Amid dozens of big budget announcements from taxation to capital expenditure, such a reference would naturally get lost. But it was no small statement. Sample this: There are 702 km of metro lines spread across 18 Indian cities. But none has adopted either of the two technologies.
Also, metro lines and regional rapid transit systems are also being built on 1,016 km across the country. There, too, neither Lite nor Neo has made any guest appearance. So why are they surfacing now? And why have policymakers suddenly endorsed something new to replace a tried and tested system of building metros across India?
The answer lies in the post-Covid transportation scenario. The pandemic, in fact, has badly exposed the flawed economics of metro building in India, forcing the government to scout for cheaper and lighter versions. MetroLite is a type of metro that caters to mobility needs of smaller cities with lower ridership, the standard specification of which was issued in July 2019 — months before the outbreak started.
But the process got attention only after the pandemic put a halt to the metros, devastating their finances, also raising a question whether we need high-cost, uniform transportation systems across the country. Vizag, Dehradun, Jammu and Srinagar are the likely candidates for the proposed MetroLite version.
MetroNeo, on the other hand, is a rail-guided system with rubber-tyre electric coaches powered by overhead traction. The standard specification for this was issued in November 2020. This type of metro looks like a trolley of buses. The country’s first experimentation with the Neo is likely to be undertaken in Maharashtra’s Nasik.
While talking to ET Magazine, DMRC’s Managing Director Mangu Singh says the Centre is no longer very keen to permit high-cost conventional metros for smaller cities. “It’s likely that most newer metros will be MetroLite. The low-cost model is the right approach for future metros. A full-fledged metro like Delhi Metro is viable only for bigger cities such as Mumbai, Chennai or Bengaluru,” he says.
Among three new corridors in Delhi that are currently under the government’s consideration for a mass rapid system, the one between Rithala and Narela (22 km with 16 stations) could have Delhi’s first MetroLite line.
The thought process of going lighter for metro rails began prior to the outbreak of the pandemic. The virus and its fallout fast-tracked that process. The pandemic, for example, gave a body blow to established entities such as Delhi Metro, by far the biggest in India and the one that was registering operational profits before the pandemic hit.
In 2020-21, DMRC reported a deficit of Rs 1,785 crore as against a surplus of Rs 758 crore a year ago, according to its spokesperson. In terms of income from all sources — traffic, feeder bus service, rentals, etc — Delhi Metro witnessed a massive drop from Rs 3,897 crore in 2019-20 to just Rs 896 crore in 2020-21, forcing it to take help from the government to repay its loan instalments to Japan International Cooperation Agency.
For a private metro, like in Hyderabad, the situation is even more precarious. It has a loan of about Rs 12,000 crore on its head and the interest component is reported to be about Rs 1,300 crore per annum. The rising cases of Covid during the last one month has only forced it to step up vigil on social distancing — which means, ridership has to be restrained even as it will lead to more financial bleeding.
Hyderabad Metro Rail’s Managing Director NVS Reddy refuses to comment on the current financial health of the metro. In a telephonic interview to ET Magazine in August last year, former DMRC chief and now a BJP member, E Sreedharan, said the pandemic would have killed the Hyderabad Metro had it not been owned by the cash-rich Larsen and Toubro.
The fallout of the pandemic on smaller metros is somewhat less intensive. For example, in the 11.6-km Jaipur Metro, daily ridership has now bounced back to a decent 15,000 as against 20,000 prior to Covid, according to a senior official who did not want to be named. He further said that for the fiscal year prior to the pandemic, the Metro earned Rs 9 crore from fare and another Rs 3 crore from streams such as rental and leasing. But as the cost of building Jaipur Metro was Rs 3,149 crore, a total state government venture, it will remain non-profitable whether there is a pandemic or not.
Maybe Jaipur would have been a classic fit for MetroLite. As against Rs 600 crore required for building a km of underground metro and Rs 250-300 crore for an elevated section, the Lite version costs just Rs 150 crore. MetroNeo is even cheaper at about Rs 110 crore per km, according to some transport research papers.
That means only the bus rapid transport (BRT), which costs about Rs 40 crore per km, is cheaper than the Neo. BRT, already experimented in India, flopped in New Delhi though it has achieved limited successes in the city of Ahmedabad.
In such comparative cost analyses, one must not, however, ignore the carrying capacity of each of the transport modes. For example, in case of a conventional metro, the passenger per hour per direction (a measurement often deployed to quantify carrying capacity) is 70,000 as against just 15,000 for MetroLite. In the case of BRT, it is higher at 25,000.
The CEO of WRI-India and former urban specialist in the World Bank, OP Agarwal, argues that metros in India won’t succeed so long as it is treated as yet another civil engineering project where the main emphasis is on how well they are built and how well they operate. “This is not enough. The city must grow around the metro, and not in isolation of it. Future land use planning must have the metro at its core,” he says, adding that the share of population using metros in India is far too less.
The pandemic has reinforced that sustaining a private metro is near impossible in India. Whereas metros in the public sector are being financed by the government during this turbulent Covid phase, the private ones have been asked to fend for themselves. After all, a package to help one or two companies could draw flak from several quarters. A 40% government subsidy, or what’s called viability gap funding, is still not sufficient for sustenance of any metro.
