Doubts cast over Jaipur Metro's viability

Internal documents suggest the city may not require a Metro till 2025

Ideally, the first Metro train in Rajasthan should have chugged off from Mansarovar station to Chandpole station in June 2013, providing much-needed respite to Jaipur’s population of four million from traffic snarls and a crumbling public transport system. But the wait for commuters has been prolonged with the deadline to run the Metro train moved to the end of this year.

“The shortage of river sand has delayed construction work. The scarcity was mainly due to a ban on mining and transportation of sand,” says Nihal Chand Goel, chairman & managing director of Jaipur Metro.

“There are other reasons as well. The contractors ran out of cash because of a steep rise in cement and steel prices. They had bid abnormally low for contracts. This resulted in payment issues with vendors, subcontractors and labourers,” he adds.

Goel says “some finishing” work is underway and the authority is in the process of obtaining safety clearances for the rolling stock. The trial runs are over. “The Metro will start operations in December,” he says. But it has been a bumpy ride for the project from the day it was brought to the drawing table. Serious questions have been raised about the feasibility of the project.

“This question (whether the state can afford the Metro project) was raised and discussed at length with officers of the (Union) urban development ministry in June 2006. Mr (E) Sreedharan, former chairman of DMRC (Delhi Metro Rail Corporation), was also present there. It was pointed out that Jaipur would not require a Metro till 2025, looking at the ridership projection,” reveal internal documents reviewed by Business Standard.

“That is why the Bus Rapid Transit System (BRTS) was suggested as a more viable solution for traffic management of Jaipur. Thus, it is true that by making totally different traffic projections, undue haste was made to start (the) Metro without even properly tying up funds,” the documents add.

The project was launched by the state’s then chief minister, the Congress party’s Ashok Gehlot, and DMRC started work on a turnkey basis in February 2010.

Officials say Wilbur Smith, a consultant of international repute, made the traffic and ridership projections for Jaipur Metro for 2011-31. Its combined mobility plan included a Metro (60 km), monorail (50 km), BRTS (165 km) and feeder buses (around 2,500). The success of the Metro was pegged on a parallel running of the monorail, feeder buses and BRTS.

“The ridership estimation was erroneous. We have asked them to show us the basis on which they have calculated the numbers. They have not come back to us,” says a top official who does not wish to be named.

Wilbur Smith had estimated 121,000 commuters a day till March 31, 2018. “This seems impractical at this stage because if we add the total number of commuters on public as well as private transport, it would be difficult to get a figure of more than 25,000 to 30,000 commuters a day. If that is so, all the projections of operational viability will go haywire,” the documents say.

Wilbur Smith did not respond to a phone call and an email seeking its comments.

If the Rajasthan government is right in its own assessment, it is staring at annual operational losses of Rs 41 crore (Rs 410 million) for the next 10 years in the initial phase. This is when losses are calculated at 60 per cent of the projected ridership. The amount rises to Rs 71 crore (Rs 710 million) a year if the loss is calculated at 20 per cent ridership.

These losses are in addition to an investment of more than Rs 10,000 crore required to make the Metro fully operational in two phases of 12 km and 23.1 km. Phase-1 is further divided into Phase-1A (9.7 km) and Phase-1B (2.3 km). The cost for the first phase is Rs 3,149 crore (Rs 31.49 billion), including the cost of Metro coaches, eight elevated and three underground stations and equipment.

The deadline for Phase-1A was June 2013, for which the Centre had invested Rs 630 crore (Rs 6.3 billion) (with 20 per cent equity), the Rajasthan government Rs 1,550 crore (Rs 15.5 billion) (with 49.23 per cent equity) and the remaining Rs 969 crore (Rs 9.69 billion) was obtained through loans from agencies like the Asian Development Bank.

Since the incumbent Vasundhara Raje-led Bharatiya Janata Party (BJP) government felt Phase-1A was ill-conceived and likely to incur operational losses of Rs 71 crore (Rs 710 million) a year, the question before it was whether to make another investment of Rs 1,126 crore (Rs 11.26 billion) for construction work in Phase-1B.

“Had we decided to discontinue, the sunk cost would have been Rs 155 crore (Rs 1.55 billion) (additional cost incurred on a depot, receiving sub-stations and systems in Phase-1, purchase of rolling stock worth Rs 100 crore (Rs 1 billion) three years in advance and Rs 25 crore (Rs 250 million) of advance payment). Also there would have been arbitration costs for cancelling the contract. The overall cost would have been around Rs 700 crore (Rs 7 billion),” says the official quoted above.

Another argument, given in the support of continuing with Phase-1B, is that it will increase the chances of success of Phase-1A and Phase-2.

“Phase 1A will never be successful without Phase-1B and Phase-2 as it caters to a section where ridership could not be high enough to make the section viable,” the documents add. The official says if Phase-1A and Phase-1B run together, the average operational losses for the next 10 years at 20 per cent ridership will come down to round Rs 65 crore (Rs 650 million) from Rs 71 crore (Rs 710 million) a year. “The amount is equivalent to the cost of scrapping Phase-1B. So, we decided to go ahead. If nothing else, at least the city will create an asset and, who knows, we might see profit in future,” the official adds.

The state government has also decided not to burn its fingers with Phase-2. It will use the public-private partnership model for executing the work. However, the Opposition is not convinced with the arguments made by officials in the incumbent government.

“The state government is deliberately delaying the project because it has a Congress stamp on it,” declares Congress state president Sachin Pilot.