With cities holding 377 million people, or 31 per cent of total population, and expected to bloat further to over 40 per cent by 2030, Indian urban transport is one of the largest markets in the world. Learning experiences from a century of India’s urban transportation can construct a good future plan, writes Manish Saigal.
Opportunities in urban transport in India are best approached by dividing current environment into four apprÂoÂach categories: regulatory, land acqÂuisiÂtion and clearances, PPP experience, and operaÂtions.
The regulatory experience
With the involvement of over 20 different components of urban mobiÂlity and a similar number of local, state and central government bodies, the sector is characterised by lack of coordination and limited accountability. Under the present manÂagement structure, while the ultimate resÂponsibility for urban transport remains with the Union Ministry of Urban Development (MoUD), Indian Railways or the Road TransÂport and Highways Department at the central government level, while at the state level, it is managed either by the urban devÂelopment or transport ministry.
At the city level, responsiÂbilities for various components lie with different agencies. There could also be independent agenÂcies set up by city authorities for operating Bus Rapid Transport System (BRTS) services in the city (examples are Delhi and Ahmedabad). Metro rail services are presently being planned, impleÂmented and operated by dedicated comÂpanies, typically JVs between state and central governments, while suburban railways, where available, are provided by the Indian Railways under the central government.
Such fragmentation of roles and responÂsibilities between various government bodies for each aspect of urban transportation has only blurred the lines of jurisdictional authority and resulted in a duplication of responsibility, an undermining of accountability, and resistance to change by government bodies. A weak instiÂtutional framework, particularly at the city level, has made the coordination of various auÂthoÂrities ineffective, making several on-paper successful projects failures on implementation.
However, in the recent past, there has been some headway in the direction of creating an independent body to overlook urban transporÂtation needs at the city level. Several working groups on transportation as well as the National Urban Transport Policy recommend the setting up of a Unified Metropolitan Transport Authority (UMTA) at the city and state level, with ultimate decision making at the central level residing with the MoUD (in the absence of a Transport Ministry at the Centre). With several cities including Bangalore and Mumbai having already set up UMTA as an adminiÂstrative need, this is definitely a step in the right direction. The 12th Five Year Plan also touches on the need for a “single agency in the state or the city to manage the multi-component urban transport sector in an integrated and coordiÂnated fashionâ€.
From a legislation perspective, the implemeÂntation and operation of urban transport proÂjects is governed by ambiguous legislative sceÂnario in India. As of today, there are only three acts specific to mass rapid transport: Tramways Act, The Delhi Metro Railway (O&M) Act, 2002 and the Metro Railways (Construction of Works) Act, 1978. In addition, there are several other acts that deal with other transport matters such as The Railways Act, 1989, Motor Vehicles Act, 1988, Road Transport Act, 1956 etc. While the number of rules and laws enacted might seem adequate, they are grossly insufficient.
Consequently, there exists a critical need for a comprehensive legislation covering all aspects of urban transportation. Supporting legiÂslation around urban transportation acts (worÂker’s compensation, taxation rules etc) must also be strengthened to provide transÂparency in operations and legal recourse when issues persist.
Acquisition and clearances
Urban transport has been no exception to infrastructure sectors’ land acquisition woes and cost implications. Social implications have led to litigations, typically leading to court rulings that order higher compensations. For example, during the construction of Hyderabad Metro Rail, Greater Hyderabad Municipal Corporation (GHMC) paid compÂensations that exceed the government value of land for road widening and for the planned metro rail project. A 12-month delay in the land acquisition for Hyderabad Metro has led to a cost overrun of about 10 per cent.
Similarly, developers have found environÂmental compatibility to proposed projects chaÂllenging. While providing an effective and less polluting public transport system, which helps in reducing the overall levels of pollution withÂin the city, the development of an MRTS must strike a balance with respect to the benefits of the environment vis-Ã -vis the destruction of trees coming along the right of way. For instaÂnce, in case of Kolkata Metro Line 3, under construction by Rail Vikas Nigam Limited (RVNL), plans are being envisaged to change the route alignment by taking the elevated metro underground by almost 7 km to reduce damage to the environment. This change is expected to escalate project costs by more than 50 per cent.
