Caught in a tussle between the Haryana authorities and the companies handling it, the Gurgaon Rapid Metro stares at an uncertain future. The Indian Express reports on the crisis facing the project that benefits 59,000 people every day
Conceptualised in 2008, Gurgaon’s Rapid Metro was meant to address “the rising population and its associated infrastructure problems” in a city weak on public transport. It was to this end that the Haryana Urban Development Authority, now known as the Haryana Shehri Vikas Pradhikaran (HSVP), invited potential bidders to develop a Metro rail link between Sikanderpur Metro station of the Delhi Metro Rail Corporation (DMRC) and National Highway 8 (NH8).
Built in two phases in 2009 and 2013, the 11.7-km line with 11 stations on its route ferries 59,000 commuters on a daily basis.
The line, and people who use it, today stare at an uncertain future.
HSVP and the companies handling the Metro have issued termination notices to each other, alleging “material breaches” in the contract. The issue reached the Punjab and Haryana High Court earlier this month, and it held that the conflict “may be resolved by negotiation”, and asked the firms to run the Metro till September 17.
But even before the Metro became entangled in this tug of war, it had been facing issues of insufficient footfall. Experts The Indian Express spoke to highlighted two factors for the Rapid Metro not generating the expected revenue: Poor route selection and high fares, ranging from Rs 20 to Rs 35.
Matter of choice
Although the Rapid Metro provides connectivity between Cyber City, home to offices of several MNCs, and the upscale Golf Course Road, where several offices, malls, and high-end gated condominiums are located, this alignment, experts said, was poorly chosen.
Sewa Ram, Transportation Planning Expert at the School of Planning and Architecture, said one of the reasons for the Rapid Metro’s struggle is that planners failed to realise that a lot of the employees working at Cyber City do not actually live in Gurgaon.
“There was a procedural failure in the planning of the Metro — the corridor was seen in isolation and not put in the context of a larger mobility plan. It connects to a completely commercial area, and then to very selective residential localities, which does not serve the purpose. It was also not realised that a lot of people working in Cyber City offices don’t stay in Gurgaon — the heavy traffic that enters the city from New Delhi each morning is proof of this. So how would the Metro line be a success?” said Ram.
“In terms of its route as well, there is a problem. The Metro does not cover the entire city, but very select locations. Its length is too short for it to be considered the main line of travel in the city. At best, it can serve as an extended line or as a feeder mode. Even the traffic it gets is mostly because it is connected to the Delhi Metro’s Yellow Line at the Sikanderpur Metro station,” he said.
Amit Bhatt, Director of Transport at WRI, India, reiterated this. “The Cyber City-Golf Course Road corridor is not a high density one. Cyber City generates a lot of employment, but most of the people working there do not live in Gurgaon… The second stretch the Metro covers, Golf Course Road, already has a 16-lane road running below it, and people prefer to take that as it saves time, rather than climbing up the stairs, going through security, and waiting for the Metro,” he said.
Connectivity to the other side of NH8, especially to Old Gurgaon, may have yielded better results, experts said.
“Other steps need to be taken for the Metro to be effective in the city, even if HSVP takes over. For instance, the fare needs to be rationalised. For people who want to save money, the Metro is too expensive at Rs 35 for an 11-km stretch. They can easily get other shared transportation, such as autorickshaws that will take the same amount of time. Another way is to link the line to the other side of the highway, which is a high density area and where a lot of commute happens,” said Bhatt.
Transport experts have also expressed concerns about the belief that a simple handover to HSVP will change the fate of the Rapid Metro. According to sources from IL&FS, the Metro is yet to make profits, with all the additional income flowing in being redirected into repaying its debts.
Unlike other Metro projects, like the Delhi Metro, where 4% of the operational cost goes into financing, for the Rapid Metro, the annual report of 2017-2018 reveals that 65% of the operation cost was of financing. Being a publicly-funded project, the Delhi Metro was eligible for loans at discounted rates unlike the Rapid Metro, where money had to be borrowed at the prevailing commercial rates.
For those who have been relying on the Rapid Metro for the last six years, the uncertainty over the future of the line is a cause for worry.
Radhika Sharma, who lives in an independent bungalow in Sector 56 and works at a multinational corporation in Cyber City, said the Metro has been a lifeline ever since she moved to the city from Lucknow a year ago. “I usually walk down to the Sector 55-56 station and take the Metro to work. Each trip costs me less than Rs 40 as opposed to the Rs 150 I would be paying in a cab,” she said.
“If the Metro closes down, even briefly, there will naturally be a surge in demand for cabs and autos. Even now, it is difficult to get one during peak hours,” she said.
Some, however, said a flat fare of Rs 20 dissuades them from using the Rapid Metro. A housekeeping staff at a restaurant near Phase 5 on Golf Course Road, who lives in Chakkarpur village, said, “The Metro is a cleaner, safer mode of transportation, but it makes no sense to pay Rs 20 to travel two-three stops. I would much rather take a shared autorickshaw and pay Rs 10.”
