mumbai railway vikas corporation limited...

MUMBAI RAILWAY VIKAS CORPORATION LIMITED (MRVC)

MUMBAI URBAN TRANSPORT PROJECT 2A (MUTP 2A)

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

Institutional Development of the Suburban Rail System: Support to Indian Railways in the

Design and Implementation of their Suburban Rail Strategy

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Contents

EXECUTIVE SUMMARY ...................................................................................................................... 1

SECTION 1: BACKGROUND ................................................................................................................ 8 1. Urban India 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 S u b u r b a n R a i l P a s s e n g e r G r o w t h i n I n d i a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2 4.2 S u b u r b a n R a i l O p e r a t i o n s i n M a j o r M e t r o p o l i t a n A r e a s o f I n d i a . . . . . . . . . . . . . . . . . . . . . 1 4 4.3 E m e r g i n g U r b a n I n d i a a n d P o t e n t i a l s o f S u b u r b a n R a i l . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 7

5. Indian Urban transport – issues and perspective ................................................................................. 21 5.1 S t u d y o n T r a f f i c a n d T r a n s p o r t a t i o n P o l i c i e s a n d S t r a t e g i e s i n U r b a n A r e a s i n

I n d i a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1 5.2 K e y R e c o m m e n d a t i o n s o f R a k e s h M o h a n C o m m i t t e e R e p o r t . . . . . . . . . . . . . . . . . . . . . . . . 2 2 5.3 F i n a n c i a l a n d I n s t i t u t i o n a l S t u d y o f C o m b i n e d M e t r o p o l i t a n R a i l . . . . . . . . . . . . . . . . . . . 2 3

6. Institutional Arrangements for Urban Transport in India....................................................................24 7. Mumbai Suburban Rail System- Issues and Concerns ......................................................................... 27 8. MRVC and its Mandate ..................................................................................................................... 27 9. Problem Statement with Respect to Suburban Rail Transport in India ................................................28

9.1 S u b u r b a n R a i l w a y O p e r a t i o n s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 8 9.2 U r b a n T r a n s p o r t - U t i l i s a t i o n o f e x i s t i n g i n f r a s t r u c t u r e P r o b l e m S u b U r b a n R a i l

n e e d i n g U r g e n t A t t e n t i o n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 9 9.3 P r o b l e m D o m a i n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 0 9.4 F o c u s A r e a s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 2 9.5 S W O T A n a l y s i s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 3 9.6 K e y A r e a s N e e d i n g A t t e n t i o n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 3

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 L e s s o n f r o m S u c c e s s i n S u b u r b a n R a i l . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 9 12.2 L e s s o n f r o m D e l a y e d i m p l e m e n t a t i o n o f S u b u r b a n R a i l . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 0

13. Thematic Approach in evolving Suburban Rail Institutional Options ...................................................44 13.1 C o n s i d e r a t i o n s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 4 13.2 I n s i g h t s t o G o v e r n m e n t o f I n d i a / I R P e r s p e c t i v e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 4 13.3 U M T A - U n i f i e d M e t r o p o l i t a n T r a n s p o r t A u t h o r i t y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 5 13.4 W h e t h e r C o r p o r a t i o n o r A u t h o r i t y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 6 13.5 S p e c i a l P u r p o s e V e h i c l e ( S P V ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 6 13.6 F i n a n c i n g R e l a t e d A s p e c t s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 6

14. Suburban Rail Institutional Strengthening - Options and Evaluation for Suburban Rail Development Organisations (SRDO) ....................................................................................................................... 47 14.1 I n i t i a l O p t i o n s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 7 14.2 E v a l u a t i o n o f O p t i o n s f o r F u r t h e r C o n s i d e r a t i o n a n d D i s c u s s i o n s . . . . . . . . . . . . . . . . . . 5 0 14.3 P r i n c i p a l S t a k e h o l d e r s V i e w o n e v o l v i n g S u b u r b a n R a i l I n s t i t u t i o n a l O p t i o n s . . 5 4 14.4 V i e w s E x p r e s s e d i n W o r k s h o p s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 6 14.5 E v o l v e d S h a r e d v i e w o n S u b u r b a n R a i l I n s t i t u t i o n a l S t r e n g t h e n i n g a n d O p t i o n s 5 8

