THE DELHI METRO PROJECTEFFECTIVE PROJECT MANAGEMENT IN PUBLIC SECTOR

PRESENTED BY :-Gourav Ranjan &

Group

INTRODUCTION

The need for a reliable public transportation was felt in Delhi for a long time.

A comprehensive traffic and transportation study completed in 1990 highlighted the urgent need for a rail-based transit system comprising a network of underground elevated and surface corridors to meet the traffic demand projected for 2021. To make this dream a reality , the Delhi Metro Rail Corporation Limited (DMRC) was registered on 3rd May 1995 and it is solely responsible for the construction and operation.

ReasonsPopulation of over 1 million.More registered vehicles than Mumbai,

Kolkata & Chennai put together.Automobiles contributing to more than

two – thirds of the total atmospheric pollution.

High rate of road accidentsMore than 35 studies recommended

Mass Rapid Transit System.

ChallengesDelhi Metro is the biggest successful

urban project in India since independence in 1947

Project has to be executed in very difficult urban environment

Being the capital city, all actions under close scrutiny of VIPs

Project implementation period compressed from 10 years to 7 years

Metro being constructed to world class standards with frontline technologies

Expertise and technology not available in the country.

The Delhi Metro ProjectSecond project in country after Kolkata

Metro:1984.A 50:50 joint venture of GoI and GNCTDDMRC incorporated under Companies Act

1995Duration of completion of Phase – 10 years by

the end of 2005Get approved by GoI in Sept 1996 (after civic

organizations recommendations)Phase-I to connect Delhi’s business, education

and shopping districts.Total land needed 340 hectares (58% govt.,

39% private agriculture and 3% private urban land)

Phase-I consists 3 Lines, total length 56 km, 50 stations (10 underground) and 3 maintenance depots.

Line Length of Line Route

Line 1 Red Line 22km Shahdara to Rithala

Line 2 Yellow Line 11km Vishwa Vidyalaya to Central Secretariat

Line 3 Blue Line 23km Barakhamba to Dwarka

Funding the Project GoI and GNCTD arranged the all capital required.

Initial estimation of cost in 1996 Rs 60 billion Revised estimation cost in 2002 was Rs 89.27

billion Final cost of project approx Rs 99 billion. 2.2 million passenger/day to become the

project viable later revised to 1.5 million passenger/day

Economic IRR 21.4% Financial IRR 3% (low IRR some minister

suggested to drop the project) Social sector project can benefit the regional

economy in more than one ways.

Cost Structure

Repayment period 30 years including 10 years grace period.

Debt to equity ratio 2:1 Exchange rate risk bore equally by GoI and

GNCTD. Sources of Revenues: fares, property

development, taxes on local public. Property Development: Shopping Mall, IT Part,

Multiplex, Restaurant and Stores etc. This project was exempted from custom and

excise duties.

S. No.

Source of Fund % of total cost

Remark

1 Equity 28% Equally subscribed by GoI & GNCTD

2 Interest Free Loan

5% Land Acquisition

3 JBIC 64% Time Sliced Soft Loan

4 Property Development

3% Commercial activities

The Project TeamMr. E. Sreedharan was appointed as project manager and managing director in Nov 1997.

A technocrat retired from IR in 1990.Earned reputation for completing the

project on time and within budget.70% of senior staff hired on

deputation from IRDMRC opted lean structure.Effective contract awarding and

procurement process (to tackle with time, cost and corruption)

Contract awarding process transparent and simple & fair and just

Removed subjectivity from tender evaluation.

Contd… Had two departments: project organization

and operation & maintenance Experts required from: Civil, electrical and

communications area etc. Young 18-30 years motivated team of

professionals personally interviewed by MD. Faced skill shortage problem everyone was

new to metro project No technical institute of such kind in the

country. Suitable candidates sent HongKong MTRC for

training. Metro Training School at Shastri Park Unique work culture: hard working, dedicated

and professionally competent

The Project Plan Individual accountability. Daily monitoring of progress. Weekly reviews and targets. Delhi Metro Act, 2002

Superseded Delhi Municipal Laws. Lower courts barred from issuing stay

orders. Dedicated team of lawyers to prevent

property disputes. Cost centers

Manpower. Energy. Material & maintenance.

Road BlocksLow Financial IRR prompted second

thoughts on the projectCriticism due to inability to recruit,

70% were deputed from Indian Railways

Lack of experience & specialized experts in Civil, Electrical & Communication Engineering

Loss of Rs 5 million if one day lostDifference of opinion on gauge to be

adopted

Critical Success Factors

‘We mean business’ attitudes.

Efficiency, courtesy & integrity in

corporate culture.

Corruption free Contract Awarding

System & Procurement Process.

Autonomy in decision making.

Advance planning in utility diversion,

minimizing public inconvenience.

THANK YOU