A megaproject matrix: ideology, discourse and regulation in the Delhi Metro Rail

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A MEGAPROJECT MATRIX:

IDEOLOGY, DISCOURSE AND REGULATION IN THE DELHI METRO RAIL

by

Anupama Mann

A Project Presented to the
FACULTY OF THE SCHOOL OF POLICY, PLANNING,
AND DEVELOPMENT
UNIVERSITY OF SOUTHERN CALIFORNIA
In Partial Fulfillment of the
Requirements for the Degree
DOCTOR OF PLANNING AND DEVELOPMENT STUDIES

May 2009

Copyright 2009 Anupama Mann

ii
Dedication

For my parents, Sumitra Mann and Dalel Singh Mann

iii
Acknowledgements

I would like to thank my advisor Prof. Tridib Banerjee for his valuable advice and input in my
work and his persistence in seeing me through the lengthy process of completing this project. I would also
like to thank the rest of my doctoral committee, Prof. Martin Krieger, Prof. Lisa Schweitzer and Prof.
Richard Little for their comments and introducing me to relevant literature. I would also like to thank Prof.
Niraj Verma, Prof. Nandini GuneWardena and Late Prof. Shahab Rabbani who gave me useful input in the
early stages of my project and June Muranaka who kept me reassured that I was keeping up with my degree
requirements. I would like to thank the Chief Public Relations Officer, Anuj Dayal, Sarvesh Tewari and the
rest of the public relations team of the Delhi Metro Rail Corporation who made their collection of media
articles available and allowed me to extensively photograph and film the metro line and stations. I would
also like to thank Prof. K.T.Ravindran of School of Planning and Architecture, Prof. Geetam Tewari and
Prof Dinesh Mohan of Indian Institute of Technology, Ashok S. Godeshwar, Chief Architect, Delhi
Development Authority, S.K.Das, Architect and the residents of Shahdara, Kanti Nagar and Ajit Nagar for
speaking with me. Finally I would like to thank my father for the newspaper clippings he kept for me, my
family and friends for their encouragement and my husband Siddhartha for his support and patience.

iv
Table of Contents

Dedication ii
Acknowledgements iii
List of Figures vii
Abbreviations xi
Abstract xvii
Preface xviii
Chapter 1- Introduction 1
Project Statement and Objectives 1
Methodology 4
Guide Map 12
Chapter 2- Literature Review and Frame of Reference 21
The City Builders, Susan S. Fainstein 21
Reconstructing Urban Regime Theory, Mickey Lauria 23
Remaking New York, William Sites 33
Cities in the International Marketplace, H.V.Savitch and Paul Kantor 37
MegaProjects, Alan Altshuler and David Luberoff 38
Megaprojects and Risk, Bent Flyvbjerg, Nils Bruzelius and Werner Rothengatter 42
Common themes and Frame of Reference 48
Chapter 3- Historical Context 55
A brief history of Delhi and the MRTS 56
Socio-Economic Profile of Delhi 59
The first twenty meetings of the National Development Council 68
The next thirty-seven years in the National Development Council 83
Delhi Government in the NDC meetings 97
Master Plans for Delhi 1962 & 2001, Academic Papers, National Capital Region & MRTS 110
Five-Year Plans, National Capital Region and the MRTS 119
Academic Studies and the MRTS 125
Five-Year Plans, Ministry of Urban Development (MOUD) and the MRTS 133
MOUD, RITES, JBIC and the MRTS 137
Chapter 4- Project Approval, Funding, Metro Act and Urban Transport Policy 148
Before Union Cabinet Approval 149
Union Cabinet Approval 152
After Union Cabinet Approval 159
Discussion 160
Funding 161
JBIC Loan 162
Concessions 165
Power 169
Fares, Security, Water, Taxes and Levies 180
Property Development 184
Funding Update 190
v

Discussion 193
Central Urban Transport Policy 200
Antagonism between Ministry of Urban Development and Railways Ministry 206
Conflict between Delhi and Central Government 208
Metro Act Update 226
Discussion 227
Delhi’s Initiative in Transport Development, MRTS criticism and alternative developments 235
Delhi Government in the NDC meetings after the approval of the MRTS project 251
Discussion 256
Chapter 5- Award of contracts for General Consultants, Gauge Conflict and Project Design 259
Beginning of the General Consultancy controversy 261
Ram Jethmalani and the contract of General Consultants 264
Clearance of the General Consultancy contract 269
Media report on circumstances surrounding the award of GC contract after it was cleared 271
DMRC MD, E Sreedharan’s views after approval of GC 274
Discussion 277
Gauge Conflict and Award of contracts- the arguments begin 282
Broad Gauge for connectivity to the NCR 286
Cabinet Approval and possibility of Delay in the project 288
Using 100% FDI Policy change to lobby for standard gauge 291
Delay in bids for rolling stock; Railways to manufacture standard rolling stock 292
Tramway Act 297
Contracts to Foreign and Indian Companies 300
Contracts- Rolling Stock 303
Tension continues between the Railways and DMRC 308
Indigenization of Coaches 313
Update 316
Discussion 320
Project Design- Academic Studies and the Delhi Metro 328
Routes 337
Connecting to the Airport 352
NCRPB, NCR’s Integrated Rail and Bus Transit System (IRBTS) and the Delhi Metro 354
Development of the IRBTS for the NCR 358
Delhi Metro connects to the NCR 361
Ring Railway 364
Integrating Delhi Transport Corporation (DTC) with the Delhi Metro 368
Delhi Urban Arts Commission (DUAC) and Urban Impact 372
Discussion 375
Chapter 6- Environmental Impact and Land Acquisition 382
Political and Critical Commentary and Rehabilitation Policy 383
Fly ash 390
Khyber Pass and MCD, Fisheries 393
Trees 394
Religious Structures 404
Slums, unauthorized shops on G T Road 411
Shahdara Vegetable Market and other shops in the area 414
Makki Sarai and other residential in Shahdara 424
Tis Hazari 426
Institutional and Historical Structures 429
White Rose Club and New Amar Talkies 431
Traders in Chandni Chowk 434
vi

Ram Bagh, Lutyen’s Bungalows and Rouse Avenue 441
Washermen Village 443
Dwarka- Connaught Place Line 444
Casualties and Incidents 454
Discussion 462
Ground Situation and photographs of stations 463
Chapter 7- Conclusions 485
Revisiting Urban Theory, application to this case and other relevant theories 486
Some recommendations 509
Bibliography 512
Appendix: Timeline of Historical Context from Chapter 3 for the Delhi Metro Rail 516

vii
List of Figures

Figure 1: Map of Delhi, 2008 12
Figure 2- Master Plan Delhi 1962 58
Figure 3: Master Plan Delhi 2001 58
Figure 4- National Capital Region 1999 63
Figure 5- Rail Network in Delhi 112
Figure 6: The ‘Modified’ First Phase of the MRTS. 153
Figure 7: Listing Delhi’s transport policy and HCBS plan 246
Figure 8: Alternative Proposal I 331
Figure 9: Alternative Proposal II 331
Figure 10: Final MRTS proposal 332
Figure 11: Six alternatives for the MRTS by RITES and CRRI in a Journal paper 335
Figure 12: Final proposal by RITES and CRRI in a Journal paper 336
Figure13: Modified Routes for the MRTS 338
Figure14: Revised routes for the metro rail 347
Figure15: Final Delhi Metro routes per 2008 352
Figure16: Rail network for the NCR 357
Figure 17: What does Labour Day stand for? 460
Figure 18: Table showing distribution of articles of issues of Environmental Impact and Land
Acquisition between English and Hindi newspapers from September 1996 to October 2003. 461
Figure 19: Aerial map of Shahdara Station 468
Figure 20: Station and parking 468
Figure 21: Long term car parking 468
Figure 22: Cycle rickshaws at the station 468
Figure 23: Hawkers at the station and G.T. road 468
Figure 24: More cycle rickshaws at the east side 469
Figure 25: Vendors near Railway station on east side 469
Figure 26: Cycle parking at the station 469

viii
Figure 27: West side road to southern residential area Telibara under railway
bridge, metro boundary wall on station side 469
Figure 28: Vegetable vendors on south side 469
Figure 29: Vegetable vendors on south side next to railway tracks 469
Figure 30: Welcome station aerial photo 470
Figure 31: Welcome station in the evening 470
Figure 32: Way leading to east side 470
Figure 33: East side main road- Bholanath Nagar Marg 470
Figure 34: Main road further south, Bholanath Nagar 470
Figure 35: Underpass on west side leading to Kanti Nagar North 471
Figure 36: Coming out in an alley in Kanti Nagar 471
Figure 37: Emerging into Kanti Nagar residential and commercial area 471
Figure 38: Kanti Nagar residential and commercial area 471
Figure 39: Seelampur station aerial photo 472
Figure 40: Seelampur station at night with cycle rickshaws 472
Figure 41: Seelampur station looking southwest 472
Figure 42: Seelampur station 473
Figure 43: Seelampur station acquired land used as playground 473
Figure 44: Path leading east along G.T. Road 473
Figure 45: G.T. Road north of Seelampur station 473
Figure 46: Drain on east side 473
Figure 47: Fence between station and parking area on west side 474
Figure 48: parking area 474
Figure 49: Road next to parking on west side 474
Figure 50: Brave kids climbing the fence, station across 474
Figure 51: Underpass and road on west side 474
Figure 52: Emerging into Ajit Nagar alley 474
Figure 53: Ajit Nagar 475
Figure 54: Ajit Nagar 475
Figure 55: Ajit Nagar 475
Figure 56: Ajit Nagar 475
ix

Figure 57: Ajit Nagar 475
Figure 58: Ajit Nagar 475
Figure 59: Shastri Park Metro Station aerial photo 476
Figure 60: Shastri Park station opening to south side 476
Figure 61: Residential development by DMRC on north for DMRC employees and future IT Park 476
Figure 62: North side of Shastri Park station 477
Figure 63: Cycle rickshaws in front 477
Figure 64: landfill area across 477
Figure 65: land fill area 477
Figure 66: Rithala Station aerial photo 478
Figure 67: Rithala Station on West end of Line 1 from Shahdara to Rithala 478
Figure 68: Cycle rickshaws 479
Figure 69: Rithala DMRC Police Station 479
Figure 70: Residential area in Rithala next to station 479
Figure 71: Residential area in Rithala 479
Figure 72: Rohini West Aerial Photo 479
Figure 73: Rohini West station, hospital on left (south side) 480
Figure 74: Ambedkar Hospital 480
Figure 75: parking on north side 480
Figure 76: Vacant land for development on north side 480
Figure 77: Rohini West H.L. Parwana Road 480
Figure 78: Feeder buses 480
Figure 79: Kohat Enclave station aerial photo 481
Figure 80: Housing Courtyard on north side 481
Figure 81: Housing service alley on south side 481
Figure 82: Commercial at street level 482
Figure 83: commercial at street level 482
Figure 84: Looking east from the station, Shaheed Jagat Narayan Marg 482
Figure 85: Looking east from the south side 482
x

Figure 86: Kashmere Gate station aerial view 483
Figure 87: Kashmere Gate station south side southwest side near parking 483
Figure 88: South side at Lothian Road 483
Figure 89: View from Kashmere Gate station looking south 483
Figure 90: Kashmere Gate station Interior 483
Figure 91: Delhi University underground station 484
Figure 92: Delhi University station 484
Figure 93: Delhi University station 484
Figure 94: Delhi University Station and its surroundings 484
Figure 95: Chawri Bazaar station in Old Delhi 484
Figure 96: Chawri Bazaar station in Old Delhi, steps leading below 484

xi
Abbreviations

ABB Asea Brown Boveri
ADAG Anil Ambani Group
APMC Agricultural Produce Marketing Committee
ARR Annual Revenue Requirement
ASI Archeological Survey of India
BEML Bharat Earth Movers Limited
BHEL Bharat Heavy Electrical Limited
BJP Bharatiya Janata Party
BLD Bahujan Lok Dal
BOO Build Own Operate
BOT Build Operate and Transfer
BOOT Build Own Operate and Transfer
BPO Business Process Outsourcing
BRTS Bus Rapid Transit System
BSES Bombay Suburban Electric Supply
CAG Auditor General
CBI Central Bureau of Investigation
CCEA Cabinet Committee on Economic Affairs
CCRS Chief Commissioner of Metro Railway Safety
CDA Critical Discourse Analysis
CEC Chief Executive Councilor
CM Chief Minister
CNCR Central National Capital Region
CNG Compressed Natural Gas
COPP Committee of Plan Projects
xii
CP Connaught Place
CPCB Central Pollution Control Board
CPM (RL) Chief Project Manager (Railways)
CPRO Chief Public Relations Officer
CRRI Central Road Research Institute
CSE Centre for Science and Environment
DBFO Design Build Finance Operate
DDA Delhi Development Authority
DDPA Delhi Development Provisional Authority
DERC Delhi Electricity Regulatory Commission
DIMMTS Delhi Integrated Multimodal Transportation System
DJB Delhi Jal (water) Board
DMA Delhi Metropolitan Area
DMRC Delhi Metro Rail Corporation
DPCC Delhi Pollution Control Committee
DPR Detailed Project Report
DTC Delhi Transport Corporation
DUAC Delhi Urban Arts Commission
DUMTD Delhi Unified Metropolitan Transport Authority
DVB Delhi Vidyut (electricity) Board
EBT Electric Bus Trolley
EGAP Everything Goes According to Plan
EIA Environmental Impact Assessment
ERR Economic Rate of Return
FAR Floor Area Ratio
FDI Foreign Direct Investment
FIR First Information Report
xiii
FRR Financial Rate of Return
GAIL Gas Authority of India Limited
GC General Consultants
GCCI Gurgaon Chamber of Commerce and Industry
GEF Global Environment Facility
GNCTD Government of National Capital Territory of Delhi
GOI Government of India
GOM Group Of Ministers
GPS Global Positioning System
HCBS High Capacity Bus System
HPL Hindustan Petroleum Limited
HSTS High Speed Tram System
HUDCO Housing and Urban Development Corporation
ICF Integral Coach Factory
IDFC Infrastructure Development and Finance Corporation
IEEP Inland Empire Economic Partnership
IIT Indian Institute of Technology
IITF India International Trade Fair
IMF International Monetary Fund
IMMRTS Integrated Multi-Modal Rapid Transit System
INTACH Indian National Trust for Art and Cultural Heritage
IOC Indian Oil Corporation
IP Indraprastha
IRBT Integrated Rail Bus Transit
IRBTS Integrated Rail Bus Transit System
IRTE Institute of Road Traffic Education
ISBT Inter State Bus Terminal
xiv
IT Information Technology
ITES Information Technology Enabled Services
ITO Income Tax Office
IWAI Inland Waterways Authority of India
JBIC Japan Bank of International Corporation
JEXIM Japan Export Import Bank
JJ Jhuggi Jhhopri (slum)
JNNURM Jawaharlal Nehru Urban Renewal Mission
KFW Kreditanstalt Fur Wiederaufbau (German Development Bank)
LBZ Lutyens Bungalow Zone
LG Lieutenant Governor
LIG Low Income Group
LOA Letter of Acceptance
LOI Letter of Invitation
LRT Light Rail Transit
MCD Municipal Corporation of Delhi
MD Managing Director
MES Military Engineer Services
MIG Middle Income Group
MIT Massachusetts Institute of Technology
MLA Member of Legislative Assembly
MLD Most Likely Development
MNC Multi National Corporation
MOST Ministry Of Surface Transport
MOU Memorandum Of Understanding
MOUD Ministry Of Urban Development
MRA Metro Railway Administration
xv
MRTS Mass Rapid Transit System
MTNL Mahanagar Telephone Nigam Limited
NBCC National Building Construction Corporation
NCAER National Council of Applied Economic Research
NCR National Capital Region
NCRPB National Capital Region Planning Board
NCT National Capital Territory
NCTD National Capital Territory of Delhi
NDC National Development Council
NDMC New Delhi Municipal Corporation
NDPL North Delhi Power Limited
NHAI National Highway Authority of India
NOIDA New Okhla Industrial Development Area
NRI Non-Resident Indian
NTPC National Thermal Power Corporation
NUTP National Urban Transport Policy
ODA Overseas Development Assistance
OECF Overseas Economic Cooperation Fund
OSD Operations and Safety Director
PAP Project Affected Person
PCI Pacific Consultants International
PDDP Planning, Design and Development Project
PIB Public Investment Board
PM (M) Project Manger (Maintenance)
PMO Prime Minister’s Office
PPP Public Private Partnership
PWD Public Works Department
xvi
RCF Rail Coach Factory
RITES Rail India Technical and Economic Services
RSDO Railways Research Design and Standard Organisation
RTI Right To Information
RTV Rural Transport Vehicle
SAIL Steel Authority of India Limited
SAPROF Special Assistance for Project Formation
SLNA State Level Nodal Agency
SOE State Owned Enterprise
SPCA Society for the Prevention of Cruelty to Animals
SPV Special Purpose Vehicle
SRTU State Run Transportation Undertaking
SUTP Sustainable Urban Transport Programme
TERI Tata Energy Research Institute
TRIPP Transportation Research and Injury Prevention Programme
TYDB Trans Yamuna Development Board
UCLA University of California Los Angeles
ULB Urban Local Bodies
UNDP United Nations Development Program

xvii
Abstract

This Planning Design and Development Project studies the Mass Rapid Transit System or Delhi
Metro Rail, a transportation megaproject being implemented in Delhi, the capital of India, through media
discourse. Mega-projects are most relevant as case studies for understanding political, economic, social and
cultural changes undergoing in a nation as they affect and are affected by the changing environment over an
extended period of time. Therefore they cannot be judged on the basis of relevance, cost benefit or risk
analysis alone. Megaprojects can be seen as testing grounds for regulation and can be used to reveal and
influence development policy for social benefit. Each megaproject is possibly unique in its own right and
therefore requires detailed studying to understand the varied effects it has on its particular conditions other
than solving the problem for which it was formulated. The choice of technology for a megaproject and the
ability of the nation state to respond to inherent problems of the technical solution can determine the
direction of development and strengthening, weakening or transformation of political ideology. The focus
of criticism should be on how to make a particular megaproject fulfill its social obligation, which will
ultimately help reform and direct the changing regulatory matrix within which a megaproject is conceived,
developed and implemented.
The methodology for this study uses, almost entirely, newspaper articles from 1996 to 2008 as the
primary source. Since megaprojects are fairly difficult to study because of their long lifespan and particular
characteristics, this research was only made possible by the extensive media coverage, undoubtedly
facilitated by the public relations efforts of the implementing body, as the prolific Indian newspapers,
investigated, recorded and also provided a context for the project over its extended implementation phase.
The study uses newspaper articles to write the biography of the Delhi Metro Rail while also analyzing it for
its various biases and hence this methodology is specific to India and to this project.

xviii
Preface

This project attempts to formulate a positive theory of megaprojects. Rather than seeing
megaprojects as a pathology that has been the norm in recent literature on megaprojects, this study is an
attempt to show that the way to judge a megaproject is not through quantitative, cost-benefit or risk
analysis (Flyvbjerg et al, 2003) or even the outcome of the specific function that it is supposed to fulfill but
by the side effects that accompany it. These include insights into the effects of ideology of a particular
place in its choice of development and responses to adverse affects of development and opens up the
possibility of introducing regulations and policies to address these affects, which may otherwise remain
hidden in less transparent institutional setups for introducing structural changes in the political economy of
a country. In fact, the study of megaproject can reveal the existing antagonisms in the political and
institutional structure of the country and the mechanisms that are used to support or resist structural
changes and how even these transform over a period of time.
The stand-alone nature of megaprojects makes them ‘strategic research sites’ to study existing
problems in project finance like issues of regulation, transparency and constraints on managerial discretion
in transactions that involve funding from an external agency as well as innovative solutions in project
finance including creation of autonomous project entities for risk management, managerial incentives and
strategies that increase project value. They are also a rich source for the study of competitive strategy,
business-government relations, marketing/ sales, negotiations, ethics and human resource management and
therefore the study of megaprojects can provide lessons on how to proceed with management of all these
aspects in development policy and regulation concerning not only megaprojects but also other development
strategies.
1

Megaprojects affect economic, political and social conditions in a particular place and once again,
their stand-alone nature can reveal both positive and negative impacts of development very transparently.

11
Esty, Benjamin C., Why Study Large Projects? An Introduction to Research on Project Finance. European Financial
Management, Vol. 10, No. 2, 2004, 213- 224, Blackwell Publishing Ltd., Garsington Road, Oxford, UK and Malden,
MA, USA.
xix
This quality about megaprojects can offer the possibility of finding solutions to oversights in project
formulation and additional supportive development that is necessary to protect the rights of the
underprivileged as well as offer new opportunities for formulation and implementation of inclusionary
practices for development.
Megaprojects are instruments for nation building and the choice of technology for a megaproject
and the ability of the state to respond to inherent problems of the technical solution can determine the
direction of development and strengthening, weakening or transformation of political ideology. The study
shows that each megaproject is possibly unique in its own right and therefore requires detailed studying to
understand the varied effects it has on its particular conditions other than solving the problem for which it
was formulated.
Jawaharlal Nehru, India’s first Prime Minister propagated a socialist ideology and a mixed
economy for the nation state with a strong emphasis on centralized planning as the framework of
development and this was largely responsible for the trajectory of planned development in India.
Megaprojects including infrastructure projects like building dams, power plants and railways were part of
this effort and came under the purview and redistributive measures of the center with the states giving
advise, direction and contributing to the resources if the project was within their territory. In the history of
urban development in India, Delhi played a major role. The development of the Delhi master plan, the
course of decentralisation or balanced growth and regional development that was seen as complimentary to
socialist, democratic, planned development, were adopted as the preferred direction of urbanisation. The
history of urban transportation policy in the Five-Year Plans and the Ministry of Urban Development
(MOUD) shows how the Mass Rapid Transit System (MRTS) persisted in the plans since 1969; how it was
related to regional development and finally after the economic reforms of 1992, how it was financed and
implemented. Technology development was privileged in the planned development of the nation state.
From among the multi-modal solutions suggested in the Detailed Project Report for the MRTS, the metro
rail was the first among the recommendations to break ground in 1998 because of its technology
predilection.
xx
When the project was cleared by the Union Cabinet in 1996, the Department of Programme
Implementation, an agency under the Central government that was set up to assess public projects, pointed
out that the project had not resolved issues of funding, jurisdictional authority, possibility of bias in award
of contracts because of the funding agency JBIC and land acquisition issues but the project was cleared by
the Central government despite these warnings. The arguments given for the project and that sidelined the
Department of Programme Implementation’s concerns were the social nature of the project, a high
economic rate of return and governments’ ability to provide subsidies. The economic rate of return was
based on the erroneous assumptions of savings in fuel costs, and lowering pollution, efficiency in road
construction and maintenance, and decrease in traffic congestion. Just as all these issues played themselves
out as the project progressed, the response of the implementing body, Delhi Metro Rail Corporation
(DMRC) and the Delhi and Central governments was both innovative and retrogressive in responding in
addressing the emerging problems.
Overseas Economic Cooperation Fund (OECF) that later became the Japan Bank of International
Cooperation (JBIC) was the external funding agency and had the ability to put pressure on the project due
to Japan’s nuclear sanctions and because of conditions of the loan contract. The DMRC from very early on
was forced to look at other options for generating finances for the project and this included a greater
emphasis on property development than had originally been envisaged. Meanwhile the two governments,
Delhi more than the Central, helped tide the DMRC over the period of nuclear sanctions after which the
JBIC resumed its funding. Introduction of a policy for 100% foreign direct investment in transport projects
by the Central government was a continuation of the liberalization policies started in 1991 and eased the
way for DMRC into the arena of property development. As of 2007, property development is generating
almost 25% of the revenue for the project even though originally it was to generate only 7%. The Delhi
Urban Arts Commission and the Municipal Corporation of Delhi have protested against DMRC’s attempts
at property development. Though their criticism is valid in light of the objectives of building an MRTS that
were reduction in traffic congestion and air pollution, the need to make the MRTS financially viable will
require property development. Both these bodies can play a major role in ensuring that the new
development is socially and economically inclusive though the necessity of a regulatory body and active
xxi
cooperation of the two governments and different development agencies will be necessary in making it
happen.
The MRTS had been part of the transportation proposal prepared by the National Capital Region
Planning Board in its plan for the development of the National Capital Region (NCR) and it was to be
connected to the Regional Rail Transit System (RRTS). The DMRC proposed in 2001 that the MRTS in the
second phase be connected to the adjoining states in the NCR. It succeeded in replacing the RRTS, at least
to the extent of connecting to Delhi’s satellite towns of Gurgaon, Faridabad, Ghaziabad and NOIDA.
Therefore, it is fulfilling the function of a regional transportation network for the NCR envisaged in the
five-year plans. This development also added to DMRC’s financial viability.
In purely monetary terms, JBIC was funding 60% of the project while 30% was being shared
equally by the Delhi and Central governments but based on calculation of subsidies provided by both
governments, it was clear the domestic financing had a larger stake (over 50%) in the project because of
project subsidies and contributions. Once committed to the project, they continued to provide subsidies but
encouraged financial independence within the DMRC by relaxing property development regulations and
increasing its autonomy in decisions directly related to project management and choice of technology. The
Delhi government helped administratively by expediting permits for the project from various agencies and
helping in land acquisition.
The project throws a light on the structural changes taking place in the economy after the
enactment of the liberalization policy of 1991. For example the dissolution of the Delhi Vidyut (Power)
Board into a series of government and private companies and the formation of a regulatory body to monitor
them is a move towards privatization. Political pressure advanced DMRC’s course to get power at
subsidised rates from private power distribution companies that indicated the strong government influence
over the private sector. The power of the popularity of the project and the quasi-government nature of
DMRC helped it get power at subsidised rates even though the government bodies like the Railways,
Municipal Corporation of Delhi (MCD) and Delhi Jal (Water) Board (DJB) were paying higher rates. The
loss of revenue to private distribution companies was to be made up by increasing tariff of power for
Delhi’s citizens but Resident Welfare Associations blocked this increase. Attachment of the issue of fare
xxii
structure for the Metro rail to the rate of power supply also shows that there was concern to keep fares
low so more people would use the metro rail. DMRC was skillful in manipulating issues to its advantage by
connecting them to politics and this was facilitated by the presence of a large number of political parties,
even at the local level. Politicization of most issues ensures a thorough examination of the pros and cons
and their effect on people. Additionally, the potential success of the project keeps its political viability alive
therefore no matter which party is in power, the project is never without political support.
DMRC’s interest lay with being under the Ministry of Urban Development and the formulation of
the Metro Act 2002 gave it unprecedented power and made its position vital as a consultant for other
projects that were anticipated to come up in urban areas of the country. It was also a way for the DMRC to
avoid paying property tax to the MCD, a local body. This indicates the lack and therefore the need for
regulation of emerging organizational set-ups like the DMRC that are quasi-government bodies called
Special Purpose Vehicles, protected from public scrutiny at the local level but also shows how the
government is responding to the movement from a centrally planned to a market led economy through the
formation of quasi-government bodies to remove the inefficiencies of previous Public Sector Undertakings
by allowing them to act like private enterprises while being under the protection of the Central government
and possibly maintaining its power.
Changes in routes showed how the originally proposed routes had been altered due to political
reasons- pursuit of another transport project, the high-speed tram system as well as possible benefit to a
particular locality. Political interference may well have doomed the project even before it started. In this
case, DMRC’s organizational structure as an autonomous body insulated from politics, helped it intervene
and revert the modified routes to those originally proposed in the Detailed Project Report and may have
been a major factor in the success of the project. It revealed managerial incentive to make a value-
enhancing decision.
2
The routes issue also revealed the lack of transparency before the project was cleared
whereas afterwards, it was well covered by the media in part because of a very strong public relations
department set up by the DMRC.

2
Ibid. p.219
xxiii
The study of the construction of the project revealed problems in award of contracts. For
example, the JBIC loan documents directed the terms for appointment of General Consultants for the metro
rail and specified the allocation of the loan to certain areas of project implementation. The issues of conflict
of interest, for example in the way the Rail India Technical and Economic Services Ltd (RITES), the
agency that prepared the MRTS Detailed Project Report and associated with the project for nine years, was
part of the consortium that was bidding for the General Consultancy contract, also came to the forefront.
Similarly, Pacific Consultants International (PCI) that was the in-house consultants for JBIC headed the
consortium that was selected as the General Consultants for the project. It revealed larger problems of loan
conditions by International Funding Agencies that cover up conflicts of interest and bias in award of
contracts in the interest of the loaning agency and/or specific domestic corporations, thus decreasing
transparency and obstructing a fair bidding process. The government accepting JBIC’s conditions is also
based on the lack of availability of investment in the country because of the low financial rate of return for
such projects.
Since there was no regulatory body, media coverage of issues opened them up to public scrutiny
such that even if there was no clear legal recourse for the government or DMRC, the publicity ensured
some sort of framework of guarantees that pushed the risk onto the contracting company that the latter had
to accept to protect the investment of the loaning agency in the event of possible public outcry and its
effects in a democracy like India. For example, in the award of the General Consultancy contract the
consultancy fee was reduced because of the extensive publicity of the issue. Similarly, Mitsubishi took on a
project manager role and gave a letter saying it would be responsible for any problems with Koros in the
Mitsubishi-Koros consortium, the lowest bidder for the tender for manufacture of coaches and that the
JBIC was also pressing to be awarded the contract.
The project became the ground for conflict between the Central government and Delhi
government and between the Railways Ministry and the Ministry of Urban Development (MOUD). After
the Metro Act 2002 was passed and the Ministry of Urban Development in the Central government
emerged with the most power over the project, there was a breakdown in DMRC and Delhi government
relations and the Delhi government turned down a progressive suggestion by the DMRC to form a metro
xxiv
fund by taxing various areas including applying a fuel surcharge for private vehicles. It resulted in a
lack of incentive for the Delhi government to cooperate with the DMRC and for the DMRC to do so with
the Delhi government since now the DMRC was answerable only to the MOUD. Sidelining the Delhi
government had the side effect of compelling it to develop its own local urban transport policy and allowed
it to develop and implement alternative transportation projects like the High-Capacity Bus System.
International funding institutes like the World Bank and Asian development bank are involved in Delhi’s
Urban Transport Policy showing that locally initiated alternative strategies are also being funded by
international funding agencies. One of the main problems that emerged was the lack of coordination
between different transportation bodies and modes in the city. There is an attempt being made by the Delhi
government to resolve this problem in its formulation of an integrated urban transport policy and proposal
for an Integrated Metropolitan Transport Authority. Jurisdictional conflicts depending on which
government, Central or Delhi, an institution is affiliated with, have been exposed to be a major roadblock in
this attempt. However, there is a continuing lack of dialogue between the DMRC on the one hand and
transportation directions being pursued by the Delhi government on the other.
The history of the project as well as the development of a Central Urban Transport Policy in the
five-year plans under the Ministry of Urban Development contributed to its power over the Metro Act
2002. The importance of the MOUD increased after the Metro Act 2002 and it received larger Gross
Budgetary Support from Central government resources. This move also revealed the Central government’s
agenda to intervene at the local level in urban areas bypassing state and city governments and showed that
despite constitutional amendments for decentralisation there still exist centralizing forces, mainly the
bureaucracy, in the Central government. The Central government did not follow due process for vetting the
Metro Bill before it became the Metro Act 2002 and this once again indicated problems in enforcing
accountability on the Central government and its countermovement towards decentralisation. Eventually,
with the election of the Congress party led by Manmohan Singh to the Central government, the
decentralization policies were given a boost with the formation of the Jawaharlal Nehru National Urban
Renewal Mission (JNNURM) that has an allocation of Rs 50,000 crores ($ 10,180 million @ Rs 49 to $1)
to be spent over a seven year period starting in 2005-06, which is encouraging local initiative for city plans
xxv
and giving cities more authority and resources to implement them. The Ministry of Urban Development
is adopting local urban transport policies in its central urban transport policy.
The Metro Act 2002 also threatened the status of the Railways Ministry with the possibility of
urban rail projects now being under the jurisdiction of the MOUD. The need to protect its interest was
expressed in the gauge conflict that pitted the DMRC against the Railways Ministry. It did not benefit the
Railways but ensured transfer of technology, domestic industry partnership and setting up of manufacturing
bases in the country. It also indicated the powerful role of the media and particularly the Hindi speaking
base in support of the domestic industry that influenced the selection of broad gauge over the standard
gauge being advocated by the DMRC and the General Consultants. Reverting to standard gauge may or
may not benefit previous businesses that have absorbed transfer of technology. On the one hand the transfer
of technology may have enabled them to easily adapt to the standard gauge while on the other hand it may
take them more time to adapt to standard gauge while contracts for new urban transit projects go to foreign
companies. The Railways has also blocked the extension of the Metro Act to the rest of the country though
this may not benefit it other than curbing the power of the MOUD, as other cities, learning from the
example of Delhi, are using other methods like the Tramway Act to stop Railways’ interference in urban
rail transit projects. Meanwhile the Railways has bounced back, is also collaborating with foreign
companies and is once again generating profits.
The implementation of the project has also revealed the economic inequality that is necessary for
the development project and the need for further intervention by the national and local governments in
protecting the rights of the underprivileged- a role they limited themselves to during the introduction of the
economic reforms. With the MRTS project, new safety standards for construction workers have been
introduced that were previously not seen in any large construction project. However, the lack of facilities
on construction sites for migrant workers and their families and a failure in safety standards in this regard
has also shown the continuing exploitation of labor and the underprivileged and a failure to provide a
regulatory framework for protecting their rights.
The lack of a clear resettlement and rehabilitation policy and follow through has also emerged as
a serious problem. Though attempts have been made to provide adequate compensation and this is a step
xxvi
forward from past practices, a policy needs to be formulated to provide a precedent for all other future
projects.
The media coverage of the project has exposed cultural and class bias existing in the Indian
society and the lack of regulatory bodies to protect citizens and environmental rights. The maximum
number and circulation of newspapers in Hindi is indicative of the power of the Hindi speaking population
on the politics of the country. In the case of the coverage of the Metro Rail in Delhi newspapers, this
diversity was evident in the subject matter that was covered by each newspaper depending on its specific
constituency. The existing class structure of society was revealed in the preference given to types of stories
that resonated with the target audience. For example the elite English newspapers carried far more stories
on environmental impacts of the project including the reduction of tree cover as well as effects on historical
structures. The Hindi newspapers covered disruption in the less affluent neighborhoods as well as religious
structures. Despite the DMRC operating under unprecedented regulatory freedom, the sheer number of
news outlets and volume of coverage on the Project led to a high level of transparency and in some cases,
for example in the gauge conflict, influenced the outcome of the decision.
The economic reforms of the early nineties required moving from centralized planning to a market
led economy without sacrificing the imperatives of a socialist ideology, which involved structural,
institutional and regulatory changes that were new and unfamiliar and therefore would require some
amount of risk taking. The MRTS was an example of how this process unfolded and its study reveals the
various political, economic, social and cultural changes taking place during this transformation. It also
reveals that the problems that have been exposed can be addressed and also indicates how they can be
addressed because it exposes very clearly the areas needing attention, whether they be, for example,
regulatory, institutional or administrative reforms.
The methodology for this study uses, almost entirely, newspaper articles from 1996 to 2008 as the
primary source. According to the annual data collected by the World Association of Newspapers in 2007
India was the second largest market for newspapers in the world with 99 million copies. What makes this
even more significant is that with a literacy rate of 65%, India’s daily newspaper circulation works out to 1
newspaper for every 6 persons; roughly the same level as the United States. According to the Registrar of
xxvii
Newspapers in India, Delhi was the second largest publisher of newspapers at 1133 and circulation of
Delhi published newspapers was over 30 million. The data shows that newspapers are flourishing in the
country and the quantity of newspapers indicates the diversity of coverage, reviews and opinions available
to the Indian population. Since megaprojects are fairly difficult to study because of their extensive lifespan
and their own set of particular characteristics
3
, this research was only made possible by the extensive media
coverage, undoubtedly facilitated by the DMRC Public Relations department, as the Indian media, mainly
newspapers, investigated and recorded the project over its very long and still ongoing implementation
phase and also provided a context as they invariably touched on other related issues. Hence this
methodology is specific to India and to this project.

3
Ibid. p.222
1
Chapter 1- Introduction

Project Statement and Objectives
This Planning Design and Development Project studies the political economy of development at
the national and local level through the discourse surrounding the Mass Rapid Transit System or Metro rail,
a transportation megaproject being implemented in Delhi, the capital city of India and a union territory with
limited state powers. As case studies for understanding the methods of regulation, mega-projects are most
relevant as they affect and are affected by the changing political and economic environment or become
methods of regulation themselves at all levels of the state over large regions and over an extended period of
time. Therefore they cannot be judged on the basis of relevance, cost benefit analysis or environmental
impact alone. They ultimately are testing grounds for changing regulatory structures.
Analysis of the discourse surrounding the project reveal the effects of ideology, ‘formation of
interest’, ‘structure of feeling’, Bourdieu’s concept of habitus, field and strategy and the creation of the
spatial imaginary in understanding the changing regulatory matrix within which the project was conceived,
developed and implemented. It reveals the reasons behind its existing structure and both its shortcomings in
fulfilling its social function and its achievements in fulfilling the role of being a testing ground for
economic and political restructuring. Hence it shows that Mega-Projects cannot be studied in isolation but
are inseparable from their regulation structures.
Regulation is a constantly changing process and the study of a concrete example in the form of a
mega-project can help understand the changes as they occur in practice. The political structure and policies
at different levels of government are revealed in the study of a megaproject (Altshuler and Luberoff, 2003)
Megaprojects are at the center of the activities of production and consumption and this makes them crucial
to the economy of local and national states within the larger context of a global world. (Flyvbjerg,
Bruzelius, Rothengatter, 2003). India’s socialist democratic ideology with the imperative to industrialize is
at the core of the pursuit of megaprojects. The strong engineering culture, domestic Railways Industry,
highly trained personnel, historical experience of technology transfer all contributed to the development of
this megaproject and the urban transport sector. Similarly, the sector of investment can influence the nation
2
state’s response to global forces that encourage short-term economic development. Additionally,
‘responses to globalization still vary by country’ (Sites, 2003) and in the case of the Metro rail project and
the public urban transport sector, the nation state has developed a regulatory structure that dictates
international capital investment in the urban transport sector according to its own terms. (Ed. Lauria, 1998)
The pursuit of the megaproject can be seen as the pursuit of national and local policy not based on
economic conditions alone and being a mass public transport project can be seen as part of a larger
framework of socialist democratic industrial development. Contrary to the literature that suggests that
mega-projects are propagated through strategic misrepresentation about their costs and benefits, this study
shows that this project was undertaken with full disclosure of the financial risks involved and its acceptance
by the public can only be explained by the successful ‘(re)definition of a “collective will” for an imagined
political community based on the ideology of the historic bloc’ (Jessop, ed. Lauria, 1998). In India,
conformance was based on the belief that this is a social project and with the right conditions the
megaproject has the capacity to become one. However, economic, political, social and cultural conditions
beyond ideology have influenced its form that partly goes against its intent of social welfare. The
implementation of this mass based transit system is a long-term strategy of economic development in tune
with the socialist democratic industrialization strategy of the past that has insisted on delayed rewards and
the likelihood is that its importance will only be felt at a much later stage.
The positive impacts of the Delhi Metro Rail project that contribute to the development and
growth of the economy include the long-term plan of development and integration of the immediate
satellite towns in the National Capital Region. It has met all its deadlines and cost estimates and has
provided a safe, fast and comfortable mode of transport for some of the most congested routes in the city
even if it has not helped decrease traffic congestion and pollution in general. It has helped illustrate how to
form successful and efficient institutional forms that have only been discussed theoretically in the past-
quasi-government bodies; public-private participations and Build-Operate-Transfer (BOT) systems. It has
also shown how a domestic industry and government can bargain with foreign firms and dictate terms of
partnerships and transfer of technology. It has thrown light on other social issues like lack of recognition
3
and consequently protection of the informal sector that plays a critical role in the country’s economy. It
has influenced the importance given to the urban transport sector at both local and national levels.
The negative impact of the project due to the lack of a regulatory structure for social welfare lies
in its land acquisition policies for property development using eminent domain to acquire land over and
above what would be required for the physical structure of the project itself and its failure to provide just
and fair compensation to the people affected. Its dependence on subsidies from the governments and
ultimately the people, which it is trying to correct with property development that further exacerbates its
negative environmental impact, is another issue. Finally, its last shortcoming is that it does not see the
project as an integral part of the city. Its segregationist policies are seen in its station design, lack of
recognition and integration of other informal and formal modes of transport. The study reveals that the
historical antagonism between the national and local governments, lack of power at the local level to
formulate and enact reforms, lack of regulations protecting citizens rights and lack of unchecked authority
with the nation state have contributed to many issues of lack of accountability, social responsibility and
enforcement of existing regulations.
The focus of criticism then should be on how to make a particular megaproject fulfill its social
obligation, which is directly dependent on reform of the regulatory structure. The study of the megaproject
helps unravel the form of the regulatory structure and expose areas that need to be in place to hold all
projects accountable to their ideology.

4
Methodology
The importance of discourse in the formation of values and in reinforcing regulation processes of
the nation state have been discussed in the literature review. The study uses critical discourse analysis to
study the Mass Rapid Transit System (MRTS) or the metro rail.
Critical Discourse Analysis (CDA) refers to the functionalist analysis of discourse in which an
attempt is made to reveal social inequalities through an analysis of discourse. A relationship is established
between social analysis and linguistic analysis on the premise that language is tied to the social conditions,
ideologies and power relations. Critical Discourse Analysis (CDA) is defined as ‘a theory and a method of
analyzing the way that individuals and institutions use language’
1
‘…CDA takes an overt moral and
political position with regards to the social problem analyzed.’
2
My position is based on the ideology of the
nation state- democratic socialist planning both at a macro and micro scale but with the belief that this
should be seen in action, policy and enforcement to equally protect the rights of all sections of society.
Despite the rhetoric of the Indian nation state, its development projects and policy have many times failed
to do that.
The historical context of the project discussed in Chapter 3 is based on analysis of meeting
minutes of the National Development Council, the Five-Year plans formulated by the Planning
Commission, data from the Election Commission, the annual reports of the Ministry of Urban
Development, Indian and Delhi Government websites, the National Capital Region Planning Board
documents, Delhi Master Plans and academic papers including the papers presented on urbanization in
India in a 1961 Berkeley Conference, Central Road Research Institute (CRRI) papers, papers from the
Journal of Institute of Town Planners of India, Indian Highways journal, National Town and Country
Planners conference papers, the Indian Roads Congress journal. Information regarding the Japan Bank of
International Corporation (JBIC) is obtained from its website and various presentations of JBIC and its
assisted projects in India and booklets outlining the role and functions of JBIC. Information on Rail India

1
Analysing Newspapers, An Approach from Critical Discourse Analysis. John E. Richardson. Palgrave Macmillan,
New York, N.Y. 2007, p.1
2
Ibid, p. 2
5
Technical and Economic Services (RITES) is obtained from the RITES website, a booklet called ‘RITES
Ltd.- Range of Services and Experience’ and a Chapter obtained from RITES that outlines the route
changes from the start of the project to 2004. Informal interviews with some of the people who appear in
the newspaper stories and extensive photography and videography of the first line of the metro rail that was
completed in 2004 also help inform the analysis. India’s e-governance initiative has flooded information
regarding the government on the internet and has helped greatly in this study.
The media plays an important role in the creation of the spatial imaginary for the realization of
hegemonic projects. Newspapers in particular are one of the most potent methods of realizing this. In
Primitive Globalization (Sites, 2003), Megaprojects (Altshuler and Luberoff 2002) and Megaprojects and
Risk (Flyvbjerg, Bruzelius, Rothengatter, 2000), the authors mention the support that the media provides to
certain projects. The PDDP looks more closely at this aspect of development and what newspaper discourse
about a megaproject reveals about the political and economic conditions of a particular region and its
globalizing context. Chapters 4,5 and 6 use newspapers as the primary source materials. My attempt has
been to reveal through this public interface between project and public, how events unfold in the public
domain. Journalism influences the reader’s understanding of social reality. The project by using newspaper
analysis as a methodology attempts to reveal if rhetoric is being used to weaken social power and normalize
and perpetuate exploitative social, political and economic conditions and the findings are to the contrary.
The media has reported on weakening of social power rather than normalizing it within the parameters of
seeing readers as consumers, commodity and understanding the class bias present in the journalistic field.
Following is a brief history of newspapers in India since a majority of this study is based on
newspaper analysis. At the turn of the 20
th
century, newspapers in India were actively propagating the
nationalist agenda. The most prominent elite newspapers at the time were ‘The Times of India’ (1838),
‘The Hindu’ (1878), ‘The Pioneer’ (1865), ‘The Statesman’ (1875), The Tribune (1881) and ‘Malayala
manorama’ (1888). Over the last century a number of newspapers appeared and these were ‘Ananda Bazar
Patrika’ (1922), ‘The Hindustan Times’ (1928) and the ‘Indian Express’ (1931), Hindustan (1936), Punjab
Kesari (1929), Veer Arjun, Dainik Jagran (1942), ‘Navbharat Times’ (1947), Amar Ujjala (1948), The
6
Economic Times (1961), The Financial Express (1961), Business Standard (1975), ‘Eenadu’ (1974), Mid-
Day (1979), Jansatta (1982), The Asian Age (1994) and Business Line (1994).
In a content analysis study done in 1981, S.M. Mazharul Haque (Haque, 1988)
3
, concluded that
development issues were being given more space in most of the main seven Indian dailies with the
exception of Navbharat Times over human interest issues. The other six were The Times of India, The
Statesman, The Hindu, The Hindustan Times, The Indian Express and the Ananda Bazaar Patrika.
According to the author, even though the media realized their role in questioning government policies and
development projects, they practiced self-discipline for social and cultural reasons and seemed ‘to
recognize that there are some socio-economic development goals facing the society’ (p. 96) The more elite
the paper the more delayed
4
reward stories it carried. There were fewer interpretative stories in Indian
newspapers (compared to US newspapers) and the newspapers studied were not sufficiently critical of
government agencies. Politics was given the maximum news coverage and there were more stories with a
positive outlook. Most newspapers were positive about the economy and development stories except the
Hindi daily ‘Anand Bazar Patrika’ (originally a Bengali daily). A lot of importance was given on ‘freshness
of news’ and most of the dailies agreed on what constituted important news. Also about a quarter of the
news was dedicated to international news.
In the 1990’s, relaxation of laws limiting the press and decrease in price of newsprint, helped
change the style, content and business model of newspapers that resulted in the bulk of profit coming from
advertisers. (Kohli, 2003)
However, a major increase in newspapers, especially at the local level happened in the 2000’s
because of new technology-the television and the modem, cable and internet, increased literacy throughout
the country, and a growing rural middle class. Other developments that affected media were the emergence
of many political parties that represented the interests of the backward classes and dalits, the oppressed

3
Haque, S.M. Mazharul. What is news in India? A Content Analysis of the Elite Press. University Press of America,
Lanham MD, 1988.
4
‘Readers or listeners according to him (Schramm), “select news in expectation of a reward, which may be either the ‘immediate’
pleasure reward of drive reduction or vicarious experience, or the delayed reward of ‘threat value’ and general preparedness and
information”…The delayed reward category includes news of public affairs, economic matters, social problems, science and
education; and the immediate reward category includes news of crime and corruption, accidents and disasters, sports and recreation,
social events and human interest stories’. (P.33)
7
classes of the traditional caste system, thus forcing them to bring their issues to the forefront. The 73
rd
and
74
th
amendments to the constitution in1992 divested more power to local bodies called panchayats.
Newspapers distributed to these grassroots organizations were financed by the states. From panchayats,
newspapers increased their readership among the emerging rural middle class. This was followed by
aggressive marketing strategies to increase local readership at all levels, a change also in part driven by the
second and third generation owners of major newspapers. As patronage increased newspapers moved from
being an elite to a mass medium, with a focus on local news and featuring advertisements from local areas.
At the same time, national and international news, bypassed regions and states to connect directly to the
local areas. There was a trend to cater to the acculturalization of the upwardly mobile into the consumer
culture.
5
(Ninan, 2007)
There was a tremendous increase in rural readership of newspapers, in Hindi and other regional
languages, in the last decade but even in urban areas, the effects of all of the above were being felt in the
way that newspapers were transforming. Newspapers in color were one effect of the advent of television
and competition between the two media to woo advertisers.
6
There has been a move from newspapers being
an elite medium to a mass medium (Ninan, p. 18) in a very short span of less than three decades. (Haque,
1988)
One of issues that is revealed from Ninan’s ‘Headlines from the Heartland’ is that because of the
penetration of newspapers at the local level throughout the country, people have devised ways of using it to
their advantage. Even though the bureaucracy is shielded from accountability- even exposés by newspapers
has no effect, politicians on the other hand, because of their direct connection to and election by the public
have to respond when people take their complaints to the press.

5
Ninan, Sevanti. Headlines from the Heartland, reinventing the Hindi Public Sphere. Sage Publications, Los Angeles,
2007.
6
Local supplements, for example in Delhi, South, West, East and North Delhi supplements addressing civic, economic,
social and cultural issues were introduced. Increasing commercialization also introduced supplements that represented
both tradition and modernity. In ‘The Times of India’ one finds both ‘Speaking tree’ devoted to quotations and
religious learning and ‘Lifestyle’ and ‘Entertainment’ sections devoted to the lives of the cultural elite in Delhi, the
latest national and international trends in fashion, food and art and fresh gossip about celebrities in India and from
around the globe.
8
The newspapers articles for this study were collected over seven years by the Delhi Metro Rail
Corporation (DMRC) from 1994 to October 2003. From 1996 to October 2003, DMRC collected clippings
of media coverage of the Delhi metro as well as other related articles and these have been used for the
study. A random cross check was done on the internet to determine that most of the articles in a newspaper
regarding the metro rail and DMRC, including critical articles had been included. There were a total of
approximately 4500
7
articles related to the metro rail in 21 English and 11 Hindi newspapers. Of these 7
major Hindi newspapers carried approximately 1500 articles and 7 major English newspapers carried
approximately 1900 articles. The rest of the newspapers carried articles in them about the metro from time
to time depending on the view and readership of the particular newspaper. The number of articles in almost
all the newspapers peaked in 2002, the year the metro rail opened its first section with the major number of
articles devoted to immediately before, during and after the service was started. From October 2003 to May
2008, a number of English newspapers have been used as source- The Times of India, Business Standard,
The Indian Express, the Hindu and other magazines to give an update on the issues that emerged between
1996 and 2003. Most of these articles have been accessed on the internet using their archive search.
Under the broader category of political economy, some of the issues surrounding the project
covered by the media were funding for the project that included external funding from the Overseas
Economic Cooperation Fund (OECF) that later became the Japan Bank of International Cooperation
(JBIC), concessions to be granted by the two governments, property development as a source of revenue,
and the Delhi and central government’s contribution towards the cost of the project. Also included were
issues of regulation that involved not only the Delhi Metro Rail Corporation (DMRC) that would run the
project, but also the Delhi and Central governments. The first of these was the appointment of the General
Consultants (GC) for the project followed by the conflict between the DMRC, Delhi government, Ministry
of Urban Development (MOUD) and Railways Ministry over the gauge of the Metro rail. Decisions on
provision of power to the project, fare structure, award of contracts, modification and relocation of routes
were all related to a power struggle that finally culminated in the constitution of the Metro (Maintenance

7
Margin of error is +/- 5% for all numbers given.
9
and Operation) Act. The Act was related to the larger plans for Urban Transport Policy in the MOUD of
the Union Government that would be enacted in cities across the country. Separately, between the MOUD
and Delhi Government, plans for connectivity to the NCR were also affected. The Delhi governments
initiative to form an Urban Transport Policy for the Union Territory-State was largely related to not only
the publicity given to the project but also to the issues of transportation and jurisdiction that emerged from
the struggle between the Union and city governments.
Under the category of environmental impact, the media brought forth issues of land acquisition
and rehabilitation impacting slums, authorized and unauthorized commercial establishments and residential
areas, monuments and institutional structures, religious structures and trees as well as issues of pollution
and safety norms.
Out of the approximately 4500 articles collected between 1996 and 2003, the 2349 studied include
topics categorized by the DMRC as Award of Contract for General Consultants-Jethmalani (99),
Monuments & Structures (73), Resettlement (213), Trees (47), Funds (160), Gauge (103), Power (89),
Rolling Stock (71), Politics (186), Casualties (41), Incidents (39), Routes (91), Others (354), Rejoinders
(70), Fares (45), General (277), Routes (141), Metro Ordinance (111) and Trial Runs (139). Most of these
were labeled by the DMRC as ‘controversies’ associated with the project. These articles were mainly
informative reports on developments on the project and other related areas, investigative articles or covered
negative impacts of the project. Another 878 articles that were referred to included Need for the MRTS
(110), Contracts (82) Interviews (77), DMRC as consultant (29), Inauguration of the project (326), Trains
(37), Pollution (97) and Safety and Security (120). These include a mix of mainly promotional articles,
some informative reporting and a small number of critical articles.
The media by acting as watchdog for the project, highlighted some issues which otherwise
wouldn’t have emerged in the public domain and that directly affected the regulatory structure. What was
realized during the study was that regulatory and institutional structures and policies are initiated,
developed and finalized over projects. Megaprojects are significant because they affect political and
economic issues at the national and local levels by crossing jurisdictional lines and because they define the
cultural agenda of the government and for the people. They are also significant by bringing to light all areas
10
they touch, including social issues. These aspects would never be known if it weren’t for the media’s
discourse, investigative stories, interviews, expert opinion and criticism and general coverage of the
project.
This study does not address the cultural impact of the project but some general observations
include the foregrounding of engineering values in the coverage of construction issues that included
landmark accomplishments in construction techniques and technology. These included 503 articles
covering General Construction (251), Land Filling at Shastri Park (25), Yamuna Bridge (45), Casting Yard
(11), Techniques (32), Underground General Construction (36), Cut and Cover (4), Tunnel Boring
Machines (54) TBM breakthrough (18) and Traffic Management (27). The technological development and
design features of the project that would be constantly covered by the media and that included 325 articles
on subjects such as Lifts and Escalators (17), Murals (19), Generals (61), Operation Control Centre (23),
Substations (7), Trains Washing Plants (9) Automatic Fare Collection Systems (39), Signaling (17),
Automatic Train Transprotection Systems (7), ATM- Food Plaza (29), Pollution (97) and General (61).
They included articles on security measures associated the project with the larger cultural values of
modernization and globalization. 436 articles on Educational tools for ‘Creating Public Opinion and
Awareness’ included Presentation (27), IITF (89), Visits (223), Information Systems (25), Community
Interaction Programs (13), Schools and McDonald (7), Nukkad Natak (Street plays) (11) and Creating
Public Awareness (41) were used to disseminate information about the project. Finally, the corporate
culture of the DMRC, its values of hard work, efficiency, punctuality and group cooperation as well as the
Managing Director, E Sreedharan emerging as the public figure, the man behind these values and the
project was not only extensively covered by the media but projected in stark contrast to the inefficient,
unresponsive and feuding government bureaucracy. These included 160 articles with Interviews (77),
Awards (45), Functions (29) and Yoga & Meditation (9).
Out of the 4500 articles about 1424 comprised of articles devoted to the above issues. There were
several overlaps with the 878 articles referred to earlier and most of the informative reports when talking
about the project recapped the benefits of the project such as reduction in traffic congestion, pollution,
11
accidents, fuel consumption and so on.

However, the total number of articles indicates that they were not
overwhelmingly sending out messages of a positive image.
8

Since the study includes both English and Hindi newspapers, articles in Hindi have been translated
into English and sometimes are presented in their entirety. There are a large number of block quotations
that are necessary to show a larger context and because the study is following the discourse surrounding the
megaproject. Direct quotations have been most often been selected for representation in the study as these
tend to be the most accurate.

8
The megaproject has been studied by Matti Siemiatycki (MS) in a paper called Message in a Metro: Building Urban
Rail Infrastructure and Image in Delhi, India, International Journal of Urban and Regional Research 30.2, 2006, in
which he argues, giving the case of the metro rail project, that ‘continued support for infrastructure support stems from
the way that such projects are presented to the public...by creating an all-round positive image that combines tangible
variables with an intangible set of symbolic meanings.’ He then argues that the presented image of the project is not
reality and that the metro ‘fails to suit the transportation needs of the city.’ Even though this study agrees with MS that
the DMRC misrepresented the project as reducing traffic congestion and pollution, there are several areas of
disagreement. Firstly as described in chapter 2, the Delhi Metro Rail System was to be part of an Integrated Rail Bus
Transit System for increased connectivity with the National Capital Region. Over the 30 years when the project was
still in the realm of government planning there was a consensus about implementing the project, between the Delhi and
Central governments. The Delhi government actively promoted the project and worked with the centre when in 1989 it
established the Urban Transport Consortium Fund to aid state governments in preparing feasibility reports for urban rail
transit systems. As discussed in chapter 4, the conflict over the project before it started operation and implementation of
the Metro Act 2002 was not simply about taking political credit for the project but had popular issues of autonomy and
control at the local and national levels. Contrary to what MS says about Rail India Technical and Economic Services
(RITES) promoting a rail-based urban transport system for Delhi, the rail-based urban transport system had been part of
the original study carried out by the Central Road Research Institute (CRRI). RITES is a consultant for all kinds of
infrastructure development projects including road-based transport systems. Though it has been indicated in some of
the articles on land acquisition that the routes were modified to facilitate property development, the debate over the
final alignment was a positive step taken by the DMRC against political interference in the design of routes and a return
to the original plans that dated as far back as 1969. Once again contrary to the article, from among 4500 articles from
over 20 English and Hindi newspapers and magazines collected by the DMRC between 1996 and 2003 on the Metro
rail, almost 2300 articles covered controversies related to environmental impact, land acquisition, subsidies, politics
and contracts. These were many more than those covering construction, technical features and public awareness efforts.
The Delhi government had initiated the HCBS in 2002 and it was also part of the original study by RITES for an
Integrated Multi-Modal Rapid Transit System. Since then it has completed its first stretch of 5.8 km and therefore it
cannot be claimed that the project was not undertaken because it did not embody ‘the intangible characteristics of a
modern world-class transit system.’