SECTION 4: RECOMMENDATION ...................................................................................................... 59 15. Recommended Suburban Rail Institutional Strategy ........................................................................ 60

15.1 R e g i o n a l / N a t i o n a l l e v e l . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 0 15.2 M u m b a i S p e c i f i c - I n s t i t u t i o n a l A r r a n g e m e n t . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 4 15.3 T i m e B o u n d A c t i o n P l a n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 7

16. Way Forward ..................................................................................................................................... 73 16.1 N a t i o n a l / R e g i o n a l P e r s p e c t i v e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 3 16.2 M u m b a i M e t r o p o l i t a n R e g i o n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 4 16.3 E x p e d i t i n g P r o j e c t s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 5



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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/ Commuter Rail 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 : Delhi Metro 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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List of Abbreviations

BCL Braithwaite & Co. Ltd.

BR British Railways

BRTS Bus Rapid Transit System

BSCL Burn Standard Company 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 Locomotive Works

CONCOR Container Corporation of India Limited

CMD Chairman and Managing Director

CMDA Chennai Metropolitan Development Authority

CPTM Companhia Paulista de Trens Metropolitanos (English: São Paulo Metropolitan Train Company)

CRIS Centre for Railway Information Systems

CSA Combined Statistical Area

CR Central Railway

CST Chhatrapati 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 Diesel Locomotive Works

DMRC Delhi Metro Rail Corporation

DMU Diesel Multiple Unit

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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IRFC Indian Railway Finance Corporation Limited

JNR Japan National Railways

JNNURM Jawaharlal Nehru National Urban Renewal Mission

KRCL Konkan Railway Corporation Limited

LB Local Body

LIRR Long Island Rail Road

LRT Light Rail Transit

MC Municipal Corporation

MCA Military Cantonment 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 Mumbai Metro 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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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 Rail Vikas Nigam 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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Executive Summary



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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 trains 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 India is

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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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 Mumbai

suburban railway 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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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 monorail system and Metro Line 1 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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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.

Regional Suburban Rail Corporation

Enhanced UMTAInc. Financing Division

“Ring Fenced”Urban Transport

Fund

Negotiates Detailed

Arrangementswith IR

Examples of UTF Potential Sources

ProgressivelyEnhanced

MRVC Role

UMTA Composition• State Representatives• ULB representatives• Centre representatives

including IR• User representatives• Representatives of other

significant contributorsto UTF

• Establishes Participating Agency Partnership Agreements

• Prepares Business Plans• Defines Service Levels & Performance

Criteria by Modes• Establishes Modal Fare Tariffs • Secures Capital & Operating

Funding/Financing Commitments• Develops Multi-modal Expansion

Plans• Contracts Delivery of Modal Services

Through Subsidiary Agencies & Monitors Performance

Multi-modal Authority

Negotiate Incremental Prime Arrangements with Indian Railways on:• Ownership/use of suburban rail

assets• Tracks ,yards, shops,

rolling stock andancillary facilities

• ROW/Lands/Property• Stations

• General terms and conditionsof operating suburban trainservices on behalf ofUMTA including fiscalarrangements

UMTA Suburban Rail System

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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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:



7

l) Fast track 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 (Kolkata, Chennai, Delhi, Kanpur, Lucknow, Hyderabad, Bangalore,

Ahmedabad 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.



8

Section 1: Background



9

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.



10

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.



11

Section 2: Problem Setting



12

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,

Pune, 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).



13

Table 4-1: Suburban Rail Passenger Growth in India

Year No. of passengers

Originating (million) CAGR

Passenger-km (million)

CAGR Average Lead

(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)

City/ Region Suburban Railway Length (km) Daily

Ridership (million)

Mumbai Mumbai Suburban Railway 434 8.00

Pune Pune Suburban Railway 103 0.11

Kolkata Kolkata suburban railway 1172 2.80

Chennai Chennai suburban railway 286 1.36

Delhi Delhi Suburban Railway 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

