Hyderabad Metro Shows The Way: India Should Evolve PPP Model For Metro Projects

  • A new metro policy which makes the PPP component mandatory, would augur well for taking metro implementation to the next level.

The world’s first railway journey took place in 1804 in England, and the first metro rail appeared as underground rail in London in 1863. In India, the first railway journey kicked off in 1853 in Bombay (Mumbai) while the first Indian metro line started in Calcutta (Kolkata) in 1984. Ever since, the Mumbai suburban railway system has been transplanted in other Indian cities where they were not able to match up to the modern lifestyle and transport demands of the people.

Then came Delhi Metro, commissioned in 2002, ushering the metro movement as an urban transport solution to Indian metropolitan cities, so much so that now even cities with population under five million are also going the metro way.

Thus far, operational metro projects in the Indian cities of Kolkata, Delhi, Chennai, Bengaluru, Jaipur, and Kochi are government projects. Because of viability challenges, among other reasons, none of these projects are entirely in the private sector domain with even Delhi Airport Metro Express now taken over by Delhi Metro Rail Corporation. Mumbai Metro is a public-and-private joint venture, while Gurugram is through the government’s special purpose vehicle, not a regular private sector company.

Hyderabad Metro, on the other hand, is coming up on the back of private sector investment by the Indian engineering giant Larsen & Toubro, which, with its earlier investment in Hyderabad, launched L&T Information City “Cyber Towers” in November 1998 that propelled Hyderabad into a top information technology destination in India. Now after 19 years, it’s expected to launch Hyderabad Metro in November 2017 with the potential to propel the city into a global hub.

Here are the highlights for which Hyderabad Metro deserves credit:

  1. It is India’s first, and probably the world’s, largest single public-private-partnership elevated metro project, of 72km.
  2. As it’s 100 per cent elevated, Hyderabad Metro will ride in the footsteps of global cities such as Tokyo, London, and New York, which have three layers (ground, underground, elevated).
  3. The largest intelligent train system in India, the communications-based train control, a continuous automatic train control system that is capable of automatic train protection, optional automatic train operation and automatic train supervision; that is, technically, it can lead to making the metro driverless in the near future, should the legal and operational framework in India become available.
  4. The project targets 50 per cent revenues outside of passenger fares by commercially leveraging the space within the station and an additional large space provided by the state government close to the major new metro stations, where L&T is building three malls with integrated multiplexes, real estate contributing to 45 per cent of the planned revenues for the project. This also speaks for the vibrancy of Hyderabad’s economy and innovative business model for sustainability with minimum possible impact on passenger fares and taxpayer money.
  5. The project integrates the largest station at Secunderabad and the largest state bus terminals at Mahatma Gandhi bus station and Jubilee bus station, enabling large-scale multi-modal transport for the people of Hyderabad.
  6. All three lines have interconnection for easy changeover, effectively giving one direct and four additional line extensions, with one change for all passengers.
  7. It’s a green metro, with 520,000 saplings planted and 2,000 trees translocated.
  8. The metro’s energy efficiency could also become the highest per passenger-kilometre with the deployment of sophisticated regenerative breaking system that, instead of wasting the kinetic energy while stopping a moving train, reverses the motors to use the energy to generate power and feedback. Given that the entire corridor has a dense station setup with a high frequency of halts, its claim of up to 35 per cent energy-saving and carbon dioxide emissions is quite possible.
  9. Since all three metro lines take the elevated route on dense routes, where people travel in city buses and other modes of transport in large numbers, it becomes easier for travellers to switch the mode of transport to metro.
  10. The project will transform Hyderabad into a people-friendly green city.

Because of the large-scale investment involved in metro projects, the role of government in the success of metro projects is significant anywhere in the world. While rich countries with large-scale tax revenues could afford high costs and drive the metro projects’ scale and penetration, developing countries find it quite hard to sustain the cost of metro setup and operation. Hence, India needs to evolve its own public-private-partnership model for metro projects that make both government and the private sector play to their strengths.

While India has already opted for the bullet train and its technology from Japan, it should also look to get Japan’s private sector railway business model, which has propelled urban transformation across the country with regional railways, providing comprehensive transport choices to people by creating new townships with shopping malls integrated with metro rail lines.

Central and state governments also must review the lessons learnt from Phase 1 in terms of delays and their potential impact to the private sector investor, and examine how they could de-risk the investor from such risks as the approach should be to attract as much private sector investment as possible while the risk in which private sector has no influence must be addressed by the state and central governments adequately, including the required public investment by the government.

While Phase 1 has addressed the core of inner city transport in Hyderabad, further phases should drive Hyderabad’s geographical growth, leveraging airport and the Outer Ring Road with arterial roads in all directions of Medchal, Shamirpet, Ghatkesar, Hayat Nagar, Shamshabad, Vikarabad, Patancheru, and so on.

A new metro policy which makes the PPP component mandatory, would augur well for taking metro implementation to the next level – by not only driving transit-oriented development but also pushing the development of satellite townships to decongest the cities and giving them radian wings to expand faster to accommodate a young, aspirational India.

The metro is an inevitable part of making any big city in India pollution-free.