India: Boom in metro rail projects

A boom in the development of metro rail projects in India is not only helping to ease congested streets – but is also generating lucrative business opportunities as the country ploughs funds into bringing its deficient public transport system up to speed.

Mumbai metro

Mumbai Metro

“Public transport in Indian cities has not been able to cope with rapidly increasing demand so far,” says Biswanath Bhattacharya, a partner at KPMG in India. “Metro systems are an option that can improve the quality of transportation infrastructure in Indian cities.”

There have been “rapid developments” in metro rail projects in India this year, he adds.

Among accelerating urbanization and growing concerns about pollution, there is a desperate need for mass urban transport solutions in India’s cities. Travelling across Mumbai during peak hours, for example, is a struggle for many because of heavy traffic jams. Between 2014 and 2050, there are expected to be an additional 404 million Indians in the country’s urban areas, as large numbers of the population move from rural areas to cities, according to the United Nations.

Narendra Modi, the country’s prime minister, has said that the aim is to have metros in at least 50 cities across India eventually.

Such development, with each project costing tens of billions of rupees, is generating huge opportunities for foreign and Indian companies.

The first line of the metro in Chennai, in south India, opened less than five months ago. In the north, a metro in Jaipur also started operations in June. The long-awaited first phase of Mumbai’s metro launched to the public last year.

Last Monday, a new line for Bangalore’s metro was launched. Metros in Kochi in Kerala and in Hyderabad are expected to open next year. There are also metro systems planned for many other cities across the country, including Ahmedabad in the western state of Gujarat.

India had been lagging behind other countries in terms of metro development. The country’s first metro in Kolkata opened in 1984, the second was the Chennai MRTS, and the third one, in New Delhi, launched in 2002. India now has eight metro systems that are operational.

“Metro projects offer business opportunities related to construction, tunnelling, provision of rolling stock and other rail equipment as well as engineering, procurement and construction and in some cases public-private partnership contracts,” says Mr Bhattacharya.

“These developments have gained momentum due to key government initiatives like allowing 100 per cent investment in most segments of rail infrastructure including metro rail and the ‘Make in India’ initiative.”

Canada’s Bombardier, one of the world’s biggest manufacturers of planes and trains, has been heavily involved in Delhi’s metro, having already been awarded US$1.2 billion of contracts for vehicles and signalling for the network, according to the company. Expansion of the city’s metro is taking place. This year, Bombardier revealed that it had won a 15bn rupee (Dh832.4 million) contract to supply it with 162 more metro cars, which would bring its fleet of Bombardier vehicles to 776, making it one of the largest metro fleets in the world. It operates a railway vehicle manufacturing site and assembly facility at Savli in Gujarat, where these cars will be produced, with plans to start delivering them in the third quarter of next year. From this factory, Bombardier is also exporting to Saudi Arabia, Brazil and Australia.

France’s Alstom is another foreign company that has been capitalising on the expansion of metro rail projects in India. Last month, the transport firm announced that it had been awarded a contract worth more than €150m (Dh589.1m) by Lucknow Metro Rail Corporation to provide metro train sets and a signalling solution for the new metro network planned for Lucknow in the state of Uttar Pradesh, north India.



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