PUBLIC TRANSPORT SYSTEM SHOULD BE SELF-SUSTAINABLE - DELHI METRO RAIL CORPORATION

Mr. Mangu Singh, MD, DMRC

Mr. Alain Flausch, Secretary General, UITP Brussels was part of panel discussion on "UN Sustainable Development Goals: A game changer for transport planning" at International Transport Forum on May 31, 2017 in Leipzig, Germany. The panel discussion was focus on the achieving the sustainable development goals and importance of transportation sector. Mr. Flausch mentioned some key points during his speech, including some specific example about India:

1. India should think of automatic fare revision mechanism to revise fare marginally every year. This important for the viability of public transport organisations. The commuters does not care about a small increase in ticket price. There will be objectons for big change. 

2. Public purse (or money) is limited and has many other priorities like education and health. Public transport operators should adopt new technologies and innovate to make operation efficient and cut losses. Public transport sector can not rely on subsidies completely. 

3. Investment in public transport should come from state only. Private sector may not able to make investment in big transportation project like metro or electric buses. The state government should fund the infrastructure and the private players should be part of Operation & Maintenance (O&M).

4. Public Transport Organisations need to change themselves to remain relevant in the business.  The entry of new mobility players will change the market landscape and it is important to understand the need of customers. The public transport operators should improve efficiency

  

It is very interesting to see the same points were highlighted by Mr. Mangu Singh, Managing Director, Delhi Metro Rail Corporation (DMRC) during his recent interview with Business Standard (published on 6 June 2017). Some of the key points highlighted by him are as follows:

1. Public transport system should be self-sustainable. The operator should not beg for subsidies. 

2. Delhi Metro has revised the fare after the gap of 8 years. The last fare revision was done in 2009. DMRC asked for 100% increase in the price to neutralise electricity (increased by 130%) and staff costs but the fare fixation committee approved lower increase. All new metro projects have a fare revision mechanism in place. 

3. The government should supply electricity at subsidised rates (constitute 50% of the operational cost) if the government want to cap the fare. DMRC cannot repay loan if the fare is not increase regularly. The government should put in more equity. The project will not be viable with it. 

4. Delhi Metro is adopting new technologies to reduce electricity cost like dynamic train scheduling, regenerative braking system and roof-top solar power.  Delhi metro needs to keep innovative new tools to improve operational efficiency. 

5. DMRC has total debt of INR 240 billion (US$ 3.7 billion) for Phase I, II and III. In next 5 years, DMRC needs to pay INR 50 billion (US$ 76 million) towards debt repayment, i.e. around US$ 15 million each year. Any big infrastructure project need to plan about debt repayment at the time of sanctioning of the project. Fare hike is one of the key components of debt repayment.

6. PPP in Metro rail is not feasible as large part of the project is social. No private player will make investment if it cannot get full return on its investment. The capital spending should be done by the government. 

Both Mr. Alain Flausch and Mr. Mangu Singh are leading industry experts and highly respected members of Public Transport sector. It is very heartening to see the message is very clear that it is important to make public transport viable and self-sustainable. 

Read the full article published by Business Standad:

(Source: Business Standard - New Delhi Edition - 6 June 2017)