Recently Union Cabinet approves new Metro Rail Policy.
The policy seeks to enable realization of metro rail aspirations with the use of PPP models.
What are the highlights of Metro Rail policy?
It focuses on compact urban development, cost reduction and multi-modal integration
It opens a big window for private investments across a range of metro operations.
PPP component is made mandatory for availing central assistance for new metro projects.
Innovative forms of financing of metro projects have been made compulsory.
Last mile connectivity - It seeks to ensure it by focusing on a catchment area of 5 km on either side of metro stations to provide necessary last mile connectivity through feeder services
Walking, cycling pathways and introduction of para-transport facilities are planned for this.
Optimal utilization - Urban Metropolitan Transport Authority (UMTA) has been made mandatory,
It is mandated to ensure complete multi-modal integration for optimal utilization of capacities.
Third party Assessments - Independent assessment by agencies to be identified by the Government, whose capacities would be augmented, as required in this regard.
Urban transformation - Transit Oriented Development (TOD) to promote compact and dense urban development along metro corridors.
TOD reduces travel distances besides enabling efficient land use in urban areas.
Fare Fixation - It empowers States to make rules and regulations and set up permanent Fare Fixation Authority for timely revision of fares.
How does the policy envisage private sector participation?
It calls for any of the following models –
Cost plus fee contract - Private operator is paid a monthly/annual payment for Operation and maintenance of system.
This can have a fixed and variable component depending on the quality of service.
Gross Cost Contract - Private operator is paid a fixed sum for the duration of the contract.
Operator to bear the O&M risk while the owner bears the revenue risk.
Net Cost Contract - Operator collects the complete revenue generated for the services provided.
If revenue generation is below the O&M cost, the owner may agree to compensate.
