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Technical issues keep Bangalore MRT project off-track

C. Shivkumar

A BLANKET of technical issues shrouds the proposed mass rapid transit system for Bangalore with uncertainty.

The issues relate to the gauges to be used in the system and also to whether the project should be a sub-surface (metro) or an elevated or a surface corridor, each with different cost estimates.

The base cost estimated for a sub-surface corridor is Rs. 350-400 crores per kilometer depending on the soil condition. In the case of rocky soil, the cost could be at the lower end whereas in the case of loose soil at the upper end. This is because tunn els in loose soil have to be supported by steel frames to prevent a cave-in. Consequently, for a 30-km stretch, the effective cost would be close to Rs. 12,000 crores.

The second alternative, an elevated corridor, has a much lower cost impact, Rs. 70-100 crores per km, entailing a project cost of Rs. 2,100-3,000 crores.

The third alternative is for a surface corridor. The cost being Rs. 12-17 crores per km translating to a total project cost of less than Rs. 600 crores.

The Bangalore MRT project has a definite bias in favour of an elevated one.

The project costs, however, have not been frozen, which is a prerequisite before any project can get into dry financial closure. (Dry financial closure is when funds are sanctioned, but not disbursed.)

The available information suggests that the State Government would provide 25 per cent equity support to the project. Assuming a 50:50 debt-equity ratio, this would mean that the State Government would be required to chip in about Rs. 375-400 crores. The remaining equity is to be subscribed by the promoter consortium led by the UB Group, consisting of the liquor major, UB Ltd, ICF-Kaiser Engineers, Transportation and Transit Associates, US, and Nippon Sharyo of Japan.

The debt component is going to be very tricky, especially when the cost recovery and debt-servicing issues remain uncertain. One thing thus is clear: The higher the cost component, higher will be the effective fares. If the effective tariffs are to be ke pt low, then there will be demand for high subsidies/subventions in order to meet the minimum internal rate of return as estimated by the investors/promoters of the project.

According to Mr. N. Viswanathan, Managing Director, Bangalore Mass Rapid Transit Ltd (BMRTL), the minimum return on equity would be in the region of 16 per cent. This would mean that the effective rate of return on the project would be slightly lower.

But such projects, he thinks, would have to be worked out not just on the basis of financial rate of return; they must also conform to certain minimum economic rate of return. For instance, the minimum economic rate of return of the Delhi Metro Project i s estimated at 37 per cent while the financial rate of return at just three per cent in the first year. This is presumably because the entire foreign currency risk has been taken care of by the government.

Next, the gauge issue. BMRTL favours the standard gauge (1435mm). But the Chennai MRTS, which is a combination of a surface and an elevated corridor, is broad gauge (BG) or 1676mm. The same is true about the Delhi project, also having both elevated and s urface corridors.

While the cost differential is almost negligible between standard and broad gauge, it is advantageous to use the latter. The only advantage in SG is that rolling stock (EMU bogies) are available virtually off-the-shelf in

Western Europe and Japan. The production facility for BG rolling stock, on the other hand, is available within the country _ both with the Railways' own manufacturing units and the public sector Bharat Earth Movers Limited in Bangalore itself.

Using the SG would mean dependence on imports, since domestic production capacity cannot be created for production of limited volume. Besides, BG coaches are 3.66m wide against the 3.2-m wide SG coaches. As a result, the carrying capacity of a BG coach is 15-20 per cent more than that of an SG coach. BG coaches allow for complete seamless travel between two destinations which is now being recognised worldwide since it would allow for integration with the Railways own network.

Based on this design, BG projects would consequently have far higher financial advantages, as it would allow for full utilisation of fixed assets during off peak hours and in turn a definite benefit in keeping fares low. This, in turn, would imply that s uch a project, if planned well, would completely eliminate the need for any demand on the subsidies/grants or subordinated loan support from the state. In other words, BG technologies have major fiscal advantages to the State Government.

Finally, the current project cost does not capture the element of disaster management support that would be required. Using BG will mean that this support would be readily available from within the country. Such support will be essential for any such pro ject especially when the user intensity will rise.

The gauge story

THE standard gauge (1,435 mm) originated in Britain for the railway system there. Those who built the railway tracks were the same people who built the tramway coaches and, therefore, used the same jigs and tools and the same kind of wheel spaci ng.

This wheel spacing was designed on the basis of the Imperial Roman War Chariot whose wheels were wide enough to accommodate the back-ends to two war horses.

The broad gauge (1676 mm) was constructed by the British while constructing and laying the railway line in the country.They opted for BG on technical considerations of lateral stability, riding comfort, safety (lower centre of gravity) with attendant ben efits of using higher-power locomotives for achieving greater speeds.