1. FINANCING URBAN TRANSPORT INFRASTRUCTURE: INDIA

2. Presentation Structure
Urban Scenario
Investment Needs
Financing Structure
Financing Options
MoUD, India

3. Urban Scenario
MoUD, India

4. Rapid Rate of Urbanization
Urban population in India increased from 62 million in 1951 to 377 million in 2011.
In 2011, 3 cities with a population greater than 10 million and 53 cities with a population greater than 1 million.
By 2031, it is projected that there will be 6 cities with a population greater than 10 million.
MoUD, India

5. Rapid Motorization
From 2001 to 2011, the annual growth of population 1.6%, but FOR motor vehicles, almost 10%
Average vehicle speed during peak hours is often as low as 10 kmph
MoUD, India
Source: Road Transport Year Book ( & ).
Ministry Of Road Transport & Highways Government Of India New Delhi
. IIHS “Urban India 2011: Evidence”

6. “Urban transport is the single most important component instrumental in shaping urban development and urban living.”
National Commission on Urbanization (NCU)
MoUD, India

7. Investment Needs
MoUD, India

8. Total for all Urban Services For Transport Infrastructure
Investment Needs – Next 20 years
Study
Total for all Urban Services
For Transport Infrastructure
Mckinsey Global Institute (2007)
US$ 1 Trillion
51%
Expert Committee (HPEC) 2011
USD 0.8 Trn
56%
MoUD, India

9. Key Issues ImpactingInvestment In Urban Transport
High Capital and Operation cost
Long Gestation Period
Project Viability
Cost Recovery: User Charge / Fare Revision
Demand Risk
Social Linkages
Macro economic issues
MoUD, India

10. Financing Structure
MoUD, India

11. Financing Structure Grnats from National Govt: 50% State Funds: 40%
City Level: 10%
MoUD, India

12. Current Goals Augment Public Transport (PT)
Capacity building of States & Cities
Create walking & Cycling facilities (NMT)
Improve accessibility for mobility
Improve road safety
Use technology for multimodal integration, safety etc.
Promote research in guided transport
MoUD, India

13. Financing Options
MoUD, India

14. Financing options Public Financing Schemes Private Sector Investments
Multilateral Investments
Innovative Financing Mechanisms
Financing Sources
MoUD, India

15. Central Schemes
Jawaharlal Nehru National Urban Renewal Mission (JnNURM)
Urban infrastructure Development Scheme for Small & Medium Towns (UIDSSMT)
Viability Gap Funding (VGF)
Central Assistance for Technical Studies like CMP, DPRs
MoUD, India

16. Private Sector Funding
Advantages
Easing Budgetary Constraints
 Improved Value For Money
 Sharing of Risks Between Public & Private Partners
 Reduction in Cost of the Project
Main sources of Private Sector Funding
Debt
Equity
Property Development
Advertisements
MoUD, India

17. Key Benefits of PPP: Entrepreneurship
Rigorous project preparation
Delivery of whole life solution
Focus shifts to service delivery
Time bound implementation plan
Better overall management of public services
PPP Options
MoUD, India

18. Owner/ Concession Period (Yrs)
PPP Examples – Metro Projects
Project
Owner/ Concession Period (Yrs)
Concessionaire
Total Cost
(Rs./Crore)
VGF (Rs./Crore)
Current
Success
Delhi Metro Airport Link
DMRC
(30)
Reliance Infrastructure Limited
5800
1786 NO
Mumbai Metro Line-1
MMRDA
(35)
Reliance Energy Limited
2356
650
Mumbai Metro Line-2
8250
1532
Gurgaon Metro Rail Link
HUDA
(99)
DLF & ILFS Limited
1088 -
YES
Hyderabad Metro
HMRL
L&T Metro Rail
11814
1458 
YES 
MoUD, India

19. Examples – Bus Operations
Indore City Bus Service
Bhopal City Bus Service
Rajkot City Bus Service
Surat City Bus Service
Bhubaneswar – Puri City Bus Service
Ahmedabad BRT operations
Delhi Bus Service
MoUD, India

20. Case Study: Bus Operations – Indore (Atal Indore City Transport Services Limited)
Before City Bus- Unorganised Transport
MoUD, India

21. About AICTSL Inception in 2006 with a seed capital of Rs. 5 million.
Adopted the net-cost based PPP model of bus operations… widely copied in other cities across India.
Started with 37 buses with 4 operators.
Installed vehicle tracking systems on the entire fleet, that is the best in the country even till date.
Initiated the BRT project in Indore which is in the final stage of implementation.
Funding from JnNURM allowed modernising the fleet with CNG buses that have electronic displays and voice announcement systems.
MoUD, India

22. PPP Model of Bus Operations Public partners role:
Planning of routes
Inviting tenders for bus operations
Providing support infrastructure
Objective: Providing affordable
& quality public transport
Safety & Quality has helped attract trips from private travel modes
Private operator responsibilities:
Owns, operates & maintains fleet
Collects fare from passengers
Pays premium to AICTSL for right to operate on route
MoUD, India

23. Lives Saved, Emissions Reduced
Lives saved due to Indore City Bus :: 6 /year
(0.024 fatalities/mill PKT * 0.64 mill PKT per day * 365 days)
Hundreds of accidents avoided.
CO2 Reduced ~5.5 ton/day
MoUD, India

24. Challenges
CNG fuel prices have increased by 64% in 24 months, thus reducing profitability to operators
AICTSL has limited financial resources (premium from operators, advertising) for additional infrastructure
Passenger ridership per bus has increased only marginally, not keeping pace with input costs
Modernising the system by way of better workshop infrastructure, improved information for passengers and customer service is necessary for expanding the system.
MoUD, India

25. Multilateral Development Banks (MDBs)
Multilateral development banks (MDBs) provide finance for investments in human and physical capital that promote development.
MDBs assist in Urban Transport Funding through the following:
Loans
Grants
The Global Environment Facility (GEF)
Clean Development Mechanism (CDM)
MoUD, India

26. Innovative Financing Mechanism
Has become increasingly relevant as cost of providing transport services has expanded more rapidly than revenue resources.
The National Urban Transport Policy 2006 emphasises on innovative use of land as a resource for financing public transport projects.
Urban Transport Fund
Financing Through Cross-Subsidy Projects
Property Development
Land Value Capture
Kiosks and Shops at Stations
Taxes and Fiscal Incentives
MoUD, India

27. Urban Transport Fund – Pimpri Chinchwad
100 metres on both sides of the corridor have been earmarked as the “BRT Influence Zone’
PCMC has raised the FSI in the influence zone from 1 to 1.8 with the added FSI of 0.8 being achieved through loading of TDR.
Based on the total influence zone area along the 60 km BRTS corridor, additional 0.8 FSI permissible in the influence zone, the project can generate close to 5000 Crs of revenue
 TDR Potential
TDRs (mn sqft)
Revenue from TDR use (Rs.cr)
Max potential, assuming absorption in 80% of influence zone 83
4980
MoUD, India

28. Case Study-The TTMC Concept
BMTC developed the innovative concept of ‘Traffic and Transit Management Centres (TTMCs)’
The TTMC concept combines the development of passenger terminals with the creation of commercial real estate space.
Revenue from rent of the commercial real estate space would cross subsidise the construction cost of the passenger terminal and amenities, and also form a source of continuing additional revenue for the corporation.
Implementation
10 TTMCs have been constructed since 2009
Initial funding was provided by JNNURM
MoUD, India

29. Thank You!
MoUD, India