12

Figure 1: Map of Delhi, 2008. Source: Maps of India (www.mapsofindia.com)

Guide Map
The dissertation is divided up into seven chapters. After the introduction, the literature review
covers Urban Theory based on case studies. The next chapter covers the political, economic and academic
atmosphere soon after independence till the time that the project was approved. The next three chapters
study the project after it enters the public realm and discuss its political economy, the project design and
environmental impacts. Each chapter takes up certain issues that were reported in the media that fall in one
of the above three categories and follows the newspaper coverage of the issue. This is followed by a brief
discussion that summarizes the story and clarifies the insights it gives into the project and the regulatory
13
structure. To get an overview of the dissertation, these discussions can be read in succession followed by
the conclusions.
Chapter 2, Literature review reviews in detail six books that cover urban theory and development
using case studies. This is followed by a discussion of common and theoretical themes that are relevant to
this study including the importance of ideology and discourse in the conception and implementation of
megaprojects and ultimately in the political economy of development. The common theme among all the
books that have been reviewed is that they use concrete examples, case studies to develop existing
theoretical approaches. Their studies are related to the political economy of development and their
theoretical approaches include Urban Regime Theory, Regulation Theory, (Lauria, 1997, Savitch and
Kantor, 2007, Feinstein, 1994), Marxist theory (Sites, 2003), Elite-Reputational, Pluralist, Public Choice,
Elite-Structural and Historical-Institutional (Altshuler, Luberoff 2002, Feinstein, 1994) and risk society and
democracy (Flyvbjerg, Bruzelius, Rothengatter 2000). Each of them, through the case studies, expose some
areas of weakness, add or refine the existing theory or point to new frameworks of analysis that may give
further insight into these theories. Susan Feinstein in the ‘The City Builders’ says that Regime theory forms
the basis of her study, but with an emphasis on ‘formation of interest’ rather than rational choice. She
shows through her study of real estate development in London and New York, that choice is determined by
ideology and uncertainty. That the meaning of interest is interpreted differently by different groups leading
to the possibility of different outcomes. The contributing authors in Lauria’s ‘Reconstructing Urban
Regime Theory’ probably cover the most ground, showing the inadequacy of rational choice theory as a
basis of Urban Regime Theory and pointing to Bourdieu’s concept of habitus, field and strategy and
Gramsci’s formation of organic intellectuals. They also emphasize the grounding of regulation theory in
concrete examples and understanding its changing nature as well as its applicability at various levels by the
use of Raymond William’s ‘structure of feeling’, Gramsci’s State theory and the concept of ‘Spatial
Structures of Regulation’. All of them emphasize the importance of Regime and regulation theories as
complimentary in the analysis of a particular case. The idea of local sweep-global broom is developed in
‘Cities in the International Marketplace’ and the case studies show that the regulatory structure, the urban
regime and social and cultural conditions influence the outcome of a city’s development. They help
14
establish that neither globalization nor the local power bloc alone is the driver for the course of
development of a city (Savitch and Kantor. 2007). Sites proposes the concept of “primitive globalization”
based on Marx’s theory of capital accumulation. He says that the nation state, in this particular case, the
United States, works in favor of neoliberal economic globalization by undermining it’s own social base.
The study emphasizes the role of the nation state, its regulation structure and processes as mediating
between the forces of globalization and the local regime and poses the question about the undergoing
changes in the accumulation regime at the level of the nation state. Altshuler and Luberoff in
‘Megaprojects’ emphasize the role of public-entrepreneurship in initiating projects, the role of business
coalitions in supporting them and the role of ‘use value’ interests in constraining them, though almost never
initiating projects with the exception of rail transit. They reveal the play between regulatory institutions and
social struggles in the arena of megaprojects. ‘Megaprojects and Risk’ does not lay emphasis on theoretical
approaches but the authors, through the case studies reveal the risk behavior and lack of accountability that
is a hallmark of the included megaprojects. They, therefore show how the regulatory structure and
processes of the accumulation regime/s work to legitimize capital accumulation of the dominant group over
more relevant social projects.
Chapter 4 studies the historical context of the Delhi Metro rail. This chapter attempts to document
the conceptual stages of the Mass Rapid Transit Project (MRTS) and the political, social, economic and
cultural atmosphere that existed during the time through the development discourse in the National
Development Council meetings at both national and local levels and related specifically to the Mass Rapid
Transit Project (MRTS). It discusses the issues that emerged in the 1961 conference in UC, Berkeley that
focused on urban development in India and the Master Plan for Delhi carried out in association with the
Ford Foundation that included academic papers studying the assumptions underlying the Delhi Master Plan
1962 like decentralization and regional development and their effect on national urban policy. It also
studies the Five-Year Plans and the policy direction that evolved in both regional development, especially
the National Capital Region and Metropolitan Transportation. This project subsisted within the confines of
the planning commission, various technological institutes and government bodies from about 1965 to 1994
when it finally reached the implementation stage and was opened up to the media and the public
15
The chapter gives the history of the Delhi Government and other agencies role in MRTS studies
that were undertaken from the late 1960’s. It focuses on Nehru’s speeches in the first twenty NDC
meetings, which defined the agenda of planned development for the country followed by examination of
the speeches of the following Prime Ministers and Deputy Chairmen of the Planning Commission in the
next thirty NDC meetings and the changing face of planned development. It also discusses the speeches of
the Chief Executive Councilors, Chief Ministers as well as Lieutenant Governors of Delhi in the next thirty
NDC meetings and how they negotiated for resources from the Center and the problems of regional
development and urban infrastructure that they emphasized. Academic studies regarding the Delhi Master
Plan and Urban Development Policy in India are especially relevant to this study because they show the
influence of the academic thought and culture in the rail based mass rapid transit system proposal and the
emphasis on regional development or decentralization in the case of the Master plan for Delhi and the
contribution of the Ford Foundation. It also follows the regional development policy and urban
development guidelines in the Five-Year-Plans that proposed development of urban regions, especially the
National Capital region and examines the metropolitan transport policy and urban development guidelines
in the Five-Year Plans that proposed rail based mass transit systems.
In studying newspapers and with the Union Cabinet approving the project in 1996 a number of
issues emerged. The first was related to the JBIC, Central and Delhi governments funding and concessions
for the project, and the problems related to the joint administrative control of the project by the
Government of India and National Capital Territory of Delhi that would appear in the form of the Metro
Act and Delhi’s transport policy. The second was at the international and national level that included the
JBIC, the international funding agency and the guidelines of its loan that would appear in the award of
contracts and reactions by the National government, domestic industry and media. The third was the
development of the project versus its support structure that would affect its viability and financial
strategies. The fourth was the project’s environmental impact including land acquisition, relocation and
rehabilitation, exposure of other social issues in newspapers and exclusionary design decisions. These are
discussed in the following chapters.
16
Chapter 4, Project Approval, Funding, Metro Act and Urban Transport Policy is divided into
four sections. The first section describes the emergence of the project in the media before during and after
the Union Cabinet Approval in September 1996 and the issues at have been mentioned briefly in the
previous paragraph that were revealed and would become a constant source of news in the media.
The second section of this chapter deals with funding for the Metro Rail Project from the Central
and Delhi governments. There is a brief overview of the JBIC loan describing how Japan’s nuclear
sanctions affected it and how it helped the Delhi and Central governments and DMRC develop and
promote alternate funding ways for the project including property development. The method of funding had
already been reported in newspapers when the project was cleared in the Union Cabinet in 1996.
The third section deals with the Metro (Operations and Maintenance) Act 2002 that defined the
legal framework for the Delhi Metro rail but its extension to urban railway systems planned in other cities
of the country was blocked by the Railways Ministry. The Metro bill would have also brought all urban
transportation railway projects under the aegis of the Ministry of Urban Development and freed them from
the Railways’ Act jurisdiction. The Metro Act was the culmination of the urban transport policy for
metropolitan areas that had been developing in the five-year plans over the last 5 decades. The Metro rail
project and the Act also became the ground for the conflict between the State and Central governments to
gain more autonomy versus retain more power.
The fourth section discusses the impact of the Metro rail project on the transportation policy and
transport sector in National Capital Territory of Delhi. As far back as 1996, there was criticism of the metro
rail project in being able to solve problems of traffic congestion and pollution. A team from the Indian
Institute of Technology (IIT) was pursuing the High Capacity Bus System alternative that would upgrade
the existing extensive road structure present in the city and organize and manage traffic so that public
transport in the form of high capacity buses as well as non-motorized vehicles were given dedicated right of
way. The Delhi government adopted these as part of their urban transportation strategy. Eventually, when
the Congress Party at the Center in 2005 started the Jawaharlal Nehru National Urban Renewal Mission
through the Ministry of Urban Development that would provide assistance to city plans generated at the
local government level, Bus Rapid Transit Systems became one of the most popular ways for addressing
17
public transport in the country’s cities and became part of the Urban Transport approach in the Ministry
of Urban Development.
Chapter 5, Award of Contract for General Consultants, Gauge and Project Design is divided into
three sections. The first discusses the appointment the General Consultants (GC) for the project, a part of
the loan conditions, the controversy over the appointment of the GC that arose when the Minister of Urban
Development, Ram Jethmalani, brought up a number of questions. Two of these surrounded the general
consultancy contract. Jethmalani questioned the bid process in selection of the GC and its recommendation
of standard gauge for the project. He also questioned the routes that had been decided for the first phase of
the project, saying that they were duplicating existing suburban railway corridors. The first section
discusses the controversy surrounding the general consultancy contract. The second section goes into detail
about the choice of gauge for the project and the third section discusses in detail the issue of the MRTS
routes.
The story regarding the MOUD Minister, Ram Jethmalani’s objections to the appointment of the
General Consultants really picked up in end August- early September 1998 when across-the-board almost
all the newspapers in this study were following the events as they unfolded. It ended with the Union
Cabinet’s dismissal of Jethmalani’s claims as well as doubts being raised by the opposition parties and
covered by the media about his stand on other issues such that his questions about the contract for the
MRTS General Consultants were totally sidelined. It is significant that the articles selected by the MRTS at
this time and related to Ram Jethmalani, not only had to do specifically with the MRTS but also all
controversies surrounding him. Hindi newspapers covered most of the stories surrounding the change in
rules and the appointment of the General Consultants more thoroughly in July and August. Only in
beginning September did the English newspapers start continuously reporting it. Even before Ram
Jethmalani first gave an update to the press about the MRTS project, he had started raising questions on the
award of the General Consultancy contract in which the MOUD secretary Kiran Agrawal was also
involved. He felt that she had not followed constitution guidelines in appraising the consultancy bids. He
questioned the entire bidding process for the general consultancy contract and wanted the process to be
done afresh in a transparent manner per the constitution’s Transaction of Business Rules and Law Ministry
18
overview. Soon after the stories regarding a rebidding process for the General Consultants of the MRTS
started appearing in the media, a ‘major controversy’ surrounding the MOUD Minister Ram Jethmalani hit
the news. He was accused by an opposition party member of illegally allotting a guesthouse to a private
company and for unnecessarily delaying the MRTS project. All the newspapers in the first ten days of
September carried over a 100 articles covering the stories of accusations as well as conflicts between
bureaucrats and politicians. The latter directly had to do with Ram Jethmalani reassigning his Secretary
Kiran Agrawal, also on the DMRC board, to other Departments in the Ministry Of Urban Development,
over his disagreement on her decisions on the MRTS General Consultancy contract and the land allotment
case. Most of the newspapers did not portray him in a very good light, calling him contentious and
irreverent towards the Ministry employees, officers from the bureaucracy, the Indian Administrative
Service. There were some newspapers that lauded his candidness and transparency with the press. Mostly,
however, the developments around this time were sensationalized.
After the controversy over the appointment of the general consultants had died down, one major
issue related to it remained in the public eye. The MOUD Minister Ram Jethmalani had pointed out that the
General Consultants had specified using the standard gauge for the metro rail and that this would mean that
India would have to rely on imports from Japan. The second section follows the story about the gauge for
the Metro rail that played out as the conflict between the Railways Ministry and Central government
recommending broad gauge and the DMRC and Delhi government recommending standard gauge. There
was never recorded direct interference from the JBIC but the threat of it withdrawing its loan for the project
always lingered overhead. It was felt in the conflict over the gauge but the outcome of the conflict was a
surprise, with broad gauge being chosen for the project. In the award of contracts, a majority of the foreign
consortia that were awarded construction contracts for the project included a Japanese partner. The rolling
stock contract, which again became an issue of controversy, went to a Japanese-Korean consortium even
though there were some misgivings about the financial health of the Korean company. The conflict
between Railways Ministry and DMRC continued over this issue and the antagonism grew further when a
Defense Ministry public sector undertaking was given the contract for transfer of technology of the rolling
stock over the Indian Railways manufacturing units. The Railways’ safety inspection organisation refused
19
to give a safety clearance to the Metro rail prior to its inauguration in December but it received clearance
from the Chief Safety Commissioner under the newly passed Metro Bill that brought the project under the
purview of the Ministry of Urban development. The influence of JBIC was revealed constantly in the award
of contracts but the Central Government, its regulatory and institutional structure and philosophy also
influenced the outcome.
The third section examines the Metro rail project as it was developed in 1969 up to the time when
the project was being implemented. Academic papers of the CRRI and RITES reveal that the research and
suggestions that were being put forth for Delhi’s transport issues in general and based on the studies
initiated by the planning commission. The section’s focus is on the routes that were proposed and modified
over the years and integration of the project with existing transportation networks and modes. Initially the
project was to be a part of a larger plan combining existing suburban railway lines, the ring railway in
Delhi and a network of feeder buses. RITES had proposed an Integrated Multi-Modal Rapid Transit System
(IMMRTS) that included both rail and High Capacity Bus Systems (HCBS). Of these, the first two were
never integrated with the Metro rail network. Feeder buses that were to come from the DTC are still not in
place. Instead the DMRC has started its own feeder buses as a separate project. The chapter also looks at
the connection of the project to the national capital region and how it has partially replaced the integrated
rail and bus transit system that was simultaneously being developed by the NCRPB, the Delhi government
and the states of Haryana and Uttar Pradesh.
Chapter 6, Environmental Impact and Land Acquisition covers the environmental impact of the
project and includes issues like use of fly ash for landfill at one of the main stations of the metro project,
controversy over building service structures like a rail yard and possible property development on landfill
area in Khyber Pass near the Delhi University station that the Municipal Corporation of Delhi was
protesting against, the effect of the project on fisheries in East Delhi where a part of the land was taken
over for the project, trees that were cut down to make way for the routes, land acquisition including slums
and squatter settlements, authorized and unauthorized residential and commercial areas, religious,
institutional and historical structures and casualties and incidents related to worker injury during
construction. Both the Delhi and Central governments had allocated funds for land acquisition even before
20
the project was started. Despite that, there was newspaper coverage about the shock and outcry among
the people being displaced over the lack of an adequate rehabilitation package and inadequate notification
times to the people being displaced. The news was that the affected people were not being provided
compensation at market value for property and other losses related to being dislocated from their social and
economic networks. It also informs that initially the Delhi government was working with the DMRC for
land acquisition. The Delhi government was helping in easing relations with those to be dislocated by
giving them reassurances. It was also responsible for the rehabilitation package. After the Metro Act 2002
was passed, the Delhi government decided to withdraw its support And the DMRC was left mainly to its
own devices for land acquisition for the Dwarka- Connaught Place line. Since now it had become a
centrally governed body, it was the Delhi Development Authority that was also under the Central
government, that bailed it out by working together to provide alternate properties for the affected people.
The authority of different communities in bargaining for compensation and rehabilitation depended on their
economic status and so did DMRC and the Delhi government’s political response to them. This chapter
also reveals the media bias in English or Hindi newspaper that reported on different issues depending on
what was being covered and the number of articles covering different issues also varied according to the
topic. A series of photographs of a few stations and the surrounding areas show DMRC’s land acquisition
policy for property development by building parking lots and its segregation of the project from
neighborhoods of lower socio-economic status.
Chapter 7, Conclusions, revisits Urban Theory and applies it to this case to better understand how
the project fits in the overall literature on urban theory and megaprojects and what can be learnt from its
particular context. The conclusions have been given in the project statement. The chapter ends with some
final recommendations on how to make the project accountable to its ideology.

21
Chapter 2- Literature Review and Frame of Reference

This chapter reviews in detail each of the books mentioned below and this is followed by a
discussion of common theoretical themes that are relevant to this study; the importance of ideology and
discourse in the conception and implementation of megaprojects and ultimately in the political economy of
development.
The common theme among all the books that have been reviewed is that they use concrete
examples, case studies to develop existing theoretical approaches. These studies are related to the political
economy of development and their theoretical approaches include Urban Regime Theory, Regulation
Theory, (Lauria, 1997, Savitch and Kantor, 2007, Feinstein, 1994), Marxist theory (Sites, 2003), Elite-
Reputational, Pluralist, Public Choice, Elite-Structural and Historical-Institutional (Altshuler, Luberoff
2002, Feinstein, 1994) and risk society and democracy (Flyvberg, Bruzelius, Rothengatter 2000). Each of
them, through the case studies, expose some areas of weakness, add or refine the existing theory or point to
new frameworks of analysis that may give further insight into these theories.

The City Builders (Property Development in New York and London 1980-2000), Susan S. Fainstein
Based on her study of New York and London, Susan Fainstein says that property development is
not a response to economic opportunity but a dynamic process in uncertain conditions where private
developers and government authorities play a part in imagining the objective need for property
development. They create the subjective reality in which they bargain between themselves towards gaining
and granting of incentives for the achievement of this imagined future. She says because the final results of
such short-term oriented speculation have very little impact on immediate personal gain, there is no check
to such actions.
She discusses the different theories related to redevelopment policy and the political and economic
factors influencing urban development. From the more extreme and simplistic position of economic
determinism to pluralist thought where political action is said to have the ultimate power to describing
politics as the engagement ground between community and elite. Liberal explanations of urban
redevelopment emphasize the importance of power and decision-making and Structuralist explanations of
22
urban redevelopment emphasize the importance of economic determinism and class logic. Regime theory
says that rational/individual choice comes into play rather than simply economic determinism or political
power. She says all these have their place in explaining redevelopment but regime theory brings in the
importance of ‘formation of interest…because the definition of interest contains such an important
interpretative element, factors that shape consciousness are of particular importance in affecting human
action. Value traditions, ideology and personality are therefore underlying causes of urban development.’
(p.15,16)
Her stand from all the above theories is that local bodies can be influential in directing the course
of development and that ‘even if the primum mobile of service-led growth is the world economy, the
unfolding of the process involves initiatives and responses within particular places.’ (p.19)
Susan Fainstein compares real estate development to the manufacturing (product) and
entertainment (production) industries while at the same time pointing out that it is largely dependent on
‘public sector decisions concerning investment in infrastructure, tax policy and regulation of construction.’
(p.198) Organization of production- real estate development goods are not mass-produced and are mostly
in-situ because of a lack of a reliable market with the exception of mass housing. Since most of the services
of the industry are given to third party contractors- the work is from job to job and in case of a downturn
there are little overheads to maintain. This nature of real estate development, contributes to a risk taking
behavior since the market is imagined and not guaranteed. ‘The dual character of property as commodity
and vehicle for capital accumulation explains why investors will risk funds on a property where production
costs exceed capitalized revenues calculated on the basis of present value.’ (p.200)
She says that government is involved in real estate development because of the government’s role
in regulating private property, because real estate development has an economic impact on the surrounding
areas and lastly because government is itself a landholder. It is a major provider of infrastructure and so
acts like a property developer when it develops the infrastructure in an area. Therefore the development that
governments undertake has a ‘direct impact on growth and distribution of benefits within their
jurisdictions’ (p.203)
Her case study of the real estate development in London and New York in the 1980’s, that was
actively promoted by both governments in the hope of economic prosperity (by the first through
23
deregulation and by the second through subsidies), but which ended in the real estate market crash in the
1990’s, illustrates that promoting growth does not necessarily ensure economic success and benefits to the
city at large. The government is in a position to bargain with the business elite for social and environmental
benefits, public participation and long-term planning.
Susan Fainstein says that large scale planned development can be beneficial to the city. Contrary
to the two arguments against property investment by David Harvey, she says that property investment is not
the secondary circuit of investment and property value increase does not mean that value increase is
unearned. She says that the type of urban regime in a place influences the response to economic pressures
and that public-private partnerships, with the government paying attention to an economic plan and putting
policy in place that addresses environmental issues and those of social equity, can lead to more equitable
outcomes in development and redevelopment programs. She emphasizes the importance of democratic
processes and public participation in achieving the above.

Reconstructing Urban Regime Theory, Mickey Lauria
The book is concerned with redefining Urban Regime Theory within the Regulation Theory
framework and at the same time using it to inform the processes of regulation and ground them in concrete
events. It is divided up into three parts.
The first part ‘Conceptualizing the regulation of Urban Regimes’ includes three chapters by Mark
Goodwin and Joe Painter, Marshall M. A. Feldman and Bob Jessop presenting different theoretical
frameworks for reworking urban regime theory with regulation theory. These include looking for insights
using Raymond Williams ‘structure of feeling’, using spatial structures of regulation as a new way of
understanding local and regional development and using a Neo-Gramscian approach by redefining
regulation theory using Gramscian State Theory. All three talk about combining urban regime theory with
regulation theory and how this can begin to be understood theoretically. These include how Urban Regime
Theory research provides examples that help illuminate regulation theory and when seen through a
regulatory framework, how urban regimes continually affect the socioeconomic processes in regulation
theory and how Urban Regimes can be understood using a neo-Gramscian regulation approach that takes
24
into account ‘their structural and strategic dimensions, their economic and ethico-political moments, and
their embeddedness in a wider economic and extra-economic context.’ (p.71)
The second part titled ‘Reconstructing Urban Regime Abstractions’ again includes three chapters
by Christopher Leo, Kevin R. Cox and Joe Painter addressing globalization and its effect on cities, viewing
the politics of Urban Regimes beyond local government boundaries and replacing the underlying Rational
Choice Theory causality of Urban Regime Theory by that of habitus, field and strategy as defined by
Bourdieu. They emphasize the importance of the nation state regulation structure and processes in
influencing the reactions and choices of local states to global forces, the importance of players other than
those involved in the local government as being more central to economic development thus undermining
Urban Regime Theory and finally the notion of individual habitus and fields influencing the formation of
the Urban Regime field and hence the regime not being economically determined.
The third part looks at concrete research by Cynthia Horan, Robert A. Beauregard, W. Dennis
Keating and Andrew E. G. Jones on the different ways Urban Regime Theory and Regulation theory play
out at the local, regional and national level. The research on Philadelphia, Boston, Cleveland and the Inland
Empire in Southern California focuses on how the regulation processes of the dominant regime of
accumulation at the national level influences the actions of the Urban Regime at the local level, how
regulation processes can be seen at the local level, how the prevalent understanding of Urban Regimes as
coalitions formed for maintaining political power by supporting private interests is relevant and how new
forms of urban regimes are being created at a regional level as a direct influence of restructuring of
regulatory processes at the national and global level.
The contributors in the book have important insights and the following are more detailed
summaries of each. Goodwin and Painter say that the shortcomings of Regulation Theory are that it is
static, at the level of the nation state and not grounded in concrete examples. Regulation Theory tries to
explain the processes that support capital accumulation but these processes are not grounded in practice, as
they should be to make it more robust. They say Marxist theory of accumulation of capital is abstract and
transhistorical. Regulation theory explains how this process of accumulation varies historically and
geographically depending on ‘the social, cultural and political process.’ Marxist theory explains social,
cultural and political process via economics of capital accumulation. Regulation theory explains the
25
economics of capital accumulation via social, cultural and political processes but it is grounded in spatial
and temporal factors. Regulation theory is the ‘concretization and complexification’ of the more abstract
Marxist theory but is still a macro/ abstract theory in which causality is based on more than individual
rational actions. It is a study of the structure of regimes and how regimes transform through a mode of
social regulation to constantly stabilize and propagate capital accumulation. They say Urban Regime
Theory is about the analysis of coalitions formed at the local government. It is microeconomic in which
causal relations are explained by rational choice theory and regime formation is based not on coalition
formation between various actors to follow a certain action but mainly to accumulate more political power.
Urban Regime Theory can help by providing a methodology for locating regulation in concrete
examples. They say that by looking at local governments, private players, community activism, local
culture and how they respond to crisis, we can understand the constantly changing nature of regulation
versus the static mode that it has been defined as. They also emphasize the importance of cultural practices
and discourse in understanding how regulation occurs. To understand the importance of discourse as basic
to the process of capital accumulation, they propose a look at Raymond Williams’ ‘structure of feeling’
1
or

1
Williams, Raymond. The Long Revolution. Broadview Press Ltd., Ontario, Canada, 1961. P-64-66, 80. “In one sense
this structure of feeling is the culture of a period: it is the particular living result of all the elements in the general
organization. And it is in this respect that the arts of a period, taking these to include characteristic approaches and
tones in argument, are of major importance. For here, if anywhere, this characteristic is likely to be expressed; often not
consciously, but by the fact that here, in the only examples we have of recorded communication that outlives its
bearers, the actual living sense, the deep community that makes the communication possibly, is naturally drawn upon.”
“Once the carriers of such a structure die, the nearest we can get to this vital element is in the documentary culture,
from poems to buildings and dress-fashions, and it is this relation that gives significance to the definition of culture in
documentary terms.” “The significance of documentary culture is that, more clearly than anything else, it expresses that
life to us in direct terms, when the living witnesses are silent. At the same time, if we reflect on the nature of a structure
of feeling, and see how it can fail to be fully understood even by living people in close contact with it, with ample
material at their disposal, including the contemporary arts, we shall not suppose that we can ever do more than make an
approach, an approximation, using any channels. We need to distinguish three levels of culture, even in its most general
definition. There is the lived culture of a particular time and place, only fully accessible to those living in that time and
place. There is the recorded culture, of every kind, from art to the most everyday facts: the culture of a period. There is
also, as the factor connecting lived culture and period cultures, the culture of the selective tradition.” “In some respects,
the structure of feeling corresponds to the dominant social character, but it is also an expression of the interaction
described. (…the aristocrat ideals tempering the harshness of middle-class ideals at their worst; working class ideals
entering into a fruitful and decisive combination with middle-class ideals at their best. The middle-class social
character remains dominant, and both aristocrats and working people, in many respects, come to terms with it. But
equally, the middle-class social character as it entered the forties is in many respects modifies as the forties end. The
values of work and self-help, of social position by status rather than birth, of the sanctity of marriage and the emphasis
on thrift, sobriety and charity, are still dominant. But punitive rehabilitation, and the attitudes to weakness and suffering
on which it rests, have been, while not rejected, joined by a major ideal of public service, in which the effort towards
civilization is actively promoted by a genuine altruism and the making of positive institutions.) Again, however, the
structure of feeling is not uniform throughout the society; it is primarily evident in the dominant productive group.”
26
Gramsci’s account of cultural hegemony which associates ‘new methods of work as inseparable from
new ways of thinking and feeling’
2
(p.27)
Marshall A. Feldman in his paper ‘Spatial Structures of Regulation and Urban Regimes’ says that
Urban Regime Theory helps us understand the contingent and particular outcome of a local state; each local
state thus being different. This outcome only becomes useful when it is seen as affecting the processes that
influence socio-economic space, which is the subject of regulation theory. He then goes on to outline what
he calls the ‘Spatial Structures of Regulation’ (SSR) that are defined as a ‘particular combination
of…qualitatively distinct flows and relations, which I refer to hear as processes, all of which are necessary
conditions for ongoing capitalist production’ (p. 31,32) He divides SSR’S into production processes and
means of regulation. Production processes are social relations of capitalist production that vary in space and
time. They include materials, value, personnel, information, property rights and authority. Means of
regulation include ways of regulating the above processes, which are command, exchange, reciprocity,
altruism/solidarity/consensus/democracy and custom. Moreover, he says, means of regulation should not be
collapsed with the ‘social and institutional forms’ that use them to regulate processes. Nor should means of
regulation be seen from a functional point of view, as (human beings not being rational) it may not be
necessary that a means of regulation is the best match for a particular process.

2
Gramsci, Antonio . Selections from the Prison Notebooks of Antonio Gramsci. London, , GBR: ElecBook, 2001. p
664-667. http://site.ebrary.com.libproxy.usc.edu/lib/uscisd/Doc?id=10015105&ppg=664, Rationalization of production and
work, “Interest of Lev Davidovitch in Americanism. He wrote articles, researched into the ‘byt’ [*= mode of living]
and into literature. These activities were less disconnected than might appear, since the new methods of work are
inseparable from a specific mode of living and of thinking and feeling life. One cannot have success in one field
without tangible results in the other. In America rationalisation of work and prohibition are undoubtedly connected.
The enquiries conducted by the industrialists into the workers’ private lives and the inspection services created by some
firms to control the morality of their workers are necessities of the new methods of work. People who laugh at these
initiatives (failures though they were) and see in them only a hypocritical manifestation of puritanism thereby deny
themselves any possibility of understanding the importance, significance and objective import of the American
phenomenon, which is also the biggest collective effort to date to create, with unprecedented speed, and with a
consciousness of purpose unmatched in history, a new type of worker and of man. The expression ‘consciousness of
purpose’ might appear humorous to say the least to anyone who recalls Taylor’s phrase about the ‘trained gorilla’.
Taylor is in fact expressing with brutal cynicism the purpose of American society developing in the worker to the
highest degree automatic and mechanical attitudes, breaking up the old psychophysical nexus of qualified professional
work, which demands a certain active participation of intelligence, fantasy and initiative on the part of the worker, and
reducing productive operations exclusively to the mechanical, physical aspect. But these things, in reality, are not
original or novel: they represent simply the most recent phase of a long process, which began with industrialism itself.
This phase is more intense than preceding phases, and manifests itself in more brutal forms, but it is a phase, which will
itself be superseded by the creation of a psychophysical nexus of a new type, both different from its predecessors and
undoubtedly superior. A forced selection will ineluctably take place; a part of the old working class will be pitilessly
eliminated from the world of labour, and perhaps from the world tout court. It is from this point of view that one should
study the ‘puritanical’ initiative of American industrialists like Ford.”
27
Bob Jessop in his paper ‘A Neo-Gramscian Approach to the Regulation of Urban Regimes-
accumulation strategies, hegemonic projects and governance’ compares Gramsci’s State theory and
Regulation Theory. He says Gramsci’s ideas about the state emphasized not the state
structure/apparatus/form but rather the mechanisms/experiments/mediation used by the state. His ideas can
be applied at local, regional, national and international levels since they are more about the methods than
the structures of hegemony. Regulation theorists study the economic and extra-economic mechanisms that
aid capital accumulation over stable periods. Jessop describes Gramsci’s views on integral politics, his
understanding of state as ‘political society + civil society’ and of state power as ‘hegemony armored by
coercion’ not by the political structure but by ‘political, intellectual and moral leadership (which) was
mediated through a complex ensemble of institutions, organizations, and forces operating within, oriented
toward or located at a distance from the juridico-political state apparatus.’ (p.52) Jessop says that this
conception of state ‘suggests that the political sphere can be seen as the domain where attempts are made to
(re)define a “collective will” for an imagined political community and to (re)articulate various mechanisms
and practices of government and governance in pursuit of projects deemed to serve it.’ (p.52) He says that
the concept of historic bloc and power/hegemonic bloc are useful in contributing to regulation and regime
theories respectively. Gramsci theorized about politics and ‘how narrow economic-corporate interests are
translated into broader ethico-political ones.’ Jessop says that regulationist concepts like ‘industrial
paradigms, models of development and accumulation strategies’ are the ‘how’ that Gramsci is talking about
because they ‘…bring out the importance of values, norms, visions, discourses, linguistic norms, popular
beliefs and so on in shaping the realization of specific productive forces and relations of production’. (p.56)
He proposes a Neo-Gramscian approach to regulation in order to understand how the state transforms
particular interests into general interests and redefines Gramsci’s historic bloc as ‘…the complex,
contradictory, and discordant unity of an accumulation regime (or mode of growth) and its mode of
economic regulation’ (p.56) His understanding of Gramsci’s conception of a hegemonic bloc ‘is a durable
alliance of class forces organized by a class (or class fraction) that has proved itself capable of exercising
political, intellectual, and moral leadership over dominant classes and the popular masses alike.’ (p.56-57)
He also introduces the concept of the economic nucleus and his interpretation of Gramsci’s economic
hegemony is ‘that the essential function of a hegemonic project is to secure the (integral) economic base of
28
the dominant mode of growth’, and that it does this through the direct, active conformance of all social
relations to the economic (and extra-economic) needs of the latter. Jessop also talks of Governance theory
and says that ‘governance refers to the self-organization of inter-organizational relations’ (p.59) i.e. the
ways rather than the institutional framework of the government through which it pursues capital
accumulation. Based on a neo-Gramscian approach and governance theory, he talks of eight lessons for
studying local economic governance. He says both the supra-local and extra-economic environment should
be taken into account in studying the local economy. Second, since it is difficult for local economic actors
to fully comprehend or influence in time the economic activities on an ever enlarging spatial scale, it is
important to ‘direct attention to the role of the spatial imaginary and economic narratives or discourses in
demarcating a local economic space with an imagined community of economic interests from the seamless
web of a changing global-national-local nexus’ (p.61). Third, it is important to study the strategy of
realization of economic growth based on a particular economic model and facilitated by organic
intellectuals linked to the dominant class. Fourth, he says, it is ‘important to examine the relationship
between local accumulation strategies and prevailing hegemonic projects’. (p.62) Fifth, he says, one has to
study how particular institutional setups are biased towards certain strategies. Sixth, what is the ‘scope of
such power structures.’ (p.64) Seventh, an examination of the governance forms and mechanisms that
facilitate in the stability of a historic bloc. Eighth, he says, studies have to take into account the
environment, ‘social and economic aspects of regulation’ that influence local regimes, mode of regulation
and growth. He says for an economic strategy to be viable it is important for the local actors to correctly
understand the spatial-temporal aspects of development. Finally he reemphasizes that ‘the regulation
approach has neglected the role of the ethico-political dimension to regulation and, in particular, the key
role of economic discourses, the organic intellectuals
3
involved in elaborating elaboration strategies and
hegemonic projects, and their implications for the formation of economic subject.’ (p.72)

3
Gramsci, Antonio . Selections from the Prison Notebooks of Antonio Gramsci. London, , GBR: ElecBook, 2001. p 133.
http://site.ebrary.com.libproxy.usc.edu/lib/uscisd/Doc?id=10015105&ppg=132. In the first place there are the ‘traditional’
professional intellectuals, literary, scientific and so on, whose position in the interstices of society has a certain inter-class aura about it
but derives ultimately from past and present class relations and conceals an attachment to various historical class formations.
Secondly, there are the ‘organic’ intellectuals, the thinking and organising element of a particular fundamental social class. These
organic intellectuals are distinguished less by their profession, which may be any job characteristic of their class, than by their
function in directing the ideas and aspirations of the class to which they organically belong.
29
Christopher Leo’s paper ‘City Politics in an Era of Globalization’ contends that globalization
exerts a homogenizing effect on cities and cities with their own particularities resist this effect. The two
pressures help to shape cities and city politics. The iaccumulation regime characteristics of the nation-state
in which the cities are located influence their response to these two forces. He says that Urban Regime
Theory is particular to the United States; instead it is important to study the political economy of separate
regions. For example he points out that because of low federal regulation, the local government in a city
like New York in the United States is at the mercy of private interests whereas in a city like Paris in Europe
where there is strong federal regulation there is a level playing field for local government and private
interests. At the same time there is much more active citizen participation in New York than in Paris. He
suggests the study of coalitions, a focus away from Urban Regimes and gives examples of coalition
formation in cities around the world.
Kevin R. Cox in his paper ‘Governance, Urban Regime Analysis and the Politics of Local
Economic Development’ says that till now Urban Regime Theory has been about cooperation and coalition
building between the local state and private interests for economic development. This however varies
considerably across local government boundaries, so more theoretical emphasis is needed on the
‘fundamental interests’ in economic development on the one hand and their ‘contingent conditions of
realization’ on the other. He uses transaction cost theory (Williamson 1975) to describe how local regimes
internalize costs when market conditions are not sufficient. This takes the form of vertical integration. For
example, he says the public equivalent of this would be the combination of separate public agencies to form
a new one or to create a new agency that has jurisdiction over functions of other agencies. The opposite of
this, disintegration, occurs when market conditions are favorable. The author also draws on Granovetter’s
(1985) emphasis on trust in exchanges but adds that to understand exchange, one must go beyond issues of
efficiency and trust to ‘rules that protect private property rights and that are laid down and enforced by the
state’ (p.103); in other words regulation by the regime of accumulation. He emphasizes that local
government may not be the center of action as seen in Urban Regime Theory. Instead, there may be other
players who are central to the governance of a place. He takes for his examples the land annexation policies
of the city of Columbus with unexpected outcomes due to external pressures and trust based cooperation
between cities in a larger metropolitan area to maximize positive outcomes for economic development.
30
Joe Painter in his paper ‘Regulation, Regime and Practice in Urban Politics’ says that regulation
theory can be applied at the urban regime scale and that Bourdieu’s concept of habitus, field and strategy
can overcome the shortcomings of an Urban Regime Theory based on rational choice theory, which makes
it incompatible with regulation theory. Habitus, field and strategy allow the inclusion of other influences
like ‘bureaucratic culture, ethical judgment, irrational assumptions, trust and mutuality, local chauvinism,
political ideology…’ (p.137) The same can then fit into the regulation theory since the latter is the study of
fields and their influence in the accumulation and legitimization of capital. Urban Regime Theory can be
seen as its own field created by actors from other fields, the habitus of each influencing and changing the
field of the Urban Regime. He says that regulation is a dynamic process and cannot be explained after the
fact. Instead, the use of habitus
4
, field
5
and strategy
6
can start explaining the formation of mechanisms of

4
Stephen W. Foster. Cultural Anthropology, Vol. 1, No. 1, (Feb., 1986), pp. 103-110 Blackwell Publishing on behalf of the American
Anthropological Association. http://www.jstor.org/stable/656326. ‘They refer to and are embedded in habitus, a concept reminiscent
of the Geertzian notion of culture. In The Algerians, Bourdieu takes culture to be "a system of choices which no one makes" (1962: 1
11).6 This formulation anticipates Bourdieu's subsequent proposal of habitus as an interpretive device. Habitus is "the social inscribed
in the body," "a system of dispositions," a feel for or sense of "the social game," "the source of most practices," "a tendency to
generate regulated behaviors apart from any reference to rules." Habitus is the background of and resource for playing the social game.
Habitus is interior to history, yet as a general environment for practice, pervades or saturates social processes.’
5
Social Space and Symbolic Power. Pierre Bourdieu. Sociological Theory, Vol. 7, No. 1, (Spring, 1989), pp. 14-25, American
Sociological Association. http://www.jstor.org/stable/202060. “If I had to characterize my work in two words, that is, as is the fashion
these days, to label it, I would speak of constructivist structuralism or of structuralist constructivism, taking the word structuralism in a
sense very different from the one it has acquired in the Saussurean or Levi-Straussian tradition. By structuralism or structuralist, I
mean that there exist, within the social world itself and not only within symbolic systems (language, myths, etc.), objective structures
independent of the consciousness and will of agents, which are capable of guiding and constraining their practices or their
representations. By constructivism, I mean that there is a twofold social genesis, on the one hand of the schemes of perception,
thought, and action which are constitutive of what I call habitus, and on the other hand of social structures, and particularly of what I
call fields and of groups, notably those we ordinarily call social classes.”
6
From Rules to Strategies: An Interview with Pierre Bourdieu. Pierre Lamaison and Pierre Bourdieu. Cultural Anthropology, Vol. 1,
No. 1, (Feb., 1986), pp. 110-120, Blackwell Publishing on behalf of the American Anthropological Association,
http://www.jstor.org/stable/656327.
“In order to escape this danger, one needs to bring into the theory the real principle of strategies, that is, a practical sense of things, or,
if one prefers, what athletes call a feel for the game (le sens du jeu).' I refer here to practical mastery of the logic or immanent
necessity of a game, which is gained through experience of the game, and which functions this side of consciousness and discourse
(like the techniques of the body, for example). Notions such as habitus (or system of dispositions), practical sense, and strategy are
tied to the effort to get away from objectivism without falling into subjectivism.” P.L.-The theory of strategies of reproduction is
therefore inseparable from the genetic theory of groups, which aims to account for the logic according to which groups, or classes,
form and break up. P.B.-Exactly. This was so evident, and important, for me that I went so far as to place the chapter dealing with
classes, which I had intended to make the conclusion of La Distinction, at the end of the first, theoretical part of Sens pratique. There I
tried to show that groups, and particularly units with a genealogical basis, existed both in the objective reality of instituted regularities
and constraints, and in their representations and all the strategies of bargaining, negotiation, bluff, etc., whose purpose is to modify
reality by modifying the representations. I hoped in this way to show that the logic which I had discerned in connection with groups
having a genealogical basis, families, clans, tribes, etc., also operated in the most typical groupings of our societies, those designated
by the term classes...And the same is true of classes, when they exist in any significant way (after all, what does it mean for a group to
exist?). Membership is constructed, negotiated, bargained over, ventured. Here again, one must transcend the opposition between the
voluntaristic subjectivism and the scientistic and realistic objectivism that coexist in the Marxist tradition. In some societies, such as
ours, distances are measured in amounts of capital, just as, in other societies, genealogical space defines distances, proximities and
affinities, aversions and incompatibilities, in short, probabilities of entering into truly unified groups, families, clubs, or mobilized
classes. It is in the struggle over classifications, a struggle aimed at imposing such and such a way of carving up this space, at unifying
or dividing, etc., that real rapprochements are defined.”
31
regulation. Individual habitus determines why actors in an urban regime choose to do what they do and
in the process constantly change the field in which they are acting. Urban regimes can be seen as one field
and each actor comes from their own field and follows their own paths in that one field. ‘Actors bring to
the regime the cultural assumptions designated by the habitus of their own field, but the disjuncture
between these and the other fields involved provides a potential source of dynamism and (strategic)
political change’ (p. 142) Also, the field has its own practices, understandings, conditions (that change
constantly because of the influence of habitus) that influence the choice of the particular habitus. Painter
rejects that regulation theory exists only at the level of the nation state. Instead, he says, since regulation
theory tries to explain accumulation processes through cultural and institutional practices, it can be applied
at any scale and may help to explain uneven development at the sub-national level.
Cynthia Horan in her paper ‘Coalition, Market and State-Postwar Development Politics in Boston’
says that urban governance is not only highly political, as in regime theory, but also attempts to negotiate
between the political and economic frameworks of the space, as in regulation theory. Her case study about
postwar development in downtown Boston talks about institutional reform, highly political governance and
regional influences that shaped its development. She emphasizes the importance of political and economic
growth in determining the course of the urban regime.
Robert A. Beauregard in his paper ‘City Planning and Postwar Regime in Philadelphia’ shows
how the dominant regulation regime at the national level influences the local regime and hence the
development politics and economic choices at the local level. As the regulation regime transforms the local
regime has to adjust accordingly. In the case of Philadelphia, as the postfordist state emerged, the local
regime took on a more entrepreneurial approach. Hence Urban Regime Theory is not based entirely on
local politics or rational choice theory but on the structure of the regime of accumulation at the national
level. However, he points out that uneven development at the sub-national level show that ‘Elements of the
mode of social regulation appear out of sequence at different spatial scales’. (p.174)
W. Dennis Keating in his paper ‘Cleveland: The “Comeback” City- The politics of redevelopment
and sports stadiums amidst urban decline’ says that global economic forces and a weakening nation state
mean that private interests can dictate the conditions of development in an urban regime, thus maximizing
their profit and minimizing their risk. He takes the example of Cleveland where sports franchises, because
32
they are not bound to stay with a particular city and because of their high profile as played out by the
media were able to demand from the local government development, highly customized sports stadiums
funded by public investment while socially beneficial public projects were sidelined. Local government
sells public investment in private interests by citing increase in public welfare through the creation of
opportunities for the public, which then seldom pan out. The local government may use ideology to sell an
idea benefiting private interests. The private interests support local officials of the government by campaign
donations etc. resulting in their re-election. The formation of quasi-public corporations help in carrying out
these projects independently, without accountability or public scrutiny. As a result of this many social
problems remain unresolved and public projects that may benefit the residents of the city remain under
funded. Keating says this is an example of the ‘dual city’ where public poverty and private wealth live in
close quarters. He also points to the severe lack of citizen participation against this type of urban regime
formation and maneuvering. The paper reinforces the concept of Urban Regime Theory- Local government
trying to maintain political power by providing policy and public investment support for private interests to
indirectly boost local economy, a condition that is seldom realized. It illustrates the entrepreneurial role of
local regimes in the global economy.
Andrew E.G.Jones in his paper ‘Suburban-Defense Transition- Territorial Reorganization in
Southern California’ says that ‘if there is ever to be a productive engagement between regulation and urban
regime theories, the relationships between structural context and strategic action must be interrogated
through the analysis of actual transformations in urban governance in particular spatial settings.’ The paper
proposes how one can study the coming together of urban regime theory and regulation theory through case
studies of areas of national interest that are undergoing change. He says that by studying the above one can
start relating the strategies of the urban regime to the structures of accumulation explained by regulation
theory. The case of the Inland Empire in Southern California brings out how new kinds of responses to a
global economy are emerging at the local level that involve regional integration. So the importance of scale
becomes relevant in the emerging debates about Urban Regime Theory and Regulation Theory. Jones talks
about the effects of suburban national policy and defense industry restructuring on the development of the
Inland Empire. The local governments whose planning departments depended on fees shut down during the
housing downturn in the 1990’s anti-growth activism in inner suburban neighborhoods, causing developers
33
to build low and medium income housing in the Inland Empire in the unincorporated areas which were
under county planning with fewer controls. The Inland Empire did not have a strong neighborhood
antigrowth lobby so the county became more powerful. Its move to include pro-growth stakeholders in its
conservation plans for the region, also gave it more importance than local governments among private
interests. A common agency called the Inland Empire Economic Partnership (IEEP) was formed that
coordinates and passes information among the 26 redevelopment agencies of the Inland Empire, the
redevelopment agencies themselves being formed to make use of federal grants under redevelopment, the
definition of which was used more creatively in the development of malls as the tax structure in the region
was moved away from a property tax base to sales tax. This considerably lowered the transaction cost for
the cities. Cities have come together, at the regional level, over the closure and realignment of defense
bases and to ask for more federal funds from defense agencies.

Remaking New York: Primitive Globalization and the Politics of Urban Community, William Sites
Sites talks about state action that undermines the social policies of the welfare state at local and
national levels and works towards the benefit of economic globalization. The more prevalent view of the
global economic era assumes that state power is being eroded by the phenomenon of globalization. If
states/ governments have to survive globalization they must adapt to become important or necessary to the
forces of globalization. The author says that contrary to this belief, states are both ‘structures and agents’,
(p. xiii) which impact the scope of globalization.
According to Marx’s theory of primitive accumulation, ‘Capital…reasserts the facilitative role of
the state not as a directive set of institutions ‘outside’ of the transition itself but as a crucial yet destructive
force within it, that is, a force whose constructive response to economic change, as in the reactive use of
political authority, is to uproot, or disembed, actors from inherited social conditions.’ (p.12) Sites looks at
the arguments presented by other theorists, for example, by Castells, Arrighi and Jessop regarding
globalization, the ongoing restructuring of regulation and the destructive role of the nation state as
inevitable and part of the history of regimes of accumulation. He describes how each falls short in
explaining the destructive role of the nation state in promoting ‘short term oriented economic gain’. This he
tries to explain by the concept of primitive globalization. He contends ‘that certain states, neither
34
circumvented by globalization nor resistant to it, instead actively facilitate globalization through the use
of state power in highly destructive or ‘disintegrative’ ways. Such a conceptual reframing makes possible a
fuller consideration of the state as simultaneously facilitator and victim of globalization’ (p.2)
He says, one cannot explain urban change by either top-down processes, for example globalization
or bottom-up processes, for example urban regimes, local action etc. Instead, all kinds of processes are
taking place at various levels and places and interacting with one another to produce the urban terrain. Sites
talks about ‘three elements of contemporary change’ based on the concept of primitive accumulation by
Marx, regarding the state’s role in facilitating capital processes. These are ‘the destructive as well as
constructive roles played by states and political actors in engagements with globalization; the continuing
variations in sub-global arrangements across nations, regions, and localities, including the ways those
differences are linked to specific relations between state levels; and the transitional, open-ended aspects of
contemporary globalization.’ (p.xix) Sites uses primitive globalization to describe the same process of the
state and other levels of government, facilitating neoliberal global economic processes. He talks about two
approaches to globalization- the first points to the ever-increasing redundancy of the nation state as
localities vie for international investment through deregulation, incentives, etc. thus undermining the
position of the former. The second talks about the important role of international agencies in regulating
development along nation states and their possible future role of redistribution. There is also a questioning
of the whole concept of globalization by some who give the example of earlier cases of economic
international integration- colonization is one such example in the 19
th
and 20
th
centuries. They explain
current events as the inevitability of capitalist expansion, as also mentioned by Marx. In response, Sites,
says that it is important to distinguish between developments that are influenced by globalization and those
that stem from within the nation state.
In his case study of New York Sites says that according to Saskia Sassen, John Friedman and
others, the characteristics of a global city and ‘enhanced international integration’ are uneven growth and
disturbing levels of inequality. Other localist arguments regarding development of New York, point out the
role of political action in its growth and resultant structure. Sites suggests that both these approaches have
their shortfalls- The first by pointing out that New York has always been a global city and the second by
the persistence of certain policies. A crisis allowed the administration to use rhetoric with the public to sell
35
ideas that may have otherwise been revealed for their pro-business, anti-social bias. (p.47) Urban
Regimes developed as a consequence of a National Policy that withdrew federal support from urban areas
and local governments had to increasingly work in tandem with private interests to ensure their own
survival. The crises helped evolve neoliberal development in New York. Briefly in the 1980’s when
economic conditions improved and simultaneously public and community issues were reaching a critical
breakpoint, community programs were initiated. However, the crash of the late 1980’s again rekindled and
solidified earlier neoliberal objectives.
On public action, Sites talks about the change in the character of community action over the
twentieth century. Whereas earlier in the century people were united around broader common goals or
enemies, the social movements later became restricted to and involved with the neighborhood unit which
could not compete with the broader goals of the past that were able to cut across local differences.
Community action developed exclusively for the neighborhood and against the city. Sites talks about
community organization in the 80’s and subsequent fragmentation in the 90’s because of the movement
from organizing around larger issues to a narrower neighborhood defined approach. This narrow approach
could not sustain the movements that crumpled externally as well as internally as increasing number of
dissonant voices fought over the right to define the ‘neighborhood’. Sites has described this movement in a
separate chapter with previous chapters devoted to how the city administration and the larger national
politics developed, that in general helped promote policies that worked against community and social
coherence and instead advanced private capital interests.
Sites suggests that one can strengthen social values against the onslaught of neoliberalism by
strengthening national politics to protect the rights of disenfranchised citizens i.e. to avoid working against
itself and the people in support of global neoliberalism. Sites is ‘against globalization as economic logic’
and the ‘reactive-destructive governmental policies directed at short-term oriented economic development.’
(p.140) He says that Urban Regime theory is usually limited to local regime and its failure to take account
the importance of national politics is its main weakness. Primitive globalization explains to a large extent
the uneven development of cities in the United States because it explains how local regimes have limited
powers in face of national policies and only when a number of positive factors come together can some
36
cities withstand the impact of the latter. He says that for community action to have any affect, it has to be
based on something larger than site based issues i.e. a ‘scaling up of a grassroots initiative’.
He says, social and economic policies are the major influence of spatial patterns. However, if one
looks at the European condition, policies based on spatial patterns can have more effect in such an
environment. Sites gives the example of Belleville, France to make his point about the influence of national
policies in facilitating local players’ agency for community development. ‘Indeed, as globalists often point
out, the export of American style neoliberal ideas to other countries shows ideological influence running in
the opposite direction.’ (p.146) On social welfare in developed countries, he says,
Cross-national research demonstrates that social-welfare systems are not being dismantled in
much of the developed world; indeed, systems of social protection remain strong in many
countries and even prove capable of constructive adaptation. Comparative studies of urban and
neighborhood change reveal that responses to globalization still vary significantly by country, and
that these national responses shape differentially the capacities of cities to address economic
polarization and social exclusion Of course, transnational currents make obsolete certain
twentieth-century economic strategies and increase the responsibilities of powerful nations to
construct stronger foundations for global governance. Yet signs of persistent (and even newly
evolving) differences between capitalist systems underline the enduring importance of national
politics and culture, as well as the conspicuous unevenness in degrees of international integration.
Such findings also heighten the suspicion that processes that go by similar names in different
countries- such as neoliberalization or privatization- may not always constitute the same processes
after all. (p.xxiv &xxv)
The kind of nation state- socialist democracy, capitalist democracy etc. helps shape the policies in
response to globalization and if studied minutely, one can see that processes of globalization may vary
across borders rather that be generalized into a single category.
Sites states that to counter primitive globalization and to strengthen nation-states’ capacity for
social welfare, both grassroots activism and change in national policies would have to take place. Sub-
global politics would have to work towards restructuring national policies to strengthen regionalism and
encourage ‘political engagement by local actors’. Rights in democracy, he says, are the foundation for
achieving this.
Sites talks about the importance of America as the superpower of the world and one that actively
is engaged in promoting international capital development. He says, for things to change, for globalization
to turn its attention to questions of equity and social justice, one of the most important steps is for US
politics to change its position that is currently oriented towards short-term capital development. He says
that does not mean that international networks of community action and grassroots democratic movements
37
are not important to help promote the move away from primitive globalization, but that politics at the
national level needs to change its current support of capital dictate of development.
7

Cities in the International Marketplace- The political economy of urban development in North
America and Western Europe. H.V.Savitch and Paul Kantor
One of the main ideas in the book is what the authors call ‘Global Sweep, Local Broom’ that says
that cities hold a lot of bargaining power in determining the kind of development course they want to
follow. ‘The central argument of this book is that urban development policies are formulated at the juncture
of local politics and the international marketplace’ (p.25)
The growth of cities is dependent on both political and economic action. The kind of growth may
take different forms dependent on a whole host of factors including type of government, structural
resources and bargaining power. The authors talk of the trajectory of global cities from deindustrialization
to deconcentration to globalization and the idea of open markets where ‘each locale finds it beneficial to
produce goods or services it can most effectively turn out and to use international markets to acquire
products that are made elsewhere’. (p.13)
The authors have analyzed their study based on four categories using which they rank the
character of their cities. These are Market Conditions that can be Favorable or Unfavorable depending on
whether or not the city is attractive to private capital, Intergovernmental Support that can be Integrated or
Diffuse depending on whether there is vertical integration between governments at the national, regional
and local levels that can exercise control over market conditions, Popular Control that can be Active or
Passive depending on strength of community action to hold elites accountable and the level of public
participation and Local Culture that can be Materialist and Non-materialist depending on norms and values,
for example economic or social values. They say that market conditions and intergovernmental support are

7
Sites in ‘Primitive Globalization’ talks of the nation state’s role in undermining its own social base due to its pursuit of neoliberal
economic development. This can also be seen as a moment in its development whereby it goes against strengthening its position in
order to retain its position. If it has developed to the stage in which it has become transnational and is actively concentrating on the
Americanization of the world, it has moved beyond the geographic boundaries of the initial nation-state in its role in international
agencies and cultural institutions and is open to accommodating harm within its own territories, at least temporarily. Economic
interventions in the third world will yield higher profits for the state. Meanwhile its own purveys into military domination of parts of
the second and third world ensure not only the solidification of the nation state by invoking nationality but also by elaborating
surveillance thus ensuring cooperation and passivity of the society.
38
more the driving variables, i.e., they determine whether development will take place and popular control
and local cultures are steering variables that determine how and what kind of growth will take place. They
also divide the approach that each city takes as social centered and market centered depending on whether
the city will pursue redistributive policies or development for its own sake. The authors contend that the
more bargaining power a city will have the more it will be socially centered.
The authors talk about how each of the ten cities they study, are similar or different based on the
factors above ranging from Dirigiste, with strong market conditions and intergovernmental support, like
Paris, Toronto and Milan, entrepreneurial, with strong market conditions and weak intergovernmental
support, like New York and Houston, dependent-public, with weak market conditions and strong
intergovernmental support, like Marseilles, Glasgow and Liverpool and finally dependent-private, with
weak market conditions and intergovernmental support, like Detroit.
Lastly, the authors say that in spite of the convergence in physical appearance of globalizing cities,
there is great divergence in how cities react to global economic liberalization that depends on the political
culture, resources, popular control and local culture of the city.

MegaProjects: The Changing Politics of Urban Public Investment, Alan Altshuler and David
Luberoff
The book further develops the idea of integrating Urban Regime Theory with Regulation Theory,
taking the case of local politics of development and national and state policy in megaprojects in the United
States. In ‘Overview: four political eras’, Altshuler and Luberoff describe the four periods- before the
1950’s with no public/government participation in megaprojects; 1950’s-60’s as megaprojects boom with
major investments from the government; 1960’s-70’s backlash and diminishing megaprojects and private
developers taking on more responsibility; 1970’s onwards when megaprojects are still a method of growth
adopted by local governments but the type is different in the sense that there is little social or
environmental disruption. The strategy is to go for projects and funding that bypass citizen participation.
This fits into the three regimes theory by Susan Fainstein- directive, concessionary and conserving and the
authors discuss in some detail the effects of the depression, new deal politics, federal redevelopment aid on
39
growth at the local level but their main emphasis is on community uprising, bottom up federalism, civil
rights movements, environmental movements that curb much of megaproject activity.
In the section on Megaprojects and Urban Theory, the authors say that other than urban renewal,
which was a wholly local government initiative, megaprojects in the United States have been
intergovernmental in nature. The authors talk about the relative absence of theoretical research in the area
of megaprojects and attribute this to restriction of research to manageable topics and attention to overt
controversy in politics whereas usually in the case of megaprojects there is the formation of agencies that
are insulated from political interference and legislative action.
The agencies entrusted with program and project execution were usually semiautonomous, and
they invariably took the position that their decisions were technical. They were in fact highly adept
at nurturing support, often by blatantly political means (in awarding jobs and contracts, for
example). But the unity and influence of their supporters, reinforcing the myth that their decisions
were technical, enabled them to prevail in nearly all cases where their decisions were challenged.
And not only to prevail but to keep specific complaints from escalating into broader controversies-
successfully framing disputes, for example, as pitting the narrow self-interest of a few (for
example, residents to be displaced) against the public interest of the city or region as a whole.
(p.47-48)
The five theories that are discussed in the book are elite-reputational in which ‘corporate elites
dominate local politics, Pluralist in which ‘influence in politics is widely distributed’, Public Choice in
which ‘politics is best understood as the expression of rational choice by actors within frameworks of
incentives’ much like Urban Regime Theory, Elite-Structural in which they say ‘corporate elites tend to
dominate, and that their ability to do so is largely a function of the broader structures within which local
politics occurs’ and Historical-Institutional in which ‘collective choices are strongly influenced by
institutional arrangements, which in turn largely reflect long-past decisions’. (p. 49-50) Furthermore Hard
public Choice theory says that rational actors are unable to produce rational outcomes whereas Soft Public
Choice Theory says that rational actors are able to work together to produce ‘collectively rational
outcomes.’
Regarding highways, the authors say that there has been an increase in federal spending for
highways albeit in a new form, not as a part of the Interstate Highway Program but of the Intermodal
Surface Transportation and Efficiency Act. The spending shifted from fewer, more capital-intensive
projects to more numerous, less capital-intensive projects, which are also distributed over a larger area.
Some of the new highway projects that are coming up have an improvement bias rather than that of
40
redevelopment and new construction and getting funding for them from the federal government is likely
to be difficult and will require innovative ways to get around policy restrictions. (p.122)
Airport expansion case studies also show an increase in construction in the 1950-60’s but with low
federal aid followed by almost two decades of no construction and minor improvements in existing airport
facilities. In the 1990’s and 2000’s there was again increased activity, improvement and expansion of
airports but hardly any new construction. Federal aid increased, declined and then increased again in the
same periods. The arguments, most recently, for airport megaprojects is the importance of improving
regional economy to sufficiently compete with other areas of the country.
This may also reflect the effect of globalization on local and regional governments and commerce
in influencing the courses of development, as these are marked by national, state and to some extent local
regulations. Citizens’ rights through environmental law are one such regulation. The case studies show the
importance of environmental law in stymieing new airport development. Environmental Opposition is seen
as a way of stopping megaprojects. Federal Policy, the law passed on environment protection, allowed this
form of protest to be a major bargaining power for those affected by the projects. There has been a
persistence of policies like environmental law even after the forces that gave rise to them dissipated.
Though both highway and airport expansion was opposed by environmental groups, they were in
support of transit projects. This was, according to the authors, because of citizen support from below and
the idea of rail transit as an environmentally friendly alternative and one of smart growth. This approach
also fit into the overall framework of sustainability. The authors talk about the more recent projects in the
US as designed ‘to reinforce existing land uses and to avoid both neighborhood and environmental
disruption’ (p.286)
They authors show that a lot of decisions are made because of political affiliations and logrolling
at the local, state and national levels. Projects depend largely on the political parties that come to power and
on the personalities of those in power.
In the chapter ‘Urban Theory Redux’ the authors talk of Historical-Institutional Theory, Public
Entrepreneurship, Hard and Soft Public Choice Theories, Elite Initiative and Pluralistic Constraints. They
say that all these theories contribute towards an understanding of the persistence of megaprojects. The
authors say that historical-institutional theory explains how it was essentially federal aid ‘directed to
41
agencies well-insulated from normal politics’ with the possibility of yielding substantial profit, like
Urban Renewal and Interstate highway programs, that allowed municipal authorities to take on
megaprojects that helped shaped the city. On their own they may have stayed grounded. ‘In sum, business-
government coalitions have adapted to new political and legal, far more than economic factors since the
period of transition’ (p.256)
In Hard Public Choice Theory, the motivation of congressional action is district benefits. Projects
are initiated at the local level and consensus at the local level is a requirement by the federal government
because congressional overseers want to preserve peace in their constituencies. In Soft Public Choice
Theory, development projects happen when federal and local government aims coincide. The authors say
that redistributive projects are much more difficult to bring about, though the decline in certain kinds of
megaprojects can be attributed to redistributive policies like environmental protection and to social values.
The authors say that Peterson et al’s claim that local government ultimately accepts promotion of
redistributive programs by the federal government may not necessarily be true as local issues are not
always resolved towards welfare or redistributive values.
Talking about Elite Initiative and Pluralistic Constraints, they say that before the1950’s local
government or business interests initiated very little development. Business interests used negative
pluralism to thwart unwanted initiatives. After the 1950’s, with federal aid coming in, there was no
requirement for voter approval and local governments along with business interests initiated development
projects. However the negative impacts of such projects caused a backlash among ‘use value’ groups to
again generate negative pluralism to fight against such projects or to gain benefits for social and
environmental values. This led to a change in the type of megaprojects with a shift from direct investment
to policies for increasing development initiatives.
The authors in support of public entrepreneurship theory cite Dahl, who based on his study of New
Hampshire and Mayor Lee, suggested that ‘great projects are likely to move forward only when political
executives take the lead- not just in developing plans but in mobilizing and then nurturing the private
support coalitions on which their efforts ultimately depend.’ (p.257) They elaborate on elite theory to say
that without private capital interests and favorable support, public officials would not be able to pursue the
interests that they want and that it is private interests that dictate the direction of development of type of
42
megaprojects. Lastly, they say ‘Use value interests’ mainly come into play when their interests are
threatened i.e. it is mainly a defensive gesture. Rarely are projects initiated by ‘use value interests’. (p.259)
Citing Logon and Molotch, the authors say that in their study two ideas are of significance. The
first is that conflict over urban development or construction of megaprojects is over ‘Exchange and Use
Value Interests’ i.e. between profit making business elite and the public that is directly or indirectly being
affected by the project. The second is that ‘Institutions, including business enterprises, vary widely in the
degree of their political activism- depending on the strength of their local ties (making exit difficult) and
the extent to which their strategies (particularly of land development) hinge on favorable government
actions’ (p.268) They say that local business elites have been initiators of megaprojects while users are
generally opposed to them (mass transit being one such exception).
The authors’ final conclusion is that megaprojects are still being promoted even though their
nature and distribution may have changed over the years. Political actors have adapted their policies to
counter social opposition against megaprojects and to some extent have had to modify them to
accommodate myriad requirements, but that has not put the brake on the megaprojects themselves and they
continue to be proposed and constructed in one form or another.