System City Opening

Year No of Lines

Notes Operated by

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

http://en.wikipedia.org/wiki/Mumbai_Suburban_Railway

http://en.wikipedia.org/wiki/Mumbai_Metropolitan_Region

http://en.wikipedia.org/wiki/Broad_gauge

http://en.wikipedia.org/wiki/Chennai_Suburban_Railway

http://en.wikipedia.org/wiki/Chennai


http://en.wikipedia.org/wiki/Kolkata_Suburban_Railway

http://en.wikipedia.org/wiki/Kolkata


http://en.wikipedia.org/wiki/Delhi_Suburban_Railway

http://en.wikipedia.org/wiki/Delhi


http://en.wikipedia.org/wiki/Multi-Modal_Transport_System_(Hyderabad)

http://en.wikipedia.org/wiki/Hyderabad,_India


http://en.wikipedia.org/wiki/Pune_Suburban_Railway

http://en.wikipedia.org/wiki/Pune


http://en.wikipedia.org/wiki/Barabanki-Lucknow_Suburban_Railway

http://en.wikipedia.org/wiki/Barabanki_city

http://en.wikipedia.org/wiki/Lucknow


http://en.wikipedia.org/wiki/Lucknow-Kanpur_Suburban_Railway

http://en.wikipedia.org/wiki/Lucknow

http://en.wikipedia.org/wiki/Kanpur




14

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 Maharashtra (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.



15

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 (MEMUs). As of 2013, the suburban sector has 580 services,

including 250 in the Beach–Tambaram section, 240 services in the Central–

Tiruvallur section, and 90 in the Central–Gummidipoondi. 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.

Avadi – Sriperumbudur – Kanchipuram

Saidapet – Sriperumbudur – Kanchipuram (Partly Elevated)

Sriperumbudur – Oragadam – Chengalpattu

Kelambakkam – Vandalur

St.Thomas Mount – Porur

The Avadi–Sriperumbudur line will cover a distance of 26.65 km. The railways

also plan to lay a 179 km Perungudi–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, South 24 Parganas, Nadia, Howrah

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 Kolkata Metro

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 Sealdah. 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 borders of India 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 western

suburbs 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 Northern

Railway zone of the Indian railways for the National Capital Region. This Railway

service covers the city state of Delhi, along with the adjoining districts of

Faridabad, Ghaziabad and other adjoining places in Haryana and Uttar Pradesh.

These services are mostly run using EMU and MEMU rakes. This also includes



16

passenger trains and DMU services up to Rewari 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 Andhra Pradesh (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 twin cities, 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 Pune District, Maharashtra. It operates on two

routes, i.e. from Pune Junction to Lonavala 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-

Daund 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

http://en.wikipedia.org/wiki/Suburban_rail_in_India

http://en.wikipedia.org/wiki/Hyderabad,_India

http://en.wikipedia.org/wiki/Government_of_Andhra_Pradesh

http://en.wikipedia.org/wiki/Lingampally,_Hyderabad



17

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. Gujarat 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



18

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

S. No. UA State Population (in Millions) Projected Population (in Millions)

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 West Bengal 11.02 13.21 14.11 15.87 17.42 18.96

4 Chennai Tamil Nadu 5.42 6.56 8.70 10.17 11.80 13.44

5 Bangalore Karnataka 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 Surat Gujarat 1.52 2.81 4.59 6.04 7.57 9.10

10 Jaipur Rajasthan 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 Nagpur 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 Indore Madhya Pradesh 1.11 1.51 2.21 2.71 3.26 3.81

16 Coimbatore Tamil Nadu 1.10 1.46 2.15 2.62 3.15 3.67

17 Kochi Kerala 1.14 1.36 2.12 2.52 3.00 3.49

18 Patna Bihar 1.10 1.70 2.05 2.56 3.04 3.51

19 Kozhikode Kerala 0.80 0.88 2.03 2.47 3.08 3.70

20 Thrissur 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)



19

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

Year

Suburban

No. of passengers Originating (million)

CAGR Passenger-km

(million) CAGR

Average Lead (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.



20

Table 4-6: Potential for Suburban Rail Expansion/ Creation in Major UAs of India

Sl. No.

UA

Projected Population by 2041 (in

Millions)

Presence of

Suburban Rail

System

Passengers/day (in

Millions) in 2013-14

Potential for

Expansion/ Creation of

in Future

Proposed Extension of Suburban Lines/Regional Rails

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

6 Hyderabad 18.54 Yes 0.20 Yes 102 km under MMTS + 280 km as 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



21

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;



22

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.



