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MUMBAI RAILWAY VIKAS CORPORATION LIMITED (MRVC)

MUMBAI URBAN TRANSPORT PROJECT 2A (MUTP 2A)

Institutional Development of the Suburban Rail System: Support to in the Design and Implementation of their Suburban Rail Strategy

FINAL REPORT (Volume I: Executive Summary and Main Report)

August, 2015

Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

Contents

EXECUTIVE SUMMARY ...... 1

SECTION 1: BACKGROUND ...... 8 1. Urban is Experiencing Massive Growth and Trying to Transform ...... 9 2. Focus of this Technical Assistance (TA) ...... 10 3. Objective and Scope of Services under this TA ...... 10

SECTION 2: PROBLEM SETTING ...... 11 4. Role of Sub Urban Rail Systems in Urban India ...... 12 4.1 Suburban Rail Passenger Growth in India ...... 12 4.2 Suburban Rail Operations in Major Metropolitan Areas of India ...... 14 4.3 Emerging Urban India and Potentials of Suburban Rail ...... 17 5. Indian Urban transport – issues and perspective ...... 21 5.1 Study on Traffic and Transportation Policies and Strategies in Urban Areas in India ...... 21 5.2 Key Recommendations of Rakesh Mohan Committee Rep ort ...... 22 5.3 Financial and Institutional Study of Combined Metropolitan Rail ...... 23 6. Institutional Arrangements for Urban ...... 24 7. Mumbai Suburban Rail System- Issues and Concerns ...... 27 8. MRVC and its Mandate ...... 27 9. Problem Statement with Respect to Suburban in India ...... 28 9.1 Suburban Railway Operations ...... 28 9.2 Urban Transport -Utilisation of existing infrastructure Problem Sub Urban Rail needing Urgent Attention ...... 29 9.3 Problem Domain ...... 30 9.4 Focus Areas ...... 32 9.5 SWOT Anal ysis ...... 33 9.6 Key Areas Needing Attention ...... 33

SECTION 3: INSTITUTIONAL OPTIONS ...... 35 10. Indian Railway’s view on Suburban Rail with Focus on Operations and Institutional Aspects ...... 36 11. Recent efforts towards restructuring railway board ...... 38 12. Lessons from Review of International Case Studies ...... 39 12.1 Lesson from Success in Suburba n Rail ...... 39 12.2 Lesson from Delayed implementation of Suburban Rail ...... 40 13. Thematic Approach in evolving Suburban Rail Institutional Options ...... 44 13.1 Considerations ...... 44 13.2 Insights to / IR Perspective ...... 44 13.3 UMTA - Unified Metropolitan Transport Authority ...... 45 13.4 Whether Corporation or Authority ...... 46 13.5 Special Purpose Vehicle (SPV) ...... 46 13.6 Financing Related Aspects ...... 46 14. Suburban Rail Institutional Strengthening - Options and Evaluation for Suburban Rail Development Organisations (SRDO) ...... 47 14.1 Initial Options ...... 47 14.2 Evaluation of Options for Further Consideration and Discussions ...... 50 14.3 Principal Stakeholders View on evolving Suburba n Rail Institutional Options .. 54 14.4 Views Expressed in Workshops ...... 56 14.5 Evolved Shared view on Suburban Rail Institutional Strengthening and Options 58

SECTION 4: RECOMMENDATION ...... 59 15. Recommended Suburban Rail Institutional Strategy ...... 60 15.1 Regional/National level ...... 60 15.2 Mumbai Specific - Institutional Arrangement ...... 64 15.3 Time Bound Action Plan ...... 67 16. Way Forward ...... 73 16.1 National/ Regional Perspective ...... 73 16.2 Mumbai Metropolitan Region ...... 74 16.3 Expediting Projects ...... 75

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

List of Tables

Table 4-1: Suburban Rail Passenger Growth in India ...... 13 Table 4-2: Daily Ridership in Suburban Railway of Different Cities (2013-14) ...... 13 Table 4-3: Suburban Railway System of different Cities ...... 13 Table 4-4: Population Growth-Major Urban Agglomerations of India ...... 18 Table 4-5: Potential of Suburban Rail Growth in India ...... 19 Table 4-6: Potential for Suburban Rail Expansion/ Creation in Major UAs of India ...... 20 Table 12-1: Broad Perspective on Suburban/ System Implementation, Operation and Maintenance – Case Countries/ Cities ...... 41 Table 14-1: Alternative Options, Evaluation Criteria and Initial Assessment ...... 52 Table 15-1: Implementation Program for Interim Arrangement- Enhanced MRVC Model ...... 72 List of Figures

Figure 14-1: Evolution of Resource Mobilisation and Institutional Arrangements ...... 50 Figure 15-1: Regional Transport Authority ...... 65 Figure 15-2: Regional Transport Authority, Urban Transport Fund and Regional Suburban Rail Corporation ...... 66 Figure 15-3: UTF - Potential Sources of Funding ...... 66 Figure 15-4: Evolution of Institutional Arrangements & Dedicated Urban Transport Fund for Mumbai ...... 67 List of Annexure

Annexure 3-1 : Detailed Scope of Services Annexure 4-1 : Detailed Insights to Indian Suburban Rail System Annexure 5-1 : Indian National Transport Committees and Policy Documents Annexure 6-1 : Urban Public Transport Scenario in India Annexure 7-1 : Present Organisation Structure of MRVC and Preferred Organization Structure for RVC and Staffing Needs Annexure 9-1 : Overview of PPP Opportunities in Suburban Rail Sector Annexure 12-1 : Suburban Rail Systems-Some Case Studies Annexure 13-1 : Rail Corporation (DMRC) Annexure 14-1 : Evaluation of Options Annexure 14-2 : Presentation – Workshop in Mumbai Annexure 14-3 : Presentation – Workshop in Delhi Annexure 15-1 : Proposed Institutional Structures for SRDC, SRDA and SRO Annexure 15-2 : Draft UMTA Bill, 2014

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

List of Abbreviations

BCL Braithwaite & Co. Ltd. BR British Railways BRTS Bus System BSCL Limited BVG Berliner Verkehrsbetriebe BWEL Bharat Wagon and Engineering Co. Ltd. CAGR Compound Annual Growth Rate CBD Central Business District CIDCO City and Industrial Development Corporation Ltd. CLW Chittaranjan Works CONCOR Container Corporation of India Limited CMD Chairman and Managing Director CMDA Metropolitan Development Authority CPTM Companhia Paulista de Trens Metropolitanos (English: São Paulo Metropolitan Company) CRIS Centre for Railway Information Systems CSA Combined Statistical Area CR Central Railway CST Shivali Terminus CTS Comprehensive Transportation Study DA Development Authority DFCCIL Dedicated Freight Corridor Corporation of India Limited DfT Department for Transport DLR Docklands Light Railway DLW Works DMRC Rail Corporation DMU DRM Divisional Railway Manager EJRC Eastern Japan Railway Company EMU Eclectic Multiple Units EPIC French: établissement public à caractère industriel et commercial ER Eastern Railway EU European Union FA Ferrocarriles Argentinos (Argentina Railways) FD Finance Department FEPASA Ferrovias Paulistas S.A. GCM Generators of Economic Momentum GDP Gross Domestic Product GLA Greater London Authority GNP Gross National Product HKTD Hong Kong Transport Department HOV Heavy Occupancy Vehicles HCBS High Capacity Bus System HUD Housing & Urban Development IDSMT Integrated development of Smaill and Medium Towns IPT Intermediate Public Transport IR Indian Railways IRBT Integrated Rail and Bus Transport IRCON Indian Railway Construction International Limited IRCTC Indian Railway Catering and Tourism Corporation Limited

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

IRFC Indian Railway Finance Corporation Limited JNR Japan National Railways JNNURM Jawaharlal Nehru National Urban Renewal Mission KRCL Railway Corporation Limited LB Local Body LIRR Long Island Rail Road LRT Light Rail Transit MC Municipal Corporation MCA Military Authority MLIT Ministry of Land, Infrastructure, Transport and Tourism MoRTH Ministry of Road Transport and Highways MRVC Mumbai Railway Vikas Corporation MSA Metropolitan Statistical Area MSR Mumbai Suburban Rail MTA Metropolitan Transportation Authority MTRCL Mass Transit Railway Corporation Limited MTT Metropolitan Transport Teams MMRC Rail Corporation MMRDA Mumbai Metropolitan Region Development Authority MMR Mumbai Metropolitan Region MMRC Mumbai Metro rail Corporation MMTS Multi-Modal Transport System MNCR Metro-North Commuter Railroad MRTS Mass Rapid Transit System MTA Metropolitan Transportation Authority, New York MTA Metropolitan Transit Authority (The Met) of Melbourne MTP(R) Metropolitan Transport Project (Railways) MRTS Mass Rapid Transport System MRVC Mumbai Railway Vikas Corporation Ltd. MTSU Mumbai Transformation Support Unit MUTP Mumbai Urban Transport Project NFTA Niagara Frontier Transportation Authority NCR North Central Railway NCU National Commission on Urbanisation NER North Eastern Railway NIUA National Institute of Urban Affairs NSE North South East NR Northern Railway NTPC National Transport Policy Committee NUTAI National Urban Transport Authority of India NUTP National Urban Transport Policy O&M Operation & Maintenance PC Planning Commission PPP Public Private Partnership PRC Peoples Republic of China PRASA Passenger Rail Agency of South Africa PT Public Transport PTCS Pallavan Transport Consultancy Services PTE Passenger Transport Executives PWD Public Works Department RATP RégieAutonome des Transports Parisiens (English: Autonomous Operator of Parisian Transports) RCIL Railtel Corporation of India Limited (RCIL) RDC Rail Development Corporation

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

RDA Rail Development Authority RDFSA Rede Ferroviária Federal Sao Paulo RER Réseau Express Régional (French), (English: Regional Express Network) RITES Rail India Techno Economic Services RLDA Rail Land Development Authority RMSP Região Metropolitana de São Paulo RoW Right of Way RRS Regional Rail System RRT Rapid Rail Transit RVNL Limited SAR Special Administrative Region SCR South Central Railway SER South Eastern Railway SL Storstockholms Lokaltrafik (Stockholm’s regional transit system) SJ Statens Jarnvägar (Swedish State Railways) SNCF French National Railway Company SP State Police SPMR Sao Paulo Metropolitan Region SPUR Special Priority Urban Regions SPV Special Purpose Vehicle SR Southern Railway SRDC Suburban Rail Development Corporation SRDA Suburban Rail Development Authority SRO Suburban Rail Operator SRSSA Suburban Rail System Service Area STB Surface Transportation Board STIF Syndicat des transports d'Île-de-France STC State Transport Corporation STM State Department of Metropolitan Transport (Sao Paulo) TA Technical Assistance TC Transit Corporation TC Transport Commissioner TfL Transport for London TMBT Tokyo Metropolitan Bureau of Transportation TO Transit Operator TOCs Train Operating Companies TRTA Teito Rapid Transit Authority TP Traffic Police UMTA Unified Metropolitan Transport Authority UK United Kingdom URA Urban Renewal Authority UTF Urban Transport Fund VBB Verkehrsverbund Berlin-Brandenburg WR Western Railway

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

Executive Summary

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

1. Study Objectives

The objective of the study was - "to support initiatives by Indian Railways for the implementation of their Strategy for Suburban Rail (as set out in Vision 2020) through development of legal and institutional arrangements within IR for the future ownership, planning, expansion, management, financing and operation of suburban rail services with a specific case study of Mumbai Suburban Rail System, for such arrangements and the proposed partnership arrangements between IR and State Authorities". 2. Context & Issues

India’s urban population is expected to grow by over 10 million each year for the next 20 years. Existing rail corridors are often the only available, unobstructed, potential higher order transit corridors yet to be exploited. Transportation planners in urban centres, often want to capture any available capacity on these corridors for urban rail transport. Understandably IR is often reluctant to grant access to their rights of way, in order to protect their core business activity-carrying inter-city passenger and freight traffic. In many cities across the world, the need for rail freight to enter city centres is diminishing, as freight handling moves to containers, which requires truck/train intermodal yards, often are best located on unencumbered large land parcels on the periphery of a city. This can afford the opportunity for railway rationalization and freeing up rail corridor capacity.

One of the key problem areas of dealing with suburban rail in that the fare tariffs for rail passenger travel has been artificially depressed to the point that it is negatively impacting the viability of new rail or road based transit projects particularly in urban centres like Mumbai. Currently the Mumbai suburban rail system is carrying 8.0 million passenges per day yet is operating at only a 50% recovery rate on operations, largely due to high inflation over multiple years and marginal increses in fares.

The delemma facing IR and possible measures that may be undertaken are illustrated by comments made in the Interim Report, March 2015 of the Mr. Bibek Debroy Committee1. a) “there are no convincing argument in favour of low user charges across the board. If subsidies are warranted for those who are poor there are better ways of targeting them, such as direct benefit transfers.”(page 23); b) “If the government, as opposed to the market, wants Railway operators (public or private) to provide certain services that fall short of market terms (such as an unviable route or unviable fare for poor passengers) both IR and private operators will be obliged to provide them as long as the government (Union or State) commits itself to pay for the shortfall.” (page 40); c) “As an end goal suburban services should be separated and run as JV’s with State and/or local governments” (page171); and d) “Suburban railways should be hived off to State governments, via the joint venture route. Until this is done, the cost of low suburban fares, if these fares are not increased, must be borne by state governments on a 50/50 basis with MOU’s signed with the State government for this purpose” (pages 181/182).

Many of the above recommendations were not included in the Final Report, June 2015 of the Bibek Debroy Committee largely because. “The interim report had too many things” But they are perhaps indicative of the potenial policies and institutional options of the Centre in continuing suburban rail oprtations.

1 In September 2014, the Ministry of Railway constituted a Committee, under the Chairmanship of Mr. Bibek Debroy, for looking into the possibility of mobilization of resources for implementing rail projects, as well as providing recommendations for restructuring the Railway Board, for making it more efficient.

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

3. Proposed Institutional Arrangements

3.1 Options Evaluated

Several alternative institutional options were evaluated using a wide range of criteria, the main variance being the complexity and ease of implementation. It was concluded that a phased implementation approach was preferred with the initial step of enhancing the role of MRVC and the establishing a zonal railway for the region. But the there is an immediate need to commence the process of creating an enhanced statutory empowered Mumbai Urban Transport Authority and an associated “ring fenced” Urban Transport Fund.

3.2 Preferred Institutional Arrangements

The MoUD National Urban Transportation Policy (NUTP) and the subsequent more specific processes to establish statutory empowered Urban Metropolitan Transportation Authorities (UMTA) and “ring fenced” Urban Transport Funds (UTF), provide reasonable and proactive steps to properly structure the provision of urban transport, with suburban rail being one of the potential modal elements. It is proposed that States and/or local urban authorities should lead and implement this process. However it inevitably will involve partnerships with all levels of government and we believe parties or stakeholders contributing significantly towards the UTF’s. This may be a lengthy transitional process. But understanding the end goal and having rationalized interim arrangements put in place to address shorter and medium term needs, will be absolutely necessary with the backlog of transport issues, evidenced in India’s metropolitan regions

Even in well-established city regions like London, Tokyo, Seoul, Paris and New York the process of delivering high quality urban transport are continuously evolving. The need for this rethinking is the consequent of our

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

limited ability to forecast changing circumstances, which are often outside the control of an individual metropolitan region. Having flexible and resilient urban transport delivery plans and structures is more important than a one vision long term plan. Planning for progressive changes in institutional arrangements is strength not a weakness.

With this perspective in mind, this study has concluded that efforts to establish longer term arrangements such as empowered UMTA’s and UTF’s must be done in parallel with more attainable shorter term enhancements to meet immediate needs. This will involve extensive negotiations between the urban transport funding partners in Mumbai Metropolitan Region and suburban rail in Mumba is effectively urban transit.

In MMR, the suburban rail system is operated by the Western and Central Railway. These zonal railways are vested with operation of inter-city passenger and freight as well as suburban operations within their jurisdiction. Recent data on the suburban rail system indicate that operating cost recovery from fares has fallen to approaching only 50% 0f operating costs with subsidy requirements reached to INR 1,110 crore during 2013-14. And is likely to reach INR 1400 crores during 2014-15. The Mumbai bus system (BEST), although being cross subsidized by electricity charges, reported an operating loss of INR 776 crore in year 2014-15. Operating losses of the first phase of the system and Metro are further adding to economic challenges for urban transport. When the capital requirements for both new transport projects and state of good repair and the upgrading of existing aging infrastructure, is added to the investment needs it is very clear that new institutional resource mobilization measures are required to be put in place as early as possible. This was addressed in the Comprehensive Transportation Study carried out by MMRDA during 2005-08, but little progress has been made to date to address this issue. A complicating factor is that it is now generally accepted that providing good quality public transport has many social and economic benefits outside of the fare box.

Since IR has many reservations on continued funding of deficits of suburban railway operations, which they deem not part of their core responsibilities. They have voiced the opinion that State governments should step forward to fill the financial voids of suburban rail operations. Since IR believes that constitutionally;

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

urban transport is a State responsibility. MUTP I & II were seen as a step in this direction. However this is a complicated issue since the operations and funding of the passenger rail services of IR has addressed many transportation, social and economic factors that vary widely across India and effectively rail fares are set by the Union government. Providing a sound, transparent and dependent source of funding for urban transport, which in Mumbai’s case includes the suburban rail system, is a key element of any institutional arrangement. Consequently, it was concluded that any resilient arrangement for the suburban railway could only be put in place in conjunction with and in parallel to setting up of a statutory empowered Urban Transport Authority and related Urban Transport Fund. This conclusion was driven by the inevitable and perhaps large financial implications of downloading suburban rail services responsibilities to the State. Potential sources of funding for Urban Transport Fund (UTF) are presented in the figure2 The principle of “growth should pay for growth is explicit in these funding sources.

The following figure illustrates a possible structure to negotiate and define the respective roles and undertakings of UMTA and IR in planning, funding and operating the suburban rail system in the MMR which should be initiated through the current UMTA. A key factor in this negotiation process would be the interim and ultimate ownership of existing railway assets which will greatly influence the eventual institutional partnerships. This could likely involve transitional arrangements as the various agencies demonstrate their capability to effectively manage the responsibilities being transferred. At this time it was concluded that, for the foreseeable future, IR or possibly a new subsidiary of IR, should continue to operate the suburban trains under a contractual arrangement through an Enhanced UTA ,which should ultimately include all major urban modes of travel.