Megaprojects and Risk: An Anatomy of Ambition: Bent Flyvbjerg, Nils Bruzelius and Werner
Rothengatter
The authors say that the building of megaprojects is part of the new worldview of a ‘frictionless
society’ (Bill Gates) or the ‘great war of independence from space.’ They say that for the new ways of
living and interacting infrastructural megaprojects are not just facilitative but imperative. ‘Infrastructure
has rapidly moved from being a simple precondition for production and consumption, to being at the very
core of these activities, with just in time delivery and instant Internet access being two spectacular
examples of this’ (p.2)
Megaprojects because of the amount of money involved are crucial in the economy. The success
or failure of these projects affects the viability of the existing government. The authors say that
environmental problems, positive regional development effects, governance transparency and participation,
all seem to be compromised in most megaprojects. Their main thesis is that megaprojects are undertaken
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because there is a lack of accountability and inadequate deliberation about risk in the project decision-
making process. They say that citizens and stakeholders should be part of the risk assessment and
management process. They identify the stakeholders as Non-Governmental Organizations, various levels of
government, industrial interests, scientific and technical expertise and the media. However involvement is
not enough since power may lie in the hands of certain interests, therefore it is important to establish an
institutional framework where the interests of all are equally represented and enforced.
They point out that megaprojects are never all public or all private. Their size ensures that they are
always a combination of the two. Cost overruns though are seen in both the public and private sectors. Cost
underestimations and overruns exist across time and place throughout the world and cannot be explained by
error alone. Instead it should be seen as ‘strategic misrepresentation or lying’. Data for megaprojects from
the past hundred years has shown that cost overruns are part of a systematized lying behavior because there
has been no learning and accountability, on the contrary the lesson has been ‘cost underestimation and
overruns pay off’ (p.17) They further go on to say that it is difficult to pin down the reasons for cost
overruns. Yet the possibility of cost overrun can be taken as fact and their focus is how to make this a part
of project formulation.
They authors say that demand forecasts are as unreliable as cost underestimation. They discuss
road and rail projects and conclude that road projects have less error in demand prediction than rail
projects, and that they predicted both low and high demands equally. Rail projects are wrong on high
demand forecast though both kind of projects show a high degree of uncertainty. Demand predictions fail
due to methodology applied, poor database, discontinuous behavior (behavior of people remains stable
even though factors affecting it change) and the influence of complimentary factors, unexpected changes of
exogenous factors, unexpected political activities or missing realization of complimentary policies, implicit
appraisal bias of the consultant, appraisal bias of the project promoter. (p.30)
A crucial point that the authors make about megaprojects, originally part of a study conducted by
the Auditor General of Sweden, is that ‘projects ‘live on’ in the planning process despite major declines in
viability’ (p.42). Very rarely is recalculation of project costs and hence viability done. Accountability is
low because there is more incentive to produce viability and more disincentives for non-viability of projects
as shown in studies done in MIT and UCLA. The main problem is ‘lack of accountability’ and there is no
44
risk to promoters and special interest groups for the projects. Accountability is related to issues of power
and institutional shortcomings. ‘Politicians may have a ‘monument complex’, engineers like to build things
and local officials have the mentality of empire-builders…it creates work for engineers and construction
firms and many stakeholders make money’ (p.46) Economic, Legal and Ethical reasons are all present for
the need to promote the necessary truth.
In talking about the role of Environmental Impact Assessment (EIA) they say that Deficiencies in
EIA are because of 1) inaccurate predictions 2) narrow scope of impacts and their time horizon and 3) lack
of integration of EIA in the overall decision making process. There is a lack of post-evaluation and
comprehensive framework for EIA’s. EIA is usually the final step of the decision therefore the authors,
citing the case of Canada, say that EIA should be part of the scoping procedure before a project is
undertaken that allows stakeholders to participate in its program. Solution for cost increase, delays and
ultimately non-viability of a project can be avoided by defining performance specifications at an early stage
that would avoid or reveal high environmental and spatial risks. According to the authors there is little
monitoring and post auditing of environmental impact for megaprojects. The few studies undertaken have
shown that EI predictions during construction are less accurate than after construction is over. The authors
propose a risk analysis approach- a ‘Stochastic risk approach’- measurable criteria, institutional framework
and auditing for EIA.
One method used by project promoters to justify megaprojects is by saying that they will
contribute to regional economic growth. However, regional growth depends on a lot of factors other than
provision of infrastructure and may be both positive and negative and the effects of megaprojects are
marginal. An infrastructure megaproject can have a positive regional effect if it relieves existing
bottlenecks in urban areas where cost of transport is reduced and if investment in infrastructure is
accompanied with investment in social capital.
Albert O. Hirschman, in his book ‘Development Projects Observed’, proposed the theory of the
hidden hand in which he said that projects of this nature would not be undertaken if all the risks were
known. The authors of the book say the same, but claim that there is a deliberate ignoring of risks. They
then say that if these known risks are revealed, less of these projects will be undertaken. Alternatively, only
45
those projects will be undertaken that live up to their claims and costs and where stakeholders are aware
and responsible for the risks.
The authors say that it is important to understand the probabilistic, stochastic nature of project
planning and the necessity of transferring the risk to the responsible parties and in some cases to an
institution for risk management- like an insurance company. The different types of risks in transport
infrastructure projects are construction cost overruns due to government, client, management, contractor or
accident, increasing financial costs, change in interest or currency rates, lower than expected revenues. For
all projects risk can be specific, market related, sector-policy related and capital-market related.
Infrastructure projects are risky because money spent on them becomes a sunk cost and the
success of infrastructure projects largely depends on the economic growth of the country, region or locality.
The risk is translated directly into expected rate of return in private-sector involvement in such projects.
The rate of return has to be much higher for the project to be invested in by private parties. In the case of
government run/built projects, the return is kept low but the risk gets transferred to the public- to taxpayers.
Further sovereign guarantee of a loan may have a negative effect on the rate of return as the lender has less
incentive to ensure the success of a project and so the low interest is offset by increase in project costs. The
authors say that according to the World Bank the general way to avoid looking at risks is according to the
EGAP principle- ‘Everything goes according to plan, which they say should be replaced by the MLD
principle- Most Likely Development. Risks are underplayed by EGAP. Instead, with MLD thresholds or
‘switching values’ can be established for different variables of a project- the point at which the project
switches from being viable to non-viable. A lesson from private enterprise for public projects is to establish
worst-case scenarios A risk management plan should be part of the feasibility studies and the contracting
structure in public sector should be changed from ‘rule-based to performance-based.’ Force-majeure risks
can be totally eliminated or transferred to parties whose best interest is to reduce the risk or transferred by
buying risk management services or spreading the risks to many parties. Market risks are the most difficult
to offset. Also, the authors say that the civil service has a legal obligation to inform the politicians and the
public of the risks associated with such projects.
Conventional megaproject planning approaches include sovereign based guarantees. There is no
pre-feasibility stage and there is a focus on technical solutions at an early stage. The external effects of the
46
project are not taken into consideration and these sometimes manifest later in the project are costly if
changes are made and even if they cannot be incorporated at all.
The authors are critical of the preoccupation with technical solutions. ‘It is not until these basic
parameters of the planning process have been established that it is really meaningful to identify technical
solutions that will be able to meet these requirements.’ (p.90)
Over the last century the trends for financing of infrastructure megaprojects have moved from
private to public to private investment again. The nature of investment in such projects is different than
other investments because of sunk costs, no past track record of profitability, no market for the sale of the
company itself, different commercial risk.
In Build, Operate, Transfer (BOT) projects long-term operating goals should take priority over
short-term construction goals. In Design and Build projects, the government remunerates the private
operator. Design, Build, Finance and Operate (DBFO) allows for innovation. Unlike contracting
agreements of the past in which the methodology was spelled out for the contractor, the client only outlines
the performance specifications. ‘The main ingredients in a successful BOT project seem to be an
experienced and simple governing body and structure, an intact contractual agreement, a structured set of
regulations, a large and reliable consortium, an experienced construction organization, an uncorrupted
political regime and no interference from politics once the contractual agreement has been decided’ (p.104)
Involvement of the private sector in infrastructure projects does not always yield positive results. There are
a lot of external factors that influence the outcome, some of these are a good regulatory framework,
committed client, a well-developed private company (this is hard to come by in such projects because of
lack of experience), economy, contracts that encourage innovation. Stakeholders’ involvement is also
crucial no matter if the project is being carried out by the private sector. It is important to have the full
commitment of government and long-term interests of the firm involved in the BOT, for it to be a success.
In the case of a state-owned enterprise (SOE) the government is acting as the ‘producer of
commercial services’ and as ‘financier of the project using public money’. As a result there is a conflict of
interest within the government as a promoter of a project and a guardian of public interest. This is an
institutional or policy-framework deficiency for mega-projects. For a successful State Owned Enterprise
(SOE), lack of transparency can be improved by private capital in an SOE, even though it is a held by a
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government majority. An SOE has the advantage of “better opportunities for ascertaining that the
operator has an appropriate management structure” (p.128).
From what the authors say, it can be deduced that for both public and private majority holding
projects, there are factors extraneous to the project that determine its success or failure. Their emphasis is
on improving accountability, structure and implementation of megaprojects, which is to say leveling the
playing field so that the interests of marginalized social groups are included in the project planning.
The authors say that the crucial way of ensuring accountability in the public sector is through
transparency and in the private sector is through competition. They point out ways to strengthen the public
and private sectors while weakening the negative traits of both. Increasing stakeholder involvement,
identifying public interest objectives and defining the regulatory regime can strengthen the public sector. Its
negative traits can be weakened by not providing sovereign guarantees and to not be a project promoter but
one with only a regulatory role. The private sector can be strengthened by including risk capital and
involvement of the sector in performance based criteria of the contract. Controlling the involvement of
lobbies with rent seeking behavior can weaken its negative traits.
The difference between conventional and alternative approaches are that the latter attempts to
ensure that the “‘philosophy’ of not harming any group” is carried out and that there is a clear division and
definition of public versus company (private or public) responsibilities. The authors propose this can
happen through performance criteria, identifying risks and involving the public in the decision making
process. They also propose legislating a framework or policy for the development of megaprojects. The
authors recommend a list of documents and studies that should be undertaken before a megaproject is
undertaken, These include a Basic Policy Document, Draft Performance specification report, Pre-feasibility
study, Consultation Document 1, Consultation Document 2, Final performance specification document,
Decision document, Information document.
They say, for accountability, the following issues are overall important. The first is transparency
or making up the ‘democracy-deficit’. It includes keeping the public, media and stakeholder groups
involved, keeping the media involved, right to information and having proper funding for two-way
communication, which should not be used for public relations purposes. It should be a fair process. All
documents should be made public. Different participatory methods and models should be used. There
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should be extended ‘peer’ communities, consisting of experts from the scientific community (apart from
the project and with no stake in it) as well as stakeholders, people who will be directly affected by it, for
continuously evaluating the project from beginning to end. The second is performance specifications- a
goal driven approach. This is effectively defining the problem and then the solution. It is not based on a
technical approach but on goals that need to be reached for example, the overall improvement of traffic,
which is part of the transport policy or minimum disruption to existing inhabited areas- so the stakeholders
are involved at this level. The third is an explicitly defined regulatory regime. This refers to economic rules
of the country, region, locality and economic rules relating to complementary activities that are necessary
for the success of the project that will allow costs to be known upfront, will define risks, will identify
political risks, the economic controls necessary like price regulation (price regulation though may
ultimately be inefficient). The fourth is involvement of risk capital. Making risk capital an inherent and
necessary part of a project means that only those projects will be undertaken that have a demand and for
which private developers are willing to take a risk. It would also shift a substantial part of the financial
burden from the general public to interests that are directly benefiting from the project i.e. those who
benefit should take the risk. The last of these ensures that only viable projects are undertaken. This does not
mean a loss of control for the government; instead it discourages rent-seeking behavior and allows
government to, without conflict of interest, safeguard public interest.
Two of the above involve understanding the regulatory system and increasing public participation.
Their suggestion of involving risk capital may not necessarily ensure a successful project, as private
investors may also be prone to risk taking behavior. Their contribution is in the identification of practical
ways that public intervention can be undertaken and showing the importance of discourse (strategic
misrepresentation) in bending public opinion.

Common themes and Frame of Reference
The books reviewed show some common themes emerging- ‘The City Builders’ shows that local
government cannot rely upon private interests and short-term oriented growth to ensure economic stability
in a city and that long-term planned development is necessary for sustained prosperity. Regimes and the
interests of the various factions that form it have interests based on ideology and uncertainty and which
49
may only on the surface appear complementary. If one uses a Gramscian framework for analysis, then
the failures in the case studies of New York and London can be explained as mistakes in the strategies of
the state, which it subsequently corrects. The two case studies show that relying on economic interests
alone is not in the best interests of the political state. Hence the state has to be cognizant of ensuring that
the polity are part of the planning and bargaining processes if it is to strengthen it’s own position.
‘Reconstructing Urban Regime Theory’ is about redefining Urban Regime Theory within the
Regulation Theory framework while at the same time using it to inform the processes of regulation and
ground them in concrete events. It also discusses globalization and its effect on cities and emphasizes the
importance of the nation state regulation structure and processes in influencing the reactions and choices of
local states to global forces. It shows how Urban Regime Theory and Regulation theory play out at the
local, regional and national level and how the regulation processes of the dominant regime of accumulation
at the national level influences the actions of the Urban Regime at the local level, how regulation processes
can be seen at the local level, how the prevalent understanding is that Urban Regimes are coalitions formed
for maintaining political power by supporting private interests and how new forms of urban regimes are
being created at a regional level as a direct influence of restructuring of regulatory processes at the national
and global level. Their case studies show that each needs comprehensive studying of the accumulation
regime, modes of regulation and protests and negotiations in the political, economic, social and cultural
terrain to understand the complexity behind the outcomes.
‘Primitive Globalization’ underscores the importance of the regulation structure and agency at the
level of the nation state in promoting neoliberal economic development and undermining the social
structure that form its own base. Localities are then forced to engage directly with global economic forces.
‘Cities in the International Marketplace’ reinforces the idea that local regimes have various levels
of bargaining power that determines the course of development they want to follow and are not totally
subject to the vagaries of economic global forces.
‘Megaprojects’ points out that different factors come together, political structure, policies at
different levels of government, local governments and public officials, business interests and community
action that determine the initiation and realization of megaprojects. Urban regimes and social factors
determine the outcome of a megaproject causing the nature of megaprojects to change over time. Their
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continuation however reveals that the accumulation regime is still in power but with evolving modes of
regulation. The case studies show that the state at all levels of its institutions is constantly negotiating the
terrain of hegemony and correcting itself in line with successful struggles and directions of civil society
that arise directly from it i.e. that have not been coerced into accepting the agenda of the state.
‘Megaprojects and Risk’ illustrates how megaprojects over the last century have been misleading
in their costs and benefits estimates. It talks about risk taking and the persistent lack of accountability in
megaprojects and tries to prescribe ways to lower risk and increase accountability for future megaprojects.
The persistence of megaprojects in spite of being exposed as consistently unjustified based on cost benefit
analysis also are evidence of the regulation processes at work for the particular accumulation regime. The
extent to which there is active consent or apathy among the public is indicative of the cultural hegemony of
the institutions of accumulation.
All the books elucidate the effect of regulatory processes and actions and local regime processes
and actions, the role of politicians and public official personalities, the impact of public opposition and
popular movements at the grassroots level on the development of cities and projects. They all emphasize
the need for increased public participation in determining the course of development. Susan Fainstein and
Sites advocate the importance of grassroots movements and public participation in changing the course of
development and policies and Altshuler and Luberoff demonstrate the affect of popular opposition on
megaprojects. Savitch and Kantor discuss popular control and local culture as major factors in determining
what will be developed and how it will be developed. Flyvbjerg, Bruzelius and Rothengatter emphasize the
importance of public participation and involvement of stakeholder groups in increasing accountability of
megaprojects.
The literature focuses on development at the local, regional (occasionally) and national level and
globalization is mentioned as an external agency only in a few of the studies. ‘Spatial Structures of
Regulation’ by Marshall M.A. Feldman includes transnational processes as part of the spatial structures.
Bob Jessop in his paper ‘A Neo-Gramscian Approach to the Regulation of Urban Regimes: Accumulation
Strategies, Hegemonic Projects, and Governance’ talks about the applicability of a Neo-Gramscian
approach to regulation and regime theories at the global level (and regional level). Christopher Leo in ‘City
Politics in an Era of Globalization’, W. Dennis Keating in his paper ‘ Cleveland: The “Comeback” City-
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The politics of redevelopment and sports stadiums amidst urban decline’ and Andrew E.G. Jones in his
paper “Suburban-Defense Transition”, Territorial Reorganization in Southern California have similar
findings as in ‘Primitive Globalization’ and ‘Cities in the International Marketplace’, wherein the extent of
global influence in local matters is mediated by the nation state, the extent of its strength ensuring different
outcomes based on the particular political structure (vertical integration, fragmentation) of the country.
As mentioned earlier, Susan Fainstein, discusses briefly the ‘formation of interest’, which can be
interpreted as value traditions, ideology and personality and other such factors shaping the formation of
consciousness and are ‘the underlying causes of urban development.’ (p.16) Similarly, a number of papers
in ‘Reconstructing Urban Regime Theory’ try to redefine urban regime and regulation processes. Goodwin
and Painter emphasize the importance of cultural practices and discourse in understanding how regulation
occurs. To understand the importance of discourse as basic to the process of capital accumulation, they
propose a look at Raymond Williams’ ‘structure of feeling’ or Gramsci’s association that ‘new methods of
work as inseparable from new ways of thinking and feeling’ (p.27) Bob Jessop proposes a Neo-Gramscian
approach to regulation and regime theory, the importance of governance and the creation of the spatial
imaginary as ways to make further inroads into the two. The creation of economic subjects can well be
understood by the discourse not only of the urban regime but also the superstructure, extra-economic
organizations and the cultural institutions that facilitate the hegemony of the political sate. Gramscian state
theory can help explain the structure of regulation, the regime as well as means of regulation through a
study of its historical development. However to understand the variations or uneven or disparate
developments over time, a more detailed analysis has to be undertaken that is particular to the place.
Joe Painter says that regulation theory can be applied at the urban regime scale and that
Bourdieu’s concept of habitus, field and strategy can overcome the shortcomings of an Urban Regime
Theory based on rational choice theory. Gramsci’s formation and action by organic intellectuals can also be
seen to parallel this concept.
Feldman’s spatial structures of regulation probably give the most detailed account of the richness
of the playing field, which can account for the variations in the outcomes of regulatory processes and the
means that are available to them. They offer the possibility of understanding the myriad ways that the
52
political economic, social and cultural structures are undergoing change and open up the possibility of
analysis of development processes in the third world.
The books and theories discussed in the literature review are concerned with development and
development theories of the western world. Their case studies include countries, regions and cities of North
America and Europe. Susan Fainstein and William Sites study the development of New York, the authors
in ‘Reconstructing Urban Regime Theory’ cover both Europe and the United States and Christopher Leo
points out that Urban Regime Theory is particular to the United States. Cities in the International
Marketplace is a comparative study of Cities in Europe, United States and Canada. Altshuler and
Luberoff’s book is an exclusive study of megaprojects in the United States. Megaprojects and Risk
concerns itself more with projects in Europe but also includes some in the United States. It is the only book
to include some megaprojects in Asia as part of the comparison data.
Out of the different theories discussed by the authors of the books above, some are more
significant to the case of the Metro Rail in Delhi. Urban Regime theory that emerged as a response to
particular conditions of local regimes in the United States is the least applicable to the case study. Almost
all other theories can be seen as relevant to the case.
Here, I would like to introduce the paper ‘Agencies of Globalization and Third World Urban
Form: A Review’ by Pizarro, Wei, Banerjee that ‘proposes a theoretical framework to examine the effects
of globalization on urban form and urbanism in the third world’. The effects of globalization, that they
describe, have relevance to this study. The authors ‘conceptualize globalization as the removal of political
and physical barriers for the free movement of capital, people, information and culture among nations’.
(p.114) They discuss the affects of the agencies of globalization- movement of capital, people, information
and culture on urban form.
Two areas that are more relevant to this study are the agency of capital and agency of culture. On
the affect of capital on urban form the authors talk about two opposing types of urban development seen in
third world cities- ‘urbanization and exurbanization, concentration and deconcentration.’ They also say
‘Infusion of large amounts of foreign capital has enabled rapid and large-scale development reflected in the
ever-growing skyline; a coarser grain in the urban fabric; and, especially, the advent of megaprojects.’
(p.116) They also say that growing competition between cities in the third world for foreign investment has
53
made them take on an entrepreneurial role in selling the city more as a product than focusing on
improving the life of its citizens. This viewpoint comes close to Savitch and Kantor’s concept of global
sweep, local broom and on more of a market centered orientation rather than a social centered one. The
basic process of development then is applicable to both third world cities and first world ones. The authors
point to three views in the discourse on the effects of globalization on local culture- the first is of the
‘hyperglobalizers’, who believe that there will be homogenization, and the culture of the dominant system
will prevail, the second is that of the ‘skeptics’, who say that homogenization is only superficial and the
third is that of the ‘transformationists’, who speak of the emergence of a new hybridization of the different
cultures. (p.121) Savitch and Kantor and Christopher Leo hold views similar to the skeptics and to some
extent the transformationists, when they say that even though the physical appearances of first world cities
is converging because of the need to create spaces for postindustrialist services and the availability of
international capital to facilitate the development, there is divergence and difference politically, particular
to each case.
In discussing how globalization affects culture the authors talk of three views. The first as put
forth by Castells ‘suggests that in the globalization of culture, there is an integration of all messages in a
common cognitive pattern where different modes borrow codes from each other…newscasts are
constructed as audiovisual shows…’ (p.122) The second underplays the importance of ‘…media in
privileging the importance of capitalism. The emergence of a global culture, they argue, is the direct
outcome of late capitalism reshaping desires, creating needs, and opening up new arenas for capital
accumulation’. (p.122) The third focuses in the influence of modernity in facilitating cultural globalization.
The above can be described as the ground where different fields interact to create new ways of relating or
can be seen as the different processes that create economic subjects as in Jessop’s neo-Gramscian analysis
of regulations and regimes and his discussion on how ‘values, norms, visions, discourses, linguistic norms,
popular beliefs’ help in translating economic-corporate interests into ethico-political ones.
Agency of people is the effect of migration within and outside national boundaries. One effect of
international migration is the homogenization of physical space, yet also ‘ethnic diversity and multicultural
identity’ (p.118) The effect of globalization in internal migration is caused due to effects of changes in the
54
world economy and third world cities can be seen to be undergoing both impaction and de-densification.
(Savitch & Kantor, 2002, Banerjee, 1996)
In discussing the agency of information and communication and technology (ICT), the authors
mention the effects of information technology in
the blurring of urban places and electronic spaces, the disorientating and alienating effects, the
intensified social control and surveillance, and the social polarization and commercialization under
way in the Western cities. Meanwhile, developing countries and disadvantaged groups within
countries are increasingly alarmed by an emerging ‘digital divide,’ in which those without access
to the latest technologies and information are denied the opportunity to compete in the global
marketplace and enjoy the ICT-improved services. (p.119)
Feldman also talks about information as a production process and how new information
technologies are used more for proliferation of ‘routine information that is gathered and processed’ versus
‘innovative information that is produced’. (p.38) On the other hand, ICT cannot only be seen as ‘an internal
linkage and the connection of the whole system to a global economy.’ (p.120) but also as an alternative to
the disappearing traditional community. All the books reviewed, briefly mention the important role of
media even if they say that there is a bias towards promoting business interests and megaprojects in the
media.
Apart from revealing the changing regulatory structures of the state, one can see that a detailed
study of the discourse on development or megaprojects can be significant in revealing the processes of
formation and creation of interests, identity and values. It can expose ideology of the state, the formation of
fields, the transformations of culture, the ‘creation of the spatial imaginary’ and the shaping of popular
opinion which are necessary to processes of growth.
55
Chapter 3- Historical Context
1

This chapter attempts to document the conceptual stages of the Mass Rapid Transit Project
(MRTS) and the political, social, economic and cultural atmosphere that existed during the time through the
development discourse in the National Development Council meetings at the level of the Center,
represented by the Prime Minister and the Deputy Chairman of the Planning Commission, and at the level
of the union territory/state, represented by the Lieutenant Governor nominated by the President and the
Chief Executive Councilor or Chief Minister, at both national and local levels and related to the Mass
Rapid Transit Project (MRTS). It discusses the issues that emerged in the 1961 conference in UC, Berkeley
that focused on urban development in India and the Master Plan for Delhi carried out in association with
the Ford Foundation that included academic papers studying the assumptions underlying the Delhi Master
Plan 1962 like decentralization and regional development and their effect on national urban policy. It also
studies the Five-Year Plans and the policy direction that evolved in both regional development, especially
the National Capital Region and Metropolitan Transportation. This project subsisted within the confines of
the planning commission, various technological institutes and government bodies from about 1965 to 1994
when it finally reached the implementation stage and was opened up to the media and the public
The first part of this chapter gives the history of the Delhi Government and other agencies role in
MRTS studies that were undertaken from the late 1960’s. The second part of this chapter focuses on
Nehru’s speeches in the first twenty NDC meetings, which defined the agenda of planned development for
the country. This is followed by examination of the speeches of the following Prime Ministers and Deputy
Chairmen of the Planning Commission in the next thirty NDC meetings and the changing face of planned
development. The fourth part follows the speeches of the Chief Executive Councilors, Chief Ministers as
well as Lieutenant Governors of Delhi also in the NDC meetings and how they negotiated for resources
from the Center, the problems they emphasized and the direction of development they envisaged for Delhi.
The fifth part discusses the academic studies on the Delhi Master Plan and Urban Development Policy in
India. The sixth section follows the regional development policy and urban development guidelines in the

1
For Timeline of the Historical Context see Appendix
56
Five-Year-Plans. The sixth part discusses the academic studies regarding transportation and a mass rapid
transport system for Delhi. The seventh part is an examination of metropolitan transport policy and urban
development guidelines in the Five-Year Plans. The eighth part covers the Urban Transport Policy reflected
in the annual reports of the Ministry of Urban Development and also covers the history of the project in
organizations such as Rail India Technical and Economic Services that prepared the feasibility studies and
Detailed Project Report and the loaning agency, Japan Bank of International Cooperation.

A brief history of Delhi and the MRTS
Delhi underwent a series of changes in its institutional and political structure after independence.
It was declared a Part C State in 1952 and was given a Legislative assembly with a council of ministers.
This was disbanded and abolished in 1956 and it became a union territory, which meant it came under the
administration of the President and the Central Government. The Lieutenant Governor, who was nominated
by the President, administered it. In 1955 the Delhi Development Authority was created for ‘planned
development of the entire Union Territory’
2
but it was under the jurisdiction of the Central government. Its
planning for Delhi was thus not directly accountable to the citizens or even to the Delhi Government. It was
the body entrusted with the preparation of master plans for Delhi every twenty years. In April 1958, the
Delhi Municipal Corporation Act was enacted and the Municipal Corporation of Delhi was created, that
was also under the Central Government even though its members were elected from different parts of the
city. Over the years, more and more of its powers have been transferred to the Delhi Government especially
after the constitutional amendments of 1993, however its governing body is still nominated by the Central
Government and is not accountable to the Delhi Government. The two other local bodies at the time were
the New Delhi Municipal Committee and the Cantonment Board that had under their jurisdictions New
Delhi and the Armed Forces settled areas respectively. In March 1961, the public works department
responsible for building the largest road network in Delhi, among the cities of India, was established under
the Delhi Administration.
3
In 1966, a deliberative body known as the Metropolitan Council that consisted

2
Planning For The National Capital Region, Objective And Strategy For Development. P.B.Rai and Dr. O.P.Gupta,
Town and Country Planning Organization, New Delhi,1982.
3
http://www.pwd.delhigovt.nic.in/orgstruct.asp
57
of directly elected officials from various districts of Delhi was created to give Delhi more control over its
territory. However it’s advisory nature gave the Metropolitan Council little power over political and
economic issues related to the city.
In 1989 an independent committee recommended the formation of a Delhi Legislative Assembly
with full legislative powers and this was adopted by the Constitution in 1992. The Legislative assembly
consists of 70 directly elected officials and has the power to make laws on the different matters of the state
except Public Order, Police and Land.
4
Around the same time the Central government adopted its policies
of economic liberalization in India and the 73
rd
and 74
th
amendments were made to the constitution, giving
more power to local bodies.
The vast number of government institutions that were either under the Central Government or
Delhi Government created administrative, institutional and implementational problems of policies, projects
and planning in the city. In fact the various agencies that would require coordination for integrated planning
and monitoring the Transportation Sector would include Ministry of Urban Affairs and Employment, DDA,
PWD, MCD, NDMC, Cantonment Board, Land and Building Department, JJ & Slum Department,
Transport Authority, Delhi Transport Corporation (DTC), Delhi Vidyut Board (DVB) for power, MTNL
for telephones, Trans Yamuna Development Board (TYDB), Inland Waterways Authority of India (IWAI),
Irrigation and Flood Control Department, Indian Railways, DMRC and RITES, Gas Authority of India Ltd.
(GAIL), Indian Oil Corporation (IOC), Hindustan Petroleum (HPL), Delhi Urban Arts Commission
(DUAC) for urban form and aesthetics, Ministry of Surface Transport (MOST) falling under the purview of
either the central or state government.
5

4
http://delhiassembly.nic.in/PresentFormAssembly.htm
5
“Ninth Five Year Plan for the Transportation Sector for Delhi”, K.B.Rajoria, V.K.Sharma. Both were engineers at the
Public Works Departments, Delhi at the time. Journal of Indian Institute of Engineers, 1997. p.199-241
58

Figure 2- Master Plan Delhi 1962
Source: Delhi Development Authority, Master Plans, http://www.dda.org.in/planning/mpd-1962.htm#

Figure 3- Master Plan Delhi 2001
Source: Delhi Development Authority, Master Plans, http://www.dda.org.in/planning/mpd-2001.htm

59
Socio-Economic Profile of Delhi
6

The population of Delhi in 2001 stood at 13,850,507.
7
The total number of registered vehicles at
the end of 2002-03 included 1,154,638 cars and jeeps, 2,449,580 motorcycles and scooters, 44,164 auto
rickshaws, 12,359 taxis, 52,550 private buses, 3,300 Delhi Transport Corporation (DTC) buses and 77,224
freight vehicles. The census did not include cycles, cycle rickshaws or other non-motorized modes. The
Mass Rapid Transit System target for the 2002-07 10
th
five-year plan was to build 39 km of the metro rail.
The number of workers in the transport category in 1998 was 1211684, 40.82% of the total workers
followed by 24.62% in manufacturing and 23.91% in trade and commerce.
8
Delhi has the highest density of
roads and private vehicles in the country and the transport sector employs a large number of people.
Major Economic Indicators of the city show that that Delhi had the second highest growth in per capita net
state domestic product of 5% from 1995 to 2000
9
and the employment in Delhi was primarily in the service
sector by 2001.
10
Delhi though had a high rate of growth in the seventies, a lower rate in the eighties and in
the nineties its rate of growth increased much more than most other states. Overall, Delhi’s surrounding
western and northern states of Haryana, Rajasthan and Himachal Pradesh also experienced high growth

6
Unit conversions: 1 lakhs = 100,000, 10 lakhs = 1 million, 100 lakhs = 1 crore, 1 crore = 10 million
7
http://delhigovt.nic.in/dept/economic/populationdetail.asp#Delhi%20at%20a%20Glance
8
http://delhiplanning.nic.in/Socioecoprofiles/finalsocioecoprofile.pdf
9
Development trends in Delhi show that it had one of the highest rates of growth in net state domestic product at 5.1%
from 1960-61 to 1969-70 and 6.2% from 1970-71 to 1979-80. During the same periods however the per capita net state
domestic product was at 0.7% and 1.7% respectively. The rate of growth of gross state domestic product for Delhi
decreased from 7.6 in 1980-81 to 1990-91 and 6.7 in 1993-94 to 1998-99. The rate of growth per capita of gross state
domestic product decreased for the same periods from 3.2 to 1.6 respectively. Delhi had the second highest per capita
net state domestic product with an exponential growth rate of 5% from 1995 to 2000, from Rs 18023 in 1993-94 to Rs
24032 in 1999-2000. Delhi ranked second after Chandigarh at Rs. 35,705 per capita Net State Domestic Product in
1999-2000 amongst 35 states and union territories. It’s credit deposit ratio of 57.6% is ranked 11
th
. It’s Public and
Private Investment at Rs. 16,246 crores in 2001 ranked 21
st
. It’s per capita Public and Private Investment at Rs. 11,787
ranked 22
nd
. It’s Plan Outlays at Rs. 3,800 crores in 2001-02 ranked 10
th
. It’s per capita plan outlay at Rs 2757.02
ranked 8
th
. Its institutional investment at Rs 195.8 crores ranked 20
th
. It’s per capita institutional investment at Rs
142.06 ranked 26
th
. It ranked first with Rs. 61306.79 Crores Total Credit Utilized in March 2001. Delhi ranked second
after Chandigarh at Rs. 44480.08 for per capita Total Credit Utilized. Delhi’s Credits to Deposits ratio from All
Scheduled Commercial Banks increased from 75.13% in 1994 to 82.9% in 2001 and it was ranked third amongst the
states in the highest C.D. ratios.
10
The Percentage Change in Percentage Share in Net State Domestic Product from 1987-88 to 1999-2000 showed a
54.37% decrease in the primary sector, a 43.14% decrease in the secondary sector and a 12.07% increase in the tertiary
sector. The Percentage Change in Percentage Share in Employment from 1987-88 to 1999-2000 showed a 25.34%
increase in the primary sector, a 6.34% decrease in the secondary sector and a 0.75% increase in the tertiary sector. In
1987-88, percentage of employment in the primary sector was 4.2%, secondary sector was 25.2% and tertiary sector
was 70.6%. In 1993-94 the primary sector declined to 2.2%, secondary sector increased to 27.7% and tertiary sector
declined to 70.1%. In 1999-2000 the primary sector increased to 5.26%, secondary sector declined to 23.61% and
tertiary sector increased to 71.13%.
60
whereas Uttar Pradesh on the east has a low rate of growth. According to an analysis by the planning
commission this growth in the nineties has been attributed to two possible reasons; the decreasing role of
redistributive centralized planning and the entrepreneurial role of states under the new economic policies.
11

Overall, even though the share of primary sector output declined from 1987-2000, the employment in this
sector, primarily agriculture increased. The employment decline in the secondary sector and increase in the
tertiary sector were also not proportional to the increase in the productivity of sectors themselves. The
tertiary or service sector in Delhi then employs over 70% of the population. It is the only city amongst 23
states to do so.
Delhi was sixth among 23 states in the decline in the Percentage of Population Below Poverty
Line, which fell over 40% from 1973-74 to 1999-2000. There were major declines in both rural and urban
poverty in the city. The same was experienced in the surrounding western states.
12

Human Development improved drastically in Delhi from 1951 to 1991. Delhi’s population
increased from 1,744,000 in 1951 to 13,783,000 in 2001 and the percentage decadal growth of population
that had been an average of approximately 52% from 1951 to 1991 declined to 46.31% from 1991 to 2000.
Though the sex ratio increased in favor of females and Infant Mortality Rate with a steeper decline in
female than male infant mortality rate, these were not significant gains. Delhi did experience a sharp
increase in the literacy rate, which went from 38.4% in 1951 to 81.82% in 2001. It is among the top five
literate states in the country. Access to safe drinking water increased with major improvement in rural
areas. Delhi was also among the top five states for plan expenditure for the social sector in 1981-82 and
1997-98. The Human Development Index in Delhi also showed an increase from 0.495 in 1981 to 0.624 in
1991. Its rank amongst the states went from 3
rd
in 1981 to 2
nd
in 1991 after Chandigarh.
13

11
http://www.planningcommission.nic.in/plans/planrel/fiveyr/10th/volume3/v3_ch3.pdf Chapter 3, Development
Trends, p.37
12
Percentage of Population Below Poverty Line fell from 49.61% in 1973-74 to 8.23% in 1999-2000. The Poverty ratio
of Rural and Urban changed from 24.44% and 52.23% in 1973-74 to 0.40% and 9.42% in 1999-2000, respectively.
13
Percentage decadal growth of population has been 52.47% from 1951 to 1961, 52.9% from 1961 to 1971, 53.0%
from 1971 to 1981, and 51.45% from 1981 to 1991 with a decline to 46.31% from 1991 to 2000. The sex ratio
increased in favor of females from 768 females per thousand males in 1951 to 821 females per thousand males in 2001.
The Infant Mortality Rate dropped in Delhi from 67 in 1961 to 51 in 2001 with a steeper decline in female than male
infant mortality rate (66 to 55 in males and 70 to 51 in females from 1961 to 1981). Delhi experienced a sharp increase
in the literacy rate, which went from 38.4% in 1951 to 81.82% in 2001. It is among the top five literate states in the
country. The difference in literacy rates for Male and Female declined from 19.5% in 1961 (Male 70.4%, Female
50.9%) to 12.4% in 2001 (Male 87.4%, Female 75%). Access to safe drinking water increased from 92.97% in 1981 to
61
In Infrastructure, Delhi’s per capita consumption of electricity was amongst the higher end in
1999-2000. It has the highest road density (Road Length per ‘000 Sq. Kms. of area) amongst all states and
this was much higher than even the second in line, Chandigarh. By 2001 it had the highest rail density and
its rail density ranks 21
st
amongst the states indicating the high density of population. Delhi also has the
highest telephone density and the highest rate of growth in tele-density amongst states. Delhi has the
highest number of population under one post office since 1980-81 but the area under one post office is the
second lowest (before Chandigarh) indicating again a high population density.
14

Plan expenditure declined from 52.26% in 1981-82 to 49.74% in 1991-92 and increased to 51.9%
in 1997-98 in the Social Sector that includes Education, Health, Water Supply & Sanitation, Urban
Development, Information, Welfare and Labour. In the Infrastructure Sector it increased from 38.37% in
1981-82 to 43.9% in 1991-92 and declined again to 38.94% in 1997-98. The Plan Outlay and Expenditure
of the Government of Delhi under the 10
th
five-year plan 2002-2007 was Rs 23,000 crores ($ 4708 million)
and under 2003-04 annual plan was Rs 5025 crores ($ 1029 million) (approved outlay). Resources for the
Annual Plan came mainly from tax revenue (Rs 6214 crores or $ 1272 million) and loan against small
savings (Rs 2012 crores or $ 412 million) and also from non-tax revenue (Rs 643.54 crores or $ 131
million), additional resources (Rs 325 crores or $ 67 million) and central plan assistance (Rs 428 crores or $
88 million). Contribution by public enterprises ran in the negatives with was at negative Rs 293.54 crores
($ 60 million). Additionally the Delhi Jal (water) Board was at negative Rs 410 crores ($ 84 million). Of
the tax revenue the maximum came from sales tax at Rs 4400 crores. Sectoral Composition of state income

95.78% in 1991 with major improvement in rural areas (from 62.26% in 1981 to 91.01% in 1991, Urban Areas
improved from 94.91% in 1981 to 96.24% in 1991).
14
Delhi’s per capita consumption of Electricity was amongst the higher end in 1999-2000 had increase from 299.2
KHz in 1974-75 to 653.2 KHz in 1999-2000. It has the highest road density (Road Length per ‘000 Sq. Kms. of area)
amongst all states and this increased from 7984 kms in 1971-72 to 17,924 kms in 1996-97. The road density of Delhi in
1996-97 was 2544 kms over the next in line, Chandigarh, which was approximately three times over Pondicherry,
ranked third. Per 2001 it has the highest rail density with 134.36 Route kms per 1000 sq.kms. However its rail density
at 1.45 per lakhs of population ranks 21
st
amongst the states. Delhi also has the highest telephone density with 15.27
phones per 100 person in 2000, and this has increased threefold from 5.56 in 1987-88, the highest rate of growth in
tele-density amongst states. Delhi has the highest number of population under one post office since 1980-81 and this
number has increased from 11350 in 1980-81 to 16295 in 1999-2000. However, the area under one post office is the
second lowest (before Chandigarh) at 2.43 sq.km in 1999-2000
62
in 2001-02 was 76.95% from the tertiary sector at Rs 54,132 crores, 21.59% from Secondary sector at Rs
15,189 crores and 1.46% from the primary sector at Rs 1,029 crores.
15

Delhi’s cottage industries include zari zardozi (silk entwined with gold), stone carving, paper craft,
papier-mache and metal engraving. Other small industries include plastic and PVC goods, sports goods,
radio and TV parts, razor blades, textiles, chemicals, fertilizers, soft drinks and hand and machine tools.
New industries include jewelry, export, embroidery, silver vases, textile, fashion, corporate industries,
Business Processing Outsourcing (BPO), Information Technology (IT), Information Technology Enabled
Services (ITES) and many others. Electronics, telecommunications software and ITES form part of the new
industrial policy. Delhi has many business districts but two-Connaught Place and Old Delhi stand out as
financial centers for their retail, banking, media offices and wholesale activities. Nehru Place is emerging
as an IT and banking center. Delhi’ rural areas contribute to the agricultural sector with wheat, jawar, bajra
and paddy. Other cultivation includes vegetables, mushroom and floriculture. Livestock products include
milk, eggs and meat. Delhi is the center of the country’s major universities. These include the All India
Institute of Medical Sciences, University of Delhi, Indian Agricultural Research Institute, Indian Institute
of Technology, Delhi, Indira Gandhi National Open University, Jamia Milia Islamia, Jawahar Lal Nehru
University, School of Planning and Architecture, Shri Lal Bahadur Shastri Rashtriya Sanskrit Vidyapeetha,
TERI School of Advanced Study and Indian Institute of Foreign Trade.
16
Delhi’s service sector includes
trade, real estate, hospitality including tourism, hotels and restaurants, financing, banking, insurance,
business services and other service centered industries.
17

Two major policies that the government has formulated and that are featured on the Delhi
government website are the Information Technology Policy and the Transport Policy. The transportation
policy was formulated in 2001 and it includes a comprehensive study and recommendations of
transportation infrastructure for the National Capital Territory of Delhi. However, a lot of work on
transportation in Delhi had already started after Delhi was given more powers, similar to a state, in 1992.

15
http://delhiplanning.nic.in/Socioecoprofiles/finalsocioecoprofile.pdf
16
The Penguin India Yearbook 2005, Compiled and Edited by Derek O’Brien, Penguin Books India, New Delhi, 2005
17
http://www.delhicapital.com/
63
All the development trends indicate that Delhi is slowly moving to a tertiary economy with 70%
of its workforce employed in the service sector though it still maintains a small manufacturing base. The
recent Municipal Corporation drives have attempted to move polluting industries to industrial land use
areas along Delhi’s peripheries. Building an efficient transport and information technology network is a
corollary to the service sector. The Delhi Government has focused sharply on these two very important
aspects of the process of globalization, despite it being at the center of a ‘developing’ country. Delhi has
been in a constant state of ‘impaction’ where there is large-scale migration from rural areas to urban areas
but no infrastructure to accommodate them, thus resulting in the development of slums and squatter
settlements. This has slowed down over the years with other towns in the National Capital Region gaining
population. There is urban growth and the satellite towns around Delhi like Gurgaon, Faridabad,
Ghaziabad, NOIDA are similar to boomtowns.

Figure 4- National Capital Region 1999, Source: Delhi 1999- A Fact Sheet NCRPB
64
Though the idea of a national capital region had been discussed in the 1950’s and 60’s and a
plan was formulated by the Town and Country Planning Organization with the Ministry of Works, Housing
and Urban Development in 1971 to control growth in the city of Delhi and increase growth in surrounding
areas, it was only in1985 that the Union Parliament passed an act establishing the National Capital Region
Planning Board (NCRPB) that included the states of Haryana, Rajasthan, Uttar Pradesh and National
Capital Territory of Delhi for planned development of the national capital region. The board was
established to deal with the problem of population pressure and increased migration to the city of Delhi. It
initially did a number of studies including a carrying capacity study that was aimed at deconcentrating
Delhi and promoting growth in the surrounding region
18

19
and a transport study for the region that
proposed ‘to build an efficient transport network within the NCR and link it to a mass transit system in the
city of Delhi.’
20
Other than this the NCRPB was mainly ineffective till the last decade because ‘the
constituent states fail to see reason in providing top priority to the NCR proposals and investing their
resources in projects that directly benefit Delhi.’
21
The Delhi Government approached the Central
Government to do the feasibility study for an MRTS for Delhi by RITES in 1989 this became the most
recent basis for the Metro project. Delhi government and Central Ministry of Urban Development
contracted the Rail India Technical and Economic Services Limited (RITES) to conduct the feasibility
study for a mass rapid transit system for Delhi. RITES had received Rs. 20 crores ($ 4 million) as
consultancy fee for the project and 200 staff members had been working on it for seven years since 1989.
22

However, numerous agencies had already done studies for a mass transit system before the RITES
feasibility study completed in 1990. Delhi’s Lieutenant Governors and Chief Ministers introduced
development concerns for the union territory of Delhi in the NDC meetings, which included the need for a

18
http://ncrpb.nic.in/overview_evolution.htm
19
Role of indicators in monitoring growing urban regions: The case of planning in India’s National Capital
Region.Banerjee, Tridib, American Planning Association. Journal of the American Planning Association; Spring 1996;
62, 2; ABI/INFORM Globalpg. 222
20
http://www.itls.usyd.edu.au/conferences/thredbo/thredbo6/verma.pdf Verma, Sushil. Modalities of a Public Private
Partnership In implementation of Delhi’s Mass Rapid Transit System. Institution Rail India Technical & Economic
Services Ltd, India. p.1
21
Urban and Regional Planning Practice in Independent India: Retospect and Prospects. S.K.Kulshreshtha, 46
th
NTCP
Congress, Mysore, ITPI, New Delhi, p.5
22
Japanese experts coming to finalize Rs. 10,000 crore MRTS project. A.N. Bajpai, The Observer, New Delhi, 6 July
1996.
65
mass transit system for the city and for the formation of a national capital region. At the same time that
the discussions of the National Development Council were taking place, studies were being undertaken,
initiated by the Planning Commission. There were three bodies that were responsible for progress reporting
and evaluation for projects initiated by the planning commission- the Committee on Plan Projects, the
Program Evaluation Organization and the Plan Coordination Section of the Planning Commission. Of the
three bodies the Committee of Plan Projects (COPP), set up in 1956, was responsible for creating study
teams for specific projects after an initial survey of possible projects. The study teams consisted of
members of parliament and state legislatures, government officials and public professionals.
23
COPP
initiated the study team for metropolitan transport and the team with the help of the Central Road Research
Institute carried out the transportation and traffic studies for Delhi from 1969- 1972.
24
Per RITES, since
then approximately 35 studies were carried out by various agencies. Apart from the 1969 study some of the
other studies that were undertaken include Town and Country Planning organizations’ studies on a) MRTS-
Network-Traffic 1981, undertaken in 1973 & b) Concept Plan, MRTS, Network & Traffic Study,
undertaken in 1974, Metropolitan Transportation Team, Ministry of Urban Development 1974,
Metropolitan Transport Project, Ministry of Railways, 1974, Planning Commission Study Group 1982,
Indian Railway Study Group 1986, Task Force, Ministry of Urban Development 1987, Planning of Mass
Rapid Transports System for Delhi, CRRI (1989), Traffic and Transportation Study in 1981 by DDA for
Preparation of Perspective Plan Delhi 2001, Delhi Urban Arts Commission Study 1984.
25

23
http://planningcommission.nic.in/reports/genrep/50NDCs/vol2_15to25.pdf “The COPP was formed by the National
Development Council in 1956 to evaluate implementation of selected development projects, evolve suitable techniques
for securing economy and efficiency in the execution of development projects in different sectors, promote
development of suitable machinery for continuous efficiency audit in individual projects and in agencies responsible
for their execution and make the results of studies and investigations generally available. It was also expected to ensure
that suggestions made in the reports prepared by it were implemented. The COPP investigations which were intended
to cover all sectors of the economy have produced reports on a very wide range of subjects including Community
Development and NES, Irrigation and Power Projects, Industry and Mining Projects, Metropolitan Transport and
Transport Services, seed multiplication schemes, grain storage, slum clearance, projects in the social sector,
performance budgeting, area development, feasibility studies and a variety of management studies etc” It’s members
included the Home Minister as Chairman, Finance Minister, Planning Minister, Dy. Chairman, Planning Commission
and the Cabinet Minister at the Centre concerned with the area of study and two Chief Ministers as Members for review
of the work of the Study Teams and the implementation of the recommendations.” (p.410)
24
http://www.delhimetrorail.com/corporates/ecofriendly/Chapter%201.pdf Per Chapter 1 regarding Urban
Environmental Engineering by RITES ltd., the first traffic study was carried out by RITES in 1957 called ‘Origin-
Destination Survey of Traffic of Greater Delhi’ that proposed the Ring Railway system and which was used in
preparation of the Delhi Master Plan in1962 which was projected for 1981.
25
Japanese experts coming to finalize Rs 10,000-cr MRTS project, A N Bajpai. The Observer, 6 July, 1996
66
In the 5
th
Five-Year Plan 1974-79, an outlay of Rs. 50 crores had been provided in the budget of
Railways, for the Metropolitan Rail Transport Scheme.
26
The Lieutenant Governor of Delhi, P.K. Dave,
who was interviewed by the newspapers regarding the project after the Union Cabinet approved it in 1996,
cited this comprehensive study by Indian Railways in 1974, out of all of the above studies, that proposed an
MRTS as the beginning of the project, He said it was not taken up because of ‘high capital cost and lack of
a coherent policy on funding such systems.’
27
Lieutenant Governor P.K. Dave, commented that the MRTS
was proposed in 1974 because a capital surplus had been generated due to the price difference between
petroleum products in the domestic market versus the correspondingly lower rise in international oil prices.
“It was suggested that the surplus generated from this hike would be used in providing multi-modal
transport system in the big cities but since the country was going through a lean financial patch, the money
was diverted to the main budget.” He went on to say that ‘policy making bureaucrats and the political
executive’ caused the delay of 30 years.
28

A month before the MRTS was cleared by the Union Cabinet in September 1996, an article in The
Hindustan Times, reported on a meeting of the NCRPB, chaired by the Prime Minister H.D. Deve Gowda
of the Janata Dal coalition that was in power for two years from 1996 to 1998, for an ‘11,000 cr NCR
scheme to decongest Delhi’. The article reported that the total fiscal plan for the NCR was Rs. 22,000
crores. Besides the various decisions for the NCR like having a common pin code, 50% captive power to be
made available to satellite towns of the NCR by the participating states, setting up a committee to
standardize taxes, setting up of a regional center office in Delhi for relocation of commercial activities into
other areas of the NCR, involvement of private sector for infrastructure development, the meeting also
decided to cover all satellite towns of Delhi under the MRTS. This plan was to be worked out by the
Railway Board. For transportation connection of the entire region, the Chief Minister of Delhi, Sahib Singh
Verma, proposed a peripheral urban expressway connecting to the 4 national highways that would relieve
Delhi of heavy traffic by diverting it. He also requested the PM to help speed the implementation of the
MRTS. The Chief Minister of Haryana, Bansi Lal, proposed that extending the NCR boundaries would

26
http://planningcommission.nic.in/plans/planrel/fiveyr/index9.html 5th Five-Year Plan, Chapter 5, Paragraph 5.103
27
Delhi Metro Rail. Prashant Teleng and Darpana Athale. Indian Architect and Builder, Mumbai, January 2001.
28
MRTS is answer to Delhi’s traffic problems: Dave. The Pioneer, New Delhi, 18 September, 1996.
67
help in decongesting Delhi and pointed out that other towns in the NCR, which formed an integral part in
the plan to decongest Delhi, had not been included in the MRTS.
29

The loan for the Delhi Metro was initiated by the Ministry of Urban Development with Japan’s
Overseas Economic Cooperation Fund (OECF) later known as the Japan Bank of International Cooperation
(JBIC). Since Delhi was not a full-fledged state, in 1994 the Delhi Metro Rail Corporation (DMRC) was
formed through a centre and state partnership. The Delhi Metro received 60% of its funding through a soft
loan by the Japan Bank of International Cooperation all of which was transferred to the DMRC as and
when needed. The exchange risk for the loan was to be divided equally between the Delhi and Central
governments.
The MOUD Secretary N.K.Singh, an Indian Administrative Service officer who later was a
member of the Planning Commission from 2001-2004 gave a brief history of the project when he said that
the State Government approached the Government of India (GOI) for a feasibility study in 1989 with 60%
cost borne by the state and 40% by GOI. It was completed in 1991 and in 1994 the Union Cabinet (with
Congress at the center and P.V. Narasimha Rao as Prime Minister) cleared it ‘in principle’ and authorized
the Urban Development Ministry to carry out a detailed project report which was completed in 1994. The
DMRC was set up in mid 1995 and the environmental report was finalized in November 1995. “We
immediately discussed funding for the project with OECF, Japan.” In May 1996, the project was approved
for 60% funding by an 11-member team of Japanese experts. Crores of rupees had already been spent on
doing 17 studies.
30
The project was cleared under the United Front Government with Prime Minsiter H.D.
Deve Gowda, in September 1996.
Delhi government and Central Ministry of Urban Development contracted the Rail India Technical
and Economic Services Limited (RITES) to conduct the feasibility study for a mass rapid transit system for
Delhi. RITES had received Rs. 20 crores ($ 4 million) as consultancy fee for the project and 200 staff
members had been working on it for seven years since 1989.
31

29
11,000 cr NCR scheme to decongest Delhi. Anil Anand. Hindustan Times, 20 August 1996.
30
MRTS gets green signal after 20 years. The Pioneer, New Delhi, 18 September, 1996.
31
Japanese experts coming to finalize Rs. 10,000 crore MRTS project. A.N. Bajpai, The Observer, New Delhi, 6 July
1996.
68
The numerous MRTS studies taken up by the different agencies of the Central Government as
part of the Five-Year Plans and eventually the recommendation by the NCRPB for a mass transit system of
Delhi as part of a regional transportation plan laid the groundwork for the Delhi Government to initiate the
final feasibility study. The desire to build the MRTS existed very strongly within the Planning Commission
and various Ministries of the Central Government, the NCRPB and the Delhi Government. It’s
implementation was dependent on the constitutional amendments in regards to Delhi and local bodies, the
economic reforms of the 90’s and political savvy of the Delhi government, regardless of party politics, to
seize the opportunity at the right time by using the NCRPB’s recommendations. The Delhi government
acted as facilitator by conducting the MRTS study with the Central government, pushing for approval by
the Union Cabinet and forming an equity partnership with the Central government for this infrastructure
megaproject for the city. The Central government acted as facilitator through its willingness to cooperate
with this project related to its long gestation period as part of the metropolitan transport policies in the five-
year plans and the MOUD’s initiative for gaining major financial support through external assistance from
the JBIC.

The first twenty meetings of the National Development Council
The Planning Commission was initially called the National Planning Committee and it was set up
in December 1938. Its 15 members consisted of four merchants and industrialists, five scientists, three
economists and three with a political background, of which one was a Gandhian, one a labor leader and one
Nehru himself.
32
It officially became the Planning Commission in March 1950 and it ‘was charged with the
responsibility of making assessment of all resources of the country, augmenting deficient resources,
formulating plans for the most effective and balanced utilization of resources and determining priorities.’
33

The National Development Council (NDC)

consisting of the Prime Minister, Members of the Planning
Commission, the Union Ministers, Chief Ministers of States and Administrators of Union Territories,
provided guidelines for the five-year plan system that were adopted by the Government of India and

32
Chatterjee, Partha. Development Planning and the Indian State. Ed. By Byres, Terence J. The State, Development
Planning and Liberalisation in India. Oxford University Press, Walton Street, Oxford OX2 6DP, 1997. p.83-84
33
Planning Commission of India. http://planningcommission.nic.in/aboutus/history/about.htm
69
assessed its progress on a regular basis. It also deliberated over the allocation of resources and the social
and economic policy affecting national development.
34
The planning commission formulated each five-year
plan with inputs from the representatives of all the states and union territories during the development
council meetings. In the NDC meetings too, the representatives of the different states and union territories,
apart from commenting on the five-year plan drafts proposed by the planning commission, presented issues
concerning their own regions.
The NDC meetings were presided over by the chairman, the Prime Minister of India. The Deputy
Chairman, who was the head of the Planning Commission, presented a summary of the plan agenda. Nehru
chaired the first twenty meetings of the NDC and his ideology is very clearly reflected in the structure and
content of the meetings. T.N.Krishnamachari was the deputy chairman and chairman of the planning
commission throughout this time. Also during this time the Congress Party was in power at the centre. All
Lok Sabha (Lower House) members of the Parliament elected from Delhi were from the Congress Party. It
was also in power in the Legislative Assembly of Delhi till it was dissolved in 1956 and Delhi became a
Union Territory. Brahm Prakash was the Chief Minister of Delhi and he attended the first three NDC
meetings but did not comment on the plan. From the fourth to the seventh NDC, Gurmukh Nihal Singh was
the Chief Minister. The Chief Executive Commissioner, A.D.Pandit attended the eighth and ninth meetings
and from the tenth to the twenty-fourth NDC meetings there was no representation by Delhi.
35

In the First NDC meeting in November 1952 Jawahar Lal Nehru, apart from laying out the general
responsibilities of the NDC, now in the preamble of the NDC, called on the Chief Ministers to work
together for the country to ensure the realization of the five-year plans. His understanding was revealed in
the contradictory representation of the nation state wherein the ‘country’ was defined by ‘political
organizations, economists, industrialists, women’s organizations, and so on’ and the ‘democratic process’
was defined as ‘consulting them’ before finalizing the draft report. However, the democratic process of
implementing the plan, was to make it a ‘people’s plan’, translated into a ‘language they understood’,

34
http://planningcommission.nic.in/reports/genrep/50NDCs/vol1_1to14.pdf Preface by Monteck Singh Ahluwalia,
Deputy Chairman, Planning Commission India.
35
http://www.eci.gov.in/SR_KeyHighLights/key_highlights.asp
70
modified to a ‘popular style’ and explained ‘through discussions, talks and speeches’.
36
The country and
the people then were not one and the same, the country being represented by the dominant elite and the rest
by the people who were outside the planning process and unable to comprehend the plan in its current form.
The democratic process was represented by participation of the dominant elite on the one hand and by
dissemination of information to the people, those outside it, on the other.
Nehru’s opening speech for the third NDC meeting in November 1954, further elucidated his
ideology. It highlighted his core ideas; the imperative of industrialization, an emphasis on change itself and
progress above all and viewing the means as constantly changing processes that facilitate change;
investment and industrialization as the biggest needs of the country; an emphasis on social good, ‘in the
sense of public ownership of means of production for the benefits of society’, versus private gain, which he
deemed as immoral; an emphasis on democratic and peaceful means of bringing about this transformation
and an emphasis in development of both cottage and heavy industries.
37

He said that there had been definite achievements in the three years of the plan, and that ‘these
could stand comparison with achievements elsewhere’ but not with ‘the productive capacity of the United
States, United Kingdom and Soviet Union because conditions are different; they had a long run’. By
bringing them up in the speech, however, he did set them up as the models for development that India as a
nation should aspire for.
He then said ‘thus far, we have been preparing for planning’ because ‘we did not have all the
information, data, statistics, which are essential for planning’ and that planning was ‘wider and deeper’ and
‘not merely giving priority to all things you wish to do’. Planning was ‘to have a definite picture of where
you are going to’ which may not be ‘doing good deeds’ or ‘putting up good enterprises', nor did it need to
be a ‘rigid picture; it may be a changing picture as we gather experience, information, etc’. He continued
saying that in the past this criteria had been ‘welfare of the Indian people’, however it too involved
‘ultimately some specific and definite views about the structure of society that you are aiming at.’ Starting
by defining the underlying statistical and hence scientific and objective basis of planning, he defined it as

36
http://planningcommission.nic.in/reports/genrep/50NDCs/vol1_1to14.pdf p.1,2. 1rst NDC meeting.
37
http://planningcommission.nic.in/reports/genrep/50NDCs/vol1_1to14.pdf Summary Record of Discussions of the
NDC Meetings, p. 22-24
71
being not just moral behavior in the now, but the structuring of society based on a future vision.
He described this vision by talking about the current times as an ‘all-exciting period in world
history’ due to the ‘vast changes’ brought about by the industrial revolution. He said that there was a
process of change in the world at an ‘ever-faster pace’ and that ‘we, in India…are excessively conservative’
in our ‘social thinking’, mentioning that the government and the planning commission had been described
as too revolutionary. He silenced the criticism by describing the critics as conservative against the
background of a world that not only had undergone revolutionary change due to industrialization but also
was still undergoing tremendous transformations.
Speaking about his trip to China and the similarities between the two countries he again revealed
his vision of an industrialized India that would only be brought about by a psychological change in the
people, towards progress and change; the assumption being that the people at present had been and were
unwilling to change in mentality and social behavior that itself was closeted as static and therefore an
unsatisfactory state in opposition to change, progress and planning for industrialization.
Now, we are different in other matters, but we are under-developed countries, a poverty-stricken
people more or less, chiefly agricultural, trying to industrialize ourselves. The way they deal with
them will inevitably be partly the same-as we deal with them or they deal with them, they are
undoubtedly different too-but the point is that the mere fact of dealing with these vast populations
in changing the face is an exacting operation- countries and peoples-changing them not at the top,
not by law passed by Parliament here-but changing the human will, bettering, and all that, and
taking him out of that static condition of mind and social habit which has been his lot for a long
time.
38

Thus having established the importance and centrality of change as the future of the nation state,
he said that the planning commission should have a ‘dynamic outlook of change, change of every kind-
political, of course, economic and social’.
Going on to talk about private enterprise, he said that ‘we wish to encourage it’ but that it is
‘completely out of date; in modern thinking it also considered immoral. I consider it immoral, i.e., basing
your society purely on the acquisitive instinct’. Pertaining to private enterprise, he said that the day of the
acquisitive element in society ‘has not passed but is passing’. Referring to socialism in India he said that
‘Here, other forces increase it’; a fairly vague explanation. Coming back to the aims of planning, he said
that

38
Ibid. p.23
72
we should be clear, broadly speaking, about the picture we are aiming at. The picture I have in
mind is definitely and absolutely a Socialistic picture of society. I am not using the word in a
dogmatic sense at all, but in the sense of meaning largely that the means of production should be
socially-owned and controlled for the benefit of society as a whole.
39

This view, though understandable due to the reaction to colonial exploitation of the country and
the economic exploitation of the masses in the industrialized and capitalist countries, sequestered private
enterprise as solely acquisitive, without any social benefits and unable to be held accountable. Also this
understanding of the role of private enterprise and social ownership of means of production left the
government with no alternative but to take on the development of heavy industries that were the basis of
the industrial revolution.
He then continued to say that change should be brought about ‘democratically and peacefully’ and
so that was the method to use in moving ahead with ‘some kind of work.’ In other words, industrialization
and the social transformation related to it would have to be brought about in a democratic and peaceful
manner unlike communist systems. Consensus would have to be built towards the industrial enterprise
without active coercion and through means of persuasion.
Talking about the urgent need to industrialize, he said that India and other countries in similar
situation were ‘on trial… and we shall be judged in the ultimate analysis by what we achieve’. By
invoking judgment, he sealed and made unquestionable the ultimate aim to industrialize.
Nehru went on to say that ‘we want progress’ and as an ‘industrially underdeveloped country’, it is
indicated by an increase in the rate of investment, in production and employment and these in turn are
related to the rate of investment that depends on ‘industrialization and industrial growth at a very rapid
pace.’ He said that even though industrialization would help employment ‘statisticians tell us how much it
costs-to employ one man say, in a heavy industry, it comes to a big sum-Rs. 10,000 or something like that.
If you work out the problem of employing all the unemployed in India at that rate, it is some astronomical
figure.’ Despite this contradiction, he said that investment in industrialization was essential and eventually
it would help employment by boosting ancillary services. He concluded that he was convinced that small,
cottage and village industries would be able to, in the meantime, provide immediate low investment
employment.

