1. THE DELHI METRO PROJECT
EFFECTIVE PROJECT MANAGEMENT IN PUBLIC SECTOR

2. INTRODUCTION
 The need for a reliable public transportation was felt in Delhi
for a long time. A comprehensive traffic and transportation
study completed in 1990 highlighted the urgent need for a
rail-based transit system comprising a network of
underground elevated and surface corridors to meet the
traffic demand projected for 2021. To make this dream a
reality , the Delhi Metro Rail Corporation Limited (DMRC)
was registered on 3rd May 1995 and it is solely responsible
for the construction and operation.

3. Reason
 Population of over 1 million.
 More registered vehicles than Mumbai, Kolkata & Chennai
put together.
 Automobiles contributing to more than two – thirds of the
total atmospheric pollution.
 High rate of road accidents
 More than 35 studies recommended Mass Rapid Transit
System.

4. Challenges
 DMP is the biggest urban invention in India since
independence in 1947
 Project has to be executed in very difficult urban
environment
 Being the capital city, all actions under close scrutiny of
VIPs
 Project implementation period compressed from 10 years
to 7 years
 Metro being constructed to world class standards with
frontline technologies
 Expertise and technology not available in the country.

5. The Delhi Metro Project
 Second project in country after Kolkata Metro:1984.
 A 50:50 joint venture of GoI and GNCTD
 DMRC incorporated under Companies Act 1995
 Duration of completion of Phase – 10 years by the end of 2005
 Get approved by GoI in Sept 1996 (after civic organizations
recommendations)
 P-I to connect Delhi’s business, education and shopping districts.
 Total land needed 340 hectares (58% govt., 39% private agriculture
and 3% private urban land)
 P-I consists 3 Lines, total length 56 km, 50 stations (10
underground) and 3 maintenance depots.

6. Line Length of Line Route
Line 1 Red Line 22km Shahdara to Rithala
Line 2 Yellow Line 11km Vishwa Vidyalaya to Central Secretariat
Line 3 Blue Line 23km Barakhamba to Dwarka

7. Funding the Project
 GoI and GNCTD arranged the all capital required.
 Initial estimation of cost in 1996 Rs 60 billion
 Revised estimation cost in 2002 was Rs 89.27 billion
 Final cost of project approx Rs 99 billion with Rs 7 billion saving
 2.2 million passenger/day to become the project viable later revised
to 1.5 million passenger/day
 Economic IRR 21.4%
 Financial IRR 3% (low IRR some minister suggested to drop the
project)
 Social sector project can benefit the regional economy in more than
one ways.

8. Cost Structure
S. No. Source of Fund % of total cost Remark
1 Equity 28% Equally subscribed by GoI
& GNCTD
2 Interest Free Loan 5% Land Acquisition
3 JBIC 64% Time Sliced Soft Loan
4 Property Development 3% Commercial activities
 Repayment period 30 years including 10 years grace period.
 Debt to equity ratio 2:1
 Exchange rate risk bore equally by GoI and GNCTD.
 Sources of Revenues: fares, property development, taxes on local public.
 Property Development: Shopping Mall, IT Part, Multiplex, Restaurant and
Stores etc.
 This project was exempted from custom and excise duties.

9. The project team
 Mr. E. Sreedharan was appointed as project manager and
managing director in Nov 1997.
 A technocrat retired from IR in 1990.
 Earned reputation for completing the project on time and within
budget.
 70% of senior staff hired on deputation from IR
 DMRC opted lean structure.
 Effective contract awarding and procurement process (to tackle
with time, cost and corruption)
 Contract awarding process transparent and simple & fair and just
 Removed subjectivity from tender evaluation.

10. Contd…
 Had two departments: project organization and operation & maintenance
 Experts required from: Civil, electrical and communications area etc.
 Young 18-30 years motivated team of professionals personally interviewed
by MD.
 Faced skill shortage problem everyone was new to metro project
 No technical institute of such kind in the country.
 Suitable candidates sent HongKong MTRC for training.
 Metro Training School at Shastri Park
 Unique work culture: hard working, dedicated and professionally
competent

11. The Project Plan
 Individual accountability.
 Daily monitoring of progress.
 Weekly reviews and targets.
 Delhi Metro Act, 2002
 Superseded Delhi Municipal Laws.
 Lower courts barred from issuing stay orders.
 Dedicated team of lawyers to prevent property disputes.
 Cost centers
 Manpower.
 Energy.
 Material & maintenance.

12. Road Blocks
 Low Financial IRR prompted second thoughts on the
project
 Criticism due to inability to recruit, 70% were deputed
from Indian Railways
 Lack of experience & specialized experts in Civil,
Electrical & Communication Engineering
 Loss of Rs 5 million if one day lost
 Difference of opinion on gauge to be adopted

13. Critical Success Factors
 ‘We mean business’ attitudes.
 Efficiency, courtesy & integrity in corporate culture.
 Corruption free Contract Awarding System &
Procurement Process.
 Autonomy in decision making.
 Advance planning in utility diversion, minimizing
public inconvenience.