UMTA Composition • State Representatives “Ring Fenced” Enhanced UMTA • ULB representatives Urban Transport Inc. Financing Division • Centre representatives Fund including IR • User representatives • Representatives of other Examples of UTF Potential Sources Multi-modal Authority significant contributors • Establishes Participating Agency to UTF Partnership Agreements • Prepares Business Plans • Defines Service Levels & Performance Criteria by Modes • Establishes Modal Fare Tariffs • Secures Capital & Operating Funding/Financing Commitments Negotiate Incremental Prime • Develops Multi-modal Expansion Arrangements with Indian Railways Plans on: • Contracts Delivery of Modal Services • Ownership/use of suburban rail Through Subsidiary Agencies & assets Monitors Performance • Tracks ,yards, shops, and ancillary facilities • ROW/Lands/Property UMTA Suburban Rail System • Stations Negotiates • General terms and conditions Detailed Arrangements of operating suburban train Progressively with IR services on behalf of UMTA including fiscal Enhanced Regional Suburban arrangements MRVC Role Rail Corporation

The consulting team heard a variety of opinions on the future options for Mumbai. However it was found to be difficult to establish one voice opinions that reflected the position of the State, IR or the Centre. Perhaps

2Source: Ministry of Urban Development’s study on “Developing Operations Documents for Urban Metropolitan Transport Authority (UMTA) and Urban Transport Fund (UTF) by Deloitte Touche Tohmatsu and Voyants Solutions

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

positions are evolving too, because the issues are complex and such steps as downloading or clarifying investment and operational responsibilities and raising fare tariffs are political hot potatoes that are beyond the mandate of the individuals we consulted with.

It is recommended that through existing UMTA, a high level meeting is convened with key representatives of the State, IR and the Centre to review the recommendations of this study and if there is concurrence, to firm up the negotiation process with the objectives to formulate the structure of an enhanced UMTA, establishing the UTF and identifying the preferred institutional arrangements, for the longer and immediate term operations of the suburban rail system in the MMR and possible timeframes for implementation. If possible a mandate should be given to an empowered Implementation Group to negotiate the details of any restructuring arrangements including the legal steps, financial undertakings and approval processes. Clearly political input will be required during this process.

While the above is being carried out it is recommended that, the Enhanced MRVC as proposed in this report, be put in place together with a Time Bound Action Plan to execute an agreed program of further improvements to the suburban rail system. This will involve financial commitments from the State, IR and possibly the Centre and funding from lending institutions.

3.3 Enhanced MRVC Model (Interim Arrangement)

It is suggested that, there should be a separate zonal system for suburban rail operations called Mumbai Suburban Rail (MSR) and would effectively assume the suburban rail responsibility of Western and Central Railway. MSR would take over all the suburban operations and maintenance of all railway infrastructure and control of train movements including all long-distance services terminating or passing through the zone from Western and Central railways. The operational jurisdictions of Western Railway and Central Railway would be redefined after creation of MSR. A Suburban Rail Operator (a subsidiary of IR) will need to be formed for operational stability and efficiency. It is proposed that an “Enhanced MRVC” model is set up which is an institutional change to the existing MRVC which would include at least the following steps that would be subject to the approval of all funding partners: a) Determine participating Central Government Partners - IR, Ministry of Urban Development (MoUD), Ministry of Finance and others; b) Determine participating State Agency Partners; c) Prepare new MRVC Incorporation Agreement; d) Establishing a Suburban Rail System Service Area (SRSSA); e) Establishing the principle of setting rail fare structures within SRSSA independent of other suburban rail systems in India; f) Establish SRSSA fares to be a revenue source to MSR/MRVC; g) MRVC to prepare and obtain approvals of Annual and 5 Year Business Plans and Operating Budgets, including financial requirements of partners, and defining clear roles and responsibilities of partners. Establish financial and procedural agreements/arrangements for services being provided by partners and/or being outsourced; h) MRVC to prepare and obtain approval of 5, 10 and 20 year Business Plans (short, medium and long term) and Budgets for Capital Projects to maintain the suburban rail system in state of good repair, to achieve approved service levels and to accommodate future growth; i) Establish the principal of optimizing the transit supportive development of surplus non-operating railway lands within the SRSSA for development by the private sector and including agreement that resulting funds be allocated to implement the SRSSA capital program. j) Formulating mechanisms for effective coordination among the various stakeholders: k) Continued segregation of main line and suburban operations:

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

l) Fast all non-fare box revenue sources like advertisement, commercialization of stations, land development, etc.; and m) Efforts to raise the capital funding from FDI, multi-lateral funding agencies, etc.

4. Expediting Projects

There are immediate concerns being voiced by many agencies involved with major infrastructure projects in MMR (including MRVC), on resolving, in a timely manner issues, which are causing significant delays in project execution. Currently with the multiplicity of agencies involved in the public realm and the lack of urgency and designated authority to quickly resolve multi-jurisdictional issues. This is causing inordinate and often publically criticised project delays, A single point agency with either the authority make decisions on issues, or at least to mediate disputes in a time bound manner, is required.

5. Application of Recommendations to Other Indian Cities

Based on a review of the current status of implementation and planning of higher order public transport in other metropolitan city regions (, Chennai, Delhi, , , , , and others), it is concluded that there may be merit in applying the MRVC partnership model (or enhanced models) with respect to existing or proposed suburban rail systems. However each urban region in India, either having a suburban rail system or aspiring to establish a suburban rail system, will have its own unique set of characteristics, current institutional arrangements, and immediate and long term planning and economic development objectives. The MRVC model and the enhancements described in the report are suggested as good practices to be considered by these metropolitan regions. There is no “cookie cutter” approach. Each metropolitan region will have to tailor make its own urban transport delivery plans including, if appropriate, an integrated suburban railways component. The need for an “Enhanced UMTA” is seen as a critical step in this process.

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

Section 1: Background

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

1. Urban India is Experiencing Massive Growth and Trying to Transform

Urban India is experiencing rapid and massive growth. The infrastructure systems of Urban India are faced with enormous pressures to accelerate transformation to meet social, economic and environmental demands and expectations.

This challenge is a world-wide phenomenon, as metropolitan regions have to reinvent the way urban transportation is provided and managed, with ever changing political and economic considerations.

Historically, for various reasons, Urban India and particularly the metropolitan cities have been deficient in terms of its infrastructural systems, including the transport systems.3

Given the problems and levels of deficiencies, that exist in the transport systems, across urban India, the governments and/or agencies are making serious and concerted efforts, in planning, engineering, operations, management and implementation of the transport systems to ensure enhanced mobility by providing efficient and safe access and relief to commuters.

Further, cities and metropolitan regions are making efforts to meet the expectations communities. In the process they are also trying to position cities, which are considered engines of economic growth at - state, national and international levels. Despite the best of intentions this has been more than a challenge, , as the size and extent of deficiencies are so enormous.

Suburban rail systems operated by Indian Railways have been playing and can play an important role, in some major cities. The planning and development of multi-modal transportation systems are recognised to be very important in meeting the intended objective of city transformation and relief to communities.

In this context, it is important to note that governments desire address through appropriate institutional reforms for efficient delivery of transport systems to meet the huge and ever growing travel demand. The questions concerning the respective roles and responsibilities of the Central and State governments in providing integrated urban transportation are a key issue that needs to be addressed. This TA is an effort in that direction.

3 Population growth in major cities is experiencing huge growth. Size of it is massive both in terms of population and but also in physical terms. As a result the trips and trip lengths have been increasing at an alarming rate. This has led to exponential growth in travel demand. Needs of travel demand are many and huge. Meeting needs of essential trips in itself is becoming a matter of serious concern, given the extent of deficiencies in the existing systems. The available infrastructure, however, is limited. Hence there is a requirement of high capacity transport systems, which need to be made suitable for the commuters, in terms of efficiency and comfort. Sub Urban Rail system has proved to be the most efficient mode of mass transport in Mumbai Metropolitan Region, although its role in India is limited to a few cities only. However, with time, with the growing need for having energy efficient systems in the area of urban transport, the need of utilizing (and developing) sub urban rail is seen as one of the best option. This is only expected to increase over years.

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

2. Focus of this Technical Assistance (TA) The present TA intends to explore the possibility of having an institutional set- up, wherein the state level transport authorities have their independence in planning and providing for the suburban rail system, and at the same time to operate within the framework provided by the Indian Railways.4

3. Objective and Scope of Services under this TA The objective of this study is - "to support initiatives by Indian Railways for the implementation of their Strategy for Suburban Rail (as set out in Vision 2020) through development of legal and institutional arrangements within IR for the future ownership, planning, expansion, management, financing and operation of suburban rail services with a specific case study of Mumbai Suburban Rail System, for such arrangements and the proposed partnership arrangements between IR and State Authorities".

In order to accomplish the stated objective, the scope of TA2 has been defined under two parts:

Part A: Development of the Suburban Rail Strategy for IR, which includes suggesting modifications in existing, or new institutional arrangement for the Suburban Rail Organisation at the city or state level, after having undertaken a detailed review of the existing setup and have referred to the best practices elsewhere in the world.

Part B: Case Study of Mumbai Metropolitan Region, which includes suggesting an MMR Suburban Rail Organisation, having discussions with the Indian Railway on the institutional arrangement suggested in Part A.

Detailed scope of services is given at Annexure 3.1.

4 Presently all the sub-urban rail systems are being managed by the Indian Railways. Each city has a different kind of travel demand and commuter characteristics. It is not possible for one national level nodal agency to cater to city specific requirements. In order to keep up with the fast pace of growth of urban transport demand, it is strongly felt that there is a need of separate and one agency at the state or city level, which can efficiently assess, plan and provide for the mobility requirements of the communities. This was appreciated by the Planning Commission way back in 1965, when it took the initiative to set up Metropolitan Transport Teams (MTT) to study the transport problems of the first four metropolitan cities of Bombay, Calcutta, Delhi and Madras and to recommend policies and programs for their improvement. Various expert committees/studies have recognized this fact and have suggested setting up of Metropolitan Transport Authority at the city level. This leads to the need for having a separate sub urban rail system, and associated institutional reform at various state/city levels. Hence, MRVC, on advice of Ministry of Railways, with assistance from the World Bank, under MUTP 2A have initiated this TA, which is called TA2, to study this important aspect.

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

Section 2: Problem Setting

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

4. Role of Sub Urban Rail Systems in Urban India Suburban rail system plays a major role in the public transport system of many of India's major cities. It is defined as a rail service between Central Business District and suburbs, a city or other locations that draw large numbers of people on a daily basis. Mumbai and Kolkata have suburban train service and have separate tracks laid for the operations of suburban railway network. Chennai, Delhi, Hyderabad, , etc. do not have dedicated suburban tracks but share tracks with long distance trains. Suburban trains that handle commuter traffic are mostly electric multiple units (EMUs). Detailed insights to Sub Urban Rail Systems in India are given at Annexure 4.1. In 1950-51, the number of passengers availing of suburban rail operations was 412 million, which grew more than eleven fold to 4,552 million by 2013-14. In terms of passenger-km, however, it grew from 6,511 million in 1950-51 to 1,68,589 million by 2013-14, which is about twenty six times increase over a period of six decades. Over the same time, average lead length doubled from 15.8 km to 37.0 km, due to the expansion of the cities. Demand for suburban passenger travel in India has been growing at an annual rate of 3.6% between 2001 and 2014. Between 2011 and 2012 the growth rate went up to 7.8% and further decreased to 1.7% in 2013-14. In terms of passenger-km, the demand has shown a growth rate of 5.0% between 2001 and 2014. With this demand situation it is therefore vital that the Suburban systems play an important and integrated role in meeting the urban travel demand of people. The more progressive metropolitan regions across the world have found it absolutely necessary to coordinate the planning, delivery and funding of all modes of public transportation including rail based systems, buses and paratransit. The institutional arrangements need to be in place to provide seamless urban travel that the travelling urban dwellers both need are now demanding. This will make it possible to have an efficient Urban India, with rapid public transport systems in place.

4.1 Suburban Rail Passenger Growth in India

Suburban passenger growth in India has been high and consistent (Table 4-1).

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

Table 4-1: Suburban Rail Passenger Growth in India No. of passengers Passenger-km Average Lead Year CAGR CAGR Originating (million) (million) (km) 1950-51 412 6,511 15.8 1960-61 680 5.10% 11,770 6.10% 17.3 1970-71 1,219 6.00% 22,984 6.90% 18.9 1980-81 2,000 5.10% 41,086 6.00% 20.5 1990-91 2,259 1.20% 59,578 3.80% 26.4 2000-01 2,861 2.40% 88,872 4.10% 31.1 2008-09 3,802 3.60% 1,24,836 4.30% 32.8 2009-10 3,876 1.90% 1,30,917 4.90% 33.8 2010-11 4,061 4.80% 1,37,127 4.70% 33.8 2011-12 4,377 7.80% 1,44,057 5.10% 32.9 2012-13 4,477 2.3% 1,45,652 1.10% 32.5 2013-14 4,522 1.7% 1,68,589 15.7% 37.0 Source: IR Year Books, IR Annual Report and Accounts, IR Facts and Figures Urban form and land-use plays a major role in the ridership of suburban rail system. This results in variation in usage of suburban railways across different cities. Daily ridership on suburban railway system in Mumbai, Pune, Kolkata, Chennai, Delhi and Hyderabad is presented in Table 4-2. City wise infrastructure and operational details are presented in Table 4-3.

Table 4-2: Daily Ridership in Suburban Railway of Different Cities (2013-14) Daily City/ Region Suburban Railway Length (km) Ridership (million) Mumbai Mumbai Suburban Railway 434 8.00 Pune Pune Suburban Railway 103 0.11 Kolkata 1172 2.80 Chennai 286 1.36 Delhi 0.37 Hyderabad MMTS and Suburban in Hyderabad 97 0.20 Source: IR Year Books, IR Annual Report and Accounts, IR Facts and Figures

Table 4-3: Suburban Railway System of different Cities Opening No of Operated by System City Notes Year Lines Mumbai Suburban Railway Mumbai 1857 3 lines Broad gauge WR, CR Chennai Suburban Railway Chennai 1931 6 lines Broad gauge SR Kolkata Suburban Railway Kolkata 1854 3 lines Broad gauge ER and SER Delhi Suburban Railway Delhi 1982 Broad gauge NR Multi-Modal Transport System (MMTS) Hyderabad 2003 3 lines Broad gauge SCR Pune Suburban Railway Pune 2 lines Broad gauge CR Barabanki-Lucknow Suburban Railway Barabanki-Lucknow 2 lines Broad gauge NR, NCR and NER Lucknow-Kanpur Suburban Railway Lucknow-Kanpur 2 lines Broad gauge NR, NCR and NER

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

4.2 Suburban Rail Operations in Major Metropolitan Areas of India

4.2.1 Mumbai Suburban Railway

The Mumbai suburban railway system acts as the mass transit system carrying about 8.0 million people daily (2013-14). It effectively handles the highest passenger density as compared to any other mass transit system in the world and the fare structure (on a purchasing power parity adjusted basis), is also one of the lowest in the world.

Mumbai region is served by two of India’s zonal railways, the Western Railway (WR) and the Central Railway (CR). Both railways carry a combination of suburban, long distance and freight traffic. As per the CTS for MMR, which was carried out during 2005-08, the share of travel demand being met by suburban system in 2005 was about 52% (about 7 million trips/day) with average trip length being about 24 km. In terms of pass-km the share of suburban rail system was about 78%. These numbers point to the fact that suburban rail system is the lifeline of Mumbai.

Mumbai Railway Vikas Corporation Ltd (MRVC), a public sector undertaking under Ministry of Railways, has identified and executed a number of suburban rail improvement projects for enhancing suburban rail transportation capacity, thereby reducing the crowding and meeting future passenger/ commuter traffic requirements. These works have been planned under Mumbai Urban Transport Projects5 (MUTP) for implementation in phases.

The works under MUTP 1, 2A and 2B will complete the physical separation of the major part of suburban rail system from the long distance passenger and freight operation. It is expected that demand will continue to increase further, and MRVC has put forward proposals for further expansion of system capacity through implementation of MUTP III beyond 2016. In parallel, the Transform Study, completed in 2008, has made some proposals for the expansion of the rail system by 2031. MMRDA is also planning to develop additional urban transport capacity by setting up Metro rail and monorail corridors.

4.2.2 Chennai Suburban Railway

Chennai Suburban Railway is a commuter rail system in the city of Chennai, operated by the Southern Railway, one of the operating railway zones of Indian Railways. Chennai has a complex railway network. Fundamentally Chennai has 4 suburban railway lines, namely North line, West line, South line and MRTS line. The South West line, West North line and West South line are merely minor extensions or modifications of the aforementioned suburban lines. The MRTS is a suburban railway line that chiefly runs on an elevated track exclusively used for running local EMUs or suburban local trains. No express trains or passenger trains run on MRTS line. The system uses EMUs operating on alternating current (AC) drawn from over-head conductor through the catenary system. The total

5 Indian Railways (IR) and Government of (GoM), through MMRDA, MRVC and the World Bank (WB) are implementing a comprehensive investment plan for improving and expanding the transportation network of Mumbai. This investment plan being partly funded by World Bank (WB) is termed as Mumbai Urban Transport Project (MUTP). Presently, MUTP is being executed in two phases.

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

system spans around 900 km, out of which only 286 km have dedicated dual tracks for suburban EMUs, the rest share tracks with other trains and are called mainline EMUs (). As of 2013, the suburban sector has 580 services, including 250 in the Beach– section, 240 services in the Central– section, and 90 in the Central–. As of 2011–2012, 1.46 million people use the suburban train services daily. This includes 500,000 in the Beach–Tambaram section, 350,000 in the Central–Tiruvallur section, and 100,000 in the Central–Gummidipoondi section. This is a 13.2 percent increase over the previous year.

The following new lines have been proposed in the Second Master Plan by CMDA as a long-term Urban transportation Scheme.

– – – Sriperumbudur – Kanchipuram (Partly Elevated)  Sriperumbudur – – –  St.Thomas Mount –

The Avadi–Sriperumbudur line will cover a distance of 26.65 km. The railways also plan to lay a 179 km –Cuddalore railway line via Mahabalipuram.

4.2.3 Kolkata Suburban Railway

The Kolkata Suburban Railway plays an important part in the life of daily commuters and tourists alike. It connects various parts of the city, the suburbs and the nearby districts - North 24 Parganas, , Nadia, and Hooghly districts, just to name a few. It is operated and managed by the Eastern Zonal Railway and the South Eastern Zonal Railway. The operates the underground Metro services in the city as well. There is a separate Circular Railway corridor in the city operated by ER.

The network of Kolkata Suburban Railway is operated from two main stations of the city, Howrah and . From Sealdah station, further division of the trains run to the main section and the south section. The main section connects northern suburbs and reaches close to the international and Bangladesh. The South section connects the southern part of the city and the southern suburbs. The overall suburban system length is about 1,172 km and there are 348 suburban railway stations. Daily ridership on the suburban rail system is about 2.8 millions/day (2013-14).

From Howrah Station, the Kolkata Suburban Railway connects south of Greater Kolkata and the western banks of river Hooghly. This is further bifurcated into South Eastern and Eastern section. 4.2.4 Delhi Suburban Railway

Delhi Suburban Railway service is a commuter rail service operated by of the Indian railways for the National Capital Region. This Railway service covers the city state of Delhi, along with the adjoining districts of , and other adjoining places in and . These services are mostly run using EMU and MEMU rakes. This also includes

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

passenger trains and DMU services up to in Haryana, which is also considered part of the National Capital Region. Delhi Suburban Railway uses the same tracks that are used for long distance trains. Daily ridership on the suburban rail system is about 0.37 millions/day (2013-14).