39
Ibid. p.23
73
In India as it is today, we have laid stress, sometimes perhaps rather casually, sometimes
because we believe in it, on small industries and cottage industries. I have not a shadow of doubt
in my mind that the employment problem can only be dealt with by that. I mean to say that it will
be dealt with by other ways too but we will not solve the unemployment problem, until we lay the
greatest stress on small and cottage and village industry, and also by attaching the greatest
importance to heavy industries. It is not a question of giving a secondary place to either of them.
Both have to be tackled. In that way only I think we can go ahead fairly fast both in regard to
production and in regard to employment and they act and react on each other.
40

This argument was able to do two things. Firstly, it justified the high investment needed in heavy
industries as an aim unto itself and to be carried out by the government, without the responsibility of
immediate benefits to society and secondly, it shifted instead the responsibility of providing the majority of
employment to the people outside the government; to small, cottage and village industries. It also left no
room for alternatives as any argument against centralized planning and industrialization would be attributed
to an inability to comprehend planning.
He then talked about Indigenous Machines, saying that the country should not import machines
and if at all, it should be so they can then be produced in India. Talking about suggestions from
‘Government Departments’ about importing machinery because it would cost less, he said that they had
a peculiar way of calculating to show how it is cheaper to get things from abroad…That I call a
perverted mind, absolutely perverted. Anything that comes from abroad is more expensive than
anything produced by Indian labour even though it may cost ten times as much.
Going on, he said, that other than ‘power and speed’, machine producing industries were the most
important, more than ‘your river valley schemes’. He said that it was important to balance heavy industry
with production of consumer goods and that ‘you cannot go on putting burdens on your people.
Nevertheless, you must always realize what you are aiming at.’ Nehru’s long term goal of industrialization
as an objective of the nation state, precluded the possibility of investment, as the ‘Government
Departments’ had shown, in importing machine components of heavy industry, that would have allowed for
larger investment in the small, cottage and village industries that he himself proclaimed would solve the
employment problem in India. Though he realized the importance of consumer goods to improve people’s
living conditions, his insistence on returning to the original aim of industrialization made investment in
heavy industries the primary motive of the nation sate.
Talking about the need for trained personnel like doctors, engineers etc. in India he said that their

40
Ibid. p. 24
74
training took time and hence even ‘half or quarter trained individuals’ could be useful for people who
were in dire need for their services. He also talked of technical institutes for training people for specific
tasks. As an important aside he said that the profession of politics was the only one that had did not require
training-‘You will find highly qualified and highly trained people and totally untrained people also, because
there is no standard laid down whatsoever.’ This perhaps was a gripe against the newly elected political
body in the parliament of the country that did not have the same backgrounds as the political elite and who
would have to be convinced of the importance of the scientific methods and planned development. On the
other hand in the NDC meetings it could have also served to quiet dissent by laying an emphasis on training
and standards for politicians and hence privileging some who had been trained to certain standards over
others.
Finally, he thought that community projects and national extension services were revolutionary, if
‘worked well’ and that they were needed to balance out the ‘big individual enterprises’. He said that ‘we
have not paid enough attention to these rural areas in the past and unless we bring them up to a certain level
we shall always be weighed down by them.’ By bringing up the opposition between community projects as
a grassroots effort in opposition to individual heavy industries as public sector undertakings, he defined the
role of the nation state as one of industrializing the country. Even though in his speech he emphasized both
cottage and heavy industries and both community and big individual enterprises, Nehru’s view of ‘these’
rural areas as needing improvement to a ‘certain level’ or else becoming a deadweight betrayed his own
understanding of the rural as outside of and dependent on the industrial enterprise represented by the nation
state.
In his closing speech, after the Union and State Ministers had given their comments and reports,
he said that there should be more frequent meetings and that the states should not use the forum to discuss
their states but to discuss ‘planning’ as members of the council.
The speech was laying the groundwork for the government to take on the task of industrialization
via a peaceful and democratic process and this broader common goal and its enormity ensured that the
states that constituted the centre would be united under it. Equally important was the fact that the allocation
of the country’s resources or investment was managed by the planning commission through the five-year
plans and was devoted to industrialization. National Development Council meetings to discuss the agenda
75
for the five-year plans prepared by the planning commission became the participatory ground in which
the states representatives were initiated into the ways of planning with the goal of industrialization and they
debated for the resources over the projects of planned development- in Bourdieun terms, it became a field
of planned development whose membership was ‘constructed, negotiated, bargained over, ventured’ by the
ability of the individual habitus of the Chief Ministers of State, Union Ministers, Administrators to conform
with, modify and circumvent this regulation process for centrally controlled industrialization.
For example, Hanumanthaiah, the Chief Minister of Mysore, in the third meeting of the NDC
suggested
that the National Development Council should meet more often so that planning would be a joint
endeavour both on the plane of thinking and taking decisions to enable them to implement the
Plan in their respective States, the Chief Ministers ought to be taken into confidence in a greater
measure. Perhaps it was necessary to modify the composition of the Council to some extent. It was
important to avoid over-centralisation. He also referred to the difficulties of the States in finding
resources to meet their share of expenditure on the schemes sponsored by the Central Government
and suggested consultation with the States before directives in this regard were issued. The
financial effects of Central loans on State budgets should be considered. The Finance
Commission, proposed in the Constitution, should be set up well in advance so as to bring the
State budgets and Central programmes into harmony with one another.
41

C.D.Deshmukh, the Union Finance Minister commented in this meeting that ‘considerable
sacrifice’ had been made in authoritarian countries for planned development and ‘India was almost the
only country practicing genuine democracy where planning on a sub-continental scale was being
attempted.’
42

Following is Nehru’s response to this
On a point raised by Shri Hanumanthaiah, the Chairman pointed out that planning was cent per
cent centralisation and nothing else. The centralised authority responsible for planning might be
big and there might be joint planning by all the States for the whole of India. But decisions by
such an authority should be taken in an overall way and given effect to jointly. The Central
Government and the State Governments should be looked upon as part of the same living
organism, which had a duty to look after the country as a whole.
The Chairman observed that because of compulsion the authoritarian approach might yield certain
results which a democratic approach did not yield. But this did not change the basic economic
factors for long. There was such a thing as an economic approach, apart from the compulsory
aspect, and this approach was worthy of consideration. The real question to consider was how the
communist countries got their resources. It would be of interest to study the system of taxation in
communist countries. We could profit from the experience of other countries.
Hence the states were made to realize again and again that the aim of the Five-Year Plans was for

41
Ibid. p.29
42
Ibid. p.34
76
the benefit of the Nation state. Nehru claimed that democracy would not be in the way of planned
development for long and that economic factors were more crucial to planned development than political
systems.
From 1952 to 1964, the NDC met twenty times to discuss the development agenda of the country.
Nehru’s views as expressed in the third meeting remained more or less unchanged and he reiterated them in
almost every speech. Overall, he talked more about community plans in the fourth meeting and also
stressed the need to motivate people by making them aware of the larger goals of the five-year plans
through films, media and publicity.
43
By the fifth meeting the agenda had been firmly placed.
In the sixth meeting the Chief Minister of Delhi, Gurmukh Nihal Singh brought the need for
resources to urban areas like Delhi and also said that that Delhi was gaining resources from taxation in
recent years and that year they had had ‘a windfall with respect to sales tax on account of the International
Industrial Exhibition’. Delhi, with a strong industrial and mercantile base was always among the more
developed parts of the country.
In the seventh plan in January 1956 Nehru emphasized the need to look within India for ‘material,
mental and intellectual resources’. Commenting on the issue of conflict between employment and heavy
industries he said that in the long run, it didn’t matter; planning would ultimately solve this problem by
increasing the ‘tempo of progress’ (sic)
44
Except for one mention up to the seventh plan, the representatives
from Delhi only commented on the larger plan. Nehru’s focus for the NDC to concentrate on India in its
totality remained the driving force for the meetings.
In response to the food crises and dwindling resources, in the eighth NDC meeting in December
1956, Nehru’s emphasis shifted to the agricultural sector. Giving the examples of Hungary and Poland and
their emphasis on the industrial sector at the cost of the agricultural sector he said that ‘in any country
agriculture was the pivot; in India, it was infinitely more the pivot of what was intended to be done and the
slightest slackening on the agricultural production front was likely to be fatal to planning.’
45
He also
referred to the effect of international development on exports and imports and suggested that the country

43
Ibid. p.70
44
Ibid. p.134
45
Ibid. p.174
77
could get more foreign exchange by increasing exports, while decreasing imports. He said that ‘welcome
external help might help’ the resources needed by the country. In his concluding remarks he talked about
the symbiotic relationship of the center and states and said that the centre may not be in touch with the
ground reality. ‘In the Central Government, they were thinking of India in a rarified atmosphere and it was
necessary that they should be brought to ground by the more practical knowledge and experience of the
Chief Ministers.’
46

In the ninth meeting in June 1957, he stated, more in keeping with his original ideas, the view that
the role of the NDC was ‘to achieve a measure of uniformity’ between centre and states. ‘He pointed out
that planning for a big country like India functioning under a federal system of government with a large
amount of autonomy for the states, was a difficult task’
47
He again said that the aim of the NDC was to
develop an ‘all-India outlook’. In this meeting too, the Union Finance Minister, T.T.Krishnamachari, on the
crisis of foreign exchange in the country and the increasing import of food grain, suggested that less
investment be made in heavy industries and more on small industries, which would also be beneficial for
employment. Nehru, commenting on the speech by the finance minister said ‘that an attempt should be
made to obtain more accurate figures to facilitate judgment regarding the trends in employment’
48
and this
became part of the final conclusions regarding employment. This was a case of using statistics and numbers
to avoid answering the real question with the implication that after looking at the numbers it would be
revealed that it was not necessary to disinvest in heavy industries.
In the tenth meeting in November 1958, Nehru emphasized the importance of statistical data in
determining the course of planning. The Finance Minister, Morarji Desai, talked about external assistance
as a major resource for the budget.
In the 11
th
meeting, the approach paper to the 3
rd
Five Year Plan was discussed. Regarding
external assistance, Nehru said that though he was grateful for the assistance by the International Monetary
Fund and World Bank to deal with the recent fiscal crises, he believed that India would follow its own

46
Ibid. p.189
47
Ibid. p. 197
48
Ibid. p. 217
78
path.
49
Citing an ‘eminent economist’ he said that the agricultural sector should be developed so that the
profits from it could be utilized to develop the industrial sector. He emphasized giving authority to
panchayats and economic authority to cooperatives and said that it was important ‘to trust the peasant and
give him power and authority’ in order to increase agricultural productivity. Talking about the private
sector, he said that it would be encouraged as long as ‘it did not get in the way of the public sector’. The
struggle to keep investing in heavy industries in the face of fiscal shortages was summed up as a choice
between producing consumer goods and depending on external assistance for industrial development on the
one hand or keeping consumerism low through democratic means and depending less on external assistance
on the other.
50
The emphasis was also on curbing population growth and increasing the agricultural sector.
In this meeting, Nehru mentioned the increasing disparity in the population and said
Today, one faced demands of all kinds—for higher salaries, higher wages and so on. But the
people whose needs were the greatest seldom made any such organized demands on
Government—people who had to go even without good drinking water and lacked the simplest
amenities of life. It was, therefore, necessary that our Plans increasingly provided for the supply of
these basic amenities to our people. It was not merely enough to tell them that, at some future date,
they would be better off.” Talking about the high salaries of employees in private foreign firms in
the country, he said it was pushing up salaries of the public sector.

49
Ibid. p.285 “The Chairman observed that the Annual Meeting of the International Monetary Fund and the World
Bank held recently was of international significance from several points of view because it brought the problems of the
so-called under-developed countries before a world forum. They were naturally grateful for the help in the shape of
loans, credits etc., which helped to get them over the present foreign exchange difficulties. They had however, always
to remember that it was the real effort made in the country that counted. They should not forget that the burden had to
be shouldered by themselves and in their own way. Referring to comments in the foreign press that Indian planning
was very ambitious and that India should take the advice offered to her and not make mistakes again, the Chairman said
that he would like to make it perfectly clear that they would follow their own advice whatever the consequences. It was
amazing that any person should think in terms of influencing or directing India’s policy. While they would profit by the
advice of those who knew more, they had their own views as to how the country should grow and they would adopt
that course.”
50
Ibid. p.333 “First, the Third Plan will have to provide for an acceleration of the effort undertaken during the two
earlier plans. In other words, the tempo of development has to be kept up and improved upon to the extent possible.
Secondly, there has to be special emphasis on planning development in a manner that would make the economy
“selfsustaining” as early as possible. This involves setting up and expansion of industries that will produce the
machinery and equipment needed to manufacture the machines and capital goods required for further industrialisation.
In this connection there are two sets of considerations. Under this pattern adequate restrictions on consumption will
have to be faced and consumption standards will have to be relatively kept down. Progress depends on the extent to
which this can be achieved under democratic conditions, for the larger the investment in the ‘more remote’ stages of
production, the larger and more varied is the ancillary investment required to support and make full use of these
processes, and the greater, therefore, is the sacrifice involved in consumption ‘for the time being’.
In the second place, until the base has been built up, industrial development remains largely dependent on foreign
exchange being made available from outside for setting up the industries required. Quicker progress towards the “self-
sustaining economy” in the sense of its being technically equipped to make the capital goods and equipment it needs
will raise the foreign exchange component of the Third Plan and will necessitate a larger measure of external
assistance. On the other hand, if this obstacle to economic development is not got over as early as possible, the period
of dependence on external resources tends to be prolonged. From both considerations it is necessary to lay out the
investible resources during the Third Plan period so as to achieve the requisite ‘balance’. The idea of a ‘balance’ in
development is of course not a fixed one and its precise content has to be varied from stage to stage as development
proceeds.”
79
This could well be the criticism for investing in heavy industries and his earlier argument that
doing so would eventually increase the ‘tempo of progress.’ Even though in the tenth meeting Nehru had
attempted to explain the increase in salaries in the public sector not on the internal structure and labor laws
but on external factor of high salaries in the private sector, in the next meeting he was more critical of the
public sector undertakings. In the next meeting, his emphasis was on agriculture and he even mentioned the
‘Manthra’ technique developed in Lucknow to desalinate land and so to make it available for agricultural
production. The third five year plan discussed in the 14
th
NDC meeting in March 1960, lay emphasis on
agriculture, industry, employment, increasing national income by 5%, reduction of inequalities in income
and wealth and more even distribution of economic power. In this meeting he repeated almost exactly, the
issues that he had raised in the third meeting, saying that the country was now familiar with planning, that
more statistical data had been collected. He added to these that some factors could not be measured like
‘the human factor and factors of work’ and that ‘it would not be possible to forecast what disturbing factors
might influence the amount of hard work that the country could put into planning’. This seemed again to
shift responsibility away from centralized planning and scientific methods to factors that were beyond
control. Mentioning that questions had been raised against the ‘whole conception of planning’, he
explained it by emphasizing the scientific basis of planning removed from political ideology and working
towards raising living standards.
51

51
Ibid. p.512,513 “It seemed to him that at this particular time not only of India's history but also of the world's history,
such an attitude was peculiarly illogical and unreasonable. Though our planning was naturally governed by our way of
looking at things, it was something apart from what might be called political ideologies and political conflicts. Planning
was a scientific process and demanded a practical approach. Ultimately, what was wanted was raising the standards of
living of the people by increasing production, by the better distribution of what was produced and also attaining a
position when we could sustain the growth of our economy by our own efforts. In the President's annual address to
Parliament, some reference had been made to reaching the stage of a self-generating and self-feeding economy. It
would be hard to say when exactly one could reach that stage. However, one certainly had the example of other
countries having reached that stage and even gone beyond it. Broadly speaking, these were highly industrialized
countries and communities which took full advantage of modern science and technology for the purpose of production,
distribution etc.”
5. “The processes of production were not governed by any ideology: rather they were governed by scientific
discoveries and knowledge common to every ideology, capitalist, socialistic, communist or any other. The uncommon
factor was the person who denied science and technology; and, what we were seeing in India, in a small way, was the
denial of these which was comprised in the denial of planning.”
6. “We had indeed made very creditable and almost remarkable progress in various sectors despite the habit in India to
condemn our progress or lack of it. Such criticism was so loud that one was almost reminded of the technique of loud
shouting to suppress the truth, which was associated with certain authoritarian regimes in the past. But the fact of the
matter was and he would say so with confidence that India had made remarkable progress in the last few years. There
had, at the same time, been remarkable failures or remarkable lack of success too. The mere fact that we had progressed
so far had also brought new problems and new difficulties before us. We had also to pull out our country from its
traditional ways of living with the help of modern techniques. He had not used the word "traditional" in ethical or moral
80
In the next meeting there was discussion on making the plan smaller and in the 16
th
meeting in
September 1960, he called for the unity of all states. Discussing the possible conflicting circumstances in
the international arena, he stressed that internally there should be an atmosphere of cooperation. He once
again talked about the broader common goal of industrialization and emphasizing the importance of
panchayats, panchayati raj and cooperatives, he said that good functioning of these systems depended on
the people themselves and not on officials of the government. In this meeting for the first time he was
critical of statistics not taking into account small industries. One of the most important issues that he
brought up and that reveal how the NDC meetings had become the forum for states to negotiate with the
center for resource allocations, was his comment on not wanting to hear about difficulties of the states. This
also revealed how the NDC meetings were becoming a bargaining ground for resource allocation. It was
also a commentary on the a disturbing disconnect and imbalance between the need to address the serious
hardships being faced by the states and being aired in the NDC forum and the creation of overall plans at
the central level that did not sufficiently address individual state issues.
Each State had its own problems, its own demands. He did not know that it did much good to
discuss each State's problems here, because that could be more easily discussed separately with the
Planning Commission but of course if there was any important aspect of it, it should certainly be
mentioned. Otherwise, they used to get into the habit of hearing a long story of the States'
difficulties and this succession of such stories had often produced a very depressing effect on him,
possibly on others too, naturally because they laid stress on the depressing aspects in the hope of
getting more help from the Planning Commission. It was far better for them, therefore, to go into
these details separately and at leisure and lay stress on the broader aspects.
52

In the 17
th
meeting in January 1961, he talked about the physical and financial aspects of planning,
and also mentioned the need to produce oil within the country. He emphasized education and technical
institutes and the ‘importance of austerity for promoting savings.’ For the first time also regional
development was mentioned though only as long as it was not detrimental to general development. In the
next meeting in June 1961, Nehru, responding to criticism about planning, said that he was surprised at it
and thought it ‘unrealistic and contrary to current thinking’. He talked of separatism harming the unity of

terms but as referring to methods of production and utilization of nature's forces. We had other difficulties too, such as
foreign exchange and the like. The biggest difficulty that we had to face was perhaps the tendency for prices to rise.
While this tendency was a normal concomitant of an advancing economy, price rises beyond certain limits had to be
curbed and prevented. There could be no real advance towards higher standards of living without greater production
and without adoption of modern techniques. It was equally clear that this could be done only by industrialization on a
big scale and all along the line.”
52
http://planningcommission.nic.in/reports/genrep/50NDCs/vol2_15to25.pdf. p.59
81
the country and its planned development. This meeting marked another change in his ideas and this was
the emphasis on education.
The Chairman said that he attached so much importance to education that he would rather scrap a
few engineering projects than reduce outlay on education. He had come to feel that education was
the basis for everything and on no account should it be allowed to suffer.
53

After the Chinese invasion in 1962 and in the nineteenth meeting of the NDC in October 1962,
Nehru talked about setting up a defence council in light of the invasion. However he again emphasized the
importance of accelerating development of the agricultural and the industrial sector, the importance of
education and the need to keep stability in prices of consumer goods. At the same time he encouraged the
growth in grassroots cooperatives and citizens committees for keeping peace and order.
In his speech in the twentieth NDC meeting in November 1963, Nehru emphasized the importance
of agriculture as the basis of growth in the industrial sector and was sad that the land reforms needed for
agricultural growth could not be enacted fully because of certain pressures. Giving the example of Punjab
he stressed the importance of agriculture and small-scale industries versus the heavy industries. He
emphasized again education and the ‘human aspects of planning’
54
and told the council members that there
should be an emphasis on education and hard work instead of squabbling among the states.
Over the years we can see that Nehru’s basic vision for planned development with the aim of
industrialization based on a socialist and democratic system remained the same though there were
alterations in attention on agriculture due to the food crises, on taking planning to the people and on
austerity for the government in response to the increase in non-plan expenditure and labor union demands
and small industries and education. External crises like the shortage of food grains or dwindling internal
resources were reflected in his speeches as he shifted the focus to agriculture but even these were to be
subservient to the larger goal of developing heavy industries. The message of educating people about
planning was for them to understand the delayed rewards of industrialization especially for immediate
needs like employment and for them to enthusiastically participate in the development project. He
repeatedly stressed the importance of initiative for development by the people at the grassroots levels but
failed to include or discuss mechanisms that would allow this to happen and further on took away

53
Ibid. p.184
54
http://planningcommission.nic.in/reports/genrep/50NDCs/vol2_15to25.pdf p. 265
82
accountability from the government by saying that the people should not depend on officials with the
implicit assumption that people were not taking initiative but were depending on the government. This was
especially tragic as there was no mention of institutional reforms or plans that would ensure ‘power and
authority’ to the peasant. The private sector was always to be in a non-competitive relation to the public
sector, which held monopoly over the major heavy industries that made up the industrial sector. By the
early 1960’s his superficial focus had shifted from agriculture to education, to the extent that he considered
cutting back on engineering projects in order to allocate resources to education. Perhaps this was a response
to criticism of planning and the view that through education, the importance of planned development for
industrialization would be better understood and therefore propagated enthusiastically by the people
themselves. In his last NDC meeting, he emphasized the importance of agriculture and small-scale
industries in bringing prosperity to the people and ultimately also to the industrial sector, from the case of
Punjab. He, also in this meeting, stressed the ‘human face of planning’ rather than the machines of planning
that had been for him the backbone of industrialization.
One of his main rhetorical tools over the years against criticism for planned development was in
labeling any thoughts contrary to the same as anti-modern and absurd. There was no doubt in his remarks
the realization of the inevitability of industrialization and of India’s place in the international economy and
in essence he knew that this process itself was removed from political ideology as can be seen in the
following words that he spoke in the 14
th
meeting.
The processes of production were not governed by any ideology: rather they were governed by
scientific discoveries and knowledge common to every ideology, capitalist, socialistic, communist
or any other. The uncommon factor was the person who denied science and technology; and, what
we were seeing in India, in a small way, was the denial of these, which was comprised in the
denial of planning.
55

However, he did propagate a socialist ideology and mixed economy for the nation state with a
strong emphasis on centralized planning as the framework of planned development and this was largely
responsible for the trajectory of planned development in India. This path was between communism and
capitalism; it was modernity and Gandhian village economy and democratic representation; it was the
creation of a single nation state composed of immense diversity. Yet superimposed by planned

55
http://planningcommission.nic.in/reports/genrep/50NDCs/vol1_1to14.pdf p.536
83
development of industrialization with a focus on centralized control, it failed to create the economic
conditions for the poorest to prosper. Planning though, became a very strong field in itself, a permanent
institutional and structural framework and the idea of planned development was absorbed into the political
system. As described earlier, Chief Ministers lobbied for resources for their individual states, for a greater
role in decision-making and for influencing the direction of the five-year plans but it was very much within
the field of planned development. Megaprojects including infrastructure projects like building dams, power
plants and railways were in the realm of planning and they came under the purview and redistributive
measures of the center with the states giving advise, direction and contributing to the resources if the
project was within their territory.

The next thirty-seven years in the National Development Council
Planning, the planning commission and the NDC meetings had been solidified in the emerging
nation state and even after the passing away of Jawahar Lal Nehru, they continued uninterrupted. In the
twenty-first meeting of the NDC in October 1964, the Prime Minister, Lal Bahadur Shastri stressed the
importance of keeping Nehru’s legacy of planning alive. There was however a difference in style and in the
order of priorities. Shastri, in his address to the NDC, suggested specific strategies for the economic
improvement of the people. He said, giving numbers for growth in national income for the last five year
plan, that growth had been slow and a serious review needed to be undertaken of ‘achievements and
failures’ in the past in order to draw appropriate policies for the future. He suggested the use of indigenous
methods for agriculture, improvement of irrigation and flood control technologies and administrative
improvements for farmers to voice their demands at the state and central level. He emphasized better
administration for streamlining prices in the public sector. He appealed to the council for paying more
attention on how resources could be mobilized for the fourth five-year plan and how the tax structure could
be changed for the agriculture community so that the people understood what they were paying for. He
stressed the need for more taxes for larger agriculturists. This was perhaps the first concrete intervention
that would cause some social upheaval, as the landed elite would have to contribute in the redistributive
efforts of the plans. He suggested that state governments should start looking at restructuring their policies
surrounding exports in order to increase influx of foreign exchange. He also supported an increase in the
84
public sector in the area of consumer goods in light of the then recent shortages. Again, this was a first
attempt at changing economic policy to encourage foreign exchange. In a move that strengthened the idea
of planning, he constituted a 20 member National Planning Council that would advise the planning
commission. It would consist of scientists, engineers, economists and other experts and would be chaired
by the Deputy Chairman of the Planning Commission. This council would assist the latter in developing
comprehensive plans for the industrial and agricultural sectors with an emphasis on employment. The plans
would be detailed enough to be monitored closely in order to assess successes and failures and assign
responsibility.
There was a movement from the general to more specific solutions to the problems facing the
country, even within the industrial sector. The emphasis on agricultural technology, empowering farmers,
cutting back public sector expenditure and increase in consumer good production, on agricultural reforms
for taxing larger agriculturalists and to increase foreign exchange and a continuous preparation and
monitoring of plans were steps towards planning that reached the grassroots level, that met peoples needs
and that attempted to generate resources through restructuring and enforcement of policy. There was no
mention of investing in heavy industries. This was the biggest change and even though the goals remained
the same, the strategy was redefined, redirected and solidified.
After the sudden death of Prime Minister Lal Bahadur Shastri, Indira Gandhi, the daughter of
Jawahar Lal Nehru, became the Prime Minister from the Congress Party. In a reversal to Nehru’s ideals in
the 23
rd
NDC in August 1966, she reemphasized the importance of the industrial sector over the agricultural
sector as well as an emphasis on defence. In the next two meetings, she emphasized ‘relying more and
more on our own resources’ by a decrease in imports and a simultaneous increase in exports and
development of industry for production in areas where import was required.
In the 25
th
NDC in May 1968, Indira Gandhi reiterated the importance of self-reliance and
resource mobilization since there was a need for non-project aid versus project aid and it had been seen that
it was more difficult to get external assistance for the former.
In the 26
th
NDC in April 1969, Indira Gandhi’s emphasis was on self-reliance, reduction in
imports, mobilization of domestic resources, changes in land tariffs and tax structures, enactment of
tenancy laws for small farmers, more taxes from landed farmers and minimum wage for all with special
85
emphasis on schedule castes and tribes and balanced regional development. Along with the Delhi CEC,
V.K.Malhotra, other members of the NDC were also critical of the budget allocations in the fourth 5-year
plan and so it was decided that it would be reassessed.
In the 27
th
meeting in March, 1970, Indira Gandhi’s focus at the beginning of the speech was on
nation building in the face of the numerous political parties that had emerged and the fourth 5-year plan
was to be the tie that bound all the states together.
56
She emphasized that planning was the basis of unity
among the states.
Over the five meetings after becoming Prime Minister, Indira Gandhi initially followed the same
aims that Nehru had set. However in the last couple of these, not only did her speeches get longer but she
started talking about specific goals, of which tenancy for small farmers, increased taxes for landed farmers,
establishing minimum wage and emphasis on improving conditions of schedule castes and tribes were
changes in the methodology of planned development. This was similar, at least in emphasis, to Shastri’s
framework in that it talked of issues other than industrial growth. The political climate, especially after the
Congress split in 1969 with Indira Gandhi forming the Congress (I) faction, was also reflected in her
speech where she invoked the planning process to gain consensus in the political sphere now teeming with
political parties.
In the NDC meetings the conversation was still about planned development, but it was becoming
more fragmented with the states individual issues and claims, that Nehru had fought so hard to minimize
for a centralization agenda, taking precedent over a united front.
The 28
th
NDC meeting in May 1972 started with the approach to the 5th five year plan. Indira
Gandhi had started a campaign to remove poverty in the ‘garibi hatao’

(remove poverty) movement and it
was reflected in the agenda for the fifth 5-year plan.
57
It said that all attention till now had been paid to the

56
http://planningcommission.nic.in/reports/genrep/50NDCs/vol3_26to35.pdf Indira Gandhi in her introductory speed at
the 27
th
NDC meeting in March 1970- “With the emergence of different political parties in power in the States, the
need for a Plan was greater than before. It is only a Plan which is widely discussed and broadly accepted, that can bind
all the constituents of the Indian federation together and impart coherence and viability to the economic and social
policy.” (p. 46)
57
http://planningcommission.nic.in/reports/genrep/50NDCs/vol3_26to35.pdf Indira Gandhi in her introductory speech
in the agenda paper for the fifth five year plan “The basic premise of our Five Year Plans has been development along
socialist lines to secure rapid economic growth and expansion of employment, reduction of disparities in income and
wealth, prevention of concentration of economic power, and creation of the values and attitudes of a free and equal
society…The assumed conflict between growth and social justice in earlier Plans has been premised on arguments
which assert that whatever surpluses can be mobilised from the richer classes are needed for investments primarily
86
rate of growth but that it was possible now to tackle poverty directly and achieve growth. The entire
proposal for the plan and Indira Gandhi’s speech focused on the removal of poverty and unemployment.
This was the culmination of the brewing changes mentioned in the previous meetings and was a departure
from the previous broader common goal, where the benefits of industrialization were to trickle down to the
people.
In the 29
th
NDC council, January 1973, in a stand more in keeping with Jawahar Lal Nehru’s
vision and the course of development that the planning commission had taken since then, Indira Gandhi
stressed ‘removal of poverty and attainment of self-reliance’ but also a need to expand basic industries like
steel, coal, chemicals and machine building. She said that science and technology should become part of
the mindset of people. The Deputy Chairman, D.P.Dhar elaborated on this
58
, by rationalizing that people’s
lives would improve only if along with an increase in income there was a simultaneous increase in
consumer goods that were readily available and that development had to be reconciled with the original
goals of social and economic equality. In her closing speech, Indira Gandhi, made a reference to class

directed at raising the future rate of growth. There might have been some justification for this view in the initial years
of planning. However, the economy now has reached a stage where larger availability of resources makes it possible to
launch a direct attack on unemployment, under-employment and poverty, and also assure adequate growth.” (p. 67) and
Pranab Mukherjee, Deputy Chairman “The level of development outlays on employment intensive programmes,
enumerated in paragraph 9, during the Fourth Plan is anticipated at Rs. 3600 to Rs. 3900 crores. The outlay on these
and other employment intensive programmes indicated in paragraph 10 may have to be about twice as much in the
Fifth Plan. The national Plan for the provision of basic minimum needs in education, public health, nutrition for pre-
school children, drinking water supply, rural home sites, rural roads, rural electrification, and slum improvement and
clearance in the larger towns may involve a further outlay of Rs. 3000 to 3500 crores during the Fifth Plan. It may be
noted that these programmes are also labour intensive. The above two sets of programmes will involve an outlay of the
order of Rs. 10,500 to Rs. 11,500 crores during the Fifth Plan. While these estimates will have to be firmed up by
detailed calculations, nonetheless they are fairly indicative of the order of effort that could make a substantial impact on
employment and on the progress towards the objective of Garibi Hatao.” (p.74)
58
http://planningcommission.nic.in/reports/genrep/50NDCs/vol3_26to35.pdf The Deputy Chairman D.P.Dhar- “The
Approach paper identified two basic objectives of the strategy of development, namely, removal of poverty and self-
reliance. There was, therefore, no contradiction between the earlier document and the present exercise. What had been
done now was, as was contemplated earlier, that the main ingredients of the strategy for redistribution of incomes in
favour of the poorest sections of the population had been integrated into an overall pattern of growth. Only a sustained
increase in the levels of production, not only in agriculture but also in the core sector of industry, would enable us to
give the people a better standard of living. On the other hand, our specific socio-economic situation imposed on equally
clear imperative of intensifying and accelerating the broad historical thrust for social and economic equality. Thus,
these two basic concepts had to be welded together in a internally consistent model of growth in the seventies. This was
what the Approach paper attempted to achieve. Naturally in this strategy there were many elements of continuity with
the basic formulations in the previous Plans. This was because the fundamentals of the strategy for India's development
as a prosperous, self-reliant and socialist society were thought over deeply and elaborated clearly by Pandit Nehru. His
basic insights into the problems of under-developed colonial economies and into the solutions for backwardness and
poverty remained as valid today as when they were first given expression to in the strategy of the Second Plan. His
emphasis on the capital goods section and on other basic industries like fertilizers, oil and power had given to the
country a strong and diversified industrial base. It was the comparative neglect of this sector in the later years that had
created many difficulties, which were being faced today. The Fifth Plan would restore Pandit Nehru's basic in-sight to
the position of centrality in the planning process. It had been possible to do so because of the direction provided by the
Prime Minister to the Planning process in the country.” (p.113)
87
struggle and oppression by the middle and upper classes, when she spoke out for participatory planning
at the grassroots level.
59

In the 30
th
NDC meeting in December 1973, though the general aims were similar, the focus was
on promotion of village and cottage industries and external assistance in the form of ‘co-operation in
productive programmes’. The retreat to older aims in the NDC meetings along with the subsistence of the
goal of removal of poverty seemed difficult to understand. An explanation could be that direct attack on
poverty was ineffective because there was no clear process of how it could be achieved. But even with the
emphasis again on industrial growth there was still an emphasis on the poor, small industries and different
forms of external assistance than that of megaprojects. In a way, it was an inkling of what was to come.
Two years later Indira Gandhi declared emergency in the country, which suspended the
government and gave her authoritarian power over the country. The democratic process suffered but at the
same time productivity in the public sector increased and Indira Gandhi pointed this out in the 31
st
NDC
meeting in September 1976.
60
She had previously introduced the 20-point economic program to improve
the living conditions of the weaker sections of society. An authoritarian system of government, much like
what Nehru and Deshmukh had discussed in the third meeting, had replaced democracy in the previous
years and through forced development had improved the implementation and functioning of the
industrializing country. This was not far removed from Indira Gandhi’s suspicion of the educated class, her
realization of the connection between industrialization and growth at one level and industrialization and
poverty at another level. In the suspension of democracy, her aim had been to improve efficiency in the
public sector and there was success towards that end, but not much was done to improve the conditions of

59
http://planningcommission.nic.in/reports/genrep/50NDCs/vol3_26to35.pdf “Involvement of the people, she said,
was one of the very basic needs of planning. Some people seemed to think that the ordinary man was illiterate and his
opinion did not count. This was a wrong way of looking at things. It was this poor and unlettered man who had fought
and sacrificed for freedom and had shared whatever little he had at times of crisis. Mere literacy or formal education
had nothing to do with an understanding of difficulties and local problems. This had to be kept in mind when drawing
up the Plan. It was the relatively better off class and not the real poor and the backward who resorted to agitations and
indulged in destructive activities.” (p. 138)
60
http://planningcommission.nic.in/reports/genrep/50NDCs/vol3_26to35.pdf “These measures had been followed by
the new Economic Programme launched last year with the objectives of stimulating production, promoting social
justice and inculcating in the Nation a spirit of discipline and efficiency. There has been as a result, all round
improvement in the performance of almost all the key sectors, including production of foodgrains, fertilisers, steel,
irrigation and energy, so much so that in some of these sectors the Nation has had to face the problem of surpluses
rather than shortages. There has been a striking and major breakthrough on the oil front which, coupled with a well
articulated export effort, has led to a welcome accretion to our foreign exchange reserves. These encouraging trends,
the Prime Minister observed, had enabled the finalisation of the Fifth Plan.” (p.199)
88
the poor. Instead thousands of people were forcibly sterilized and in urban areas vast areas of slum and
squatter settlements were cleared.
In the general elections in 1977, Indira Gandhi and the Congress Party were defeated and the
Bahujan Lok Dal (BLD) formed a coalition government with Morarji Desai as Prime Minister. The Draft
6
th
Five-Year Plan was presented in the 32
nd
NDC meeting in March 1978 meeting. Summarizing planning
since 1951, the Prime Minister said that it had yielded results in industrial development as well as science
and technology, however agricultural development had lagged and the benefits of development had not
reached the population with 40-50% of the population still below the poverty line. Saying that this could be
caused by inadequate implementation of the plan, the focus would now be on the concept of a ‘rolling
plan’; a continuous system of planning so that implementation of the plan remained undisturbed. He talked
about the need for science and technology for the benefit of humanity and there was a reiteration of
achieving the development goals in a proper manner consistent with democracy. There was emphasis on
agriculture, improvement of the public distribution system covering essential articles of mass consumption
and creation of employment opportunities.
The proposed plan allocated more resources to the state than the central plan. This was the first
instance of a non-congress government at the center but planning had been institutionalized and the new
government continued on the same path. Their emphasis though, moved away from heavy industries to the
agricultural sector, increasing consumer goods production, and employment and reaching development
benefits to the poor. These were similar to Shastri’s plans also as was the concept of a continuous ‘rolling’
plan. The human factor in science and technology was emphasized as in Nehru’s past meetings and
planning in a democratic manner was reiterated. The most significant change was that more resources went
to the states and this marked a break in the strong centralization plans of the past. In the next meeting the
same issues were brought up by the Prime Minister.
In 1980 the Congress (I) led by Indira Gandhi won the general elections. She presided over the
34
th
NDC in August in which a new framework for the 6
th
Five Year Plan was presented. She listed her
agenda of self-reliance, social justice and benefits to the poor and also removal of regional inequalities,
emphasis on science and technology and consumer goods production, efficiency in the public sector and
increasing exports. The Deputy Chairman of the Planning Commission, Narayan Dutt Tewari, stressed
89
development of rural areas, problem oriented development of science and technology and the rehauling
of management and administrative procedures; a structural adjustment to the new international
environment. The goals were not very different from that of the previous regime as in that they were a
combination of Indira Gandhi’s previous agenda as well as that of the previous governments.
In the 35
th
NDC meeting in February 1981, Indira Gandhi, in her closing speech defended the
socialist democratic system that India was following versus the communist system of other countries such
as China in light of the higher growth of the latter, even if that meant a slower path towards economic
development.
In the 37
th
NDC meeting in July1984 the approach paper for the 7
th
five-year plan was presented
and it stressed the importance of planning and taking it to the level of the people. In the same note as the
previous meetings and even closer to the goals of the BLD in 1977, the plan was to be geared towards
decentralization of the planning process and satisfying the basic priorities of food, work and productivity.
In this meeting, Indira Gandhi in her closing comments called for preservation of harmony among different
communities.
She was assassinated in October of the same year and Rajiv Gandhi and the Congress party were
elected into power soon after. Congress had got a majority for the Lok Sabha seats in the general elections
and had also won the state elections in 1983.
Manmohan Singh was the deputy chairman of the planning commission for its 38
th
meeting in
November 1985 and he reiterated the importance of planned development, the 7
th
Five Year Plan was
described as an employment-oriented plan. Rajiv Gandhi pointed to the economic independence and
growth that India had achieved in the 6
th
five-year plan but said that due to new economic conditions and
constant change that defined the nation, one had to reformulate planning to respond to new socio-economic
issues. He stressed the importance of improving the agricultural sector and also overhauling management at
all levels to achieve this. He tried to introduce the idea of efficiency and a ‘new work-culture’ in the
industrial sector.
61
One of the themes that emerged in this meeting was the view that there should be a

61
http://planningcommission.nic.in/reports/genrep/50NDCs/vol4_36to44.pdf Rajiv Gandhi in his opening speech- “In
the new phase of industrial development, the focus must be on increasing efficiency, reducing costs and improving
quality. The thrust of the policy would be for absorption of new technology, modernisation, reduction of costs and
greater competition.” (p.63)
90
reduction in centrally sponsored schemes.
62
The process of decentralization and introducing the idea of
efficiency was now gathering momentum in the planning commission. In the next meeting Rajiv Gandhi’s
opening speech was focused entirely on education at all levels.
In the 40
th
NDC meeting in March 1988 the discussion had moved back to the issues of efficiency,
increasing exports, agriculture growth and agricultural planning at the district level; a response to the recent
drought. Rajiv Gandhi talked about the importance of the growth of the industrial sector, technological
upgradation, better management and labor relations, education and family welfare and environmental
protection as a necessary part of project formulation. He emphasized planning and democracy at the
grassroots level and a need for increasing returns from the given resources of the country. He called on
economists, scientists and technologists to accomplish this. Rajiv Gandhi also used the term ‘Detailed
Project Report’ in a response to a query by one of the state ministers. He had introduced the concept of
Detailed Project Report (DPR) a year earlier to diminish cost overruns associated with projects.
63

Despite a directed move towards structural reforms, the Congress lost the elections in 1989 and a
coalition led by the Janata Dal came into power. In the 41
st
NDC meeting in June, 1990, the Deputy
Chairman R.K. Hegde emphasized employment, democratic decentralization, more freedom to the private
sector and efficiency in the public sector and that the basis of development was social transformation rather
than one based on economic parameters. The Prime Minister V.P.Singh said that the benefits of the
economy were accruing largely to the middle class and that India had a foreign debt of $63 billion. He
emphasized institutional reforms to give more planning, administrative and financial power to gram
panchayats and land reforms in general. He talked of the need to improve the living conditions of schedule
castes and tribes and for them to ‘share in the management of the country.’ He focused on agriculture,
economic and social infrastructure in rural areas, debt relief to farmers, changes in industrial technology,
creating a competitive atmosphere for the private sector and encouragement to entrepreneurship. He spoke
of improving the economic and social status of women, mentioned ‘innovative ways of financing

62
Ibid. p.135
63
Ibid. “The Prime Minister intervened at this stage to point out that the cost of projects escalated mainly because the
projects were processed without Detailed Project Reports being prepared. He drew the attention of the Chief Minister,
Kerala to the fact that clear instructions had been issued over a year ago that no projects were to be cleared without a
detailed project report.” (p.205)
91
particularly the infrastructure projects’ and involvement of the private sector in infrastructure
development. He suggested a possible ‘limit on unproductive wealth’ and ‘a spirit of austerity.’
64
In his
closing speech, he emphasized the importance of decentralization, labor in industry, ‘socially appropriate
technology’ and a check on non-plan expenditure.
In fact his speech covered the whole history of the directions set by the previous governments.
There was Rajiv Gandhi’s emphasis on decentralization, technological upgradation, labor relations and
efficient management; Indira Gandhi’s emphasis on Schedule Castes and Schedule Tribes and the poor;
Morarji Desai’s focus on agriculture and the use of science and technology for the benefit of society;
Shastri’s plan for institutional reforms at the local level; Nehru’s call for austerity and ‘human face of
planning’. V.P.Singh widened these goals of the past by focusing on a larger role for the private sector and
creating an economic atmosphere that would encourage entrepreneurship. The shift to ‘fiscal management’
was another contribution as was a clear emphasis on labor-intensive industries versus heavy industries.
In the next meeting in October 1990, he suggested that ‘right to work’ should become a
fundamental right. He spoke about the importance of developing a social indicator of development. He
stressed fiscal management rather than a focus on ‘tax efforts’. He pointed out that employment had
declined both in the agricultural and industrial sector and increased in the services sector. He called for the
involvement of youth in national development and put an ‘emphasis on labor-intensive industries, agro-
industries and decentralized production in the small-scale sector’ so that the demand pattern changed to
mass-based rather than elite based. He went on to say that the gulf crises would effect the economy and the
urgency of this externally arising crisis should be made known to people. Finally, he suggested that
domestic oil prices should be attached to international oil prices and the states should focus on ‘tightening
their belts’.
His emphasis on ‘right to work’, a social indicator of development and a call to the younger
generation for leadership in the country was a new direction in planning. The fiscal crises that was about to
occur saw mention in his call to alert citizens of India of the affect of the Gulf crisis on the economy and
again in a first attempt at opening up the economy, he suggested that domestic oil prices should reflect

64
http://planningcommission.nic.in/reports/genrep/50NDCs/vol4_36to44.pdf p.215, 216, 217
92
international prices rather than be subsidized by the central government. The gulf crises of the early 90’s
only precipitated the economic reforms that had been gathering momentum in the past years.
The Janata Dal coalition fell and in general elections 1991 the Congress party again came to power
with P.V.Narasimha Rao Prime Minister and Pranab Mukherjee as Deputy Chairman of the Planning
Commission who pointed out that the country faced a fiscal crises.
65
The discussion had shifted from a
more general rhetoric of the personality of the nation to the very specific and serious discussion on the
ways of averting economic crises. The following is an excerpt from the Finance Minister’s speech from the
43
rd
NDC meeting in December 1991.
Dr. Manmohan Singh stated that today planning was being undertaken in a situation of extreme
difficulty. The difficulty arose from the extraordinary high fiscal deficit, the difficulty of paying
even for essential imports. Inflation threatened to get out of control. This difficulty came to a head
in mid 91 just before the present Government resumed power at the Centre. The magnitude of the
crisis was not sufficiently realised. Our reserves had come down to Rs. 2600 crores which was
barely enough to finance two weeks of import. Severe import restrictions had been imposed four
months earlier. It caused steep decline in industrial production. Buyers of our goods abroad held
off in the expectation of a devaluation. NRIs were withdrawing their deposits at the rate of over
Rs. 300 crores a week. Banks abroad were not even prepared to give short-term credit for our most
essential imports-fertilizer and diesel and the accelerating inflation was threatening to destroy the
confidence in our ability to manage the economy. Under these circumstances, stern measures were
taken and the crisis was averted. The decline in reserves was reversed and today the reserves stood
at over Rs. 9000 crores. International confidence has been restored and access to the international
capital market reopened. The gold we had pledged in our extremity has been redeemed. However,
a great deal has to be done to ensure steady and rapid growth in employment and incomes, which
must be the aim of the Eighth Plan. There was need to bring down inflation, manage the balance
of payments and reduce our foreign debt. Dr. Singh stated that a beginning in facing the crisis at
the Centre had been made by restricting non-Plan expenditure, abolishing export subsidies,
reducing fertilizer subsidies, etc. With these drastic measures, we aimed to bring down the fiscal
deficit of the Centre from 8.9 per cent of gross domestic product to 6.5 per cent this year. But this
was by no means enough. If investment in priority areas was to be restored, the deficit will have to
be reduced further. And if the Centre was to reduce its deficit from 6.5 per cent this year to 5 per
cent next year and further following year, and at the same time, to continue to make the most
unavoidable investments in infrastructure, its ability to assist the States will be limited. (p.342)

65
http://planningcommission.nic.in/reports/genrep/50NDCs/vol4_36to44.pdf 43
rd
NDC Meeting- “The Deputy
Chairman made specific references to the adverse balance of payment situation and fiscal deficit and their effects on the
economy. The growth process, he said, was being threatened by fiscal imbalances, mounting inefficiencies in the public
sector enterprises and diminishing marginal returns from public sector outlays. He stressed that the task before the
planners was not only to develop strategies for overcoming the present crisis but also to forestall such crisis in
future…Drawing attention to the number of policy changes undertaken by the Government in order to put the economy
back on the rails, the Deputy Chairman made specific references to the liberalization of the trade and industrial policies,
fiscal reforms and adjustments of the external value of rupee. He however, stated that there would be sometime lag
between the policy changes and the desired results. He expressed confidence that our resilient economy would as in the
past bounce back.” (p. 301)

93
In the 43
rd
meeting also a committee for grassroots development, a committee for austerity and
a committee on population employment were set up. The committee of austerity aimed to reduce
government and personnel and cut back on extras.
The slow movement towards decentralization that had been building up came to fruition during
this period. Attached with decentralization was the need to generate resources and the central government,
pulling back its role as the main developer and financier of planned development, had to now look outside
itself for creating an environment suitable for economic development. Its role too changed from generator
to regulator.
In the 44
th
NDC meeting in May 1992, Pranab Mukherjee said that the ‘economic reforms and
structural adjustments had to be carried forward without sacrificing the imperatives of development.’
(p.361)
66
The eighth plan was geared towards transitioning from a centrally planned to a market-led
economy. He said that opening up the economy may result in widening disparities between the rich and the
poor and that the state would work towards protecting the latter. The states role was to be amplified in the
areas of health, literacy, education and basic needs like drinking water, housing and welfare programmes
for the weaker sections of society. Focusing on infrastructure, he envisaged that investment in power,
transport and communications would help in rapid economic development. He talked about administrative
and institutional reforms to decrease lack of coordination between the numerous agencies handling a single
sector and decentralization with an increased role of the village panchayats and participatory planning at
the grassroots level for development projects.
The Prime Minister P.V. Narasimha Rao said that it was important to keep political interests out of
development. He said that the direction should be one of ‘growth guided by market forces and liberal
policies’
67
He defended the position of planning as necessary for development in light of the new policies.
68

66
http://planningcommission.nic.in/reports/genrep/50NDCs/vol4_36to44.pdf “The Eighth Plan has been formulated in
the face of these challenges. This makes it a Plan with a difference. It is a Plan for managing the change, for managing
the transition from centrally planned economy to market-led economy without tearing our socio-cultural fabric.”
(p.362, 44
th
, Pranab Mukherjee) “This Plan is performance-oriented. It concentrated not so much on its allocative role,
but on how to utilise the allocations optimally. The stress is on performance improvement, quality consciousness,
competitiveness, efficiency of operations and on-time completion of the projects.” (p. 363)
67
Ibid. p.368
68
Ibid. “The Prime Minister noted that momentous changes were taking place around us in the economic, social and
political spheres. A philosophy of growth guided by market forces and liberal policies was emerging. In this context,
the role and even the relevance of planning was being questioned. But, the emerging global economic and political
94
Unlike Nehru’s focus on changing the mentality of the people, Rao’s focus on human development in
planning seemed to emphasize the availability of amenities and opportunities for people to prosper. The
outlays for the 8
th
Five-Year Plan would focus on infrastructure that included energy, transport, irrigation
and communication. Also, the Finance Minister, Manmohan Singh, spoke about transferring all external aid
for projects to the states and appealed to the State governments to manage their finances with prudence
without seeking aid from the center as the center was in a state of crisis.
69
In fact, his speech invoked the
states’ responsibility to carry on efficiently the project of development with the center’s role now being that
of the facilitator in the endeavors and protector of the underprivileged.
In the 45
th
NDC in April 1993, reports on the committees of austerity, population and employment
and literacy were presented. By this time the conversation on development had moved on to structural
adjustments and institutional changes needed for development in a very concrete form. The discussion
revolved around issues of how state administration could be made more efficient and workable plans to this
end were being developed. It also focused on issues of how it would be easier for states to get external
assistance with minimum involvement of the center, since the center did not have distributable resources
itself. There was an atmosphere of bargaining as the structural changes happening at the center meant
cutting back on its role as guarantor and passing the external assistance, as well as the risks, to the states.
The atmosphere had quickened and there seemed to be general cooperation between states.
70

changes did not mean a reduction of responsibility on the part of government and the Planning Commission; rather,
these changes only serve to reinforce their roles. He stated that in the last NDC meeting he had emphasized that
planning had a critical role in the social, human and economic development of our people. It had a particularly crucial
role in the creation of social infrastructure and in the sphere of human development.”
69
p. 412-413, 44
th
NDC, Finance Minister, Manmohan Singh. “The FM noted that the trend of disbursement of external
assistance was exceedingly disturbing. There was, in the pipeline, twenty billion dollars of undisbursed foreign
assistance. Every year our disbursement was not more than 15 per cent and if we could improve this to about 20 per
cent, he assured that there would be no need to go to the IMF. If we wanted our balance of payment to become viable
without having recourse to institutions like the IMF, then it was obligatory on us to do some soul searching as to how
this twenty billion dollars of undisbursed aid could be utilized. There was proliferation of projects. Projects had started
but they were not completed. They were financed thinly. There were several administrative bottlenecks. He informed
that the Finance Ministry was going to transfer 100 per cent of foreign aid to the State Governments. Further from the
next year, there was a proposal to provide to the State Governments an advance of eight per cent to improve their
liquidity position so that there would be no alibi for any State to claim that paucity of funds was standing in the way of
utilisation of assistance. If we did not want to have recourse of institutions like IMF, if we did not like their
conditionalities, then, this year we must raise this ratio of foreign aid utilisation to 20 per cent.”
70
http://planningcommission.nic.in/reports/genrep/50NDCs/vol5_45to50.pdf “Expressing concern over the resort to
unauthorised overdrafts by the states, the Finance Minister observed that such overdrafts were inconsistent with the
minimum amount of financial discipline so necessary to stabilise prices, control inflation and ensure orderly financing
of the Eighth Plan. He also referred to the problem facing the externally aided projects, namely, the inability to fund the
projects adequately, and the consequent time and cost over-runs, which in turn reduce the ability to draw the assistance
95
In the 46
th
NDC meeting in September 1993, the focus was again on findings of the various
committees; the follow-up action on the report of the NDC committee on austerity to reduce non-plan
expenditures and presentation of the status report on the progress of the transfer of 113 centrally sponsored
schemes to the states. The main focus of the 8
th
Five Year Plan was on Human Development. There was a
change in state and centre relationship in the preparation of the annual plans with more input from the
states and more flexibility on how they could use their allocated resources.
In the general elections in 1996 a coalition government was formed with the external support of
the Congress and with H.D.Devegowda as Prime Minister and Madhu Dandavate as Deputy Chairman of
the Planning Commission. In the 47
th
NDC meeting held in January 1997, the Prime Minister summarized
the 9
th
Five Year Plan as ‘growth with equity’. The emphasis was to be on the rural and agricultural sector
as well as infrastructure. He called for cooperation between states and collective decision-making.
The government however fell after two years and the BJP formed the next government with Atal
Behari Vajpayee as Prime Minister and K.C.Pant as the Deputy Chairman. In the 48
th
NDC meeting held in
February 1999, the prime minister talked of removing poverty and building a strong economy.
71
The
Deputy Chairman, K.C.Pant’ address to the council was a slide presentation marked by charts, statistical
data and specific targets. The BJP continued the legacy of the previous government with an emphasis on
social and physical infrastructure, Information Technology and a ‘knowledge-driven society’. The private
sector was seen as playing a prominent role in the agricultural and industrial sectors. The role of the
planning commission in a liberalized economy was to give direction to development with ‘pro-people

as per entitlement. 13.3. The Union Finance Minister requested the august gathering to consider the problems posed by
such yawning gaps, especially because the Central Government with a deficit of Rs. 16,000 to Rs. 17,000 crores could
not bridge such gaps. Failure to mobilise resources by the states would mean cut in plan outlay with adverse
implications for future growth and rise in standard of living. This would obviously present a hard option for the NDC.
13.4. He invited the attention of the participants to the views expressed by some members in regard to the terms of
external assistance and observed that he was prepared to accept the demand for passing on external assitance in respect
of externally aided projects on the same terms as the Central Government received from the donor agencies provided
the exchange risks were borne by the States. (p.13, 45
th
NDC, Finance Minister Manmohan Singh)
71
http://planningcommission.nic.in/reports/genrep/50NDCs/vol5_45to50.pdf “The Deputy Chairman, Shri K.C. Pant,
began his speech by thanking the Prime Minister for his inspiring address. He observed that the forty-eighth meeting of
the NDC had a heavy agenda on its hands. The first item of agenda was the consideration and adoption of the Ninth
Five Year Plan. He said that this was a historic document, in that it represented, like no other, the continuity of
governance in the country and the convergence of views on the development strategy among various political parties.
He pointed that the plan was initiated in 1995 by the Congress government, developed to a substantial extent by the
United Front government, and put forth for finalisation by the present government. During this long process, he said,
there had been considerable degree of consultation, both formal and informal, with diverse political parties, civil
society representatives and the State governments, making it a truly collective effort.” (p. 140, 48
th
)
96
policies’. Microplanning was envisaged at the local level. The prime minister talked of improvements in
quality of life with action plans to provide water, housing, sanitation, education, healthcare, connectivity.
He said that ‘sustainable economic growth’ was related to human development.
In the 49
th
NDC meeting in September 2001, the agenda paper for the 10
th
Five Year Plan was
presented and its focus was on coordination between public, private and community based organizations,
infrastructure, railways, institutional and administrative reforms, a ‘pro-poor’ focus on economic reforms
and most importantly good governance.
72
E-governance, using IT to bypass bureaucracy was given
emphasis. The focus was on quality of employment opportunities and the shift to the service sector.
73

The words ‘knowledge-driven’, ‘sustainable’ and ‘governance’ had now entered the vocabulary of
planning. The focus was on a service-based society, structural reforms and infrastructure. The past thirty
meetings of the NDC reveal continuity in the planning process from government to government. No matter
which political party was in power, the course of planned development, from a centralized, closed economy
to a decentralizing liberal economy though slow, remained uninterrupted. The socialist agenda however did
continue and at least in the speeches of the Prime Ministers, there was always a concern for improving the
conditions of the poorest. Even with the transition to a market economy, the government’s role was seen as
that of protector of basic rights and regulator for equitable development. In the country too, there was a
shift to the service sector and so development of the entire supporting infrastructure came to the forefront.
The losses of the Public Sector Undertakings and non-plan expenditure led to steps towards government
and policy restructuring. The private sector was envisaged as taking the lead in development.

