Indian cities planning newer forms of urban transport would need to closely examine the imperatives of an integrated system, which is lacking in spite of the fact that the projects are new—say developers and vendors.Experts:Sumit Banerjee, Vice Chairman, Reliance Infrastructure, which is currently developing three metro rail projects across Mumbai and Delhi. Pushkar Kulkarni, CEO, Efkon Group India, which is implementing an Automatic Fare Collection System in Jaipur.Harsh Mehta, Director—Communications and Public Affairs, Bombardier Transportation India, which considers India as central to its growth strategy and is setting up its manufacturing facility in Gujarat.Lata More, Director—Corporate Finance Advisory Services, BDO India, the Indian member firm of BDO, a worldwide network of public accounting firms.What urban transport systems are viable for India’s ever-growing cities?BanerjeeThe transport system requirement for each Indian city is different. Even within cities the transport system need varies based on its geography, demographics, connectivity and travel patterns. Delhi, for example, has suburban railways, metro, buses and a whole plethora of road bound vehicles, serving some area or segment of population.The viability and popularity of urban transport system depends on the proper integration of transport system with intermodal interchanges which will add to the commuter’s convenience and provide them with a seamless travelling experience.MoreRoad and rail systems are the most viable urban transport systems for growing cities. Indian cities presently face the twin challenge of providing adequate road space for future use and improving the poor condition of existing roads. Investment in Metro Rail and improving existing suburban rail system by providing interchange facilities will reduce the ever-increasing pressure on the rail transport system.User unwillingness to pay is a reason that urban transport is often considered unviable. Do you believe that a PPP model can work?BanerjeeIt would be wrong to say that urban transport is unviable because of user unwillingness to pay. The commuters are willing to pay if they get easy and comfortable travel along with cost and time saving. Of course there is a tipping point, but urban transport is a viable option. In fact, it is the need of the hour to develop seamless travel solutions for the commuters.There is a strong case for public-private partnership (PPP) in capturing the value of urban transportation projects that accrues to all categories of beneficiaries. The main potential benefit of PPP projects in infrastructure development is the optimisation of life cycle costs through innovation and adapted design. The PPP model is imperative for a developing nation like ours. The execution of the 23 km long Reliance Airport Metro Express Line in Delhi with DMRC is an example of a successful PPP model: The Airport Express was completed in a global record time of 27 months and has been successfully operating for over a year.MoreYes, PPP model can work especially in India, where investment requirement cannot be met only by government resources. PPP model is prone to project delay risks due to policy issues, complex contracts, non-transparent procedures and exploitation by corrupt individuals, firms or politicians. Under the right conditions, PPPs can work best for governments, business and consumers.KulkarniIn a PPP model a private investor evaluates user willingness to pay for the project as of certain benefits for end-user (reduction in travel time, convenience) will overcompensate the cost of using the utility (toll). Being a private profit-oriented entity a concessionaire will only invest in a PPP model if traffic projections are sustainable, thus making the project viable. Hence PPP models will cause a natural selection mechanism for feasible projects.MehtaDue to limitations in budgetary support and available resources, there is an increased focus on PPP. The railway sector has placed PPP at the centre of its agenda and it realizes that PPP is an optimal solution for modernisation of the railway network. There are various projects which can be taken up under PPP and Railways authorities are trying to revamp their policies to ensure higher private participation. The PPP model itself is evolving in India and will get stabilised in the coming years. In principle, we support it and are willing to be partner to rail operators in India.Do you think urban transport projects need more risk diversification?BanerjeeDefinitely. Presently in the context of highly capital intensive systems like Metro Rail or monorail, there needs to be some equitable distribution of profits and risks.MoreYes. Controllable risks such as operations risks could be diversified by PPP projects where risks are transferred to the service provider. The risks of a project are a function of the market structure and the nature of the service that the project offers. Risks are design, finance, construction, operation, market and commercial, policy (political and regulatory) and force majeure. With PPPs, risks are allocated to the party best able to manage or absorb each particular risk. In some cases, private investors operate projects, but do not own them, such as, management concessions. In others, private parties take on only the operating and collection risk. In some models of risk sharing, they also take on investment and financing risks. This includes BOT structures in all sectors.KulkarniThe dynamics of ITS industry in India is that it works with a lot of inherent risks. Urban transportation systems are no exception. This is a booming industry prone to sovereign risks. The risk can be attributed to inter alia, policies and regulations. In a developing economy like India, support from government bodies is imperative.What policies and regulations will unlock the potential of better governance and more participative urban transport infrastructure in Indian cities?MoreGovernment policies like National Urban Transport Policy (NUTP) and Jawaharlal Nehru National Urban Renewal Mission (JNNURM) have motivated the states and in particular medium sized cities or Tier II cities across India to attempt to design and implement the Bus Rapid Transit System (BRTS) and other sustainable public transport solutions and non-motorised infrastructure projects.In more complex, multi-tiered administrative systems, urban transport financial resources may be pooled within an urban transport fund administered by a strategic transport authority at the municipal or metropolitan level.Under such an organisation, all local transport-user charges, including congestion charges and any allocations of local taxes or intergovernmental transfers for transport, should normally be made to the fund. While earmarking taxes has the advantage of a stable basis needed for long-range planning, the value of having an integrated urban transport fund does not depend on earmarking but on the clarity and coherence of its objectives, and the rigor and transparency of fund allocations.