Infrastructure: In The Fast Lane

Kumar keshav, the managing director of Lucknow Metro Rail Corporation (LMRC), clearly remembers 27 September, 2014 — the day construction work for the Lucknow Metro began. “There were apprehensions. People wondered if it would be done within the timeframe. Today, I can say with authority that on 1 December this year, the metro trial runs will begin and within two to three months of that commuters will be able to take metro rides in Lucknow,” says a confident Keshav, a veteran of Delhi Metro and an alumnus of IIT Roorkee and IIT Kanpur.

Termed as the ‘dream project’ of chief minister AkhileshYadav alongside the expressways, highways and industrial complexes, the timely completion of phase-1 of the Lucknow Metro is nothing short of a record of sorts for a mega infrastructure project of this magnitude. There are, in fact, several firsts associated with the Lucknow Metro, including the fact that the Lucknow Metro started construction with seed money, land and other amenities provided by the State government much before approvals came in from the central government. Funding from the European Investment Bank (EIB) and the Centre came in only a few months ago.

Among other firsts, the Lucknow Metro is anticipated to be the fastest operational stretch, expected to open in less than 28 months from the date of commencement of construction, overtaking metro projects of Kochi (under construction), Jaipur (phase-1 operational), Chennai and Bangalore. The LMRC also boasts of being the first cost-effective metro construction with the lowest per-kilometre cost and the highest level of indigenisation, around 90 per cent. The rolling stock (coaches) is manufactured in Sricity, Andhra Pradesh by Alstom’s Indian joint venture firm. Alstom will supply 20 Metropolis trainsets, each comprising four metro cars. Another first is the use of the latest communications-based train control (CBTC) signaling system provided by Alstom. The CBTC will enable trains to run at higher frequencies and speeds in total safety. The headway of the Lucknow Metro will be 90 seconds, says Keshav, implying that LMRC would dispatch trains at intervals of one-and-a-half minutes. “The CBTC system virtually means operating a driverless train,” says Keshav.

In the first stage, LMRC will operate nine trains, each with four coaches, on a 8.5-kilometre stretch with eight stations between Transport Nagar near Lucknow airport and Charbagh railway station.

Getting It Right
Land is a major hurdle for any city-specific infrastructure project. But thanks to the active involvement of the CM’s office, land procurement was smooth, tension-free and cheap, which speeded up the process tremendously, says Keshav.

“The Lucknow and Kochi Metro Rail projects are among the fastest with both projected to be completed in three years’ time,” says E. Sreedharan, popularly known as the ‘Metro Man’. He is the principal advisor to LMRC and the Kochi Metro. Explaining why the Lucknow Metro was the cheapest on cost-per-km, Sreedharan says, “Land cost in Lucknow is cheaper compared to Kochi and that has helped the project immensely.”

For its first phase, the cost per km for the Lucknow Metro works out to less than Rs 235 crore whereas it is Rs 288 crore per km for the Vijaywada Metro, over Rs 260 crore/km for Jaipur, Rs 386 crore/km for the phase-III in Delhi and Rs 425 crore/km for the Bangalore Metro.

According to Sanjay Garg, partner, Capital Projects, PwC India, the cheaper land costs in Lucknow “will have a positive effect on capital returns”.

Securing Funding
Construction began in September 2014, but the Central government’s approval took time and two separate meetings occurred at the Public Investment Board (PIB) before Central funds were released, recounts Keshav. “The first PIB meeting was in August 2014 when I had just joined LMRC. It did not come up for approval back then. We were told to get the funding tied up first. It was ultimately approved by PIB in August 2015 and by the Union Cabinet last December,” says Keshav. The LMRC is a 50:50 joint venture between the Central and the Uttar Pradesh (UP) governments. The Central government’s ceiling in terms of fund infusion is about 20 per cent or around Rs 1,300 crore, while UP government’s is around 26 per cent of the total 46 per cent funding commitment of the two JV partners, including land, State taxes, etc. The remaining 54 per cent of funds will be provided by EIB, which works out to €450 million, or approximately Rs 3,300 crore. The agreement to release the first tranche of €200 million has already been signed.

Till date, the State government has invested around Rs 900 crore. “The Central government had kept a provision of Rs 140 crore in last year’s budget which we managed to secure on 30th March this year,” says Keshav.

Garg of PwC says for metro projects to be successful, it has to be ensured that they are operationally self-sustainable. “A combination of farebox and non farebox revenues, and solar power to reduce power bill, among other steps are essential,” says Garg. Since most of the cost in operating a metro comes from power consumption, enhanced use of solar energy and subsidy by the State government can be beneficial in reducing per unit cost for power consumption,” adds Garg.

The Cascading Effect
It is estimated that the total ridership in the proposed North-South corridor of the Lucknow Metro will be 6.5 lakh passengers per day by 2020. In the East-West corridor, it is projected to be 2.45 lakh passengers per day. “This will have a cascading effect on the reduction in congestion and pollution levels in Lucknow city,” says Garg of PwC. Echoing similar sentiments, Keshav of Lucknow Metro adds, “We have visualised that during the peak hours there will be at least 20,000 metro commuters per hour going in one direction by 2018 and 6.5 lakh per day by 2020.” The LMRC will employ around 500 people by March next year when phase-1 gets operational. But the cascading effect of the Lucknow Metro is much bigger.

Enthused by the success of the LMRC, the UP government has made LMRC the interim consultants for four new metro projects to be undertaken across Agra, Meerut, Kanpur and Varanasi. “LMRC is doing a detailed project report for these cities. Kanpur was the first. The State has already approved it and now it is with the Centre. We are asking for in-principle approval like Lucknow Metro for Kanpur, Agra, Meerut and Varanasi, so contracts can be awarded, lands acquired and construction can begin,” says Keshav. This means thousands of more jobs will be created by metro project in UP over the next few years.

Big Infra Push
While metro is the most visible and talked about infrastructure project in UP, there are others quietly moving towards completion. These include the Rs 15,000-croreLucknow-Agra expressway, which is expected to open for business by Diwali. This longest access-controlled expressway in the country is funded entirely from the State coffers. It spans across 10 districts, namely, Agra, Firozabad, Mainpuri, Etawah, Auraiya, Kannauj, Kanpur City, Unnao, Hardoi and Lucknow. The UP government is looking to develop agricultural ‘mandis’ along this expressway to facilitate faster transport of foodgrain and vegetables, handicraft and produces of small and micro industries, among others. The work on other ambitious projects, such as the IT City Lucknow and the Trans-Ganga project, are also moving fast. At this pace, the fast-developing State may soon earn itself a new name — ‘Metro Pradesh’.

ashish.sinha@businessworld.in; @ashish_BW