The Cabinet on Wednesday gave its nod for a new metro rail policy. Framed by the Urban Development Ministry, the policy is expected to promote ‘Make in India’ initiative in metro rail projects, according to Finance Minister Arun Jaitley.

The policy will help meet the metro rail aspirations of various cities. Apart from financial returns, the policy lays emphasis on intangible benefits on the environment and safety fronts.

For approving the projects, the Centre will take into account an economic rate of return of 14 per cent instead of financial rate of return of 8 per cent.

Metro projects in 13 cities are at various stages of planning and appraisal.

While asking States to take steps for ensuring financial viability, it has also called for evaluating other transport modes such as buses, trams and light rail transit. Some level of private participation in the operation and maintenance of the metro system will be mandatory for all projects that take funds from the Centre. Most of the metro systems globally, barring the one in Hong Kong, make operating losses .

Additional tax The new policy wants States to charge a “betterment levy” in areas that will benefit from the metro rail projects.

Indicating that States should provide for higher floor area ratio to keep the costs low for commuters, the policy mandates ‘transit oriented development’ to promote compact and dense urban development along metro corridors. TOD reduces travel distances besides enabling efficient land use in urban areas.

Permanent fare committee The policy also empowers States to make rules and regulations and set up a fare fixation authority for timely revision of fares.

For rigorous assessment of new metro proposals, the policy has suggested independent third party assessment by agencies to be identified by the government — like the Institute of Urban Transport and other such centres of excellence — whose capacities would be augmented as required.

Setting up of Unified Metropolitan Transport Authority (UMTA) has been made mandatory, which will prepare comprehensive mobility plans for cities for ensuring complete multi-modal integration for optimal utilisation of capacities such as last-mile connectivities.

State commitment To ensure financial viability of metro projects, the new policy requires States to clearly indicate in the project report the measures to be taken for commercial development at stations and in the surrounding urban land.

This is for maximising non-fare revenue. States are also required to accord all the required permissions and approvals in advance.

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