A case study of DMRC

By
K. Jayapal
A.K.Kulshrestha
Shantanu bhar
Mahesh Karol
Asheesh Tripathi
 Delhi Metro Rail Corporation
• A company by name of Delhi Metro Rail
Corporation was registered under
companies act,1956 on 3rd May 1995.
• The company had a 50-50 parternership of
HOI & GNCTD(Govt. of national capital
territory of Delhi)
 Mission 1

• To cover whole Delhi by 2021

• Delhi metro to be of world class standards
in regards to safety, punctuality,reliability,
comfort & customer satisfaction.
• Metro to operate on sound economic
ground obviating the need of Government
support.
1-http://delhimetrorail.com/corporates/about_us.html
 History 2

• India’s first brush with metro was at Calcutta where

we were able to construct 22.3 kms. Of railway line
in 20 years starting from 1972 at nearly 12 times
the initial estimate.
• The reasons panned from Political interferences to
frequent labour troubles, to numerous litigations to
financial crunch.
• This was taken as a part of learning curve by
authorities planning for a highly politicized, litigious
environment of Delhi.
• 2-http://en.wikipedia.org/wiki/Calcutta_Metro
 History 3

• Construction on Delhi metro’s Ist phase began on

1st October 1998 with a target date of completion
of 2009.
• This first line from Dilshad garden to Rithala was
inaugurated by Prime Minister Atal Bihari
Vajpayee on 24th December 2002.
• Ist phase was completed 3 years ahead of
schedule and under budget in 2006.
3-http://en.wikipedia.org/wiki/Delhi_metro
 Present 3

Length

Milestone Terminals

(km)

December 24, 2002 25.09 Dilshad Garden Rithala

December 20, 2004 17.36 Jahangirpuri Central Secretariat

December 31, 2005 47.4 Noida City Centre Dwarka Sector 9

January 7, 2010 6.25 Yamuna Bank Anand Vihar

April 3, 2010 15.1 Inderlok Mundka

June 21, 2010 14.47 Qutub Minar HUDA City Centre

 Finance 4
http://delhigovt.nic.in/dmrc.asp

Source of Fund Percentage of Total Cost

1. Equity contribution from GOI& GNCTD 15% each

2. OECF (Japan) Loan Approx. 56%

3. Revenue from Property Development Approx. 6%

4. Subordinate Debt towards Cost and Land Approx. 8%

The above financial plan is based on :

Debt Equity ratio 2:1
Fare: Base rate Rs. 5.00 (at April, 1995 prices) per passenger trip of 7.12
km.
 Project 4

• Economic IRR of the project -21.4%,

• Financial IRR- Less than 3%
• Land requirement-340 hectare
58% Government
39% Private Agricultural
3% Private Urban
 Challenges
• The project was envisaged in the city of Delhi which is
supposed to comprise of seven ancient cities with many
heritage sites.
• The metro was supposed to pass through all this terrain.
• The areas are highly populated and with heavy traffic
• Keeping in mind the long time and energy taken by
Calcutta metro, it was a challenge to construct such a
project in a highly politicized environment of Delhi
• Selection of quality vendors who could deliver
services/material on time
• Litigations were a major threat to the project
 Challenges
• Hiring of competent project team for
carrying out the project.
• Inexperience of Indian railways in carrying
out similar projects
 Opportunities
• The first step towards success was taken by the Delhi
metro when it hired Sh. E. Shreedharan as the MD of the
Delhi metro project.
• Delhi metro project act 2002 gave special powers to the
project.
• Delhi Metro 2002 superseded the Municipal Laws
• Lower courts were barred from issuing stay orders,
hence decreasing the stoppages of work
• A dedicated team of lawyers were hired to take care of
property disputes.
 Opportunities
• Sh. E. Shreedharan was given sweeping
powers to hire personnel for the project.
• He was given the power of choosing the
vendors and not sticking the L-1 criteria for
selecting the vendors.
• Exemptions from Excise & custom duties
were provided o the project.
 Project Monitoring
• Individual accountability.
• Daily monitoring of progress.
• Weekly reviews and targets.
• Punctuality is the buzz word
• A reverse clock is installed to indicate the time
left in commissioning of a particular phase and
all the clocks have been defeated by the Metro
team.
 Project Monitoring
• Special quality assurance team
• Safety of workers.
• Global bidding program for consultancy and contracts.
• Secured best technology available globally.
• 5 member consortium called General Consultants
Group.
• Advance planning for utility diversion.
• Adoption of technologies to make up for lost time and
to reduce costs.
 Political management
• Sh. E. Shreedharan came with a reputation and maybe was
appointed for the same reason to head the DMRC after his
success with Konkan Railway project.
• Sweeping powers were given to him in Delhi Metro act 2002,
which gave him powers above the municipality laws, which are
a major hindrance in execution of project of this magnitude.
• Lower courts were barred from passing stay orders for
stoppages of work, hence reducing the nuisance of litigations in
our litigious country.
• Faith was shown in him by his employers, the GOI & GNTDC
for completing the projects.
 Political management
• After a spate of accidents 2008 & 2009, he resigned taking
responsibility for the same, his resignation was not accepted
and he was persuaded to continue.
• Keeping a no nonsense and honest attitude toward work
inspired his team to deliver more.
• Being a stickler for punctuality, he imbibed the same into the
organization he is heading, beating time lines and delivering
results much ahead of schedule.