INFRASTRUCTURE CONSULTING & MANAGEMENT

GROUP 6PRATEEK BAHL B005VIPUL CHAWLA B009MOHIT GAUR B016APOORV MITTAL B042

OVERVIEW

Scenario in 1995

• Population over 11 million• About 25 lakh motor vehicles: Number of motor vehicles

in Delhi more than that of Mumbai, Calcutta, Chennai put together

• Extreme congestion on Delhi roads and environment pollution

• Trend of metro planning at 1 million plus population in developed nations

The Government of India and Government of Delhi jointly set up a company called the Delhi Metro Rail Corporation (DMRC) with 50-50 equity stakes, on March 5, 1995 with E.Sreedharan as the managing director

The DMRC was given full powers to hire people, decide on tenders and control funds

30% of total investment by equity capital from GOI and Govt of Delhi. 60% funding from “soft” loans from the Japan Bank for International Cooperation (JBIC) and the Japan International Cooperation Agency (JICA)

Rest of the investment proposed to be recovered from internal revenues through operations and property development

Physical construction work on the Delhi Metro started on October 1, 1998

First line started on December 24, 2002

Phase I:• Estimated cost: Rs.10,570 crores. 65.11 km of route length, of which 13.01 km is

underground and 52.10 km surface or elevated having 58 stations• The first phase of the project was completed in 2006 on budget and ahead of its schedule

Phase II:• Estimated cost Rs.19,131 crores. Route length of 128 km having 85 stations• The first section opened in June 2008 and the last line opened in August 2011

Phases III:• Estimated Cost : Rs.35242 crores. Route length of 136.32 kms having 69 stations. 2 new

lines and 11 route extensions proposed for Phase III• First 2 phases were radial expansions while this phase aimed at interconnecting existing

lines by ring lines to improve connectivity• Extension of Delhi Metro to Faridabad with route length of 13.875 km having 9 stations,

funded by Government of Haryana and GOI excluding rolling stock, which is being funded by DMRC

• Phase III will have 28 underground stations covering 41 kms• Expected ridership of 4 million after completion; planned to be completed by 2016

Phase IV:• Plan for seven corridors for route length of 113.208 km is under preparation• It will supplement the existing metro network and provide interchange connectivity and is

planned to be completed by 2021

Phases: 4 phases of 5 years each spread over 20 years

The network consists of six lines with a total length of 190.03 kilometres having 142 stations of which 35 are underground

It is one of the largest metro networks in the world

Links Delhi with Noida, Gurgaon, Ghaziabad and Faridabad

It has a combination of elevated, at-grade and underground lines and uses both broad gauge and standard gauge rolling stock

The metro has an average daily ridership of 1.9 million commuters

Red Line• The Red line was the first line of the Metro to be

opened and connects Rithala in the west to Dilshad Garden in the east, covering a distance of 25.09 kilometres

• The inauguration of the first stretch between Shahdara and Tis Hazari on December 24, 2002

Yellow Line• The Yellow Line was the second line of the

Metro and was the first underground line to be opened.It runs for 44.36 kilometres from north to south and connects Jahangirpuri with HUDA City Centre in Gurgaon

Blue Line• The Blue Line was the third line of the Metro to be

opened• It connects Dwarka Sub City in the west with Noida

and Gaziabad in the east by bifurcation at the Yamuna bank into 2 lines, and coveres a distance of 47.4 kilometres

• The first section of this line between Dwarka and Barakhamba Road was inaugurated on December 31, 2005

Green Line• Opened in 2010, the Green Line was the first

standard-gauge corridor of the Delhi Metro running for 15.1 kilometres

• This line also has the country's first standard-gauge maintenance depot at Mundka

Violet Line• Most recent line of the Metro to be opened, and the

second standard-gauge corridor after the Green Line covering a distance of 20.2 km

• The first section between Central Secretariat and Sarita Vihar was inaugurated on October 3, 2010, just hours before the inaugural ceremony of the 2010 Commonwealth Games, and connects the Jawaharlal Nehru Stadium which is the venue for the opening and closing ceremonies of the event

Airport Metro• It is 22.7km in length and connects New Delhi railway

station to Airport terminal 3• Built at a cost of 2,885 crore line was opened on 24

February 2011

The Network

Sourcing of Funds

Revenue Sources Ticket sales: Revenue through passenger traffic

Advertisements and property development

Revenue by leasing out its trains and stations for film and advertisement shoots. Producers have to pay as much as 1 lakh for every hour of filming, besides a security deposit and insurance

Consultancy projects for upcoming metro projects: Pune, Raipur, Kerala Monorail, Bangalore etc.