23

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.



24

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,



25

Hyderabad, Kolkatta, Jaipur, etc.) and BRTS (Pune, Pimpri-Chinchwad,

Ahmedabad, Vijayawada, 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.



26

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.



27

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.



28

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

Rail Transport in India

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



29

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 Virar Fast runs express to Borivli, and hence is a local. The Karjat Fast is an express until Kalyan. The Ambarnath Fast Local goes CSTM - Dadar - Thane and thereafter stops at all stations on its route. The Borivli Fast Local used to run (1980s) from Jogeshwari to Bombay Central non-stop.



30

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



31

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.



32

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 perspective

11;

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



33

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, maintenance infrastructure for development and operation of suburban systems.

IR Owns lands in prime areas which can be used for commercial development and raising the resources.

Redevelopment along with commercial development potential/ opportunities of existing suburban railway stations.

IR has wealth of experienced administrative, technical and maintenance staff for delivery, operation and maintenance of suburban railway system.

GMs vested with multiple tasks i.e. taking care of the inter-city as well as suburban systems development, maintenance and operations.

Centralized decision making i.e. high dependence on Railway Board.

Coordination problems with other stakeholders

Difficulties in raising the resources for capital investment needs and O&M losses on suburban railway systems from the internal sources

Difficulties in convincing the State Government or its entities or ULBs to take 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

urban areas for both inter-city and intra-city (suburban operations) operations and effective use of the stations for commercial development.

Integrated development of intercity rail terminals and intra-city suburban system especially in greenfield areas.

Over-burdened with the responsibility of suburban railway development, maintenance and operation which is not the responsibility of the Indian Railways

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;



34

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.



35

Section 3: Institutional Options



36

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, IRCON International and

other PSUs of Railways.’

12 The excerpts are taken from IR Vision 2020



37

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 manufacturing 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



38

− 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



39

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 (Germany), 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.



40

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 Line 2, 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.



41

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 Metropolitan Region

Moscow Metropolitan Area

Greater London New York Metropolitan Area

São Paulo Metropolitan Region

Hong Kong

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) Source : World Bank

5,960 2,613 3,400 2014.78 2435.18 15684.81 2252.67 2632.60

GDP Per Capita of the Country (In 2012) (Amount in US Dollars), ( Source: World Bank)

46,720 39,772 41,514 14,037 38,514 49,965 11,340 36,796

GDP of City ( Amount in US Billions of Dollars)

(For Metropolitan Area) (Source: Wikipedia and Official website of City’s website)

1,479 (2008) 723(2008) 117 ( 2009) 225 (2009) 731.2 ( 2012) 1406 (2008) 388 (2008) 2,633

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 (considering motorised modes only)

39.5% 7.2% - - 3.7% 0.7% 15% -

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

and operated by the National Railway, the

Metropolitan Government, a “partnership”

between them, or a private company.

If owned and operated by the National

Railway, is this done by a separate “Suburban

Rail Operator” as envisaged by IR.

Commuter / suburban rail is operated by private entities (EJRC and others)

Capital and operating funding, setting service levels and fare structure

established by STIF

The RER (Réseau Express Régional) system comprises five lines that service the immediate suburbs of Paris, though some lines extend further out. They are composed by letter: A, B, C, D, & E. The RATP operates Lines A & B jointly with the SNCF (Société Nationale des Chemins de fer Français), the French National Railway Company, while LinesC, D, & E are solely operated by the SNCF.

Suburban network is known as the Transilien, operated solely by the SNCF structure is

S-Bahn Berlin GmbH, a 100% subsidiary of Deutsche Bahn the national railway organisation operates commuter lines. Though Deutsche Bahn is a private company, the government of Germany holds majority of share capital and therefore Deutsche Bahn can still be called a state-owned company.

Moscow Railway, a subsidiary of Russian Railways owns and operates commuter rail lines

Moscow Railway is one of the 19 regional railway bureaus of Russian Railways

Operated as concessions contracted by Cental government to a number of private rail firms (c2c, Chiltern Railways, First Capital Connect, Gatwick Express, Greater Anglia, Heathrow Connect, Heathrow Express, London Mainland, London Overground Rail Operations, South West Trains, Southeastern, Southern and Stansted Express.)

