An in-depth analysis of the financial situation of Kochi Metro is called for, where on one side huge losses have accrued while on the other extensions are being planned.

A Kochi Metro train service PTI
news Public transport Friday, December 04, 2020 - 15:27

Amidst the pandemic, phase 1 of Kochi Metro became fully operational with the inauguration of the Thykoodam – Petta stretch on September 5. Needless to say, like other public transport operators, the Kochi Metro Rail Limited (KMRL) suffered huge losses – estimated to be around Rs 34.18 crore – due to the ongoing situation which led to the suspension of services for about five months. Though the current situation is a peculiar one, it does not affect the loan repayment process.

This calls for an in-depth analysis of the financial situation of KMRL where on one side huge losses have accrued and on the other extensions are being planned. Work on the extension line from Petta to Thrippunithura terminal is in progress, the (Detailed Project Report) DPR of the additional line from JLN Stadium to Kakkanad has been submitted to the Union government for approval and an extension from Aluva to Angamaly is also planned. Does the city really need these extensions? Or can the operator ensure the financial viability of these? These are few crucial questions for which we need to find answers.

During the extension of the new phase, the Union Minister for Housing and Urban Affairs expressed the hope that the extensions would increase the daily ridership from 65,000 (during pre-COVID days) to over 1 lakh. These numbers have to be looked at more carefully. As per the DPR of Phase 1 (2011), the estimated ridership in 2020 was 4.68 lakh passengers/day. This is almost seven times the actual ridership. It reveals how incorrect the forecast was. Analysing the KMRL financial statements for three consecutive years, the trend shows that the losses are increasing every year.

 

Financial year

Net loss of KMRL (in crores)

2017-18

2018-19

2019-20

167.33

281.23

310.01

Source: KMRL annual reports

These figures don’t present a robust picture of Kochi Metro’s financial situation. This points to a need to re-examine the proposals to extend the Metro or plan additional lines. Though metro rail is considered a ‘symbol’ of development and a ‘world-class’ identity for Kochi, the cost we are paying for it is gargantuan, which is not achieving its ultimate objective – ridership. The expenditure on Metro could have been utilised by the government for other developmental activities and building infrastructure. For instance, the cost of an AC Volvo bus is around Rs 70 lakh to Rs 1 crore. If the city had invested on them instead, we could have had almost 300 buses per year.

The Metro Rail Policy of 2017 states: ‘Proposals for additional metro lines in a city, or new metro in a state already having a metro rail in one of its cities, would be appraised keeping in view the state government’s efforts in ensuring financial viability of the existing lines’. It would be apt to cease the extension process and rethink the additional lines.

Need for alternate transit modes

Kochi city demands alternate transit modes. Various factors such as demand, capacity, cost, ease of implementation, etc. have to be considered before narrowing down to the most suitable Mass Rapid Transit System (MRTS) for any city. According to a ridership study of Kochi Metro conducted by the Centre for Public Policy Research (CPPR) in 2019, a majority of the respondents who were not using the Metro stated the reason as ticket fare is high. The primary data collected through the survey shows that the average Metro rider is a private sector employee in the 31 – 40 age group with a monthly income between Rs 20,000 and Rs 40,000. There is considerable disparity in the monthly income of Metro users and non-users with majority of non-Metro users earning between Rs 6,000 and Rs 20,000. This could be the reason why the Metro ticket fare was ranked poor by regular and infrequent Metro users and non-users.

Studies have proven that built environment variables such as density, diversity, design, destination accessibility, distance to transit and demand management strategies adopted affect the travel behaviour of individuals. And density is a critical factor here.

City

Population (in millions)

Area (in sq km)

Density
(persons per sq km)

Kochi (KMC)

6.02 lakh

94.86

6347

Kochi City Region[1]

12.23 lakh

369.72

3308

Delhi

167.87 lakh

1483

11320

Bengaluru (BBMP)

84.43 lakh

741

11394.97

Mumbai (MCGM)

124.78 lakh

437.71

28426

Kolkata (KMC)

44.96 lakh

206.08 sqm

21820

Source: Census 2011 & websites of respective Municipal Corporations

This might also be a reason why the projected ridership and actual ridership is closest for the Mumbai Metro compared to any other Metro in the country[2]. When we compare the density of Kochi with other major cities, it is clear that the city is much less dense. This again questions the suitability of a metro rail in the city.

In Kochi’s context, a BRT system (Bus Rapid Transit System) or a tram system would have been a better choice. A holistic assessment is required for finalising the MRTS projects. Now with the functioning of the Kochi Metropolitan Transport Authority (KMTA), it could take up the task of assessing the most suitable transit mode for the city considering various factors.

Metro as an urban transformation project

The Metro Rail Policy also states that the Metro rail system need not be seen merely as a transportation project, but as an urban transformation project that help a city to move from a sprawled development to greater compactness leading to sustainable cities. This requires a conducive environment and favourable ecosystem. According to Kerala Municipality Building Rules (KMBR) (Amendment in 2017), the maximum permissible Floor Area Ratio (FAR) for residential and commercial occupancy has been increased to 4. This is a blanket increase in the FAR for the entire municipal area throughout the state, which is mostly underutilised at present. In this situation, how can a Metro facilitate compact development?

A coordinated and holistic approach from different agencies/departments involved are crucial for compact development. There are multiple agencies involved in the land redevelopment process in Kerala, the major ones being the Municipal Corporations. When there is no regular coordination between Kochi Municipal Corporation (KMC) and KMRL; and when KMC is getting no incentive from it, why would it facilitate the process of compact development around the Metro corridor? Hence the densification or compact development around the Metro corridor is still a far-fetched dream with a non-supporting ecosystem.

Public transport issues in the city

Everybody in Kerala understands how crucial and relevant private buses are in the state’s public transport system. A unique and enterprising model, it played a very significant role in the social and economic development of the state. But if we look at the figures, there has been a drastic decrease in the numbers. During 2000, Kerala had 49,343 private buses, but now (pre-COVID) the number has fallen to 12,000 buses. This drastic reduction is a result of unfavourable policy decisions taken by the government against private operators, usually in the form of permit regulations and providing no incentives for providing this ‘service’.

First and last-mile connectivity still remains a major issue. Again, policy barriers restrict exploring various other options such as shared autos, mini-vans, etc. in the state, which can act as efficient feeder systems. Without solving or exploring these issues, why are the decision makers investing in capital intensive projects such as the Metro? On one side, there are projects like the Metro where the investments made by the government are over Rs 7,000 crore, incurring huge losses. And on the other side, there are systems like the private buses which were giving revenue to the government in the form of taxes. Tax payer money is spent for public transport operations, but the benefits are not visible when they are offered by the state through the Kerala SRTC and Metro alone.

Way forward

The city needs to strengthen its bus systems by introducing more routes and permits, route rationalisation, permits for smaller vehicles to act as feeder systems to transit modes, etc. The CPPR study also presents the reasons Kochi Metro users prefer this particular mode. The major reasons are timings/schedule, less travel time, comfort, cleanliness and safety. Wouldn’t users shift to an alternate transport system if it provides these same facilities and is also cost effective? Let us put our faith in the KMTA and hope that it will find solutions to the city’s transport issues.

Praseeda Mukundan is a Senior Research Associate at the Centre for Public Policy Research (CPPR), Kochi.

Views expressed are the author’s own.


[1] Comprehensive Mobility Plan for Greater Kochi Region. 2016

[2] WRI, India

 

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