72
Ibid. “Shri Vajpayee stated that India needed a strong partnership between five agents of development the Union
Government, State Governments, PRIs, the private sector and non-governmental and community-based organizations -
to achieve all-round development. One of the main reasons for the wide gap between India’s developmental potential
and her actual performance lies in insufficient appreciation, in the planning process, of the need for a partnership
between all the five drivers of national development. He noted that the Approach Paper to the Tenth Plan seeks to
correct this critical shortcoming.” (p. 221, 49
th
NDC)
73
Ibid. “The Deputy Chairman said that a multi-pronged approach has been adopted to integrate growth with equity
and social justice. Agriculture development was appropriately a core element of the Plan. There was also an added
emphasis on bringing about rapid growth in sectors with high quality employment opportunities. The sectors that
needed special focus include information technology enabled services, entertainment, real estate and housing, modern
retailing, tourism and transport. In his presentation, he also highlighted some of the areas of concern such as
deceleration in economic growth, global economic environment, precarious fiscal position of both Centre and States,
borrowings for meeting revenue expenditure, abnormal increase in pension bill, continuous decline in the ratio of Plan
outlay to GDP both at the Centre and the States, persistence of many controls in agriculture, trade and industry, and
flow of private investment in infrastructure being below expectations.” (p.223)

97

Delhi Government in the NDC meetings
It is important to recall that in 1966, a deliberative body known as the Metropolitan Council that
consisted of directly elected officials from various districts of Delhi was created to give Delhi more control
over its territory. Delhi, now, had its own legislative body and a modicum of independence in matters
pertaining to its territory. This independence was reflected in the participation of the Chief Executive
Councilor
74
(CEC) in the NDC meetings.
In the 24
th
NDC meeting in December 1967, the CEC for Delhi, V.K. Malhotra who was also
affiliated with the political party Bharatiya Jan Sangh that had won the majority seats in the Lok Sabha
in1967 in opposition to the Congress, spoke after a gap of fourteen meetings in participation by Delhi. He
began by being critical of the Center not being able to meet its promises due to lack of resources and added
that people should be given a real and clear picture of what was possible with the resources available. He
said that there was a need for discussion by representatives of all political parties for improving resources
and demanded that states and union territories who ‘did not get their due share of the Central Assistance in
the last two years’ should be given the same in 1968-69. He also said that ‘the criteria for allocation of
resources in the fourth five-year plan should be carefully decided.’
75

There was a marked change in the National Development Council meetings wherein the changing
political structure and rise of opposition parties was reflected in a higher stake in the direction of the five-
year plans and the resources allocated to different areas.
V.K.Malhotra was more vocal about Delhi in the 25
th
meeting in May 1968. He complained about
the lower resource allocation to the city of Delhi whose population was increasing at the rate of 5-6% per
year and which could face serious ‘water supply, sewerage system and road transport etc.’ problems. He

74
http://delhiassembly.nic.in/metropoliton.nic The Chief Commissioner or Administrator for the Metropolitan Council
of Delhi was known as the Lieutenant Governor from 1966 and worked under the control of the president. The Chief
Executive Councilor was one of four executive councilors appointed by the President of India but could be also be an
elected member of the Metropolitan Council. He was to ‘assist and advise the Lieutenant Governor in the exercise of
several of his functions in relation to matters enumerated in the State List or the Concurrent List in the Seventh
Schedule to the Constitution and functioned as Leader of the House in the Metropolitan Council. In consultation with
other Members of the Executive Council and the Chairman, he made proposals for the dates of summoning and
prorogation of the House for the approval of the Administrator. He drew up the programme of official business to be
transacted in a session of the Council. He was consulted by the Chairman in regard to the arrangement of government
business. He was usually present in a sitting of the House and had the right to address the House whenever he liked.’
75
Ibid. p.434
98
emphasized its special place as the capital of the country and suggested that a separate cell should be
formed in the planning commission to look at regions in Uttar Pradesh and Haryana that came under the
Delhi Master Plan. This was the beginning of the effort to form a National Capital Region.
On the general plan, he suggested a uniform tax policy, reduced foreign aid and increased self-
reliance, rationalization of the existing licensing, permit and quota system, an increase in the standard of
primary education and removing the distinction between public and private schools to stop the development
of a class hierarchy.
76

In the 26
th
meeting in April 1969, V.K.Malhotra, CEC, Delhi was again critical of the draft 4
th

Five-Year plan proposal and said that it lacked clear suggestions to tackle the basic problems as stated in
the plan. He was also dissatisfied with the resources allocated to Delhi, pointing out that they had not been
increased as in other union territories. He said Delhi’s population had grown at a rate four times more than
Calcutta and six times more than Bombay in the last 20 years and that despite Delhi’s own efforts which
had generated an additional Rs 16 crores through new taxes, the Rs 155 of central allocation would not be
enough to meet the utility demands of the city. In another take at giving importance to Delhi and its
surrounds as a region, he suggested that a metropolitan fund be created which included the states of
Haryana, Uttar Pradesh and Rajasthan.
The CEC Delhi, V.K.Malhotra, in the 27
th
meeting in March 1970, demanded that union territories
be given the same benefit as the states of keeping non-plan gap period ‘proceeds of additional resources
mobilization’ for development schemes and he managed to get this partly through with the Ministry of
Finance, which granted 50% of the proceeds to union territories.
77
Next, he again stated his opinion about
the inadequate budget assigned to Delhi in the 4
th
Five-Year plan and complained about the lack of
availability of allocated funds even for annual plans. Delhi’s important position as capital, its urban
character and much needed development, were cited as important factors in the need for a larger allocation
of resources.
78

76
Ibid. p.529
77
Ibid. p. 55,60
78
Ibid. p. 56
99
He proposed that Delhi should be treated like a state in that the additional outlays for the union
territory should be distributed in consultation with the Delhi administration. This was an attempt to give
voice to the Delhi government decisions regarding development of the city. He once again pointed to the
need to develop the region and towns around Delhi so that employment opportunities and public amenities
in these areas would stop the inflow of migrants to Delhi. Getting more specific about the idea of a
Metropolitan fund that he had raised in the precious meeting, he said an amount of at least Rs 25 crores
should be set aside ‘for the development National Capital Region as a Central plan programme.’ (sic)
79

The focus for developing the National Capital Region was to stop the inflow of migrants. The
immigrants constituted the urban poor and they were the people who were to be contained by growth in the
NCR. Regional growth and economic opportunities in Delhi’s hinterland was seen as a strategy for
achieving this.
80

In the case of Delhi, getting a metropolitan council gave it additional powers to make decisions
about its administration and development and this change was reflected in its representation in the NDC
meetings. What was notable though was that within four meetings the focus of the CEC, Delhi had shifted
from commenting on the general plan to issues and resource allocation for Delhi. Also seen here was the
struggle to gain independence from the center in the form of statehood as well as the strategy of bringing a
larger geographical area under the heading of NCR which would require funds separate from that of Delhi
but which would ultimately benefit Delhi by stopping the inflow of migrants.
In the 28
th
meeting of the NDC in May 1972, Radha Raman, the new CEC of Delhi continued the
thread of his predecessor for resource allocation and regional development but there was also a focus on
poverty alleviation, which tied into Indira Gandhi’s agenda at the centre. He called for a ‘ceiling on urban
property’ to make land cheap and easily available and commenting on the vast number of slum and squatter
settlements that had come up in Delhi, he said that apart from improvement schemes for the urban poor,
rural development and development of ring towns around Delhi would be able to curb migration. He too

79
Op.cit
80
An alternative explanation is that for a union territory, lacking the powers of a state, it was difficult to compete for
resource allocation and to have a say in the areas of the allocation. The creation of a National Capital Region was one
method of increasing its geographical influence and hence gaining more resources that were separate from that of the
city and more decision-making autonomy.
100
emphasized regional planning and requested inclusion of schemes to this end in the Fifth plan.
81
He
asked for more financial assistance for Delhi and brought attention to the need to improve water supply,
implement the ring railway, establish Delhi as a dry port, build more rural housing, speedily implement and
improve transport, and underground markets and overbridges.
His suggestions on the general plan included ‘vocational training, dignity of labour and self-
reliance’ in education; producing consumer goods for the poor rather than the affluent and monitored
production and distribution of these to control prices; creation of productive employment and increase in
productivity of public sector undertakings, for example with the provision of incentives; setting up labour-
intensive light and medium industries in areas where India had a competitive advantage to other countries;
and imaginative planning to avoid water pollution.
82

Radha Raman in his speech focused as much on poverty alleviation in the city through ‘land
ceiling’ and improvement schemes as on infrastructure improvements and development of the NCR. His
comments on the general plan were both socialistic and entrepreneurial with an emphasis on efficiency in
the public sector, employment generating industries and looking for a competitive edge for labor in suitable
areas of the international market. These were inputs towards achieving the goals set up by the center.
In the 29
th
meeting in January 1973, the CEC, Radha Raman, continued on the same note with full
support for the Approach paper for the 5
th
Five-Year Plan. He called Delhi a ‘miniature India’ and urged
the planning commission to use it as a testing ground for pilot projects for the country. He also urged
publicity of development programs ‘to secure the cooperation of the public in their implementation and in
making a success of these schemes.’ Calling attention to the rapidly increasing population of Delhi, in
comparison to other states, he again stressed the importance of transport, maintenance of law and order,
housing, provision of civic amenities and attention to needs of small scale industries which made up the
bulk of Delhi’s Industrial base. He said that there were 1.7 lakhs (170,000) unemployed people for whom
employment schemes were needed and ‘Due to urbanisation, a large number of people whose lands had
been taken away and who were thus getting uprooted needed to be provided with alternative

81
http://planningcommission.nic.in/reports/genrep/50NDCs/vol3_26to35.pdf. p.95
82
Ibid. p.96
101
employment.’
83

Other than his endorsement of the general plan, Radha Raman spoke exclusively on Delhi. His
description of Delhi as representative of the nation, and the appeal to the planning commission to use it as a
testing ground for new projects was a strategic move to gain priority for development. Both ideas of
regional development and MRTS were first developed for Delhi before being taken to other regions and
cities though urban rail systems were implemented in Calcutta, Bombay and Madras prior to Delhi. His
stress was on infrastructure and Delhi’s small industries base but he also pushed for employment schemes
and land compensation for people displaced by urbanization.
In the 30
th
NDC meeting in December 1973, the CEC, Delhi, Radha Raman said that the growing
population of Delhi and a housing shortage was straining the infrastructure and resulting in the emergence
of slum and squatter settlements. Saying that the Rs 305 crores ($ 62 million) allocated by the Centre was
not adequate for current and future social and civic amenities required, he concluded that a decrease in the
influx of population could only be achieved by development of the NCR at which point Delhi and the
neighboring states could together start tackling the problems of the region as a whole. He went on to ask for
dedicated power for the city from the new power plants being set up in Rajasthan and Uttar Pradesh. He
talked of the urgent need for improved public transportation; an increase in the number of buses and
streamlining of the public transport system as important issues for the city. Finally, talking of the small-
scale industrial base of the city, he said that there should be development of supportive facilities to help in
their growth.
84
So even as the Delhi CEC’s attention was directed at the urban poor and poverty alleviation
programmes, the pressure on existing utilities and the city’s lack of resources to improve infrastructure
seemed one of the reasons he promoted development of the NCR as a way to stop the increasing population
pressure on Delhi’s infrastructure.
By the third NDC meeting he attended, Radha Raman’s remarks had become more focused on a
few issues. Of these, the most important was resource allocation for Delhi followed by regional growth,
infrastructure and development of small industries for the city.
In the 31
st
NDC meeting in September 1976, Radha Raman, in keeping with Indira Gandhi’s

83
Ibid. p.134
84
Ibid. p.183,184
102
policies in the last few years, stated that Delhi had relocated half a million people from slums to a
planned colony and had performed 65,000 sterilizations. Capital work programs for building schools and
social welfare programs had been launched. He thanked the planning commission for making a correct
appraisal of Delhi’s need and its ‘additional resource mobilization efforts.’ The National Capital Region
had already become part of the five-year plans and Radha Rama noted of the lower resource allocation to
the NCR in the plan, that it should not be decreased. Talking about the Delhi’s economy, he said that small-
scale industries with a distributive and export-oriented nature, made it suitable as a dry port. He added that
the schemes for industrial estates established by the Delhi Administration needed to be cleared. He talked
about how the non-hazardous industries in Delhi were apprehensive about being moved to ‘conforming
area of the NCR’.
85

Delhi’s planning efforts were closely tied to the Central government before and during the
emergency, while Congress (I) was in power in Delhi’s Legislative Assembly with Radha Raman as CEC.
Slum clearances and relocation was part of the solution for decongesting Delhi of the urban poor, as was
the development of the NCR. The focus was on developing Delhi’s small industries and improving
infrastructure.
There was a shift from programs for the urban poor to Delhi’ commercial base and infrastructure
development. Even though ‘moving’ half a million people to a planned colony was seen as an achievement,
the methods employed were disruptive, undemocratic and ultimately like most relocations without
supportive employment opportunities, that would have been available formally and informally around slum
and squatter settlement areas in the city core, would deprive people of their livelihoods. The treatment of
the squatters and slum dwellers who had no voice in the NDC versus the concern for small industries’
‘apprehension’ of being moved to non-conforming areas showed the differential treatment of the two
groups. Through the meetings, the CEC’s views had shifted away from their socialistic base and the
center’s goals were reflected in Delhi’s approach to development in the city.
In 1977, the majority of representatives from Delhi for the Lok Sabha also came from the BLD.
The Janata Party, in 1977, had also won the Delhi elections, and Kedar Nath Sahni was the CEC from the

85
Ibid. p. 223
103
Janata Party in the metropolitan council.
86

However, Lieutenant Governor of Delhi, D.R.Kohli, spoke on behalf of Delhi in 32
nd
NDC
meeting in March 1978. He talked about the need for adult education, water supply to rural areas around
Delhi and emphasized the importance of regional development with growth centers that would help relieve
migrant and growth pressure on Delhi.
87
He lauded both the emphasis on continuous planning and majority
resource allocation to the states.
With a new government at the center and the same party in Delhi there was a shift back to basic
needs like water supply and rural development. The NCR development plan though remained a valid
approach for relieving the population pressure in Delhi.
In the 33
rd
NDC meeting in February 1979, the CEC, K.N.Sahni said that the resources allocated
for Delhi from the centre were not in line with the problems of the city. He implied that even the allocation
of the resources given were tipped towards specific areas like the New Delhi Municipal Committee
covering New Delhi and occupied by government officials. Reminiscent of V.K. Malhotra’s demands in the
early 70’s, he asked that Delhi should be granted the same financial powers as states.
Delhi, then, continued on the path of NCR development to stop population growth, more resource
allocation and state powers, at least in financial issues, since this would give them more financial benefits.
88

Statehood for Delhi was again a call for more powers and independence from the center even as the biased
resource allocation from the center was called out.
Indira Gandhi and the Congress party were back in power at the center and Delhi was still
represented by the opposition party and the politics marked a change in Delhi’s expression in the meetings.
Compared to its growing vocalization in previous meetings and demand for more resources and a regional
plan, the CEC, K.N. Sahni in the 34
th
NDC in August 1980 barely said five lines. These were critical of the
general plan, not in its intention but in the reality of empowering rural areas. He said that the panchayats in
Delhi’s villages were unable to take any actions to improve their villages due to lack of power and

86
http://www.eci.gov.in/StatisticalReports/SE_1977/StatisticalRep_delhi_77.pdf
87
Ibid. p.264, 265
88
As an aside, Sikhander Bakht, the Union Minister of Works and Housing and Supply and Rehabilitation pointed to a
clerical error in the list of centrally sponsored schemes of the Housing Ministry that listed the NCR project under the
Delhi State Plan. He said ‘This was not physically possible because that scheme was meant to bring relief to Delhi, and
it was contemplated to operate it in three States. So, it should be transferred back to the Central sector.’ (p.349)
104
resources that resided in the Municipal Corporation of Delhi, which came under the Centre.
The new Lieutenant Governor of Delhi, Jagmohan, among other things felt that ‘in urban and
metropolitan areas, land could be used as an instrument of economic and social development’ and so there
was a need to change legal framework around land to allow a smoother and faster implementation of
development projects without administrative delays.
89
This was particularly applicable to the union territory
of Delhi as laws regarding land were under the centre’s jurisdiction.
Going back to Mysore’s Chief Minister, Hanumanthaiah’s remarks in the third meeting, Delhi’s
CEC and Lieutenant Governor were pointing out the discrepancy in the goals of the central government
versus the institutional and constitutional structures that weakened local bodies economically, politically
and socially in being able to develop their jurisdictions. The reference to Delhi’s land development, still
under the central government, was a case in point.
In the next two meetings there was no representation by the CEC, Delhi. Instead the Lieutenant
Governor spoke on behalf of Delhi. In the 35
th
NDC meeting in February 1981, the Lt. Governor,
Jagmohan, expressed satisfaction at the resource allocation for Delhi and said that a Statutory Board for the
NCR would help regulate and direct investment in the entire region. He also requested institutional reforms
for smooth execution of development projects in Delhi.
90
In the next meeting there was more of the same
along with the news that there had been an improvement in all sectors with a growth rate of 5.2%. Another
issue that was raised was the streamlining of industrial licensing procedures to avoid cost over-runs and
removal of government policies coming in the way of utilization of existing capacities. Other than the need
for an NCR board, the focus was on institutional reforms for development projects, removing bureaucratic
hold-ups for the private sector and easing of controls that limited the market. Lt Governor Jagmohan was
moving towards a liberalization effort for Delhi.
The CEC, Delhi, Jag Pravesh Chandra from the Congress party that had won the Delhi
Metropolitan Council elections in 1983
91
, in the 38
th
meeting in November 1985, pointed to the problem of
growing population in Delhi and stressed the importance of implementation of plans for the National

89
Ibid. p.408
90
http://planningcommission.nic.in/reports/genrep/50NDCs/vol3_26to35.pdf p. 450
91
http://www.eci.gov.in/StatisticalReports/SE_1983/StatisticalReportDelhi_83.pdf
105
Capital Region with major assistance from the centre to balance this growth. He asked for allocation of
more resources to the Union Territory because of ‘its special place in the country’ and said that central
support was necessary for solving problems of transport, electricity and housing in the capital. He pointed
Delhi Administration’s efforts towards the ‘manpower plan’ for quality employment opportunities and
public distribution of wheat, sugar and rice to fair price shops.
In the changes that were taking place in the planning process was more autonomy for states, union
territories and the more recent regional areas in choosing, managing resources and implementing the
development projects that had been under the central government till now. The nature of the centralized
development projects- power plants, dams or infrastructure projects, however, did not change.
In the 40
th
NDC meeting in March 1988, Jag Parvesh Chandra was satisfied with the resource
allocation for Delhi but was concerned about the population growth from migration in Delhi, the lack of
attention to developing the National Capital Region and the need to improve water supply in Delhi. He
suggested marriage licenses; family planning and raising the marriageable age of girls from 18 to 21 were
ways to check overall population growth.
Jag Parvesh Chandra, also of the Congress party, focused on the development of the NCR, Delhi’s
importance as capital of the country and its need for infrastructure development. From the first meeting he
attended wherein he talked of creating ‘quality employment opportunities’ he moved on to stress the acute
problem of population growth by proposing other methods of curbing population growth in addition to
development of the NCR.
The Lieutenant Governor of Delhi, Arjan Singh, did not make any comments in the 41
st
or 42
nd

NDC meetings June, 1990 and October 1990.
In the 43
rd
NDC meeting in December1991, the Lieutenant Governor of Delhi, Markandey Singh
talked about the pressure on Delhi’s utilities like water, sewerage, power, transport, education and
healthcare, due to increase in population. For increasing water supply he proposed the construction of two
dams with a commitment to share in the construction cost. For power supply he proposed that Delhi was
looking into the construction of a Rs 2000 crore, gas-based power plant. The transportation problems he
said would be solved by the ‘execution of what is known as Mass Rapid Transport System which has been
106
accepted in principle at the Secretaries’ level.’
92
He also pointed to the need to remove slum and
squatter settlements that came in the way of the Master Plan, saying that ‘some very hard decisions’ needed
to be taken. He proposed a sub-plan for such areas should be prepared ‘so that we are in a position to
decongest Delhi and lessen immigration’.
93

The affect of economic reforms at the center in 1991 was immediately seen at the state level with
Delhi stepping up, not only to clearly define how the infrastructure problem was going to be solved but also
willing to contribute towards the development projects it proposed. In fact, the NCR was not mentioned in
this 43
rd
meeting. Instead there was a direct reference to clearance of slum and squatter settlements from the
city as a solution to decreasing migrant population and ‘decongesting’ Delhi. This meeting was also
significant as the Mass Rapid Transit System (MRTS) project was mentioned for the first time as a
development project to solve transportation problems.
In the 44
th
NDC meeting in May 1992, the Lieutenant Governor of Delhi, P.K.Dave, was
supportive of the 8
th
Five Year Plan and his suggestions regarding Delhi included the autonomy of the
National Capital Region Planning Board in order for it to formulate and execute projects at a regional level.
To this end and referring to the states of Haryana, Uttar Pradesh, Rajasthan and National Capital Territory,
he pointed out that ‘In the modern world, when countries had selectively surrendered their sovereignties to
regional groupings, this was not a strange concept.’
94
He also said that financial resources should be
earmarked in the central plan and state plans under ‘Special Component Plan for NCR’ so that they are not
diverted to other areas without prior approval of the NCRPB; an institutional mechanism to ensure that the
distributing ministries did not reallocate funds based on their own agendas. He talked about the need for
basic amenities in the capital due to increased migration and the need for more resources. Regarding
transportation in Delhi, he said
The transport system was also under great stress. The number of vehicles had risen from little over
12,000 in 1951 to over 19 lacs in 1991. The free flow of traffic had been impaired and until the
MRTS was implemented, he did not think the decongestion of Delhi roads will be possible.
95

92
http://planningcommission.nic.in/reports/genrep/50NDCs/vol4_36to44.pdf p.347
93
Ibid. p.348
94
http://planningcommission.nic.in/reports/genrep/50NDCs/vol4_36to44.pdf p.404
95
Ibid. p.404, 44
th
NDC
107
In this meeting, the new lieutenant governor of Delhi had shifted the focus back on the NCR,
going to the extent of saying that regions were becoming more important than nations. The MRTS was
again brought up and it was described as the solution to Delhi’s traffic congestion.
The Lieutenant Governor of Delhi, P.K.Dave, in his opening remarks in the 46
th
NDC meeting in
September 1993, requested that the Central government provide assistance with the water supply in Delhi
and approve and fund the MRTS in light of the growing migrant population and subsequent ‘social
tensions’ in Delhi. He also requested that the involved states work together in the development of the
National Capital Region. For the 8
th
Five Year Plan, he talked of increasing employment opportunities in
the satellite towns and within Delhi, ‘rehabilitation programmes for villagers whose land had been acquired
for urbanization, setting up high-tech small-scale,’ environment-friendly, space-saving, power-saving
industries that employed educated and skilled labor.
96
He asked for more coordination between different
agencies working for Family Welfare and talked about the different literacy programs that the city had
undertaken. Though he said he was satisfied with the revenue collected that was more than the non-plan
expenditure and was expected to be an additional Rs. 527 crore with new sales tax, excise duties and power
tariff, he pointed out that Central Plan assistance to the city had been declining over the years. In his
closing remarks, among other things, he requested assistance for the MRTS project.
The Lt. Governor also focused the Council’s attention to some of the general problems being
faced by the U.T. namely, inward migration of people from all over the country, nonavailability of
adequate raw water for meeting drinking water requirements, ever increasing pollution with some
21 lakh vehicles registered in Delhi, heavy traffic congestion etc. and sought Central assistance to
deal with such problems effectively. He specially referred to the MRTS and National Capital
Region Plan and urged the Govt. of India to expedite investment decisions for implementation of
schemes since all the plans were totally dependent on the successful implementation of the NCR
Plan. (p. 67-68, 46
th
NDC)
Once again the emphasis was on getting Central government approval for the MRTS project.
Implementation of the NCR and MRTS was stressed, but at the same time there was also mention of social
programs like rehabilitation of displaced farmers, creation of new small industries and literacy programs
and better coordination among different agencies for family welfare programs.
The effect of the demand for statehood by the CEC’s in the NDC meetings was seen in the
appointment of the Sarkaria Commission, later known as the Balakrishnan Commission, by the

96
Ibid. p. 68
108
Government of India in 1989 to look into administrative issues for the Union Territory of Delhi.
Following its recommendations, the 69
th
Amendment to the Constitution in 1991, granted Delhi a
legislative assembly and power over more subjects concerning the territory other than land, public order
and police.
97
After a gap of ten years Delhi held elections for its legislative assembly in 1993, won by the
Bharatiya Janata Party (BJP)
98
.
In the 47
th
NDC meeting held in January 1997, the Chief Minister of Delhi, Sahib Singh Verma
from the BJP approved of the approach of the plan. Regarding Delhi, he talked about the need to improve
services to meet the needs of the growing population. Recalling the mismatch between the central and
states needs in the three annual plans for Delhi since it had been given the status of ‘National Capital
Territory with its own legislature’ and the subsequent 1995 report of the Dr. Arjun Sengupta Committee, he
called for the finalization of ‘the pattern of financing of Plan for Delhi’. He requested that Delhi be
declared a State. He said the Delhi Government was committed to implementing a plan for ‘Seven Basic
Minimum Services.’ He was critical of a Rs 883 crore mini master plan introduced in 1994 for socio-
economic development of villages around Delhi, saying that 90% of Delhi’s population lived in urban
areas. He talked of the need for more power and requested the ‘centre to expedite the matter of giving
counter guarantee for the Bawana Gas Turbine Project with 421 MW capacity.’
99
He expressed the need for
more potable water for the city and was happy at the centre for clearing the proposal for the ‘environment-
friendly’ MRTS. He also talked about the need to improve the Delhi Transport Corporation and fight
vehicular pollution; set up effluent treatment plants and minimum disruption, health and education schemes
for people whose industries had to be relocated.
Sahib Singh Verma reversed Lieutenant Governor P.K.Dave’s efforts for socio-economic
development of rural areas around Delhi by concentrating on the urban population. Even though the earlier
plan seemed to have emerged from the need to develop Delhi’s hinterland by improving employment
opportunities and ultimately to curb migration. As stated by the Chief Minister, this was not in the
development interests of the core city of Delhi that needed the funds that had been granted for the rural

97
http://delhiassembly.nic.in/PresentFormAssembly.htm
98
http://www.eci.gov.in/StatisticalReports/SE_1993/StatRep_DL_93.pdf
99
http://planningcommission.nic.in/reports/genrep/50NDCs/vol5_45to50.pdf p.122
109
areas. There was no mention of the NCR and instead the focus was on statehood for Delhi.
Infrastructure plans for Delhi were moving ahead, with a power project in the pipeline and approval of the
MRTS project by the Union Cabinet, for which the Chief Minister expressed his gratitude. The MRTS was
for the first time described as environment-friendly. At the same time within the city, other than
infrastructure, there was a focus on providing ‘7 basic services’ and rehabilitation programs for displaced
industries, effluent plants and improvement in the bus fleet. The speech concentrated on Delhi as a city
rather than the regional plan in the previous meetings.
Once again the Congress Party was elected to the Delhi Legislative Assembly in 1998. In the 48
th

NDC meeting held in February 1999, the Chief Minister of Delhi, Sheila Dikshit, emphasized the
importance of the National Capital Region and was sorry that even after 14 years of its creation ‘there was
no correlation between the development needs and the allocation of funds to this region.’
100
She gave the
example of ‘cooperative federalism’; cooperation between centre, states and the national capital territory to
develop the region. She suggested a common tax structure and services as a starting point. She talked in
great detail about the economic, infrastructure and utilities concerns surrounding Delhi. In the first half of
her speech she requested the government to release specific financial amounts owed to Delhi that were
being held up due to administrative procedures, redirecting funds from the central plan assistance and a
lump sum grant in lieu of abolishing the terminal tax. She asked the centre to clarify Delhi’s position as
state in the Financial Commission and pointed out that Delhi now had an elected legislative body and
should be allowed to make laws for the NCTD rather that approaching the Government of India regarding
laws for Delhi created by the Parliament or Ministry of Home Affairs. The three areas that the government
of India still retained power over were land, public order and police and this was again an appeal to give
Delhi power over law, which affected all three areas. She also requested that the Delhi Development
Authority, that prepared the Master plan for Delhi and was the primary body for development of land, be
brought under the purview of the Delhi government. Being under the Central government freed it from
being accountable to the Delhi government and at the same time deprived the latter income through land
development. She said that the central government should compensate Delhi for increase in land values due

100
http://planningcommission.nic.in/reports/genrep/50NDCs/vol5_45to50.pdf p.165
110
to development by the Delhi government. She talked about the need for better coordination between
states to improve power supply in Delhi, the importance of the Yamuna Action Plan and water supply to
Delhi. She also talked about the pollution problem in Delhi and requested that the conversion of buses to
Compressed Natural Gas (CNG) mode be expedited by custom and excise exemption on imported CNG
kits. The MRTS that was under construction was brought up as a project that would reduce pollution and
provide alternative public transport and so was the development of the ring railway, a project that had also
been mentioned over 30 years go.
She also requested the concerned authorities for timely completion of the MRTS project which
would contribute to a large extent in reducing pollution in Delhi on the one hand and in providing
an alternative mode of Public Transport on the other. Action could also be taken to ensure that the
Ring Railway system was simultaneously developed in a coordinated manner.
101

She requested that the Delhi Urban Arts Commission, another centrally operated agency, also be
accountable to the Delhi Government and approve its projects in a timely manner. Finally, placing Delhi in
an international context she requested ‘all concerned to provide the requisite help in making Delhi the most
beautiful among the National Capitals of the world.’
102

This was a demand for autonomy for Delhi along with the justification as to why it was necessary
for the Delhi Government to be in control of its development. The administrative and financial ambiguity
regarding the governance and development of Delhi were now being clearly enunciated to the center
without any hesitation on the part of the national capital territory. The MRTS project was on its way and
the focus had now shifted on ensuring that the project would be carried out in the stipulated time period.

Master Plans for Delhi 1962 & 2001, Academic Papers, the National Capital Region & the MRTS
The vast influx of refugees after the partition prompted the Government of India to appoint a
Delhi Improvement Trust Enquiry Committee in 1950. The Birla report published by the Trust in May
1951, with input from the Delhi Development (provisional) Authority (DD(P)A), recommended the
preparation of a civic survey and master plan for Delhi. The Town Planning Organization (TPO) formed in
December 1955 was to assist the DD(P)A in formulating the master plan. The TPO published the interim

101
p.167
102
p.168
111
master plan for Greater Delhi in 1956 in anticipation of the final General Master Plan. The assumptions
of the interim general plan included among others, ‘planning on a regional basis, and the concentration of
population and achieving a balanced distribution of land uses.’
103
It also proposed the formation of a
national capital area planning commission. DDA and the TPO, both set up in 1955 and under the purview
of the Central Government prepared the Master Plan for Delhi 1962 with the help of the Ford Foundation
and with input from the public. The Delhi master plan was the first master plan to be prepared and it was
seen as a model for similar plans for cities and towns throughout the country. Delhi Master Plan 1962
called for the planning of Delhi in the context of its region, decentralization, conservation of a ‘healthy,
organic pattern by checking encroachment’ and creating a pleasing environment in accordance with Delhi
as the city beautiful. The plan document discussed the development of six ring towns around Delhi as part
of the Delhi Metropolitan Area that needed to be developed as self-contained planned units to avoid urban
sprawl and which would ‘deflect some of the population’ headed for Delhi but which would be
economically, socially and culturally connected to the core city. For this the economic base of the ring
towns was to be strengthened with industrial development and local government offices.
104
However
because of lack of funds, a detailed plan for regional development could not be developed in the Delhi
master plan 1962. The general approach was that uneven growth between Delhi and the neighboring towns
was resulting in massive urban growth in Delhi and a heavy strain on the infrastructure necessitated a
regional strategy to balance its growth. A high power board had been formed after the proposal of the first
Delhi Master Plan, to study the development of the National Capital Region (NCR).
105

Regional connectivity through the railways was sought by increasing the frequency of the service.
Though mentioned very briefly, a mass transit proposal was envisaged for the future. ‘Proposal to have an
electric subway should be explored in the future. For the present the Ring Railway recommended with the
local bus service should meet this demand for mass transit.’

The need to relocate industries was also

103
Breese, Gerald. Urban and Regional planning for the Delhi–New Delhi area capital for conquerors and country.
Princeton, New Jersey, 1974. P.22.
104
http://www.niua.org/mpd/Pages%20from%20MPD1962_ch1_pages1-11.pdf P.1
105
Breese, Gerald. Urban and Regional planning for the Delhi–New Delhi area capital for conquerors and country.
Princeton, New Jersey, 1974. P.35.
According to the paper ‘Planning of the National Capital Region, Objective and Strategy for Development, P.B.Rai and
O.P.Gupta, Town and Country Planning Organization, New Delhi, 1967’, the high power board recommended that a
statutory body would be needed to ensure implementation of policies for the NCR.
112
recommended in the Master Plan. ‘It is recommended that a systematic weeding out of obnoxious
industries and village-like trades should be undertaken. In the zoning regulations a time schedule for the
removal of “non-conforming uses” stipulates the general elimination of these uses.’
106

Figure 5- Rail Network in Delhi
Source: Delhi 1999- http://www.delhicapital.com/delhi-maps/delhi-railway-map.html
The Ford foundation established an office in India in 1952 at the invitation of the Prime Minister
Jawaharlal Nehru. This was the first Ford Foundation office outside of the US and it still remains one of its
largest field offices. The Ford foundation was pivotal in the preparation of the Delhi Master Plan in 1962 as
is seen in the preamble of the plan. It was partly responsible for conducting some of the statistical studies
for Delhi along with the Town Planning Organization of Delhi and the Delhi Development Authority.
In 1961, three professors from University of California Berkeley, Kingsley Davies, Richard L.
Park, and Catherine Bauer Wurster with an interest in urbanization and international development decided

106
MPD1962_appendix.pdf, p.91-93. Appendix II- Summary of Recommendations- Traffic and Transport, 42- Future
Mass Transit and 45-Urban Renewal and Development. DDA, September 1, 1962, New Delhi, India.
113
to host a conference in Berkeley on urbanisation in India, in which they invited officials and other
academics from India and the United States to speak on urbanisation in India. The Ford foundation was the
main body that coordinated with UC, Berkeley in setting up this conference. The Delhi Master Plan
featured very prominently in the conference and the idea of the city and its hinterland and regional studies
was seen in almost all the papers presented at the conference. The key word that was used was
‘decentralisation’ in relation to future urban development in India. Following is a brief summary of a few
papers that were presented by members of the Ford foundation, officials of the Planning Commission,
MCD, press and academicians on the Master Plan for Delhi, to show the influence of the idea of
decentralisation on government policy in India.
At the local level, the role of the municipal body was highlighted in the discussion of a pilot
project financed majorly by the Ford Foundation for citizen empowerment in slums through participation
and self-help activities for improving living conditions, stopping them from worsening and increasing civic
awareness. One of the goals of the project was ‘democratic decentralization’ with the formation of vikas
mandals or development councils.
107

Other papers focused on ‘Urban Structure and Urban Society’ and urbanization was focused on
regional development.
Finally, a working knowledge of the functions of the hinterland and of its interaction with the city
is going to be increasingly important in the planning of the future course to be taken by the
urbanisation in India. If the city of the future in India is going to resemble the regional city of the
Western type, understanding of the hinterland at this time will permit the establishment of policies
that would insure its efficient and profitable regional development.
108

In a comparison of urban development in India with other countries, its social and cultural history
was seen as being more comparable to European countries than the United States and judging from figures
of percentage population growth in urban areas of the last fifty years it was extrapolated that Indian
urbanization was proceeding at the same pace as that in Europe during industrialization in the nineteenth

107
India's Urban Future, Edited by Roy Turner, Selected studies from an international conference sponsored by
Kingsley Davis, Richard L. Park, Catherine Bauer Wurster, 1962 Berkeley and Los Angeles University of California
press. IV- ‘Urban Community Development in India: The Delhi Pilot Project’, B. Chatterjee, Director of Urban
Community Development, Delhi Municipal Corporation and Marshall B. Clinard, Department of Sociology, University
of Wisconsin, and Consultant, Urban Community Development, Delhi.
108
Ibid. V- ‘City Hinterland Relationships in India: with special reference to the hinterlands of Bombay, Delhi, Madras,
Hyderabad, and Baroda’, Richard A. Ellefson, International Population and Urban Research, University of California,
Berkeley; then Department of Economics and Geography, San José State College. 1962.
114
century. The differences included the percentage of people employed in agriculture and manufacturing.
Though in Europe the percentage employed in the latter had been higher, in India this was reversed and this
‘lag in industrial development’ was also seen in the cities. The small-scale sector or unorganized sector was
seen to employ a large part of the labor force but it was considered so prolific only because of
the very inefficient capital market, the absence or malfunctioning of effective institutions for
combining many small capitals into one of larger size, and the over-all low level of saving in the
community. These factors tend, moreover, to inhibit the development of many external economies
in urban areas, which are generally acknowledged to have been important factors in the economic
development of Western countries. Moreover, the small size of many industrial firms also prevents
the exploitation of internal economies, i.e., economies of scale of production.
The above factors were given as reasons for slow economic development overall and in cities.
Cultural differences of the urban population between India and other European Countries included the
difference in the culture of the rural migrants. It was argued that there were fewer differences in the overall
attitudes of rural migrants with the urban population in Europe and they very soon became acculturated to
the city. In India however there was a very small population that was urbanized and rural migrants
maintained their culture, values and ties to the hinterland. It was also observed that the concept of cities and
their development in India was imposed by Europeans and so was not a natural development in the country.
As a result, in the city, the small group of urbanized people, mostly with ‘European style education’ had
attitudes and values that were vastly removed from that of the rural migrants. Though the prevalence of the
caste system had become diffused in the vocational and professional spheres of the cities, it still maintained
a strong hold in personal relationships. Finally, European cities, according to Max Weber, were seen to
have had a very strong history of citizen participation and local government whereas it was observed that
there was no such tradition of urban self-government in India.
A comparison of Indian urbanization with other countries from Africa and Latin America,
revealed that cities in Latin America seemed to fall somewhere in between European cities and Indian cities
in their socio-economic development. However the cultural gap between the upper-class elites and the
masses was as severe as seen in India. In fact even in Latin America the rural migrants maintained their
rural way of life rather than changing it to conform to urban lifestyles. However in Latin America there
was a higher availability of capital that came from, for example, the United States and could be utilized for
industrial development. In Africa, future urban development was called out as difficult to predict, in
115
whether it would follow the course that was being seen in India. These very different conditions in the
urban centres of India reportedly made it difficult to prescribe a similar path of development for India as
seen in the European cities. Japan and China were held up as more suitable examples in providing
guidelines for future urban growth.
109

It was said that urban decentralisation was related to the policy of socialist planned development
in India. In accordance with the idea of establishing a socialist society, the idea of decentralisation was seen
as pertinent at all levels; of political power in the concept of state, district and panchayat system; of
economic power in the encouragement of small and community based industries and establishment of
dispersed industrial towns and devolution of financial power and control of market conditions; of spatial
power in the sense of balanced geographic development through the above. The Indian condition of
planned development and the course it took was summarized as follows:
Comprehensive decentralization, therefore, means redistributing power without affecting
adversely the operations necessary for supplying an ever widening market. The relocation of
industrial units and the adoption of suitable techniques of production have of necessity to be
accompanied by rationalization of certain other processes, viz., financial and marketing
organizations. Hence the usual association of decentralized production with cooperative or state
organization of marketing and credit supply. The alternative to this is acceptance of a change in
the nature of the market in the direction of small entities supplied by groups of small producers, in
which case decentralization reaches its logical conclusion--at the cost of technical and industrial
progress. Those who favor decentralization have, therefore, to accept either (a) concentration of
great power in the hands of the state as regards finance, trade, large-sized industrial operations,
etc., or (b) breaking up the market into local units, with an inevitable trend toward sluggishness.
To deny this choice amounts in effect to a denial of the main purpose of decentralization, which is
the avoidance of an unequal distribution of economic power between individuals and groups in
society.
110

The choice of the nation state was to try and concentrate power at the center and in the objectives
of planned development as seen in the national development council meetings and the five-year plans-
centralized control over heavy industry and financial and market conditions. There was encouragement of
the small-scale sector and local political power but what was lacking, also because of paucity of resources,
was the devolution of economic power and the inability to create the market conditions to allow it to grow
well. The limited resources were in turn divested in the heavy industrial sector but even this was not

109
Ibid. VIII- ‘The Role of Urbanization in Economic Development: Some International Comparisons’, Hoselitz, Bert
F., Research Center in Economic Development and Cultural Change, University of Chicago, and Consultant, Delhi
Regional Plan. 1962
110
Ibid. XI- ‘Centralisation and the alternate forms of decentralisation: the key issue’, Sachin Chaudhuri, Editor,
Economic Weekly. 1962.
116
enough to develop the sector sufficiently. It left inadequate means of encouraging the small-scale sector
and creating favorable conditions. The institutional mechanisms were absent or biased in favor of
centralized power, politically and economically, resulting in limiting private entrepreneurship and there
was concentration of power in the hands of the state without the concomitant mechanisms to produce
effective decentralization.
The relationship between centralisation and decentralisation for the future growth of the Indian
nation state was discussed. Much like Jawahar Lal Nehru had stated in the third National development
Council meeting, the main goal of Indian development was defined as ‘human welfare’. Human welfare
was linked to and ultimately dependent on ‘material progress and a minimum level of physical welfare’.
The goal of socialist democratic development meant that private interests had to be stopped or regulated
and the responsibility of development of infrastructure and heavy industries fell on the shoulders of the
central government. Regarding the great growth in urban population in the coming decade, urban
development was seen as needing special attention if the country had to avoid the ‘bitterest’ conditions for
the urban poor. There was also criticism of the ideas of replicating urban development by the
establishment of industries in rural areas and the ‘possibility of decentralising to a limited degree, below the
city size of one quarter million persons’. Other factors like opposing policy decisions and contradictory
development objectives were called out as impediments in the development of umbrella industries around
the decentralized industries. Instead, the need for developing urban policy in response to the existing urban
conditions was stressed. Within the larger urban centres, a policy for regional development, for example the
development of the metropolitan area and of coordinated development between objectives, policy and its
implementation that did not run counter to existing patterns of development, was viewed as the long-term
direction for alleviating urban problems.
111

Three other problems that Indian cities were seen as confronting were the poor living conditions in
cities, population growth and the importance of low-cost development. Most of the participants in the
conference shared two assumptions. ‘Large, congested metropolitan centres are relatively expensive
method of urban expansion, and that some form of urban industrial decentralisation should be encouraged.’

111
Ibid. XIII- ‘Urban Centralisation and Planned Development’, Britton Harris, Institute for Urban Studies, University
of Pennsylvania, and Consultant, Delhi Regional Plan. 1962
117
On the contrary, other participants felt that ‘...continued metropolitan concentration is either essential to
maximum productivity, or impossible to prevent in a free society such as India’s.’ The different forms that
decentralisation were described as
spreading suburbs, satellite communities, new independent towns of varied size and purpose, the
expansion of existing small towns, village industry, the strengthening of local government in
general, or entirely new forms and methods of development which have not yet entirely been tried
or even thought up.
Indian planners were viewed to be in a unique advantageous position in that they could start anew
and state authorities could be responsible for regional development. In the West both these conditions had
been lacking during industrialization. The policy of decentralisation was seen as a response to the problem
of poverty and unemployment in cities, caused by the inability of the government to supply jobs versus
demand created by migrants. Investment in capital-intensive transportation was seen as beneficial to long-
term development through lowered land and housing costs much like the United States. There was
identification of problems of jurisdiction and administration created by the split in planning between
municipal areas and the region as in the case of the Delhi master plan. ‘Indeed, all regional planning,
everywhere in the world, suffers from the fact that a “region,” almost by definition, is usually an area for
which there is no effective governmental structure.’ In the case of India, it was said, because the states were
highly involved in central planning and had the ability to influence regional development they could in fact
work out a system of regional development that was operable.
112

Tarlok Singh, Secretary of the Planning Commission talked of three approaches to urban
development; firstly, middle towns could provide the environment for industry to grow; secondly, middle
and small towns needed to be developed as counter magnets to large cities and; thirdly, small towns and
large villages needed to be selected for the development of medium-sized and small industries. His
approach was for ‘balanced development’ between rural and urban areas and he said that he preferred this
way of describing urban development rather than ‘decentralisation of industry’.
113

112
Ibid. XIV- ‘Urban Living Conditions, Overhead Costs, and the Development Pattern’, Catherine Bauer Wurster,
Department of City and Regional Planning, University of California, Berkeley, (The paper included excerpts from
another paper by Echeverria, Edward G., City Planner, and Consultant, Delhi Regional Plan) 1962.
113
Ibid. XVI- ‘Problems of Integrating Rural, Industrial, and Urban Development’, Tarlok Singh, Joint Secretary,
Planning Commission, Government of India. 1962.
118
The basis of planning multi-centres in the metropolitan region was based on the need to take
care of half a million rural migrants because ‘in examining the physical and geological features and in
setting plans limits to the potentially open central–city area, it is found that beyond a certain point
development becomes excessively costly.’ Exacerbating existing conditions due to increased population in
Delhi led to a solution for development of balanced growth not only for the Delhi Metropolitan Area but
the entire national capital region and preparation of a large number of interim plans for different regions
was suggested. Again, similar to Nehru’s views, planning was called out as being beyond the grasp of most
people, seen as a ‘single, static blueprint’ by politicians and so the importance of public education and
programmes to this end was stressed. A Ministry of Urban–Regional development was envisaged.
114

Transportation for development was mentioned in almost all the papers and especially in relation
to connectivity of cities and their hinterlands and public transit was given priority over private modes.
In the conclusions of the conference the following was stated.
There exist apparently only two published proposals of development plans for large Indian cities:
an early and rather sketchy plan for Bombay, which was proposed in 1948, and the very detailed
and highly elaborate plan for greater Delhi. But there are clear signs that the need for urban
planning is more and more widely recognized. In many of its aspects of the Delhi master plan
should be regarded as a model for analogous urban plans elsewhere in India, and, indeed, in Asia
as a whole; moreover, the urban social economic surveys sponsored by the planning commission
have been responsible for pointing up the crying need for city planning.
115

The Ford Foundation and other representatives from the Planning Commission, MCD and the
press all seemed to focus on the idea of decentralization and regional development as the direction for
urban growth and this approach as also seen in the Delhi Master Plan 1962.
Meanwhile the town and country planning organization conducted detailed studies of alternative
forms for regional development around Delhi in the mid 1960’s up to early ‘70’s for the National Capital
Regional Plan. Studies had included ‘Industries in the National Capital Region: employment and growth in
industries’, ‘A diagnostic study of migration to Delhi’, ‘Dominant role of Delhi as a Distributive Center–a
case for Decentralisation’, ‘Traffic and Transportation–roads’, ‘railways’, ‘Development patterns in the
National Capital Region’, and ‘Traffic studies by the Central Roads Research Institute’. The two main aims

114
Ibid. XVII- ‘National Implications of Urban–Regional Planning’, Albert Mayer, Architect and Planner, New York
City and Consultant for the Delhi Regional Plan. 1962.
115
Ibid. Editor’s PostScript, Roy Turner. 1962.
119
of the National Capital Regional Plan by the Town and Country Planning Organization was ‘a national
spatial development strategy’ for ‘decentralisation of economic activity to check the rural exodus and the
‘development of linkages between metropolitan cities, medium-sized towns and the rural hinterland.’
116

In the preamble of the Delhi Master Plan 2001, it was again emphasized that Delhi should be
planned as an integral part of its region and restructuring of settlement pattern and transportation network
should be used to limit rapid growth. The National Capital Region Planning Board, formed in 1985, was
listed as the primary body to coordinate regional growth between the states of Haryana, Uttar Pradesh,
Rajasthan and the National Capital Territory.
117

Also in the preamble for the Delhi Master Plan 2001, of the eight issues
118
that were emphasized,
the sixth referred to a Multi-modal mass transport system and it introduced the MRTS as a solution for high
density corridors to meet a demand for public transport in some corridors that was not being met by city
buses. The Intra-city transportation plan recommended a multi-modal transportation service, provision for
cycles, rerouting and increased efficiency of buses, reasonable freedom of cars, safe pedestrian movement
and innovative management techniques. There was an emphasis on existing and proposed MRTS-Light
Rail, provision of cycle tracks and buses and formation of a metropolitan transport authority. An inter-
modal transportation development was the framework for the future transportation infrastructure of the city.
Cars and other private vehicles did not feature prominently in the Master Plan.

Five-Year Plans, National Capital Region and the MRTS
As mentioned earlier, the idea of a national capital region had been discussed in the 1950’s and
60’s and metropolitan areas and regional development started featuring in the Five-Year Plans from the 3
rd

116
Breese, Gerald. Urban and Regional planning for the Delhi–New Delhi area capital for conquerors and country.
Princeton, New Jersey, 1974. P.42.
117
Master Plan For Delhi Perspective 2001, Delhi Development Authority. VIBA Press Pvt. Ltd., New Delhi, August
1990
118
The eight issues in order they are 1) Delhi to be planned as an integral part of its region and the use of restructuring
of settlement pattern and transportation network to limit rapid growth 2) the geographical features of the ridge- a part of
the Aravalli Hills, to be maintained in its ‘pristine glory’ and the Yamuna to be cleaned and developed for recreational
uses 3) Old Delhi and surrounding to be treated as a special zone because of its indigenous pattern 4) Urban heritage to
be conserved 5) Decentralization of city by having more business districts 6)Multi-modal mass transport system 7)
Urban development to be low rise, high density and 8) Urban development to be hierarchical in the following order
from small to large- housing cluster, housing area, neighborhood, community, district.
120
Five-Year Plan from 1961-66.
119
So the suggestions in the Delhi Master Plan 1962 and of the
participants in the Berkeley conference entered the realm of government and the practice of planned
development. Technical, economic and social data as well as surveys of the Delhi Metropolitan Area,
among other cities, was undertaken to understand the ‘problems and possibilities of regional development’
for future planning.
120
Regional studies of metropolitan regions around Delhi, Greater Bombay and
Calcutta were also started.
121
In fact, regional development was put at par with national development.
In the perspective of long-term development, with the economy advancing rapidly towards the
stage of self-sustained growth and with steady rise in the living standards of the people, regional
and national development are essentially two different facets of a common objective.
122

The Urban Planning Section of the plan advocated the development of general land use plans
followed by regional plans. Master plans for metropolitan cities were to be prepared first within a regional
framework for balanced social and economic development.
123
The development policy focused on placing
industries away from core cities with the intent to anchor the former as centres of development in the
context of the entire region. The responsibility for preparing master plans resided primarily with the states,
with the center providing some support. Town and country-planning legislation was seen as a requisite for
preparing master plans and state governments were advised to enact their own town planning
organizations.
124

The accomplishments of the 3
rd
Five-Year Plan, 1961-66, included ‘particular recognition’ of
urban and regional plans, and preparation of development plans for 72 urban centers. This followed the
suggestion presented in the Berkeley conference. By 1968, almost all the States had introduced Town

119
http://planningcommission.nic.in/plans/planrel/fiveyr/index9.html 3rd Five-Year Plan, Chapter 9- Balanced
Regional Development, paragraph 18. ‘Problems of a somewhat different kind are posed by the growth of metropolitan
cities and of large and growing cities. In metropolitan regions like Calcutta, Delhi, Bombay or others, it is necessary to
pursue a series of programmes aiming at balanced regional development, including appropriate land and housing
policies, establishment of new-towns and decisions regarding the location of industries.’
120
Ibid. Paragraph 25.
121
http://planningcommission.nic.in/plans/planrel/fiveyr/index9.html, 4
th
Five Year Plan 1969-74, Chapter 19, Urban
Development, Housing and Water Supply, Regional Development
122
Ibid. Paragraph 26
123
http://planningcommission.nic.in/plans/planrel/fiveyr/index9.html 3rd Five-Year Plan, 1961-66, Chapter 33,
Housing and Urban and Rural Planning, Urban Planning and Land Policy, paragraph 30
124
Ibid. Paragraphs 27 & 28
121
Planning Legislation with varying scope.’
125
Between 1963-69 with an allocation of Rs. 5.5 crores,
interim development plans for 40 cities were completed. However, as stated in the Plan, because of lack of
resources these could be carried out only in a few old and new towns. The importance of implementation of
interim plans to ‘prevent unregulated growth’ was stressed.
In the third five-year plan and before that, the idea of regional development was strong in the
planning commission as an approach to urban development in various urban areas around the country. This
emphasis on regional growth was simultaneously being implemented in the preparation of master plans ‘in
the first instance’ all over the country and in Delhi. Delhi master plan policy emphasis was on regional
development with self-sustaining ring towns to avoid sprawl and attract migrant population thus relieving
Delhi of some of the population pressure. In hindsight, placing national and regional plans at the same
level indicated a farsightedness that can only be appreciated based on recent trends in regional growth
around the world where ‘international cities’ emerge as stronger contenders in the global economy versus
the nation state. It also reflected the understanding that urbanisation was the corollary to industrialization
and hence regional development was the long-term goal.
The idea of regional development also entered the political arena with the Delhi CEC
V.K.Malhotra’s insistence in the 27
th
NDC meeting in March 1970 on the formation of a National Capital
Region along with similar issues concerning other major cities was a show of support for the idea of
regional plans that had been initiated earlier in the 3
rd
Five-Year Plan.
In the 4
th
Five Year Plan, 1969-74, there was even greater emphasis on regional development. The
importance of a regional authority for larger planning regions was envisaged that could formulate plans to
be enacted by the local and municipal bodies.
126

Pointing to the projected doubling of urban population in the next twenty years, from 1961-1981,
and doubling of towns with over 50,000 in population from 250 in 1961 to 536 in 1981, the plan stressed
the need for regional studies and planning. Regarding population growth in metropolitan centers, the plan
said that it had become ‘almost a law and order problem’ in Bombay and Calcutta and therefore in such

125
http://planningcommission.nic.in/plans/planrel/fiveyr/index9.html 4
th
Five-Year Plan, 1969-74, Chapter 19-
Regional Development, Housing and Water Supply, Regional and Urban Development.
126
Ibid. paragraph 19.5
122
areas not only did growth have to be prevented but also the city had to be decongested and the existing
population dispersed.
127

In the case of the other cities, future planning must be oriented towards, stabilisation of population
at a desirable optimum figure and towards planning suitable new centres in the region for the
likely spill-over. In this context, the potentialities of developing existing small-towns in the area
need to be fully explored. Unless-such positive approach in relation to growth of population in our
bigger cities and smaller towns is adopted now, it will be difficult to control the situation later.
128

The plan went on to say that providing utilities became unproductive when the population reached
a certain limit and creation of economic activity in smaller centers would help disperse this population. It
referred to the mismatch between the areas under local municipalities or corporations and the need for
planning for larger regional development. It was suggested that a regional authority would take over this
role and local authorities would be involved in implementing the regional plans. This too was suggested in
the Berkeley conference. The need for administrative reforms for local bodies and a long-term plan to avoid
wasteful expenditure was also stressed and ultimately it led to a call for local bodies to eventually be self-
financing.
129

In 1972-73, 10 years after the formulation of the Delhi master plan, the Town and Country
Planning Organization reviewed the Delhi Master Plan and suggested the establishment of Delhi as a dry
port, developments in adjoining Uttar Pradesh and Haryana states, and a proposed rapid transit system.
130

In the 5
th
Five-Year Plan, 1974-79, the outlays for Urban Development under the State Sector
included Urban Territory Plans. Under the Central Sector, outlays were included for integrated urban
development of metropolitan cities and areas of national importance, development of National Capital
Region and research and development in local self-government, urban development and financial assistance
for studies in urban and regional planning.
131

127
Ibid. paragraphs 19.2 & 19.3
128
Ibid. paragraph 19.3
129
Ibid. paragraphs 19.4 &19.5 ‘In the long run, the plans of development of cities and towns must be self-financing.
This is intimately connected in turn with the vexed question of land acquisition and land prices. One of the largest
sources of unearned income at present is the rapid increase in values of urban land. On the other hand, high prices of
land are one of the main obstacles in the way of properly housing the poorer classes. The evolution of a radical policy
in this regard is an immediate requirement for future development.’
130
Breese, Gerald. Urban and Regional planning for the Delhi–New Delhi area capital for conquerors and country.
Princeton, New Jersey, 1974. P.38.
131
5
th
Five-Year Plan, ANNEXURE 39 (Chapter V. 9. Para 5.165) The outlays were revised from initial Rs 26.60 in
the draft plan to Rs 23.93 crores for Urban Territory Plans under the State Sector. Under the Central Sector outlays
123
In an annexure of the 34
th
NDC meeting in August 1980, the speech by the Minister of Works
and Housing said that ‘we need to develop counter magnets to metropolitan cities’ in order to decentralize
metropolitan cities like Delhi. The idea of developing an NCR and counter-magnets in the hinterland to
decentralize Delhi continued in the planning commission agenda.
In the 6
th
Five-Year Plan, 1980-85, within the Programmes section under Urban Development,
Rs.10 crores provision was made for a scheme ‘to de-concentrate economic activity from the core of Delhi
into regional towns-located in U.P., Haryana and Rajasthan’ for the National Capital Region.
132

133

In the 7
th
Five-Year Plan from 1985-89, resources of Rs 35 crores were also allocated for the
development of the National Capital Region under the Urban Housing section of the Plan. One of the
greatest achievements listed in the plan was the constitution of the National Capital Region Planning Board
(NCRPB) in 1985 as a statutory body under the Central Government, Ministry of Urban Development that
would look into studies for schemes for the entire region. In the seventh plan this body started a detailed
plan for the development of the NCR.
134
Detailed plans for interconnectivity in the NCR by the NCRPB are
discussed in Chapter 4.
In the Urban Development section of the 8
th
Five-Year Plan from 1992-97, the development of the
NCR was aimed at providing infrastructural support to priority towns around Delhi, to the overall region
and to local areas.

were revised from Rs 230 in the draft plan to Rs 149.51 crores for integrated urban development of metropolitan cities
and areas of national importance, Rs. 20.0 crores in the draft plan to Rs. 5.09 for development of national capital region
and Rs. 2.0 crores in the draft plan to Rs. 0.18 crores on research and development in L.S.G., urban development and
financial assistance for studies in urban and regional planning.
132
http://planningcommission.nic.in/plans/planrel/fiveyr/index9.html. 6th Five-Year Plan, Chapter 23- Housing, Urban
Development and water supply, paragraph 23.24 (d)
133
Under a section for Urban Land Policy, it was pointed out that state governments had been unable to implement the
Urban Land Ceiling and Regulation Act of 1976 that was to prevent land speculation and ‘optimal allocation of land to
different users’. The Act was to be improved and further studies undertaken to understand ‘functioning of urban land
markets and to identify the causes of the increase in the value of land’ to check land prices for equitable distribution of
urban land. Ibid. Paragraph 23.25
134
Ibid. Volume II, Chapter 12- Housing, Urban Development, Water Supply and Sanitation, Paragraph 12.38 (d) An
outlay of Rs. 35 crores has been included in the Plan of the Ministry of Works and Housing for the development of the
National Capital Region (NCR) around Delhi. This will be in addition to the provisions included in the plans of other
Central Ministries like Railways, Shipping and Transport, etc. The NCR Plan envisages deconcentration of economic
activity from the core of Delhi into regional towns located in Haryana, Rajasthan and Uttar Pradesh. A statutory
Planning Board for NCR has been constituted under the Chairmanship of the Minister for Works and Housing and a
detailed Plan for Development for NCR is under preparation.
124
The NCRPB approved the Regional Plan-2001 for development of the NCR and its goals
included limiting growth of population of Delhi urban territory to 112 lakhs, moderate growth of Delhi
Metropolitan Area (DMA) and high growth in priority towns around the NCR. The direction of the plan
was to generate employment in priority towns by developing land, developing regional infrastructure,
developing local infrastructure of priority towns and Delhi Metropolitan Area (DMA), development of state
highways and power distribution. The actions to be taken included land acquisition for residential and
economic use, development of sub-regional centers and counter-magnet areas, strengthening of plan
implementation, upgradation of regional roads, development of power transmission and distribution,
augmentation and rehabilitation of urban infrastructure in DMA and priority towns. The State governments
would be involved in conceiving, financing, implementing and operating development programs. The
Center was to help in their implementation and private sector involvement was to be encouraged by
creating a suitable ‘financial and legal climate’. For the activities of the plan, the Ministry of Urban
Development was to provide outlays to NCRPB, which would then distribute it to the States or
Implementing Agencies. The States or Implementing Agencies were to provide a matching amount in the
case of development and acquisition land, development of regional centers and counter magnet areas.
Housing and Urban Development Corporation (HUDCO) and financial institutions were to provide funding
for local infrastructure and Central Ministries for national infrastructure.
135
The Regional plan or Delhi was
the first and only plan in the country that included jurisdictions of three states and the National Capital
Territory.
A Metropolitan Transport Coordination Committee set up under the NCRPB develop an integrated
multi-modal transport system of the Delhi Metropolitan Area by extending the proposed MRTS to DMA
towns and a core transport group had been set up to study how the proposed Delhi IMMRTS would be
integrated with the transport network in the DMA and NCR. Subsequently, it became part of the NCRPB’s
regional transportation plan, to be eventually integrated with the Regional transport network. It is discussed
in more detail in Chapter 4.

135
http://planningcommission.nic.in/plans/planrel/fiveyr/index9.html 8
th
Five-Year Plan Chapter 13-Urban
Development Paragraphs 13.5.27 to 13.5.22.
125
In the 9
th
Five-Year Plan from 1997-2002, the program for regional development was further
detailed and its applicability to other parts of the country where there were ‘regional disparities and
economic backwardness’ was discussed.
In the history of urban development in India, Delhi played a major role. The development of the
Delhi master plan, the course of decentralisation or balanced growth and regional development that was
seen as complimentary to socialist, democratic, planned development, were adopted as the preferred
direction of urbanisation. The movement towards planned development was suspended during many
periods from 1951-1996, but the overall goals were always picked up and the institutional, administrative,
political and economic conditions surrounding it strengthened. In some ways, the aim, despite continued
migration to Delhi was being felt in the NCR as could be seen in the percentage decrease of migrants
compared to towns in the national capital region.
136
However, actual implementation of the plans took off
only after the economic reforms at the national level in 1992.

