Metro rails in Chennai, Bengaluru, Hyd & Kochi struggle with low revenues

A Standing Committee report has observed that reasons behind low patronage could be due to lack of last mile connectivity, parking etc.
A Hyderabad metro train: Metro rails in Chennai, Bengaluru, Hyderabad and Kochi struggle with low revenues
A Hyderabad metro train: Metro rails in Chennai, Bengaluru, Hyderabad and Kochi struggle with low revenues
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None of the four metro rails in south India – Bengaluru metro, Hyderabad metro, Chennai metro, and Kochi metro – have recorded enough operational revenues to meet the principal and interest repayments. All four have recorded low ridership and this means the rail networks have not been, and will not be able to breakeven even after 6-7 years of continuous operations. While Chennai and Bengaluru metros have completed seven and six years respectively, Hyderabad and Kochi metros are just about at five years of operations, having begun in 2017. These observations were among those revealed in the report on the ‘Implementation of Metro Rail Projects’ submitted by the Standing Committee on Housing and Urban Affairs on July 19. While the Standing Committee has made several recommendations and observations about metro rails across the country, we look specifically at what has been shared about the metro projects in south India.

In regards to operational revenues and repayment of the loan and interest, it was revealed that Chennai Metro Rail Limited (CMRL) has a cash deficit and is unable to pay both the interest and the principal amounts. As per an MoU, when CMRL is not in a position to service the loan, the state government has to meet the same.

Hyderabad Metro Rail Limited’s (HMRL) operational revenues are also not sufficient to meet the interest and principal repayments. “Currently, the promoter of the project SPV (special purpose vehicle), Larsen & Toubro Limited, is providing regular fund infusions into the project in order to support the debt service obligations of SPV, thereby avoiding NPA (non-performing assets) situation for the PSU (public sector undertaking) lenders of the Project. The existing shortfall in debt service is continuing to add further to the debt burden in the project,” noted the Committee.

When it comes to the Kochi Metro Rail Limited (KMRL), the metro projects are able to pay the loan payments, but not from operational revenues from the metro project. The required fund is being released by the government of Kerala as per the terms in the MoU between the government of India, the government of Kerala, and KMRL.

As per the tripartite MoU that exists in the case of the Bangalore Metro Rail Corporation Limited (BMRCL), the losses, including the interest on loans and the principal repayment, are backstopped by the Karnataka government. BMRCL has been incurring losses, and hence, the government of Karnataka has released funds to meet the interest and principal repayment.

Metro ridership figures (Image Credit: Twitter/PRSLegislative)

Low ridership

The committee has observed that all four metro rails in south India have recorded low ridership, which is why they wouldn’t be able to breakeven even after six to seven years of continuous operations. Citing the probable reasons for this, the committee observed faulty detailed project reports (DPRs), lack of proper planning to provide last mile connectivity, and unavailability of parking as some of the reasons for the low patronisation of the metros.

The report said, “The Committee is of the view that if metro rail projects are to be made as mass transportation medium in a true sense, operated on a sustainable basis, and the commuters are to be weaned away from using private vehicles, a compelling proposition should be made available to them in terms of comfort, convenience, quality, affordability, and reliability, etc.” The committee has directed respective metro rails to take concrete steps to improve ridership and to inform the committee of the same.

First and last mile connectivity

The committee directed the respective metro rails to pay special attention to feeder systems such that people as far as 5 km away from metro stations could comfortably travel to the metro station.

Observing that the Kochi metro does not have a planned public bike sharing station, the committee recommended that for upcoming metro stations, no approval should be accorded until the DPR has a provision for first and last-mile connectivity.  

Green energy initiatives

Chennai metro, Hyderabad metro, and Kochi metro are adopting energy conservation measures and development of green sources of power such as solar energy. The committee noted that Kochi metro has planned to meet 60% of its total operational energy requirement through solar power. The committee expressed disappointment that Bengaluru metro, among others, has not provided information about solar power generation in their networks.

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