External project works: Multi-level car park for Delhi high court, construction & supervision for Jaipur and Kochi metro, work for ILBS

Source Revenue (in Crore Rs.)Traffic Operations 1523.74

Consultancy Projects 34.23

External Project Works 817.62

Other sources (ads, real estate, shoots)

311.89

Total 2687.48

For financial year 2012-2013

• Various studies conducted on the impact of the DM on the environment

• Most studies conclude that there is a positive impact on the environment and reduction in population

• 24-29% reduction in NO; 26-69% reduction in CO

• Employment opportunity for unskilled, asset less migrated workers

• Increase in real estate prices.• Between 2005-08, the prices

rose at about 18-40% p.a.• Major rise within 500m of the

metro station• Decrease in no of road

accidents due to Delhi Metro

According to a report by CRRI• 1.2 lakhs vehicles are off the

road because of the Metro• Rs 523 crore is saved annually

in fuel cost• Rs 2978 crore: Cost in terms

of time of passenger saved per year

Economic Benefits

Delhi Airport Metro Express (DAME)

Bidding Players 2008◦ L&T-GE Consortium

◦ Seek annual subsidy of 346 crore, or interest free loan of INR 1440 crore from DMRC◦ Reliance-CAF consortium (95% Reliance Infra, 5% CAF)

◦ Pay annual concession fee of 51 crore from Year 1, increase by 5% annually◦ Revenue sharing of 1% from Year 1 to 15 and 5% from Year 15 onwards◦ License Fee of Rs. 10,000 per annum

Contract awarded by DMRC to Reliance Consortium 30 year BOT PPP model Civil structures to be built by DMRC & Reliance Rolling stock to be supplied, installed, operated by Concessionaire Cost of construction: INR 57 billion, 54% paid by Reliance Concessionaire Reliance to raise money at 70:30 debt-equity ratio Concessionaire shall operate the line for 30 years, DMRC to take charge

post that

Proposed Actual (as on Jul 2013)

Running Time 24 hours a day, 10 min frequency

0600 to 2330 Hrs, 15 min frequency

Train Speed 135 kmph (tracks support speeds upto 350 kmph)

50-65 kmph (since Jan 2013)

Scheduled Completion 31st Aug 2010

23rd Feb 2011 (INR 967.5 million fine

paid to DMRC)Daily

Ridership 42,000 11,000 (peak 20,000)

Areas of Dispute

Delay in launch by 6 months (12 months) Line was conceived primarily for 2010 CWG, but Reliance couldn’t complete it in time Blemish on DMRC’s reputation, who hadn’t delayed any project

DMRC officials suspended services in July 2012 after multiple technical problems reported 540 bearings had to be replaced, some girders had cracked, water seepage in tunnels Officials from DMRC & R Infra blamed each other for faulty construction Line reopened after 6 months with reduced speed of 50 kmph

Reliance expressed unwillingness to operate the line in July 2013 DMRC team had to take over Operations & Maintenance on short notice of 2 days Agreement Terminated & R Infra slapped notice on DMRC to recover costs

Lessons Learnt

High estimation of traffic & inflated

revenue expectations

•Actual revenue generated from core (fare collection) & non core (advertisements, lease of commercial space, vending & retail outlets) significantly lesser

•Operational loss of 4 crore per month by Concessionaire•Metro line was planned in isolation with no feeder links & poor accessibility

Improper risk sharing in

Agreement

•Commercial, Operational, & Maintenance risks should be borne by private player, while political & land procurement risks should be borne by govt in a PPP infra project

