PUBLIC BRIEF

REPUBLIC OF

Project to extend ’s two existing metro lines

CONTENTS

I - THE SECTOR AND ITS CHALLENGES ...... 2 1.1 - SECTOR PRESENTATION ...... 2 1.1.1 - The urban transport sector is growing fast ...... 2 1.1.2 - Bangalore, a dynamic city but also one of the most congested in the country ...... 2 1.1.3 - Significant public transport growth: phase I of the Bangalore metro ...... 2 1.2 - GOVERNMENT POLICY: UPGRADING URBAN INFRASTRUCTURE ...... 2 1.3 - IMPORTANCE FOR THE COUNTRY ...... 3 1.4 - CONTRIBUTION TO THE STRATEGIC GOALS OF FRENCH AID AND AFD ...... 3 1.4.1 - Lessons learned from the main activities of AFD and other French aid actors in the sector ...... 3 1.4.2 - Contribution to the strategic goals of French aid and AFD ...... 3 II - THE PROJECT ...... 3 2.1 - OBJECTIVE ...... 3 2.2 - SPECIFIC OBJECTIVES ...... 3 2.3 - PROJECT CONTENT ...... 4 2.4 - KEY ACTORS AND OPERATING METHODS ...... 4 2.4.1 - Funding arrangements ...... 4 2.4.2 - Technical arrangements ...... 5 2.4.3 - Timetable ...... 5 2.5 - COST AND FINANCING PLAN ...... 5 2.6 - NATURE OF THE FINANCIAL PRODUCT PROPOSED BY AFD ...... 5 III - PROJECT IMPACT EVALUATION ...... 5 3.1 - CONTRIBUTION DU PROJET AUX ENJEUX DU DEVELOPPEMENT DURABLE ...... 5 3.2 - EXPECTED PROJECT IMPACT ...... 5 3.2.1 - Economic effects ...... 5 3.2.2 - Environmental impact and climate strategy ...... 6 3.2.3 - Social impact ...... 6 3.2.4 - Institutional impact ...... 6 IV - MONITORING, FOLLOW UP AND INDICATORS ...... 6 4.1 - MONITORING MECHANISM ...... 6 4.2 - IMPACT INDICATORS FOR THE LINE EXTENSIONS ...... 7

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I - THE SECTOR AND ITS CHALLENGES

1.1 - Sector presentation

1.1.1 - The urban transport sector is growing fast

Until recently, urban public – essentially fleets of buses – was old, poorly maintained, inappropriate and highly polluting. To meet increased urban mobility needs, mass transport projects have emerged in the form of metros and Bus Rapid Transport (BRT) with dedicated traffic lanes. Metro, whose first line opened in 2002, demonstrates this trend. Since then, around 10 more metros and extensions have been planned for the country’s main cities (Gurgaon, Jaipur, , etc.).

1.1.2 - Bangalore, a dynamic city but also one of the most congested in the country

Capital of the State of , Bangalore is situated in the southeast of one of India’s most developed federal states. Indian public enterprises and multinational corporations have been outsourced there, fuelling the development of qualified sub-contracting activity and providing the bedrock for the emergence of a technology and economic hub. These specialised firms have created new jobs for the middle class. India’s third most populous city, Bangalore is experiencing the country’s fastest population growth after Delhi. In 30 years, its population has almost tripled to 8.5 million people today. The urban area is growing by 5.4% or about 22,000 hectares a year. The division of space reflects a two-speed urban growth. The East and South are home to tech hubs that meet international standards (particularly or the International Tech Park) and gated communities housing the middle and upper classes. The North and West accommodate traditional industry and the poorest populations live there in slums and squalid living conditions. The clear separation between employment hubs and living quarters encourages people to buy a vehicle for transportation. Bangalore and Delhi have the greatest number of vehicles per inhabitant in the country. Transportation is divided as follows: public transport (bus) 34%, walking 28%, two wheels 18%, auto-rickshaw 9%, car 8% and bicycle 3%.

1.1.3 - Significant public transport growth: phase I of Bangalore Metro

To meet these challenges, Bangalore has launched a first mass transport project: phase I of a metro system, covering 42km and with 40 stations, that is currently being constructed. It has two lines that cross at Majestic station, a major bus hub situated opposite Bangalore City Railway Station. The metro is projected to carry 900,000 people daily when it has fully entered service in 2016. In December 2012, AFD allocated funding for this first phase of construction via a sovereign loan of €110 million. For phase I, costing about 138,500 billion rupees or €2 billion, several international institutions participated alongside AFD, including the Asian Development Bank with a non-sovereign loan of $200 million and JICA with a $490 million sovereign loan denominated in Yen. An initial section of 6.7km with 6 stations in the East between MG Road and Bayappanahalli opened in October 2011. A second section of 9.9km with 10 stations between Industry and Mantri Square Sampige Road entered service in March 2014. Bangalore’s two metro lines are due to be fully operational in December 2015 for the East-West line and August 2016 for the North-South line.

