<div>Seva Ram shows no signs of fatigue, though it’s way past 11 pm. Or of winding up his handcart, snuffing out the petromax lantern and heading home. He sells paani-puri outside Saket station on Delhi Metro’s Yellow line. In early 2010, he hawked the same fare, but went home as early as 9.30 pm. <br /><br />In distant Savli, Vadodara, the third shift is hard at work at 2 am at the Bombardier plant. The 55,000 sq. metre covered production unit of the $18 billion Montreal, Canada-based company is an unending buzz of activity. Bombardier, contracted to supply the Delhi Metro Rail Corporation (DMRC) in mid-2007, has already made 614 rail cars for the Metro. The 400-odd employees at the 33 million euro (Rs 230 crore) facility are in a rush to meet delivery schedules, turning out one coach every day. <br /><br />The common thread between the two is the Delhi Metro. Though not the first — the Kolkata Metro started back in 1984 — its success has had a rub-off on many — big and small. The Delhi Metro covers 190 km as of now and is expected to be a 330-km grid when the third phase is completed in 2016. With an investment of Rs 30,000 crore so far and another Rs 35,000 crore on the current expansion, it has inspired many cities to embark on similar projects. While the Bangalore Metro is up and running, the first phase of Gurgaon’s Rapid Metro is slated to start in May this year. By 2016, it is estimated that close to 600 km of fresh Metro networks will be added across a dozen cities, including Mumbai, Chennai, Hyderabad, Pune, Ahmedabad, Jaipur and Kochi.<br /> <br />“There is huge activity happening across the country in building Metro rail networks. The bids for the third phase of the Delhi Metro, Mumbai’s line 3, Bangalore’s phase II, Kochi and Ahmedabad will be finalised in 2013,” says Harsh Dhingra, chief country representative and whole-time director, Bombardier Transportation India. <br /><br /> </div><table width="250" cellspacing="8" cellpadding="8" border="0" align="right"><tbody><tr><td><a href="/image/image_gallery?uuid=7c37a78b-2d6e-47fa-b5b9-fc425972ed42&groupId=222852&t=1364924299838"><img width="250" height="267" align="left" src="/image/image_gallery?uuid=3d0dbbd8-0c85-44aa-b462-b0c08319e5ae&groupId=222852&t=1364924229670" alt="" /></a></td></tr><tr><td><span style="color: rgb(128, 128, 128);"><strong>Click on the graphic for an enlarged view</strong></span></td></tr></tbody></table><div><strong>Train to India</strong><br /> Not surprisingly, the Indian Metro rail market is the fastest growing globally after China, which already has a dozen cities connected and is rolling out networks in another 10. It is estimated that by 2020, the investment in Metro rail projects in India is likely to be in the region of Rs 200,000 crore ($ 40 billion). So, some of the biggest names globally in railways — coach manufacturers, tunnel boring machine (TBM) makers, signalling and train control systems, electromechanical components, contactless cards and token manufacturers — have laid their tracks to India for setting up manufacturing facilities as the action in the Metro rail market has, to a large extent, shifted out of developed markets. These manufacturers have created close to 7,000 direct jobs and around 15,000 indirect jobs. <br /> <br /> Bombardier set up the Savli plant in mid-2007. The plant delivered its first rail car to the Delhi Metro in June 2009. Bombardier chose Vadodara as it already had its propulsion equipment plant there. <br /> <br /> Bombardier is not the only one making Metro rail cars in India. At Sri City on the Tamil Nadu-Andhra Pradesh border, Paris-based Alstom has set up a 30 million euro Metro rail coach manufacturing unit that can roll out over 300 rail cars a year. It is from here that the company will supply cars to the Chennai Metro. And, in Bangalore, state-owned BEML, in collaboration with South Korea’s Hyundai-Rotem, has got an Rs 1,800-crore contract from L&T Hyderabad Metro for the supply of 171 cars.