Hyderabad Metro : The uncertainty is finally over. Metro rail services have arrived in Hyderabad. Metro train services can avoid unwanted congestion on roads as it is a mass transport system that has the capacity to carry millions of commuters at a high speed and frequency.

This would ensure greater dispersal of population leading to lowering urban density. Such a rapid and mass transport system can reduce reliance on private transport to a great extent, contributing to many economic and environmental benefits. It saves fuel and reduces pollution. The productivity of Hyderabad city would be enhanced with the arrival of this new transport system.

“How is Metro different from suburban train or monorail”
A rapid transit system like Metro is a technologically advanced public transport system, which operates on rail tracks in an urban area with high capacity and high frequency, is fast and is segregated from other traffic – underground tunnels (subways) or elevated above street level (elevated transit line). This system is automated with respect to operations and since it has a dedicated right of way it is able to provide high reliability to its users. Whereas monorail is a rubber tyre guide way-based transportation system which is guided on a single beam with a much lower carrying capacity. Source: Reliance Mumbai Metro.

Cities like Hyderabad certainly need a mass, rapid and affordable public transport system. A city is considered to be environmentally sustainable, if at least 70 per cent of the people use public transport to commute. But, estimates suggest that in Indian cities, public transport caters to less than 40 per cent of people, with Hyderabad probably not being an exception.

But the reports indicate that the Metro fares are far higher than what was expected and earlier agreed upon. This raises serious questions over the affordability which we cannot ignore amidst the euphoria over the arrival of the much-delayed Hyderabad Metro.  Commentators who defend higher fares on Hyderabad Metro compare them with those of air-conditioned buses. But that cannot be a justification. Metro fares should be accessible to common commuters especially the working people.

The long gestation period and the unexpected delays are cited to defend relatively higher fares on Hyderabad Metro. But the ordinary metro commuters are not responsible for this inordinate delay that led to cost overruns. Why should they be penalised for no fault of their own. Everybody knows that partisan demands and whimsical politics were behind the delay.  The ordinary commuters are now asked to pay for the failures of polity and governance.

The higher fares are not just a burden for ordinary commuters, they also go against the economic logic of ensuring the viability of such a mass transport system. In any transport sector, higher fares dampen the occupancy ratio (OR). Higher Occupancy Ratio is essential for ensuring the fiscal viability of a transport system.

The recent experience of Delhi Metro testifies to this argument. After the second metro fare hike in October, Delhi Metro lost over three lakh commuters per day. The ridership data came from an RTI query. The average ridership of 27.4 lakh in September came down to 24.2 lakh in October, a fall of about 11 per cent.

The experience of Delhi Metro should serve as a warning signal for Hyderabad Metro.  Given the complaints that the initial fare itself is higher than what was agreed upon, any further fare hike is fraught with similar such consequences. But often the Metro authorities cite increase in operational costs to justify the fare hike. Though this cannot be completely ruled out, its implications on the occupancy ratio and in turn on its future viability also cannot be ignored. This brings to fore the importance of non-fare revenues sources.

Make fares public-friendly so that wage labourers and other ordinary commuters do not suffer.  Metro should be accessible to all strata and income groups, if it has to serve the purpose for which it is meant for. Across the world, investments are made in Metro systems for higher economic returns rather than financial viability. Mass and rapid public transport systems like Metro do not just benefit the individual commuters, it has positive externalities like improving the productivity of work force, thereby contributing to the overall economic growth.

Besides the city will have better environmental sustainability and decongestion, leading to urban dispersal. This would in turn ensure lower cost of living and better living conditions. For instance, people can reside in a faraway place where the living costs are relatively less and commute to work places in the heart of the city. But the problem is that all such positive externalities do not offer monetary accruals for the said transport system to facilitate its financial viability. This is precisely the dilemma that haunts the State Road Transport Corporation (RTC). We always hear about RTC incurring huge losses.

Meanwhile, Metro rail services are capital-intensive. As India’s Metro Man Sreedharan said in a media interview sometime back, “a good reliable transportation system is a must to make a city liveable and for its economic growth.  Would Mumbai have been able to survive without its suburban rail services?” Metro cannot be a profitable business. But, Hyderabad Metro is modelled as a profitable venture. Metro operators often hike fares to make it profitable. This has its negative impact as explained above. The profitability of the business and its affordability to the commuters are mutually irreconcilable. How this gets resolved is something to be keenly watched.

The experiences offer grim lessons. For instance Delhi Airport Express line performed dismally when its fares were high in order to recover costs. Reliance Infrastructure which was originally operating the line has ultimately abandoned the project.

This is not to sound alarming bells on the Muhurat day. But, the objective is to make people alive to impending problems so as to ensure that the Hyderabad Metro is affordable to commuters and profitable to its operator.
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Therefore, the governments which are so anxious to invest in elite projects like bullet trains should focus more on Metro rail services. This is essential as Metro services are expensive to operate and need to be affordable to lower strata of the society.

Experience with Metro projects and similar such transport systems reveal that there are often underestimation of costs and exaggeration of benefits especially inflated ridership.  This is not the result of any error or hyderabad unexpected developments.  But, it’s a result of strategic misrepresentation to serve business interests (‘Mythologies Metro Rail Systems and Future Urban Transport,’ by Dinesh Mohan, Economic and Political Weekly, 26th January 2008).  One only hopes that Hyderabad Metro will not face such a worldwide experience.