Metro: State funding may prove costly

State funding may prove costly: report
The Times of India

Bangalore: The Due Diligence Report prepared by iDeCK (Infrastructure Development Corporation (Karnataka) Ltd has raised questions on the viability of the Metro Rail project with state funding. It was commissioned by the Bangalore Mass Rapid Transit Limited (BMRTL) on the Bangalore Metro Rail

Observing that no detailed financial analysis has been made, the report has said that various realistic scenarios considered indicates that the Karnataka government and the Government of India (GoI) may have to bring in Rs 6,500 crore to Rs 7,500 crore for the project against other projected figures. What started as Rs 3,000 crore is now already Rs 6,207 crore.

The report has stated that in a pessimistic scenario, GoI/GoK would need to bring in over Rs 14,000 crore if projected ridership fails (including equity share capital). Citing examples, officials said that the experience of Delhi Metro was that the cost rose from Rs 4,800 crore to Rs 12,000 crore.

However, BMRTL officials maintain that it is a hypothetical consideration and may not require such huge investments as pointed out by the report. “Bangalore is a rapidly growing city and it needs a Metro Rail system.’’

The ridership has been estimated as 8.20 lakh trips/day in the first year of operations. This appears to be high based on project-related parameters such as the population in the influence zone and non-home-based(NHB) trip characteristics.
Information on how accurate previous traffic forecasts have been in comparison with actual traffic observed may have given the necessary assurance on the dependability of traffic studies.

The operating experience of the Chennai MRTS and the Calcutta Metro, which are the nearest alternatives available for comparison in the country, are particularly useful in this regard. Current ridership levels in both transit systems are way below projected estimates.

Another observation made is that targeting even a reasonable share of trips would require a number of ridership enhancement initiatives like rationalisation of bus routes, integration with commuter rail and suburban rail systems (especially at Byappanahalli, Yeshwantpur, Mysore Road ends) and regulating growth in private vehicle ownership.

The report has observed that the detailed project report has not provided detailed calculations for the derivation of capital and operating costs and most items of costs appear to have been derived from the experience gained in the Delhi Metro project.