:50 joint
venture, formed the Delhi Metro Rail Corporation Ltd (DMRC) under the Companies Act to
construct the Delhi Metro. The Delhi Metro Project is:

 Second project in country after Kolkata Metro: 1984.

 In 1995, RITES (Rail India Technical & Economic Services Limited) submitted a
detailed project report for Phase I of the Delhi Metro Project.
 The DMRC was to complete Phase I of the project within 10 years, i.e. by the end of
2005.
 E. Sreedharan was appointed Managing Director (MD) of the DMRC and project
manager for Phase I of the project in November 1997.
 Work on line 1 of Phase 1 started in October 1998.
 Total land needed was 340 hectares (58% government, 39% private agriculture and 3%
private urban land).
 Final cost of project was approximately Rs 99 billion with Rs 7 billion saving.
 Challenges:
 Delhi Metro Project was going to be the biggest urban invention in India since
independence in 1947.
 Project has to be executed in a very difficult urban environment.
 Being the capital city, all actions were under close scrutiny of VIPs.
 Project implementation period got compressed to 7 years from 10 years, since
project started late.
 Low Financial IRR (3%) prompted second thoughts on the project
 Estimated loss of Rs. 5 million if one day is lost.

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  Expertise and technology was not available in the country to construct Metro of
world class standards with frontline technologies.
 DMP faced criticism due to inability to recruit and 70% were deputed from
Indian Railways.

Strategic Intent of Delhi Metro Project:

Delhi Metro Project was conceived as a social sector project aimed to solve Delhi’s traffic
problems, which had almost become unmanageable and to improve both the quality and
availability of mass transport services in Delhi. Almost all the studies on Delhi traffic
recommended the Mass Rapid Transit System (MRTS) as a means to solve the problem but the
project was very expensive, so the GoI and GNCTD bore the capital costs to make it financially
viable on a commercial basis. Government of India decided to go ahead with the project,
keeping in mind that it was essentially a social sector project, expected to benefit the regional
economy in more ways than one, even though the financial IRR for the project worked out to be
3%.

Project Statement of Work:

 Phase I of DMP was planned to connect Delhi’s business, education and shopping areas
through construction of 3 lines, total length of 56 km, 50 stations out of which 10 are
underground and 3 maintenance depots. (Refer Exhibit 1 for the Delhi Metro Map of
Phase I)
 For Phase I of the metro to become viable, it was estimated that it would have to
transport 1.5 million passengers per day.
 The DMRC planned to generate around Rs. 6 billion by developing real estate projects
in and around the metro stations. This included an IT park, a mega shopping mall cum
multiplex, restaurants, ATM counters, beverage counters, web stores, chemist’s shops,
and coffee parlors, to repay the OECF loan. (Refer Exhibit 2 for Cost Structure of the
DMP)

Project Life Cycle:

Stage 1 (Specification of Project):
Phase I of Delhi Metro Project of 3 lines, total length of 56 km, 50 stations out of which
10 are underground and 3 maintenance depots, is planned to be constructed in 10 years
duration, from1995 to 2005.

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  Project Team: The project was led by man with a reputation of completing project on
time, a retired technocrat, Mr. Shreedharan. The core team has composite of 100 people,
70% of whom were on deputation from Indian Railways. Mr. Shreedhran was in
complete authority of selecting the team and forms a team by viewing their track record.
Though this project took more time than expected by results was a team full of
experience and commitment. Unlike other public sector organization, DMRC opted for
flat & lean structure. The selected employees were sent to Hong Kong’s Mass Transit
Railway Corporation (MTRC) for training. Later DMRC established its own school at
Shastri Park, New Delhi.

