How Do Metro Systems Perform?

The Delhi Metro is one of the largest mass transit systems in the world that was built in a very short period of time.

It may be true that a city like Delhi needs a wide mass transit system and that many Delhiites find the Metro quite useful. But this does not mean that the Delhi Metro is financially well-performing.

This is an important question, because the underground sections in the third phase of the Delhi Metro were built at a cost of Rs 552 crore per kilometre. This makes it one of the most expensive urban transport projects in India. So, is the money being spent in the most efficient way possible?

In most developing countries, mass transit systems have not performed very well. This does not mean that these systems have not served a good purpose. This implies that there could be better ways to spend such large amounts of money. The Delhi Metro has been running on loss based on the Earnings Before Tax (EBITDA) figures for the past few years. The Delhi Metro also does not cover the costs in low-traffic routes, except in peak hours. This is not so much because of low demand for the services of the Delhi Metro, but because of poor integration with other transportation systems.

Metro stations tend to be far enough from where people live, and it is very difficult to access the stations easily without good feeder systems. When there are not many people using the Delhi Metro on a certain route, the frequency of trains tend to become low. When the frequency becomes low, less and less people will use the Delhi Metro. The third phase of the Delhi Metro was designed to solve this problem. Most people do not like walking more than ten minutes to the Metro station, and a normal person cannot walk more than 800 meters in ten minutes. So, authorities decided to build more stations and increase connectivity between south and southeast Delhi. This is also intended to lower congestion across Metro stations. But at a cost of Rs 552 crore per kilometre in underground sections and Rs 221 crore in elevated sections, it is not clear whether it is cost effective.

Moreover, Delhi has become more spread out in the past few years with car ownership rising significantly.  As Metro services are likely to be profitable only in high demand corridors, all these factors tend to act against this. The Metro trains are also highly overcrowded in high demand corridors. The number of people traveling back and forth from high-density corridors like Connaught Place have also declined, with the city becoming more spread out.

In many developing countries, there is near-consistent pattern. Even when projects are completed on time, and are technically impressive, there is not enough passenger demand. So, without more people using it and without fares rising substantially, Metro systems are not likely to become more profitable when they are extended to more cities or to other parts of cities in developing countries. When a study was done by the thebigcity.net in 2011, they found that London has the most expensive Metro system, but few of the routes cover operating costs. Of the 135 Metro corporations in the world, only four made operational profits: Singapore, Taipei, Hong Kong, and Delhi. It seems that despite all the flaws, and despite its failures in the recent past, the Delhi Metro is ahead of most Metro corporations in the world.