Academic Studies and the MRTS
The Metropolitan Transport Team of experts of the Planning Commission was set up ‘to advise
City and State organizations to prepare and implement Comprehensive Transportation Plans consistent with
finances, existing and proposed land use distribution and desirable growth.’ In 1968 the ‘team proposed
that studies should first be conducted in cities with a population greater than 1 million.’
137
The Central
Road Research Institute carried out the comprehensive traffic and transportation studies for Delhi from
1969-1972
138
. The study on a mass rapid transit system for Delhi was carried out as part of these studies at
the request of the Planning Commission and Delhi Administration.
139
It was conducted by Dr.
N.S.Srinivasan et. al. and a paper and panel discussion based on the study was published in the Journal of

136
Role of indicators in monitoring growing urban regions: The case of planning in India’s National Capital Region.
Banerjee, Tridib. American Planning Association. Journal of the American Planning Association; Spring 1996; 62, 2;
ABI/INFORM Global pg. 222

137
“Transportation Planning for Delhi” Dr. N.S.Srinivasan, Indian Highways, December 1982. p.43
138
http://www.delhimetrorail.com/corporates/history.html
139
Prof. C.G.Swaminathan, Acting Director, Central Road Research Institute, New Delhi, 23
rd
April, 1975. Reprinted
from the Journal of the Institution of Engineers. (India), Volume 54, CI 3 January 1974.
126
the Institution of Engineers.
140
It received the 1973-74 President of India’s prize and is discussed in
detail in Chapter 9.
This paper is significant for a number of reasons. First, it won the President’s award, which shows
that the proposal was considered an exemplary solution to traffic problems. Second, it was the first
mapping of the metro rail and when future studies by CRRI and RITES were conducted, the final metro
routes were almost identical to those proposed in the paper in 1974.
141
Also significant is that at this stage,
the emphasis was not so much on traffic management or increasing efficiency of buses but was more on
shifting the burden of mass transit onto rail. This was in keeping with the socialist and planned
development approach of the nation state with the aim of industrialization for two reasons, firstly it was
mass transit and efficient and affordable to the extent that it would be subsidized by the state and at the
same time it was an ancillary function and physical infrastructure associated with an industrialized state.
Mass rail transit was found in all the international cities of the industrialized nations, New York, London,
Paris and Tokyo and per the paper, cities all over the world with a population of over 1 million switched to
a rail based transit system. Finally, it was based on the land use studies developed in the Delhi Master Plan
1962, with its emphasis on decentralization and regional development.
The above paper underwent a panel discussion in which members of the CRRI commented and
criticized the findings of the paper. In the opening remarks by the chairman R. Thillainayagam, the first
sentence was “The main aim of any metropolitan transport planning is to divert from private travel to
public travel.” In the discussion that followed various issues were mentioned repeatedly. These were 1)
necessity of separate cycle tracks
142
2) improvement in mass transit 3) coordination with Delhi Master Plan

140
Rapid Transit System For Delhi. Dr. N.S.Srinivasan, Ishwar Chandra, Y. Suryanarayana, B.L.Suri, Anand Prakash.
Central Road Research Institute, New Delhi, 23
rd
April, 1975. Reprinted from the Journal of the Institution of
Engineers. (India), Volume 54, CI 3 January 1974.
141
Ibid. p.15 The north-south route included the University, Timarpur, Old Secretariat and interstate bus terminal in the
north and Green Park, Malviya Nagar, Kalkaji, Okhla Industrial Estate, Sadar Bazar, Rani Jhansi Road, Connaught
Place, Central Secretariat, Vinay Nagar, Ramakrishnapuram office and residential complex and the Indian Institute of
Technology in south and central Delhi. The east-west route would pass through Central Secretariat and Indraprastha
office complex and connect east and west colonies. The feeder line would connect north-west Delhi to the ring rail.
142
Discussion on Paper No. 300 on January 4, 1976. Shri M.K. Chatterjee commented “The Authors have suggested
that for avoiding long distance travel for the cyclists, the city should not be spread far and wide. At least in Delhi, quite
the reverse is happening. The city is spreading, colonies are coming up far from the center and the poor cyclists have to
travel much more…We will naturally be interested what steps would the authorities take to segregate the cycle
traffic…”

127
and land use as a strategy for reducing work trips 4) staggering work times to reduce peak hour traffic
till such time that a mass transit system was in place 5) improvement of pedestrian facilities 6) financial
viability of capital intensive projects.
In response to these comments the authors made the following suggestions to the planning
commission that had authorized the initial study 1) Transportation studies for all major cities to preempt
problems with scientific solutions that required planning at the central level and referred to technical
approaches 2) restriction of the size of major cities or a ‘zero growth’ policy with an emphasis on
development of smaller towns 3) mass transport system rather than auto-oriented development in Delhi 4)
Integrated development of rail and bus based mass transport systems 5) coordination between land use
planning and transportation authorities 6) importance of proximity of home to work in expanding cities and
7) Studies regarding transport demands and travel characteristics every ten years to accommodate changing
economic conditions of the population.
Most of the panel members acknowledged the importance and inevitability of a mass transit
system. Only one question was raised regarding the viability of the mass transportation system, its
relationship to the policy assumption of the Delhi Master Plan and the rationalization for deciding the
modal split towards a mass transit system. No response was given for the latter other than the fact that the
suggestion for the same was based on the data.
143

The author’s suggestion of an MRTS was along the socialist pattern of planned development at
least as far as it was capital-intensive mass transit. Like the case of heavy industries, to be affordable to
most people, it would have to be highly subsidized and for cyclists who could not even afford to travel on
local buses, it would be out of reach. This planned development approach was present in the academic
milieu implicitly for the mass rapid transit system, which was for the most part taken for granted, despite

143
Ibid. Shri N. Ranganathan pointed out “The CRRI study for the comprehensive traffic studies for Delhi urban area
has become the basis on which the transportation planning on other urban areas is being proceeded with, including the
mass transportation system planning…There is a very great need for developing a mass transportation system but there
is no capacity either for the government to invest for such a high capacity and a high capital intensive system or for the
people to pay reasonable fares where the system could be at least self-sustained. Now this leads to the need for a very
important policy decision as to how either a metropolitan area should be planned including its transportation system
and what measures are necessary to contain the growth and travel demands of the city and disperse the growth over a
wider region…To conclude, while the Paper has brought out the trip characteristics within Delhi, it does not critically
analyze the achievements of the policy assumptions of the Master Plan as revealed by traffic characteristics. It also
does not give a rational basis for deciding the modal split for a mass transportation system whose need it stresses.”
128
being capital intensive. The socialist ideology of the nation state in academics was seen in the
suggestions for improvements for cyclists and pedestrians.
Another discussion based on a paper mixed traffic regulation in urban areas by Dr.
N.S.Srinivasan
144
in 1976 revealed that the focus of transportation issues was shifting towards traffic
management as a source and solution to the traffic problems of Delhi. The author in his introduction said
that the ‘traffic problem in the country is more or less a problem of human behavior. To curb the erring
drivers and other road users, we have got to have proper enforcement without which, I feel, we will not be
successful.’ He said that despite traffic management, efficiency would only be achieved through ‘the
progressive elimination of slow moving vehicles’. The mixed traffic regulations were welcomed by most of
the panel members who suggested various ways to manage slow moving and fast moving traffic, most
notably by providing segregated lanes. Attention was given to the pedestrian and often the example of other
countries was quoted to emphasize what was being said.
145

Other suggestions included flexibility in the concept of segregated lanes based on experiences in
Jaipur and traffic easement through carpooling.
146
It was pointed out that the main issues surrounding
mixed-use traffic were traffic education and land use integration and the lack of power of transportation
planners and engineers in policy decisions. It was proposed that target groups including decision makers-
bureaucrats, politicians and citizens be identified for this purpose.
147
This was a direct reference to the

144
Dr. N.S Srinivasan as part of Traffic Engineering Committee. “Guidelines on Regulation and Control of Mixed
Traffic in Urban Areas”. A panel discussion on the paper took place on January 8,1976.
145
Ibid. For example Shri K.K.Nambiar said of the suggestions and practice of widening the carriageway to ease
congestion at the cost of the pedestrian “It goes by the theory of the right of road-use being given in favor of the motor-
car and other sophisticated traffic. Actually this so-called right is being questioned in the socialistic pattern of society
all over the world.” He went on to laud the suggestion in the paper for the provision of pedestrian precincts to ease
traffic.
146
Ibid. Shri K.K. Sarin who pointed out the reasons for failures of similar interventions in traffic management in
Jaipur. He said that existing were too narrow to provide a separate carriageway for slow moving vehicles and so they
would need widening which probably would not happen since the local authorities did not have enough money to do
this. In the slow moving lane competition between the different slow moving vehicles would result in spillage onto the
motor carriageway and the recommendations were based on the assumptions that there would always be equal traffic
on either side of the road whereas in Jaipur it had been seen that during peak hours either one or the other side of the
road was congested. He suggested a more flexible approach with more number of lanes. Shri. Y. Srihari suggested
carpooling as a traffic easement measure based on the shared taxi concept introduced by Mr. Wilfred Owen of the
Brooklyn University.
147
Ibid. Shri N. Ranganathan recalled an anecdote regarding the arbitrariness of traffic regulations: “About 5 years
back when we prepared a working paper for the seminar on re-development of Connaught Place under the chapter on
Transport I wrote ‘while the least convenience to the car user is strongly resisted, the problems of the pedestrian and
cyclists are at best debated and forgotten.’ I only hope that this debate will not be one of them. As you all know, India
129
power of the car users, a group with much more political clout than the common person. At the same
time there was an optimistic view that education of decision makers would be enough to ensure that the
rights of pedestrians and cyclists remained protected or given priority. Over all in the discussion, it was
clear that there was a consensus that a mass transit system would help reduce slow moving traffic and
ultimately congestion.
Despite the suggestions by the panel for protection of rights of pedestrians and cyclists, it was
sidelined. Following this panel discussion, a booklet was published by the Indian Roads Congress called
‘Guidelines on Regulation and Control of Mixed Traffic in Urban Areas’, New Delhi 1977. The booklet
listed various traffic-engineering strategies for mixed traffic in urban areas. There were a number of issues
that stood out. First was the need to create public participation and to get opinions on which traffic rules
would be willingly adopted. Second was the importance of educating the public and third was the including
the role of land use planning as a necessary long-term solution. However, the booklet implied that the
ultimate aim was to develop a motorized mode of traffic in India and eliminate non-motorized modes.
Slow moving traffic such as bullock carts, tongas, camel carts, cycle rickshaws and handcarts
cause great impediments to the flow of traffic in the streets. In view of the economic condition
prevailing in the country, it will not be possible to ban these vehicles absolutely from our streets
and they will have to be tolerated.
In a revealing division of class barriers, it was clear that the slow moving vehicles, the modes used
by migrants from the surrounding areas were to be ‘tolerated’ in the design of traffic. On a kinder note, it
may have hoped for the migrants’ upward mobility and change to motorized transport modes with
improved economic conditions in the country. Subsequently, the guidelines contained engineering solutions

Gate is a monument area of Delhi attracting a large number of people. Earlier this area was cut through by traffic
arteries and as such the open spaces were divided. During Asia 72, after a lot of detailed discussions, studies etc., we
tried to integrate these open spaces into one unit to enable developing the same into a recreational park with India Gate
as a focus. The hexagon around this area was developed into a major road with necessary capacity including
synchronized signal system. At the same time the cycle traffic was, for the first time in Delhi, segregated from the fast
traffic. This traffic circulation system was evolved after very detailed inter-departmental discussions. It was also
approved at the highest level by the then Lt. Governor of Delhi. This traffic circulation worked smoothly for three
years. Traffic police records have shown that traffic accidents had come down remarkably. There was no fatal accident
whereas previously there were some. Surprisingly, one day, one read in the newspaper that the traffic circulation
system has been put back to the original pattern i.e., with the main traffic arteries cutting through the open spaces. I feel
this reversal of the decision was because of the pressure put by the car users. The car users were not ready to undergo
an inconvenience of traveling an additional 200 meters per day against their trip length of 15 to 20 km. The fact is, the
car users accounted for about 20 percent in terms of traffic and perhaps less than 10 percent in terms of total number of
persons. However, they were able to have their way against the interest of other road users, particularly the cyclists and
the pedestrians. Along with this, the plans for integrating the six pieces of open spaces and developing it into a nice
recreational area has also fallen into jeopardy. This example clearly shows that our efforts in imparting traffic education
should reach all levels of road users and decision makers.”
130
included slow moving vehicle needs. However towards the end of the book it was emphasized that slow
moving vehicles should be phased out and a suggestion was made that it should be accomplished by not
issuing any new permits.
148

The papers and discussions reveal the different solutions to traffic problems ranging from mass
transportation systems and single modes to traffic management and education of people. Dr. Srinvasan, the
proponent and introducer of the rail based MRTS in Delhi, changed his approach to traffic problems that
reflected the regional, decentralization policies for urban areas that were being pursued by the planning
commission.
His next paper in 1982 introduced the history of transport modes in the west, buses and the tube in
London, expressways and freeways in Los Angeles and public transportation in eastern Europe against
‘miniscule’ infrastructure development in developing countries due to lack of funds. He was now dedicated
to propagating the idea of an integrated or systems approach. He charted an overall transport facilities
planning approach and stressed transport policies for decentralization within urban areas, restriction of
metropolitan growth, economic factors like growth of counter magnets, prevention of migration by
developing villages and urban policy for overall growth of both villages and cities. However, he cautioned
the readers not to go too far with this approach and instead to see transport development as necessary to
overall balanced growth.
149

Mass transportation systems were mentioned several times for cities in this paper. He emphasized
the importance of high capacity rapid transit not only in the metropolitan area but also its periphery. He
said that in order to stop the cycle of short term measures in the face of high demand for transport
improvements, steps needed to be taken to ‘curtail, or rather systematize demand’ one of which would be
for the central government to release funds for immediate projects while at the same time simplifying land

148
To this day, rickshaw owners and pullers have to face grave difficulties and harassment to be able to get permits for
their vehicles. For a detailed study on this see ‘Deepening Democracy: Challenges of Governance and Globalization in
India’, Chapter 1- Laws, Liberty, and Livelihood: Economic Warfare against Rickshaw Owners and Pullers, Kishwar,
Madhu Purnima, Oxford University Press, New Delhi, India, 2005.
149
Transportation systems for Metropolitan Areas. Dr. N.S.Srinivasan, Indian Highways, May 1982, p. 24. ‘A
simplistic corollary would be to suggest that the cities be left as they are and villages be tackled. This is what is in fact
being suggested. But to argue in this fashion would be to negate centralized markets and commerce, education and
technology. A more retrograde step cannot be imagined. The whole spectrum of human settlements must be tackled to
produce a viable rural to urban continuum. Transportation can help to a great extent in the development of hierarchical
human settlements.’
131
acquisition laws for infrastructure development and compensation for the displaced through integrated
planning.
150

In a paper in the same year still based on the 1969 traffic study conducted by Dr. Srinivasan and
his team for the Planning Commission, Dr. Srinivasan one can see almost all concerns that surround
transportation planning- from concrete steps in traffic management to a systems approach and the
importance of funding to the formation of a special body that is responsible for the overall transportation
development to coordination with other agencies to the involvement of citizen groups. Though these
approaches mostly referred to a road based system, metropolitan rapid transit was also suggested.
151

Initiated by the planning commission, the idea of a mass rapid transit system for metropolitan
areas had been absorbed in the urban transport policy of the Five-Year Plans. The influence of government
policy can be seen in academic papers. In the papers by Srinivasan and his team, there is a reflection of the
planning policies that were being propagated at the center especially those of regional development,
development of smaller towns, counter magnets and the hinterland. The need for coordination among
transportation bodies was also seen in both academics and the five-year plans.
152

Other than papers on mass rapid transit other alternative and peripheral threads in academics
included emphasis on safety and infrastructure for cyclists with examples of transportation solutions for
cyclists in various countries in Europe and the need for ‘…planners and decision-makers (to make) a
fundamental psychological shift from their concern for movement of motorized vehicles to one of concern
for the people’ in order for cycles to be seen as viable, popular and an energy saving means of transport.
153

Studies that went against the grain of mainstream transportation planning, where the phasing out of Non-

150
Ibid.
151
“Transportation Planning for Delhi” Dr. N.S.Srinivasan, Indian Highways, December 1982.
152
For example in a paper by K.K.Madan, who was the president of Indian Roads Congress as well as Director
General-Works CPWD, New Delhi titled ‘Integrated Multimode Transit System for Indian Urban Areas- Need for a
Systems Approach’, the author mentions his visits to Japan where he saw different types of transit systems such as
commuter rails, monorails, AGT, LRV, LRT, HST. The paper talks about how there is a return to the old tram system
in countries all over the world. After a period during which road-based transit systems and automobiles became the
norm, there is a movement to re-introduce light rail transit to augment the road-based system like buses. The issues to
focus on, the author says, are a thorough feasibility study, a public-private partnership, a high level of safety standards,
a well integrated multi-modal system, available financing, preconstruction planning and the involvement of all
authorities concerned for example with land, power, traffic, services, utilities etc. so that there is cooperation and
integrated solutions for various problems that affect such projects.
153
“An Assessment of Facilities of Cyclists in Delhi” Dr. P.K.Sarkar, Dr. S.M.Sarin, Gulab Chander. Indian Highways,
July 1987.
132
motorized vehicles was seen as inevitable due to reduction in such trips with an increase in a city’s
population and size, viewed non-motorized vehicles and modes as necessary to supplement motorized
modes for smooth flow of traffic and safety of people.
154
The mass transportation system though reflected
the ideals of planned development, industrialization and investment in capital-intensive technological
projects that was so prominent in the NDC meetings.
The picture that finally emerged based on papers and suggestions from different departments,
mainly prepared by engineers is one that has very carefully studied the different problems facing the city.
Though seemingly concerned with providing for the weakest sections of society, some of the guidelines
published by the Indian Roads Congress were anti-poor and dismissed alternate non-motorized modes like
cycle rickshaws as viable solutions in traffic management, because they were used by the poor. Hence,
guidelines like non-issuance of new permits that created segregation rather than integration of a mode that
was providing an alternate competitive transport service to people all over Delhi. Flyovers and other
smaller projects such as marking of cycle tracks, pedestrian over and underpasses, guardrails in central
medians were already underway in the late 80’s, early 90’s, but these privileged motorized vehicles by
giving them the right of way and making it more difficult for pedestrians by having to walk longer
distances, climb steps etc. Cycle tracks without traffic management created common lanes for cycles and
buses thus creating maximum danger for cyclists. Other suggestions ranged from minor and low-cost
interventions to mega and extremely capital-intensive projects, all to work together in solving the
transportation problems of the city. Time and again what was repeated was the need to move forward on
this multi-directional approach- multimodal transportation models and land use policy. The mass rapid
transit system was privileged in the planned development of the nation state and from among the multi-
modal approach within the MRTS, the metro rail was the first among the recommendations to break ground
in 1998.

154
“Non-motorized transport in Urban Areas- on the verge of extinction or hope for the future?” Geetam Tewari-
Indian Highways, September 1995.

133
Five-Year Plans, Ministry of Urban Development (MOUD) and the MRTS.
The first intimation of the Mass Rapid Transit System for Delhi came in the 21
st
meeting in
October 1964 when in the Agenda papers under Road development it was suggested that a study group
should be set up to study metropolitan transportation.
155
Even though there was no mention of Delhi in
this agenda paper, the idea of a separate transportation study for metropolitan areas would subsequently not
only include it but also make it the precedent for other areas.
156

In the 24
th
NDC meeting in May 1968, among the discussed items, a report mentioned that of the
two projects initiated by the COPP and being studied at the time, one was on Metropolitan Transport. Also,
in 1969 the Central Road Research Institute conducted comprehensive traffic and transportation studies of
Delhi on the request of the Planning Commission with the Delhi Administration. The Mass Rapid Transit
system was a proposal for traffic problems in Delhi that was based on the studies and an academic paper on
this was published in the Indian Institute of Engineers journal in 1974.
In the 4
th
Five Year Plan from 1969-74, a provision of 50 crores was made for ‘schemes for mass
transit facilities in the metropolitan cities of Bombay, Calcutta, Madras and Delhi’ in the railways
budget.
157
This amount was carried over in the 5
th
five-year plan.
In the 6
th
Five-Year Plan, 1980-85, under the Objectives and Policies of the Transport section the
following paragraph appeared:
Steps will be taken to expand and strengthen the public transport system and thus reduce the level
of personalised motor transport which is highly energy intensive. Efforts will also be made to

155
http://planningcommission.nic.in/reports/genrep/50NDCs/vol2_15to25.pdf “A study group should be set up by the
Planning Commission in cooperation with the Ministries of Railways and Transport and the State Governments
concerned to make recommendations regarding future development of metropolitan transport (specially Calcutta,
Bombay and Madras). The recommendations of this group should include road and rail transport and organizational
and financing problems. Special provisions may be made for road development in metropolitan areas in the Fourth
Plan.” (p. 307) It may be of significance that Lal Bahadur Shastri had been the Union Minister for Railways and
Transport during Nehru’s time.
156
In the 3
rd
Five-Year Plan, The Committee on Transport Policy and Coordination discussed the Railways, the most
developed infrastructure network in the country that contributed majorly to the country’s resources. They emphasized
that railways were important for transportation of goods and would require adequate resource allocations and any new
lines to be built and were found technologically unfeasible would have to be subsidized by the central government or
parties concerned. They also pointed to the experience in other countries where railways were incurring heavy losses
and advised that this should be kept in mind in the expansion of the currently profit producing railways. So, the
planning commission was aware of the financial losses being incurred by railways in other countries.
http://planningcommission.nic.in/plans/planrel/fiveyr/index9.html 3rd Five Year Plan 1960-65, Chapter 31, Scientific
and Technological Research, paragraph 61 and Chapter 28 Coordination of Transport: Approach in the Third Plan,
paragraphs 11,12 &13.
157
Ibid. Chapter 15, Transport and Communications, Trends in Rail and Road Traffic, paragraph 15.8
134
introduce slec. trie (electricity) based public transport in urban areas, like electric multiple unit
(EMU) rail services and electric trolley buses.
158

There was a description of the worsening transport situation in urban and metropolitan areas due
to migration from rural areas in search of employment opportunities in the city. The approach, giving the
example of the West, said that instead of suburban dormitory towns connected to urban areas by capital
intensive rail (rapid suburban transport systems) there should be ‘development of counter magnets, beyond
the commutable distance, in the shape of self-contained residence-cum-work places through suitable
incentives.’
159
At the same time, in the Railways section, an outlay of Rs. 255 crores was allocated for
Metropolitan Transport Projects.
160

This was the first instance where urban-regional development and transport policy in the five-year
plans seemed to come together. Solutions of urban transportation problems were being situated in the realm
of regional development but the transport policy downplayed a regional network of transportation by using
the ‘counter-magnet’ approach to emphasize self-contained centers such that investment in capital-intensive
rapid transit could be avoided. For within the city, provision was made in the Railways budget for studying
metropolitan rail transit.
In the 7
th
Five-Year Plan from 1985-89 under Development Perspective: Towards The Year 2000
Long-term Development Strategy and Transport Section, mass transit systems for cities became part of the
national plan for development. ‘In large metropolitan towns, grade separated mass transit systems would be
set up to improve the mobility of intra-city commuter traffic.’
161

In the Transport Section of the Plan there was again a note on the need to strengthen and expand
the public transport system since these were more energy efficient than personalized motor transport.
‘Effort would be made to introduce electricity-based mass transit systems in major cities’
162
The outlay
under Railways for Metropolitan Transport Projects had increased to Rs 400 crores.
163

158
http://planningcommission.nic.in/plans/planrel/fiveyr/index9.html. 6th Five-Year Plan, Chapter 17- Transport,
Paragraph 17.14
159
Ibid. Paragraph 17.24
160
Ibid. Table 17.4, Plan headwise Outlay in the Five Year Plan 1980—85 (Railways)
161
http://planningcommission.nic.in/plans/planrel/fiveyr/index9.html Volume I, Chapter 2, Paragraph 2.75
162
Ibid. Volume II, Chapter 8- Transport, Paragraph 8.14
163
Ibid. Volume II, Chapter 8- Transport, Table 8.7, Railways- Plan Headwise Outlays
135
Also, in 1986, planning and coordination of Urban Transport was transferred to the Ministry of
Urban Development. In 1988-89 an Urban Transport Consortium was created to ‘assist State Governments
in taking up feasibility studies for Urban Transportation Systems.’ It was described in the plan as ‘a modest
achievement because the objective of this was to involve the concerned Ministries of the Government of
India, State Governments, financial institutions and local bodies in planning, coordination and execution of
urban transport projects.’
164
The Ministry of Railways, Ministry of Surface Transport as well as various
consulting agencies on a job-to-job basis were to provide the technical assistance for feasibility studies.
Central resources in the 8
th
plan were allocated to the preparation of the Detailed Project Report (DPR) for
the Delhi MRTS project.
165
Central assistance was also provided for transport studies in Calcutta, Madras,
Jaipur and Bangalore and more requests from various state governments had started coming in for the
same.
In the 8
th
Five-Year Plan from 1992-97, under the Scenario subsection of Transport, the
conversation had moved on from the necessity of Mass Rapid Transport System (MRTS) for urban areas to
the need for a ‘a financially viable entity for constructing and operating a Mass Rapid Transport (MRT)
system’ and finding ‘acceptable answers to the problems of funding the construction of an integrated MRT
system in metropolitan cities.’
166
Until this became a possibility, there was an emphasis on low-cost
options. Under the Urban Transport section, the need for attention to transport in urban areas was pointed
out, due to increase in traffic and an unreliable transport system leading to a shift to private vehicles that
ultimately resulted in an increase in pollution, congestion and increased usage of energy. The idea of
creating a financial institution to provide soft loans for urban transport projects, involvement of private and
joint sector was floated. The importance of involving Ministry of Railways in developing the MRTS for
megacities was emphasized.
167

164
http://planningcommission.nic.in/plans/planrel/fiveyr/index9.html 8
th
Five-Year Plan, Chapter 13- Urban
Development, Paragraph 13.2.27, 13.2.28 &13.2.29.
165
Ibid. 9th Five-Year Plan, Chapter 3- Transport, Urban Transport, Performance Review, Paragraph 3.7.172
166
http://planningcommission.nic.in/plans/planrel/fiveyr/index9.html. 8th Five-Year Plan, Chapter 9- Transport,
Paragraph 9.1.13
167
http://planningcommission.nic.in/plans/planrel/fiveyr/index9.html. 8th Five-Year Plan, Chapter 13- Urban
Development, Paragraph 13.5.29
136
In the 9
th
Five-Year Plan from 1997-2002, under Performance Review of Urban Transport,
limited funds for the urban transport sector and lack of coordination between land use and transport and
lack of emphasis on non-motorized traffic and pedestrians were areas pointed out as requiring
improvement. It was also mentioned that in September 1996, the MRTS project was cleared by the center
and was on its way to being implemented.
168
The high financial cost of rail based transport systems was
discussed and an alternative of surface and elevated MRTS was given. The following funding strategies for
rail-based projects were suggested.
The Central/State Governments would have to necessarily participate in the equity of such projects
and also consider making certain provisions for interest-free/low interest subordinate debt,
incentives for property development, tax exemptions/ concessions, freedom to fix fares, etc.
Budgetary and Plan support from the Central and State Governments will be required for these
purposes. The resource mobilization strategy that the Central and State Governments may adopt
for financing these activities may include a mix of dedicated levies and taxes on user and non-user
beneficiaries of mass transport systems, which may be in the form of additional excise duty/sales
tax on petrol/diesel, surcharge on motor vehicle tax, entry fee on motor vehicles entering
metropolitan areas, passenger terminal tax (rail, road, sea and air), surcharge on property tax and a
mass transportation tax. The proceeds from these levies may be used to finance the capital costs of
MRT projects, and also to discharge part of the long-term loan liabilities. The exploitation of air
space above and around the metro stations, depots, sheds etc, for commercial and residential
purposes could generate a substantial amount towards the project cost, which can form a part of
the State Government's capital contribution to MRT projects. Keeping in view these possible
developments, there is a need to set up a National Urban Transport Development Fund during the
Ninth Plan. This Fund would provide financial assistance for mass urban transport projects in the
country, preparation of feasibility studies and project reports and training and R&D activities.
Similar Funds at the city level may also be encouraged to meet the share of contribution of the
State and the Urban Local Governments in urban transport projects.
169

Apart from rail based urban transport, priorities and Strategies for Urban Transport had become
more detailed and comprehensive in the five-year plans. Good transportation was linked to increased
productivity. The focus was on a multimodal system as most suitable for cities, operational policy
instruments to reduce the use of private vehicles, improving the institutional and organizational framework
and financing strategies to be made integral to infrastructure programs. Greater emphasis in an entire

168
http://planningcommission.nic.in/plans/planrel/fiveyr/index9.html. 9th Five-Year Plan. Chapter 3- Human and
Social Development, Section 3.7- Housing, Urban Development, Water Supply and Civic Amenities, Paragraph
3.7.173. The major urban transport projects that were approved or proposals were initiated during the Eighth Plan are in
Delhi,Mumbai, Calcutta,Chennai and Bangalore. The Modified Phase I of the Delhi MRTS project was approved by
the Union Cabinet in September, 1996. It consists of 11 kms of underground and 44.3 kms of surface/elevated railway
tracks. The total cost of the modified Phase-1 project is estimated at Rs. 4,860 crore at April, 1996 prices. The project is
to be implemented by Delhi Metro Rail Corporation Limited, a joint venture of Government of India and Government
of National Capital Territory of Delhi. The OECF (Japan) has agreed to provide loan assistance upto about 60 per cent
of the project cost. Initially, a loan of Rs.478.78 crore (14.76 billion Yen)will be provided at 2.3 per cent rate of interest
per annum.
169
Ibid. Paragraph 3.7.182
137
section was given to the provision for non-motorized traffic in an effort to balance the ‘elitist approach’
in the past that had given more emphasis on motorized transport.
170

The history of urban transportation policy in the Five-Year Plans and the Ministry of Urban
Development (MOUD) shows how the MRTS persisted in the plans since 1969; how it was related to
regional development and finally after the economic reforms of 1992, it was financed and implemented. It
was initiated by the planning commission and became part of the urban transport policy for metropolitan
regions around the country. Once the Urban Transport Consortium Fund was formed in 1989, feasibility
studies for MRTS systems around the country were initiated, the first being the Delhi MRTS. An
administrative and implementing body called the Delhi Metro Rail Corporation was set up as a joint
Government of India (GOI) and Government of National Capital Territory of Delhi (GNCTD) venture for
smooth functioning of the project. Finally after exploring different funding options for such a capital-
intensive project, external assistance in the form of a soft loan by the OECF was attained and supplemented
by Central and City financial assistance and through levies, subsidies and revenue generating schemes.

MOUD, RITES, JBIC and the MRTS
The Ministry of Urban Development (MOUD) was given the responsibilities for coordinating
Urban Transport throughout the country in 1986 and an Urban Transport Consortium Fund was created in
1989 to provide central assistance for state governments for transportation feasibility studies.
In the annual report of MOUD, 1990-91, the techno-feasibility study for Delhi by Rail India
Technical and Economic Services (RITES) was under examination by the Ministry
171
and by the next
annual report 1991-92, in light of the high investment of Rs 5378 crores required for the IMMRTS in the
study, the MOUD started ‘exploring the possibilities of getting collaboration’ with Indian and Foreign

170
Ibid. Chapter 7- Transport and Communication, Section 7.1- Transport, Paragraph 7.1.16 as follows: Non-motorised
transport modes, powered by human and animal energy, could also play a bigger role in the developing transport
scenario of the country. Bicycles, rickshaws and similar vehicles, and even hand carts, have a considerable role in
urban areas for catering to short trips in congested areas and on narrow streets and lanes and for providing access to
formal mechanised modes of transport. Animal carts are an essential part of the rural agricultural economy. But the
elitist approach has not focussed on the development of these modes of transport as much as on the formal motorised
modes, despite their manifold benefits like relatively lesser cost, simple technology, large employment potential, non-
polluting operations etc. The provision of simple technological inputs of improved designs, standardisation of spare
parts and ensuring safe and smooth movement could go a long way in achieving greater complementarity of various
modes of transport catering to the varied needs of the different sectors of the economy.
171
http://urbanindia.nic.in/moud/quickaccess/ann_report/1990-1991/English/4.pdf
138
companies on a turnkey or Build, Operate, Transfer (BOT) basis.
172
This approach continued the next
year and examples of a joint stock company that would raise its own resources floated for the Hyderabad
Light Rail Project and World Bank assistance for a comprehensive transport study as part of the Urban
Transport Project-II for Bombay, became possible strategies for public/private partnership and foreign
assistance in implementing the Delhi metro rail project.
173

The MOUD in its 1993-94 annual report talked of the need for developing public transport in at
least 23 cities with a population of over 1 million because railways and other public/private transportation
modes did not carry enough passengers to meet the estimated trips generated in these cities. In previous
years, it had initiated transport studies to develop a ‘National Transport Policy’ that would provide the
institutional framework and funding structure for transport infrastructure projects but the ‘enormous’ cost
of urban transport projects was an issue. The cost of the MRTS proposal by RITES had increased to Rs
7,500 crores and ways of financing the project were being developed in the form of property development,
dedicated taxes, levies and surcharges. Different ways of involving the private sector through Build-
Operate and Transfer (BOT), Build-Own-Operate and Transfer (BOOT) and Build -Own-Operate (BOO)
systems were also being explored.
174

In 1994-95, Rs 20 crores was contributed as central assistance for implementation of the Delhi
MRTS, Hyderabad LRTS and other cities. It was mentioned that Phase I of the MRTS Delhi, consisting of
underground metro of 27 kms, surface rail of 31 kms and dedicated bus-way of 17.5 kms at a cost of Rs.
3401 crores, had been approved in principle by the Government of India and a Detailed Project Report was
being prepared by RITES with a completion deadline of April 1995. A company with equity participation
by the Delhi Government and Government of India would be set up for implementing the project.
175

In the 1995-96 Annual report of the MOUD, the idea of a National Urban Transport Policy was
close to being realized with RITES nearing completion of its urban transport study for 21 cities. Regarding
Delhi, from among the different modes of the initial MRTS plan, the proposal for ‘Rail-based’ Mass Rapid

172
http://urbanindia.nic.in/moud/quickaccess/ann_report/1991-1992/English/4.pdf
173
http://urbanindia.nic.in/moud/quickaccess/ann_report/1992-1993/English/4.pdf
174
http://urbanindia.nic.in/moud/quickaccess/ann_report/1993-1994/English/4.pdf
175
http://urbanindia.nic.in/moud/quickaccess/ann_report/1994-1995/English/4.pdf
139
Transit System (MRTS) for Delhi was chosen for implementation ‘keeping in view the acute problem
of road congestion and air pollution prevailing in the city.’ The GNCTD was to be an equity partner with
the central government in funding and implementing the project. Loan Assistance was sought from the
Overseas Bank of International Cooperation (OECF), Japan (now Japan Bank of International Cooperation-
JBIC) that had already performed a techno-financial appraisal of the project under its SAPROF (Special
Assistance for Project Formation) scheme. The Delhi Metro Rail Corporation (DMRC) was formed on 3
rd

June 1995 and had paid a share capital of Rs 3.6 crores. According to RITES, the cost of modified Phase-I
of the MRTS covering 55.3 kms out of a total 184.5 kms was Rs 4182 at April 1995 prices and a timeline
of 10 years was given from start to completion.
176

By 1996-97, the cost of the project stood at Rs 4860 crores at April 1996 prices in the MOUD
annual report. DMRC was a joint venture by the Delhi Government and Government of India. The OECF
was to provide 60% of the cost with a loan of 14.76 billion yen (Rs 4767.8) crores at an interest rate of
2.3% per annum.
The Ministry of Urban Affairs & Employment has made a beginning in extending financial
support to urban transport projects in the country by equity participation in the Delhi MRTS
project. Since Urban transport projects are conventionally non-profit social sector projects, private
sector investment participation in such projects is generally not forthcoming unless there are
substantial subsidies provided.
177

Urban Transport Projects, classified as social sector projects, would not be able to generate
enough profits for the private sector and would have to be supported by the governments through subsidies.
The 1997-98 MOUD Annual Report described the relationship between lack of urban transport
and slow economic growth and decay of cities. The Planning Commission Sub-Group on Urban Transport
in the 9
th
Five-Year Plan had recommended that in cities with over 5 million population, the modal split in
favor of mass transit should be 70-80% because they were generally expected to have up to 40,000 peak
hour direction trips. For this, ‘appropriate’ mass transport systems in cities needed be provided. The report
pointed out the modifications made in the original study by RITES from 67.5 km of route length with 19
km underground metro, 48.50 km surface rail and 17.5 km of busways to 11 km of underground metro,

176
http://urbanindia.nic.in/moud/quickaccess/ann_report/1995-1996/English/5.pdf Urban Transport Projects in the
country, Delhi, paragraph 7.
177
http://urbanindia.nic.in/moud/quickaccess/ann_report/1996-1997/English/4.pdf
140
44.30 km surface rail and no busways due to the tram system recommendations by the Ministry of
Surface Transport. This was the only mention of MRTS having been modified based on the HSTS proposal
for Delhi by Jagdish Tytler, Minister of Surface Transport and the Chief Minister Madan Lal Khurana,
back in 1994. The main achievements on the MRTS listed by the MOUD, included the release of the first
installment by the OECF after finalization of its loan on 21
st
October 1997 and contributions of Rs 277
crores by the Delhi Government and Government of India. Also noted was that the DMRC had become
fully functional with the appointment of key personnel including the managing director. The DMRC had
purchased 3800 sq.mts. in the NBCC place, Lodi Road, Delhi for office space, the process of appointment
of General Consultants was underway and was to be finalized by June 1998. Notifications had been issued
under the Land Acquisition Act for private land required for the project and the State and Central
government shared the Rs 404 cores cost for land acquisition. The Government of India had released Rs 60
crores of its share of Rs 202 crores.
178

In the 1998-99 annual report, the connection between productivity and urban transport in cities
and the importance of cities in the economy of the country was further emphasized.
Incomes are higher in urban areas. This is so because they are more productive. Therefore,
wellbeing of urban areas comprising of 26% of total population is very important as they
contribute to nearly 55% of the GDP of India. This share has the potential of rising further in
coming years. This greater productive efficiency of cities is, however, only the potential. It is
conditional upon the appropriate management of urban areas and particularly upon the efficiency
of transport system. Urban transport plays a key role in this relationship between potential and
effective urban productivity. A good road network coupled with an efficient mass transport system
makes a substantial contribution to the working efficiency of cities for their economic, social and
political development.
179

Regarding the MRTS, it was informed that the first installment of Rs 408 crores ($ 83 million) by
the JBIC would be utilized for construction of the metro corridor, general consultancy services, interest
during construction and contingencies only. The consultancy contract had been awarded at Rs 208 crores
and the General Consultants had started work on the project. It was also indicated that the JBIC loan would
be made available to the DMRC as ‘pass through assistance’ and ‘against which provisions were being
made in the MOUD budget.’ Regarding the Rs 404 crores ($ 82 million) to be released by both the Delhi
and Central Governments within the first two years of the project, it was noted that the central government

178
http://urbanindia.nic.in/moud/quickaccess/ann_report/1997-1998/English/7.pdf
179
http://urbanindia.nic.in/moud/quickaccess/ann_report/1998-1999/English/7.pdf
141
had ‘only’ released Rs. 115 crores ($ 23 million). of their share of Rs 202 crores ($ 41 million).
Notifications for acquiring 20.19 hectares out of a total of 172.35 hectares of private land had been sent out,
and the DMRC was working on transference of 146.87 hectares of government land to the project. An
MRTS cell had been set up in the MOUD to monitor the progress of the project.
180

In the 1999-2000 MOUD Annual Report, additional information included an update saying that Rs
173 crores of the Rs 202 crores ($ 41 million) share of the central government had been released whereas
the Delhi government had released its entire share of Rs. 202 crores ($ 41 million) towards land acquisition.
Also the DMRC had taken over 60 hectares of private land and 84 hectares of government land.
181

Delhi government and Central Ministry of Urban Development contracted the Rail India Technical
and Economic Services Limited (RITES) to conduct the feasibility study for a mass rapid transit system for
Delhi. RITES had received Rs. 20 crores ($ 4 million) as consultancy fee for the project and 200 staff
members had been working on it for seven years since 1989.
182

RITES, a public limited company, was established in 1974 as a Government of India enterprise,
under the ‘aegis of Indian Railways’. Its chairman and managing director as well as director of projects and
other employees are appointed from the Indian Railways. It is a multi-disciplinary consultancy organization
and currently it has a repertoire of 600 projects in India and all over the world. Its clients include national
governments and other apex organizations in the world and central and state governments, public sector
undertakings, corporations and industrial establishments and private enterprises in India. For funding,
RITES collaborates with international funding organizations such as the World Bank, Asian Development
Bank, African Development Bank, United Nations Office for Projects Services, United Nations Industrial
Development Organization, United Nations Development Program and Kuwait Fund for Arab Economic
Development. Its Urban Transport Department is not only consulting for the Mass rapid transit system but
also for the high-capacity bus system corridors and more recently, the monorail system in Delhi.
183
RITES
was also given the contracts to prepare Project Management, Proof Checking, Construction Supervision

180
Ibid.
181
http://urbanindia.nic.in/moud/quickaccess/ann_report/1999-2000/English/6.pdf
182
Japanese experts coming to finalize Rs. 10,000 crore MRTS project. A.N. Bajpai, The Observer, New Delhi, 6 July
1996.
183
http://www.rites.com
142
and Commissioning reports for Phase I of the Delhi MRTS surface, elevated and underground
corridors, Regional transport study for NOIDA, Greater NOIDA with linkage to Delhi, Bus route
rationalization and rescheduling study, feeder bus planning for Metro system, Delhi and Feasibility and
Detailed Project Report on Integrated Rail cum Bus Transport System for commuter travel in the National
Capital Region Delhi. Apart from these it was carrying out similar studies in other cities of the country like
Chennai, Hyderabad, Bangalore, Ahmedabad and Kolkata.
RITES works with local organizations in all its projects and the 1992 academic paper on the Delhi
MRTS was an outcome of the study ‘Planning of Mass Rapid Transit System for Delhi’ entrusted by
RITES and the Delhi Administration in 1989 to the Central Road Research Institute (CRRI) that had
initially conducted the 1969 traffic and transportation studies including the original proposal for a mass
rapid transit system for Delhi.
184
Hence the proposal for an MRTS for Delhi came back full circle to the
CRRI, ‘a premier national laboratory established in 1948 as part of the Council of scientific and industrial
research’ and engaged in carrying out research and development projects in various fields including
transportation planning. These research institutes were the main bodies used by the planning commission to
conduct various studies on infrastructure and other technical issues. CRRI’s past achievements between
1970 and 1979 include the comprehensive urban road improvement and traffic management plan for Delhi
and Bangalore that brought its traffic and transportation division to the foreground.
In February 1996, RITES’ managing director, Mr. Bharat Singhal, in one of the first articles that
appeared on the MRTS, announced that approximately Rs. 6600 crores would go into construction of the
first phase of the project. At the time however, the JBIC was only to fund one third of the project and the
Central and Delhi government the rest two third. In his announcement he also stressed the fact that the cost
of the project was going up at a rate of Rs. 2 crores per day. The MRTS, right from the start, was not sold
as a profit-producing project. Bilateral and multilateral agencies that took loans for urban transport projects
in general, would have to be subsidized by the government through ‘budgetary resources or through the

184
Planning of Mass Rapid Transit System- A Case Study of Delhi, Dr. A.C.Sarna, General Manager, Urban
Transportation, RITES, Anand Prakash, Scientist, C.R.R.I., D.Mukhopadhaya, Scientist, C.R.R.I., N.L.Bhatia, General
Manager, Urban Transportation, RITES, H.H.Suthar, Scientist, C.R.R.I. Indian Roads Congress Journal, Paper No.
418, Volume 53-3, pages 553-558, 1992. p.587.

143
grant of concessions to the operating company.’ These would include ‘provision of free or concessional
land, property development rights and advertisement rights at or near the metro stations.’ Mr. Singhal
pointed out that the governments could raise the resources for funding the mass rapid transport projects
through ‘imposition of dedicated levies in the form of passenger terminal tax, a surcharge or cess on sales
tax or excise duties on motor vehicle fuels, surcharge on property tax, tax as a percentage of the total wage
bill.’ He said that since it was important to keep an affordable fare structure, the subsidies by the
government were necessary for maintenance and operation costs of the project.
185

The government and consulting agency knew that the MRTS in itself would not be financially
profitable or even self-sufficient and still decided to go ahead with the project because of its social benefits
and the funding agency, JBIC, considered it a transportation project that would ultimately boost the
economy while helping in traffic decongestion and environmental improvement.
Even though foreign aid or external assistance did not feature prominently in the Indian economy,
it was tied to development projects and very directly to megaprojects like dams and power plants. Foreign
Aid allowed the central government to pursue specific economic projects needed for industrialization.
These were also the kind of projects for which funding and expertise was readily available by international
aid agencies. So even as economic policies restricted foreign direct investment, controlled foreign aid was
welcomed as a financial source that the central government, as a monopoly and as a protective state, could
use for the pursuit of development planning.
186
The external assistance for the second and third five-year

185
Japanese team to visit India to discuss MRTS funding. Richa Mathur. The Indian Express, New Delhi, 22 Feb. 1996.
186
Policy Analysis, Foreign Aid and India: Financing the Leviathan State. Shyam J. Kamath.
http://www.cato.org/pubs/pas/pa-170.html. “The centrally planned industrialization strategy of India's post-
independence period has resulted in over 60 percent of investment in the industrial sector going into public-sector
enterprises. The private sector has been severely restricted by the banning of private-sector investment in major
industries; a strict regime of industrial licensing; intrusive quantitative, price, and distribution controls; uneconomic
preferences for cottage, village, and other small industries; extensive labor-market and employment controls; and
comprehensive external-sector controls.(3) Restrictions have included prohibitive tariffs, perhaps the developing
world's most comprehensive and onerous set of quantitative controls and restrictions, an ever-expanding export control
and subsidization scheme, and severe and often prohibitive restrictions on both direct and portfolio foreign
investment.(4) Over 20 million Indians are on the public payroll, and around 70 percent of all formal, above-ground
employment is in the public sector. Confiscatory tax rates combined with a jungle of red tape--permission to open a
hotel involves 45 applications and over 25 different government agencies--have led to the growth of one of the largest
and most thriving underground economies in the world, where an estimated 50 percent of economic activity is
generated.(5) From 1950 to 1985 per capita income in India grew at a meager average annual rate of 1.5 percent,
compared with rates of 5.5 to 6.5 percent in the "newly industrializing countries" of Hong Kong, South Korea,
Singapore, and Taiwan and 3 to 4 percent in the three southeast Asian nations of Indonesia, Malaysia, and Thailand.
India's heavily centralized economic planning, its lack of openness to trade and investment, and its large accumulated
inflow of foreign aid--mainly in the form of official development assistance- have set it apart from its neighbors.”
144
plans was twenty-four and twenty-eight percent of the overall budget respectively. For the first and
fourth to eighth five-year plans, external assistance remained below sixteen percent. Other sources for the
budget came from Internal Borrowing, Deficit Financing, Additional Resources Mobilization,
Miscellaneous Capital Receipts over non-plan Disbursement, Public Sector Enterprises (including
Railways), and Balance from Current Revenues. Internal borrowing which increased from twenty-three
percent of the overall budget for the first five year plan to sixty-nine percent for the eight five year plan
included market borrowings, small savings, Provident Fund and Other Special Funds.
187
One can infer that
the emphasis on savings, education and protectionist domestic policies were slowly and steadily yielding
results for the internal economy of the country in spite of an annual average growth rate of 1.5 percent from
1950 to 1985. However, this was almost entirely being spent on non-plan expenditure and losses being
incurred by the public sector undertakings. The resources to reinvest in plan expenditures were tight and
finally led to the fiscal crisis of 1991. There were two hurdles to individual states initiating and managing
development projects. First most development projects across the country were under the jurisdiction of the
central government and second external assistance was negotiated at the level of the central government.
These hurdles were removed during the economic reforms initiated by the central government in 1991
when it became easier for the center and states to scope and process external assistance. The loan for the
Delhi Metro was initiated by the Ministry of Urban Development with Japan’s Overseas Economic
Cooperation Fund (OECF) later known as the Japan Bank of International Cooperation (JBIC). Since Delhi
was not a full-fledged state, the JBIC loan was a pass through loan to the DMRC borrowed and guaranteed
by the Central government. DMRC was a joint venture by the Delhi Government and Government of India.
The Delhi Metro received 60% of its funding through a soft loan by the Japan Bank of International
Cooperation all of which was transferred to the DMRC as and when needed. The exchange risk for the loan
was divided equally between the Delhi and central governments.
Japan has a history of providing external resistance to India since soon after its independence. In
1959 the Export Import Bank of Japan (JEXIM) gave its very first concessional long-term, low interest loan
called Official Development Assistance (ODA) to India. Its first overseas representative office was also

187
http://planningcommission.nic.in/data/dataf.htm. Table 1.4 Pattern of Financing The Public Sector Plans, P.13, 14,
15

145
opened in India in 1959. By 1961 JEXIM had transferred most of its loans to another fund called the
Overseas Economic Cooperation Fund (OECF). The two bodies JEXIM and OECF merged in 1999 to form
the Japan Bank of International Cooperation (JBIC). Most of the ODA loans were for infrastructure
projects such as Thermal and hydro power generation, transmission systems, road, irrigation, water supply
and sewerage systems. According to JBIC, ‘the evident example of Indo–Japanese cooperation is Delhi
Mass Rapid Transport System Project which is based on advanced technology.’ The six stages of JBIC
ODA loan procedures include project preparation, loan request, examination/ appraisal and ex-ante project
evaluation, exchange of notes and loan agreement, implementation including procurement and
disbursement, and ex-post evaluation.
From among other things for project identification, a few stand out. First is ‘establishment of
project concept as potentially viable and consistent with the country’s development objectives’ and second
is ‘consistency with the related master plan or regional development program’. Though the MRTS met
most of the other requirements, these two were particularly important for the project fitting in with not only
the planned development trajectory that the country had decided to follow but also the Delhi master plan
and the idea of regional development.
JBIC stresses the importance of a feasibility study to determine its ‘expected contribution to
economic and social development and to see whether the project is environmentally sound.’
188
A feasibility
study is needed and in the case of the MRTS, RITES had carried it out for the Government of India and the
Delhi government earlier. JBIC also stresses the importance of Environmental Impact Assessment as part
of the project formulation and feasibility study. In the project preparation phase, JBIC nominees review the
identified projects with the Central government and the project plan is also further analyzed from
economic, social, technical and environmental aspects.
In the Loan Request phase, the Ministry of Finance, Department of Economic Affairs,
Government of India coordinates and collects proposals from various ministries/public sector undertakings
of the Central government and state governments across the country on an annual basis and files a loan
application with the Embassy of Japan, New Delhi after screening the projects. Subsequently the JBIC

188
Operational guidance on the preparation for Japan’s ODA loan projects. Japan bank for International Corporation
publication, Tokyo, Japan, p.8.
146
reviews the project proposals through a fact-finding mission, which may decide to meet with the
Government of India officials, connected to the project and conduct field visits.
The loan for the MRTS under the JBIC, came under the SAPROF scheme, an acronym for Special
Assistance for Project Formation. The SAPROF scheme ‘assists prospective borrowers in drawing up a
complete implementation program for a project.’ It usually comes into play when the project is considered
viable but the feasibility studies are not satisfactory per JBIC project appraisal criteria.
Finally the project is approved by the JBIC depending on the appraisal criteria which includes
whether the project enjoys high priority in the social economic development plan of the
borrower’s country and whether the project is appropriate in the light of the more reliable current
projections; whether the major policy issues regarding the targeted sector are appropriately
addressed in the government’s development policies; whether the project preparation is adequate
to ensure successful implementation and sustainable operation from the economic, financial,
technical, social, institutional and environmental viewpoints; whether the technical and financial
capabilities of the executing agency are adequate to ensure satisfactory implementation of the
project; whether the nature of the project makes it eligible for Japan’s ODA loan financing
(example of project which could generate very high financial return and could attract private
financing is usually not eligible); if any problems are identified, measures can be adopted to solve
them.
189

The project had been very much a part of the urban transport policy and socio-economic
development plan for the National Capital Region and given the development of satellite towns, increase in
population and traffic in the city and master plan development goals, the project was very appropriate.
RITES had undertaken feasibility studies and prepared a Detailed Project Report that addressed economic,
financial, technical, social, institutional and environmental viewpoints. DMRC had also been formed as a
joint Government of India and Delhi State government undertaking so ascertaining a measure of vertical
integration at the state and central level and with qualified engineers and other officials from the Indian
Railways. As mentioned earlier in the MOUD Urban Transport Reports, it had already been established that
it was difficult to get private sector financing for such projects because of the low financial rate of return.
The project met the appraisal criteria of the JBIC on all fronts. Additionally, the SAPROF scheme provided
further insurance for project formulation and implementation.
According to the Observer, the Government of India had submitted the project to Japan for
funding in 1994 and was approved in the same year. In October 1995, the Union Ministry of Urban

189
Ibid. p.12
147
Development Minister Mr. R. K. Dhawan discussed the MRTS project with the Japanese Vice-Minister
for International affairs in the Ministry of Transport, Mr. Niko Hirano. In November 1995, the JBIC team
appraised the project, the feasibility studies, cost estimates, designs and other details prepared by RITES
and expressed satisfaction.
190

The feasibility study was completed in 1991. On July 19, 1994, the Union Cabinet ‘in principle’
gave approval to the MRTS project, which was then to comprise 67.5 km length (which has now
been reduced to 55.3 km). The Union Cabinet then authorised the Urban Development Ministry to
go in for a detailed project report. After the report was completed, the Delhi Metro Rail
Corporation Ltd was set up in mid- ‘95. After this, the RITES (Rail India Technical and Economic
Services) Detailed Project Report was completed in August 1995, and the Environmental Report
in November 1995...We immediately discussed funding for the project with Overseas Economic
Cooperation Fund (OECF) of Japan, Mr. Singh said (MOUD Secretary)...Subsequently, an 11-
member team of Japanese experts evaluated the project and gave a green signal for funding 60%
of the total cost in May 1996... The 11-member team in fact walked the entire 11 km length of the
North-South Corridor to inspect for themselves the congestion, traffic, and feasibility of the
corridor, he said.
191

The MRTS received the loan from JBIC under the transportation sector in an effort to improve
infrastructure for economic growth, along with 10 other projects in various sectors. The project summary
for the MRTS, JBIC described the need for the project for not only alleviating traffic congestion but also
reducing air pollution and developing a suburban rapid transit system i.e. a regional network.
Delhi, the capital of India, benefits from the extensive nationwide road and national railway
networks, constructed at the beginning of this century in accordance with a well-conceived plan
intended to provide long-distance transportation for both passengers and freight. On the other
hand, the transportation system inside the city, such as the commuter trains connecting the suburbs
and the center, is inadequately developed. As a result, transportation in Delhi depends mainly on
the bus network, with buses always overcrowded because the number of buses is inadequate and
there are frequent delays. The inadequacy of the mass transportation system causes many serious
problems, such as heavy traffic jams and air pollution due to the rapid increase in the number of
cars and other vehicles. Given the projections for the increase in the number of cars, construction
of a mass transportation is required both for preservation of the environment and in order to
alleviate traffic jams.
192

The two reasons cited for promoting the MRTS were lack of an adequate public transport system
that currently consisted of buses and increase in the number of private vehicles that were primarily
responsible for traffic congestion and air pollution.

190
Japanese experts coming to finalize Rs. 10,000 crore MRTS project. A.N. Bajpai, The Observer, New Delhi, 6 July
1996.
191
MRTS gets green signal after 20 years. The Pioneer, New Delhi, 18 September 1996.
192
http://www.jbic.go.jp/english/base/release/oecf/1997/A21/B2102/0225-e2.php#6
148
Chapter 4- Project Approval, Funding, Metro Act and Urban Transport Policy

This Chapter is divided into four sections. The first section describes the emergence of the project
in the media before during and after the Union Cabinet Approval in September 1996. A number of issues
were revealed and would become a constant source of news in the media.
The second section of this chapter deals with funding for the Metro Rail project from the Central
and Delhi governments. There is a brief overview of the JBIC loan describing how Japan’s nuclear
sanctions affected it and how it helped the Delhi and Central governments and DMRC develop and
promote alternate funding ways for the project. The method of funding had already been reported in
newspapers when the project was cleared in the Union Cabinet in 1996.
The third section deals with the Metro (Operations and Maintenance) Act 2002 that defined the
legal framework for the Delhi Metro rail but its extension to urban railway systems planned in other cities
of the country was blocked by the Railways Ministry. The Metro bill would have also brought all urban
transportation railway projects under the aegis of the Ministry of Urban Development and freed them from
the Railways’ Act jurisdiction. The Metro Act was the culmination of the urban transport policy for
metropolitan areas that had been developing in the five-year plans over the last 5 decades. The Metro rail
project and the Act also became the ground for the conflict between the State and Central governments to
gain more autonomy versus retain more power.
The fourth section discusses the impact of the Metro rail project on the transportation policy and
transport sector in National Capital Territory of Delhi. As far back as 1996, there was criticism of the metro
rail project in being able to solve problems of traffic congestion and pollution. A team from the Indian
Institute of technology was pursuing the High Capacity Bus System alternative that would upgrade the
existing extensive road structure present in the city and organize and manage traffic so that public transport
in the form of high capacity buses as well as non-motorized vehicles were given the right of way. These
were adopted by the Delhi government as part of their urban transportation strategy. Eventually, when the
Congress at the Center in 2005 started the Jawaharlal Nehru National Urban Renewal Mission through the
Ministry of Urban Development that would provide assistance to implementation of city plans generated at
the local government level, Bus Rapid Transit Systems became one of the most popular ways for
149
addressing public transport in other cities as well and became part of the Urban Transport approach in
the Ministry of Urban Development.