4.2.5 Hyderabad Suburban/ MMTS Railway

The South Central Railway (SCR) operates Multi-Modal Transport System (MMTS) as a mass transport system in Hyderabad Metropolitan Area in joint partnership with erstwhile Government of (GoAP). The first phase of MMTS started its operations in August, 2003, over a distance of 46 km, with 27 stations connecting Secunderabad, Nampally, Debirpura, Malakpet, Falaknuma, Madhapur and Lingampally. The Diesel Multiple Units complement the MMTS along few other suburban routes like Bolaram, Umdanagar etc. Presently 115 schedules a day are operational. In addition, Indian Railway operates 33 schedules on Secunderabad-Bolaram-Medchal-Manoharabad route as suburban service.

In May 2010, Indian Railways agreed to implement the 105 km Phase-II project of the MMTS in the same set-up as phase-I. In March 2012, the Union Cabinet Committee on Infrastructure approved up-gradation of railway infrastructure for the introduction of Phase II of MMTS in the , the cost of which is to be borne by the state as well as Indian Railways. Phase-II will integrate with the upcoming Metro at nine junctions. Phase II has been programmed into two stages. In addition to this network, Comprehensive Transportation Study (CTS) for Hyderabad Metropolitan Area (HMA) has recommended 280 km of expansion of MMTS under Phase III and Phase IV, which are to be completed by 2041.

4.2.6 Pune Suburban Railway

Pune Suburban Service, also known as Pune Suburban Railway or Pune Local Railway, is operated by Central Railways (CR). It connects Pune to its suburbs and neighbouring villages in , Maharashtra. It operates on two routes, i.e. from Pune Junction to and from Pune Junction to Talegaon. There are 5 trains which operate on Pune-Talegaon route while 18 trains operate on Pune-Lonavala route.

The Pune-Lonavala section operated 9-car services till March 2009, after which 12-car services were introduced because of heavy rush of passengers. Although CR plans to introduce 13-car services on the section, but no time frame for implementation has been fixed. According to the Railway officials, the pre- requisite for operating longer trains is extension of existing platform at some stations. Officials plan to extend the platform to accommodate 15-car services, keeping in mind future needs. There are plans for suburban operations on Pune- route which is about 84 km long.

4.2.7 Suburban Railway Operations other places: Barabanki-Lucknow and Lucknow- Kanpur

Barabanki-Lucknow Suburban Railway (36 km) is a commuter rail service operated by Northern Railways, North Central Railway and North Eastern Railway to connect Lucknow with Barabanki. These services are mostly run using

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

EMU and MEMU rakes. However it does not have dedicated suburban tracks but share the tracks with long distance trains. Locally it is called BL meaning Barabanki Lucknow.

Lucknow–Kanpur Suburban Railway (72 km) is a commuter rail service operated by Northern Railways, North Central Railway and North Eastern Railway to connect administrative capital Lucknow with the economic and industrial capital Kanpur of the state Uttar Pradesh. These services are mostly run using EMU and MEMU rakes. However it does not have dedicated suburban tracks but share the tracks with long distance trains. It is fondly called LC meaning Lucknow Cawnpore (old name of Kanpur).

4.2.8 Planned Suburban Railway Systems in Ahmedabad and Bangalore

A suburban rail system is planned for Ahmedabad and Bangalore. In November 2011, RITES conducted a feasibility study for a suburban rail service in Bangalore and submitted its report to the Directorate of Urban Land Transport (DULT) in November 2012. The report suggested implementation of a suburban rail service in stages. The study proposed 3 long routes and 4 long distance routes, thus making up a total rail network of 440.8 km. Bangalore Suburban Rail Corporation Limited, a special purpose vehicle to implement the project, is proposed to be set up for implementing the system.

Similarly, in Ahmedabad also, a Regional Rail System (RRS) was planned by GIDB in 2003 through Delhi Metro Rail Corporation (DMRC) and RITES. The objective was to enable people to stay in satellite townships of Ahmedabad, by ensuring that they could reach their work places using the suburban rail-based transport system. state government is intending to set up a Special Purpose Vehicle (SPV) to launch its ambitious regional railway project to connect towns around Ahmedabad, covering 288 km.

4.3 Emerging Urban India and Potentials of Suburban Rail

In 2011, about 377 million persons (31.2% of total population) were living in urban India and this is the second largest urban population in the world. The urban population is expected to rise to about 38% by 2026 (535 million). In 2011 there were 53 urban agglomerations, with population more than one million.

Government of India’s National Urban Transport Policy (NUTP) primarily focuses on the mobility of people, and not the mobility of vehicles. This requires the public transportation system to be more attractive for users. The challenge for improved public transport is to provide good quality service at an affordable price. All the million plus cities need one or the other form of public transport systems or combination thereof, depending upon the size of the city/ region, to contain the traffic congestion, reduce the pollution levels, provide affordable, safe and secure transport facilities. The public transport options vary between relatively low cost buses operating in mixed traffic, to high cost rail based suburban system/metros system. Moreover the size, urban configuration and physical constraints of a city, greatly influences the provision of viable modes of transport. In recent years the explosion of private modes of mechanized transport is compounding city

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

congestion, but this phenomenon has been partly driven by inadequate mobility provided by public transport which has not kept pace with urban growth and intensification. In addition, for a variety of reasons, institutional reform and capacity building has not responded to the many challenges associated with introducing and implementing public transport system improvements.

Projected population of twenty major urban agglomerations, by 2041 is expected to be about 195 million (Table 4-4). The actual suburban rail passenger demand in India, during the period 1950 to 2012 has been studies, and possible growth by 2031 has been assessed (Table 4-5) to be about 3 times of what it was in 2011-12, and in terms of passenger-km it is expected to be about 2 times. Table 4-4: Population Growth-Major Urban Agglomerations of India Population (in Millions) Projected Population (in Millions) S. No. UA State 1991 2001 2011 2021 2031 2041 1 Mumbai Maharashtra 12.60 16.43 18.41 21.63 24.54 27.45 2 Delhi Delhi 8.42 12.88 16.31 19.94 24.38 28.33 3 Kolkata 11.02 13.21 14.11 15.87 17.42 18.96 4 Chennai 5.42 6.56 8.70 10.17 11.80 13.44 5 Bangalore 4.13 5.70 8.50 10.48 12.66 14.85 6 Hyderabad Andhra Pradesh 0.87 5.74 7.75 11.66 15.10 18.54 7 Ahmedabad Gujarat 3.31 4.53 6.24 7.62 9.08 10.55 8 Pune Maharashtra 2.49 3.76 5.05 6.32 7.60 8.88 9 Gujarat 1.52 2.81 4.59 6.04 7.57 9.10 10 1.52 2.32 3.07 3.86 4.64 5.41 11 Kanpur Uttar Pradesh 2.03 2.72 2.92 3.45 3.89 4.34 12 Lucknow Uttar Pradesh 1.67 2.25 2.90 3.50 4.12 4.74 13 Maharashtra 1.66 2.13 2.50 2.93 3.35 3.76 14 Ghaziabad Uttar Pradesh 0.51 0.97 2.36 3.13 4.05 4.97 15 1.11 1.51 2.21 2.71 3.26 3.81 16 Tamil Nadu 1.10 1.46 2.15 2.62 3.15 3.67 17 1.14 1.36 2.12 2.52 3.00 3.49 18 Bihar 1.10 1.70 2.05 2.56 3.04 3.51 19 Kerala 0.80 0.88 2.03 2.47 3.08 3.70 20 Kerala 0.28 0.33 1.85 2.40 3.19 3.98 TOTAL 62.70 89.25 115.82 141.88 168.92 195.48 Source: Census of India (1991, 2001 and 2011), Consultants estimates (2021, 2031 and 2041)

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Table 4-5: Potential of Suburban Rail Growth in India

Suburban Year No. of passengers Passenger-km Average Lead CAGR CAGR Originating (million) (million) (km) 1950-51 412 6,511 15.8 1960-61 680 5.1% 11,770 6.1% 17.3 1970-71 1,219 6.0% 22,984 6.9% 18.9 1980-81 2,000 5.1% 41,086 6.0% 20.5 1990-91 2,259 1.2% 59,578 3.8% 26.4 2000-01 2,861 2.4% 88,872 4.1% 31.1 2008-09 3,802 3.6% 124,836 4.3% 32.8 2009-10 3,876 1.9% 130,917 4.9% 33.8 2010-11 4,061 4.8% 137,127 4.7% 33.8 2011-12 4,377 7.8% 144,057 5.1% 32.9 2012-13 4,477 2.3% 145,652 1.1% 32.5 2013-14 4,552 1.7% 168,589 15.7% 37.0 2016-17 5,074 3.0% 183,857 5.0% 36.2 2021-22 5,741 2.5% 223,691 4.0% 39.0 2026-27 6,338 2.0% 259,319 3.0% 40.9 2031-32 6,828 1.5% 286,309 2.0% 41.9 Source: Indian Railways (for the period 1950-51 to 2013-14) and Consultants estimates (for the period 2016-17 to 2031-32) Based on the forecasted urban population and the role of the existing suburban systems, the future suburban rail passenger growth and the potential for suburban rail expansion in major cities of India is assessed (Table 4-6). Given this enormous growth, there seems to be a significant increase in demand for sub urban rail system in India in future.

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

Table 4-6: Potential for Suburban Rail Expansion/ Creation in Major UAs of India Presence Potential Projected Passengers/ of for Sl. Population day (in Proposed Extension of Suburban UA Suburban Expansion/ No. by 2041 (in Millions) in Lines/Regional Rails Rail Creation of Millions) 2013-14 System in Future 1 Mumbai 27.45 Yes 8.00 Yes MUTP II and MUTP III, MRVC 2 Delhi 28.33 Yes 0.37 Yes IRBT 3 Kolkata 18.96 Yes 2.80 Yes 4 Chennai 13.44 Yes 1.36 Yes Second MP by CMDA 5 Bangalore 14.85 No Yes 204 km, DULT/ BSRCL 102 km under MMTS + 280 km as 6 Hyderabad 18.54 Yes 0.20 Yes per CTS 7 Ahmedabad 10.55 No Yes RRS (288 km) 8 Pune 8.88 Yes 0.11 Yes Pune - Daund Route (84 km) 9 Surat 9.10 No Yes 10 Jaipur 5.41 No Yes 11 Kanpur 4.34 No Yes 12 Lucknow 4.74 No Yes 13 Nagpur 3.76 No Yes 14 Ghaziabad 4.97 No Yes 15 Indore 3.81 No No 16 Coimbatore 3.67 No Yes 17 Kochi 3.49 No No 18 Patna 3.51 No Yes 19 Kozhikode 3.70 No No 20 Thrissur 3.98 No No Total 12.84 Source: Consultants estimates and websites of Indian Railways and wikipedia

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

5. Indian Urban transport – issues and perspective Indian Urban Transport has been and is under distress. Reasons for this are many. Deficiencies in provision of supply have been one key aspect. Studies undertaken suggest that there is huge gap between demand and supply. Throughout India, transportation plans have been evolved that call for high levels of capital investment for rural, intercity and urban transport improvements. Recent studies done for MMR and Hyderabad revealed that investments needed were to the tune of US $ 50 billion and US $ 40 billion up to 2031 and 2041 respectively. Studies also document that the service levels have dropped, given the deficiencies in the existing transport systems which is impeding economic growth objectives.

Urbanization and Urban Transport has been reviewed in India by many studies commissioned by then Planning Commission, Ministry of Urban Development and other Policy Documents prepared at national level. Detailed note on Indian National Transport Committees and Policy Documents is presented in Annexure 5.1. Detailed Perspective and insights on Urban Transport briefly is described in ensuing sections.

5.1 Study on Traffic and Transportation Policies and Strategies in Urban Areas in India

The study undertaken for Ministry of Urban Development on “Traffic & Transportation Policies and Strategies in Urban Areas” by Wilbur Smith Associates in 2008 is the most recent national level effort. Key aspects of study on the Traffic and Transportation Policies and Strategies in Urban Areas of India are:

 Between 1950 and 2000 the global urban population has more than tripled to 2.86 billion. The urban population is further forecasted to increase by 80 million every year. By 2020, 77% of the global urban population (3.26 billion) is expected to be in developing countries.  Public transport systems have not been able to keep pace with the rapid and substantial increases in demand over the past few decades. The understanding that the public transport system in every city is falling short of meeting the increasing demand as well as the expectation level of the users.  Unless problems are remedied, poor mobility can become a major dampener to economic growth and also cause quality of life to deteriorate.  Further some of the study findings are:  The share of personalized modes, especially of two wheelers, have gone up leaps and bounds clocking 12% per annum in the past two decades, while public transport has generally dwindled;  Operating bus services in congested streets have become increasingly difficult in congested networks with turnaround times increasing by the day. Fleet sizes in nearly all public undertakings have declined rather than grown to meet the demand;

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

 Another important observation is the decline of NMT especially cycling. Congestion, increase in trip lengths due to urban sprawl, increase in purchasing power of people and totally inadequate facilities for cycling have all contributed to reducing cycling to less than 11% of the mode share which is down from nearly 30% in 1994. And for pedestrians our city roads have simply forgotten they exist. The percentage of roads with pedestrian footpaths runs to hardly 30% in most cities; and  The share of Public Transport over years is observed to have gone down.  Trip Length: With the increase in the sprawl of the city and the job opportunities being pursued by people seeking pay and career advancement, is driving up the average trip lengths making mechanized travel essential for a growing segment of the population. The management of urban transport infrastructure investment needs efficient and evidence based criteria to properly guidance, planning, sustainability, adequate provisions for their maintenance and safeguard. Apart from the required fund, adequate expertise and proper institutional mechanism to implement the urban transport infrastructure is the basic requirement. Further, study also emphasise that the institutional framework, needs to include implementation/setting up of Unified Metropolitan Transport Authority (UMTA) on priority, development and management of central urban transport database, strengthening of existing institutional setup to enable the implementing agency to meet the ever growing urban transport demand, development of urban transport software library and clearing house for new technologies / major projects/projects involving different agencies in urban transportation.

5.2 Key Recommendations of Rakesh Mohan Committee Report 6

This report is devoted to setting the a coherent transport strategy for India in the long term horizon - 2032. The vision is to keep in place a well developed and competent institutional system for planning, management and execution of transport by the end of this period. The highlights/sector specific recommendations of report are as follows.

 The primary responsibility for urban transport should lie with state governments. Over time, urban transport responsibilities should be devolved to metropolitan and city authorities, particularly for India’s larger cities of more than 1 million  Metropolitan Urban Transport Authorities should be set up as holistic and integrated decision making and coordinating bodies with adequate technical staff.  Dedicated non-lapsable and non-fungible Urban Transport Funds (UTF) should be set up at the national, state and city levels. The UTFs should be funded in a robust manner A Green Surcharge of Rs. 2 on petrol sold across the country; A Green Cess on existing Personalised Vehicles should be levied at the rate of 4 per cent of the annual insured value for both car and two wheelers; Urban Transport Tax on Purchase of New Cars and Two Wheelers: At 7.5 per cent of the total cost of the petrol vehicles and 20 per cent in case of personalised diesel cars.

6 The National Transport Development Policy Committee (NTDPC) was constituted by the Government of India in 2010 to formulate a long-term transport policy.

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

 Massive capacity expansion of the railways must be undertaken for both freight and passenger traffic in a manner that has not taken place since independence.  This will require significant organisational reform of Indian Railways. There is need for institutional separation of roles into policy, regulatory and management functions. The Ministry of Railways (or the unified Ministry of Transport in the future) should be limited to setting policies; a new Railways Regulatory Authority would be responsible for overall regulation, including the setting of tariffs; and the management and operations should be carried out by a corporatized entity, the Indian Railways Corporation (IRC) to be set up as a statutory corporation, which would retain many of the quasi governmental powers endowed to the Railways under the current Act. Existing railways corporations such as CONCOR, DFCCIL, and the like will become subsidiaries or joint ventures of the IRC.

5.3 Financial and Institutional Study of Combined Metropolitan Rail

Operations in Bombay, 1996 - The Indian Railway Board undertook a detailed study on Financial and Institutional Study of Combined Metropolitan Rail Operations in Bombay’ under the BUTP-II in 1996. The report reviewed the institutional, legal and financial status of the Mumbai suburban rail system, consisting of the suburban sections of the Central and Western Railways. Some of the aspects covered in the study are presented and/or reproduced as under:

 Corporatization of IR to create an arm's length relationship with the government;  Institutional Section covers description of the network and operations, the institutional framework for urban transport in Mumbai, current urban transport policies for India generally, and for Mumbai in particular, relevant legal framework for the operation of suburban railways in India and property development in Mumbai, performance of the suburban system, review of institutional structures in use elsewhere in the world within which suburban railways are operated and identification of key issues that have been identified as criteria against which an alternative institutional arrangement should be assessed;  Review of organisational structures and human resources;  Patronage and revenue forecast which includes forecast of both fare and non-fare revenue;  Medium term Capital Investment Program for Bombay suburban system, based on committed and planned works as well as the rolling stock investment requirement for replacement of the existing fleet and for the provision of additional capacity in line with expected growth;  Real Estate Development Strategy for the IR land in Mumbai;  Asset Valuation which covers various issues pertaining to fixed assets with specific emphasis on requirements for the BSRO;  Financial Model development for BSRO;  Five Year Business Plan and financial projection for Mumbai suburban rail operations and BRDC under interim option (recommended through the study) and outline of Business Plan for BSRA under the long term option(recommended through the study); Action Plan with a supporting time line to transform the institutional structure of Mumbai suburban rail system from the then arrangement to interim option and thereafter to the long term option.

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

6. Institutional Arrangements for Urban Transport in India

Urban and urban transport management has become very critical. The institutional and governance needs specific attention, as these are under some level of discussion since early 1980s. By late 1990s or early 2000 the need for urban transport authority is being felt. Formally, in the first national urban transport policy (NUTP), the Government of India (GoI) has advised that there should be a single Urban Metropolitan Transport Authority which is unified to look after the urban transport planning, engineering, operations and management, as UMTA. Given that this thinking has been there for a quite a while, and some studies and plans recommended UMTA for metropolitan areas. These include - Delhi, Mumbai and Hyderabad. Although steps have been taken to set up UMTA’s they fall well short of the intent of the GoI policy objectives and recommendations. This suggests that there are either fundamental issues of intent, or perhaps, difficult to overcome political or institutional impediments to the implementation of the UMTA policy that needs higher levels attention and resolution. India is not alone in comprehensively addressing urban transport. Even in metropolitan regions, having advanced and integrated arrangements for urban transport, the processes and responsibilities continually evolve and are subject to periodic rationalization and modification. The key is to aggressively commence the process of implementation even if the ultimate integration goals may take many years to achieve.

