Union Cabinet approves new Metro Rail Policy

Aug 17, 2017 16:54 IST

The Union Cabinet on 16 August 2017 approved new Metro Rail Policy focussed on compact urban development, cost reduction and multi-modal integration.

This new Metro Rail Policy seeks to enable realization of growing metro rail targets of a large number of cities.

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Highlights of the Metro Rail Policy
The policy enables private investments across a range of metro operations making Public-Private Partnership (PPP) component mandatory for availing central assistance for new metro projects.
Private participation either for complete provision of metro rail or for some unbundled components will form an essential requirement for all metro rail projects seeking central financial assistance.
It seeks to ensure a catchment area of 5 kms on either side of metro stations to provide necessary last mile connectivity through feeder services, Non-Motorised Transport infrastructure like walking and cycling pathways and introduction of para-transport facilities.
It mandates evaluation of various modes of mass transit like BRTS (Bus Rapid Transit System), Light Rail Transit, Tramways, Metro Rail and Regional Rail in terms of demand, capacity, cost and ease of implementation to ensure that least cost mass transit mode is selected for public transport.
It also mandates setting up of Urban Metropolitan Transport Authority (UMTA) to prepare Comprehensive Mobility Plans for cities for ensuring complete multi-modal integration.
It specifies a shift from the present ‘Financial Internal Rate of Return of 8 per cent’ to ‘Economic Internal Rate of Return of 14 per cent’ for approving metro projects.
It mandates Transit Oriented Development (TOD) to promote compact and dense urban development along metro corridors as TOD reduces travel distances besides enabling efficient land use in urban areas.
In order to ensure financial viability of metro projects, the Policy requires the states to clearly indicate the measures to be taken for commercial development at stations and for other means of maximum non-fare revenue generation through advertisements, lease of space etc.
It empowers States to make rules and regulations and set up permanent Fare Fixation Authority for timely revision of fares.
States can take up metro projects and exercise any of the three options for availing central assistance - PPP with central assistance under the Viability Gap Funding scheme; Grant by Union Government and 50:50 Equity sharing model between Union and state governments.
The policy mandates private sector participation in metro services in different ways such as Cost plus fee contract, Gross Cost Contract and Gross Cost Contract.

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