The Central Government has retained ownership and is essentially responsible for the overall railway infrastructure and grants accessibility to the operating consesstions The Greater London Authority also operates a number of “Overland” rail lines

The Metro-North Commuter Railroad (reporting mark MNCR), trading as MTA Metro-North Railroad or Metro-North, Long Island Rail Road and Staten Island Railway are the commuter rail lines owned and operated by the Metropolitan Transport Authority (MTA), an authority of New York State

Companhia Paulista de Trens Metropolitanos (CPTM) (English: São Paulo Metropolitan Train Company) is a commuter rail company owned by the São Paulo State Secretariat for Metropolitan Transports (of the Sao Paulo state).

Mass Transit Railway Corporation (MTRC) (sole shareholder was the Hong Kong Government) operates commuter rail network connecting the north eastern and north- western new Territories with the rest of Hong Kong. Kowloon-Canton Railway Corporation (KCRC)

The reasons given and the benefits claimed for the ownership and operations arrangements in place, and the steps and elapsed time required to establish this arrangement

Japan has adopted implementation of commuter lines through privatization since 1930s in which rail development has been linked to township development and commercial development in and around stations.



42


Whether the suburban rail system is operated directly by a the National Railway, or the Metropolitan Government, or by a contractor under terms and conditions specified by the National Railway (or Rail Regulator) and/or the Metropolitan Government

Commuter/ Suburban rail infrastructure is owned by MLIT/ TMG and operated by private entities

SNCF Transilien is a tradebrand of SNCF. It is the body responsible for Paris urban (with RATP, Autonomous Operator of Parisian Transports) and suburban transport system.

S-Bahn Berlin GmbH operates commuter lines under terms and conditions specified by Deutsche Bahn and BVG

Moscow Railway, a subsidiary of Russian Railways operates commuter rail lines

Operated by number of private rail firms

MTA operates the suburban/ commuter rail services

CPTM under the terms and conditions by the São Paulo State Secretariat for Metropolitan Transports

MTRC under the terms and conditions by the Hong Kong government

The political and institutional structure of the Metropolitan Government and the Metropolitan Transport Agency– in particular whether it is

directly elected body covering the whole of the metropolitan area formed by a group of individual local authorities within the metropolitan area specifically for the purpose of strategic planning and delivery of transport services, (and strategic land use planning also) and lead by an elected head or a Board

The Tokyo Metropolitan Government (TMG), is a regional government

The Tokyo Metropolitan Assembly is the fundamental decision-making body of Tokyo Metropolis. Governor and 127 members are directly elected by the citizens, and represent the Metropolis of Tokyo

The Syndicat des transports d'Île-de-France (STIF) is the autorité organisatrice de transports (transport organisation authority) that controls the Paris public transport network and coordinates the different transport companies operating in Île-de-France, mainly the RATP, the SNCF and Optile.

Greater London Authority (GLA), a regional government headed by a Mayor and has 25 politicians, all directly elected.

MTA is governed by a 17-member Board. Members are nominated by the Governor, with four recommended by New York City's mayor and one each by the county executives of Nassau, Suffolk, Westchester, Dutchess, Orange, Rockland, and Putnam counties. All Board members are confirmed by the New York State Senate.

Hong Kong is a Special Administrative Region (SAR) of the People's Republic of China (PRC)

Who is responsible for creating the Vision for the development of the suburban rail system in a given city, and the strategic planning for the suburban system

Tokyo Metropolitan Bureau of Transportation (TMBT) of TMG

STIF BVG TfL MTA São Paulo State Secretariat for Metropolitan Transports

Hong Kong government

Who provides the finance for Capital Expenditure, and whether this is provided through a regular budgeting process, or ad hoc on a “project by project” basis.

National and Local Governments

Ad hoc on a “project by project”

Federal and state governments


Federal government


Federal government


MTA/ Federal government


São Paulo State Secretariat for Metropolitan Transports



Who provides the finance for operating expenditure (or subsidies) and the overall terms and conditions of any service supply contract with an operator

MLIT STIF Deutsche Bahn and BVG 17% of operating expenses are provided by the Moscow Railway and the remaining 83% subsidized by regional governments

Operating expenses are not subsidized

MTA Hong Kong government

Whether decisions on strategic service planning, service expansion and service standards are made by the Metropolitan Government (or Metropolitan Transport Agency), also responsible for other aspects of transport and urban development within the metropolitan area, or by the National Railway or Suburban Rail Operator.

