THE DELHI METRO PROJECT

EFFECTIVE PROJECT MANAGEMENT IN PUBLIC SECTOR

 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.
The Delhi Metro Rail Corporation has been certified by
the United Nations as the first metro rail and rail-based
system in the world to get "carbon credits for reducing
greenhouse gas emissions" and helping in reducing
pollution levels in the city by 630,000 tonnes every year.
Mission
To cover the whole of Delhi and adjoining areas
with a metro network by the year 2021.
To serve the customers including differently
abled commuters with passion.
To sustain the image of being number one in the
transportation sector in India and to be among the
top 3 Metro Rail systems in Asia with regards to:

safety reliability punctuality quality and

responsiveness to the customers
To make Delhi metro self-sustainable.
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.
 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.
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.
Got approved by GoI in Sept 1996 (after civic organizations
recommendations).
P-I connects Delhis 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.
 The Delhi Metro Rail Corporations projects are carried
out in phases, Phases I and II are now complete. The
first section of Phase I opened in 2002. Phases III and
IV should become operational in 2016 and 2021
respectively. The team that did all this made it look
simple. However, building a new metro system in a
crowded capital city required complex planning and
execution.

The Metro project faced numerous technical and

systemic hurdles. Despite these, it delivered the first
phase nearly 3 years ahead of schedule and within
budget, thanks to comprehensive planning, effective
project design, and a professional work culture.
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 was 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% ( IRR was low so some minister
suggested to drop the project).
Cost Structure
S. No. Source of Fund % of total Remark
cost
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.

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.

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 were sent to HongKong MTRC for training.

Metro Training School at Shastri Park.

Unique work culture: hard working, dedicated and professionally

competent.
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.
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.
Case study on
Delhi Metro Project
 About
BREAKING IT DOWN:

HOW THE DELHI METRO WAS

DELIVERED BEFORE TIME & ON
BUDGET ?
7 LESSONS FROM
THE DELHI METRO PROJECT
1.AN EXPERIENCED

LEADER
 Dr. E Sreedharan, the former MD of DMRC
and project manager of Phase I, led his team
through the important stages of planning,
construction and subsequent commissioning of
different sections of track. Sreedharans history
of delivering several railway projects on
time would prove critical. He was also allowed
to handpick his core team, and, through them,
ensured that the whole organization followed a
we mean business culture.
2.LEAN
STRUCTURE&COSTS

Lean Organization Structure

Mr. Sreedharan opted to have only two departments

- Project Organization & Operations, and
Maintenance. Costs were limited to just three heads:
energy, manpower, and materials & maintenance
to control expenditure.
OWNERSHIP
FROM EVERY STUFFER

DMRC used a system in which every individual

was aware of their accountabilities. Every
employee prepared a detailed report on the
work assigned to them. In case of a delay or
deviation from the plan he/she had to give valid
reasons and see that the problem was resolved.
REVERSE
COUNTDOWN CLOCKS

Regular reviews, new and revised targets

ensured adherence to schedules. Project delays
due to property disputes were minimized with
prior preparation and support from a team of
lawyers. Use of innovative technologies helped
reduce construction time and enabled quick
decision making.
PROJECT MANAGEMENT

TOOLS

Primavera Project Planner software was used

for project planning and monitoring. The
software helped DMRC keep track of all project
activities, resource availability and thus
optimized both time and resource up to
maximum efficiency
TRANSPARENCY
WITH STAKEHOLDERS

Besides completing projects on time and within budget,

effective project management also involves managing
stakeholders. These include contractors, the public,
funding agencies and the government. In addition,
DMRC used a separate team to ensure quality and safety
standards were met by all staff.
Contracting and procurement processes were
transparent, simple and fair. Contractors were paid on
time and didnt have to resort to bribes. This boosted
their morale and dedication toward providing better
services. Moreover, DMRC also partnered with the Delhi
Traffic Police and environmental experts to minimize
pollution and inconvenience caused to the public.
CONSTANT
IMPROVEMENT

The DMRC is now working on new projects to

reduce passenger travel time by connecting
critical stations on different lines. It has also
introduced feeder buses to improve last-mile
connectivity, as well as solve the problem of
inadequate parking at metro stations.
DMRC set benchmarks in effective and efficient
infrastructure project construction and operation,
despite numerous challenges. As a result, it is
now hailed as one of Indias best examples of
urban project management in the public sector,
encouraging other cities to take up similar
projects.
Conclusion: Quotes

Project management can be defined as a way of

developing structure in a complex project, where the
independent variables of time, cost, resources and
human behavior come together.
Rory Burke
Trying to manage a project without project
management is like trying to play a football game
without a game plan. K. Tate
https://
www.youtube.com/watch?v=25TI5LPNodU