Also, if the metro revolution needs to be sustained, low-cost models have to be evolved and implemented efficiently. If Delhi Metro is a benchmark in terms of timely completion of projects as well as in its operational efficiency, its costly technology is clearly an impediment in replicating it in smaller cities with lesser mobility needs. In this backdrop, Lite and Neo appear to be the right fit.
We have proposed one MetroLite corridor for Delhi: Mangu Singh, MD, DMRC
Delhi Metro Rail Corporation’s Managing Director Mangu Singh says low-cost metro rail should be the preferred model for expanding metro rail’s footprint across India. In an interview with ET, he adds there will be no change in the deadline for phase-4 despite initial shortage of workers due to the pandemic.
Won’t the new Covid wave deteriorate Delhi Metro’s financial health further?
Right now, we are not so much concerned about our financial health. We have not made any attempt to bring in more passengers. We have been concentrating on measures such as social distancing. In a way, we are dissuading people from using our metro system. As Covid numbers have started rising again, our enforcement of restrictions has become even more stringent. During the last one week, the number of people being penalised for not wearing masks or not maintaining social distancing has gone up substantially.
Still, how is the financial health and ridership vis a vis pre-Covid days?
Our ridership is at 30-40% of pre-Covid level. Our revenue is also in that range.
Have you recently tried to increase your revenue from other sources such as rental, consultancy and advertising?
Unfortunately, other revenue streams are also hit badly by the pandemic. For example, parking lots, retail shops inside our stations — all are affected. Some licensees have closed down their operations. We have been very considerate to them and even decided not to burden them during such a difficult phase. Our approach is they must survive along with us.
Did you adopt any cost-cutting measure during the last one year?
We are a government organisation. We can’t sack people the way a private organisation does. We have, however, reduced the number of outsourced employees. Also, we slashed employee perks. Two measures that substantially brought down our costs were deferring of non-safety-related maintenance and reduction of energy consumption.
Will the private metros survive Covid?
We always believed that metro rails owned by private players are not desirable. Metro is a long-term project and the risks are huge. No one can anticipate such risks. I don’t think the government will now come to rescue private metros in Mumbai or Hyderabad.
Has the pandemic forced you to shift the deadline for the phase-4 project?
There is no financial constraint. But yes, we faced some labour issues in the beginning. For about two months of the lockdown, all construction work stopped. We took care of all the workers, provided them food during the period. But once unlocking began, many labourers returned to their hometowns. It took us over a month and half to bring them back. So, we lost momentum for about three and half months. But since we were in the beginning of a four-year-long project, we should be able to make up the lost time. Our deadline for phase-4 remains the same.
Is Delhi Metro adopting the government’s new concept of MetroLite and MetroNeo?
We have identified one corridor — Rithala-Narela — for MetroLite. It is one of the three corridors under the government’s consideration. There is no proposal for a Metro-Neo in Delhi. The central government is now very critical of the way more and more cities are asking for metros. It’s likely that most newer metros will be MetroLite. The low-cost model is the right approach for most future metros. A full-fledged metro like Delhi is viable only for bigger cities such as Mumbai, Chennai or Bengaluru.
Don’t treat metro as a civil engineering project: OP Agarwal, CEO, WRI-India and former urban specialist in World Bank
Many Indian cities have built metro rail systems and many others are planning to. These are very expensive facilities, costing about Rs 250-300 crore a km. Therefore, it is extremely important that they serve their intended purpose. Public transport systems are primarily intended to serve two functions — (1) offer a transportation service to those who cannot afford personal motor vehicles, and (2) serve as a sustainable alternative to the personal motor vehicle.
The one metric that most appropriately measures the success, or lack of it, for any metro rail system is the share of the city’s population that uses it to meet its daily travel needs. How well the metro operates, how clean it is, how safe it is does not matter as it will all be reflected in that single metric.
Unfortunately, on this metric, our metro systems have not been performing too well. Barely 10% of the people living in the region served by the Delhi Metro use it. In the other cities, it is much lower.
A major reason for this low usage has been that the metro systems have been primarily conceived as civil engineering projects, where the emphasis is on how well they are built, and how well they operate. This is not enough. A wider vision of the larger system in which they should operate is lacking. Such projects need to be conceived more as ‘urban transformation’ projects and not just ‘urban transport projects’. The city must grow around the metro, and not in isolation of it. Future land use planning must have the metro at its core.
Unfortunately, that has not been the case. Decisions on metro alignments and future land use planning have not been integrated. In this context, India is fortunate that its urban population is yet to grow to its fullest level. Projections are that it will double in the next 30 years. India will have some of the most populous cities in the world, with Delhi likely to surpass Tokyo in the next 10 years. This is unlike the developed world, where urbanisation already stands at over 80% and future growth of cities will be limited.
India should seize this opportunity and put metro rail systems at the core of future growth plans for the city. Creating density efficient last-mile connectivity to the metro and good integration with all modes of transport are key to realising the full potential of the investments already made. Else, we run the risk of high-cost, glamorous white elephants that will be a perpetual drain on public revenues.