<br /> </div><table width="200" cellspacing="10" cellpadding="10" border="0" align="left"><tbody><tr><td><img width="200" vspace="8" hspace="8" height="275" align="middle" src="/image/image_gallery?uuid=f3102711-43c9-4770-ba85-703e536fce4e&groupId=520986&t=1361457602182" alt="" /></td></tr><tr><td><strong>Our Savli plant is as good as any of our plants globally and is the first railway coach facility in India to use robotic welding”<br /><span style="color: rgb(153, 51, 0);">HARSH DHINGRA</span><br />Chief country representative & whole-time director, Bombardier Transportation India </strong>(BW pic by Tribhuwan Sharma)<strong><br /></strong></td></tr></tbody></table><div>Meanwhile, Spain’s CAF (Construcciones y Auxiliar de Ferrocarriles), the world’s fourth-largest railway car manufacturer, is scouting to set up a Metro rail car plant in the country after it bagged an order for 84 coaches from the Kolkata Metro. Says Sanjiv Rai, MD, Rapid Metro Gurgaon: “For international vendors to compete in the domestic market, they need facilities here. As manufacturing is cheaper, they are in a position to win more orders.” <br /><br />Metro rail car plants are usually set up after companies bag large contracts. Says Dhingra: “Our plant here is as good as any of our plants globally and is the first railway coach facility in India to use robotic welding.” Jojo Alexander, managing director, Alstom Transport India, says: “Apart from supplying rail cars, we are doing a significant part of the signalling business from India.” <br /><br />While these plants meet domestic demand, they also help India take a crack at the global market. Alstom’s Alexander points out that apart from India, there are opportunities for steel Metro railway cars in Thailand and the Middle East. Bombardier is already supplying semi-finished Metro coaches to Adelaide, Australia. <br /><br /><strong>The More the Merrier</strong><br />The Metro juggernaut does not stop at rolling stock. Since a coach has close to 50,000 components, the rail car manufacturers need a steady supply of parts. Over the years, many component makers have set up shop in the country. They include France’s Faiveley Transport Rail Technologies (brake assembly, brake kits, air-conditioning systems, pantographs); Germany’s Schlatbau (electro-mechanical components); and Japan’s Asahi Glass. Faiveley has set up its plant at Hosur, near Bangalore. Says D. Kumar, executive director, Faiveley Transport Rail Technologies India: “We are already looking to expand our operations. We plan to start door manufacturing out of India soon.” </div><div> </div><div>break-page-break</div><div> </div><div>The action is not just restricted to building Metro rail cars and their components. The Alstom Transport Software Development Centre in Bangalore supports global R&D and product engineering activities. Says Alexander: “Signalling is a significant part of Metro rail operations. The train control and protection systems in the DMRC ensure that the driver has to only close the doors.” While Alstom has been in India for a while, France’s Thales has recently bagged the Rs 740-crore contract for providing communications-based train control (CBTC) and integrated communications and supervision (ICS) systems for the Hyderabad Metro. Says Reynald Seznec, senior VP, international, Thales: “As the growth areas are shifting, we need to be present in areas outside of Europe. As part of that, we would like to do more local R&D in India.” Bombardier too has been active in the signalling area—it has done work on 39 km of Delhi Metro’s lines 5 and 6. <br /><br />But, much before a Metro rail car starts moving, the infrastructure has to be in place. That is where TBMs come in. To cater to their rising demand, Germany’s 1 billion euro Herrenknecht has set up a facility on the outskirts of Chennai. It has, till date, supplied close to 75 per cent of the 40-odd TBMs used in India’s Metro rail projects. Herrenknecht is the only TBM maker present in India. <br /><br />For an underground rail network, security is critical. That’s where Sweden’s Gunnebo comes in. It supplies the turnstiles. Says Per Borgvall, president and CEO, Gunnebo: “There is a security need for airports, Metro systems, the railways, power plants and important buildings in India, which will continue to grow.” <br /><br /><strong>Local Flavour</strong><br />But to cross the turnstile at a Metro station, commuters need either contactless tokens or magnetic cards. This brings in smaller Indian companies. Brothers Alok and Puneet Kapoor invested close to Rs 10 lakh to set up their radio frequency identification (RFID) venture — APK Identification (APK-ID) — at the Noida Special Economic Zone. It bagged the global tender to supply contactless tokens for the Delhi Metro in 2005. APK-ID brought down the price of a token — originally supplied by Japanese companies — from Rs 240 to Rs 15. Today, APK-ID supplies close to 3 million tokens annually to Delhi Metro. Says Puneet Kapoor, partner, APK-ID: “We are looking to bag contracts from other Metro systems as they are set up.” Another local player, Mumbai-based Seipmann’s Card Systems, makes magnetic cards. <br /><br /><strong><img width="537" height="372" align="middle" alt="" src="/image/image_gallery?uuid=9bb712ea-203c-4667-990c-65467181354a&groupId=520986&t=1361457091962" /></strong><br /><img width="450" vspace="8" hspace="8" height="593" align="middle" alt="" src="/image/image_gallery?uuid=fd3f87bb-e020-4291-a13a-bf1e086c58ae&groupId=520986&t=1361457146453" /><br /><br />APK-ID is not the only home-grown company to ride the Metro manufacturing bandwagon. There are many small suppliers of components that include lights, glasses and track fittings. One such company is Delhi-based Sidwal Refrigeration that supplies roof-mounted air-conditioning units for Delhi Metro rail cars. There is also VAE-VKN, a joint venture between Europe’s VAE and Sonepat’s VKN Industries, that supplies railway track systems. <br /><br />Hot on the tail of the manufacturers are some of the world’s largest infrastructure consulting, technical and management support services firms. These include New York-based Parsons Brinckerhoff that is involved in the Gurgaon and Delhi Metros and AECOM, which did the concept plan for Gurgaon’s Rapid Metro. <br /><br /> </div><table width="200" cellspacing="10" cellpadding="10" border="0" align="right"><tbody><tr><td><img width="200" vspace="8" hspace="8" height="200" align="middle" src="/image/image_gallery?uuid=10853726-2f9d-432a-b7cd-fb87a4e87ee0&groupId=520986&t=1361457841759" alt="" /></td></tr><tr><td><strong>“Apart from supplying rail cars, we are doing a significant part of the signalling business from India” <span style="color: rgb(153, 51, 0);">JOJO ALEXANDER</span> Managing director, Alstom Transport India </strong> (BW pic by Sanjay Sakaria)</td></tr></tbody></table><div><strong>Resurgent Realty</strong><br />Besides spawning a manufacturing ecosystem, the Metro network has given a huge fillip to real estate as well. As a result, many areas that were once considered outlying, such as Dwarka in south-west Delhi, have seen property prices rise with the launch of Metro services. Says Rai: “Cyber City in Gurgaon has close to 25 million sq. ft of property. There is bound to be an impact on property value and rentals as connectivity improves with the arrival of the Metro.” Adds Manish Kashyap, managing director, transaction services, CBRE: “Today, when corporates are relocating, the first question they raise is ‘how far is it from the nearest Metro station?’” Builders are also using proximity to proposed Metro lines to advertise their properties. “They are attracting investors looking for price appreciation 3-4 years down the road,” adds Kashyap.<br /><br />The expanding Metro network requires a talent pool. To create one, former DMRC managing director E. Sreedharan tied up with the Indian Institute of Technology, Delhi, to start a one-year specialised course in Metro technology. Larsen & Toubro (L&T) too has set up a facility in Hyderabad to train people. Says Vivek B. Gadgil, chief executive and managing director, L&T Metro Rail Hyderabad: “We provide basic training in rail systems.” <br /><br />These are early days. The action in the Metro space is not expected to die down anytime soon.<br /><br />anup(dot)jayaram(at)abp(dot)in<br /><br />(This story was published in Businessworld Issue Dated 11-03-2013)</div>
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