1.2 - Government policy: upgrading urban infrastructure

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In India, urban transport policy and strategy come under the Central Government, while planning and implementation come under the federal states. The National Urban Transport Policy is the national reference framework for urban transport. It has been in force since 2006 and was updated in 2014. In particular, it calls for: (i) an integrated transport approach with the setting up of transport organising authorities, (ii) joined up thinking between urban planning and transport development and guarantees (iii) financial support from Central Government to conurbations with more than 1 million inhabitants for mass public transport projects. At the national level, the 12th Five Year Plan (2012-2017) emphasises the traffic problems in India’s big cities that have come about with the increase in the number of private vehicles. It recommends fast urban rail networks and high-speed regional networks, the integration of different transport modes through transport mapping and the organisation of audits covering social and other such issues for transport projects.

1.3 - Importance for the country

India has been experiencing continuous population growth for years. The urbanisation rate remains low and is increasing relatively slowly, going from 28% in 2001 to 31% in 2011, when the most recent census was carried out. However, the effects in absolute terms are big, with 91 million more urban dwellers in 2011 than in 2001. India’s overall urban population is set to grow from 340 million urban residents in 2008 to 590 million in 2030 and will be concentrated in Very Big Conurbations (VBC). Among the consequences for urban mobility are an increase in the number of private vehicles and an intensification of congestion, which is behind the high levels of pollution observed in Indian cities. The existing urban transport infrastructure cannot meet the needs presented by this demographic growth. For the moment, only 20 of the 85 cities with more than 500,000 inhabitants have a bus network that is run by the public authorities.

1.4 - Contribution to the strategic goals of French aid and AFD

1.4.1 - Lessons learned from the main activities of AFD and other French aid actors in the sector

Beyond Bangalore Metro, AFD is also contributing to funding for Metro with an €180 million loan. It is also being invited to help fund the metros of Lucknow and Nagpur in 2015.

1.4.2 - Contribution to the strategic goals of French aid and AFD

Since 2006, AFD has responded to increasing numbers of requests for urban transport funding, be they for trams (Rabat, Casablanca, Tunis, Medellin), metros (Rio de Janeiro, Santo Domingo), Cairo, Istanbul, Bangalore, Hanoi), urban rail (Tunis, Bandung, Sao Paolo), cable car (Medellin), ferry transport (Izmir), rapid bus transport with its own lanes (Curitiba, Lagos, Istanbul, Amman, Dhaka, Noumea) or multi-transport station hubs (Wuhan). This project is in line with AFD’s mandate in emerging nations, which is to foster green and socially responsible growth. By helping Bangalore provide and better manage public transport for its inhabitants, this project embodies two of the principles underpinning AFD’s intervention in India.

II - THE PROJECT

2.1 - Objective

Improve urban mobility for Bangalore residents and improve urban transport performance by encouraging sustainable development for the conurbation.

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This project aims to maintain progress on construction of the Bangalore metro. It will: - Increase mobility and access to public transport for a greater number of residents - Serve the city’s vital economic areas, particularly International Tech Park, an industrial zone, the International Exhibition Centre, the University of Bangalore and the satellite city of - Prevent road congestion and restrain the increase in the rate of vehicle ownership in Bangalore - Reduce local polluting emissions and carbon emissions - Encourage integrated urban development by strengthening multimodal transportation and greater density along major public transport routes.

2.3 - Project content

The project AFD is invited to contribute towards concerns part of phase II covering extensions at each end of the two metro lines under construction. This amounts to 23km of new elevated lines and 27 additional stations, all of which are elevated.

# Extension Dir. Length No Area served stat. 1 Mysore Road – Kengeri West 6.5 km 5 Industrial and commercial area. University of Bangalore 2 Baiyappanahalli – Whitefield East 15.5 km 14 International Tech Park 3 Hesaraghatta Cross – BIEC North 3.8 km 3 Industrial and commercial area. Bangalore International Exhibition Centre. 4 Cross – Sout 6.3 km 5 Middle class residential area. Township h

Construction will not require much site acquisition because the lines will run above existing roads. Some acquisitions will however be necessary around stations and for two new depots, one at Kengeri and one at Anjanapura. A feasibility study for the four line extensions has been prepared by the Delhi Metro Rail Corporation (DMRC). These extensions are to be completed in 2019 and will enable an expected additional 400,000 daily passengers to use the service. Technical decisions have been made with Delhi Metro as a reference, and will naturally correspond to the specifications of phase I of Bangalore Metro. They include standard gauge rails, electricity supplied by a 750V third rail, signal cabins and electronic ticketing etc. Some 239 additional carriages will be acquired to absorb the increase in use, both of the lines already in service and the extensions. A Transit-Oriented Development study is underway. The Directorate of Land Urban Transport has also launched a station accessibility study that should enable improvements to station planning and design to include all the different modes of transport. Multimodal integration is a priority for phase I and its extensions because in all, there will be six interchange stations linking to city bus stations, six interchange stations linking to intercity bus stations and five interchange stations connecting to railway stations.