Recently, the GoI, (MOUD) is making new efforts to consult with stakeholders, to fully establish UMTA in the larger metropolitan regions across India. Implementing commitments at the State level will be fundamental to the outcome. A critical issue is the constitutional inability of a Metropolitan Region effectively raises resources and independently manages the funding of regional scale infrastructure and service programs. International experiences reveal that, even where there a well-structured metropolitan agency, funding partnerships are necessary between all levels of government. Further the funding mechanisms being employed by agencies target a wide array of resource opportunities well beyond direct user charges.

While above are crucial to urban transport, the following other major issues have been identified, each of which needs to be addressed, if the problems currently faced by the railway are to be successfully overcome:

a) At national level, the present institutional structure of Railway Board focuses more on inter-city passenger services and freight services, as providing these services is considered its prime responsibility. Its focus on provision of suburban services is taken as a secondary responsibility. In the recent past, some of the state governments, with the help of MoUD are implementing the metro systems (Mumbai, Bangalore, Chennai,

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Hyderabad, Kolkatta, Jaipur, etc.) and BRTS (Pune, -, Ahmedabad, , etc.). Brief details on Urban Public Transport Scenario in India is presented in Annexure 6.1. In most of the cases, the plans are implemented without proper coordination among the major stakeholders. Each organisation conceives the project keeping in mind their own organisational strategies without following a rational and holistic approach for the city/ region. There is a need for good coordination between central government ministries which are responsible/ relevant for urban transport7; b) Despite their challenges, suburban railway services in Mumbai, Kolkata, Chennai, etc. operate remarkably well, providing a service that is generally reliable. However, the challenges faced by the suburban railway system vary from city/ region to city/ region. Mumbai faces the challenges of inter alia, limited funding, severe overcrowding, encroachment into the right-of- way by squatters’ hutments and into station approaches by retailers and hawkers, delays at level crossings and poor track drainage. Any organisational or institutional changes must not create any risk of reducing the operational efficiency of the system in any way and should be carefully designed to ensure the maximum focus on suburban operations; c) In order to operate efficiently, there needs to be a significant amount of cooperation between the railways, state government and local government. On the railways’ side, their biggest single operational problem is their inability to control their right of way, in particular, issues such as encroachment, level crossing delays and poor track drainage. On the state government side there does not appear to be any mechanism or incentives by which any accountability can be established for the quality of suburban railway services; d) The capital funding arrangements for the suburban railway system appear to be unclear and arbitrary. IR is unwilling to invest in suburban systems as a matter of policy, whilst the state governments seem reluctant to invest in a system over which they have very limited neither control nor ownership of the asset being created. IR’s view appears to be partly based on fears of setting precedents, as well as the view that the suburban services are inherently incapable of repaying any investments made. The net effect is that capital funds are limited and fail to keep pace with system requirements; e) Surveys have indicated that passengers in Mumbai are prepared to pay higher fares for better quality services. Fares are currently constrained to a common level throughout India, although this is a matter of policy rather than a strict legislative requirement. Increasing local fares in a particular city/region, like Mumbai suburban area where the people are willing to pay more, would increase the funding available for capital works; and f) One of the major sources of funds for the proposed investment programme is planned to be surplus revenues from property development of either

7 MoUD is planning to setup a National Urban Transport Authority of India (NUTAI) and has set up a Working Group for drafting the law. NUATI comprises representatives from various Central Government Departments, State Governments and Institutions working in the field of urban transport. A draft of the NUTA Bill has been prepared by Urban Mass Transit Company (UMTC) which is under review. Hope NUTAI would become a platform for discussions/ debates on policies towards planning, coordination, institutional and sources of funding for urban transport infrastructure.

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

redundant railway land or air space above the operational railway. Experience throughout the world has shown that income from land will be maximized if the land is managed by a specialist property development group, rather than being handled as part of a railway’s general civil engineering activities. Such a group would also need to be able to function without being constrained by the cumbersome bureaucratic procedures, typically in use within Government agencies such as IR. The group would need to be supported by simple institutional mechanisms to enable income from the development of railway land in major metropolitan areas (where suburban railway system is under operation) to be channelled into investment in the suburban railway network. The mechanism would also need to provide an effective link between land development planning and railway planning to ensure that commercial development is not authorized on land which may be required for future railway expansions/ extensions.

The issue of the need for physical separation of the different types of services is a matter of considerable debate within IR. A regime, in which the suburban trains are fully segregated from mail express and freight, by providing them with dedicated tracks, would undoubtedly provide an easier operation environment, particularly for the non-suburban operations. Nevertheless, it is not an absolute technical requirement and there are many examples around the world of high- density suburban operations sharing infrastructure with other operators under a common control. Clear operating procedures need to be established to ensure fair access to the available track capacity and cost-sharing mechanisms need to be developed. However, such problems have been overcome elsewhere and, in our view, shared use of infrastructure is not an insuperable obstacle to organisational and institutional restructuring.

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7. Mumbai Suburban Rail System- Issues and Concerns

In order to make the suburban railways efficient, it is required that the strategy formulation for the two is undertaken differently. This has been recognized by various studies/committees like Financial and Institutional Study of Combined Metropolitan Rail Operations in Bombay (1996), IR Vision 2020, White Paper on Indian Railway 2009. Beyond this the Working Group Report for Twelfth Five Year Plan on Railway Sector Organisational Reform also states the need for separation of policy making and operational responsibility at the Railway Board, reorganisation on business lines of railways wherein one of the aspects is related to maintaining separate profit-centres from long distance and suburban traffic movement and empowering the Zonal Railways.

With the incorporation of the MMRDA in 1975, a number of transport projects were implemented under MUTP. However, the World Bank emphasised the need of developing both suburban rail and road projects for MMR, since rail system for movement of commuter traffic was gaining importance. Following this, the Indian Railway, entered into an in principal agreement with the GoM, to participate in the MUTP projects on 50:50 basis. In 1999, MRVC was established to look after the implementation of the suburban rail projects being funded under MUTP. Present organisation structure of MRVC is presented in Annexure 7-1.

Issues and problems as noted are applicable to Mumbai suburban rail system. Mumbai needs similar and/or more attention, given the size of travel demand, we feel Mumbai did receive attention and an institutional set up in the form of MRVC is being set up, to part address the aspects needing attention. This need to be further refined and appropriately addressed keeping the long term needs of Mumbai Region.

In many respects suburban rail system serving the Mumbai region has more of the characteristics of an urban metro than a traditional suburban rail system. Although station spacing may be slightly longer than a metro, the high frequency of trains, travel speeds, the preponderance of intra-urban travel function and the huge number of passengers being carried, are clearly traditional metro attributes. Consequently the integration of suburban rail, metro and bus services and means of access to stations is critical to the door-to door journeys of people. Mumbai could not exist without its suburban rail system, and this dominant and non- alternative dependability is of concern.

8. MRVC and its Mandate The Mission of MRVC is to develop world class infrastructure for an efficient, safe and sustainable railway system in Mumbai Suburban section to provide comfortable and friendly train services to the commuters.

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The Objectives of MRVC are: 1. Integrate suburban rail capacity enhancement plans with urban development plan for Mumbai and propose investments; 2. Implement the rail infrastructure projects in Mumbai suburban sections; 3. commercially develop Railway land and airspace in Mumbai area to raise funds for suburban railway development and 4. Resettlement & Rehabilitation of Project Affected Households.

The Board of Directors of MRVC comprise the Chairman and Managing Director, along with his team of Directors and some other officers. The total staff strength of the organisation is 219, across the different hierarchy.

9. Problem Statement with Respect to Suburban

9.1 Suburban Railway Operations

Urban areas are growth magnets. Hence, for development, attention needs to be given to urban areas. The cities in India have been growing over the years. The needs of communities are also becoming bigger. To meet these needs the infrastructure requirement, including that of the transport systems, is also going up, and is further expected to increase in future in all urban areas.

Suburban rail, urban rail, commuter rail, or regional rail, plays a major role in the public transport system of many of India's major cities. Suburban rail is defined as a rail service between central business district and suburbs, a city or other locations that draw large numbers of people on a daily basis. The trains providing such services are normally termed suburban trains and are the ones that stop at all, or nearly all, of the stations along a route. In Mumbai, these are referred as "local trains" or "locals". Most of these tend to be quite slow.

Suburban rail in India operates on lines shared with other passenger and freight trains (like Lucknow-Kanpur Suburban Railway) or a combination of dedicated suburban lines and lines for long distance trains (like the Mumbai Suburban Railway).

The infrastructure, in India, is owned by Indian Railways and usually operated by one or more of the railway zones of Indian Railways. In some cities of India, the opening of rapid transit systems has led to a decline in use of the Suburban rail system.

Mumbai and Kolkata have local EMU suburban train service and have more or less separate tracks laid for the operation of suburban railway network. Chennai, Delhi, Hyderabad, Pune, etc. do not have dedicated suburban tracks but share tracks with long distance trains (In Chennai, only one corridor i.e. MRTS corridor has dedicated tracks for suburban operations). Suburban trains that handle commuter traffic are mostly Electric Multiple Units (EMUs). They usually have

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nine or twelve coaches and sometimes even fifteen to handle rush hour traffic (as in Mumbai).8

In major metropolitan areas of India (Mumbai, Kolkata, Chennai, Delhi, Hyderabad, Bangalore, etc.), the suburban areas are growing fast with a preference for cheaper housing as compared to those in the core/CBD areas. However, the concentration of employment is still in core/CBD areas, resulting in need for developing faster transportation systems. Towards this, in the past, Indian Railways has developed suburban rail systems in Mumbai, Kolkata, Chennai, Delhi, Bangalore, etc. IR is responsible for providing, operating and maintaining the rail system in the country at all levels – national, regional and urban. The same rail network is being used for both, long distance as well as at the suburban and regional level movement in all cities except for Mumbai, where some of the lines are planned only for suburban rail. The management at all levels of rail operations is being handled very efficiently by IR.

The recent past has witnessed multiple fold increase in size of cities, which is putting undue pressure on the IR for planning for meeting the transport needs of the cities. This multiplies the responsibility of the IR, more so because the functions of the two railway systems are different to some extent. The national level rail system deals with both freight as well as passenger transportation over long distances. The suburban rail system, on the other hand, deals with very short trip lengths (on an average about 37 km observed in 2013-14), primarily of passengers who are daily commuters. Hence the strategy for running a suburban rail system, as against the national level rails is bound to be different. In order to make the suburban railways efficient, it is required that the strategy formulation for the two is undertaken differently.

9.2 Urban Transport-Utilisation of existing infrastructure Problem Sub Urban Rail needing Urgent Attention

Urbanisation is an inevitable outcome of any development process. With rapid urbanization, the Urban Transport in India needs more attention than ever before. Some of the key issues/aspects of the urban transport scenario in India needing appreciation and attention are:

 lack of adequate and hierarchical road network  lack of optional utilization of existing transport network  low supply levels of bus system and public transport systems  lack of coordinated provision of public transport system  lack of coordinated land use and transport planning  increasing trends of urban sprawls  rapid increase in travel distances/lengths  high growth of private modes  exponential growth of travel demand  multiplicity of organizations and no coherent effort  needing transport mode specific institutional arrangements/organizations

8 Mumbai suburban services have various such designations (not all of them official, but in wide use). A 'fast' train or 'fast local' is essentially one that is fast (runs express, skipping stops) until a certain station, and from that station onwards runs like a local, e.g., the Fast runs express to Borivli, and hence is a local. The Fast is an express until . The Fast Local goes CSTM - - and thereafter stops at all stations on its route. The Borivli Fast Local used to run (1980s) from to Bombay Central non-stop.

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 active participation and partnership of local/state governments These issues have been there and are attracting attention of authorities. Efforts have been on to come out with appropriate remedial measures and solutions in attending to these concerns. It is these efforts that makes urban India mobile today and situation is not therefore grim. Measures taken thus far included many - planning, operational, financing, management and institutional.

Pronouncedly, more recently, cities are wanting to transform and position themselves as most competitive cities and attract investments to be on national and global platforms.

Importance of Urban transport had been recognized several decades back, at least policy level. Now, it needs concerted effort in planning and appropriate institutional framework.

9.3 Problem Domain

India’s urban population is expected to grow by over 10 million each year for the next 20 years. Most of this growth will occur by expanding or densifying existing cities. Existing rail corridors are often the only available unobstructed higher order transit potential corridors yet to be exploited. Transportation planners in urban centres often want to capture any available capacity on these corridors for urban rail transport. Understandably IR are often reluctant to grant access to their rights of way to protect future inter-city passenger and freight business. However each city is different, each rail line has different operating characteristics and therefore capturing available capacity for say suburban trains has to be evaluated on a case by case basis.

Another factor that has been evident in many cities across the world is the need for rail freight trains to enter city centres is diminishing as freight handling

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moves to containers which requires truck/train intermodal yards often best located on unencumbered large land parcels on the periphery of the city.

This can afford the opportunity for railway rationalization and freeing up rail corridor capacity but again each city is different. If at grade rail transit is possible on rail corridors, which diminishes the need for say elevated metro corridors, there may be win/win transportation and urban redevelopment opportunities.

This brings into play the function: funding: form relationship discussed in this report on formulating railway institutional arrangements. Such opportunities are unlikely to be on the radar screen of IR but are often conceived by urban and transportation planners. The formation of business and institutional partnerships to execute such rationalization projects has to address both the problem and opportunity sides of regenerating our cities in cost effective ways

One of the key problem areas of dealing with suburban rail in India is that the fare tariffs of rail passenger travel has been artificially depressed to the point that it is negatively impacting the viability of new rail or road based transit projects particularly in Mumbai

Mumbai is a unique example of the potenial effeciveness of an suburban rail system, with 35% of all rail passenger trips in India using the Mumbai suburban rail system. The system carries 59% of all mechanised person trips in the MMR and 78% of the person-km. trips which is a better measure of traffic congestion relief. Even carrying 8.0 million passenges per day the system is operating at only a 50% recovery rate largely due to high inflation in operating costs and no increase in fares.

The following comments were made in the Interim Report, March 2015 of the Mr. Bibek Debroy committee9. e) “there are no convincing argument in favour of low user charges across the board. If subsidies are warranted for those who are poor there are better ways of targeting them, such as direct benefit transfers.”(page 23); f) “If the government, as opposed to the market, wants Railway operators (public or private) to provide certain services that fall short of market terms (such as an unviable route or unviable fare for poor passengers) both IR and

9 In September 2014, the Ministry of Railway constituted a Committee, under the Chairmanship of Mr. Bibek Debroy, for looking into the possibility of mobilization of resources for implementing rail projects, as well as providing recommendations for restructuring the Railway Board, for making it more efficient. More details are presented in Chapter 11.

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private operators will be obliged to provide them as long as the government (Union or State) commits itself to pay for the shortfall.” (page 40); g) “As an end goal suburban services should be separated and run as JV’s with State and/or local governments” (page171); and h) “Suburban railways should be hived off to State governments, via the joint venture route. Until this is done, the cost of low suburban fares, if these fares are not increased, must be borne by state governments on a 50/50 basis with MOU’s signed with the State government for this purpose” (pages 181/182). Many of the above recommendations were not included in the Final Report, June 2015 of the Mr. Bibek Debroy Committee and were explained in an following interview10 with Mr Bibek Debroy.

“The interim report had too many things. As a consequence, the big things tend to get missed. And tend to focus on the small things. So, in the final report, what we have done is to ensure that we do not lose sight of the big picture. And the three big building blocks in our report are transformation in accounting, or, in other words, a shift towards commercial accounting; human resources issues, or breaking down the silos; and independent regulator.”

The desire of IR to at least download the fiscal responsibilities for providing suburban rail service to the States and the need to rationalize fare tariffs has been on the table for several years without reaching any conclusion. It is a politically charged issue that is difficult to deal with in the climate of protract election cycles.

The apparent reluctance of State officials to assume the mandate for suburban rail may be a reflection of both fiscal and political concerns. However the mandate issue will not go away and perhaps seeking a transitional and progressive partnering between the Centre and States offers the best route for rationalization.

9.4 Focus Areas

The focus of the services provided by the railways at the suburban level is:

a) Maintaining punctuality –delay by even a few minutes in the suburban rail system is bound to lead to chaos among the passengers. This breaks the link in commuting, especially if the trips involve changing of number of trains/other modes of transport; b) Comfort – Since traveling in a suburban train is a part of daily routine of the commuters, it needs to provide a comfortable travel. If the comfort of passengers is not given enough heed, it may result in loss in productivity of the commuters due to the exhaustion while travelling, thus affecting the national productivity; c) Providing enough space for movement of passengers to enable high turnover of the same - Every station on suburban route, witnesses heavy alighting and boarding of passengers; d) Private Sector Participation – Unlike the national railways, suburban railways may have higher possibility of PPP, due to it being restricted to one jurisdiction, and the possibility of taking decisions unanimously on aspects related to giving sweeteners to the concessionaire for making the project attractive enough from commercial perspective11; e) Station area development – Since the passengers using a suburban rail system are daily commuters, the strategy needs to focus on providing the items of daily needs of

10 , 14th June, 2015. 11 Overview of PPP Opportunities in Suburban Rail Sector is presented in Annexure 9-1.

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commuters in and around the station area. This would help in attracting passengers from other modes of PT on to the rail system; f) Network to meet demand at micro level - need to plan to meet demand by each route over the day, at the same time seeing that the capacity is not left un-utilized. This asks for a detailed multi-modal transport study at the city level, which may be too much of a responsibility for a national level organization to undertake; and g) Expansion plan of the suburban rail network has to be more flexible and demand responsive in nature, with need for faster and quicker decisions to be taken for implementation of required new lines or up-gradation of the existing one. h) Door to door travel, efficiency and safety - Both General Managers of CR and WR have expressed views regarding the way the present suburban railway operates including, the need to consider the efficiency and safety of overall door to door travel, the overcrowding and unacceptable safety conditions, the need for increased financial involvement of the State and looking beyond the fare box for operational funding.

9.5 SWOT Analysis

The above stated focus areas are not totally different from the national railway, but the intensity level in the two systems varies substantially. In case of suburban system, the tolerance level is fairly low. Hence there is a need that the strategy developed for the suburban rail system is separate and specific to the travel characteristics of the city/region. A high level SWOT of problem statement is given under:

Strengths Weaknesses  Indian Railways own track, station,  GMs vested with multiple tasks i.e. taking maintenance infrastructure for care of the inter-city as well as suburban development and operation of suburban systems development, maintenance and systems. operations.  IR Owns lands in prime areas which can  Centralized decision making i.e. high be used for commercial development and dependence on Railway Board. raising the resources.  Coordination problems with other  Redevelopment along with commercial stakeholders development potential/ opportunities of  Difficulties in raising the resources for capital existing suburban railway stations. investment needs and O&M losses on  IR has wealth of experienced suburban railway systems from the internal administrative, technical and sources maintenance staff for delivery, operation  Difficulties in convincing the State and maintenance of suburban railway Government or its entities or ULBs to take system. part in joint development of suburban railway infrastructure, sharing of O&M losses, etc.  Expected higher time even for small changes in the institutional reforms  Railway unions resistance to any institutional change Opportunities Threats  Development of rail infrastructure in  Over-burdened with the responsibility of urban areas for both inter-city and intra- suburban railway development, maintenance city (suburban operations) operations and and operation which is not the responsibility effective use of the stations for of the Indian Railways commercial development.  Integrated development of intercity rail terminals and intra-city suburban system especially in greenfield areas.