Stage 2 (Planning the Project):

 Mr. Shreedharan was given full authority and there were no political interference from
Government of India.
 The deadline approach was followed and the employees were required to keep a record
of scheduled work for the day and work completed. Every Monday Heads of the
department use to meet to review targets and set the deadlines.
 The project which was scheduled to start in 1995 eventually started in 1998, delay
because of Government approvals, but Mr. Shreedharan said that we will still complete
the project in the deadline specified as per the start of 1995.
 The total cost to the Delhi Metro project was split into three overheads: (i) Manpower
ii) Energy iii) Materials including maintenance
 Manpower Cost: The manpower cost was controlled by DMRC through efficient
practices. They followed the international norm of 45 individuals per kilometer which
was three times less than that of Kolkata Metro. The organization was made lean and
effective.
 Energy Cost: The cost to energy was controlled by terming a special agreement with
Delhi Transco ltd to source the power for the project at low cost. Total power required
for running trains with modern coaches on the corridors is estimated to be 75 MW. To
ensure continuous availability of quality power for running trains on the MRTS
Corridors, DMRC, have made arrangements to get 120 MW from NTPC Thermal Power
Station at Oriya Stage II.
 Material including maintenance cost: To reduce the expenditure on this front DMRC
used Primavera Project Planner 3.0 for monitoring and planning. The software alerted
users about the inventory position and the cost planning module provided a complete
cost break-up for the project. The implementation of project allowed DMRC to move on
critical path and stopped any delay as one day project loss would have cost about Rs. 5
million. The use of ballast-less tracks also minimized maintenance cost, reduced
vibration and, provided greater safety and comfort.
 To ensured proper safety of each employee, the safety equipment was made compulsory
for every employee working on site irrespective of rank they hold.

 Work Breakdown Structure for Fabrication of Metro Station:

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The Work Breakdown structure for the construction of a particular Metro Station has been
defined below. The data taken is through various sources and assumption is made that it is same
for the most of the Metro stations work completion. The subsequent Gantt chart and network
model has been prepared and a copy has been send along with the main project.

Work TASK PREREQUISITE TASK DURATION (days)

A Survey
B LAYOUT
C EXCAVATION
D PILING
E FOOTING
F FABRICATION OF
GIRDER
G STRUCTURE PAIR
H PAIR CAP
I PAIR ARM
J GIRDER
K DESK SLAB
L PERFORM SLAB
M BREAK WORK
N SHEETING
O TRACK
P FINISHING
30
A 12
B 10
C 1
D 4
21
E 1
G 1
H 1
F 5
J 1
K 1
L 4
M 90
23
N,O 10

 The number of days that has been estimated for the completion of a Metro Station is 215
days.
 Payback Period: A study by CRRI of Delhi Metro Phase-I have estimated EIRR to be
19.96%. Thus, the entire cost of Phase-I was recovered by the city of Delhi in 5yrs by
2010.
 Budget: Refer to Exhibit 3 for approved budget 2006-07 for Phase I.

Stage 3 (Project Implementation):

The construction work for the project started in Oct 1998 and the entire project was divided into
three lines which were further divided into sections.
Milestone 1
 Line 1 (Shahdara to Rithala): The work on Phase I started with the Shahdara - Tis Hazari
section of Line I, covering a distance of about 8 kilometers. The work included a lot
diversions and barricading along with traffic planning. The tracks were supported on

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 piers and elevations were of 10 meters made in between the middle of the roads. The
tracks were properly barbed and slabs were used to prevent trespassing.

Milestone 2
 Line 2 (Vishwa Vidayalaya to Central Secretariat) : This line of the phase was covering
11 kilometers. The part of project completed 8 months before the schedule. The
tunneling started in August 2002 which eventually completed in 2004. Different types of
machines were used for tunneling, depending on the soil conditions. Technologies like
rock tunnel boring machine and earth pressure balance machine were used for tunneling
process. The Line 2 got completed within the budget and nine months ahead of the
contract schedule.