2.4 - Key actors and operating methods

2.4.1 - Funding arrangements

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The primary beneficiary of the loan will be the Republic of India, represented by the Department of Economic Affairs (DEA), which is responsible for mobilising external funding in the name of the Indian Ministry of Finance. The DEA will therefore be signatory to the Credit Facility Agreement along with AFD. Another agreement, the Project Agreement, will be signed with the Bangalore Metro Rail Corporation Ltd (BMRC), to which the funds will be retroceded. This retrocession will take place in line with the provisions contained in Chapter 7 of the Indian Constitution covering financial transfers from Central Government to Federal States.

2.4.2 - Technical arrangements

BMRC is the project authority. It is a public body and Special Purpose Vehicle owned in equal measure by India’s Central Government (represented by the Ministry of Urban Development) and the Government of Karnataka.

BMRC will appoint a General Consultant, a private appointee to help with project management. This will be the Indian consultancy RITES, which has already successfully provided this service for phase I. The team allocated to the Bangalore metro for phase I had up to 280 engineers including 15 foreigners.

2.4.3 - Timetable

The four extensions will be completed in 2019. The first disbursement from AFD is expected in the last quarter of 2015.

2.5 - Cost and financing plan

The cost of the four extensions is estimated at €1.2 billion. The financing plan will follow the phase I model: equity and debt taken on by Central Government and the Government of Karnataka and loans from private banks and donors. The project will be cofinanced by KfW, the German bilateral financial institution.

2.6 - Nature of the financial product proposed by AFD

A sovereign loan to the Indian Government and retroceded to BMRC is envisaged.

III - PROJECT IMPACT EVALUATION

3.1 - Contribution of the project to sustainable development challenges

Support for the development of clean urban transport is in line with AFD’s policy for supporting sustainable development in two ways: improvement to residents’ living conditions and reduction of local pollution and carbon emissions.

3.2 - Expected project impact

3.2.1 - Economic effects

The line extensions will give greater balance to the way the metro is used because they will enable extra passengers for minimal investment (a better investment-passenger use ratio than phase I). The metro will improve the connection between residential and employment areas and will in particular improve access to the university, the International Tech Park and industrial Cop-M2021 NCO Version Finale 5/7 zones. Construction will create jobs for affected populations with an estimated need for 400,000 men each day per year. Traffic reduction also has a role to play in making Bangalore more attractive because the city is competing on an international level to attract multinationals. Extending Bangalore’s metro lines will have a knock-on effect on the conurbation’s economy.

3.2.2 - Environmental impact and climate strategy

By contributing to the growth in ‘clean’ public transport in Bangalore, the project fosters sustainable development and will lead to a significant reduction in carbon emissions.

The carbon saving comes to 170,000 tCO2/year for the project’s lifetime. Around 21% of motorbike users are expected to shift to the metro, along with 12% of car users from 2016. The 8,310 trees planted in compensation will save 42 tonnes of carbon each year.

3.2.3 - Social impact

The metro is open to all sections of the population while Bangalore’s buses tend to encourage social segregation through their different levels of fares and comfort. In terms of accessibility for wheelchair users and the blind, BMRC will carry on the significant work that is already underway. The project aims to facilitate daily journeys as well as providing equal access to essential facilities and services (employment, hospitals, leisure centres etc). The metro will reduce travelling times for populations, provide a level of comfort and accelerate the development of a multimodal transport system. Low ticket prices should enable everyone to use the infrastructure. Living conditions along the lines should improve with the reduction in pollution (atmospheric and noise) and the development of services and trade near the stations.

Since 2013, BMRC has complied with the Karnataka recruitment law, which calls for 30% of new jobs to go to women recruited through external advertising. For the next round of hiring technical staff taking place by the end of 2014, 41 of the 130 jobs are to go to women. For passengers, in time and in line with practices seen elsewhere, some trains will increase from three to six carriages including one carriage reserved for women, which appears to be the wish of civil society.

3.2.4 - Institutional impact

A metro system is a permanent installation on the same scale as its conurbation. It will last beyond its theoretical lifetime of 30 years, based on economic calculations. The phased development approach taken by BMRC guarantees the metro’s sustainability in the very long term. The governance framework is clear and secure thanks to the alliance between Central Government and the Government of Karnataka, which are able to progress projects despite political constraints. BMRC’s teams have proved their ability to manage construction and run and maintain a metro system. BMRC has put in place a dedicated management team made up of 680 people for operation and maintenance that has a training centre and a train simulator. Beyond BMRC considerations, discussion is taking place in order to reinforce the link between urbanism and transport across the conurbation. The Directorate of Land Urban Transport plays an innovative role in integrating projects with urban planning to ensure urban transport is deployed in the most logical way and urban densification is built in.

IV - MONITORING, FOLLOW UP AND INDICATORS

4.1 - Monitoring mechanism

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Biannual reports will be requested from the project authority. They will show (i) technical and (ii) financial progress and results for (iii) operational use (passenger numbers, revenue/costs) and (iv) environmental and social monitoring.

4.2 - Impact indicators for the line extensions

Aggregated indicators: Value indicator Unit of measure Line length 32 Km Number of passengers transported 400,000 Passengers/day Reduction in CO2 emissions 170,000 Tonnes CO2/year Population, hubs and activities served Satellite city of Number Kengeri, International Tech Park tech hub, BIEC, Vedehi Hospital.

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