Metro Transportation, fast-growing industry all over the world

In such a scheme manufactures are paid on a time basis (hourly, daily, weekly or monthly) regardless of the passenger numbers

Delhi Metro
Image for representation

Metro Transportation is a fast-growing industry all over the world. Its adaptability, Accessibility, comfort and safety make the metro the best pick among the transportation sector. In India, a number of Metro projects are in the plan and under commissioning.

One of the main issues regarding metro projects is the High capital cost and less revenue generation. The success of the metro is dependent on many factors such as no of commuters, operating cost, alternate revenue etc. Metros are not only provided comfortable transportation to commuters it is environmentally friendly too. Researchers and experts are working on reducing the capital cost of metro rails in order to make the Metro industry more flexible. Since civil structures to be built at the initial stage that no deviation is possible that.

In the energy section, metros can implement solar panels on a lease basis, to reduce the conventional energy consumption buildings and stations. Industry can pay the rent and can give energy back to the grid as rent since the entire viaduct(elevated Rail structure) is running along with the city, the considerable panel may be exposed to sunlight which can provide a sufficient amount of energy. When coming to Buildings, open space at stations can be leased out for other vendors to generate alternate revenue.

In case of Rolling stock, the method which is in consideration is Train procurement on a lease basis. I.e, just like we lease rooms rather than buying them, the industry can use the trains which are under someone else’s ownership, creates the revenue and pay back a portion of it which was agreed at the biding time. In such a scheme manufactures are paid on a time basis (hourly, daily, weekly or monthly) regardless of the passenger numbers. I.e, they will get paid even if there are fewer passengers in the metro. All they have to do is ensuring the availability of trains for the revenue service. Let’s see some pros and cons of such a scenario,

Pros of train procurement on a lease basis

  1. Since burden of availability lies with the manufacturer, less chances of service breakdown during revenue service.
  2. Since trains are on lease, Preventive as well as corrective maintenance can also be outsourced to the manufacturer which can reduce the company man power thus cost can be reduced further
  3. Consumables spares need not to be purchased or stored in a separate building by the metro organization, since everything shall be taken care by the manufacturer
  4. Since manufacturer need to occupy local places and buildings for offices and warehouses the rent can also be a revenue source for the organization
  5. Ads, film shooting, Sticker ads etc will get more exposure since private party also intervening in the public transport.
  6. Will encourage more pvt companies to invest or participate in public transport sector.

Cons of train procurement on a lease basis

  1. Considering all the above advantages, operational cost may be same as that of conventional metros
  2. Job security may be less for the workers just like in a private firm.
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