Similar and frequent changes are rampant in route length, construction methodology, and so on, founded on opposition from authorities such as the Airports Authority of India and Archaeological Survey of India (ASI)—which delayed Phase I of Delhi MetÂro—in granting clearances.
Increasing tendency towards monorail is welcome since monorail projects are more comÂpact and usually do not face significant land acquisition issues as they pass over existing public routes and the alignment can even take sharp curves to avoid acquisition of additional land. Bangalore and Hyderabad Metro lines, too, have been designed to ply over existing roads.
A possible solution to issues in land acquiÂsition could be giving Transfer of Development Rights (TDR) in lieu of compensation for land. This has eased the difficulty in acquisition of land in cities. For instance, residents in Chennai have even gifted private land to Chennai Metro Rail Limited (CMRL) for construction of the Metro.
Mode of delivery
Third, from the perspective of Public-Private-Partnership (PPP), it is worth mentionÂing that while government funding for urban transportation projects has seen an unprecedÂented growth over the last few years, there exists a large gap between requirements and availability. Considering that overall urban transportation projects require an investment of over Rs 4 billion over the next few years, this gap is only expected to get wider.
Indeed, most legacy government funded transportation projects have suffered from an inefficient quaÂlity of service, low return possibilities and outÂdated technologies. Consequently, most state governments are pursuing PPP route to fund their pet transportation projects including Metro rails.
While definitely proving to be the preferred route of funding by the state and central govÂernment, PPP has its own share of risks and concerns. The selection of an appropriate conÂcessionaire is critical to successful implemenÂtation. In addition, as projects are awarded to private concessionaires in consortiums, coorÂdination between parties needs to be managed in an efficient manner.
Interestingly, PPP-based rail projects have not been very successful globally. Of the 113 metro rail projects analysed, only about 13 cities had some sort of PPP structures while the remaining were all developed and operated in the public sector.
While the reasons for the reluctance of PPP-based funding mechanisms usage by governments elsewhere has not been specified, it does indicate that there is a need for alternative and innovative financing mecÂhanisms to fund large projects.
Operations
Fourth, the segment of operations offers another significant learning experiences. While learning from implementation issues associated with the Kolkata Metro, the Delhi Metro was constructed using a combination of broad and standard gauges, to allow for a seamless inteÂgration with India’s existing rail network using Alternating Current technology. Now, the operaÂtional decision on what gauge should be adopted by Metro Systems has now been left to the decision of the respective state governments.
Next, the implementation of BRTS in India has had a mixed response. One of the critical issues in the success of BRTS in India is the lack of appropriate signalling system on roads. A BRTS must be complemented with an Intelligent Traffic System to achieve the planned Peak Hour Peak Direction Traffic (PHPDT) and the target average speed of the buses in order to make it effective.
Finally, from the perspective of effective outcomes of MRTS, such projects should be integrated with a wide multimodal network, accessible through a non-motorised form of transport, ideally walking. Other critical factors that could drive traffic towards MRTS include service’s affordability, reliability, efficiency, speed, safety, connectivity with supporting feeÂder systems and the overall travel experience.
While the need of the hour is a fully inteÂgrated solution to transportation at the city level, a supporting eco-system to successful impÂlementation must be developed to compÂlement the opportunities.
Coordination betÂween state, central and local bodies, strong legislation, financing and well-planned transÂportation solutions will only aid continued growth and making living a lot easier for India’s urban population. The loudest alarm bell in urban transport should come from India’s first PPP project in Metro rail, Learning: Delhi’s Airport Express Metro Line modelled mainly around real estate development, which in early July closed because, despite charging high fares, “the business model is not workingâ€, as the Delhi Metro chief had said.
The author is Partner at KPMG India.
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