Presented By Bhupinder Pal Singh 10P132 Shobhit Jaiswal 10P233

Agenda
DMRC Project Overview Funding of Delhi Metro Concessions by Government Sources of Revenue Operations Management Social Benefits A look at London MRTS

Insights about Metro Rail financing

Discussion Questions
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 Project Objective
o To cover the whole of Delhi with a Metro Network by the year 2021. o To operate on sound commercial lines obviating the need for Government support

Incorporated in 1995 1.7 m daily commuters, 1.25 b since inception

Reduced pollution levels in the city by 6.3 lakh tonne every year.
First metro rail and rail-based system in the world to get carbon credits for reducing greenhouse gas emissions DMRC was given full powers to hire people, decide on tenders and control funds
o Calcutta Metro was badly delayed and 12 times over budget due to "political meddling, technical problems and bureaucratic delays"
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Financing
Equity capital, GOI Equity capital, GNCTD Debt, JBIC Revenues through operations 300.00 1,464.0 0

Capital Cost for first two phases: 22,828 Cr (120

Cr/km)
1,464.0 0

1,915 Cr received in grants 567 Cr interest amount paid

6,839.0 0

back (as of Aug 2010)

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Phase I II III

Length 65 124.6 105

Cost (in Rs. Cr) 10,571 16,000 18,000

Funds released by government as per 10th annual plan (in Rs. Cr) :Particulars Equity Subordinate debt Phase I 846.20 53.00 Phase II 387.00 116.00

Pass through assistance

Total
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5477.10
6376.30
5

424.00
927.00
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Revenue Graph
Fare box revenues Advertisements Property Development Leasing of space to ATMs, food outlets, cafes etc. Leasing of trains, stations for 4% Real Estate 4% 11% 9%

Travel Fares
Consultancy

72%

shooting films
Consultancy

External Project Works Others

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 Interest free Subordinate Debt:

The cost of land equivalent to Rs. 2180 m To be repaid within 5 years after the senior debt is repaid

The risk associated with the exchange rate fluctuations is borne by government in case of foreign debt

exempted from payment of income tax, capital gains tax, property

tax and customs duty on imports Permitted to generate resources through property development over a period of 6-20 years No dividend is paid on GOI share of equity till the senior debt is repaid
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 One of only five metro systems in the world that operate at a profit without government subsidies 99.9% of all trains running on

Technology
State of the art coaches Automatic train control 380 MHz, optical fibre communication system RFID tokens Google Transit

time since it began operating

Frequency: 3-4.5 minutes Minimum maintenance costs 6 lines, 189.63 kilometres, 142 stations

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800
700

16000 14000 12000 10000

600
500

400
300

Net Sales
PAT Interest Expenses

8000 6000 4000 2000

Networth

Gross Block
Equity Paid Up Long Term Debt

200
100

0
-100

-200
-300

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* Finished building the initial $2.3 billion subway system in 2005 under
budget and almost three years ahead of schedule

* Good corporate governance * Autonomous decision making * Bureaucracy-free environment

The managing director is 77 years old, spiritual and is laying tracks like there's no tomorrow.

Forbes India magazine

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Reduction in Air Pollution

Time Saving to Passengers Reduction in Accidents Reduction in Traffic Congestion Savings due to reduced fuel consumption

Employment to unskilled labor

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 Construction started in early nineties, first to operate electric trains 270 stations, 402 kms of track

Only half of the costs are met from passenger fares, rest from grants from DfT
Became part of LPTB in 1933, became separate entity, LUL in 1995 In 2003, it began operating as a PPP Metronet, responsible for 2/3 of network could not control costs In 2007, Metronets demise cost UK government 2b pounds Government efforts to find another private firm didnt materialise TfL (part of Greater London Authority) took over Metronets role
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S.No 1 2 3 4 5 6

Cities Shanghai London New York Chicago Beijing Madrid

Country China UK USA USA China Spain

Opening Year 1993 1863 1904 1974 1969 1919

Route Length (Km) 434 408 368 358 336 287 Public

Ownership

PPP No No No No Yes Yes

Public, failed PPP attempts in past 10 years Public Public PPP Public, operation by private player on concession Public, Airport line PPP

7
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New Delhi

India

2002

189 13

Yes
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Source: Position paper for working group on urban transport for 12th 5 year plan

Public ownership of Metro Rail is a universal phenomenon

Nothing like private ownership exists In contrast to other modes such as intercity freight and passenger transport, port & airport

Dominant way to Metro Rail development is the Public Sector Approach

Out of 113 cities with metro rails, 88% developed in public sector mode

Recent efforts of PPP in metro rail development have not succeeded

London Underground, 2007 Hopewell project, Bangkok

Even limited applications of PPP has been in operations and maintenance

Marseille and Lyon in France Latin America - Buenos Aires & Rio De Janerio Asian Cities Metro Manila and Bangkok
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No City has adopted PPP as the central strategy

Private capital has played a very minor role

Government contribution in financing is substantial

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Should Delhi Metro be used as a model project for MRTS in other cities of the county?

Should PPP model be used in case of Metro Rail projects?

How big a role does the management play in successful projects?

Should there be focus on indigenous technology development?

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