Before Union Cabinet Approval
In May 1996, the then Delhi Minister of Transport, Rajendra Gupta of the BJP government, gave
preliminary information to the press about the MRTS and transportation developments in the city. It
included clearance of MRTS within a month or ‘very soon’ by the Union Cabinet; completion of all tenders
and requisite plans for the project; Rs 200 crores contribution towards the project by the Central and Delhi
Governments and the remaining funding by the Japanese government; completion of three corridors in the
first phase of the project by 2005-‘one underground line from Delhi University to the Central Secretariat
and two elevated corridors, one from Shahdara to Nangloi and another from Subzi Mandi to Holambi Kalan
via Rohini’ and; tentative fixing of fares at Rs. 5 per kilometer but subject to change depending on
inflation. Regarding high-speed tram services for Delhi, a project put forward by the previous Chief
Minister of Delhi, Madan Lal Khurana, Gupta expressed unsuitability of trams for Delhi traffic because
they only carried medium intensity traffic and said “MRTS is a reality, the tram project will have to be
reworked according to the MRTS and the super expressways”. Expressways that would connect Delhi to
the NCR and help bypass heavy traffic from the main city were also being planned.
1

The following month, the Union Minister of Urban Affairs and Employment, M Arunachalam said
that the project would be presented to the finance minister before being put forward in the Union Cabinet
after Rail India Technical and Economic Services (RITES) made a presentation to him on the Modified
First Phase of the MRTS and ‘raised issues relating to financing, institutional and other arrangements
required for speedy implementation of the project’. The cost of the project based on the detailed project
report of April 1995 was said to be Rs 4,182 crores and at the time of the publishing of the article would be
Rs 6,000 crores. The urgency for clearance of the project due to cost escalation with time was emphasized.
2

1
Clearance for Super Expressways Likely. The Statesman. 22 May 1996.
2
Delhi MRTS awaits finance ministry nod. Business Age, June 29, 1996.
150
Next, the aims of the MRTS were listed and they were reducing fuel consumption, air
pollution and providing relief to the bus system by integrating it with metro rail system. As in the previous
article funding was said to come from equity contribution from the government and external assistance or
loan but Japan was not mentioned in this regard. The article established the involvement of the Urban
Affairs and Employment Ministry (MOUD) and Finance Ministry in the MRTS. At this time, RITES was
revealed to be the agency on the forefront in advocating the project. The pressure of increasing costs with
time was also expressed along with information about a ‘Modified First Phase’ of the MRTS, though this
was not explained in detail.
More news about the progress of the project started appearing in newspapers. The Observer
reported that other projects ‘like the ring railway, light railway and tramway... now stood... discarded, with
the ambitious MRTS project, conceived over three decades ago, nearing fruition.’ There had been major
obstacles for the project, which had been cleared. The reporter however cautioned that ‘barring a last-
minute unforeseen hitch, the first-phase of the MRTS may be expected to be launched soon.’
The project that would cost Rs 10,000 crore, per July 1996 prices, with Rs 4,500 crore for the first
phase and Rs 5,500 crore for the second phase to be financed by a Japanese loan funding two-thirds of the
cost of the project at a 3 percent interest rate whose repayment would start after 10 years of project take off
with a return period of 10 years. The Delhi and Central governments would equally contribute towards the
remaining one-third of the cost.
The MRTS corridors would consist of 185 km out of which 27 km would be underground. The
first route would be from Nangloi to Inter-State Bus Terminus (ISBT) and would be completed in the first
four years. RITES, a government of India enterprise, would act as project consultants.
A team of Japanese experts had appraised and were satisfied with the feasibility studies for the
project, prepared by RITES prior to clearing funding for the project by the Indo-Japanese Protocol, a
decision taken only once a year.
3
Mentioning this fact added to the urgency to take a decision on the
project. By mid August, the decision to clear the MRTS had still not been taken and the August 15 deadline
for the JBIC loan was approaching.
4
In an article subheaded ‘Giving a Push’, it was reported that the

3
Japanese experts coming to finalize Rs 10,000 crores MRTS project. A.N.Bajpai, The Observer, 6
th
July, 1996.
4
Decision on MRTS for Delhi delayed. Industry bureau, Business Standard, New Delhi, 8 August, 1996.
151
Central and Delhi governments would provide a series of concessions for the MRTS. These would
include customs duty exemptions for equipment imports; both governments equally sharing the exchange-
rate fluctuations against the yen; exemption for DMRC from income tax, capital gains tax and property tax;
DMRC to be allowed to generate resources through property development; land acquisition cost to be
provided by both governments and; DMRC to pay no dividend on government equity till senior debt was
fully repaid to JBIC by the 20
th
year. These provisions were based on an increase in fare rates at 7.5% per
annum.
5

As discussed earlier and as reported in February 1996 in the press by the RITES managing
director, the MRTS was never described as a profitable project. Instead, the concessions to make the project
financially viable were openly acknowledged and it was considered a ‘social sector’ project.
The Prime Minister H.D.Devegowda Gowda approved the MRTS project on August 18, 1996 in a
meeting of the NCRPB as part of an overall Rs 22,000 crore ($ 4500 million) fiscal plan to develop the
NCR and decongest the capital.
6

RITES had worked out a financing structure to help fund the MRTS that would include a uniform
tax levied on city dwellers including metro rail users and non-users benefiting indirectly from the project.
This issue was to be presented in an upcoming Union Cabinet meeting along with request for approval for
the MRTS proposal and the two-third project financing that the OECF (JBIC) would provide for the first
phase of the system. News about the expansion of the MOUD’s Urban Transport policy was also appearing
in the media that reported that the Centre had approved MRTS systems for the cities of Mumbai,
Bangalore, Calcutta, Madras, Hyderabad, and Jaipur.
7

Business newspapers or the business sections of main newspapers almost exclusively carried news
regarding the financial workability of the project. In August, The Economic Times reported that a ‘multi-
national transportation company ADtranz’ from United States and ‘trading giant Itochu’ from Japan signed
a partnership agreement to bid for the MRTS project. The US-based company had already set up a
subsidiary office in India and ‘earmarked an investment of Rs. 100 crore ($ 20 million) for the first phase

5
MRTS sops may include free land, tax reliefs. Mukul Chandra Gogol. The Economic Times, 11 August 1996.
6
11,000 cr NCR scheme to decongest Delhi. Anil Anand, The Hindustan Times, 20 August, 1996.
7
Uniform tax may be levied for MRTS. Mukul Chandra Gogol. The Economic Times, New Delhi, 20 August, 1996.
152
of its operations in India.’ Other Japanese firms, the article reported, were also preparing to bid for the
project.
8
This was happening even before the Union Cabinet had given approval to the project. ADtranz
and Itochu later teamed up as part of a consortium to bid for the underground section of the metro and were
also awarded the contract.
In August of 1996 the Hindustan times had already announced “MRTS now a reality in capital”,
saying that after the Prime Minister’s approval, the project had been forwarded by the MOUD minister for
the Union Cabinet approval. The article informed a wider readership of the concessions granted to the
MRTS. Other relevant information included the environmental impact management that would involve
‘rehabilitation of 5912 jhuggis, 912 concrete houses and 663 shops’ and compensation for the people to be
rehabilitated. The rhetoric that would be used repeatedly to justify the project also began to appear. The
scheme presented to the Prime Minister earlier in the month, listed the reasons for the need for the MRTS
as traffic congestion, frequency of accidents and saturation of roads. ‘Delhi incidentally is the only city in
the country with five million plus population which does not have a suitable rail-based transport system.’
The details of routes for the first phase were given along with the explanation that it had been modified
‘keeping in view that the population of Delhi would be 13.2 million and the number of registered vehicles
3.91 million by 2001.’
9

Union Cabinet Approval
The Cabinet of Ministers of the Union Government approved the Delhi MRTS project on 17
th

September 1996. MOUD had presented the proposal and the ‘high-powered committee’ that cleared the
project consisted of Union Secretaries of Finance, Expenditures, Urban Affairs and Surface Transport,
Chairman of the Railway Board and Member Secretary of the Planning Commission. The MOUD was
credited for doing the groundwork for the project and the MOUD secretary was to be the chairman of the
Delhi Metro Rail Corporation (DMRC) that would be in charge of the project. The Chief Minister of Delhi
said that the DMRC had been established with an authorised capital of Rs 1000 crores. The Delhi

8
ADtranz, Itochu make pact to bid for Delhi MRTS project. Shubham Mukherjee, The Economic Times, New Delhi,
26 August, 1996.
9
MRTS now a reality in capital. The Hindustan Times, New Delhi, 28 August, 1996.
153
government would appoint the Managing Director of the DMRC and it would include members from
the agencies connected with the project.
Almost all the newspapers carried the news of the MRTS being cleared by the Centre. There
would be three corridors of total length of 55.3 km divided into 44.3 km surface and elevated and 11 km
underground stretches. The corridors would include the north-south corridor running from Central
Secretariat to Delhi University via Patel Chowk, Connaught Place, New Delhi Railway Station, Chawri
Bazaar, Delhi Main, ISBT, Civil Lines and Old Secretariat. The East-West corridor would run from
Shahdara to Nangloi via ISBT and the Northwest corridor would run from Sabzi Mandi to Holambi Kalan.
(Figure 6) The first line would be commissioned six years from start date and a common ticketing system
between different modes would be developed. The second line from ISBT to Delhi University would start
in six years in 2002. A total of nine corridors would be constructed in the second and subsequent phases of
the project.

Figure 6: The ‘Modified’ First Phase of the MRTS. Source: Has MRTS run into wrong track? Hemendra Singh
Bartwal, Map by Viney. The Hindustan Times April 5, 1999
154
The OECF would provide a loan of 60% at 2.3% interest to the Central government and this
would be passed on to the DMRC at the same concessional rate. GOI and GNCTD would be share 30% of
the cost of the project, 7% would be through property development and 3% through subordinate debt
towards land cost. The Public Investment Board’s (PIB) had expressed reservations about the viability of
the project because of a Financial Rate of Return (FRR) of 2.8% versus an Economic Rate of Return
(ERR) of 21.4% not including the cost of land, which was to be an interest-free subordinate debt. Taxes and
levies in the NCTD would be used by the state and central governments to equally cover losses if any.
10

This issue was described well in an article in ‘The Economic Times’ with the headline, ‘Cabinet
overrules PIB, clears MRTS.’ The project was described as ‘controversial’ and the article informed that the
Public Investment Board had objected to the OECF loan to the project, saying that it would ‘prove costly in
the long run.’ The PIB’s objections were based on the exchange rate risk of the yen ‘given the traditional
volatility of the yen vis-à-vis the rupee.’ The PIB had suggested that it might be easier for the government
to get resources from the market; the private sector. The PIB’S objections about the difference between the
ERR of 21.4% versus the FRR of 2.8% were overruled by the Union Cabinet that dispelled the PIB’s
concerns by saying that any financial shortfalls for the project would be met by dedicated levies or taxes on
the city population.
11

The MOUD Minister, U.Venkateswarlu, said that the work would be completed in 2005-2006 and
it would produce savings of ‘Rs 1901 crore ($ 390 million) annually in terms of operating costs of vehicles,
road decongestion and savings on additional road infrastructure’ including savings on fuel of Rs 465 crores
($ 95 million). The project cost of Rs 4859.74 crores ($ 996 million) would go up to Rs 8000 to Rs 8300
crores ($ 1640- $ 1700 million) by its completion due to cost escalation.
12

If we withdraw the various duty concessions on imports, the actual cost of the project is between
Rs. 6000-8000 crores ($ 1230- $ 1640 million), so if the opportunity cost of this investment is
assessed then it is not evident whether the project is viable.
Senior government officials expressed doubts about the financial viability of the project based on
the loan currency and hinted that it was ‘approved hastily to accommodate the Japanese announcement to

10
Cabinet clears first phase of MRTS. The Statesman, New Delhi, 18 September 1996.
11
Cabinet Overrules PIB, clears MRTS. The Economic Times, New Delhi, 18 September, 1996.
12
Cabinet clears first phase of MRTS. The Statesman, New Delhi, 18 September 1996.
155
be made at the opening of the India Development Forum meet in Tokyo on Thursday’.
13
On 3rd
October 1996, the Business Times Bureau of The Times of India ran an article with the heading ‘Hurdles
on MRTS route overlooked’. The article reported that the Cabinet Committee on Economic Affairs
(CCEA) that approved the project in September 17 had done so in a hurry without addressing the concerns
of the PIB and without getting approval from the Department of Programme Implementation that was now
raising questions about the viability of the project. The first of these was the projects cost estimate, which
RITES had reported at Rs. 4182 crores ($ 857 million) based on April 1995 prices and would become Rs.
6313 crores ($ 1294 million) with 10% inflation rate in 10 years. By the time the project was approved it
had become Rs 4860 crores ($ 996 million) based on April 1996 prices and would subsequently become Rs
8200 crores ($ 1680 million) with 10% inflation rate in 10 years (calculated it is actually Rs 7336 crores ($
1503 million) with 10% inflation rate in 10 years). Even though the terms used to arrive at the new
numbers were not given, the funding for the project seemed to be based on an incorrect estimate. Of the Rs
6313 crores ($ 1294 million), the part being funded by the Central and State governments through domestic
borrowings took into account 10% interest rate whereas regularly it was charged at 18%. The escalation in
price was computed at a dollar rate of Rs 31 whereas at that time the dollar rate was approximately Rs 50.
The cost of acquisition of private land was Rs 93 crores ($ 19 million) and had also not been included in the
cost overrun. The project had not looked into the matter of how it would obtain its power and water
requirements. More problems pointed out by the Department of Programme Implementation included the
lack of specification for the technology tie-up and methodology of executing projects in the detailed project
report. The joint administrative control of the project by the Delhi government and Central government was
also anticipated to create confusion. And lastly, the article said ‘It is feared global tenders are unlikely to go
through competitive bidding, as the OECF loan may bias the bid in favor of a few countries, including
Japan.’
In response to these concerns the MOUD secretary and ex-officio chairman of DMRC for the first
five years, N.P.Singh, said that talks were in progress to get power from the northern grid from the 11
th
year
onwards after construction of the project. Instead, he felt that the real challenge lay in “land acquisition

13
Centre Clears MRTS for Delhi. Business Standard, 18 September 1996.
156
without much litigation, which could be achieved only by very liberal compensation. Besides, the very
legitimate problem of dislocating jhuggis around the rail routes has to be taken care of.” Other problems
talked about in the article included the yet to be appointed executives of the DMRC. N.P.Singh said that the
board had met recently to “evolve a time-bound action plan” and that the post of the managing director had
been advertised with the Delhi government making the appointments by December of the same year and
the number of directors expected to increase from 7 to12. The OECF/JBIC loan was to be finalized the
following year.
14

Other concerns raised by the Department of Programme Implementation were not addressed.
Financial information regarding the project was mostly covered in the business newspapers and right from
the beginning the financial viability of the project was being questioned. The media reported the hidden
costs and misgivings regarding these costs.
However the MOUD secretary, N.P.Singh, part of the bureaucracy, a proponent of the project and
also the chairman of the DMRC, pointed out that crores of rupees had already been spent on studies done
so far on the project. The Union government had given approval ‘in principle’ on the feasibility study by
RITES and asked for a Detailed Project Report (DPR). The DPR by RITES was completed in April 1995
and it was costing an additional Rs 2 crores per day the project was delayed.
15
He said the modal split right
now was 61% by buses, 38% by private vehicles and 1% by trains. The MRTS was to increase the train
modal split to 16%.
16
He also talked about the possibility of a Unified Metropolitan Transport Authority
(UMTA) with Lieutenant Governor P. K. Dave as chairman to encompass and manage all transport modes
in the city.
17
This idea of a UMTA had already made its appearance in the Five-year plans. This was
essentially a Central government initiative to manage and control transportation in Delhi and was further
evidenced by the Lieutenant Governor P.K. Dave who, in a seminar called ‘Urban Transport and Mass
Transit’, apart from talking about the history of the MRTS, called for top priority of redesigning roads to
give more space to buses and cycles and increasing average speed of vehicles. He called the MRTS ‘a

14
Hurdles on MRTS route overlooked. Swati Sucharita, Business Times bureau, The Times of India, New Delhi, 3
October, 1996.
15
Union Cabinet approves Delhi MRTS project. The Times of India, New Delhi, 18 September 1996.
16
Cabinet clears MRTS for Delhi. The Pioneer, New Delhi, 18 September 1996.
17
MRTS gets green signal after 20 years. The Pioneer, New Delhi, 18 September 1996.
157
lasting solution to Delhi’s transport problems’ and said that it had been delayed due to policy-making
bureaucrats and political executives. The Ministry of Surface Transport Secretary S.Sunder talked about
redesigning buses and subsidizing State Transport Undertakings as the latter provided a social service by
running buses on unviable routes.
18

Regulatory and legal mechanisms would be put in place to integrate the MRTS with other modes
and avoid unhealthy competition. A unified transport authority would integrate MRTS with buses and other
systems of transport. The MRTS would carry 32 lakhs (3.2 million) passengers daily on completion. The
importance of the MRTS was stressed in reducing vehicular operating costs, traffic congestion, accident
rates and pollution and better time management and savings on account of additional road infrastructure,
which would otherwise be required in the absence of the MRTS.
19
It was described as ‘bound to have an
impact on the cityscape, its commuter service and culture and even life pattern.’
20
There was urgency in the
way the project was described. The approval was called ‘long awaited’ and the project was described as
having run into rough weather in the past. The Chief Minister of Delhi described the project as ‘a dream
come true for Delhiites’. The project was also described as ‘ambitious’ and ‘prestigious’ (sic) and was to
remove pollution in the city. It was connected to other built and proposed rail systems in the country.
The cabinet approval for the MRTS assumes importance as Delhi is the fourth most polluted city
in the world today, with as much as 64% of the air pollution in the capital coming from vehicular
sources, most of it from two wheelers. The concentration of major atmospheric pollutants like
carbon dioxide, nitrogen oxides, lead oxides and others have already crossed the permissible limits
at major traffic intersections in the city, resulting in increased cases of asthma, bronchitis and
other lung-related diseases....Of the nine megacities of the country with a population of 2 million-
plus, such mass rapid transport system is already available in Mumbai, Calcutta and Madras. Two
more are in the offing in Hyderabad and Bangalore. Similar projects are to be implemented in the
remaining three megacities of Ahmedabad, Kanpur and Pune.
21

The land acquisition for the project was to begin in 1996 and the cost of land would be Rs 403.68
crores ($ 83 million) out of the Rs 4860 crores ($ 996 million) for the overall project. It was not anticipated
to be much of a problem because the Railways and the Delhi government were reported owning most of it.
Approximately 10-15 ha was private land, which had to be acquired, whereas 133 ha came under the

18
MRTS is answer to Delhi’s traffic problems: Dave. The Pioneer, New Delhi, 18 September, 1996.
19
MRTS gets green light after 30 years. MRTS gets Govt okay, work to start next year. The Indian Express, New
Delhi, 18 September 1996.
20
Centre clears MRTS project. The Hindustan Times, New Delhi, 18 September 1996.
21
Cabinet nod for Delhi MRTS project. The Hindu, New Delhi, 18 September, 1996.
158
agricultural category. It was said that the Delhi government had contributed Rs 2.84 crores ($ 0.6
million) to the project already and it would subsequently be contributing Rs 100 crores ($ 20 million) per
annum to the project. The MRTS fare was given at Rs. 5 (a dime), subject to revision at the time of
implementation of the project.
22
This did not match figures provided in the MOUD 1998-99 Annual Report
that said that notifications for acquiring 20.19 hectares out of a total of 172.35 hectares of private land had
been sent out, and the DMRC was working on transference of 146.87 hectares of government land to the
project. So, the quantity of land to be acquired was broken up into private versus agricultural in the media
even though agricultural was also private land.

After Union Cabinet Approval
Party politics over the project was played out by the United Front government at the Center
claiming it as its achievement versus the Bharatiya Janata Party (BJP) Delhi government saying it approved
the project in July.
23

The day after the Union Cabinet approval, there was an article on MRTS routes in the Pioneer.
Even though extensive feasibility studies had been undertaken, a detailed project report prepared and both
thoroughly examined by the OECF/JBIC, the articles started with the following comment. ‘The Delhi
government might have to re-chart the routes suggested for phase one of the MRTS as the proposed routes
ignore the present traffic flow pattern.’ The reason given was that the previous Delhi Administration with
Chief Minister Madan Lal Khurana and the Union Surface Transport Minister Jagdish Tytler had asked
RITES to modify the 16 MRTS routes it had proposed, to complement the High-Speed Trams System
(HSTS) suggested by them. The HSTS would have covered the higher density traffic routes while the
MRTS would be limited to peripheral routes. The Union Cabinet had approved these modified routes.
However because the HSTS was not implemented, the modified routes for the MRTS would have minimal
impact on the traffic. A summary of the HSTS routes covering 177.3 km as well as the original and
modified MRTS routes reported that though the HSTS was to be started in September 1995, the project ran
into trouble.

22
MRTS project: A dream come true for Delhiites: CM. The Hindustan Times, New Delhi, 18 September, 1996.
23
Cabinet okays rapid transport system for city. The Asian Age, New Delhi, 19 September, 1996.
159
The project got a death blow with the arrest of Mr C.S.Khairwal on corruption charges and Mr
Khurana then asking for a review of the project...The project has been delayed for too long. Since
no one is interested in it any more and no studies have been carried to support the project, the
HSTS is dead for all practical purposes, a senior Delhi government official said...Though the
HSTS features weighed down on the list of priorities, the MRTS is still living under its shadow.
Sources said that an effort would have to be made to revive the original plan. Asked about the
possibility of changing routes, Transport Minister Rajendra Gupta said, we would definitely have
to do something about this, but a final decision would be taken by the Delhi Metro Rail
Corporation (the company to run the MRTS), when it is established.
24

In November and December 1996 articles on delay of the MRTS project started appearing. One of
the conditions of the OECF was that the funds for the loan would not be released until all the required land
had been acquired for the project. Even though the official word by the Delhi Transportation Minister was
that the State government would carry out its responsibilities on time and that acquisition of land was well
under way, other sources according to the articles, said that there could be problems because the Railways
was ‘reluctant to provide its land at a subsidized cost.’ Delay in acquisition of land would result in an
increase in the cost of the project by Rs 1000 crores ($ 205 million) and it would now cost Rs 9000 crores
($ 1844 million) by the time it was completed. The view that the OECF loan would be expensive in the
long run because of the rupee–yen exchange-rate volatility, was again expressed.
25
The scrutiny by the
press on the Central government not contributing towards the project as had been worked out in its funding
structure continued with more reports of the cost of the project increasing at the rate of Rs 2 crores ($ 0.4
million) per day because the Union Finance Ministry had delayed releasing its funds for the project and the
land acquisition was dependent on the release of these funds. OECF officials commented that the
government would have to carry the responsibility of making up the difference in case of cost escalation of
the project. However, they would consider giving the second loan if the government was not in a position
to be able to do that.
26
The MOUD had approached the Empowered Committee to look into the matter and
it was reported that the OECF would not sign the loan agreement unless ‘the Indian side puts its house in
order.’
27

24
Government may have to redraw MRTS routes. City, The Pioneer, New Delhi, 19 September, 1996.
25
Delays raise MRTS cost by Rs 1000 cr. Mukul Chandra Gogol. The Economic Times, New Delhi, 22 September,
1996.
26
The delay in MRTS project costing Rs 2 crores a day. Mukul Chandra Gogol. The Economic Times, New Delhi, 18
December, 1996.
27
Delayed release of equity money jeopardizes project, rises costs. Empowered committee to study MRTS. Mukul
Chandra Gogol. The Economic Times, New Delhi, 11 January ,1997.
160
By January both the Delhi and Central governments had contributed Rs 140 crores ($ 29
million) and Rs 50 crores ($ 10 million) respectively for the year 1997-98 for the MRTS project. The Delhi
Government announced that notifications would be sent out for compulsory land acquisition for the MRTS
project and the managing director would soon be selected and that the OECF had agreed to the soft loan for
the project on the condition that the project would stick to a schedule of eight years starting from April
1997 for Phase-I.
28

On 26 February, 1997, the Government of India signed an agreement with the ‘Japanese
government backed’ OECF for a $132-bn low-interest loans package, which was ‘the largest yen
dominated credits Japan had ever provided to India the same day.’
29
In October 1997, the Union
government appointed E. Sreedharan, the chairman and managing director of Konkan Railway Corporation,
as the managing director (MD) of DMRC.
30

Discussion
The problems pointed out by the Department of Programme Implementation were the ones that
emerged during the construction of the project- funding, jurisdictional confusion, bias in award of contracts
because of the funding agency and land acquisition. The issue of modified routes also made an appearance
in the media. This indicates that contrary to Flyvbjerg et al’s (2003) emphasis on good practices for
choosing and implementing megaprojects as a way of ensuring accountability, even with a regulatory body
like the Department of Programme Implementation in place and its accurate predictions of the
shortcomings of the project, a conscious decision was made to go ahead with the project. The arguments
that justified its approval were based on it being considered a social project with a high ERR even if it was
not a profit making project with a high FRR. The government agreed to provide subsidies to ensure its
viability. The high ERR itself was based on assumptions of the project ensuring savings through decreased

28
Government may issue notification on land acquisition for MRTS soon. The Times of India, New Delhi, 15 January,
1997.
29
Business Digest- Japan will give $ 132-bn loan. The Times of India, New Delhi, 26 February, 1997.
30
Sreedharan is MD of DMRC. The Tribune, New Delhi, 23 October, 1997. This appointment was earlier reported to
have been the prerogative of the Delhi government. The Delhi government may have forwarded his name, but the
Union government had to officially announce the appointment.
161
use of fuel, lesser road construction and maintenance, lower pollution, decrease in health costs and
decreased traffic congestion.
However, these assumptions were based on the impact of MRTS on other modes of transport and
change in people’s travel behavior. These arguments were being used to dismiss the HCBS system but they
were also applicable to the MRTS. There were too many political, regulatory and institutional issues that
kept appearing during the unfolding of the project and threw light on why these assumptions would be
difficult to achieve. The last of these, reduction in traffic congestion, had been an assumption based on the
first study done by the CRRI in the 1960’s. The rest appeared in the later studies by RITES. A possibility of
connecting the MRTS with reduction in pollution was a news article in December of that year that reported:
Sources added that in order to reduce the cost, the Government of India had earlier proposed to the
Japanese side to accept the MRTS as an environmental project. The latter rejected the proposal on
the ground that it has no direct linkages to environmental protection.
31

This assumption was rejected in the first instance by the lending agency itself that stated that the
project was not directly connected to environmental protection.
The following section discusses the project’s funding and creation of the Delhi Metro
Maintenance and Operations Act 2002.

Funding
When the Union Cabinet approved the project in 1996, its funding structure included not only
60% of the cost of the project to be funded by the OECF loan but also 30% of the cost to be shared by GOI
and NCTD, 7% through property development and 3% through subordinate debt towards land cost. The
Central and Delhi governments would provide a series of concessions for the MRTS. These would include
customs duty exemptions for equipment imports; both governments equally sharing the exchange-rate
fluctuations against the yen; exemption for DMRC from income tax, capital gains tax and property tax;
DMRC to be allowed to generate resources through property development; land acquisition cost to be
provided by both governments and; DMRC to pay no dividend on government equity until senior debt was
fully repaid to JBIC by the 20
th
year. These provisions were based on an increase in fare rates at 7.5% per

31
The delay in MRTS project costing Rs 2 crores a day. Mukul Chandra Gogol. The Economic Times, New Delhi, 18
December, 1996.
162
annum.
32
Additionally because of it low 2.8% Financial Rate of Return (FRR) not including the cost of
land, which was to be an interest-free subordinate debt, taxes and levies in the NCTD would be used by the
State and Central governments to equally cover losses if any.
33

JBIC Loan
The threat of withdrawal of Japanese funds for the Metro rail project was never too far. As far
back as June 1998, newspapers reported on the effect of the Pokhran nuclear tests on Japanese aid to India.
This was also the time that Japan had placed economic sanctions on India due to its nuclear tests.
The media reported that fears regarding the sanctions hitting the MRTS, now an important project for the
city, were allayed by a highly placed source at DMRC that was quoted as saying “it is unlikely that the
OECF loan will be affected because it was committed earlier. The stakes are equal for both parties. Yet, if
they withdraw the loan, we have an alternative plan to raise funds.”
Included in this article was a cartoon depicting Indian and Japanese officials holding an MRTS
train with a nuclear blast labeled ‘sanctions’ in the background.
34
At the end of June it was reported through
a direct quote from the OECF chief representative in India, M. Hiroshi Oita, that OECF loans would not be
affected by the economic sanctions. The OECF was also giving loans for power and transmission projects
in India, worth several billion yen.
At the same time that the OECF was planning to pull out of the project there were a couple of
articles that covered meetings of the Delhi transport Minister with the Russian delegation where the
possibility for Russian funding for the second phase of the MRTS was discussed.
35
Many newspapers
covered this news and additional information including how Russia would help specifically in the
construction of Metro stations and running of electric trolleys on the Ring Road.
36

32
MRTS sops may include free land, tax reliefs. Mukul Chandra Gogol, 11 August 1996.
33
Cabinet clears first phase of MRTS. The Statesman, New Delhi, 18 September 1996.
34
Mass transport system for Delhi gets on the rails, Japanese company to act as consultant for the Metro project. Arun
Kumar Das. The Times of India, 2 June 1998.
35
Metro rail. The Hindustan Times, New Delhi, 13 September, 1998. Discussion on taking help from Russia for
Metro rail project. Rashtriya Sahara, New Delhi, 2 September, 1998.
36
Russia will help in numerous plans for Delhi as well as metro railway. Kuber Times, New Delhi, 17 July 1998.
Russia suggests help in metro rail and Yamuna water management in Delhi. Rashtriya Sahara, New Delhi, 17 July,
1998. Moscow is ready to help in top development projects: Sahib. Dainik Jagran, New Delhi, 17 July 1998.
163
In keeping with the DMRC’s stand at all times that there was no funding issue, the DMRC
Director for Projects and Planning, C.B.K.Rao said that the MD, DMRC and Delhi and Central
governments were meeting but that the “agenda of the directors meeting is a secret document.” However,
there were hints about leaving out a large section of the project and ‘privatization of the project permitting
investors to join in financing it, in the remaining six years.’ It was reported that the Delhi and Central
governments had refused to increase their share of funding for the project.
37

Immediately following this, a number of newspapers published articles saying that the DMRC was
not facing shortage of funds as was being claimed in the media. The DMRC, Delhi and Union governments
as well as OECF had denied any funding problems.
38
It was also reported that the OECF and Japan would
not be giving aid to India because of its nuclear policy but it was considering giving aid to ongoing projects
such as the MRTS.
39

An article following Khurana’s claims that the DMRC was facing shortage of funds gave the
history of the project and said that after the nuclear tests at Pokhran in India, Japan decided to withdraw
support for the project. However DMRC officials denied this saying that they had enough funds for the
next two years and their request for the second installment of the loan was awaiting review by the JBIC.
40

By beginning April, along with giving an update on the project, the MD, DMRC, announced that
the JBIC would release Rs 1600 crores ($ 328 million) as second tranche of the loan by June.
41
In
beginning May, he also said that the money from the first installment of the loan from JBIC had gone

37
“Pokhran Tremor’s comeback to hit Delhi’s Metro rail project, Japanese collaborator refuses to release funds”; 16
km chopped off the initial phase; board meets today to look for alternative funding. The Indian Express, New Delhi, 13
August, 1999. Metro rail funding: Centre, Delhi government say sorry. Ayswaria Venugopal. The Indian Express, New
Delhi, 14 August, 1999. Government refuses additional financial aid for Metro rail project. Veer Arjun, 15 August,
1999.
38
Delhi metro rail assured of funds. In the Times of India, New Delhi, 14 August, 1999. Metro denies funds crunch.
Business standard, New Delhi, 19 August, 1999.
39
Japan blow to green cover aid. The Statesman, New Delhi, 20
th
September 1999. OECF loans down 90% post-
Pokhran. Business standard, New Delhi, 6 October, 1999. Pokhran II blasts leads to a heavy cuts in OECF loans. The
Observer, New Delhi, 6 October, 1999. Also the Financial Express.
40
“Metro rail officers are quiet on Khurana’s testimony”; claim of completing project, but after two years, where will
the money come from? Jansatta, 17 January, 2000.
41
Delhi Metro may get Rs 1600 crore Japanese aid. Business standard, 5 April, 2000. Jansatta.
164
towards payment of the General Consultant – a stipulation also mentioned in the loan conditions as
stated in the annual plans of the Ministry of Urban Development.
42

In August it was reported that the Japanese Prime Minister, Yoshiro Mori, after a meeting with
senior officials announced to the reporters, “Japan and India have become global partners as of today.”
Japan would now resume funding for the MRTS along with the Simhadri thermal power project. The
newspaper article continued, ‘the significance of Tokyo’s offer to release approximately $ 200 million (19
billion yen) for these two projects cannot be underestimated, even at the loan amount itself is not that
large.’
43

On 31
st
August 2000, the Central government announced that it would carry the risk of exchange-
rate fluctuations in the value of the rupee for the JBIC loan to DMRC. Earlier in 1996, it had been reported
that both the Central and Delhi governments would be carrying this risk. Now the risk was taken over
entirely by the Centre.
44

The next day it was announced that JBIC had cleared the second installment of Rs. 217 crores ($
44 million) for the MRTS project loan to meet its requirements till March 2001. It also referred to possible
lifting of sanctions by the Japan government after India’s nuclear tests.
45

On 1
st
February, an article reported on the possibility of privatization of the second phase of the
Delhi Metro since ‘external financing for the first phase has been found to be too expensive.’ Examples of
other countries were given and of companies like Alstom, ADtranz and Siemens who built and operated
MRTS projects in other countries. The DMRC spokesperson, Vinay Sharma, pointed out that this would
require major regulatory changes and mechanisms to ensure quality control, safety, service etc.
46

Another article a year later, in February 2002, on renewed Japanese aid to India, stated that the
MRTS project was to receive 28,659 million yen (Rs 1.6 crores or $0.3 million) as ODA from Japan.
47
On

42
Crucial Japanese loan by end of May. The Pioneer, 1 May, 2000.
43
Japan and India are global partners now: Yoshiro Mori. Jyoti Malhotra. The Indian Express, 24 August, 2000.
44
Centre to shield Delhi Metro against rupee fluctuations. Anil Sasi. Business Standard, 31 August, 2000.
45
Japanese bank okays Rs 217 cr Metro Rail loan. Business standard, 1 September, 2000. Also in The Times of India,
The Indian Express, the Hindu, Rashtriya Sahara, Veer Arjun, Dainik Jagaran, Punjab Kesari.
46
Delhi Metro mulls Phase II privatization. Jyoti Mukul. The Financial Express, 1 February, 2001.
47
Japanese loan for metro, and Japanese aid for power, rail projects. The Hindu, 13 February, 2002. The Pioneer,
Dainik Jagaran.
165
18 January, 2003, another year later, the Statesman informed that the JBIC had extended another soft
loan of Rs 580 crores ($ 119 million) to cover the revised cost estimates for extending the third metro
corridor from Dwarka to Barakhamba Road, that would cost an additional Rs 1800 crores ($ 369 million).
The total cost of this line was given as Rs 3000 crores ($ 615 million).
48
Additionally, on 2
nd
April 2003, it
was announced that Japan would be giving a Rs 1360 crore ($ 279 million) loan for the MRTS.
49

Per the MOUD Annual Report 2000-2001, till December 31, 2000, a total amount equivalent to
Rs. 550.45 crore ($ 113 million) had been disbursed by JBIC just a little over the Rs 478 crore ($ 98
million) constituting the first tranche of the loan. That the DMRC was facing funding issues because the
OECF had refused to release its second installment of the loan to DMRC, was borne out by the MOUD
Annual Report 2001-2002 that showed that the second tranche of the JBIC loan amounting to
approximately Rs 276 crore ($ 57 million) was only released in March, 2001 almost four years after the
first tranche was released in 1997. The agreement for the Rs 1041 crore ($ 213 million) third tranche of the
loan was signed on February 13, 2002.
50
This was after the nuclear sanctions were lifted in October 2001
51

even though as newspapers reported, DMRC and JBIC continued to say that for projects such as the MRTS,
funding was continued to be provided even during the nuclear sanctions establishing that despite DMRC’s
claims there was pressure of economic sanctions from the loaning agency JBIC.

Concessions
The 1997-98 MOUD Annual Report listed the main achievements on the MRTS as release of the
first installment by the OECF after finalization of its loan on 21
st
October 1997 and contributions of Rs 277
crores ($ 57 million) towards the project and Rs 404 cores ($ 82 million) cost for land acquisition by the
Delhi Government and Government of India. The Government of India had released Rs 60 crores ($ 12
million) of its share of Rs 202 crores ($ 41 million).
52
In the 1998-99 annual report regarding the Rs 404
crores ($ 82 million) to be released by both the Delhi and Central Governments within the first two years of

48
Japan to provide Rs 580 crore more for extending Delhi metro phase I. The Hindu, 8 January, 2003. The Statesman.
49
Rs 1,360 cr Japanese loan for Delhi Metro. Business standard, 2 April, 2003. National Herald.
50
http://urbanindia.nic.in/moud/quickaccess/ann_report/2001-2002/English/8.pdf
51
Metro all smiles as Japan loosens purse strings. Ayswaria Venugopal. The Indian Express, 28 October, 2001.
52
http://urbanindia.nic.in/moud/quickaccess/ann_report/1997-1998/English/7.pdf
166
the project, it was noted that the Central government had ‘only’ released Rs. 115 crores ($ 24 million)
of their share of Rs 202 crores ($ 41 million).
53
Minister of State for Railways, Ram Naik, announced along
with technical clearance for the project that a sum of Rs 266.47 crores ($ 55 million) including Rs 211
crores ($ 43 million) for land acquisition had been approved up to February 1999 for the project.
54

The DMRC Managing Director, E Sreedharan also said that construction on Yamuna Bridge was
90% complete and he was satisfied with the smooth construction process. Praising the Chief Minister of
Delhi, Sheila Dikshit, for helping get permissions for the project from various civic agencies, he said “the
Chief Minister was very prompt ordering various departments to accelerate the process soon after she took
over office.”
55

According to the 1999-2000 MOUD Annual Report, Rs 173 crores ($ 35 million) of the Rs 202
crores ($ 41 million) share of the Central government had been released whereas the Delhi government had
released its entire share of Rs. 202 crores ($ 41 million) towards land acquisition.
56
On 1 March 2000, it
was announced that the Central budget allocation for the DMRC had been increased from Rs 134 crores ($
27 million) to Rs 160 crores ($ 33 million). An additional Rs 50 crores ($ 10 million) had been allocated for
the development of the National Capital Region ‘which would eventually help in decongesting Delhi.’
57

Based on the outlays reported in the Statesman, 5% of the Delhi budget went to the MRTS. The outlay for
the Transport Department was increased by almost 50% from Rs 465 crores ($ 95 million) to Rs 699 crores
($ 143 million).
58
Immediately after the budget was announced there were reports on the MD’s speech to
the PHD
59
Chambers of Commerce and Industry in New Delhi, in which he talked about savings in fuel,
man-hours, road infrastructure and reduction in accidents due to the MRTS.
60
In the 2000-2001 MOUD

53
Ibid.
54
Technical go ahead for metro. The Asian Age, 19 March, 1999. The Hindu, Business Standard, Dainik Jagaran,
Navbharat Times
55
‘Metro rail to be completed in stipulated time.’ The Statesman, New Delhi, 1 October, 1999
56
http://urbanindia.nic.in/moud/quickaccess/ann_report/1999-2000/English/6.pdf
57
Saathi hopes for increased allocation. The statesman, 1 March, 2000.
58
Transport, education get priority. The Statesman, 28 March, 2000.
59
PHD is an acronym for Progress, Harmony and Development. The PHD Chambers of Commerce and Industry was
started in 1905 and serves businesses in 9 northern states. http://www.phdcci.in/
60
Delhi Metro Rail to save Rs 500 cr annually. The Financial Express, 31 March, 2000. The Pioneer.
167
Annual Report, a total amount of Rs 400 crore had been released by both the Governments up to
December 31, 2000 for land acquisition.
On 23
rd
February 2001, it was reported that the delay in the MRTS project had raised its cost by
Rs 351 crores ($ 72 million). ‘The report identified funding constraints, delays in land acquisition and
award of contracts as the major reasons for cost escalation.’
61

On 31
st
July 2002, it was announced that the centre would be providing Rs 1346 crores ($ 276
million)of budgetary aid to the MRTS as part of its equity financial contribution to the funding of the
project.
62
In the meeting, the Central government said it was open to providing more funds for the Metro
rail but was opposed to tax waivers for the project.
The DMRC demanded waiver of customs and excise duty of all the equipment and materials,
which they were importing. This is one area where the Centre does not want to help. An argument
was put out on behalf of the ministers that this might set a precedent.
63

However in April 2003, these waivers were given to the DMRC so that it did not run into a loss.
An article in April announced that the DMRC would employ 750 people for running the first phase of the
Metro project.
Another concession granted to the DMRC in December 2002 was the exemption from customs
and excise duty amounting to approximately Rs 1407 crores ($ 288 million) by the Centre. The Central
government said that it was expecting the Delhi government also to exempt Rs 393 crores ($ 81 million) in
sales tax and works contract taxes ‘to shield the project from these levies to ensure that it was able to
sustain itself.’
64
On December 19, the Group of Ministers (GoM) approved the new line proposed by the
DMRC and Delhi government that would run from Connaught Place to Dwarka instead of Tri Nagar-
Barwala line. The DMRC had already put out tenders for this section and one was to be opened the same
day that the Central government’s approval was announced. According to DMRC there would be no delay

61
Delays push Metro rail project by Rs 351 crore. The Pioneer, 23

February, 2001.
62
Rs 1346 crores aid for Delhi Metro rail project. Dainik Jagaran, 31 July, 2002.
63
Dy PM puts Dwarka-CP Metro link on first track. The Indian express, 26 July, 2002.
64
Rs 1407-cr Delhi Metro duty waived. The Economic Times, 19 December, 2002.
168
in this section as “it was only due to financial reasons that it was held back but now that the necessary
allocations and tax sops have been provided, the construction work would gather pace.”
65

In February 2003, there were a number of articles on the MRTS running at a loss because of low
earnings in fares. At the same time articles in Jansatta and Indian Express reported that the Delhi Metro was
running out of funds and that the MOUD minister, Ananth Kumar, had written to the planning commission
for allocation of more funds than the Rs 680 crores ($ 139 million) that would go towards the MRTS from
a total allocation of Rs 1600 crores ($ 328 million) earmarked for the MOUD. Instead it had asked for Rs
3383.67 crores ($ 693 million) Gross Budgetary Support (GBS) for 2003-04.
In a letter to the planning commission deputy chairman K.C.Pant, Ananth Kumar said, this amount
will be barely adequate to meet their requirement to July 2003 and DMRC will be forced to seek
supplementary grant for the balance of Rs 1127 crores ($ 231 million) in the first batch of
supplementary demands during the monsoon session of Parliament itself.
66

In March, in the preliminary General Budget 2003-04, Rs 880 crores ($ 180 million) was allocated
for the DMRC. Rs 51.9 crore were given to the MOUD for the Delhi government. Additionally, the Home
Ministry made an allocation of Rs 428 crores ($ 88 million) for the Delhi government.
Of this, Normal Assistance accounts for Rs 367.73 crore ($ 75 million), Slum Development (Rs
17.94 crore) ($ 4 million), Prime Minister Grameen Yojana (Rs 10.78 crore) ($ 2 million),
Construction and Maintenance of Roads and Bridges (Rs 27.05 crore) ($ 6 million), National
Social Assistance Programme (Rs 2.73 crore) ($ 0.6 million), National Programme for Adolescent
Girls (Rs 1.77 crore) ($ 0.4 million).
This breakdown showed the difference between allocations for the MRTS versus social
programmes. The budget for a single megaproject was twice that for all other programmes for the Delhi
government.
67

On 5
th
April 2003, it was announced in nine newspapers that DMRC would get a tax waiver from
the Centre amounting to Rs 1403 crores ($ 288 million) so that the project with the Dwarka-Connaught
Place (CP) line could be completed within the estimated cost of Rs 10,571 crores ($ 2166 million) at 2005
price levels. Of this Rs 945 crores ($ 194 million) would be exemption of import duties and Rs 458 crores
($ 94 million) would be exemption of excise duty equipment purchased by the DMRC for the project. An
exemption of Rs 140 crores ($ 29 million) sales tax and Rs 50 crores ($ 10 million) work contract tax was

65
Dwarka Metro tender now on Jan. 13. The Hindu, 19 December, 2002.
66
Delhi Metro to run out of steam without funds. Anil Kumar Narayan. The Indian Express, 20 February, 2003.
67
Metro Rail to get Rs 880 crore. National Herald, 2 March, 2003.
169
being expected from the Delhi government.
68
On 5
th
June, 2003 it was reported in seven newspapers
that the Delhi government had given a Rs 460 crores ($ 94 million) tax exemption to the DMRC including
Rs 140 crores ($ 29 million) sales tax and Rs 250 crore ($ 51 million) work contract tax.
69

Another article in May 2003 and announced that the DMRC looking for ways to earn revenue,
would allow filming at the Metro stations to make up for the loss in fares.
70

Power
The availability of power for the project was a concern that the Department of Programme
Implementation had raised when the Union Cabinet cleared the project in September 1996. On 21
st
January
1999, it was reported that Phase I of the MRTS would require 75 MW of power and given the terrible
power situation in Delhi ‘doubts are being raised over the availability of power for this ambitious project.’
The DMRC responded by announcing that it had ‘made arrangements to get 120 MW power from the
National Thermal Power Corporation (NTPC) with a back up from the Indrapratha (IP) gas turbine power
station.’ Additionally it would have back-up generators to keep emergency services like lights and
ventilation running in case of failure of both power plants. The power would be supplied to three stations
and distributed to others with interconnections to allow balancing of power.
71
To calm apprehensions, the
DMRC issued a press statement that the project would use a minimal amount of power. The MRTS would
use ‘only’ 3 percent of the total power being used by the capital that was about 2600 MW.
To ensure continuous availability of quality power for running MRTS trains, utmost efforts are
being made to plan and design the power supply system with a degree of reliability as prevalent in
the other world metros.
72

In other developments, the Delhi Vidyut (Power) Board, a public sector company was to be split
up into a generation company, a transmission company and three distribution companies to increase

68
METRO gets tax waiver from centre. The Tribune, 5 April, 2003. Metro may end at Dwarka doorstep. The Tribune,
11April, 2003. National Herald, Hindustan Times, Hindustan, Veer Arjun, Dainik Jagaran, Rashtriya Sahara, Punjab
Kesari, Jansatta, Amar Ujjala.
69
DMRC to get Rs 460 crore tax exemption. The Indian express, 5 June, 2003.
70
Metro will make up for lost by allowing the shooting of films. Navbharat Times, 10 May, 2003. In
71
MRTS will have backup plan on power supply. Arun Kumar Das. The Times of India, 21 January, 1999. Sturdy
transmission network for MRTS. The Hindu, 28 January, 1999.
72
rapid transportation system will only use three percent power. Veer Arjun, 9 August, 1999. High reliability ensured
for MRTS power supply. The Hindu, 9 August, 1999. The Asian Age, The Pioneer, Jansatta, Dainik Jagaran,
170
efficiency, service and participation by the private sector. This was part of the structural changes in the
economy like privatization of public sector undertakings and basic utilities, approximately ten years after
they were initiated.
73
In April 2002, it was announced that power would be sold to the DMRC at the rate of
Rs 4.7 per unit. The DMRC wanted power at lower rates based on its status as a bulk user and asked for
lower tariffs from the Delhi Electricity Regulatory Commission (DERC).
74

The issue of power supply to the Metro rail came up again in November 2002 as the inauguration
of the project neared. It was also directly related to the conflict between the Delhi and Central governments
and the Congress and BJP parties respectively over the Metro Bill. The Delhi BJP opposition brought up
the issue of power supply by private companies to the DMRC.
Though the DMRC wanted power directly from Transco, a government-owned company, at
subsidised rates, it was reported that the Delhi government wanted it to buy power from private distcoms
(distribution companies). There were two reasons cited for this. The first was that the DMRC would draw
power from various locations unlike the NDMC and second if power was given to DMRC at subsidised
rates then the Municipal Corporation of Delhi (MCD), Delhi Development Authority (DDA), Delhi
Jal/Water Board (DJB) would also demand power at the same rates. The latter was after the DMRC had
cited New Delhi Municipal Corporation (NDMC) as a precedent as it was a licensee of Transco and getting
power at a subsidised rate. According to newspapers, in an attempt to increase its popularity, the Delhi
government was making efforts to provide DMRC with cheaper power so that the cost of the Metro tickets
could also be kept low. This was because 35% of the operating cost of the Metro went towards paying for
electricity to run the system.
75
It was also reported that Transco supplying power directly to DMRC would

73
Delhi Transco Ltd. is the State transmission Utility for the National Capital Territory of Delhi (NCTD). It is
responsible for transmission of Power at 220 KV and 400 KV, operation and maintenance of EHV (extra high voltage)
network as per the system requirements. www.delhitransco.gov.in The transmission company Transco was government
owned. The distcoms were public private companies with 51% equity with the private sector and 49% with the Delhi
government. Delhi Electricity Regulatory Commission (DERC), a regulatory body, helped to facilitate ‘a tripartite
agreement between Delhi government, DVB (Delhi Vidyut (Power) Board) and private companies to ensure
stakeholder cooperation in the reform process.’
74
Tariff orders shocks DMRC, wants power cheaper. Sunil Jain. The Indian Express, 8 April, 2002.
75
Who will supply power to Metro? Chetan Chauhan. Hindustan Times, 4 November, 2002.
171
‘lead to the violation of agreement that the Delhi government has reached with private companies to
distribute power in the city.’
76

While the Metro Bill conflict between the Central and State governments were unfolding, the
opposition leader in the Delhi legislative assembly, Jagdish Mukhi, alleged that the Chief Minister and
Delhi government were helping Brihanmumbai Suburban Electric Supply (BSES), a private company, earn
crores of rupees by supplying power to DMRC. He demanded that instead Transco, a government
undertaking, should supply power to DMRC at subsidised rates. He asked for a Central Bureau of
Investigation (CBI) enquiry into the matter and said that BSES, a distribution company, did not have the
capacity to generate power so it would buy power from Transco at Rs 1.32 per unit and sell it to DMRC at
Rs 5 per unit making enormous amounts of profit. He said this would greatly upset the citizens of Delhi, as
it would put undue burden on the Metro rail project with the DMRC having to pay Rs 105 crores extra per
year.
77

Transco had given a statement that the DMRC had applied for a license with the DERC and the
latter was to decide on it. The DERC was also to decide the tariff ‘after the distribution companies
submitted their annual revenue requirements.’ The Delhi government Transport Minister, Ajay Maken, told
the press that it would not allow private companies to profit from the DMRC. Instead, the independent
regulatory body, DERC would decide the power tariff. He further assured that even if DERC did not allow
DMRC to buy power directly from Transco, it would ensure that private companies did not sell power to
DMRC at higher rates. The Delhi government would suggest a low rate of Rs 2.70 per unit.
78

Next, the private distcom BSES issued a statement saying it would supply DMRC power at a
lower rate to ensure its fares were kept low. The BSES executive officer, J P Chalasani said that according
to its agreement with the Delhi government in July 2002, when the power distribution was transferred to
private companies it was part of the MoU (Memorandum of Understanding) that other than NDMC and
Military Engineer Services (MES) who were license holders with Transco, all other users in the future

76
Who’ll power Metro rail- public or private agency? Rajendra S. Markuna. National Herald, 8 November, 2002.
77
Chief minister accused of benefiting BSES, demand for CBI enquiry. Hindustan, 8 November, 2002. Metro rail:
accusation of scandal on government over electricity supply. Navbharat times, 8 November, 2002. There were eight
articles including 3 Hindi articles on November 8, 2000 to on cheaper power for Metro.
78
‘DERC will decide tariff.’ Hindustan Times, 9 November, 2002.
172
would have to be BSES consumers, whether or not the power they needed was 220 KV. DMRC was
trying to get itself classified in the same category as NDMC and MES by applying for a license with
DERC.
79

The hullabaloo over the Metro Bill having quieted in the media, on November 9, it was reported
that the Delhi government would take up the issue in the winter session of Parliament. The issue of power
supply to the MRTS was mentioned and the chief executive of BSES, J.P.Chalasani, described the
involvement of the Delhi government.
From the transfer scheme notified by the Delhi government in November 2001, it is apparent that
the DMRC is the consumer of BSES and not the state-owned transmission company Transco. We
have assured all support to the DMRC for a lower subsidised tariff before any filings or
proceedings before the commission. To keep Metro rail tickets affordable, we will propose a lower
tariff for the DMRC in its annual revenue requirement submissions to be filed before the DERC.
80

The Transport Minister Ajay Maken described the allegations by the opposition leaders as
baseless. “To the contrary, efforts are being made to provide electricity to the DMRC at rates much cheaper
than what is provided to even the Indian Railways.”
81
The issue of power supply to DMRC was a Delhi
government issue and Maken pointed out how Delhi played a role in the success of the MRTS project.
The Delhi government will provide power for the project; its Transport Department will prepare
the feeder routes for the Metro rail; it would ensure that competitive transport is not run along the
metro routes, a common ticketing system would be worked out between the DTC and MRTS. So
then how could the centre decide the fares? Delhiites would help pay back the OECF loan but the
authority lies with the Central government. If the authority over DMRC is with the centre it will
not be accountable to the Delhi government similar to the DDA and Delhi police. If the centre is
fully responsible then it should take over hundred percent of the project cost.
He also denied charges of a power scandal and said that the DMRC would be given power at
prices set by the Delhi Electricity Regulation Commission (DERC).
82
‘...It will be ensured that the
electricity be given at the rate of Rs 2.70- 2.60 per-unit- as contrast to Rs 4.95 per-unit given to Railways-
so that the metro is not run in loss.’ (sic)
83

79
BSES to propose lower power tariff Metro. The Hindu, 9 November, 2002.
80
Delhi to discuss metro rail role. The Asian age, 9 November, 2002.
81
Delhi trains its guns on Centre’s Ordinance. Central-State tussle over Metro. The Statesman, 9 November, 2002.
82
Metro cannot run without help from Delhi: Maken. Said, Mukhi’s accusation is wrong, the government is ready to
give electricity at lowered rate. Jansatta, 9 November, 2002.
83
Maken slams centre over Metro rail takeover attempt. National Herald, 9 November, 2002.
173
The inconsistency now was between the Delhi’s MoU with the ‘private’ distcoms and a
subsidized power tariff for the DMRC to keep fares low. The DMRC was pushing for getting power from
Transco saying “even a difference of 50 paisa in tariffs of Transco and BSES can mean an extra burden on
passengers if the government refuses to subsidize tariff”. The BSES, however, was saying it would provide
DMRC power at subsidized rates but would hold the Delhi government responsible for making up for the
subsidy.
84
The Delhi government chose to take a stand against the private company BSES.
Jagdish Mukhi, the BJP opposition leader in the Delhi’s legislative assembly, released a letter to
the press by the Delhi Government Power Secretary Jagdish Sagar, addressed to BSES ‘asking them to
supply power to DMRC.’ He said that this was in violation of an earlier letter for power supply from Delhi
Vidyut (Power) Board (DVB) to the DMRC. However this was before the November 2001 agreement with
power companies to take over power supply. The BSES chief, J P Chalasani, refuted the BJP opposition’s
allegations and said,
The BJP’s allegations are wrong as neither the government nor the private companies have the
power to dictate the price of electricity. DERC is the sole regulatory authority, which decides the
power tariffs for all types of consumers, including public utilities like the DMRC.
Transco, a government run organisation also denied that it had told BSES to sell power to DMRC
at higher rates. Rishi Raj, additional public relations officer at Transco said
We are not in a position to do so. In fact, at a meeting held on November 6, the distribution
companies had said they would propose lower retail tariff for DMRC as a special category
consumer. It is, however, up to DERC to take the decision.
85

Another private company, North Northwest Delhi Power Ltd’s (North Delhi chairman, Anil
Sardana also spoke out against the BJP opposition, Jagdish Mukhi’s claim that ‘private companies had no
right to supply power to the Metro...BSES should now fulfill power supply requirements of DMRC as
mentioned in the bulk power supply agreement.’
86

84
Transco can’t supply power to DMRC, claims BSES. Chetan Chauhan. Hindustan Times, 9 November, 2002.
85
Metro to rock parliament. ‘DERC will decide tariffs’. The Times of India, 9 November, 2002.
86
Supplied to DMRC: Discoms refutes charges. Transco says Metro will be offered lower power rates. The Indian
Express, 9 November, 2002. In their first seven articles on November 9, 2000 on the DERC to decide power tariff rates
for the Metro rail.

174
The Delhi government, as savior and clearly establishing the importance of its role in
facilitating the operation of the MRTS, announced that the DMRC would be supplied power at a subsidized
rate of Rs 2.70 per unit. Ajay Maken informed the press that there were three main areas where the Metro
rail needed power-
Traction (which is the actual movement of the trains on the tracks), auxiliary functions like signals
and lighting at the stations and finally for commercial activities at the Metro stations like eating
joints and shops...We will not let the discoms make profit in the first two in areas, said Maken.
This was immediately followed by Maken’s criticism of the Central government for not including
the Delhi government in the Metro Bill. He said the Metro rail was not like the railways that could function
independently and that the Metro rail needed to work in tandem with other arms of the Delhi government.
Maken also lambasted the central government for trying to take all the credit when 85% of the
money will be spent by Delhi government and the people of Delhi. Asked whether lowering
electricity tariff to DMRC would affect the ticket rate for the metro, he said, the tariffs and routes
are fixed by the central government...We will provide electricity, feeder buses and 85% of the
money that will be spent. It is a question of survival. The Metro requires all these added facilities,
it cannot run in isolation.
87

The issue of special treatment of DMRC was now discussed in an article pointing out that the
independent regulatory body, DERC, had already classified DMRC in the same group as MCD and DJB
and that if it were given a special license and lower tariff, the other two would demand power supply at
subsidized rates too.
88

On November 13, the DERC announced that the DMRC had to buy power from BSES, since their
application for a license to get power directly from Transco had not been admitted on grounds of some
legal loopholes per the ‘deficiency note’ sent to it by DERC. The DERC said that the DMRC might not be
applicable for a license because it was an end consumer rather than a purchaser and distributor of power
like the NDMC and Military Engineering Services (MES), Cantonment Board. This raised questions about
the Delhi government’s claims of getting DMRC power at subsidised rates.
89
In response there was
discussion within the Delhi government about subsidizing DMRC’s electricity bill if ‘DERC’s clarification
notwithstanding’, it had to buy power from BSES.
90

87
Delhi government is planning to reduce DMRC power tariff. Prashant Solomon. MidDay, 12 November, 2002.
88
New twist to row over metro power supply. Hindustan Times, 12 November, 2002
89
‘Metro, end-user, can’t buy from Transco’. ‘It’s in the rulebooks’. The Indian Express, 30 November, 2002.
90
DMRC to buy power from BSES. The Tribune, 13 November, 2002.
175
In a separate article on the DERC, the privatization of power and subsequently the need for
involving the public in monitoring private companies was discussed. Over a month had elapsed since the
power companies issued public notices for comments or objections from the stakeholders for their
respective areas.
The Delhi Electricity Regulatory Commission (DERC), to which these companies have applied for
licenses, will have to settle the issue by itself when the 90 day statutory span beginning from the
date of issue of the public notice comes to an end. Mr V K Sood, DERC chairman at a press
conference on Tuesday, disclosed this. It is a case of public notice being the least noticed, he
remarked pointing out that the companies, Discoms and Transco had put the public notices in
leading dailies on the 5
th
and 10
th
of the last month respectively but not a single stakeholder has
come forward. He urged the media to sensitize the public and added that when the private
companies had entered the field, Stakeholders became the watchdogs... The distribution business
has privatized as the erstwhile Delhi Vidyut Board (DVB) restructured on functional basis into
one generation company, one transmission company and three distribution companies.
Meanwhile in the same article it was reported that the DMRC would have to wait at least three to
four months till such time that the license issue was resolved by DERC.
91

Faced with accusations of falsely claiming that the DMRC would get power at subsidized rates,
the Delhi government announced the next day that it would ‘help the Delhi Metro Rail Corporation
(DMRC) pay the higher tariff rates the Delhi Electricity Regulatory Commission (DERC) has said it will
charge until the metro authority is issued a license or new tariff rates are fixed.’
92
The BJP opposition
meanwhile demanded a CBI enquiry into the decision and said that the DERC chairman V.K.Sood and
Power Secretary Jagdish Sagar were working with BSES, a private company. ‘The BJP leaders charged that
the Sheila Dikshit government was also obliging the private power companies in order to ensure generation
of funds for the Congress party to contest assembly polls next year’.
93
They asked for Ajay Maken’s
resignation, saying he deliberately misled the public by saying that the DMRC would get power at a rate of
Rs 2.60 per unit and accused the Delhi government for helping the private company in order to gain
election funds for the upcoming legislative elections.
94
The BJP opposition in Delhi accused the Congress

91
DERC to adopt own method as companies get least response. Metro row continues. National Herald, 13 November,
2002. There were 11 articles, including 3 Hindi articles, on November 11, 2002 on the DMRC having to pay more for
power initially.
92
Government to help metro pay power tariff. Hindustan Times, 14 member, 2002.
93
BJP leaders demand CBI probe into power purchase. The Hindu, 14 November, 2002.
94
Asked for resignation from Maken over matter of giving electricity to Metro, the government is in the throes of
collecting money for elections: Mukhi. Hindustan, 14 November, 2002.
176
party of raising funds in the name of DMRC by trying to give the contract of power supply for the
Metro rail to BSES, a private company that would buy power from the government at Rs 1.32 per unit and
sell it to DMRC at Rs 4.60 per unit.
95

An article talked about Ajay Maken’s reassurances being hollow and the fact that the Central and
Delhi governments were responsible for setting the fares so people would use it.
96
The Centre asked the
Delhi government to waive the electricity tax that would be charged on the DMRC by the MCD and would
be to the tune of Rs 1 crore per year for the next two years and possibly Rs 11 crores per year by 2005
when the entire first phase became operational.
97

It was clear that Transco could not supply power to the DMRC per the Delhi government’s power
transfer scheme. On November 20, the Chief Minister met with officials from DMRC and the power
distcoms and asked them to work out a Memorandum of Understanding. According to the article ‘DMRC
will get the power from private distcoms at the rate Transco buys power from northern grid.’ So the price
of electricity to DMRC was fixed at Rs 2.60 per unit.
98

As the Delhi Congress government prepared to oppose the Metro Bill in the Rajya Sabha and
Sheila Dikshit appealed to the Congress party MP’s to back this issue, given its majority in the house, the
BJP opposition in the Delhi government decided to raise the issue of relocation of industries, of scandal in
the privatization of power supply and MCD issues like parking and new ways of taxing income, in the
Delhi legislative assembly meeting that was being held simultaneously.
99
The Delhi government defended
itself. “The tariff will be decided by Delhi Energy Regulatory Commission (DERC), which is an
independent body. We have never suggested the power tariff should be fixed at Rs 4.70 per unit,” said
Sheila Dikshit.
100

95
Sharp blows by BJP: Congress collected election money in the name of national pride metro raid. Punjab Kesari, 14
November, 2002. There were 5 articles, including 3 Hindi articles, on November 14, 2002 on the government helping
pay for the power supply to DMRC.
96
Metro journey will be expensive if rate of electricity increases. Hindustan, 17 November, 2002
97
Metro rail throws up another taxing issue; Centre asks Delhi government to waive electricity tax. Ayswaria
Venugopal. Today, 19 November, 2002.
98
Distcoms to supply power to DMRC. Chetan Chauhan. Hindustan Times, 21 November, 2002.
99
Delhi government will make last attempt to get Metro under it. Manoj Mishra. Jansatta, 24 November, 2002.
100
Maken’s Challenge to Centre on Metro Control. National Herald, 27 November, 2002.
177
In another article, it was informed that the DERC had accepted the DMRC application for a
license to buy power directly from Transco. The basis for the change was the DMRC selling power to
commercial and other enterprises in its property development around the stations that also made it a
distributer. However, the article pointed out that electricity at subsidised rates for the Metro would result in
increased power tariffs for residents of Delhi. A senior Transco official was directly quoted, “the profit
which was earlier to come from Metro rail would now have to be passed on to the consumers through
power tariff.”
101

Immediately after the meeting, BSES proposed a fare structure for the DMRC to the DERC with
two options.
The first option is the sum total of the cost of per unit of power supplied by Transco multiplied by
a number of units per month, and a lump-sum amount to cover the distribution overheads of
BSES...As per the second option, the private company has replaced the lump-sum amount for
overhead costs by ‘a cost per unit’ to cover the distribution overheads of BSES.
The DERC was given the responsibility of making the final decision.
102
In early December, it was
reported that the DMRC had failed to follow up on the procedures to gain a license for Transco and may be
willing to pay a higher rate to BSES or private companies directly because Transco would put too many
restrictions on it.
Sources said the DMRC was now not interested in getting the Distcom license as this would bring
it under the purview of the Delhi Electricity Reforms Act 2000 and make it accountable to the
DERC. As per the provisions of this Act and DERC regulations, it would have become mandatory
for the DMRC to file its annual revenue requirement (ARR), which is subsequently made
public...This was probably not acceptable to the top DMRC officials as they want to continue with
their tradition of maintaining secrecy which they argue is the reason for their success, they said...
The license would also have given the DERC (authority) to interfere into DMRC matters, which
also was not acceptable to them, they added.
103

Another article said that power cuts in Delhi would not affect the MRTS, which would have a
backup supply from the Indraprastha Gas Turbine Power Station, the generating company after the
devolution of the DVB, in case of a grid failure.
104
Three days before operation, it was reported that instead
of BSES, the second private distcom, Tata Power, would supply power to DMRC because the area for

101
Metro to be powered by cheap power. Lalit K. Jha. The Hindu, 27 November, 2002.
102
BSES tariff proposal for Metro. Shubhajit Roy. The Times of India, 28 November, 2002.
103
DMRC backs out on power proposal. Lalit K. Jha. The Hindu, 9 December, 2002.
104
Power won’t fail Delhi Metro. Amba Batra. The Indian express, 16 December, 2002.
178
power supply around Yamuna Ghat was under its jurisdiction. Transco pointed out this mistake. The
BSES’ role became limited to supplying additional power from the Rajghat Gas Turbine Station. It was
again reported that though the DERC had not decided the fare, ‘the government had said that tariff would
be Rs 2.60 per unit.’
105

Beginning January, the MD, DMRC announced that the DERC had to fix the power fare for
DMRC but that it would be on a no profit- no loss basis.
106
The Transport Minister, Ajay Maken, who also
said that the Delhi government did not want to create any problems in the progress of the Metro, seconded
this news about fares.
107

In January, the MRTS had faced a number of ‘hitches’ with regular power supply that interrupted
service on a number of occasions. A bill of Rs 76 lakhs comprising of Rs 36 lakhs overhead charges and Rs
40 lakhs for electricity at a rate of Rs 4 per unit for 10 lakhs units, was also sent to the DMRC by North
Delhi Power Limited, a private distribution company.
108
On January 31, it was announced that the DMRC
chairman, Madan Lal Khurana, was upset at the Rs 76 lakhs power bill sent to the DMRC by the NDPL,
calling it inappropriate.
109
Newspapers carried Khurana’s demand for concession in power tariff for the
DMRC. He expressed outrage and wrote to the Chief Minister, Sheila Dikshit, criticizing the Delhi
government for not facilitating lower tariffs for the DMRC or helping get a license so it could get power
directly from the government run Transco. The Transport Minister, Ajay Maken, replied that the Delhi
government with the DERC and private companies had already negotiated the price of Rs 2.60 per unit for
the DMRC power supply.
110

105
Tata Power may get electricity supply contract after December 24. Chetan Chauhan. Hindustan Times, 21
December, 2002.
106
Commission will decide on topic of electricity to metro. Jansatta, 11 January, 2003.
107
Metro will get electricity at lower rates. Amar Ujjala, 15 January, 2003.
108
Khurana remarks misleading: Maken. The Hindu, 31 January, 2003.
109
Wrong to send metro corporation an electricity bill of 76 lakhs: Khurana. Dainik Jagaran, 31 January, 2003.
110
“Metro served fat bill, Khurana protests.” The Indian Express, 31 January, 2003. Another article in the Hindu
commented that Khurana’s outcry over the power supply had only exposed the problems in the MRTS electrical
equipment. It described the technical problems being faced by the imported Metro trains and other subsidiary
equipment in adjusting to the power supply available in India.
‘A senior Metro official told the Hindu that the equipment installed in the Metro was not capable of handling
fluctuations in frequency beyond 3%. With 50 Hz being the ideal, it collapses the moment frequency drops below 48.5
Hz. While the equipment being used by the Indian Railways is of sturdier variety and capable of withstanding greater
fluctuations, the DMRC for reasons best known to it, opted for a system which is requiring modifications and changes
179
In response to Khurana’s outcry at the bill, the North Delhi Power Ltd responded that the
DMRC had been charged ‘the prevailing tariff under the category of railway traction.’ An NDPL official
said “Anyway the DMRC has so far paid us as per the rate of Rs 2.60 per unit while we had asked for Rs
3.40...We have asked the Delhi Electricity Regulatory Commission (DERC) to decide on tariffs for the
DMRC.”
111

In March 2003, the Hindu, continuing its story on the power supply to DMRC, reported that even
if the DMRC were supplied power at a subsidised rate by putting it under a special category, the burden of
the subsidy would fall on taxpayers. This would be done because as per the agreement of the Delhi
government with the private distcoms, they had been assured of a profit of 16%.
Though the proposal (of considering DMRC as a special category of power consumer) if accepted
would provide to big relief for the Metro, the DERC would be left with no other option but to shift
the burden on to the consumers by increasing the power tariff. The Delhi government’s policy
direction issued in November 2001 instructs DERC to give tariff structure, which will give a profit
of at least 16% to Distcoms...Even if there is no income from the DMRC, 16% profit to Distcoms
has to be ensured by increasing the tariff from the other consumers, officials said...Highly placed
sources said the Tata Power and BSES agreed to the Delhi government’s proposal, which came
under pressure due to the political opposition by the BJP which charged the Chief Minister and the
Delhi power secretary with favoring the private Distcoms and resorting to unfair practices on the
issue of tariff to the DMRC because the tariff structure to 2006 – 2007 does not matter much for
them as they have been guaranteed an annual profit of 16%.
112

That BSES had requested the DERC that DMRC, as a consumer should be supplied power by
them. Khurana opposed this saying, “the distribution company scheme to supply power to DMRC because
by doing so it would recover the entire cost since there would be no transmission loss.”
113

On 11 April, there were 11 articles, including 8 Hindi articles, and more even before that covering
Khurana’s demand for a power license for the DMRC from the DERC so it could be supplied power at

just a month into normal operations... On its part, DMRC has now placed orders for power equipment, which is able to
tackle fluctuations in frequency in a better way. The new equipment will, however, come at an extra cost.’
‘Firm told to make coaches with erratic power in mind- The Metro has asked the Japanese manufacturers of its rolling
stock coaches to adjust their software to the low-power frequency problem in the capital. “We have asked and
manufacturers of rolling stock to examine the software and make changes to handle the frequency problem before the
summer sets in,” said Satish Kumar, Director, Rolling Stock and Electricals. With the frequency falling below 48.5 Hz
on 19, 20 and 21 January, 55 train runs were delayed up to 30 minutes.” Madan Lal Khurana, now the chairman of
DMRC, tried to blame it on erratic power supply by the private distcoms thus shifting the attention away from an
increase in the cost of the project because of the new equipment that would be required to resolve the flaw.
111
Khurana says power for metro costly, erratic. Hindustan Times, 31 January, 2003. There were 14 articles, including
6 Hindi articles, on January 31, 2003 on the power bill for the metro rail.
112
Cheap power for Metro may prove costly for consumers. The Hindu, 18 March, 2003.
113
Khurana wants distribution, retail licence for Delhi Metro. Today, 3 April, 2003.
180
subsidised rates. The DMRC officials were never featured in these articles and it seemed more like
publicity for political gain.