9.6 Key Areas Needing Attention

The key issues with respect to this as we see are:

a) Multiplicity of agencies; b) Need for state government partnership;

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c) Definition of ownership; d) Skills sets in planning and operating agencies; e) Coordination; f) Financing and funding; g) Defined specific and region-wide institutional arrangement to plan and manage the systems; h) Planning and prioritization; i) Resolution relating to conflicts of asset ownership; and j) Setting up national and state local level agency.

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Section 3: Institutional Options

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

10. Indian Railway’s view on Suburban Rail with Focus on Operations and Institutional Aspects

The IR Vision 2020, December 2009 suggests12 that -

a) ‘The look and feel of Indian Railways in 2020 will be radically different from what it is today. Railways will eliminate shortage and meet the demand for rail travel in full. Passengers travelling long distance or short distance between cities or availing of our suburban services must find the journey on Indian railways pleasant- fast, punctual, comfortable, clean and indeed memorable; b) In the suburban segment, the main challenges are the creation of adequate capacity, segregation of commuter lines from long-distance lines and expansion of services to ensure comfort to commuters. Partnership with state authorities will be necessary for development of suburban rail systems. Railways may also aim at integrating the metro-rail and suburban rail-systems under a single management in partnership with the respective state/city authorities; c) Partnership with state and city authorities will be established to augment the infrastructure and manage suburban service under a single management. Suburban trains must be passenger friendly with adequate accommodation for all categories of passengers, especially for ladies, students, senior citizens and the physically disabled. Both suburban and long distance trains must also look smart and colourful, reflecting our belief in and commitment to ‘change for a Better Tomorrow’; d) Development of Metro rail services in unserved cities is another area in which the Indian Railways has significant core competence. It has all the capabilities to execute such projects with substantial cost reduction. A separate Indian Railway Metro Development Authority could be formed for this purpose. This authority could also execute Light Rail and Mono Rail projects, wherever appropriate; e) Commercial utilization of vacant railway land, not required for operational use, can generate sustainable streams of revenue to finance the growth of Railways. This would be done in a professional, transparent and accountable manner; f) Judicious internal reorganization and decentralization of decision-making and authority, both financial and for execution purposes, to zonal and divisional levels. In the past, corporatization within railways, has yielded good results. Examples are Container Corporation, RITES, IRFC, and other PSUs of Railways.’

12 The excerpts are taken from IR Vision 2020

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

The White Paper on IR, 2009 states that -

 One of the issues under passenger business highlighted was “Highly subsidized suburban transport”. The possible options documented under passenger business are: o Segregation of suburban business in Mumbai, Kolkata and Chennai by creating a separate administrative unit; o State Government to share the cost/ losses in the operation and maintenance of socio economic lines; o Investment by municipal bodies/State governments for development of suburban rail network; o Policy initiatives/ incentives for construction of rail lines by private sector; and o Providing incentives to Private sector for uneconomic branch line rehabilitation/ operations.  Development of suburban rail network should be done through cost sharing with local bodies and State Governments for faster expansion of rail networks;  Organisational change has to be brought about for freight and passenger services including suburban services operating on a common network;  At present there is no organizational differentiation of suburban, intercity and long-distance service streams from a business point of view;  There has been substantial growth in passenger traffic, especially in suburban second class, second class mail/express and in second class ordinary. Hence a need to meet this high demand efficiently; and  Despite the best efforts of the Railways to provide efficient train services along with several passenger friendly initiatives, overcrowding on trains, especially suburban trains, has been a major concern. The Working Group Report for 12th Five Year Plan: Railway Sector– Organisational Reforms recommendations are -

. Separation of Policy Making and Operational Responsibility at the Railway Board

− Proposed separate executive body for day-to-day operations monitoring and decision making with power of oversight over the Zonal Railways and project organisations − Special quarterly meetings by Railway Board where fixed number of external experts (as special invitees) having expertise in technical, managerial and financial and economic fields . Hiring off of non-transportation tasks: The entire range of activities falling outside the core transportation operations such as of rolling stock, parcels, management of major stations and staff colonies, etc. would be critically reviewed from the perspective of either retention or outsourcing/ hiving off on the basis of organic integration with operational need and the logic of “make or buy”.

. Reorganization on business lines

− Freight transportation, inter-city and suburban passenger transportation, parcel and miscellaneous activities as separate profit-centres

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− Assistance of private partners/ SPVs for development and management of terminals, marketing, road bridging, etc. − On suburban rail passenger: Attempt should be to achieve physical separation of the long-distance network for the suburban network

. Empowerment of Zonal Railways

− Zonal Railways would be made accountable for return on capital, transport output, profitability and safety

11. Recent efforts towards restructuring railway board

In September 2014, the Ministry of Railway constituted a Committee, under the Chairmanship of Bibek Debroy, for looking into the possibility of mobilization of resources for implementing rail projects, as well as providing recommendations for restructuring the Railway Board, for making it more efficient. The terms of reference for the committee included:

“(i) Reorganizing and restructuring the Board and subsequently the Department so that policy making and operations are separated, the Department does not work in silos, policy making focuses on long term and medium term planning issues and operations focuses on day-to-day functioning of the Organization;

(ii) Promote exchange of Officers between the Railways and other departments;

(iii) Estimate financial needs of the Railways and ensure appropriate frameworks and policies are in place to raise resources, both internally and from outside the Government, to enable Railways to meet the demands of the future; and

(iv) Examine and suggest modalities for implementing the existing Cabinet decision on setting up a Rail Tariff Authority and give recommendations.”

In March 2015, the Committee gave its interim recommendations. Since the study has focus on the Railway Board and the Indian Railway, the recommendations do not deal at large with the suburban railways. It states that ‘at this stage, the committee has no comments to make on … MRVC’. However, some of the recommendations, which have reference to the suburban systems have been extracted as follows:

 Over time, the suburban services should be separated from the Railway Board, and should run in joint venture with the State and/or local government. The tariff structure should be fixed by the state and/or the local government;

 On projects which are implemented under the cost sharing mechanism, the incidence of subsidy burden should be clearly indicated between the Central and State government on one hand and the Indian Railway on the other. The subsidy should include both on capital cost as well as operating costs.

 As already mentioned, the suburban railway system should be totally separated from the Railway Board. However, till such time as this gets

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materialized, in case of any losses arising due to low tariff, these should be borne by the State government on 50:50 basis. Regarding this, a MOU is suggested to be signed with the State government.

 In order to encourage competition the following steps are recommended: − ‘Decentralization, particularly for local passenger services (ie. Suburban or non-trunk routes) which rarely cover costs, but which local government may want to subsidize;

− Separation of rail track from rolling stock and unbundling the former;

− Separation and unbundling of no-core as well as peripheral activities.’

 IR should have two separate ‘organizations’, one responsible for track and other infrastructure, and the second which should be looking after the train operations

 Unfortunately, these recommendations were not included in the Final Report, June 2015 of Mr. Bibek Debroy so their status is somewhat uncertain.

12. Lessons from Review of International Case Studies

A number of cities13, across the globe, have been making endeavor to develop efficient suburban rail systems to meet the growing demand emanating from increased urban mobility levels. Some cities have been successful in developing an efficient suburban rail system, whereas, others have not been so successful. They have experienced delays in operationalization of the system. In order to benefit from the experiences elsewhere, a review of the international case studies has been undertaken. The outcome of the review, by each city, has been given at Annexure 12-1. The lessons drawn from the case studies, have however, been presented in the ensuing sections.

12.1 Lesson from Success in Suburban Rail

The share of suburban rail in the total urban transport varies significantly across the cities. Among the cities which have been selected for review14, it is seen that in the city of Tokyo, the share is highest at almost 40% of all the motorised modes, followed by Sao Paulo, where the share is at 15%. Some of the institutional aspects worth considering from these two cities are as follows (detailed analysis given at Table 12-1):

 The suburban rail/ commuter rail infrastructure is owned by either the regional or the metropolitan government;

13 Tokyo (Japan), Paris (France), Berlin (), Moscow (Russia), London (UK), New York (USA), Sao Paulo (Brazil) and Hong Kong. 14 Tokyo (Japan), Paris (France), Berlin (Germany), Moscow (Russia), London (UK), New York (USA), Sao Paulo (Brazil) and Hong Kong.

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 The system is operated under the instruction of the metropolitan government by either private companies or by company created for the purpose;  The metropolitan level agency is responsible for preparing the Vision as well as the strategic plan for development of suburban rail system;  Decision on strategic service planning, service expansion and service standards are made by the metropolitan government, who is also responsible for other aspects of transport and urban development within the metropolitan area;  Fare policy is decided by the state, region or city government; and  Capital cost is funded/ shared by the national and the state government on ‘project to project’ basis.

12.2 Lesson from Delayed implementation of Suburban Rail

The Manila Light Rail Transit System , also known as MRT2, is a rapid transit line in Manila in the Philippines. Generally it runs in the east-west direction along the Radial Road 6 and a portion of the Circumferential Road 1. This project took 14 years to progress from inception to operations. Originally it was conceived as a Build-Operate-Transfer project but initial procurement was unsuccessful. It is an automated 14 km radial metro line and was fully operational from 2004. The project was changed and became a traditional public sector led development, funded through Japanese Official Development Assistance. It is operated by the Light Rail Transit Authority (LRTA), a government-owned and controlled corporation under the Department of Transportation and Communications (DOTC) under an Official development assistance scheme.  The reason for delay is contributed significantly to ineffective planning and decision-making, which reflected through cost escalation of the project.  The procurement was termed as not being transparent and straightforward  Depreciation of Japanese currency went against the project, resulting in delays  There was no operational strategy and the operations were also not planned in advance. To add to this, there was no new organization set up for operations and maintenance.

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Table 12-1: Broad Perspective on Suburban/ Commuter Rail System Implementation, Operation and Maintenance – Case Countries/ Cities

Japan/Tokyo France/ Paris Germany/ Berlin Russia/ Moscow UK/ London USA/ New York Brazil/ Sao Paulo Hong Kong Name of Metropolitan Region/ Area Tokyo Metropolitan Region Île-de-France Berlin-Brandenburg Moscow Metropolitan Greater London New York Metropolitan São Paulo Metropolitan Hong Kong Metropolitan Region Area Area Region Population of the metropolitan region (million) 37.9 (2014) 12.0 (2012) 5.9 (2013) 15.0 (2012) 8.3 (2012) 20.1 (2014) 20.9 (2014) 7.2 (2013) Area (sqkm) 4,000 14,500 30,370 2,500 1,572 17,405 8,051 1,104 GDP (in 2012) (Amount in US Billions of Dollars) 5,960 2,613 3,400 2014.78 2435.18 15684.81 2252.67 2632.60 Source : World Bank GDP Per Capita of the Country (In 2012) (Amount 46,720 39,772 41,514 14,037 38,514 49,965 11,340 36,796 in US Dollars), ( Source: World Bank) GDP of City ( Amount in US Billions of Dollars) 1,479 (2008) 723(2008) 117 ( 2009) 225 (2009) 731.2 ( 2012) 1406 (2008) 388 (2008) 2,633 (For Metropolitan Area) (Source: Wikipedia and Official website of City’s website) Gauge used for Suburban/ Commuter Rail - - 1,450 mm 1,524 mm - - 1,600 mm (Irish auge) 1,435 mm Suburban/ Commuter Rail market share 39.5% 7.2% - - 3.7% 0.7% 15% - (considering motorised modes only) Suburban/ Commuter rail Fare system Distance Based Fare Zone Based Fare Zone Based Fare Zone Based Fare Zone Based Fare Distance Based Fare Distance Based Fare Distance Based Fare Share with Inter-city/ freight lines No Little - - Little Little Little Little Capital subsidy No 100% 100% - 100% 100% 100% 100% Operating subsidy No Yes Yes Yes Yes Yes Yes Yes Whether the suburban rail system is owned  Commuter / suburban rail is operated  Capital and operating  S-Bahn Berlin GmbH, a  Moscow Railway, a  Operated as concessions  The Metro-North  Companhia Paulista de  Mass Transit Railway and operated by the National Railway, the by private entities (EJRC and others) funding, setting service 100% subsidiary of subsidiary of Russian contracted by Cental Commuter Railroad Trens Metropolitanos Corporation (MTRC) (sole Metropolitan Government, a “partnership” levels and fare structure Deutsche Bahn the Railways owns and government to a number of ( (CPTM) (English: São shareholder was the Hong between them, or a private company. established by STIF national railway operates commuter rail private rail firms (c2c, Chiltern MNCR), trading as MTA Paulo Metropolitan Train Kong Government) organisation operates lines Railways, First Capital Connect, Metro-North Railroad Company) is a commuter operates commuter rail If owned and operated by the National The RER (Réseau Express commuter lines. Though Gatwick Express, Greater Anglia, or Metro-North, Long rail company owned by network connecting the Railway, is this done by a separate “Suburban Régional) system  Moscow Railway is one Deutsche Bahn is a private Heathrow Connect, Heathrow Island Rail Road and the São Paulo State north eastern and north- Rail Operator” as envisaged by IR. comprises five lines that of the 19 regional company, the government Express, London Mainland, Staten Island Railway Secretariat for western new Territories service the immediate railway bureaus of of Germany holds majority London Overground Rail are the commuter rail Metropolitan Transports with the rest of Hong Kong. suburbs of Paris, though Russian Railways of share capital and Operations, South West Trains, lines owned and (of the Sao Paulo state). Kowloon-Canton Railway some lines extend further therefore Deutsche Bahn Southeastern, Southern and operated by the Corporation (KCRC) out. They are composed can still be called a state- Stansted Express.) Metropolitan Transport by letter: A, B, C, D, & E. owned company. Authority (MTA), an The RATP operates Lines  The Central Government has authority of New York A & B jointly with the retained ownership and is State SNCF (Société Nationale essentially responsible for the des Chemins de fer overall railway infrastructure and Français), the French grants accessibility to the National Railway operating consesstions The Company, while LinesC, Greater London Authority also D, & E are solely operated operates a number of “Overland” by the SNCF. rail lines  Suburban network is known as the Transilien, operated solely by the SNCF structure is

The reasons given and the benefits claimed for  Japan has adopted implementation the ownership and operations arrangements in of commuter lines through place, and the steps and elapsed time required to privatization since 1930s in which rail establish this arrangement development has been linked to township development and commercial development in and around stations.

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

Japan/Tokyo France/ Paris Germany/ Berlin Russia/ Moscow UK/ London USA/ New York Brazil/ Sao Paulo Hong Kong Whether the suburban rail system is operated  Commuter/ Suburban rail  SNCF Transilien is a  S-Bahn Berlin GmbH  Moscow Railway, a  Operated by number of private  MTA operates the  CPTM under the terms  MTRC under the terms and directly by a the National Railway, or the infrastructure is owned by MLIT/ tradebrand of SNCF. It is operates commuter lines subsidiary of Russian rail firms suburban/ commuter and conditions by the São conditions by the Hong Metropolitan Government, or by a contractor TMG and operated by private the body responsible for under terms and conditions Railways operates rail services Paulo State Secretariat Kong government under terms and conditions specified by the entities Paris urban (with RATP, specified by Deutsche Bahn commuter rail lines for Metropolitan National Railway (or Rail Regulator) and/or the Autonomous Operator of and BVG Transports Metropolitan Government Parisian Transports) and suburban transport system. The political and institutional structure of the  The Tokyo Metropolitan  The Syndicat des  Greater London Authority (GLA),  MTA is governed by a  Hong Kong is a Special Metropolitan Government and the Metropolitan Government (TMG), is a regional transports d'Île-de-France a regional government headed 17-member Board. Administrative Transport Agency– in particular whether it is government (STIF) is the autorité by a Mayor and has 25 Members are Region (SAR) of directly elected body covering the whole of the  The Tokyo Metropolitan Assembly is organisatrice de politicians, all directly elected. nominated by the the People's Republic of metropolitan area formed by a group of individual the fundamental decision-making transports (transport Governor, with four China (PRC) local authorities within the metropolitan area body of Tokyo . Governor organisation authority) recommended by New specifically for the purpose of strategic planning and 127 members are directly elected that controls the Paris York City's mayor and and delivery of transport services, (and strategic by the citizens, and represent the public transport network one each by the county land use planning also) and lead by an elected Metropolis of Tokyo and coordinates the executives of Nassau, head or a Board different transport Suffolk, Westchester, companies operating in Dutchess, , Île-de-France, mainly the Rockland, and Putnam RATP, the SNCF and counties. All Board Optile. members are confirmed by the New York State Senate. Who is responsible for creating the Vision for the  Tokyo Metropolitan Bureau of  STIF  BVG  TfL  MTA  São Paulo State  Hong Kong government development of the suburban rail system in a Transportation (TMBT) of TMG Secretariat for given city, and the strategic planning for the Metropolitan Transports suburban system Who provides the finance for Capital Expenditure,  National and Local Governments  Federal and state  Federal government  Federal government  MTA/ Federal  São Paulo State  Hong Kong government and whether this is provided through a regular  Ad hoc on a “project by project” governments  Ad hoc on a “project by  Ad hoc on a “project by project” government Secretariat for budgeting process, or ad hoc on a “project by  Ad hoc on a “project by project”  Ad hoc on a “project by Metropolitan Transports project” basis. project” project”  Ad hoc on a “project by project” Who provides the finance for operating  MLIT  STIF  Deutsche Bahn and BVG  17% of operating  Operating expenses are not  MTA  Hong Kong government expenditure (or subsidies) and the overall terms expenses are provided subsidized and conditions of any service supply contract with by the Moscow Railway an operator and the remaining 83% subsidized by regional governments Whether decisions on strategic service planning,  TMG  STIF has real autonomy  BVG  Moscow Railway/  Greater London Authority (GLA)  MTA  Hong Kong government service expansion and service standards are made and is not dependent on Russian Railway by the Metropolitan Government (or Metropolitan the French Government. Transport Agency), also responsible for other STIF is responsible for aspects of transport and urban development providing integrated and within the metropolitan area, or by the National efficient transport Railway or Suburban Rail Operator. services throughout the region to all Parisians. STIF implements the decisions made by the authorities during the Board of Directors’ meetings. These decisions can be of a structural nature (new infrastructures, etc.), concern innovation of the existing infrastructure (new services, etc.), 42

Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

Japan/Tokyo France/ Paris Germany/ Berlin Russia/ Moscow UK/ London USA/ New York Brazil/ Sao Paulo Hong Kong concern quality issues (quality of service, improving supply, etc.), or economic and social issues (prices, travel cards, etc.). STIF’s decisions are then implemented by the RATP, SNCF and OPTILE (private bus network) transport operators. Who makes decisions on fares policy  TMG  STIF  BVG  Moscow Railway/  Transport for London (TfL)  MTA  State and City  Hong Kong government Russian Railway governments In case the suburban system is not operated as EJRC, one of the seven Japan Railway part of the National Railway, the approach used Group companies ensures continuing to ensure the continuing updating of institutional up-dation of staff skills in rail and staff skills and knowledge particularly in rail operations operations. What incentivize are given to the entity to Operations by private entities through improve its financial performance. revenues from fare as well as commercial development of stations. What are other activities of the entity, if any, that  Commercial development of stations  Transit Oriented  Real estate development cross subsidize its railway operation. How  Real estate development in the Development (TOD) along railway routes effective is the institutional arrangement in vicinity of the stations initiates developing and operating non-rail business. Note: Detailed documentation on the international case studies is presented in Annexure 12-1

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

13. Thematic Approach in evolving Suburban Rail Institutional Options

A number of aspects have been taken into account while evolving the options for the suburban rail institutional setup.

