It cost Rs 1,171 crore, took 16 long years to build and was projected to carry six lakh people a day. Chennai's Mass Rapid Transit System (MRTS) covers a distance of about 20 km and passes through (mostly as an elevated structure) some of the most congested localities in the city. There are 15-odd futuristically-designed stations along the route and each has parking space for more than 100 cars and 500 two-wheelers. At peak hours, the end-to-end trip from Velachery in the city's southern suburbs to Chennai Beach (the central business district) takes just 40 minutes by MRTS as against two hours by road.
Ideally, such a transport system should be overflowing with people. But the MRTS carries barely 80,000 people a day, doing in all 128 trips using nine-car and six-car rakes. For the 10-month period (April 2009 to January 2010), the MRTS earned a revenue of Rs 12.76 crore (Rs 12.21 crore from ticketing sales, Rs 0.26 crore from publicity and Rs 0.29 crore from parking contracts) as against an estimated operating expense of about Rs 23 crore. Southern Railway, which operates the MRTS, is seriously considering reducing the number of car rakes to just three during non-peak hours. The project has become a financial nightmare.
The Problem: There are no takers for the MRTS despite connecting densely populated areas, faster commute and futuristic stations.
The Cause: Ranging from poor access to the stations and poor safety to unsafe parking facilities and a lack of integration with other modes of transport.
The Solution: Commercially exploit the large built-up area at the stations; speed up land acquisition for extending the line to St. Thomas Mount.
The Challenge: Bureaucracy; the need to make the best use of available resources and greater co-ordination between Southern Railway and CMDA.
When the project was conceived in 1984, it was decided that the route will run along the Cooum river for most part of its length. "This alignment was chosen to avoid problems of land acquisition as the rail line passes through the congested parts of the city," says R. Ramanathan, Chief Administrative Officer (Construction), Southern Railway. (Ironically, the slums that dot the banks of the river proved difficult to relocate resulting in significant cost increases and delays.) But what the planners overlooked was the location of the stations. "The MRTS' alignment along the river meant that most stations were actually located far away from the actual users who had to walk quite a distance in the absence of proper connectivity (bus or autos) to reach the stations," points out S.K. Kulshrestha, Divisional Railway Manager, Southern Railway, Chennai. The state government, which does not get any revenues from the project, despite investing heavily (67 per cent of the project cost is shared by the state but does not get any revenues from ticketing sales.Its only potential source of revenue is by developing the air space above the station building and that has not taken off yet), is reluctant to invest any further. The location of the stations at desolate places without proper access roads and street lighting and surrounded by slums is a major safety hazard: There have been instances of chain snatching. Anyone taking the MRTS has to come to terms with the lack of proper inter-connectivity and common ticketing with the city's popular bus system. Railway officials acknowledge these problems. "We are in a chicken-and-egg situation. We cajoled Chennai's Metropolitan Transport Corporation (MTC) to run bus services to a few stations. After a few weeks they discontinued the service saying there were no users for it," explains Kulshrestha.
Repeated attempts to find parking lot contractors for many of the stations have failed as there is hardly any traffic. Similarly, poor usage is preventing the Railways from properly maintaining the huge stations. Despite deploying about 50 Railway Protection Force officers and constables to guard the MRTS stations, taps, electrical fittings, hand railings, cement slabs and other such things get stolen, often leaving the station dark and untidy. The fact that the Railways cannot protect its own property is reflecting on the usage, especially among women. The "ladies specials" that MRTS started six months ago has an average occupancy of 10 per cent!
Does that mean that the MRTS is a jinxed project? Not really, if the Railways and CMDA get their act together. The Railways should wake up to the potential that exists in commercially exploiting the 5,000 sq. metres of real estate space it has already built at each of the stations. For many years now, the commercial exploitation of this real estate has been caught in a bureaucratic muddle and remains untapped. "We, in Southern Railway, do not have the power to lease out such a large area," admits Kulshrestha. And those in Delhi have other priorities. After the advent of Railway Land Development Authority, the papers have been sent to the authority, which is yet to act.
Commercial exploitation, it is estimated, could earn Southern Railway as much as Rs 36 crore per annum, thus making the MRTS operationally profitable. That apart, once commercial activity picks up, many of the MRTS' problems- access, safety, parking and maintenance of the stations-will disappear as footfalls increase. It may ultimately get more people to board the train as well!
The other big opportunity is the phase II extension that is now under way at a cost of Rs 496 crore. "Anything which is a dead end will not be of much use. The phase II extension will link Velachery to St. Thomas Mount where the MRTS will connect into a suburban line and the Chennai Metro, which is under implementation. This will make the MRTS the preferred mode of transport," says Ramanathan. Land acquisition for 3.5 km of the 5-km phase II extension is complete but the challenge is the next 1.5 km, which passes through a dense residential area. The CMDA needs to move in quickly to acquire the remaining land. This segment is supposed to become operational by December 2010. But frustrated railway officials don't see that happening before 2012 end.
Commercial focus needed
Mass Transit Rail System of Hong Kong with a daily average ridership of 3.6 million and Singapore's MRT with 1.5 million commuter trips a day are success stories. Their profitability can be attributed to their seamless integration of services with different modes, common ticketing for travel over all modes, simplified ticketing process, innovative fare and a single management.
Integrated property development and extensive commercial exploitation of land, have also contributed to their bottom lines. MRTS Chennai lost its central business district of Parry's Corner, with the shifting of markets and bus stand to Koyambedu.
The operation of a competing bus service, accessibility problems, absence of thickly-populated residential areas close to the stations, and above all, lack of co-ordination between the State Government and Railways, despite the cost-sharing, dented the prospects of the system further.
Spurred by the contemplated link to St. Thomas Mount and Cooum river beautification scheme, the fortunes of the system may improve. But this would require a separate business entity with equity participation from Railways and Tamil Nadu, with commercial focus.
Future planning for the MRTS has to naturally take note of over-ambitious ridership projections. Due to its glamour, the MRTS attracts many planners who fail to explore alternatives. A complete and thorough evaluation of other lowcost solutions should be made.
A comprehensive mobility plan, facilitating seamless travel, to attract users of personal vehicles to public transport and an institutional mechanism for single-point collection of revenue must form part of the project report. Integrated property development and commercial exploitation of land and air space must also be spelt out and tied-up.
- Vijayalaksmi Vishwanathan, former Financial Controller, Indian Railways
Involve the private sector
Almost 10 rupees, on an average, belonging to every man, woman and child in India, is invested in this project. More is being lost every year. Examples of such wasteful expenditure can be found in many parts of the country.
A wonderful opportunity for publicprivate partnership has been wasted. Using real estate to subsidise a public transport system is a fundamentally sound idea. Governments are well positioned to assemble land, take the initial risk, and find capital from the tax kitty. But to make the project work you need commercial sense, efficient management, business creativity and great financial management. These are best provided by the private sector.
So, how do you marry the public with the private? The two governments in this case should have roped in the private sector to conceive, design, build, and benefit from the real estate. The private sector can also be made responsible for the management of the commercial and non-commercial facilities on the platforms. All this will lead to better service and generate more revenues.
The Railways and the Government of Tamil Nadu have jointly financed and then physically divided each piece of real estate between them! It is like saying I will look after the upper half of the baby and you look after the lower half. A commercial project is an organic whole and has to be managed as such to maximise value.
Physical division of the commercial space is an archaic way of running a business of this size. A special purpose company led by the private sector with participation from the two governments is the way to go.
- Pradeep Singh, Vice Chairman and MD, IDFC Projects Ltd.