Economic choices before metro rails

Just a few weeks ago, the London Underground celebrated 156 years of operation. As one of the world’s earliest urban rail systems, it has influenced the design of dozens of urban transport networks, right down to its iconic map. Even the Delhi Metro, with "mind the gap" announcements of its own (and a similar map design), reflects that influence, despite being several generations younger — just 16 years old, in fact.

But in the world of infrastructure, younger also often means better as later projects learn from the successes and the mistakes of those who debuted earlier. From larger and airier stations, more modern rail tracks and rolling stock, the Delhi Metro is technologically streets ahead of not just the London Underground, but many other earlier generations of metro systems such as the New York metro. 

It is also catching up rapidly. The infrastructural statistics reflect this — the total track length of the Delhi Metro is now around 327 km, which compares very well with London’s 402 km. London has 270 stations to Delhi’s 236. Delhi is close to achieving, in less than 20 years, what it has taken London to do in 150.

Yet in other ways, the Delhi Metro still has a long way to go, compared with its older counterparts. The London Underground’s ridership is 5 million per day, compared with 2.5 million for Delhi, despite the fact that London’s population is just about half that of Delhi. The Delhi Metro’s ridership, in fact, fell in 2017-18, compared with a year earlier.

That decline in ridership was attributed by many to two successive fare hikes. A subsequent report by the Centre for Science and Environment argued that Delhi was the second most expensive metro system in the world after Hanoi, Vietnam, in terms of the share of monthly income spent by a middle-income commuter on metro fares. This was hotly rebutted by the Delhi Metro itself, pointing out that fares had been increased after many years, even as average wages in the capital had increased, making the new fares affordable.

illustration: Ajay Mohanty
But ridership levels of the Delhi Metro are also just a third of that of Mumbai’s suburban rail (in its own way, as iconic as the London Underground, which it predates by three years). As the Delhi network expands its reach, that gap will narrow, but it begs the question: What is the way to assess how “well” the Delhi Metro is doing? And what are the lessons to be learnt by the other new generation metro projects mushrooming across the country, many of them modelled along the lines of the Delhi Metro?

The world over, the key decision that urban metro systems have had to grapple with has been how to manage the trade-off between affordability and enabling access to all sections of the population, while managing to stay financially viable. In most European countries and in the United States, the farebox recovery ratio, or the fraction of operating costs met from passenger fares is well below one, necessitating subsidies or other measures to raise revenues. For the Delhi Metro, this measure rose sharply, as expected, after the fare hikes, making it less reliant on subsidies from the Delhi or the central government, its two major shareholders, to support its operations. It is close to 89 per cent, up from 60 per cent a year earlier. 

Again, it is instructive to look at the case of New York and London. London’s ability to recover costs from passengers is far superior to that of New York — it actually manages to make enough money from passengers to cover operating costs and some more. New York, by contrast, has a farebox ratio of less than 50.

This is due to the difference in fare structures. Metro systems like London and Delhi follow a distance- or a zone-based model, whereby the further a commuter travels, the higher the fare he/she pays. In cities like New York, commuters pay a flat fee, irrespective of distance. Poorer commuters, who cannot afford to live close to their place of work, are far better off under such a system.

It all comes down to the trade-off above. New York’s metro system is far more affordable than that of London. However, that affordability comes at a cost. Lower fares, in the absence of subsidies that cover expenses, mean an inevitable decline in service standards over time. The quality and maintenance of rolling stock and tracks, and upgrade take a hit as well. And while non-core income like real estate development will partly make up the losses, this is not an option that many metro systems across the country will have. 

Ultimately, governments will have to put their money where their mouth is, and subsidise the metro systems they so eagerly sought in the first place. Or, keep fares at a level that could well exclude poorer passengers, thus hurting that section of the population which benefits the most from a fast and efficient mode of public transport, as well as decongesting city roads of vehicular traffic.

The right choices will have to be made. 
The writer is chairman, Feedback Infra

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