13.1 Considerations

For arriving at the most suitable institutional arrangement for the suburban rail systems in Indian cities, a number of options were evolved with the following considerations:

 Should be need based and meet the expectations of the people;  Following the best practices elsewhere in the world;  Keeping in mind the current arrangement, so as not to deviate too much from it; and  Ease of implementation. All these considerations may not be possible for inclusion in each of the evolved options. Hence, some of the options are based on only one consideration while others have more than one. An approach of DMRC for urban transport is stated in Annexure 13-1.

13.2 Insights to Government of India/ IR Perspective

The various reports and documents prepared for the Indian Railways, including the Vision 2020, White Paper (2009) and the Working Group Report for 12th Five Year Plan reflect the perspective of the IR on suburban railway system. With respect to the suburban rail system, the focus is on its expansion, as it is seen as the mode of transport which has the capacity to ‘eliminate’ the ‘shortage’ and meet the future travel demand:

 Partnership with the state and city authorities need to be established to effectively manage a suburban rail service; this partnership needs to be honored even while sharing the costs and the losses

 Segregating the suburban operation by creating separate administrative units; the suburban rail system should form a separate profit center

 Relatively more financial and executive autonomy given to the zonal and divisional level

 Private sector to be encouraged to participate

 The railways have substantial land which should be commercially utilized for generating additional revenue for railways or even for attracting the private sector

 The policy making body should be different from the project executing body

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

 Given that the Railways have substantial expertise in executing metro projects, a separate Indian Railway Metro Development Authority to be formed for executing the metro, Light Rail Transit and Mono-rail projects

13.3 UMTA- Unified Metropolitan Transport Authority

Urban transport comprises various modes of transport, which are governed by different acts and regulations. Such a fragmented system of planning and implementation of urban transport only makes the functioning of urban transport systems more complex and inefficient. This calls for a very close coordination among those who provide different urban services. Perceiving the problems being faced by various cities, the National Urban Transport Policy (NUTP) recommended setting up of a Unified Metropolitan Transport Authority (UMTA) in all million plus cities to facilitate better coordination in planning and implementation of urban transport systems. The authority is not expected to operate any transport facility, but only function as a coordinator for various operators.

Functions

UMTA is expected to perform regulatory functions. It plays an important role in preparing vision for improved mobility and ensuring that the required investments take place.

 Policy Functions: Formulation of policies, Strategies and financing for city Urban Transport System,  Regulatory Functions: Ensure coordination among various Urban Transport Services.  Integrated and holistic planning: Comprehensive Integrated transport planning and implementation of all components.

As stated in 12th Five Year Plan, “All the million plus metropolitan areas should set up an UMTA to develop and implement city level transportation plans. These must be integrated with spatial and land use plans of cities.”

Structure

UMTA should be headed by the head of the city government and should have heads of / representatives from all the organizations involved in the transport planning and delivery, and contributing to its decision making, like:

 City/ regional development authority or State Town and Country Planning Organization  City or regional level Public transport providers - public transport undertaking, state transport corporation, metro rail corporation, suburban railways, etc.  IPT associations  State Transport Department  Traffic police  Pollution Control Board  PWD

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

 State Urban Development department  Sectoral experts  NGO’s  Other agencies dealing with housing, industries, commercial activities, etc.

13.4 Whether Corporation or Authority

An authority is any entity, which is incorporated through an Act while the formation of a corporation is done under a Companies Act.

13.5 Special Purpose Vehicle (SPV)

Special purpose vehicle/SPV is a legal entity15 created to fulfil narrow, specific or temporary objectives. SPVs are typically used by companies to isolate the firm from financial risk. SPVs are also commonly used in complex financings to separate different layers of equity infusion. In addition, they are commonly used to own a single asset and associated permits and contract rights16, to allow for easier transfer of that asset.

It envisages participation of the stakeholders and beneficiaries besides national level infrastructure funding institutions in the development and creation of infrastructure through appropriate concessions. Financial participation can be through equity participation in the SPV. An SPV can be a joint venture with Railways as majority/minority partner, or a pure private company. Revenue from operations is generated by SPV through revenue apportionment. Railway land, as available, required for the project is made available on lease/license. Tariff freedom as per provision of Railways’ Act, 1989 Commercial utilization of railway land, commercial publicity rights as permissible under the law and public policy is permitted with profit sharing. Initial project development is done by Indian railways to establish project cost, land acquisition, other project component requirements, and project viability. Land acquisition is done by the Indian railways for partnership projects. Project construction is decided by the SPV. .

13.6 Financing Related Aspects

The implementing agency needs to be financially independent and self sustained, so as to give them autonomy in taking decisions and thus making the project planning more beneficial and implementing process more efficient. For this the balance sheet of the agency needs to be made strong through transfer of assets and/or through enabling revenue earning/sharing mechanism from the ongoing projects. With this, more avenues of raising funds for the project will be open – like borrowing from the domestic banks, multilateral funding agencies or the raising resources from open market.

15 usually a limited company of some type or, sometimes, a limited partnership 16 such as an apartment building or a power plant

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

14. Suburban Rail Institutional Strengthening - Options and Evaluation for Suburban Rail Development Organisations (SRDO)

14.1 Initial Options

The above stated considerations and aspects led to evolving the following progressive strategic options for the suburban rail institutional strengthening:

Option 1: Status Quo or Business as Usual Case for particular suburban system

Option 2: The current MRVC Model IR in partnership with State Agencies)

Option 3: An enhanced MRVC Model

Option 4: As Option 3 but with exclusive suburban rail organization – New Zonal Railway

Option 5: As Option 4 but Including All Rail Based Regional Public Transport

Option 6: As Option 5 but including All Higher Order Regional Transit (Including Buses) and possibly the major regional roads)

It should be noted that with Options 5 and 6 the delivery of suburban rail services would likely be under the mandate of Urban Transport Authority/ Regional Multimodal Transport Authority/ Unified Metropolitan Transport Authority17. Further for easy understanding, the following terminology has been used:

 System development: Suburban Rail Development Corporation (SRDC)/ Suburban Rail development Authority (SRDA) in option 4, Rail Development Corporation (RDC)/ Rail Development Authority (RDA) in Option 5 as metro/ monorail systems have been added in addition to suburban system. Further, in Option 6, Transit development Corporation (TDC)/ Transit development Authority (TDA) have been used as bus system also has been included.

17 Urban Transport Authority or Regional Multimodal Transport Authority or Unified Metropolitan Transport Authority means same throughout the document.

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

 Operation: Suburban Rail Operator (SRO) in Option 4, Rail Operator (RO) in option 5 and Transit Operator (TO) in Option 6.

14.1.1 Option 1: Status Quo or Business as Usual Case

No organisational changes are proposed in this option which means it is “Business as usual” option. However, improvement in efficiency will be the inherent part of the existing system.

14.1.2 Option 2: Current MRVC Model (Partnership with State Agencies)

Success story of MRVC in MMR in delivering the capacity enhancements to the suburban rail system is good example of partnership between IR and the state government for emulating similar institutional model in other major cities/ regions where the suburban rail operations are high like Kolkata, Chennai, etc. in the near future, and over a period of time in other places like Delhi, Bangalore, etc.

14.1.3 Option 3: Enhanced MRVC Model

The strategies followed in major cities/ metropolitan areas around the world for mass transportation systems indicates that, good coordination between local, regional and national governments in planning as well as raising the resources is vital for sustainable mass transport systems. Keeping in mind the strategies followed in those cities, and the existing institutional and organisational structures at local, regional/ state and national level, Enhanced MRVC model has been evolved as an option, which would include at least the following steps that would be subject to the approval of all funding partners:

n) Determine participating Central Government Partners - IR, Ministry of Urban Development (MOUD), Ministry of Finance and others;

o) Determine participating State Agency Partners;

p) Prepare new form of a MRVC Incorporation Agreement;

q) Establishing a Suburban Rail System Service Area (SRSSA);

r) Establishing the principle of setting rail fare structures within SRSSA independent of other suburban rail systems in India;

s) Confirm SRSSA fares to be a revenue source to MRVC;

t) MRVC to prepare and obtain approvals of Annual and 5 Year Business Plans and Operating Budgets, including financial requirements of partners, and defining clear roles and responsibilities of partners;

u) MRVC to prepare and obtain approval of 5, 10 and 20 year Business Plans (short, medium and long term) and Budgets for Capital Projects to maintain the suburban rail system; and

v) Establish the principal of optimizing the transit supportive development of surplus non-operating railway lands within the SRSSA for development by the private sector including agreement that resulting funds be allocated to implement the SRSSA capital program.

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

It is a fact that for quite some time to come, it will not be possible to completely segregate the suburban rail system from other railway operations, particularly longer distance passenger trains. Consequently under this arrangement, the responsibility of train control must be maintained by IR. The allocation of rail capacity for corridor service needs will need to be carefully managed based on previously agreed principles and practices between the partners.

14.1.4 Option 4: As Option 3 but with exclusive suburban rail organisation –New Zonal Railway

In this option, an Option 3 which is described above with exclusive suburban rail organisation along with new zonal railway has been proposed. In this option, an interim option of Suburban Rail Development Corporation (SRDC)18 shall be created and under long term it will be transformed to Suburban Rail Development Authority (SRDA). A new operator, Suburban Rail Operator (SRO), which would be jointly owned by SRDC/SRDA and IR, would operate suburban rail services under contract against service performance targets agreed with SRDC/SRDA.

14.1.5 Option 5: As Option 4 but Including all Rail Based Regional Public Transport

Similar to the Option 4 with the SRDC/ SRDA taking additional responsibility of development and operation of other guided transport systems (metro, monorail, etc.) that are developed/ being developed in the city/ region. Rail Operator (RO) would operate suburban rail service and metro/ monorail systems under contract against service performance targets agreed with RDC/RDA.

14.1.6 Option 6: As Option 5 but Including all Higher Order Regional Transit (Including Buses)

In addition to Option 5, the SRDC/ SRDA would take the additional responsibility of development and operation of buses also that are developed/ being developed in the city/ region. Transit Operator (TO) would operate suburban rail service, metro/ monorail systems and bus system under contract against service performance targets agreed with Transit Development Corporation/ Transit Development Authority (TDC/TDA).

Each of the above stated options is built on the previous option, starting from Status Quo, with the last one being the most desirable institutional set-up, which suggests a structure which includes all the modes of public transport, including even the buses. The level of complexity in achieving the desired resource mobilisation and institutional arrangement is given in Figure 14-1. Hence to arrive at the optimal institutional arrangement, it is required to undertake a very rigorous approach, which, besides incorporating an analytical approach, should also take the views and suggestions of the stakeholders into consideration.

18 SRDC in case of MMR already exists as Mumbai Rail Vikas Corporation and further institutional changes are required to translate MRVC in to Suburban Rail Development Authority (SRDA).

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

Figure 14-1: Evolution of Resource Mobilisation and Institutional Arrangements

14.2 Evaluation of Options for Further Consideration and Discussions

In order to assess the robustness of each of the options towards contributing to operational efficiency of the system, an evaluation has been undertaken, with the following evaluation criteria:

a) Operational responsibility; b) Ownership and maintenance of assets; c) Service planning; d) Fare and operating subsidies; e) Business planning; f) Strategic planning for system planning and capital investment; g) Partnership arrangement with state authorities; h) Property development management; i) Public Private Partnership arrangements; j) Legal status; k) Institutional changes required in the Ministry of Railways; and l) Ease of Implementation The process of evaluation includes extensive series of discussions with railway management, MRVC and other stakeholders. Further to this, the experiences of existing systems overseas and in India have also been referred to. The evaluation matrix is given at Table 14-1. The prioritised options19, as emerged, are given below:

1. Option 4: As Option 3 but with exclusive suburban rail organization (New Zonal Railway) and Creation of SRDA and SRO 2. Option 5: As Option 4 but Including All Rail Based Regional Public Transport 3. Option 6: As Option 5 but including All Higher Order Regional Transit (Including Buses)

19 Evaluation of options is presented in Annexure 14-1

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

4. Option 3: Enhanced MRVC Model 5. Option 2: Current MRVC Model (Partnership with State Agencies) 6. Option 1: Status Quo or Business as Usual Case

Clearly the evaluation indicates that, the options 1 and 2 have scored lowest. The requirement of the day, hence, is to provide much more than what is there at present.

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

Table 14-1: Alternative Options, Evaluation Criteria and Initial Assessment

Operational Partnership Ownership and Strategic Planning for Property Public Private Institutional Changes Stability and Fare and Operating Arrangements with Ease of Option/ Criteria Maintenance of Service Planning Business Planning System Expansion and Development Partnership Legal Status Required in Ministry of Operating Subsidies State Authorities Implementation Assets Capital Investment Management Arrangements Railways Efficiency (public-Public) Option 1 Status Quo  No change  No change (IR  No change (IR  Difficult to absorb the  Difficult task  Difficult with existing  Difficult with  Difficult with  Difficult with  No change  No change  No difficulty or Business as Usual (Existing Zonal would continue to would do) fare and operating institutional setup at existing existing existing Case Railways would own and maintain subsidies zonal Railways institutional institutional institutional continue in the assets) setup at zonal setup at zonal setup at zonal taking care of the Railways Railways Railways operational responsibility of suburban operations (No complexity for IR) Option 2 Current  Same as above  Same as above  Same as above  Difficult to absorb the  Possible  Possible (similar to  Possible similar  Difficult with  Difficult with  No legal hurdles  No change  No difficulty MRVC Model fare and operating conceiving MUTP like to MRVC existing existing for creation of (Partnership with subsidies projects programme) (partnership institutional institutional Rail Development State Agencies) between IR and setup at zonal setup at zonal Corporation Government of Railways Railways (RDC) which Maharashtra) would be similar to MRVC Option 3 Enhanced  Same as above  Same as above  Same as above  Difficult to absorb the  Possible  Difficult with existing  Difficult with  Difficult with  Difficult with  Partnering IR  Partnering with other  Low difficulty MRVC Model fare and operating institutional setup at existing existing existing with other central central government subsidies zonal Railways institutional institutional institutional government organisations/  Establishing the principle setup at zonal setup at zonal setup at zonal organisations/ departments may of setting rail fare Railways Railways Railways departments may warrant for capacity structures within SRSSA need some legal building and independent of other amendments institutional changes in suburban rail systems in the Railway Board India – A challenging political decision.  The fare and operating subsidies may be shared by the stakeholders.

Option 4 As Option 3  SRO (Less  The ownership of  SRDC/ SRDA  SRDC/ SRDA being  As SRDC/ SRDA  Possible (similar to  Possible similar  Difficult with  Difficult with  No legal hurdles  Creation of new zonal  Medium but with exclusive complexity for the entire jointly owned, the fare would adequate conceiving MUTP like to MRVC existing existing for creating new railways for suburban difficulty suburban rail IR). A new suburban rail and operating subsidies institutional projects programme) (partnership institutional institutional zonal railways for operations in the major organization (New operator, which infrastructure, may be shared by the capacity with a between IR and setup at zonal setup at zonal suburban metropolitan areas and Zonal Railway) and would be wholly which is currently stakeholders more focus on Government of Railways Railways operations in the further creation of Creation of SRDC/ or jointly owned vested in the suburban rail Maharashtra) major SRDC under interim SRDA and SRO by one or more Railways, is to infrastructure metropolitan option, SRDA under of SRDC/SRDA, transferred to and operations, areas long term option IR or State SRDA. will be  No legal hurdles warrant for capacity Government, responsible for for creating RDC/ building and would operate preparing SRA institutional changes in suburban rail Business Plan the Railway Board services under for suburban  Creation of SRO for contract against rail new zonal railways service infrastructure created for suburban performance and operations rail operations warrant targets agreed for capacity building with and institutional SRDC/SRDA. changes in the Railway Board

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

Operational Partnership Ownership and Strategic Planning for Property Public Private Institutional Changes Stability and Fare and Operating Arrangements with Ease of Option/ Criteria Maintenance of Service Planning Business Planning System Expansion and Development Partnership Legal Status Required in Ministry of Operating Subsidies State Authorities Implementation Assets Capital Investment Management Arrangements Railways Efficiency (public-Public) Option 5 As Option 4  SRO translated  IR need to share  RDC/ RDA (Rail  Same as Option 4  RDC/ RDA (Rail  Same as Option 2  RDC/ RDA/RO will  Relatively Easy as  Relatively Easy  Joint ownership  Same as option 4  High but Including All Rail to RO i.e. Rail the suburban rail Development Development  RDC/ RDA in have partnership RDC/ RDA/ RO as RDC/ RDA and management  Development and difficulty Based Regional Operator (More infrastructure Corporation/ Corporation/ coordination with the arrangements will have will have of RO by IR with operation of additional Public Transport complexity for with other Rail Rail City/ Regional with State partnership adequate State guided transport IR) stakeholders like Development Development authorities and Governments arrangements institutional Governments systems i.e. metro/ State Authority) Authority) Urban Development with State arrangement to require monorail systems in Governments/ Department of the Governments go for PPP amendments to the newly created MoUD and State State Governments arrangements the Acts. zonal railways would Governments/ invite further more MoUD need to capacity and share the metro/ institutional changes in monorail the Railway Board infrastructure with IR Option 6 As Option 5  RO translates  IR need to share  TDC/ TDA  Same as Option 4  TDC/ TDA  Same as Option 2  TDC/TDA/TO will  Relatively Easy as  Relatively Easy  Joint ownership  Same as option 4  Very High but including All PTO i.e. Public the suburban rail (Transit (Transit  TDC/ TDA in have partnership TDC/ TDA/TO will as TDC/ TDA and management  Development and Difficult Higher Order Transport infrastructure Development Development coordination with the arrangements have partnership will have of TO by IR with operation of additional Regional Transit Operator (More with other Corporation/ Corporation/ City/ Regional with State arrangements adequate State guided transport (Including Buses) complexity for stakeholders like Transit Transit authorities and Governments with State institutional Governments systems i.e. metro/ IR) State Development Development Urban Development Governments arrangement to require monorail systems and Governments/ Authority) Authority) Department of the go for PPP amendments to bus system in the MoUD and State State Governments arrangements the Acts. newly created zonal Governments/ railways would invite MoUD need to further more capacity share the metro/ and institutional monorail changes in the Railway infrastructure Board with IR

Note: In option 4, the Suburban Rail Development Corporation/ Suburban Development Authority would change to Rail Development Corporation/ Rail Development Authority in Option 5 as metro/ mono systems are added in Option 5 and further the same would change to Transit Development Corporation/ Transit Development Authority in Option 6 as road based bus system is also added. Similarly, operations point of view, Suburban Rail Operator would change to Rail Operator in Option 5 and Transit Operator in Option 6.

