Infrastructure Management - DMRC Study
- 1. INFRASTRUCTURE CONSULTING & MANAGEMENT GROUP 6 PRATEEK BAHL B005 VIPUL CHAWLA B009 MOHIT GAUR B016 APOORV MITTAL B042
- 2. 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
- 3. 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
- 5. 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
- 6. • 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
- 7. 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)
- 8. 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 Situation Bank 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
- 9. Handling Increased Ridership Recorded 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 Total 1 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
- 10. Rooftop Solar Power Commissioned 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 Capacity 90-2500 KW Network Potential 52 MW 86.5 mn units Electricity/year $8mn (47.6 cr) Savings with current tariffs
- 11. Rapid Rail Corridors July 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-Alwar 180kms Delhi-Panipat 111kms Delhi-Meerut 90 kms
- 12. Rapid Rail Corridors : First Three Alwar 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 & State 100 Cr Urban Development & Railway Ministry 22.5% NCRPB 5% Delhi, Haryana, Rajasthan and UP Approx. Project Cost Rs 72,170 crore Stations 48 Total Length 349 kms Corridor Length Delhi 70.7 kms Completion By 2019
- 13. THANK YOU
Editor's Notes
- #9: responsibility for civil works (stations, tunnels and viaducts) is with DMRC, and system works (track, signals, power distribution system and rolling stock) is with DAMEPL demand for due diligence in drawing up PPP contract in the future. The contracts should set a floor level to the debt-to-equity ratio for the project that the concessionaire cannot breach and the financial institutions can monitor.
- #11: With the support of GIZ, the DMRC found that its stations and yards can accommodate solar power projects with capacity between 90 kW and 2,500 kW with a network-wide potential of about 52 MW implement pilot projects at a few stations , go with all stations and yards on the network 52 MW, DMRC could end up generating about 86.5 million units of electricity every year. At current power tariff, DMRC would save about $8 million (₹47.6 crore) every year.
- #13: National Capital Region Transport Corporation, formed in 2013, is stillexploring options to fund the corridors that are expected to cost at least~70,000 crore. The corporation was formed with 50 per cent equityparticipation from the Centre and the rest from the state governments ofDelhi, Haryana, Rajasthan and Uttar Pradesh. Transportation drives development