Milestone 3
 Line 3 ( Barakhamba to Dwaraka Subcity): The work of line 3 started in February 2003;
the line was extended to additional 9 km. This has also got to do with the success in
under budget and quick completion of projects earlier versions. Line 3 was different
from other two lines because in this segment none of the foreign players were involved
as DMRC and RITES have developed enough capabilities and confidence to go on their
own. Cheaper technologies like U-Shaped girders were used constructing all elevations
as they were cost effective. Cement was replaced with steel at many palaces to reduce
the time. The remaining section of Line III Barakhamba-Dwarka metro section was
inaugurated in 2005 as was completed within 30 months. The further extension (Dwarka
to Dwarka Sub City) was carried out by elevating most of the routes so as not to displace
public and traffic during construction.
 The project also included various environmental considerations as part of their initiative
like OHSAS certification and rain harvesting, complete coverage so no soil or dirt flush
out of construction site. Plantation of new sapling along the route was also a new
initiative.This segment also completed within stipulated budget and time without any
considerable support of foreign player.

Stage 4 (Project Evaluation):

 The successful completion of the project effectively silenced the critics who had been
skeptical about the ability of an Indian public sector organization to complete any
project. DMRC stuck to its completion target throughout the project and even finished
some sections ahead of schedule.
 DMRC saved Rs. 6 -7 billion on the project, it was successful in keeping the cost of the
project at US$ 32-53 million per kilometer.
 With Phase I of the Delhi Metro Project nearing completion, the GoI decided to extend
the metro network and work on Phase II of the Delhi Metro project was set to commence
in September 2006.
 The GoI and the GNTCD had prepared a comprehensive plan to extend the Delhi Metro
to 244km by 2021 I three subsequent phases.
 Refer to Exhibit 4 for Operational Aspects of the Delhi Metro Project Phase I.

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Critical Success Factors:
 The right person, a trained and experienced project manager was appointed.
 Through thorough planning, an effective project design, and a ‘we-mean business’
culture, DMRC was able to overcome all the technical and systematic challenges during
the construction of the metro.
 The organizational culture was based on punctuality, honesty, and a strict adherence to
deadlines.
 The DMRC ensured that the project was environmentally safe and also successfully
managed the various stakeholders in the project like the general public, government
bodies, etc. through:
- Autonomy in decision making.
- Advance planning in utility diversion and minimizing public
inconvenience and
- Corruption free contract awarding system and procurement
process.

Grey Areas of the Project:

 The GoI’s decision to adopt the broad guage for the Metro seemed to have created
problems for the DMRC.
 Another challenge that the DMRC faced was the severe dearth of parking facilities at its
metro stations. Many of its parking lots were full and in some areas, the municipal
authority that owned the land around the metro stations did not allot it sufficient space
for parking facilities.

Conclusion:
The DMRC project stands tall among not only public sector projects but also among any project
across country. The project has established the fact that with right intent things could be
achieved. The leadership of Mr. Shreedharan is live example of how a leader can influence the
culture of the organization. A project which has got completed well within the time prescribed.
Delhi Metro is being termed as an urban miracle by many. The project management techniques
used as a true lesson for any industry to follow. The project has also been a great example of
learning curve for any industry that how it has evolved to from a project implementation of
foreign players to learning bastion and further achievement of milestone by them. The clear
breakdown of process and proper defining of milestones has helped to achieve timely delivery
and within budget completion.

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Exhibit 1: Phase I of the Delhi Metro Project

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Exhibit 2: Cost Structure of the Delhi Metro Project

S. No. Source of Fund %age of total Remark

cost
1 Equity 28% Equally subscribed by
GoI and GNCTD
2 Interest Free Loan 5% Land Acquisition
3 JBIG (OECF Loan) 64% Time Sliced Soft
Loan
4 Property 3% Commercial
Development Activities

Exhibit 3: Approved Budget 2006 – 07 for Delhi Metro Phase I

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Exhibit 4: Operational Aspects of the Delhi Metro Project Phase I

Compiled from various sources

References

http://pmi.org.in/manageindia/volume3/issue04/cover.story.html

http://www.icmrindia.org/casestudies/catalogue.html

Project Finance & Infrastructure Finance, Apr2010, p32-32. 1p

Business Today, 8/24/2008, Vol. 17 Issue 17, p192-192, 1/4p. 1 Color Photograph

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