•Maintenance risk in DAME was shared between partners, with room for both parties to blame each other

Hurried process

•All infrastructure PPP projects above 100 crore must be approved by PPP Appraisal Committee•Gaps in contract enabled Reliance Infra to de-risk its borrowings by reducing its equity from 70%

and passing on full debt liability to new promoters & government•Equity dilution enabled Reliance to make upfront profits & terminate contract, with no incentive to

invest for longterm health of project

Unrealistic bidding

•DMRC itself made loss of 233 crore in 2004, 761 crore in 2005, 894 crore in 2006•Reliance’s claim of sharing revenue from Day 1 should have been inspected, with respect to L&T

seeking subsidy. ICRA submitted a detailed report in 2009 questioning business model of R Infra•Claims of developing land for commercial development were attached by Reliance as ‘sweeteners’

Present SituationBank consortium led by Axis bank slapped legal notice for non payment of bank loans

Project has turned into non performing asset

DMRC reduced passenger fare by 40% in July 2014 to attract passengers, and offered higher discounts to daily riders

Feeder bus services have been introduced Speed of trains increased to 80 kmph 30.43% increase in ridership observed since DMRC took over in July 2013

Handling Increased RidershipRecorded ridership of over 27 lakhs on 04th August, 2014

Increased Avg speed 33kmph to 36kmph

200 additional automatic fare collection installed gates at various stations

Handling the increasing numbers : 136 Additional 6 coach & 8 coach in last year

Line 4-Aug Ridership 4-Coach 6-Coach 8-Coach Total1 Dilshad Garden-Rithala 382,188(14.1%) 19 10(focus) - 29

2 Jahangirpuri -HUDA City Centre 962,428(35.6%) - 27 33(focus) 60

3/4 Dwarka Sec21-Noida City Centre/Vaishali 10,23,245(37.8%) - 46 25(focus) 71

5 Inderlok/Kirti Nagar-Mundka 99,357(3.67%) 17 1 - 18

6 Mandi House-Badarpur 218,734 (8.1%) 29 01 - 30

Rooftop Solar PowerCommissioned and operated under the Renewable Energy Services Company (RESCO), GIZ

DMRC : Site for the project Developer : Capital cost for project development, Project Operation and Maintenance Cost

Power Purchase Agreement with the project developer. terms of this agreement have not been made public

Delhi Metro might get power free of cost after the developer has recovered its capital investment

Power generated could be used for in-house use at the stations, sold to nearby advertising hoardings or used for charging electric vehicles in the near the future

Project Capacity90-2500 KW

Network Potential52 MW

86.5 mn units Electricity/year

$8mn (47.6 cr) Savings with current tariffs

Rapid Rail CorridorsJuly 2013 : National Capital Region Transport Corporation Limited (NCRTC)

Implementing Agency for Regional Rapid Transit System (RRTS) projects in the NCR

NCRTC responsibilities : Designing, developing, implementing, financing, operating and maintaining RRTS on a pattern similar to the Delhi Metro

Provide impetus to the development of satellite towns around Delhi

8 Rapid Rail Corridors expected

3 rapid rail corridors finalized (June 11, 2014)

Alwar | Meerut | Panipat

Delhi-Alwar180kms

Delhi-Panipat 111kms

Delhi-Meerut90 kms

Rapid Rail Corridors : First ThreeAlwar RRC is supposed to terminate at Gurgaon | DMRC is perusing to link the Airport Express Metro Line

If agreed upon => operationally profitable Airport line

Delhi will have a total of 11 stations Anand Vihar | Sarai Kale Khan | ISBT Kashmere Gate | Mukarba Chowk | Narela | ND railway station| INA | Dhaula Kuan | Mahipalpur | Airport Link (Debate)

Center & State100 Cr

Urban Development & Railway Ministry

22.5%

NCRPB 5%

Delhi, Haryana, Rajasthan and UP

Approx. Project Cost

Rs 72,170 croreStations

48Total Length

349 kmsCorridor Length

Delhi70.7 kms

Completion By

2019

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