Metro Rail Policy 2017 needs relook

Metro Rail Policy 2017 needs relook

Important Facts:
1. Policy provides direction for undertaking metro rail projects at various urban centers
2. Policy provides three conditions for undertaking rail projects.

• First, state government is responsible for exploring and choosing urban mobility options and implementation of projects.
• Second, Comprehensive Mobility Plan (CMP) is mandatory prerequisite for metro rail planning in any city.
• Third, Unified Metropolitan Transport Authority (UMTA) for ensuring an integrated approach in planning and management of urban transport.

3. Policy advocate Social and Economic viability of project should be assessed as part of whole analysis
4. Policy mandate to have private participation for approval and central aid for states. The policy directs states to adopt innovative mechanisms such as value capture financing tools to mobilize resources for financing metro projects by capturing a share of increase in the asset values through a “betterment levy”. States will also be required to enable low-cost debt capital by issuing corporate bonds for Metro projects.

Issues:
1.CMP and UMTA:  No conditions for mandatory UMTA constitution before any metro rail planning and CMP by statutory body only.
Recommendation: An accurate CMP can help in assessing the viability of a metro rail project because it’s dependence on integration of secondary and tertiary transport feeder services; UMTA should ideally have powers to regulate fares for all urban transport units and prepare, monitor and audit the CMP
2. Fixing fares in a metro rail system: No Metro line anywhere in the world is financially remunerative. Recommendation: concerned state governments must put a fare fixation committee in place in accordance with the Metro Railways Act, 2002 and the same will attract PPP
3. Every state Government is going for Metro rail systems irrespective of the anticipated passengers per hour per direction (PPHPD) figure.
4. Financial Constraints: Private Companies are reluctant to invest in metro rail project due to low investment return as evidenced world over of investment return of not more than 2-3%.
India had earlier tried three public-private partnership (PPP) experiments—Delhi’s Airport Metro Line, Hyderabad Metro and Mumbai Metro section—but either they were a failure or a bitter experience. Recommendation: Metro rail projects are capital-intensive should be financed by central and state governments with equity and grants.