New Metro rail policy

The new Metro rail policy has opened window for private investment in activities such as operation and maintenance, fare collection and other non-core functions. Under the current regime, the private sector is allowed under the public-private partnership framework for the entire project. The changes will enable private sector to manage rolling stock and signalling systems, as it would bring “managerial efficiency“.

The policy, approved by the Cabinet, also mandates states to ensure feeder transport facility for a 5 km area so that passengers don't struggle for last-mile connectivity. Ridership is largely linked to the issue of last-mile connectivity. The aim is to deepen Metro railway presence. Currently, 370 km of Metro is operational in eight cities and another 537 km is under construction in 13 cities.

The new guidelines also say Metro projects should be proposed only after assessing other mass transit solu tions such as BRT (bus rapid transport), LRT (light rail transit) and monorail to find which is most cost effective.

States can also take up Metro rail projects on their own and opt for central assistance of one-tenth of the project cost without worrying about the Centre's involvement. Considering the huge requirement of capital in such projects, the policy mandates private investments for accessing central assistance for new projects.

Sources said though Metro man E Sreedharan had suggested that Centre should stay away from PPP route, the government has given the go-ahead. The policy also focuses on the need to get revenue from alternative sources including property development and advertisements to make the projects financially viable. It makes its mandatory for states to incorporate some elements of transit oriented development, which focuses on development of office and residential complexes along Metro rail corridors.

States also need to adopt innovative mechanisms to mobilise resources by capturing a share of the increase in the value of the asset through a `betterment levy'.

States would also be required to enable low cost debt capital through issue of corporate bonds for Metro rail projects.

This means projects such as Delhi Metro phase-IV, which are still to get the go ahead, will now need to incorporate these provisions in their proposal.

However, sources said the policy hardly puts in place a framework for prioritising the sanctioning of projects. Without having an assessment system in place, it would have little impact.

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