Mumbai elevated rail corridor creating a ground for private companies

The first project to take off from the railway portfolio in the government's infrastructure package will be an elevated rail corridor in Mumbai. To be built at a cost of around Rs 20,000 crore, the project may turn out be the railways’ first public private-partnership initiative in the passenger segment, with the responsibility of building the line, its operations, fare fixation and collection being handed to the private partner.

For industry, the project could be both an opportunity and a learning exercise. "Handing over the operations and maintenance to private player will be a significant move. Though one single move would not make much of a difference, yet if the railways adapt this model in other projects, then private players are likely to take railway projects more seriously. Big companies currently do not have a railway division, whereas they have roads and airport on their agenda," said Amrit Pandurangi, senior director, Deloitte.

The preliminary rate of return for the full corridor (Oval Maidan-Churchgate –Virar) was envisaged at 5.10 per cent and for Mahalaxmi–Virar was 8.07 per cent. The fare structure for the corridor would be similar to the one proposed for the Mumbai Metro Line 1 & 2 fare structure, said a railway official who did not want to be named.

Though the western and central corridors of the Mumbai suburban railway network form the backbone of the city’s transport network, there has been a long standing demand for air-conditioned services in Mumbai. Besides, the existing suburban system is unable to handle the passenger volumes. The new corridor is expected to fill this gap by not only redistributing traffic on the mass transit system but also by offloading a part of passenger traffic from the existing suburban system and roads. Mumbai, with a daily sub-urban commuter movement of around 6.5 million, has no integrated planning for the transport system, as is the case in many other cities. Pandurangi, however, said the huge demand could absorb different systems ,though integrated planning is always desirable.

In a technical feasibility report, RITES and Systra have worked out a plan for a double-line elevated corridor capable of running 15-car air conditioned trains every three minutes. The 62-km corridor will run from Churchgate to Virar, along the present Western Railway route, with a 8-km underground section and about 12 km of stretch at ground level between Santa Cruz and Vile Parle.

ON THE TRACK

• Mumbai elevated corridor was first conceived in 2008
• RITES and Systra were expected to submit the technical feasibility report by Dec 2010 but a final report was submitted in Jan 2012
• With no space on ground for additional tracks, the Railways conceived an elevated track
• It will cost Rs 17,000 crore without interest
• Schedule-Contracts-expected to be awarded by March 2013
• Commissioning by 2019

Challenges ahead:

• Financial modelling of the project to make it viable
• Avoidance of disturbances to the existing suburban railway lines during the construction work
• Integration with existing modes of transport.

The railways have called for bids to appoint legal and financial consultants. "They will suggest the project structure and sourcing of funds — how much operation and maintenance cost will be met through fares, how much private partner, state and centre will invest in the infrastructure creation and how the private partner will retrieve its cost. We are targetting that the report will be ready by September,” said the official.

A state support agreement was under discussion between the railways and the state government to lay down the responsibilities and liabilities with regard to the project. This would be crucial for land acquisition, resettlement and rehabilitation, traffic diversion, improvement in dispersal facilities, redevelopment of surrounding areas and real estate development. The agreement would instill confidence in the prospective PPP partners, said the official.