TMG STIF has real autonomy and is not dependent on the French Government. STIF is responsible for providing integrated and efficient transport 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.),

BVG Moscow Railway/ Russian Railway

Greater London Authority (GLA) MTA Hong Kong government



43


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/ Russian Railway

Transport for London (TfL) MTA State and City governments


In case the suburban system is not operated as part of the National Railway, the approach used to ensure the continuing updating of institutional and staff skills and knowledge particularly in rail operations.

EJRC, one of the seven Japan Railway Group companies ensures continuing up-dation of staff skills in rail operations

What incentivize are given to the entity to improve its financial performance.

Operations by private entities through revenues from fare as well as commercial development of stations.

What are other activities of the entity, if any, that cross subsidize its railway operation. How effective is the institutional arrangement in developing and operating non-rail business.

Commercial development of stations

Real estate development in the vicinity of the stations

Transit Oriented Development (TOD) initiates

Real estate development along railway routes

Note: Detailed documentation on the international case studies is presented in Annexure 12-1



44

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



45

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



46

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



47

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.



48

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.



49

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).



50

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



51

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.



52

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

Option/ Criteria

Operational Stability and

Operating Efficiency

Ownership and Maintenance of

Assets Service Planning

Fare and Operating Subsidies

Business Planning Strategic Planning for System Expansion and

Capital Investment

Partnership Arrangements with

State Authorities (public-Public)

Property Development Management

Public Private Partnership

Arrangements Legal Status

Institutional Changes Required in Ministry of

Railways

Ease of Implementation

Option 1 Status Quo or Business as Usual Case

No change (Existing Zonal Railways would continue in taking care of the operational responsibility of suburban operations (No complexity for IR)

No change (IR would continue to own and maintain the assets)

No change (IR would do)

Difficult to absorb the fare and operating subsidies

Difficult task Difficult with existing institutional setup at zonal Railways

Difficult with existing institutional setup at zonal Railways



No change No change No difficulty

Option 2 Current MRVC Model (Partnership with State Agencies)

Same as above Same as above Same as above Difficult to absorb the fare and operating subsidies

Possible Possible (similar to conceiving MUTP like projects programme)

Possible similar to MRVC (partnership between IR and Government of Maharashtra)



No legal hurdles for creation of Rail Development Corporation (RDC) which would be similar to MRVC

No change No difficulty

Option 3 Enhanced MRVC Model

Same as above Same as above Same as above Difficult to absorb the fare and operating subsidies

Establishing the principle of setting rail fare structures within SRSSA independent of other suburban rail systems in India – A challenging political decision.

The fare and operating subsidies may be shared by the stakeholders.

Possible Difficult with existing institutional setup at zonal Railways




Partnering IR with other central government organisations/ departments may need some legal amendments

Partnering with other central government organisations/ departments may warrant for capacity building and institutional changes in the Railway Board

Low difficulty

Option 4 As Option 3 but with exclusive suburban rail organization (New Zonal Railway) and Creation of SRDC/ SRDA and SRO

SRO (Less complexity for IR). A new operator, 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.

The ownership of the entire suburban rail infrastructure, which is currently vested in the Railways, is to transferred to SRDA.

SRDC/ SRDA SRDC/ SRDA being jointly owned, the fare and operating subsidies may be shared by the stakeholders

As SRDC/ SRDA would adequate institutional capacity with a more focus on suburban rail infrastructure and operations, will be responsible for preparing Business Plan for suburban rail infrastructure and operations

Possible (similar to conceiving MUTP like projects programme)

Possible similar to MRVC (partnership between IR and Government of Maharashtra)



No legal hurdles for creating new zonal railways for suburban operations in the major metropolitan areas

No legal hurdles for creating RDC/ SRA

Creation of new zonal railways for suburban operations in the major metropolitan areas and further creation of SRDC under interim option, SRDA under long term option warrant for capacity building and institutional changes in the Railway Board

