'A metro never ends'
— Rajeev Jyoti, President & Managing Director, Bombardier
Almost every major Indian city is planning a metro rail
system as a solution to its urban transportation. Rajeev Jyoti talks to
Venugopal Pillai on the various aspects concerning metro rail projects
and why Bombardier is optimistic about rapid urbanisation and the growing market
for transport solutions.
Metro projects in India are progressing slower than
expected. What are the typical problems that metro projects face?
Developing a metro system is a very capital intensive exercise and needs huge
investment. It is much more than construction. A metro system is a complex
engineering feat. Talking about rapid urbanisation in India, there is a huge
market. A metro system is not merely a mode of transport but also forms the
backbone for further transportation modes and also of urban development in the
city. This has happened in cities like London, Paris and New York. In any city,
construction of metro can never be accomplished soon. It takes intensive
planning and coordination, besides investment and technical expertise. Metros
are developed in cities that are congested; hence implementation will always be
difficult. If cities were not crowded and there were no land constraints, there
would have been no need for a metro rail!
In India, there is an ongoing debate on whether the EPC route or the
public-private partnership route should be followed for metro rail project. What
is your view?
There is no universal law that governs the selection of EPC or PPP routes. It
varies from case to case. A good implementation mode is one that works in the
interest of everybody. As said earlier, a metro system needs huge investment and
when the expected returns to the private developer are low, it is better to use
the EPC route. It must also be remembered that a metro system is not just a
transport solution but also the harbinger of urban development.
A PPP model is generally a large and complex model where there are multiple
partners working together. It is also clear that when we look at PPP model, one
needs to be very clear about the long-term commitment that the private
consortium has to give to the public authority or government (grantor of
concession). When we look at any public transportation, it is clear that these
are not very easy to handle for a 30-35 year period, which is usually the
concession period. Several "external" situations can develop over a period of
time that could go against the transportation mode conceived at any point.
Before entrusting large responsibility in private hands, a lot of research has
to be done.
Take, for example, Mumbai Metro (Line 1) which is a 17-km elevated corridor
between Versova and Ghatkopar via Andheri. Assuming that the line is made, there
is a competitive mode of transport that could take riders away from the metro
system. The entire economics of a project is based on returns, which is
determined by the usage pattern of the metro system. There is also the issue of
pricing. Passengers cannot be charged high amount for their travel, and there
will be certain regulation from the government. Thus if a private consortium is
governed by the authority for ticketing and it has invested heavily in
infrastructure, the economics of the project might be defeated.
There is also a point of competing infrastructure. While granting a concession
for a metro project, the government would ensure that no competing
infrastructure would be created so as to maintain the economic viability of the
project. However, there could be a possibility where the government, in true
social interest, thinks that the mass rapid transit system is just not working.
In this case, the government could be compelled to create or abet the creation
of a competing infrastructure. Also in PPP projects, the government has an
equity stake, however small. Thus, there could be some "government influence"
and there is an element of uncertainty on the ramifications that this could have
during the concession period.
How do you see the market for Bombardier's products from India given that
almost every major city has planned a metro rail system?
Like anywhere else in the world the metro rail (metro) culture in India is an
ever-expanding process. A metro never ends. It keeps growing with the city. This
growth opens up newer markets for solution providers like Bombardier. Entering a
metro system in any city is more than supplying services. It means establishing a long-term
relationship because it means working side-by-side with the customer to optimise
In India, Delhi Metro Rail Corporation has been a big client for Bombardier.
Delhi Metro is also expanding and this will continue. In future, there will also
be scope for fleet renewal. We are very encouraged by the prospects in India and
are confident of increasing our presence in the country.
Mumbai has been grappling with an ideal transportation solution. Growing
population and land shortage are major constraints. What is your view?
Mumbai is a crowded city and an efficient public transport solution is
absolutely fundamental. Given its linear geographical shape and ever-growing
population, there are constraints while devising an ideal transportation system.
Mumbai, in fact, has been lucky to have a very efficient system in the form of
the suburban railway that is an effective and efficient public transportation
system. It is very well defined for city's geography and population. However,
the system is now proving inadequate and sufficient investment is being made to
improve the carrying capacity of the system. For instance, the conversion of DC
(direct current) system to AC (alternating current) system to enable the running
of more and longer trains is an important step. Urban planners are also now
working on integrating the three suburban lines—Western, Central and Harbour—and
this is where the Mumbai metro has come in.
Working within the constraints of land and growing population, alternatives are
being suggested. But again, these should be economically feasible. Underground
metro can be a technically feasible solution as was the case with the Delhi
Metro where lines have been built 20-30m below the ground with no impact
whatsoever felt on the surface.
Monorail is an alternative but these can be used only where routes are not very
dense. Monorail cannot carry large number of passengers, as a railway or a
metro, but are lighter and easier to install.
What is the current status of Bombardier’s plant to manufacture coaches in
collaboration with the Indian Railways.
Land has been acquired at Vadodara in Gujarat. Civil construction has begun.
With work progressing rapidly, we hope that the plant should be ready by the end
of 2008. We would be investing 25-30 million euros in plant and machinery. The
overall investment would be higher considering the softer issues like
technology, knowledge etc.
Bombardier is happy with the fact that it would be the first multinational to
set up manufacturing facility for railway and metro coaches in India.
[May 19-25, 2008]