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14.3 Principal Stakeholders View on evolving Suburban Rail Institutional Options

14.3.1 Indian Railway The senior officers of the Indian Railways (IR) feel that the present functions and operations of the IR are more geared and focussed towards long distance travel. Hence, most of their planning is focussed in that direction. Due to this, even though they are undertaking the operation of the suburban rail systems, they are of the view that since it forms a very important mode of transport in most of the big cities, especially for the economically not so well-off population, much more should be done. They further feel that there should be a strategy for strengthening the present institutional arrangement of the implementing agencies. Towards this, they are welcoming suggestions and recommendations, even if it requires some changes to be made to the present set-up of the IR.

14.3.2 Mumbai Metropolitan Region Development Authority (MMRDA)  There is no need to have a new organization for the suburban rail system. With some improvements in the existing MRVC institutional structure, it can continue to function as a suburban rail organization in MMR;  There is a need for more clarity on sources of funding for the suburban rail operations; and  Possibility of privatization of suburban infrastructure development and operations should be explored, as that would significantly take away the financial burden off the government shoulder.

14.3.3 Mumbai Railway Vikas Corporation Ltd (MRVC) a) It was emphasised that more focus should be given on improvements/changes that can be made in a relatively short period of time (5 to 10 years) to expedite the delivery of suburban rail projects in order to provide immediate benefits to passengers. They considered only minor changes to the way MRVC is currently functioning to be the need at this time.

b) The following areas were identified for attention:

- A single point clearing/decision body to deal with multiple jurisdictional issues and implementation delays - Securing cleared rights of way - Relocating existing utilities. - Expediting approvals and utilisation of funds, since most government agencies significantly underspend the approved budgets due to bureaucratic gridlock and inertia. c) It was generally agreed that Mumbai Suburban Railway (MSR) system is more akin to a Metro rather than conventional suburban railway. But there was no consensus on ”MSR should be planned like a Metro”. One of the major difference between the MSR and Metros, is the longer distance between stations in the former, and the resulting very large station catchment areas and excessive passenger station access times and costs. It was understood

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that the proposed Metro lines would help to address this problem and offload the MSR.

d) It was felt that integrated operational management of the MSR and the Metro was an attainable objective and that perhaps independent operations with connectivity opportunities now being planned, was the most pragmatic approach.

e) On the institutional arrangement, MRVC contemplates following forms of organisational set-up20:

- Business as Usual - Separate Railway Zone for Mumbai Suburban Rail System - Joint SPV between MoR and GoM for entire Mumbai Suburban Railway System including mandate for fare fixation, commercial development, etc. - Joint SPV responsible for providing infrastructure, station development, commercial development, revenue collection, fare fixation, etc. while Railway continues to operate and maintain the system on predefined track access charges.

14.3.4 City and Industrial Development Corporation (CIDCO)

a) CIDCO suggested bringing all public transport under single organisation i.e. suburban rail system, metro, monorail and bus systems.

b) It was felt that the existing institutional arrangement and coordination mechanism for planning and implementation of suburban rail projects in MMR is lengthy and time consuming. 14.3.5 Central Railway (CR) CR is of the opinion that bringing about institutional changes may take relatively more time as it involves bringing together a number of organisations, departments, unions, etc.

14.3.6 Western Railway (WR)

a) WR stressed the need for providing door-to-door services through coordinated efforts of various stakeholders responsible for transport infrastructure in MMR; and c) It also felt that having a separate organisation for planning, operation and maintenance of suburban railway system in MMR may lead to some problems with the centre.

14.3.7 Urban Development Department, Government of Maharashtra a) The fiscal responsibility of providing the Mumbai Suburban Railway system should be maintained by IR; b) MRVC should play an expanded role including taking over of the suburban rail assets of IR and also suburban railway staff, although there is uncertainty associated with the implications of doing this;

20 The views are of MRVC as expressed in one of the meetings.

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c) Effort should be made to reduce the staffing needs while bringing about the institutional change; d) Implementing some form of development charge mechanism and establishing a “ring fenced” infrastructure fund covering transport and other infrastructure; and e) Favoured an approach that allowed setting up of differential regional tariff structure.

14.4 Views Expressed in Workshops

Two workshops are organized in 2014, one in Mumbai (12th March 2014) and another in Delhi (31st October, 2014) to discuss and debate on the issues/ problems, institutional changes required, possible options, etc. The presentations made during the workshops in Mumbai and Delhi are presented in Annexure 14-2 and Annexure 14-3 respectively. Brief on the views expressed by various stakeholders are presented in the following sections. 14.4.1 Workshop held in Mumbai

a) Existing transportation systems and major stakeholders responsible for planning, implementation, operation & maintenance in MMR is very complex and there is a need for integration of regional transport functions. Considering various public transport modes (bus, suburban, metro, monorail) and complexity involved in planning, implementation, operation & maintenance of these systems, it would remain concrete block in bringing all these modes under one single umbrella or four umbrellas and different people had different views on that; b) It was felt that fares should act as a means of financing urban transport. Apart from this, direct user fee and land value gains were also mentioned as important source of funding urban transport; c) It is essential to involve state and local authorities in the institution that is responsible for urban transport; d) On the alternative institutional options, it was felt that the progress should be step by step from where MRVC is presently. Idea of separate zone was also put forward; e) Extensive discussion was held on functioning of UMTA. So far, UMTAs in urban cities have been created by amendments and are not effective. Priorities should be given to transportation projects that are binding on various agencies. And of these, if UMTA is given specific mandates, probably it would help.

14.4.2 Workshop held in Delhi

a) Urban Transport in India needs greater attention and institutional strategies should be in place, to meet long term perspective. It's implementation can be in an interim to long term way with a time bound plan; b) It is felt that existing rail system in urban areas of India should be used most optimally from various considerations including the energy savings perspective, apart from Mobility considerations and therefore Suburban Rail System should be planned, developed and significantly encouraged with time;

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c) In formulating preferred urban transport institutional strategies for a complex urban region like Mumbai, there was a consensus that, the strategies cannot be divorced from the resource mobilisation issues; d) It is felt that Institutional Strategy be evolved considering the Funding21 i.e. Resource Mobilisation and partnership of states and local governments and cannot be devoid of these. Further, it is strongly felt that institutional strategy and development of the same should be on the principles of Function22 driving the Form23; e) Practicality to attempt to plan, fund and operate a multi-modal public transport system with compatible fare tariffs- based on the service levels being provided was discussed and debated. The outcome was that, the fare structure of public transport modes in particular city/ region should be based on input costs, inflation, etc. and the fares could be different for different cities/ regions; f) Most large metropolitan regions rely on many public and private transport modes to meet the travel needs of its citizens and business activities. People often use multiple modes to make a single trip. This has led to the progressive establishment of regional transport agencies, to coordinate the planning, funding, implementation and operations of all major modes of urban transport. The need for emulating the similar institutional changes was felt inevitable for the large metropolitan regions in India; g) Mobilization of resources to fund capital, operating and state of good repair costs is a major issue for almost all regional transport agencies across the world. In MMR, underinvestment in the suburban rail system is compounded because of years of funding neglect. It was felt that, wide basket of resources needed to achieve a sustainable, predictable and “ring fenced” Transport Investment Fund. The sources other than normal fare box revenue like fare surcharge, advertisement, land based revenue sources, loans from international funding agencies like World Bank, JICA, etc., Foreign Direct Investment (FDI) opportunities, etc.; h) It is felt that there should single Umbrella Organisation to look after Urban Transport, by setting up Regional Transport Authority, like other countries have and further there should be a business-like approach to this whole issue of Urban Transport, without foregoing social objectives of governments in place; i) Potential alternative roles for state governments on capacity enhancements, operation and maintenance, funding, etc. of suburban rail systems were discussed ranging from not taking any role at all to active participation. Depending on the city/ region local circumstances, the beneficiary stakeholders, etc. need was felt for joint efforts by Indian Railways, State Government and Regional Development Authority and ULBs for development and operation & maintenance related aspects of suburban rail system;

21Funding in the context means which organization/ organizations shall provide funds for capital and O&M needs of suburban railway system. 22 Function in the context means clarity on which organization is responsible for providing suburban rail transport system as per the acts 23Form in the context means institutional option/ structure.

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j) Metros are being proposed for cities having the population more than 1.5 million. These metros are using the latest technology including air- conditioned coaches. Discussed about planning and budgeting to upgrade the suburban services /standards to meet the public aspirations for better comfort/safety, even if this means increased fares. With respect to Mumbai Suburban Rail system, meeting such requirements would reduce the capacity and there is a need for further enhancing the capacity by way of latest signalling system, additional corridors, etc. which would have capital investment needs. MRVC has been suggested to initiate feasibility studies for alternative ways of enhancing the capacity of the suburban railway system; and k) Given the current positioning and operations of Suburban Rail system, the need is felt to evolve a time bound plan and importantly to have integrated approach to this complex and challenging issue, given the complexities involved in this effort. There should a partnership approach to this issue, by involving the State, the local governments, the Ministry of Urban Development and Ministry of Railways. In this context, it is also felt that one should move with an Interim Solution to begin with to a Long Term solution, as this is more sustainable and such provide relief and service community. All these considerations may not be possible for inclusion in each of the evolved options. Hence, some of the options are based on only one consideration while others have more than one

14.5 Evolved Shared view on Suburban Rail Institutional Strengthening and Options

 Function should derive the form of the evolved institution for the suburban rail system;  The suburban service to be separated from the Indian Railway;  The strategy should be geared towards strengthening the present institutional arrangement, so that the implementation can be faster;  More clarity needed on the sources of funding for suburban rail operations;  All public transport, viz. suburban rail, metro, monorail an bus system, should be brought under a single umbrella;  The new institutional arrangement should enable faster planning and implementation of suburban projects in MMR; and  Wide basket of resources are needed to achieve a sustainable, predictable, and ‘ring fenced’ Transport Investment Fund.

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Section 4: Recommendation

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15. Recommended Suburban Rail Institutional Strategy

15.1 Regional/National level 15.1.1 Form, Governance and Institutional Arrangement

Function should be the main drivers for establishing the appropriate or preferred form of governance and/or institutional arrangement in a look forward assessment of options for various Regions/cities in the country. Based on this, it is felt that the proposed regional governance arrangement should be fundamentally underpinned by an empowered Regional Multimodal Transport Authority. Hence the arrangement suggested for the suburban rail system is the creation of a Regional Multi-modal Transport Authority, which forms an umbrella for the various agencies which are responsible for different modes of transport.

For the suggested option, there will be a need to identify participating state government and Central Government Partners like IR, Ministry of Urban Development, Ministry of Finance, etc. This will be followed by incorporation of a Suburban Rail Development Corporation (SRDC) in the interim. However in the long run, as already mentioned, the SRDC shall be transformed into Suburban Rail Development Authority (SRDA). A new operator, Suburban Rail Operator (SRO), which would be jointly owned by SRDC/SRDA and IR, would operate suburban rail services under contract, against service performance targets agreed with SRDC/SRDA.

In order to facilitate hassle free movement of the people across various modes of public transport, three cities i.e. Greater London, Paris Region and New York Region have created integrated modal governance which looks after all the modes of public transport.

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In the process of integration of the functions of various agencies providing public transport facilities, the resource generation for funding the projects, both operation and capital, also tend to become consolidated. The aspect of ‘Growth should Pay for Growth’, can be applied with ease thus increasing the possibility of generating higher revenue through imposition of levies like development charges, since they are a result of the development of the regions, which in turn happens due to, among other factors, better accessibility. With one unified implementing agency looking after all modes of public transport, such proceeds need not get distributed among multiple agencies, thus making the basket of funding bigger. 15.1.2 Major Roles and Functions of Regional Multimodal Transport Authority

The roles and functions of the Multimodal Regional Transport Authority are envisaged as follows:

 Partners: A dynamic partnership between Centre, State and Local Municipalities including Indian Railways, and all parties contributing towards Multimodal Transport Funding;  Plan formation and prioritisation: Formulating integrated, comprehensive multimodal plans and implementation priorities;  Fares: Formulating integrated public transit fare policies and charges for public transit (including suburban rail) and other user charges of urban transit (tolls etc.);  Service Levels: Establishing service levels to be provided including frequency and duration of public transit, acceptable crowding levels and safety standards;  Funding and Management: Establish a Financial Management Division to oversee, monitor and manage a sustainable regional Multimodal Transport Investment Fund to meet capital, operating and state of good repair costs, while ensuring fund is “ring fenced and transparent” and reflects evolving investment plans;  Procurement Processes: Oversee terms of tenders and contracts being used by Modal Corporations/SPV’s to contract with public and private parties for delivery of urban transport services, including an enhanced suburban rail service operated by IR;

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 Private sector participation: Seek opportunities and mechanisms for private sector participation and other measures to maximize investment efficiencies and leverage of Transport Fund revenues;  Roles and responsibilities of subsidiary model corporations: Establish roles, administrative/institutional responsibilities of subsidiary modal corporations/SPV’s namely; o Regional Bus Corporation – Consolidation of all municipal bus operations in the region; o Regional Road Corporation – Responsible for a designated network of higher order regional roads. All other public roads would remain under jurisdiction of ULB’s; o Regional Metro/Monorail Corporation – Responsible for all metro/monorail projects and operations in the region; and o Suburban Rail Corporation – Would assume responsibility of designated physical and rolling stock of the fully separated suburban rail system in the region including stations exclusively used for suburban rail.

15.1.3 Suburban Rail Development Corporation (SRDC)

Under the interim option, the development and up-gradation of suburban railway infrastructure in major cities/ regions would be planned and undertaken by SRDC, a newly created government company. The most feasible structure for RDC would be that of a government owned Company incorporated under the provisions of the Companies Act, 1956. It can be jointly owned by the Central and State Governments. SRDC would be vested with special powers for project approval, procurement and project management. The responsibilities of SRDC would include: a) Develop coordinated plans for the rail components to be included in the planned overall transport infrastructure plans of the city/ region and other planned investments in the city/ regional rail services and execute the resulting infrastructure projects; b) Integrate urban development plans for the city/ region with rail capacity and proposed investments; c) Mobilise financial resources to fund commercial land development and suburban railway infrastructure projects; d) Coordinate the improvements of track, drainage and removal of encroachments and trespassers from the railway right-of-way and station approaches; e) Approve and execute specific projects for commercial development of railway land and agree the appointment between GoI/ IR and state government; f) Agree with IR annual service performance targets for city’s/ region’s suburban rail services and review performance against these targets; g) Determine revisions to the passenger tariffs and surcharges for the suburban rail services; and h) Ensure development of the city’s/ region’s suburban EMU fleet and establishment of a common fleet design and integrated fleet management.

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15.1.4 Suburban Rail Development Authority (SRDA)

Over time, SRDC would evolve into SRDA with the general objective of securing the best possible suburban railway system. The ownership of the entire suburban rail infrastructure, which is currently vested with the Indian Railways, is to be transferred to SRDA. Apart from requiring the approval of the Railway Board, this will almost certainly require modification to the existing internal rules and regulations governing disposition of such property. The suburban rail services are to be operated by SRO and to be supervised, controlled and monitored by SRDA. This scenario is a departure from the Railway Act under which both functions are vested exclusively in a Indian Railway administration. SRDA’s responsibilities/functions would include: a) Providing, maintaining and enhancing the infrastructure required for suburban rail operations and providing improvements to the related environment; b) Keeping under review the suburban rail network and preparing plans for its future expansion and development in line with trends in land-use planning and consequent changes in commuting, residential and leisure activities; c) Securing (through SRO) safe, adequate and efficient suburban rail services; d) Preparing, maintaining and promoting a financial and business plan for the operation of, and investment in city’s/ region’s suburban railways, including projects which may not be directly concerned with railway infrastructure or operation but which affect aspects of passenger service; and e) Formulation of policies for the contracts involved in operation of suburban trains, asset management, renewal and development of the railway infrastructure.

15.1.5 Suburban Rail Operator (SRO)

A new operator, Suburban Rail Operator (SRO), which would be wholly or jointly owned by one or more of SRDC/SRDA, IR or State Government, would operate suburban rail services under contract against service performance targets agreed with SRDC/SRDA. To prepare for the establishment of SRO, in any of the newly created Suburban Zonal System, IR would need to: a) Ensure a thorough dissemination of SRDA and SRO’s policy statements, goals and relationships with GOI/IR; b) Undertake organisational changes within the new suburban zonal system established under interim option of SRDC to take account of the establishment of SRDA and SRO, including the movement of staff to SRO on deputation/ secondment; and c) Establish change management protocols

SRO, as an operator, would be required to collaborate, as appropriate, with the Planning Manager of SRDA, so as to provide professional and strategic input to the SRDA financial and business plan. SRA would be responsible for apportioning costs and recharging to GoI/ IR (as agreed) those costs relating to non-suburban operations. Brief on proposed institutional structures for SRDC, SRDA and SRO is presented in Annexure 15-1.

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15.2 Mumbai Specific - Institutional Arrangement

The transport needs and recommended institutional arrangements of the Mumbai Metropolitan Region are described in this section of the report since the current and future urban transport issues of the MMR are unique.

Recent data on the suburban rail system indicate that operating cost recovery from fares has fallen to approaching only 50% 0f operating costs with subsidy requirements reached to INR 1,110 crore during 2013-14 and likely reaching to INR 1400 crores during 2014-15.

The Mumbai bus system (BEST), although being cross subsidized by electricity charges, reported an operating loss of INR 776 crore in year 2014-15. Operating losses of the first phase of the monorail system and Metro Line 1 are further adding to economic difficulties.

When the capital requirements for both new transport projects and state of good repair and upgrading of existing aging infrastructure is added to the investment needs it is very clear that new institutional resource mobilization measures are required to be put in place as early as possible. This was addressed in the Comprehensive Transportation Study carried out by MMRDA during 2005-08 but little progress has been made to date.

The GoI (MoUD) has initiated efforts to establish Unified Metropolitan Transport Authorities (UMTA) and Urban Transport Funds (UTF) and recently proposed processes and mechanisms to implement both UMTA’s and UTF’s on a statutory basis which was a significant shortcoming of the original advisory and coordinating intent of the UMTA. Draft UMTA Bill, 2014 is presented in Annexure 15-2.