Creation of SRO for new zonal railways created for suburban rail operations warrant for capacity building and institutional changes in the Railway Board

Medium difficulty



53

Option/ Criteria

Operational Stability and

Operating Efficiency

Ownership and Maintenance of

Assets Service Planning

Fare and Operating Subsidies

Business Planning Strategic Planning for System Expansion and

Capital Investment

Partnership Arrangements with

State Authorities (public-Public)

Property Development Management

Public Private Partnership

Arrangements Legal Status

Institutional Changes Required in Ministry of

Railways

Ease of Implementation

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

SRO translated to RO i.e. Rail Operator (More complexity for IR)

IR need to share the suburban rail infrastructure with other stakeholders like State Governments/ MoUD and State Governments/ MoUD need to share the metro/ monorail infrastructure with IR

RDC/ RDA (Rail Development Corporation/ Rail Development Authority)

Same as Option 4 RDC/ RDA (Rail Development Corporation/ Rail Development Authority)

Same as Option 2

RDC/ RDA in coordination with the City/ Regional authorities and Urban Development Department of the State Governments

RDC/ RDA/RO will have partnership arrangements with State Governments

Relatively Easy as RDC/ RDA/ RO will have partnership arrangements with State Governments

Relatively Easy as RDC/ RDA will have adequate institutional arrangement to go for PPP arrangements

Joint ownership and management of RO by IR with State Governments require amendments to the Acts.

Same as option 4

Development and operation of additional guided transport systems i.e. metro/ monorail systems in the newly created zonal railways would invite further more capacity and institutional changes in the Railway Board

High difficulty

Option 6 As Option 5 but including All Higher Order Regional Transit (Including Buses)

RO translates PTO i.e. Public Transport Operator (More complexity for IR)

IR need to share the suburban rail infrastructure with other stakeholders like State Governments/ MoUD and State Governments/ MoUD need to share the metro/ monorail infrastructure with IR

TDC/ TDA (Transit Development Corporation/ Transit Development Authority)

Same as Option 4 TDC/ TDA (Transit Development Corporation/ Transit Development Authority)

Same as Option 2

TDC/ TDA in coordination with the City/ Regional authorities and Urban Development Department of the State Governments

TDC/TDA/TO will have partnership arrangements with State Governments

Relatively Easy as TDC/ TDA/TO will have partnership arrangements with State Governments

Relatively Easy as TDC/ TDA will have adequate institutional arrangement to go for PPP arrangements

Joint ownership and management of TO by IR with State Governments require amendments to the Acts.

Same as option 4

Development and operation of additional guided transport systems i.e. metro/ monorail systems and bus system in the newly created zonal railways would invite further more capacity and institutional changes in the Railway Board

Very High Difficult

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.



54

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



55

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.



56

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;



57

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.



58

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.



59

Section 4: Recommendation



60

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.



61

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;



62

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.



63

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.



64

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.



65

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.

24

Source: 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



66




Fund

Negotiates Detailed

Arrangementswith IR



MRVC Role

















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

Figure 15-3: UTF - Potential Sources of Funding



67

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

For Mumbai

Co

mp

lex

ity

Time

Option 1:

Current

MRVC Model

(Partnership

with State

Agencies)

Option 4: All Rail

Based Regional

Public Transport

Provided by Regional

Transport Authority

by contracts with

separate service

delivery companies:

• Suburban Rail

(trains operated by

IR)

• Metro and

Monorail)

Option 2:

Enhanced

MRVC

Model

Option 5: As

Option 4 but

including All

Higher Order

Regional Transit

(Including Buses)

& Major Roads

ExistingUMTA

ExistingUMTA

Option 3: As

Option 2 but

with Exclusive

Suburban Rail

Organization

(SPV)

ExpandedUMTA

ExpandedUMTA

RegionalTransportation

Authority

RegionalTransportation

Authority

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



68

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, Navi Mumbai, 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



69

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.



70

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



71

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.



72

Table 15-1: Implementation Program for Interim Arrangement- Enhanced MRVC Model

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.

Task No. Task Name

2016 2017 2018



73

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.



74

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.




Fund

Negotiates Detailed

Arrangementswith IR



MRVC Role

















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.



75

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.