Tuesday 29 April 2014

Putting cart before horse: ‘Dynamic’ Fare structure for Static ADMK project!

Recently there was a report in an English daily, obviously planted by some over-enthusiastic and super ambitious quarters in the ADMK regime, on the fare structure to be followed in the monorail system in Chennai announced by Jayalalitha immediately after coming to power in May 2011 with much fanfare just for the sake of rivaling successful Metro Rail project, conceived, approval obtained and funded by the previous DMK rule and continues to be executed by the authority concerned.
In spite of the veteran of urban rail projects and at present the Chief Adviser of Delhi Metro Rail Corporation E. Sreedharan, popularly known as Metro Man, pleading with the ADMK regime to give up the proposal of Monorail project, which was not only grossly inadequate to cater to the needs of a populous city like Chennai but also proved to be a failure all over the world and instead execute the Phase II of the Chennai Metro rail, which was halted by this regime, the Jayalalitha regime remained reticent.
However, works relating to the monorail project never took off except routine announcements in the Assembly now and then. However, after recently Jayalalitha flagged off the trial run of the Metro Rail from Koyambedu, she seemed to have seen the fruits of the project and futility of her pet monorail project because in the Governor’s address to the Assembly this year it was stated that “the State government will ensure faster clearance from the Centre for the Washermenpet-Tiruvottriyur Metro Rail corridor, besides taking up a detailed project report for Phase II of the project in newly identified corridors. The Metro Rail work was progressing well and so far, and Phase II of the Chennai Metro Rail project is necessary for maximum utilisation of the scheme aimed at traffic de-congestion and enhanced connectivity”.
However, soon after there was a report last week that the State government has decided to approach the Japan International Cooperation Agency (JICA) to fund one of the two corridors of the Chennai Mono Rail Project - Vandalur-Velachery, even as pre qualification bids have been floated for the other corridor - Poonamallee to Kathipara.
As per a conservative estimate, the cost of the 23-km-long Vandalur-Velachery corridor will be around Rs. 4,000 crore. Those who are part of the project formulation say it may take a year for completing all the formalities with the JICA.
As for the Poonamallee-Kathipara corridor, it is for the project developer to raise funds. For this, against the original two alignments, the authorities have made it into one, by including essential features of the now-abandoned Poonamallee-Vadapalani corridor. Apart from Vadapalani, areas such as Valasaravakkam and Virugumbakkam will be covered. The estimated cost of the Poonamallee-Kathipara corridor has been reduced to Rs. 3,235 crore, against Rs. 8,000 crore earlier.
It is to be noted that it is for the third time that the bidding process has been initiated for the Chennai Mono Rail Project, one of the flagship projects of the present ADMK government, for reasons best known only to the rulers.  Between August and December 2011, the first round of the bidding process was carried out, by inviting request for qualifications. Not satisfied with the limited number of participants, the authorities decided to start the process afresh. In the second round, a couple of prospective promoters were shortlisted, but eventually, these firms did not participate in the bidding process. About six months ago, the tender was allowed to lapse, says an official. This is why the authorities had to go in for the third round.
The authorities have used the passage of time to fine tune features of the project. As per the revised scheme, the Poonamallee-Kathipara corridor over a distance of about 21 km will be served by 16 stations. Among the planned stations are Karayanchavadi, Kumanananchavadi, Iyappapanthagal, Ramachandra Medical College, Porur Lake, Porur and Nandambakkam. A link has been provided from Porur to Vadapalani.
It has been said that by July, the entire bidding process will be completed, according to the schedule drawn up by the authorities.
As for the monorail’s Vandalur-Velachery corridor, the funding arrangement will based on that of the Chennai Metro Rail Project. It is the Japan International Cooperation Agency (JICA) that is funding the project in the form of a loan. The official says the loan for the Vandalur-Velachery corridor may either be taken by the government or by the executing agency.
When the scope of the project and the biddings themselves have not been finalised and confusions seemed to be looming large, may be as a face-saving step the authorities are issuing notifications, as if the yet-to-take-off project is alive and kicking.
According to another report in a daily, the Transport department has come up with a “dynamic fare structure” for the ‘upcoming’ monorail project. The base fare has been set at Rs 10 for 2 km, and the operator can charge up to 25% extra during peak hours. The operator can designate only four hours a day as peak hours, and he can offer discounts during off-peak hours. “To avoid doubt, the differential fare shall be with reference to the time of entry of the user in the respective train,” read the fare notification from the Transport department.
Sources in the department said dynamic fares are a way to provide operators incentives to put their own money into the project. “Unlike metro rail, monorail is built on a PPP (public private partnership) model. So we have to give the operator some freedom to decide fares,” said a source from the department.
The project is being executed under design, build, finance, operate and transfer ( DBFOT) scheme and the funds required are estimated to be Rs 16,650 crore. Of this, the government has agreed to pay Rs 970.5 crore to the operator as a grant. If there is a change in the current alignment and project cost, the proportion of grant may increase or decrease.
While the minimum fare will be Rs 10 for up to 2 km, the implementing agency will be allowed to charge Rs 13 for journeys between 2km and 4km, Rs 15 for 4km to 6km, Rs 18 for 6km to 9km, and Rs 20 for 9km to 12km. For journeys between 12km and 15km, the fare will be Rs 22.
This is expected to be the base fare when the system comes into operation, but the operator can revise fares by 5% every year. For example, if the system is commissioned on April 1, 2018, the first fare revision on April 1, 2019 will be to Rs 10.5 for 2km. The fares will be revised every April 1. This will be an automatic procedure and does not require a government notification every year. “The base fares have been set following recommendations from the planning commission. It is a simple formula that takes into account the base fare and price index of the week as well as the year,” said a source from the department. Once metro rail fares are announced, the contractor has to ensure that monorail fares are not lower. “This is because per passenger cost of monorail is higher,” the source added. Metro rail is likely to notify its fares in two months, sources have said.
It looks like the case of putting the cart before the horse...monorail project is being talked for about three years now...still in papers...and now they have decided to charge dynamic fare structure for such static project...What a fantasy?

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