Partnering Private

by November 7, 2018 0 comments

private-partner

Even after some bad experiences, DMRC would still want to partner with private names.

As Delhi Metro’s third phase of construction comes to an end, it now has a track length exceeding 300 kilometers, making it one of the 10 longest metro systems in the world. Despite delays during construction of late, especially due to land acquisition issues, this is a truly remarkable feat given the Delhi Metro only started operations in 2002. No other Indian city’s current Metro track exceeds 50 kilometers and with the proposed fourth phase of construction, Delhi Metro will have a track length exceeding 500 kilometers putting it third behind Shanghai and Beijing in terms of track length. Yet, there are a couple of proposals by the Delhi Metro for the fourth phase that are a bit odd, to say the least.

First, there is the issue of leasing rolling stock, which is peculiar for a large Metro system. The second is to allow private players to operate lines on the Metro. The latter proposal is very strange indeed for the Delhi Metro Rail Corporation (DMRC) given how badly burned it was on the Airport Express Line when it was under a private operator; DMRC lost a colossal arbitration award as it was deemed to have delivered deficient hardware. Of course, there is the example of the Rapid Metro in Gurugram which was developed and is operated by IL&FS and it has been a successful model, the only such model in the world. That said, the Rapid Metro is a very small system. The Hyderabad Metro is another unique Private-Public Partnership model, but that too was rescued after the Satyam fiasco as the initial operator of the Hyderabad Metro was Maytas Infrastructure, a Satyam subsidiary.

That is not to say that a private-partnership or a privately owned Metro system cannot work, but the Delhi Metro’s idea of developing the hardware and having a private operator run the trains, the way the Delhi Transport Corporation has private buses operate, is not a great idea. Understandably, the Delhi Metro is facing cost issues with rolling stock becoming expensive and despite two fare hikes in the past year, costs, particularly of construction, are beginning to escalate. However, the Delhi Metro must keep building as the Metro is the only thing keeping Delhi’s economy going and while the Metro may not be a profitable venture, its economic value to Delhi and its suburbs cannot be understated. Going down the private operator route, though, may not be the smartest idea.

Writer & Courtesy: The Pioneer

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