Since IR has many reservations on continuing funding deficits of suburban railway operations, which they deem not part of their core responsibilities, they have voiced the opinion that State governments should step forward to fill the financial voids of suburban rail operations, since constitutionally; urban transport is a State responsibility. MUTP I & II were seen as a step in this direction. However this is a complicated issue since the operations and funding of the passenger rail services of IR has addressed many transportation, social and economic factors that vary widely across India. Providing a sound, transparent and dependent source of funding for urban transport, which in Mumbai’s case includes the suburban rail system, is a key element of any institutional arrangement. Consequently, it was concluded that any resilient arrangement for the suburban railway could only be put in place in conjunction with and in parallel to setting up of a statutory empowered Urban Transport Authority (Figure 15-1) and related Urban Transport Fund. This conclusion was driven by the inevitable and perhaps large financial implications of downloading suburban rail services responsibilities to the State.

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Figure 15-1: Regional Transport Authority Figure 15-2 illustrates a possible structure to negotiate and define the respective roles and undertakings of UMTA and IR in planning, funding and operating the suburban rail system in the MMR. Potential sources of funding for Urban Transport Fund (UTF) are presented in Figure 15-324. The principle of “growth should pay for growth is explicit in these funding sources. A key factor in this negotiation would be the interim and ultimate ownership of existing railway assets which will greatly influence the eventual institutional partnerships. This could likely involve transitional arrangements as the various agencies demonstrate their capability to effectively manage the responsibilities being transferred.

24Source: Ministry of Urban Development’s study on “Developing Operations Documents for Urban Metropolitan Transport Authority (UMTA) and Urban Transport Fund (UTF) by Deloitte Touche Tohmatsu and Voyants Solutions

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UMTA Composition • State Representatives “Ring Fenced” Enhanced UMTA • ULB representatives Urban Transport Inc. Financing Division • Centre representatives Fund including IR • User representatives • Representatives of other Examples of UTF Potential Sources Multi-modal Authority significant contributors • Establishes Participating Agency to UTF Partnership Agreements • Prepares Business Plans • Defines Service Levels & Performance Criteria by Modes • Establishes Modal Fare Tariffs • Secures Capital & Operating Funding/Financing Commitments Negotiate Incremental Prime • Develops Multi-modal Expansion Arrangements with Indian Railways Plans on: • Contracts Delivery of Modal Services • Ownership/use of suburban rail Through Subsidiary Agencies & assets Monitors Performance • Tracks ,yards, shops, rolling stock and ancillary facilities • ROW/Lands/Property UMTA Suburban Rail System • Stations Negotiates • General terms and conditions Detailed Arrangements of operating suburban train Progressively with IR services on behalf of UMTA including fiscal Enhanced Regional Suburban arrangements MRVC Role Rail Corporation

Figure 15-2: Regional Transport Authority, Urban Transport Fund and Regional Suburban Rail Corporation

Figure 15-3: UTF - Potential Sources of Funding

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Mumbai is a city with very high travel demand, being met by multimodal transport system. Suburban rail, however, plays a very critical role. In the long run, MMR also needs to target a MMR Multimodal Transport Authority, as the umbrella agency, bringing all agencies under one roof. However, since this option will take time for execution, in the interim it is proposed that an Enhanced MRVC Model is set up. Evolution of institutional arrangements and setting up of Dedicated Urban Transport Fund for Mumbai is presented in Figure 15-4.

Evolution of Institutional Arrangements & Dedicated Urban Transport Fund Regional Regional For Mumbai Transportation Transportation Authority Authority

Expanded UMTA Option 4: All Rail Option 5: As Based Regional Option 4 but Public Transport including All Expanded Option 3: As Provided by Regional Higher Order Existing UMTA Option 2 but Transport Authority Regional Transit UMTA with Exclusive by contracts with (Including Buses) Suburban Rail Option 2: separate service & Major Roads Option 1: Enhanced Organization delivery companies: Existing (SPV) UMTA Current MRVC • Suburban Rail MRVC Model Model (trains operated by (Partnership IR) with State • Metro and

Agencies) Monorail) Complexity

Time

Figure 15-4: Evolution of Institutional Arrangements & Dedicated Urban Transport Fund for Mumbai

15.3 Time Bound Action Plan

The actions/ tasks required for achieving the institutional arrangements for the Enhanced MRVC Model, which is the interim stage for Mumbai, including the establishment of the SRSSA have been identified. Brief description on each of the steps is given below.

1. Determine participating Central Government Partners: Development of suburban system needs active and coordinated involvement of Indian Railways, Ministry of Urban Development and Ministry of Finance. MRVC needs to start dialogue with the suggested Central Ministries for assessing the likely roles in development, operation and management of suburban railway systems.

2. Determine participating State Agency Partners; including roles and responsibilities: Transport infrastructure planning, execution, operation and

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maintenance are taken care by number of stakeholders. Specific to Suburban railway system, the system planning, operation and maintenance is taken care by Indian Railways (through Western and Central zonal railways) and MRVC. MMRDA and CIDCO have been playing a major role in development of suburban railway under MUTP programs. There is a need for continuation of their roles and further involvement of major ULBs like Municipal Corporations of Greater Mumbai, Thane, , etc. as the benefits of development/ improvement of suburban railway system in MMR are wide and all the organisations are expected to benefit from it. MRVC need to initiate dialogue with major ULBs of MMR for their roles in development of suburban railway system.

3. Prepare new MRVC Incorporation Agreement: MRVC is a Public Sector Undertaking of Govt. of India under Ministry of Railways (MoR) with an equity capital 51:49 between Ministry of Railways and Government of Maharashtra. MRVC currently is responsible to execute the projects under Mumbai Urban Transport Project (MUTP) as sanctioned by Ministry of Railways. Any new agreement needs to clearly address the roles of the board of directors and the powers conferred on the board members by their respective appointing agencies particularly with respect to financial matters. One of the key responsibility of MRVC should be to secure firm commitments of the agencies to the annual and a 5 year Business Plans, Capital and Operating Budgets; The proposed institutional change for existing MRVC i.e. Enhanced MRVC, warrants some changes in the MRVC incorporation agreement. MRVC needs to take initiative towards having discussions with IR, Government of Maharashtra and other Central Government ministries (MoUD, Ministry of Finance, etc.) and Government of Maharashtra, major ULBs who are expected to be part of Enhanced MRVC and prepare a new incorporation agreement.

4. Establishing a Suburban Rail System Service Area (SRSSA) for MMR: In MMR, the suburban railway systems are operated and managed by Western and Central railways. These zonal railways are vested with operation of inter-city passenger and freight as well as suburban operations within their jurisdiction. It is suggested that there should be a separate zonal system for suburban rail operations which may be called Mumbai Suburban Rail (MSR). It’s essential characteristic will be elimination of Western and Central Railway classification, and taking over of all the suburban operations and maintenance of all railway infrastructure and control of train movements including all long-distance services terminating or passing through the zone from Western and Central railways. The operational jurisdictions of Western Railway and Central Railway shall be redefined after creation of MSR. Towards this, the following sub-tasks have been identified:

a) Notification by GoI, Ministry of Railways, to establish a new zone b) Parliamentary approval c) Preparation of budget, including set up costs of approximately INR 100 crores d) Appointment of General Manager

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e) Transfer of offices from other zonal railways, which are currently operating the city/ regional suburban railways f) Development of establishment by the GM and officers g) Identification of suitable office accommodation h) Transfer of staff from other zonal railways i) Implementation of revisions to accounting systems

5. Establishing the principle of setting rail fare structures within SRSSA independent of other suburban rail systems in India: Currently, the suburban rail system fares are same across all Indian cities. This appears to be a deliberate government policy, and not a legal requirement. The planned investment programme for the Mumbai suburban railway system will undoubtedly improve the level of service for the passengers and it would seem reasonable that they contribute to the cost of this through the fare- box. In the past, adjustments to fare levels have been made to recover the cost of specific investment25. MRVC needs to take lead in discussions and debates with Indian Railways for establishing the principle of setting a separate rail fare structure for suburban rail system in MMR considering the capital investment needs, operation and maintenance needs, etc.

6. Confirm SRSSA fares to be a revenue source to MRVC: MRVC is expected to be the organization responsible for overall planning, operation and maintenance of Mumbai Suburban Rail, for which, it needs revenue streams. Currently, the revenue coming from fare goes to IR. MRVC needs to be vested with special powers for collecting and retaining the fare, to fund capital development, operation and management of MSR operations.

7. MRVC to prepare and obtain approval of 5, 10 and 20 year Business Plans (short, medium and long term) and Budgets for Capital Projects to maintain the suburban rail system in state of good repair, to achieve approved service levels and to accommodate future growth: CTS for MMR carried out by MMRDA and further studies carried out by MRVC propose suburban capacity enhancements to existing suburban railway system and new railway lines for the horizon period 2031. MRVC is suggested to raise funds from alternate sources for capital investment and O&M needs26. Based on these studies, MRVC is suggested to prepare and obtain approvals of 5, 10 and 20 year Business Plans.

8. Prepare and obtain approvals of Annual Business Plans and Operating Budgets, including financial requirements of partners, and defining clear roles and responsibilities of partners: Following the Short term Business Plan, MRVC needs to obtain the approval of annual plans. Further, MRVC is advised to update the medium and long term business plans at an interval of 5 years keeping in mind the delivery of planned suburban transport infrastructure, changes in travel demand by various modes of transport, implemented transport infrastructure by other Organisations, etc. For this the following sub-tasks have been identified.

25 In particular, a surcharge is currently in place on the Harbour line routes which provide connectivity to Navi Mumbai area. 26 fare box, commercial exploitation of railway stations/ vacant lands, inter-governmental transfers, transfer from the stakeholders, grants from beneficiary Organisations, etc.

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a) Prepare and obtain approvals of Annual Business Plans and Operating Budgets b) Assessing Financial Requirements of Partners for getting approvals c) Defining Clear Roles and Responsibilities of Partners d) Financial and Procedural Agreements/ Arrangement for services being provided by partners and/ or being outsourced

9. Establish the principal of optimizing the transit supportive development of surplus non-operating railway lands within the SRSSA for development by the private sector including agreement that resulting funds be allocated to implement the SRSSA capital program: In MMR, there is substantial demand for properties located very close to the transit stations. One of the potential sources of revenue for MRVC could be commercial development of surplus non-operating railway lands within SRSSA. MRVC needs to develop strategies for development of surplus non-operating railway lands by the private sector and ensure that the funds raised would be allocated towards implementing the planned and approved capital programs.

10. Formulating mechanisms for effective coordination among the various stakeholders: In MMR, there are number of planning and execution agencies/ organisations of infrastructure. There are immediate concerns being voiced by many agencies involved with major infrastructure projects in MMR including MRVC, on resolving, in timely manner issues that are causing significant delays in project execution. MRVC needs to establish good coordination mechanism within MRVC and with Central Railway, Western Railway, Railway Board and the Government of Maharashtra and its associated departments/ agencies/ organisations and also seek for establishing a high level coordination mechanism among all for implementation of planned suburban infrastructure in timely manner.

11. Continued segregation of main line and suburban operations: MRVC needs to plan for continued segregation of main line and suburban operations through MUTP III, MUTP IV, etc. and joint efforts with other development authorities and ULBs.;

12. Fast track all non-fare box revenue sources like advertisement, commercialization of stations, land development, etc.: MRVC needs to plan for enhancing the sources of funds for capital funding and O&M short falls of the suburban system in MMR through commercial development of stations, land development, non-fare box revenue sources like advertisement, etc..; and

13. Efforts to raise the capital funding from FDI, multi-lateral funding agencies, etc.: MRVC shall explore the possibilities of capital funding from FDI, multi-lateral funding agencies, etc. for the planned works under MUTP III, MUTP IV, etc.

The Table 15-1 sets out an indicative time line required for implementation of each of the above stated tasks. Most of the tasks to be accomplished are related to Indian Railways and Government of Maharashtra. MRVC is ideal organization to take initiation and make IR and Government of Maharashtra to understand

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the need for further institutional changes. MRVC is also suggested to take the help of World Bank in successful achievement of proposed institutional change.

Once these tasks are accomplished, a review on the time required for achieving the form of ‘Regional Transport Authority’ will need to be undertaken. However, it is felt that it may take at least 5 years for its creation, provided immediate action is initiated by the IR.

The above tasks would be undertaken in conjunction with the setting up of an enhanced UMTA as described earlier and shown in Figure 15-2. However the task descriptions assume that an interim partnership has to be put in place until a statutory empowered UTA and UTF are in effect. This partnership would likely be similar to the current MRVC partnership between IR and the State.

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

Table 15-1: Implementation Program for Interim Arrangement- Enhanced MRVC Model 2016 2017 2018 Task No. Task Name Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1 Determine participating Central Government Partners 2 Determine participating State Agency Partners 3 Prepare new MRVC Incorporation Agreement 4 Establishing a Suburban Rail System Service Area (SRSSA) 4.1 Notification by GoI Minister of Railways to establish the new zone 4.2 Parliamentary approval 4.3 Preparation of budget, including set up costs of approximately INR 100 crores 4.4 Appointment of General Manager 4.5 Transfer of offices from other zonal railways which are currently operating the city/ regional suburban railways 4.6 Development of establishment by the GM and officers 4.7 Identification of suitable office accommodation 4.8 Transfer of staff from other zonal railways 4.9 Implementation of revisions to accounting systems 5 Establishing the principle of setting rail fare structures within SRSSA independent of other suburban rail systems in India 6 Confirm SRSSA fares to be a revenue source to MRVC 7 Prepare and obtain approvals of Annual and 5 Year Business Plans and Operating Budgets, including financial requirements of partners, and defining clear roles and responsibilities of partners. Establish financial and procedural agreements/arrangements for services being provided by partners and/or being outsourced. 7.1 Prepare and obtain approvals of Annual and 5 Year Business Plans and Operating Budgets 7.2 Financial Requirements of Partners 7.3 Defining Clear Roles and Responsibilities of Partners 7.4 Financial and Procedural Agreements/ Arrangement for services being provided by partners and/ or being outsourced 8 MRVC to prepare and obtain approval of 5, 10 and 20 year Business Plans (short, medium and long term) and Budgets for Capital Projects to maintain the suburban rail system in state of good repair, to achieve approved service levels and to accommodate future growth 9 Establish the principal of optimizing the transit supportive development of surplus non-operating railway lands within the SRSSA for development by the private sector and including agreement that resulting funds be allocated to implement the SRSSA capital program. 10 Formulating mechanisms for effective coordination among the various stakeholders 11 Continued segregation of main line and suburban operations 12 Fast track all non-fare box revenue sources like advertisement, commercialization of stations, land development, etc. 13 Efforts to raise the capital funding from FDI, multi-lateral funding agencies, etc.

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16. Way Forward 16.1 National/ Regional Perspective

Each urban region in India, either having a suburban rail system or aspiring to establish a suburban rail system, will have its own unique set of characteristics, current institutional arrangements, and immediate and long term planning and economic development objectives.

The MOUD National Urban Transportation Policy (NUTP) and the subsequent more specific processes to establish statutory empowered Urban Metropolitan Transportation Authorities (UMTA) and ‘ring fenced” Urban Transport Funds (UTF) are provide reasonable and proactive steps to properly structure the provision of urban transport with suburban rail being one of the potential modal elements. States and/or local urban authorities are being mandated to lead and implement this process. However it inevitably will involve partnerships with all levels of government and we believe parties or stakeholders contributing significantly towards the UTF’s. This will be a lengthy transitional process but understanding the end goal and having rationalized interim arrangements put in place to address shorter and medium term needs will be absolutely necessary with the backlog of transport issues evidenced in India’s metropolitan regions

Even in well-established city regions like London, Tokyo, Seoul, Paris and New York the process of delivering high quality urban transport are continuously evolving. The need for rethinking is the result of our limited ability to forecast changing circumstances which are often outside the control of an individual metropolitan region. Having flexible and resilient urban transport delivery plans is more important than a one vision long term plan.

With this perspective in mind, this study has concluded that efforts to establish longer term arrangements such as empowered UMTA’s and UTF’s must be done in parallel with more attainable shorter term enhancements to meet immediate needs. An example of this was the establishing MRVC to meet a historic need to optimize the capacity of the critical rail corridors in Mumbai.

The MRVC model and the enhancements proposed are suggested as good practices to be considered by other metropolitan regions across India. However there is no “cookie cutter” approach. Each metropolitan region will have to tailor make its own urban transport delivery plans.

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Institutional Development of the Suburban Rail System: Support to Indian Railways in the Design and Implementation of their Suburban Rail Strategy

16.2 Mumbai Metropolitan Region

Figure 15-2: Regional Transport Authority, Urban Transport Fund and Regional Suburban Rail Corporation is replicated here since it was intended to provide an overview of the steps suggested for the immediate term in Mumbai.

UMTA Composition • State Representatives “Ring Fenced” Enhanced UMTA • ULB representatives Urban Transport Inc. Financing Division • Centre representatives Fund including IR • User representatives • Representatives of other Examples of UTF Potential Sources Multi-modal Authority significant contributors • Establishes Participating Agency to UTF Partnership Agreements • Prepares Business Plans • Defines Service Levels & Performance Criteria by Modes • Establishes Modal Fare Tariffs • Secures Capital & Operating Funding/Financing Commitments Negotiate Incremental Prime • Develops Multi-modal Expansion Arrangements with Indian Railways Plans on: • Contracts Delivery of Modal Services • Ownership/use of suburban rail Through Subsidiary Agencies & assets Monitors Performance • Tracks ,yards, shops, rolling stock and ancillary facilities • ROW/Lands/Property UMTA Suburban Rail System • Stations Negotiates • General terms and conditions Detailed Arrangements of operating suburban train Progressively with IR services on behalf of UMTA including fiscal Enhanced Regional Suburban arrangements MRVC Role Rail Corporation

The consulting team heard a variety of opinions on the future options for Mumbai. However it was found to be difficult to establish one voice opinions that reflected the position of the State, IR or the Centre. Perhaps positions are evolving too, because the issues are complex and such steps as downloading or clarifying investment and operational responsibilities and raising fare tariffs are political hot potatoes that are beyond the mandate of the individuals we consulted with.

It is recommended that through existing UMTA, a high level meeting is convened with key representatives of the State, IR and the Centre to review the recommendations of this study and if there is concurrence, to firm up the negotiation process with the objectives to formulate the structure of an enhanced UMTA, establishing the UTF and identifying the preferred institutional arrangements, for the longer and immediate term operations of the suburban rail system in the MMR and possible timeframes for implementation.

If possible a mandate should be given to an empowered Implementation Group to negotiate the details of any restructuring arrangements including the legal steps, financial undertakings and approval processes.

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While the above is being carried out it is recommended that, the Enhanced MRVC as proposed in this report, be put in place as per the proposed Time bound Action Plan to execute an agreed program of further improvements to the suburban rail system. This will involve financial commitments from the State, IR and possibly the Centre and funding from lending institutions.

16.3 Expediting Projects

There are immediate concerns being voiced by many agencies involved with major infrastructure projects in MMR (including MRVC), on resolving, in a timely manner issues, that are causing significant delays in project execution. With the multiplicity of agencies involved in the public realm and the lack of urgency and designated authority to quickly resolve matters, this is causing inordinate and often publically criticised project delays, A single point agency with either authority make decisions on issues, or at least to mediate disputes in a time bound manner, is required.

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