Delhi Metro: NCR's 'lifeline' turns 20, begins new era of modern commuting

For a city that is considered thousands of years old, a two-decade old addition to its landscape should hardly evoke feelings of immense pride. But Delhi Metro, which turns 20 today, has become an iconic institution of the city, mirroring its economic growth, and carrying close to 5 million passengers daily (as of October 2022).

Flagged off by then Prime Minister Atal Bihari Vajpayee and the longest serving chief minister of Delhi, Sheila Dixit, Delhi Metro started its first run two years and nine months ahead of schedule – a rare record for a country infamous for delayed infrastructure projects. Its predecessor, Kolkata Metro, was 30 years in the making, but Delhi Metro was up and running in seven years.

The Making of Delhi Metro 

E Sreedharan, the man who helmed the Delhi Metro Rail Corporation (DMRC) at the time, attributes its success to the coordination between a variety of stakeholders. “It was a joint venture with equal participation from the government of India and Delhi,” says Sreedharan, who came to be known as the “Metro Man”.

Sreedharan says the DMRC had modelled the metro on the lines of similar systems in Singapore and Hong Kong. “But we completed it at 50 per cent less cost. This was mainly because of low-cost labour and cheap loan (at 0.2 per cent rate of interest) provided through Japanese assistance,” he says. Another significant factor was that the DMRC was given full authority to sanction estimates and award contracts.   

Public exchequer versus PPP

A key feature of the DMRC is its complete self-reliance in building the metro rail network. It has kept private participation limited to goods and services contracts alone.

“In Delhi metro, private sector participation was mainly on the execution side. The entire non-fare box revenue was taken to the current level by the private sector,” says Jagannarayan Padmanabhan, director and practice leader for transport and logistics at CRISIL Infrastructure Advisory.

Metro rails are considered a test case for public-private partnership (PPP), but DMRC’s brush with PPP has not been a happy one. The body currently stares at a Rs 7,100 crore hit to its finances due to the terminated Airport Express Line contract with Delhi Airport Metro Express Pvt Ltd (DAMEPL), a subsidiary of the Anil Ambani-owned Reliance Infrastructure. DMRC and DAMEPL have been in a legal battle for over a decade.

Though DMRC has not taken any PPP project after that, and does not plan to do so either, say senior executives, this has not derailed its long-standing business relations with those private contractors which play a key role in its operation.  

Says Olivier Loison, managing director, Alstom India, which has delivered over 800 coaches and provided advanced signalling and train control solutions to DMRC, “As the network continues to expand in the NCR, we see even greater opportunities to develop and deliver mobility solutions for the future of urban transportation and help the region transition to a low-carbon future.”

Running at a loss

DMRC continues to be a net loss-making enterprise (Rs 2,341 crore in FY 2020-21). Globally, no metro rail has ever been able to break even and experts say that expecting anything else from DMRC is unfair as it is a “social good.”

Harsh Dhingra, former chief country representative at Bombardier Transport India, says while there are clear guidelines on how the fare structure should be revised by the fare fixation committee, they are not followed due to political compulsions.

Fare hike is, in fact, a double-edged sword – higher tariff can make the metro unaffordable for a section of the population; on the other hand, no fare hike hurts the finances of the company.

As Vijay Dutt, a former senior official of the railways, and who was also part of the committee on urban transport set up by late Prime Minister Rajiv Gandhi, says, “Urban transport must lose on fare box revenue to be viable. You cannot have unrealistic return expectations from infrastructure projects.” 

Meanwhile, Delhi Metro continues to shine and win plaudits for running trains on time while maintaining a spotless no-mishap record since 2002.