PPP model not suitable for metro rails, says Sreedharan

In metro projects where fares or tickets are low, state and central governments should come together

PTI | October 20, 2010



Public-private-partnership (PPP) models work well only in projects such as airports, ports, highways, etc and not metro rail projects as the latter offers low returns while being highly capital intensive, a senior infra sector expert said.

"Metro projects are very expensive and social projects. They are not expected to make profits. Private players will come in only when there is profit," Delhi metro rail corporation's managing director, E Sreedharan told reporters on the sidelines of a function in Mumbai.

Only the government should undertake metro projects, Sreedharan said, adding both the central and state governments should jointly undertake such projects.

"Personally, I do not favour the PPP model for metro projects. Ideally, it should be a 50:50 participation from central and state governments. Therefore, no one particular government can dominate," he said.

Sreedharan, who is credited with completing the first two phases of the Delhi metro in record time, said that the Mumbai metro One, being undertaken by the Anil Ambani group on the BOT model is very much beyond schedule.

"Currently, L&T and the Anil Dhirubhai Ambani group are building metros. We are yet to see how they will perform," he said.

Sreedharan said that private players undertake such projects only when fares are very high and they get high returns.

"Private players will come in only when fares are high. In the case of rail lines connecting the airport, fares can be high. Air passengers would not mind paying Rs 150 or so considering the money that they will be paying to taxis to reach the airport. But in metro projects where fares or tickets are low, the state and central government should come together," he said.

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