The project, its troubles
It was in 2009 that Rapid MetroRail Gurgaon Limited (RMGL), a consortium of three companies — IL&FS Transportation & Network Limited (ITNL), Enso Rail Systems Limited and DLF Metro Limited — executed a concession contract with HSVP to execute Phase 1 of the Rapid Metro project.
Even as work on Phase 1 began, HSVP floated another proposal for developing Phase 2 — between Sikanderpur Metro station and Sector 56. Identifying Golf Course Road as “one of the busiest roads”, the Authority sought to “address transportation needs of not only the office complexes” located along the stretch, but of “large residential societies” on the road.
In 2012, Rapid MetroRail Gurgaon South Limited (RMGSL), comprising IL&FS Rail Ltd (IRL) and ITNL, was selected for the purpose.
While Phase 1 was opened to commuters in November 2013, Phase 2 was completed in March 2017.
In July 2018, barely a year after Phase 2 began operations, IL&FS ran into financial trouble, with the company facing issues in making repayments on its bonds.
The same month, RMGL and RMGSL issued a notice to HSVP, alleging “material breaches/defaults” on their part and by the Haryana government. The notice directed them to “cure” the breaches “within a period of 90 days”, failing which steps would be taken for termination of agreement.
Although officials from IL&FS refused to comment on the matter on record, sources said the “breaches” were regarding advertisement rights and infrastructure development.
On October 11, 2018, HSVP responded to the notice issued by IL&FS, denying the allegations of material breaches and instead granting 60 days to the company to cure its own breaches and withdraw the notice. These alleged breaches included failure to pay land lease charges, failure to comply with clauses in the agreement relating to appropriation of non-fare revenue, failure to comply with fare fixation guidelines, and failure to obtain prior consent before creating encumbrances.
When several meetings between the parties, between November 5, 2018, and March 4, 2019, to discuss the “modalities” of taking over the project failed to yield a breakthrough, RMGL and RMGSL, in June 2019, responded to this letter, denying any breach of the agreement. A termination notice was also issued, which would come into effect 90 days later, on September 9, 2019.
On August 19 this year, IL&FS submitted a request to Justice (Retd) D K Jain, appointed by the National Company Law Appellate Tribunal (NCLAT) to supervise the resolution of matters, seeking permission for hand over of the Rapid Metro project to HSVP. This matter is still before the Tribunal.
Officials from HSVP and IL&FS, when contacted for a response, refused to comment as the matter is sub judice.
Three days before the termination notice was set to come into effect, on September 6, HSVP and the Haryana Mass Rapid Transport Corporation (HMRTC) submitted a civil writ petition in the Punjab and Haryana High Court, seeking “quashing” of the termination order, terming it “illegal”, “arbitrary” and “against public interest”.
The petition highlights what’s at stake. “It is relevant to mention here that as per the figure supplied by the respondent themselves, approximately 59,000 commuters in both the projects are commuting daily and they are earning approximately Rs 4 crore every quarter,” states the petition.
It also points out that the hand over of the project “cannot be done overnight”, especially considering the “staff and employees” and the “technical aspect” involved, adding that, if this is forced upon them, “there will be no other alternative but to close the Metro line”.
How the crisis unfolded
Nov 2013: Phase 1 of the Rapid Metro, between Sikanderpur and NH8, completed
Mar 2017: Phase 2, between Sikanderpur and Sector 56 on Golf Course Road, completed
Jul 17, 2018: RMGL and RMGSL issue notice to HSVP, calling on them to cure purported material breaches within 90 days
Oct 11, 2018: HSVP responds to notice, denying allegations of material breaches, and granting 60 days to RMGL and RMGSL to cure its breaches and withdraw notice
Nov 5, 2018 to Mar 4, 2019: Meetings held to discuss modalities of HSVP taking over project in an amicable manner. No amicable resolution reached
June 7, 2019: RMGL and RMGSL respond to October 11 letter, denying breach of agreement. Also issuing termination notice that would be effective in 90 days i.e. on Sept 9, 2019
Aug 26, 2019: HSVP and HMRTC issue termination notice to RMGL and RMGSL following their failure to cure breaches
Sept 6, 2019: HSVP and HMRTC file civil writ petitions requesting “quashing” of termination order dated June 7, 2019, terming it “illegal”, “arbitrary” and “against public interest”
Sept 6, 2019: Court directs Rapid Metro to continue operations until midnight of Sept 9, 2019
Sept 9, 2019: Court finds that dispute “may be resolved by negotiation”, defers hearing of case to Sept 17 to allow time for the same. Directs RMGL and RMGSL to continue operating and managing Rapid Metro rail until the date