Fares, Security, Water, Taxes and Levies
The responsibility of deciding the fare structure was given to the National Council of Applied
Economic Research (NCAER) that ‘conducted a study on the possible fare structure and ticket pricing for
the Delhi Metro Rail project.’ RITES had given an initial proposal of the fare structure.
114

The fare was structured so that it would be equal to that of the DTC’s for a commute of 3-6 km
and cheaper than Delhi Transport Corporation’s (DTC) for over 6 km.
115
The fare from Shahdara to Tis
Hazari at Rs 4 would be less than the same journey by a bus to encourage commuters to use the Metro rail.
The NCAER said that it was important to keep in mind the financial status of the residents around the
Metro line so that they would switch to the MRTS. The buses in the area would then be deployed
elsewhere. However, fares in other lines of the Metro would be kept equivalent to that of buses. Keeping in
mind the 40 lakhs population residing in the area, the DMRC expected 10 lakhs commuters to use the
Metro train every day.
116

Meanwhile the Delhi State transport minister, Ajay Maken said,
We have agreed in principle to keep the tariff low at about Rs 4 or even lower...We want to
dissuade commuters from using two wheelers, cars or auto-rickshaws, and take the Metro instead.
For the first three years till the first phase is completed in 2005, we are going to keep the fare
cheaper than the buses. Later, they may be made comparable to the bus rates as applicable then...
The proposal has been prepared by National Council of Applied Economic Research (NCAER)
experts, who have suggested we keep the fares low in the first few years. This will be required to
draw people to the Metro, which is going to be something novel for Delhiites.
117

The fare announcement by the Transport Minister was negated by the DMRC that said that they
were unaware of such a proposal and that the NCAER had ‘suggested slabs wherein for the first 8-10
kilometers, the commuter would end up paying a little more than bus fares, but thereafter the rates would
be much more competitive. “The idea was to discourage the use of the Metro for short distances. The

114
NCAER to study Delhi metro fare structure. Anil Sasi. Business Standard, 4 July, 2000.
115
Journey of more than 6 km would be cheaper on Metro rail. Jitendra Kumar. Rashtriya Sahara, 25 June, 2001.
116
Shahdara to Tis Hazari ticket on Metro rail will be Rs 4. Alok Gaud. Dainik Jagaran, 7 July, 2002. Metro rail
Corporation settlement with Delhi electricity board refused. Less fair plan is soured. Hindustan, 7 July, 2002.
117
Metro rail fares to begin cheap. Anurudha Mukherjee. The Times of India, 15 July, 2002.
181
longer route fares were to be cheaper than DTC fares.”
118
Another article reported on a possible conflict
between the Delhi and Central governments over the fare structure of the Delhi Metro with the Transport
Minister, Ajay Maken, announcing a fare slab of Rs 4 to 7 that would,
put the onus on the Centre to take a liberal view on this issue in the interest of the masses....We
have seen in the past how the Centre handed over the Delhi Transport Corporation (DTC) and
DESU to the Delhi government only when both the organizations accumulated losses worth
hundreds of crores. If the Centre takes over the entire metro project, it will only breed
corruption.
119

Continuing on the fare issue, it was reported that a cold war had started between the Delhi and
Central governments, with the Transport minister, Ajay Maken announcing the Rs 4 fare for the Metro and
the Center saying that the NCAER was to decide the fare. The DMRC refused to comment on the issue.
Meanwhile Maken’s move to keep the fare lower than DTC bus fares was described by sources, as a
political move to gain popularity in the upcoming elections.
120

In early November, the Centre issued the Metro Bill that gave power for deciding the fare to a
three-member fare fixation committee. The Delhi government opposed this and said it ‘will condemn the
Centre’s move to retain the power to decide the Metro Rail fare during the ensuing winter session of
Parliament.’
121
The Prime Minister’s office then released a statement saying that the Centre would decide
the fare structure for the Metro rail.
122
The fare fixation committee would include two members from the
Central and State governments, chosen from amongst officials who held similar positions in the relevant
departments of the governments. The third member, a High Court judge would be serving or retired. A
serving judge would be appointed with the advice of the Chief Justice of the High Court. The DMRC
would have to abide by the decision of the fare fixation committee. It would be formed for a maximum of
three months and the Centre would form it from time to time when issues of fares arose. For the time being
for the line to be started in December, the DMRC had been given the authority to decide the fares.
The DMRC decided to keep the fare structure the same as had been proposed by the Transport
Minister, from Rs 4 to Rs 7. The Congress party government in Delhi was displeased at not being given

118
Delhi government, DMRC disagree over fares. Gunjan Veda. The Indian express, 11August, 2002.
119
Fare proposal? Aken moots Rs 4-7 slab. S K Jha. The Pioneer, 17 August, 2002.
120
Cold war has started over Metro rail fare. Jitendra Kumar. Rashtriya Sahara, 23 July, 2002.
121
Delhi to condemn Centre’s move to decide Metro rail fares. The Pioneer, 7 November, 2002.
122
Centre has taken authority over deciding fare for metro rail. Rashtriya Sahara, 1 November, 2002.
182
authority to decide the fare. ‘Although the Bill stipulates that all decisions should be taken in
consultation with the government of NCT of Delhi, the Congress isn’t amused.’
123
In May 2003, the
DMRC chairman Khurana said the Metro rail fares would be increased after the operation of the second
part of the Shahdara- Tis Hazari line. ‘DMRC has incurred a loss of Rs 26 lakhs on fares during the first
three months of its operation, though it raised additional funds through advertisements. It earned Rs 4.27
crore as revenue between January and March.’
124

In July, on the issue of security for the metro rail, the Delhi police submitted an affidavit before
the Delhi High Court that included the permission to set up a separate police station for the Metro rail.
125

The protection for the Metro rail was of the highest order.
Delhi police has asked for additional 518 personnel for the Metro police unit, which will include
the 180 personnel who have already been deputed to guard the six Metro stations. Senior police
officials said that the creation of new posts will entail an additional expenditure of over Rs 6.5
crore.
The article also said that initially the Delhi police had requested 1430 posts but have been asked to
reduce these by the Lieutenant Governor.
126
The Delhi police suggested a separate Metro rail police for the
Delhi Metro.
127
This would increase the size of their department and more resources would be allocated to
it. The Centre was providing security for a private project and pay for 518 police personnel came from
Central government resources, but at the same time, that many jobs were also being created. The idea of
safety was being linked with the Metro rail. The DMRC was also setting safety standards on Metro
construction sites.
128
In January 2003, it was announced that the Delhi Metro had got its own 518 Personnel
police force.
129

A single article among 10 articles on train washing after a press tour of train washing plants,
questioned the use of 500 litres of water with 125 litres being fresh water per train wash when the residents
of Delhi faced a water crisis.

123
AC comfort on Metro to cost Rs 4. The Tribune, 25 November, 2002.
124
Metro fares will not be raised: Khurana. The Times of India, 31 May, 2003.
125
Separate police station for Metro rail. The Hindu, 15 July, 2002.
126
Police want more men for Metro. The Indian Express, 30 January, 2003.
127
Plan to set up force to check metro rail crimes. Chetan Chauhan. Hindustan Times, 5 February, 2001.
128
Safety: conflict of interest? Parakram Rautela. The Pioneer, 25 April, 2002.
129
Metro police gets L-G’s approval. The Pioneer, 3 January, 2003
183
What Delhi Jal Board finds fit for drinking isn’t good enough for washing the Metro. While
the Chief Minister, Mrs Sheila Dikshit, recently advised the capital’s residence to use just half a
bucket of water for a bath, the DJB, which is headed by her, is helping the Delhi Metro pour water
incessantly over its trains. The capital might be reeling under a severe water crisis – driving its
citizens to the brink of rioting – but the Delhi Metro trains are still rolling into the Shastri Park
maintenance depot for a shower.
A DJB senior official was directly quoted as saying,
Though part of it is recycled, they also use a lot of fresh water from a pipeline depending on the
number of trains coming in for cleaning...Though the Delhi government is issuing advertisements
appearing for conservation or water and not to use water for washing cars, it is turning a blind eye
to this huge wastage.
130

An article in Amar Ujjala while describing the washing techniques for the metro called it ‘a royal
bath tub’ and said that such pure water is not even available to Delhi’s residents for drinking.
131
The
DMRC was being provided uninterrupted water by the Delhi Jal Board.
In November 2002 there was another development regarding concessions as mentioned in 1996
when the Union Cabinet cleared the project. The MD, E Sreedharan, wrote to the Chief Secretary Shailaja
Chandra, about levying of a Metro tax as part of four possible ways of generating funds for the expansion
of the Metro.
These would include 2% on the payrolls of all establishments with more than 100 employees, a
10% surcharge on luxury tax on the earnings of all star hotels in Delhi, 50% cess on the tax levied
for registration of road vehicles and a surcharge on fuel...The Metro fund would be a non-lapsable
fund. It would be utilized only for funding the expansion of the Metro rail network in Delhi. The
Karnataka government has already started dedicated levies for funding Bangalore metro project.
132

The Delhi government now used this issue to point out that since the Central government had
wrested control of the project, it should fund the second phase. They also pointed out that the Central
government had not even approved the second phase despite the Delhi government having approved and
forwarded the same to the Central government three months ago. It said that if the Delhi government was
not being given powers over the Metro, why should the citizens of Delhi provide the financial wherewithal
for the project.
133

130
Shower for metro coaches, dribble for Delhi’ites. Nitin Mahajan. The statesman, 30 April, 2003.
131
Metro bathes in 'royal bath tub', clean in five minutes, water is purer than mineral water. Amar Ujjala, 8 April, 2003.
132
METRO M.D. asks for Metro tax. The Asian age, 26 November, 2002.
133
Delhiites may have to ‘pay’ for Metro. The Hindu, 26 November, 2002. Metro: Maken attacks Centre on
Ordinance. DMRC sought metro tax. The Indian Express, 26 November, 2002. There were 10 articles on this issue on
November 26 including 3 Hindi articles.
184
In an article the Congress member, Arvinder Singh Lovely, questioned imposition of taxes on
Delhi’s citizens for the metro rail project.
Mr Lovely said since DMRC control is now under the Union government, it should explain to the
people of Delhi why funds are not being extended for the second phase and why all these taxes
and surcharges are sought to be imposed on the people of Delhi.
134

The Delhi government refused the creation of the Metro fund that would be maintained by taxes
and levies imposed on Delhi.
Delhi government recently turned down a demand of the Delhi Metro Rail Corporation to impose
a metro tax on Delhiites.... Lovely said that the Centre and the opposition had the gall to maintain
that the Delhi government had no say in the matters of the Metro and yet expect the people of
Delhi to pay for the Metro.
135

Property Development
On 31
st
August 1999, the DMRC asked for concession for property development around the
MRTS by asking for a tax break for making the project attractive to foreign direct investment (FDI). The
article also informed that the “DMRC is looking at the option of cross subsidization of Metro fares through
revenue and from property development.” The idea of making the MRTS financially viable had come up
when the hundred percent FDI policy for urban transportation projects was announced. The in-house
property development studies of the DMRC say that the overall FAR of the city would be maintained if
adjusted so that the high-density development along the metro corridors could be balanced by taking away
the FAR from other areas.
136

Business Standard reported that the DMRC was looking at property development with private
sector investment for generating Rs 2000 crores that would cover hundred percent of funding for the
MRTS. The MD, E Sreedharan, said
We will generate Rs 500 crores through property development during the construction period
itself. Over a period of 30 years, property development will provide Rs 2000 crores to DMRC.

134
Delhiites may have to ‘pay’ for Metro. The Hindu, 26 November, 2002.
135
Metro: Maken attacks Centre on Ordinance, ‘DMRC sought metro tax’. The Indian Express, 26 November, 2002.
136
Property Development Report, DMRC, July 1999. In a report prepared for RITES by Dr. Tridib Banerjee under the
TOKTEN Program called ‘Some Observations and Recommendations for the Integrated Multimodal Mass Rapid
Transport System (IMMRTS) Planned for Delhi’ in 1994, had given these recommendations for transit oriented
development and had also recommended that fair and just compensation in acquisition of private land for public good
and mixed use development around stations.
185
The Corporation plans optimum utilization of station buildings as well as land held by the
corporation along with stations.
Citing the case of the Calcutta Metro project where no commercial development had been
undertaken, he said that this was because it was developed by the Indian Railways that had enough
resources for funding the project, “But DMRC is determined to undertake every possible effort to make the
project financially viable. And property development has tremendous potential.” A property development
cell was set up in the DMRC that included civil engineers, architects, and environmentalists for conducting
detailed studies on the viability and type of property development. Many areas like Tis Hazari and ISBT
were cited as ideal spots for commercial offices and shopping malls for the lakhs of passengers using the
MRTS. The DMRC had already planned to construct residential apartments at the Shastri Park Depot.
137

On 25
th
January 2001, it was announced that the government had approved DMRC’s plan for
involving foreign direct investment in property development to raise Rs 500 crores as funds for the MRTS
project and operations. The government was to provide land to the DMRC for development at concessional
government transfer rates. This was part of the initial concessions package that the Union Cabinet had said
it would provide the MRTS when it approved the project in September 1996.
138

A follow-up article on the clearance of 100% FDI in urban transport policy said that the policy
would not cause an increase in urban transport projects because such projects were usually commercially
nonviable and should be considered social projects. The policy, though, would help urban transportation in
general. The DMRC finance director R.N. Joshi said,
It will ease the burden on the Exchequer and we shall gain from the experience from other
countries because the investing organizations would bring new technology along with the funds.
In the long run, it will help in accelerated movement of funds in this infrastructure sector, which
was starving, primarily because of lack of finances.
139

Another article reported that 100% FDI was not likely to attract investment in urban transport
projects since these were not commercially profitable. They would have to be heavily subsidised by the

137
Property development to fund Delhi Metro, Metro rail Corporation to raise Rs 2,000 crawled through real estate
development. Rajeev Jayaswal & C Shivkumar. Business standard, New Delhi, 25 November, 1999.
138
6% of total cost from real estate development: Delhi Metro’s FDI plan okayed. Parul Gupta and Partha Ghosh.
Business Standard, 25 January, 2001.
139
100% FDI in MRTS projects not likely to lure much investment. Business standard, 12 May, 2001.
186
government and a model that may work would be if the private companies were also allowed to operate
the system.
140

The DMRC immediately moved in to capitalize on this development by their decision to appoint a
General Consultant to look into FDI for property development. The importance of property development
was cited by giving the example of Hong Kong MRTS that was the only profit-making metro in the world
because of revenue from property development. Shopping malls, commercial office space and residential
areas were envisaged at the stations. “Setting up the stores in these locations makes sense because the
players would be able to attract maximum eyeballs and footfalls in these locations,” said an industry
expert.
141

An article in Rashtriya Sahara reported that the DMRC was trying to get the Delhi MRTS
classified as an infrastructure project as that would open up the doors for approximately Rs 2000 crores of
FDI for property development. It said that the project cost had increased from Rs 4860 crores to Rs 8155
crores and constant investment would be required in order to keep it trustworthy and per international
standards. After being refused investment by domestic companies, DMRC had been offered FDI from
Japan, Singapore and Hong Kong companies on the condition that the MRTS be declared an infrastructure
project so that the centre would provide lawful security and services for the project. The article ended with
the statement that with the MRTS being declared an infrastructure project, the DMRC could open up
several acres of land for investment by international companies. According to a DMRC spokesperson, it
had already written to the Central government in May 2000 regarding the same and it felt that the centre’s
attitude seemed encouraging.
142

After the Metro Maintenance and Operations Act was passed in December 2002, the DMRC had
started working on property development that had been part of its funding plan.
143
In September 2003, the

140
100pc FDI in MRTS unlikely to improve urban transport. The Financial Express, 14 May, 2001.
141
DMRC to name consultant to chalk out a plan to attract FDI. Anil Sasi & Gaurav Raghuvanshi. Business Standard,
4 June, 2001.
142
Request to declare Delhi Metro an infrastructure project. Rashtriya Sahara, 31 July, 2001.
143
The Act gave the DMRC the following authorities regarding property Development: The Delhi Metro Railway
(Operation and Maintenance) Act, 2002, Chapter III Functions and Powers of the Metro Railway Administration.
http://www.helplinelaw.com/docs/
6. Powers of metro railway administration.-(1) The metro railway administration shall have the power to do anything
which may be necessary or expedient for the purpose of carrying out its functions under the Act.
187
adviser (property development) of DMRC, R.M.Raina reported that the DMRC had changed its initial
policy.
As such, initially the plan was to sell off the commercial areas for generating additional revenue.
But with the property rates falling by around 50% since, the Corporation decided to retain the
ownership of properties to enjoy profits, which are expected to grow in the future...In view of the
change, we have taken a lump sum amount in down payment for a commercial property that is
coming up on 5 ha plot at Khyber Pass. But the ownership has not changed and it has only been
leased out on a 50-year annuity, which will bring higher returns every year to us and restore the
property to DMRC at the end of the period. A similar policy will cover other Metro properties, Mr
Raina explained. Stating that while as of now the returns through property development and
advertising almost matched the fare box, Mr Raina said in the future the returns are likely to
exceed the fare box and thereby will greatly helped in subsidizing the travel. Also, he noted that
while right now the Delhi metro is operating between Shahdara and Tis Hazari, which primarily
comprises the weakest economic area of Delhi, in the future it would reach the more affluent parts
of the capital...The companies have lower budgets for certain areas like East Delhi where some of
them spend less than 5% of the total outlay for Delhi. But when it comes to New Delhi or South
Delhi, they open their wallets easily, said the official, adding that the picture would only become
rosier with the passage of time...With expansion of Metro and higher ridership, its attraction
would leap.
144

An article reported on another proposal of the Metro rail as a development project with housing,
commercial property development around stations instead of it being simply a transportation solution. It
said that ‘since the Delhi Metro project has been one of the most significant developments in Delhi, the
Master Plan 2021 should take fully into account the future planning of Delhi Metro with common
objectives and approach.’ Mr. Raina said
that to help in maximizing the utilization of the MRTS system and to bring relief to the already
overloaded road system, an attempt should be made to ‘densify’ the MRTS routes. Giving the
example of Hong Kong, he said that similar large-scale residential development should happen
along the MRTS as in Rohini and Dwarka. He also said that the Metro rail system should be taken
to the 14 district centres planned in the Delhi Master Plan to help decongest the areas.
145

(2) Without prejudice to the generality of the foregoing provision, such power shall include the power to-
(a) acquire, hold and dispose of all kinds of properties owned by it, both movable and immovable;
(b) improve, develop or alter any property or asset held by it;
(c) enter temporarily in or upon the lands adjoining the metro railway alignment in order to remove obstruction, or
prevent imminent danger from any source, such as tree, post or structure, which may obstruct the movement of the
rolling stock, or passengers, or the view of the signal provided for movement of the rolling stock;
(d) execute any lease or grant any licence in respect of the property held by it;
(e) enter into, assign and rescind any contract or obligation;
(f) employ an agent or contractor for discharging its functions;
(g) obtain licence from the Central Government to establish and maintain telegraph lines;
(h) lay down or place electric supply lines for conveyance and transmission of energy and to obtain licence for that
purpose; and
(i) do all incidental acts as are necessary for discharge of any function conferred, or imposed, on it by this Act.
144
METRO plan to reap the harvest from properties. Gaurav Vivek Bhatnagar. The Hindu, 8 September, 2003.
145
‘Master plan should follow the Metro’. The Hindu, 31 May, 2002.
188
The Lieutenant Governor in December 2002 was talking about the idea of the Metro rail not as
a traffic solution but as a catalyst for development. ‘Giving examples from Western countries, wherein big
cities are developed by laying down railway lines and other facilities prior to habitation, he said he hoped
that the Metro will act as a nucleus for the development of East Delhi.’
146
The existing mixed use that
included dense low-income residential and commercial development that surrounded the metro rail route
in East Delhi and parts of which had been removed to make way for huge parking lots around the metro
stations was not seen as relevant development. The ‘development’ that the lieutenant governor referred to,
excluded existing development.
The DMRC was actively pursuing property development to cover its shortfall in profits from fares
by developing the areas around the stations along the lines of the Hong Kong Metro. The finance director
of DMRC, R.N.Joshi had the following to say about generating up 6% of the project cost through property
development. “By doing integrated development of the stations and the areas around it, the value of the
entire rail corridor goes up.”
147

Next it was reported that RITES in its report had said that taking the Metro rail to Dwarka would
help the DDA’s Master Plan to develop Dwarka area as more people would be willing to move to the area
with a Metro rail connection. At present even after getting houses in the area, people were not moving in
because of which several houses were lying empty. The article said that RITES lobbied heavily for
constructing this route in the first phase saying that it would be beneficial in all aspects. 114.32 ha of land
would need to be acquired for this route of which 37.7 ha was government land. The rest 76.62 ha of
private land would include shops on Panchkuian Road and a slum settlement- Kathputli Colony between
Shadipur and Kirti Nagar. It would also involve removal of illegal construction in Shadipur, Moti
Nagar,Tilak Nagar, Uttam Nagar, Om Vihar and Sevaram Park. The slum wing of DDA would resettle the
affected slums. Others would be resettled after discussion with the respective departments under which they
fell. For Panchkuian Road, 6 ha of land would be acquired that was currently occupied by the Kalavati
Sarai Hospital and 188 single story homes for postal and telegraph workers. The plan was to tear down the
houses and build multi storey residential buildings that would also house the postal and telegraph workers.

146
Metro rail to provide impetus to development: LG. The Tribune, 5 December, 2002.
147
Ground Realty. Business world, 11 November, 2002.
189
The article then went on to say that eight such areas ranging from 1.5-5 ha had been identified for
development along the Dwarka- CP corridor and they were near Damkal Center, Panchkuian Road, Kirti
Nagar, Dwarka, Najafgarh Depot, Shivaji Road, Khyala Village and Subhash Nagar. Development of these
areas would yield revenue of Rs 300 crores.
148

Soon after the Dwarka-CP line was approved, articles on real estate development in Dwarka were
published. The Delhi government in its efforts to invite private capital for real estate development approved
the construction of a 500-bed hospital, Guru Gobind Singh University and Interstate Bus Terminus.
149

‘The Delhi government has also proposed to build its own IT park over hundred acres at Pappan
Kalan, Dwarka Phase II. This high-tech city will provide state-of-the-art facilities for software firms and
the telecommunication industry. It will offer both developed plots and built up space for companies to
make their own campuses.’
150
The Lieutenant Governor of Delhi, Vijay Kapoor, announced that the Central
government had ‘in principle’ cleared the third CP-Dwarka line of the MRTS. He also talked about the next
Master Plan and how it would ‘have provisions of “dense development” in one and a half km on both sides
of the Metro line, by increasing the floor area ratio.’
151

Along with the approval of the Dwarka-CP line, was the announcement that the Delhi Master Plan
would work towards densification along the metro corridor with the floor area ratios being increased along
half a kilometer on either side of the corridor.
152
The Master Plan was reorienting itself around the Metro
by making it ‘the city’s primary transport system with other public transport systems being metro-centric.’
All other transport modes- buses, autos etc would cater to the metro stations. The Master Plan would allow
for 10-storey buildings to come up on either side of the metro corridor on plots over 2000 sq.yds. in size.
153

148
Agreement to run Metro rail on Barakhamba Road- Dwarka route will give strength to the project. Alok Gaud.
Dainik Jagaran, 31 January, 2002.
149
On the fast track, Dwarka will be well on its way to success after the completion of the Metro. Hindustan Times, 19
October, 2002.
150
It’s all happening here at Dwarka. Today, 11 October, 2002.
151
Centre approves 3rd metro line. The Pioneer, 16 November, 2002. The Indian Express. The Asian nature, National
Herald, Dainik Jagaran.
152
Metro to pass through Dwarka, says L-G. The Indian Express, 9 January, 2003.
153
New Master plan focuses on Metro and construction. Chetan Chauhan. Hindustan Times, 9 January, 2003.
190
Funding Update
By March 2004, the DMRC had increased its minimum fare from Rs 4 to Rs 6 and had overall
increased the fares by 30-50%.
This hike was recommended by the three-member fare fixation committee... The DMRC board
which has representatives from the Central and the Delhi government, had discussed the hike
yesterday. The Centre’s nominees opposed the fare hike. The decision was put to a vote.
154

By June 2005 DMRC was looking for other ways of funding phase 2 of the Metro rail project in
case the loan with JBIC did not work out.
155
The DMRC was also experiencing funding problems for its
second phase with JBIC only providing for 48% of the cost of the project and was planning to ask the Delhi
and Union governments to increase their equity funding and raise funds from other sources, like ‘revenue
from its existing operations and interest-free loan for land acquisition by the government.’
156
The DMRC
asked the states of Uttar Pradesh and Haryana to contribute 80% of the cost of the links going to cities and
their respective states in phase 2 of the MRTS project due to their higher cost because of lower number of
stations in the routes.
157

On June 19, 2007, the Indian Institute of management, Lucknow announced that based on a case
study they had found that the DMRC was one of four metros in the world, including Singapore, Taipei and
Hong Kong, running at an operating profit among 135 metros globally. “DMRC has been making operating
profits ever since it became operational. However, in 2005-06, it earned Rs 448.93 crore ($ 92 million),
whereas its expenditure was Rs 102.41 crore ($ 21 million), thus making an operational profit of Rs 346.52
crore ($ 71 million),” the case study adds.
158
On the other hand in an interview with Business Standard, the
DMRC MD, E Sreedharan mentioned the DMRC needed to increase its revenue shortfalls in some areas by
providing feeder air-conditioned buses.
The revenue from traffic operations has to be consistent with the paying capacity of passengers.
So, we have fixed the metro fare at a minimum of Rs 6 and a maximum of Rs 24. I would be
happy if we are able to reduce the revenue from traffic operations and compensate it by increasing

154
Delhi Metro hikes fares by 30-50%. Business Standard, 31 March, 2004.
155
Delhi Metro seeks alternate funding for phase 2. Devidutta Tripathy. Business Standard, 2 June, 2005.
156
Delhi Metro falls short of Rs 550 cr. Business Standard, 3 February, 2006.
157
States told to fund 80% cost of metro projects. Business Standard, 11 March, 2007.
158
DMRC a success, says IIM Lucknow study. Rayana Pandey. Business Standard, 19 June, 2007.
191
the revenue from other sources like advertisements, commercial exploitation of available
space, consultancy services, among others. This would ensure that the passengers benefit the
most.
159

Hence it was not clear why the DMRC wanted to generate revenue from other sources if it was
generating an operating profit. On 6
th
March 2007, it was reported that DMRC was starting a pilot project
by taking 200 buses from the DTC and upgrading them with GPS technology and that passengers would be
able to use DMRC smart cards on the buses. This was a source of generating income for the DMRC and
would also solve the issue of feeder buses to the stations.
160

In April 2004, the DMRC announced that it would be giving contracts to a single contractor for
developing properties around stations as it was having a lot of problems dealing with multiple contractors.
It had also asked the government ‘to declare smaller plots of land which are less than 3 ha commercial land
so that the DMRC can use it for developing parking spaces and raise revenues from it.’ The chief urban
planner, K Srinath said that even though the DMRC was planning to raise 3% of its revenue from property
development, the Hong Kong Metro raised 30% of the project cost from real estate development. ‘The
corporation is aiming to increase the earnings from property development to 25% so it is looking at
building residential area on total area of 93.4 acres at Khyber Pass depot.’
161
The DMRC was now planning
to develop the area around stations as commercial properties because it said that it took too long for the
land use to be changed from institutional to residential and most of the properties around its stations came
under the institutional use. ‘It took us four years to get land-use clearance certificate when we first applied
for developing residential areas in the institution areas’ said K Srinath. It was still going ahead with
residential development in the Khyber Pass Depot as it was getting a good deal from real estate developers
Parsvanath.
162
In 2007, it was reported that the DMRC was earning 25% of its revenue from property
development.
163

159
‘DMRC needs to earn from other sources’. Bhupesh Bhandari & Biljith R, Business Standard, Mumbai, 11 August,
2008.
160
Delhi metro plans feeder buses. Animesh Singh. Business Standard, 6 March, 2007.
161
Metro stations to have single developers. Ankita Sarkar. Business Standard, 29 April, 2004.
162
Land-use rules hit metro’s plans. Ankita Sarkar. Business Standard, 1 July, 2004.
163
DMRC Earning High from Property Development. Indian Realty News, 5 March, 2007. DMRC earns the third from
property development. The Economic Times
192
In July 2007, the MOUD requested that the DDA should relax its norms on property
development. Currently, a DDA technical committee would review plans for property development around
stations and in the past had found problems because the DMRC had disposed of properties without
approved layout plans. Therefore they were against relaxing the norms.
Delhi Metro, meanwhile, says it has been in regular touch with DDA...Easing norms will help us
because metro (Railways) all over the world are capital-intensive projects, Delhi Metro
spokesperson Anuj Dayal said...We need to repay a loan amounting to Rs 6000 crore to the
Japanese government, and the only way to do that is to develop commercial properties.
164

By October 2008, the DMRC had been given authority by the Empowered Committee to develop
property around and over stations without any restrictions. It no longer needed permission from the MOUD
but would still have to obtain clearances from local agencies like the MCD, DDA and NDMC.

A senior government official who was part of this development said the idea behind relaxing
norms is to ensure DMRC can fund its own projects and procure stock without waiting for
government assistance...They have been allowed to develop property even in the past but now they
no longer need permission from the Urban Development Ministry, the official said. Nor will they
have to follow strict regulations on land-use.
165

It also gave clearance to the Haryana government to develop property around metro stations along
the Delhi- Gurgaon line within the state’s jurisdiction in the NCR.
An article in July, 2006, reported that the ‘Metro rail could soon become an industry of over Rs
50,000 crore if all the projects for which the Delhi Metro Rail Corporation (DMRC) has submitted detailed
project reports to various states are implemented. The amount is as much as the government had earmarked
for its high-profile golden quadrilateral highway project when it was launched in 1998.’ The Mumbai and
Bangalore Metro projects were under construction and the DMRC was working on DPR’s for 10 more
projects. ‘DMRC officials said given the number of projects for which the organisation had turned
consultant, it might in the long-run even open a separate consultancy division.’
166
The DMRC had become
a major consultant for other Metro projects in the country and abroad for example the Bangalore,
Ahmedabad, Hyderabad, Ludhiana and Karachi metro rail projects. It was also consulting for high-speed
Metro links to airports in the cities of Bangalore and Hyderabad. Other countries that were seeking DMRC

164
Can metro bypass DDA and build? Mandakini Gahlot. The Indian Express, 22 July, 2008.
165
Now, Metro gets commercial green light. Esha Roy. Yahoo News, The Indian Express, 11 October, 2008.
166
Rs 50,000 cr ride on Metro. K P Narayan Kumar. Business standard, 4 July, 2006.
193
consultation for project management included Pakistan, Bangladesh, Indonesia, Sri Lanka, Syria,
Ireland, and Indonesia.
167

Discussion
The nuclear sanctions imposed on India by Japan after the Pokhran Nuclear Tests in 1998 caused
uncertainty about continued funding from JBIC and this was reflected in it releasing only slightly more
than the first installment of the loan, 4 years after the agreement was signed. The loan conditions that
stipulated that the first instalment be used to pay the General Consultants, discussed in detail in Chapter 5,
meant that a large portion of the first installment would not be utilized in the construction of the project.
The Central government having to give a guarantee for the exchange rate risk would put additional
financial burden on the Indian government in case the value of the rupee dropped against the yen.
The Union government had already listed other funding options including property development.
Apart from providing subsidies for the project, a policy on 100% FDI for Urban Transport projects and
revenue generated from property development were given special attention. Another way of funding that
was discussed was through privatization of the second phase by giving the contract for constructing the
project on Build-Operate-Transfer basis but, as pointed out by a DMRC official, it would require a well
worked out regulatory framework for foreign firms to be able to work within the country apart from
creating competition for DMRC. Of the above, property development, based on the Hong Kong metro
model, became one of the main ways for the DMRC to generate revenues for the project.
Both the governments, Central and Delhi, were mostly forthcoming in providing subsidies for the
project including concessions on imports, equipment, excise duty, sales tax and work contract tax. By May
2003, the Metro project had received at least Rs 3000 crores in subsidies that amounted to 30% of the cost
of the first phase of the project. If these subsidies were added the project cost would be Rs 11,000 crores
and the total contribution by the Delhi and Central governments would be over 50% for the project. Other
subsidies not included in the above calculations included subsidies for power, water, fares and security. The

167
DMRC a success, says IIM Lucknow study. Rayana Pandey. Business Standard, 19 June, 2007.
194
budgetary resources for the Metro rail and for the transport sector in general far exceeded any other area
of development.
The Delhi government was more prompt in releasing its contribution of funds, towards the project
and towards land acquisition than the Central government especially in the initial stages of the project when
there was a possibility of JBIC pulling out because of the nuclear sanctions. When the Metro Bill conflict
started between the two governments, the Delhi Chief Minister, Sheila Dikshit pointed out how the Delhi
government had helped out the DMRC when it was in a financial crunch. The Delhi government had also
helped administratively by helping expedite permissions for the project from various civic agencies and in
land acquisition.
During and after the enactment of the Metro Bill that gave the Central government control over the
project, the Delhi government expressed reluctance in providing subsidies but political pressure from the
opposition and DMRC by successfully using the issue of ‘social benefits’ of the project and the visibility of
the project, forced the government to continue with the subsidies. The resistance came through breakdown
in cooperation and regulatory agreements like refusal of the Delhi government in stopping buses on roads
parallel to the metro routes, providing feeder services at stations and helping in land acquisition. The MCD
continued to demand property tax from the DMRC. The Delhi government also pursued its own Transport
Policy as discussed later and there was no transport integration with the metro rail that the Delhi
government had planned earlier, even though Delhi pursued a policy for intermodal traffic integration.
After the Metro Bill was cleared in December 2002, the DMRC was classified under the Ministry
of Urban Development and there was an increase in lobbying by the Urban Development Minister to gain
funds for the project from the Central government. The role of the MOUD within the government started to
grow because of the Delhi MRTS and it received a larger share of central budgetary resources.
During the opposition by the Delhi government to the Metro Bill, the Delhi BJP opposition was
highly critical about power supply to DMRC by a private company at rates at which it was sold to the
railways, MCD and DJB. They brought up the issue of power supply by private companies to the DMRC to
discredit the Delhi government and detract from the issue of the Metro Bill as this was directly related to
who would then get credit for the project and gain political support. It was also an effort to pressure the
Delhi government into ensuring that the DMRC was supplied power at subsidized rates in spite of the
195
Centre’s control of the project through the Metro Bill. The Delhi Congress government bent over
backwards to ensure DMRC of power at subsidized rates to keep its popularity in light of the MRTS being
a ‘social project’ and to gain sympathy and admiration from the public for cooperation with the project
despite its subordinate position in the Metro Bill. The DMRC gained most in this conflict, as it did not have
to advocate for the lower power tariffs; the political parties were doing that on its behalf with the BJP
accusing the Congress government of corruption and the Congress government making all efforts to keep
up its cooperative image for fear of losing popular support. This clearly showed how the state government’s
powers were limited to a large extent and it did not take the risk of losing public support, a perception that
was generated by the BJP opposition and the DMRC through the media. Even in 2002, because of the
strong socialist state heritage, any government stand would have to be against private enterprise and for
social projects in order to maintain popularity. DMRC had already been classified as a social project. The
Delhi government would have been in the right by letting DMRC buy power from the private company, at
the rate it was offering, given that one of the main justifications that the Centre had given to keep the
project under its wings was its connection to the Railways who were not getting power supply at subsidised
rates. Power was privatized to increase efficiency but faced problems when supplying power to ‘public’
projects due to politicization of issues. What remained unsaid and unaddressed by the political parties was
that ultimately, the losses would be adjusted against taxes on the citizens of Delhi because of the MoU
signed between the Delhi government and private distcoms. The tariffs on Delhi’s residents were increased
5% in 2003-2004 and an attempt to increase them by 10% in 2004-2005 was met by resistance from
residents and they succeeded in being able to stop them.
168

The DMRC, like the NDMC and MES, was getting heavy subsidies as in the case of power versus
Delhi government organizations like the MCD and DJB who were paying for utilities at higher rates. The
Central government organizations were being subsidized and therefore the actual expenditure of

168
Sheila rules out rollback, defends privatisation of power in Capital. The Tribune, 26 August 2005. In an article in
The Tribune in 2005, on a 10 percent power tariff hike in the city, the Chief Minister Sheila Dikshit said: ‘After
privatisation, there was no tariff increase in the year 2002-03, five per cent increase in 2003-04 and 10 per cent in
2004-05. Thus against assumed over all tariff increase of 40 per cent up to 2005-06, the increase has been only about
23 per cent, she said.’ By September, protests by Resident Welfare Associations had forced the Delhi Government to
withdraw the tariff hikes for domestic and agricultural consumers and instead would be covered by subsidy. The price
of reforms, Aman Sethi, Frontline, Volume 22, Issue 19, Sep 10-23, 2005.
196
organizations like the NDMC, MES or DMRC remained hidden, whereas Delhi government
organizations struggled with their financial situations.
The DMRC attached the issue of increase in fares or running at a loss very effectively to the power
tariff. Politicians repeatedly mentioned that they would ensure that the people of Delhi did not suffer
because of an increase in fares that was contingent on how much the DMRC would have to pay for power
supply. Even though the DMRC’s said that the project should not be politicized, in this case it was using
politics to gain subsidies. The agreement between the MRTS and DVB (Dehi Vidyut/PowerBoard) became
void once the DVB was privatized. The two new private distcoms BSES and Tata Power Company had
indicated that they would sell power to DMRC at commercial rates. The DMRC said that this would
directly affect the price of the Metro fares and it may now not be able to afford to provide the Rs 4 fare.
The private distcoms claimed that DMRC was a private company and should be sold power at commercial
rates but that the final decision would be made after discussions between them. The DMRC again stressed
that the private distcoms should provide power at subsidised rates so that the fares could be kept low and
they had to be kept low so more people switched to using the metro rail.
Since the private distribution companies were exerting their rights based on the MoU signed
between them and the Delhi government, the latter caught between this agreement with the distcoms on the
one hand and negative publicity over a public project on the other was contemplating subsidizing the
private distcoms to avoid what it perceived would be a public outcry; a questionable step that the Transport
Minister Ajay Maken had announced and that the Chief Minister Sheila Dixit later denied saying that the
DERC would decide the tariff. That it assumed that there would be less publicity in doing so, than taking
the stand that DMRC should pay for power at the same rates as the Indian Railways and other municipal
organizations, revealed the power that the project had consolidated through its visibility and public
relations by linking power to an increase in DMRC fares and by these virtues making it an election issue
for politicians. The opposition objected to the Delhi government’s reassurance that it would help the
DMRC pay the higher power tariff to BSES, saying that the Delhi government was trying to benefit private
companies because they needed financial contributions from them for the upcoming elections. This charge
of corruption had the effect of checking public subsidization of private distcoms. Not only was the Delhi
government caught between its MoU with private companies, unpopularity if it took a stand that the DMRC
197
should pay for power at higher rates and being charged with corruption when it said that it would cover
the cost of the DMRC power tariffs, it was also being asked by the Central government to waive the MCD
Electricity tax on the DMRC that would have been a big source of income for the Delhi government.
Meanwhile, DERC agreed to accept DMRC’s application for direct power supply from Transco
but at the same time pointed out that due to the MoU between the Delhi government and private distcoms
that assured them with a 16% profit, the balance of it losing the DMRC contract would have to be made up
by Delhi’s citizens. BSES proposed a lower tariff plan for DMRC to DERC either because it was assured of
profits from other areas or it did not want to risk losing a lucrative contract to Transco. This was the best
deal for DMRC since it would not require it to furnish its annual revenue requirement to the DERC that
would also make its records public. Subsequently, there was another change in who would supply power to
DMRC with the contract going to Tata Power Supply instead of BSES as it was discovered, by Transco,
that DMRC’s route fell under the former’s jurisdiction. This may have been a way to create some
competition between the two private companies and further lower the tariff. In the end, the DMRC had
prevailed in getting power at a subsidized rate. The DERC however still had to decide on the tariff.
Unlike the metro rail project, private distcoms were low on the visibility scale. This was reflected
in another article that probably wouldn’t have been written had the issue of power for the Metro rail project
from private distcoms not emerged. In an interview with the chairman of DERC, it was revealed that there
had been no public response to advertisements by private distcoms for comments on the functioning of the
distribution companies. In fact he used this opportunity to request the media to cover these issues more
effectively. The publicity of the power supply to DMRC also threw light on the newly formed private
power companies and the need for the increased role of public participation in regulating privatization.
In 2003, the DMRC chairman, Madan Lal Khurana intervened when the DMRC received a bill
from NDPL at the prevailing railways tariff rates saying that the DMRC should be given a license by
Transco, even though the DMRC itself was not pursuing the issue. NDPL’s argument that they had simply
sent the bill to DMRC at the prevailing Railway tariff rate was a reminder that they were getting special
treatment, even though they would still pay the bill at the adjusted rate. Again, this time a Transco official
was reported to have said that ultimately if the DMRC was given power at a lower rate, the difference
would have to be paid by the citizens of Delhi based on the MoU between the Delhi government and the
198
private distcoms that ensured them of a 16% profit; the reason they had agreed to the lower tariff for
DMRC. Transco blamed the BJP for forcing the Congress government, with their charges of corruption, to
have the private distcoms agree to the lower tariffs from DMRC with the understanding that their profit was
assured.
169
Though there was no follow-up on the story, and it is not clear whether this allegation was
indeed true, it shows the lack of transparency and factual information available to the public that would
have very clearly revealed how this decision affected them. If it was true, then the Delhi government was
being forced to give a disproportionate amount of subsidy to the project without having any stake in it,
especially after the passing of the Metro Bill 2002. More importantly, the responsibility for making up the
losses fell on Delhi’s citizens and therefore the Delhi government was not watching out for their interest.
The business of setting fares became an issue of control of the Metro project with the Transport
minister saying that Delhi had a larger stake in the project with 15% investment and repayment of the
Japanese loan through the metro fare by Delhiites. With the Metro Bill being cleared in the Rajya Sabha in
2002, this decision was given to an independent committee with equal participation from the two
governments, therefore Delhi did not have any direct control over setting fares. The immediate decision to
set the fares rested with the DMRC and in a smart political move, it chose to go along with the fares that
had been announced by the Delhi government.
The DMRC also received subsidies in the supply of water as it was assured of continuous supply
even when the city of Delhi was facing a water shortage. It also got its own security force of 518 police
personnel provided by the central government.
The conflict over ownership of the Metro resulted in the Delhi government turning down a
progressive suggestion by the DMRC for creating a metro fund in Delhi, at least at the time. Politics and
intergovernmental conflict ultimately had repercussions on the project, both positive and negative and the
evidence is that the DMRC was skilful in manipulating this situation to its own advantage most of the time.
Other times it came at the cost of Delhi’s transportation as the atmosphere of cooperation gave way to
resentment and more importantly the control of the project went to the Central government, giving the
Delhi no incentive to actively participate in it. Since political parties would continue to change in the

169
It would require study on the power tariffs in other areas at the time.
199
Central and Delhi governments, it was the central bureaucracy, especially the Ministry of Urban
Development that was able to consolidate its power.
The 100% FDI investment liberalization move by the Central Government was a continuation of
the economic policy started in 1992 but it was also influenced by the Delhi MRTS project and the financial
crunch it had faced when the primary funding agency JBIC and the Japan government imposed sanctions
on India after the nuclear blasts. From being a panacea for traffic congestion and pollution, the social
project was now turning into a real estate development project for a city ‘bursting at the seams.’ One of the
main reasons was that it was actively looking for ways to become a profit-making enterprise through
property development, as the Hong Kong metro with profitable property development around stations was
the only precedent of a profitable metro system. Though 7% of its revenue earlier was to come from
property development, the share would slowly increase over the years.
If property development generated revenue, then it would make sense to plan transit-oriented
development along with the project and this would be best done on vacant land earmarked for development.
However if the project was constructed to curb traffic congestion and pollution etc, as it was, then it was
going to be built in dense parts of the city with little scope for property development due to existing high
density and problems of land acquisition. Land could most easily be acquired from slum settlements
followed by unauthorized and then authorised areas. Land acquisition is discussed in more detail in Chapter
6.
Though the DMRC was pursuing property development as an alternate source of revenue, the
metro rail was also being viewed as a catalyst for development. By January 2003, the Delhi Master Plan
2021 had included the possibility of further densification along the corridor for 10 storey high buildings on
2000 square yards of plots. The state or private developers, if they wanted, would now be able to
consolidate the plots and rebuild. In areas where the DDA had already invested in infrastructure, the metro
rail would provide a fast and efficient transport system and good connectivity to commercial centres. This
was most visible in the case of Dwarka, where despite housing construction by the DDA, few people were
willing to move into the area. The DDA hoping to its increase its property values and encourage people to
move into Dwarka, worked out a contract with the DMRC to extend the Dwarka-CP line further into the
200
heart of the area. A large number of articles about increasing property values in Dwarka, plans of
foreign direct investment for property development in that area, started to appear soon after.
170

By 2007, the MOUD had given the DMRC freedom from any regulations for property
development around stations and had requested the DDA to do the same. Essentially, this meant that the
DMRC now had unprecedented amount of power to acquire and develop property, change land use and
give contracts. If this was implemented, the Metro rail would have initiated urban renewal and
gentrification. The DMRC was also turning into a consultancy for metro projects around the country and
was initiating other schemes like its own feeder bus fleet to generate more revenue.

Central Urban Transport Policy
At the end of October, 1996, the Economic Times gave an update on the status of proposed MRTS
projects all over the country. In Mumbai, a multimodal transport system had been recommended by the
Mumbai Metropolitan Regional Development Authority, the cost of which would be shared by the Ministry
of Railways and the Government of Maharashtra. Negotiations for funds were also underway with the
World Bank. In Calcutta, one feasibility study had recommended extension of the existing Metro and
RITES had proposed a circular rail in another feasibility study. In Madras (Chennai), a railway corridor
under the Ministry of Railways was already under construction and nearing completion. Funding for the
second phase of the project was being discussed with the State and Central governments, as the Ministry of
Railways was hesitant to take on the project because of decreased resources. In Ahmedabad, RITES had
conducted a feasibility study and recommended an MRTS for 58.5 km. In Jaipur, RITES had submitted its
feasibility study to the State government and it was under review. Jammu, Nagpur, Vijayawada, Lucknow,
Cuttack, Bhubaneswar and Noida were other cities where studies for MRTS had already been conducted.
171

170
The main opposition for property development came from the Municipal Corporation of Delhi that wanted DMRC
to pay property tax for development around stations and the Delhi Urban Arts Commission that wanted any
development to conform to its Urban Design guidelines and these are discussed in the Chapter 8- Union Urban
Transport Policy and the Metro Ordinance and Chapter 9- Routes, NCR, DTC and DUAC.
171
On the rails, Status of proposed MRTS projects. The Economic Times, New Delhi, 29 October, 1996.
201
In September of 1997, a story cited the Chennai (Madras) MRTS as a precedent to be emulated
by the Delhi MRTS. A background of the Chennai MRTS revealed its similarity in nature to the history of
the Delhi MRTS. The project was conceived in the 1970s.
In 1971 the Metropolitan transport project (Railways) Madras was established by the Indian
Railways to study the techno-economic feasibility of having the metro rail in the city. A detailed
survey was carried out for Mass Rapid Transport System.
The article said that Delhi should learn from the smooth functioning of the project, the innovative
technology used and the three-tier models of the stations in Chennai. The Delhi government was blamed for
the delay of the project and increasing pollution in the city due to lack of finances and political will.
172

In January 1999, in an interview with the press, the Lieutenant Governor, Vijay Kapoor called for
developing independent towns hundred kilometers away from Delhi, that would have the same facilities,
utilities and opportunities as the capital and which would help stop immigrants from moving to Delhi and
reducing the strain on the capital’s utilities. He said initially the region around Delhi was being used for
farming and the towns in the National Capital Region were very small. “Now there are no longer any
villages on the outskirts of Delhi and the small towns have become substantial cities. Delhi has to bear the
load of the population from these cities also.” He called for new directions, initiatives and citizen
participation in the Delhi Master Plan. Talking about the various new projects that were planned for Delhi
including housing and flyovers, he mentioned that construction on the first phase of the MRTS project had
started and all problems concerning land acquisition had been solved. The first-phase of the project was to
be completed in seven years.
173
He also said that the change in the Delhi government to the Congress while
the BJP in power in the Central government as well as the Municipal Corporation of Delhi would not affect
development in the capital.
174

In a televised address on India’s Republic Day, 26 January, the Lieutenant Governor of Delhi,
Vijay Kapoor, spoke about some of the same issues as had been covered in an article in the beginning of
January that were the pressure of migration on the capital city, participatory approach from citizens and
government, private and non-government organizations for the Delhi Master Plan and Delhi as part of the

172
Delhi should learn from Chennai MRTS. Shibani Dasgupta. Delhi Mid-Day, New Delhi, 17 September, 1997.
173
Lieutenant-governor worried about the increasing load of population in the capital, towns with similar facilities will
be developed 100 km from Delhi, settlers from other states are the biggest problem. Dainik Jagaran, 7 January, 1999.
174
‘Govt’s change not to hamper development.’ The Hindustan Times, 7 January, 1999.
202
NCR. He mentioned that some of the transport problems would be solved by the MRTS, one of the
major projects that had been launched that year and he also mentioned that the environment of the capital
would improve with the completion of transportation projects.
175
Right from early 1999 the Lieutenant
Governor of Delhi, a nominee of the central government, by talking of the MRTS, was making a claim on it
as a Central government project.
A year and a half later, with the Delhi MRTS having been cleared in the Union Cabinet and about
to start construction, it was reported to have become ‘a trendsetter for other metro cities like Bangalore,
Hyderabad and Mumbai. After the disappointment of the Calcutta Metro, light-rail systems had fallen into
disfavor.’ But the Delhi MRTS with its approach to financing and project management was setting a
precedent.
176
The DMRC was giving tours of the construction site to reporters and they reported that the
Delhi Metro rail was being presented as a model and if it was completed successfully then an MRTS would
be started in every city.
177

An op-ed on urban transport systems by M M Goel, additional member of the Railway Board,
envisaged mass rapid transit systems as the most suitable mode of urban transport in the urbanizing cities of
India. He said that there had been a rapid growth in the population of urban areas post-independence and
therefore rapid transit system would be necessary to cater to such large populations. Because the range of
influence of railway stations was for a radius of one kilometer, feeder buses would have to be put in place
‘to serve the MRTS routes from the outlying residential areas and commercial/ business establishments.’
He said the entire bus system would have to be reorganized so that it would cater to the MRTS. He
suggested that a surface railway system would be the most cost-effective at Rs 20-25 crore per km versus
three times as much for elevated rail and 15 times as much for underground metros. He continued to the
fact that railway stations usually formed the heart of the city with railway lines radiating out in all
directions. The Indian Railways’ right of way could also be utilized to build new lines and mass rapid
transit systems. He suggested that both the MRTS and the Indian Railways suburban services should be
integrated and therefore should have the same rolling stock and other railway equipment.

175
LG asks residents to help build great city. The Times of India, 27 January, 1999.
176
Delhi’s MRTS – a trendsetter for other metro cities. The Hindustan Times, 15 February, 1999.
177
Metro rail work commences at war level, but there are still some obstacles. Jansatta, New Delhi, 16 April, 1999.
203
As the total requirement will be sufficiently large, country can realize substantial economies of
scale. Economies of scale will also accrue in many other areas, such as training, recruitment,
research and development, management practices, standards and documentation, human resource
development, disaster management, etc.
He said the main issue impeding the development of urban rail transit systems was separate
budgets for the Indian Railways, resulting in the latter subsidizing the loss-making suburban rail systems.
This was the reason for the Indian Railways not being ‘proactively involved in the planning and operation
of cost-effective URTS (Urban Rail Transit Systems).’ On the other hand, he said, the Central and State
governments were also undertaking the development of such systems and so there was a disconnection
between the railways and urban rail systems that went against integration of the different systems and
breakdown of economies of scale.
178

In an article called ‘Following Calcutta’, the development of mass rapid transit systems in other
cities of India, was discussed. The topic was the grants given by the Ministry of Urban Development to
various cities to carry out feasibility studies for MRTS and light-rail systems. As discussed earlier, the
assistance was given to city schemes from the Urban Transport Consortium fund, which had been
established in 1989. In this article, the Delhi Metro project was cited as a precedent for other cities. ‘Its
performance and utility, say planners, are bound to spur on other states to emulate the MRTS.’ Light rail
transit systems were to come up in other cities like Bangalore for which the Karnataka government wanted
Rs 500 crores equity participation by the Centre. Other cities where feasibility studies had been completed
included Hyderabad, Calcutta, Chennai, Jaipur, Ahmedabad, Noida, Jammu, Simla and Cuttack-
Bhubaneswar. Cities where feasibility studies were still going on included Lucknow, Kanpur and
Lucknow-Kanpur corridor. Cities considering feasibility studies for MRTS included Kochi, Bhopal, Indore
and Gwalior and Thane.
179

An article in the Indian Express with the heading, ‘Delhi Metro- a catalyst for Metro construction
in India’, said that urban transport was a major issue in increasingly urbanizing Indian cities that relied on
buses for public transport. A rail-based system would be more efficient as it had a carrying capacity of
80,000 people per hour versus a bus-based system that carried 10,000 people per hour.

178
A cost-effective urban transport system, planning of the MRTS on Indian Railways right of way may provide the
least cost option for most megacities, says M M Goel. The Economic Times, New Delhi, 11 May, 1999.
179
Following Calcutta. The Statesman, New Delhi, 11 June, 1999.
204
The techniques and construction methodology being adopted for Delhi’s Metro will be
available for other cities planning such systems in future. With Ahmedabad, Pune, Bangalore and
Hyderabad thinking of rail-based systems, the country is watching Delhi closely. Over 23 cities as
per the 1991 census had crossed the 1 million-population mark. It is time they started planning
their metro’s immediately.
180

This same information was in other articles but was attributed to E Sreedharan. He said that work
on the Delhi MRTS was important because it would be used as the basis for construction of metro projects
in other cities of India.
181

In a follow-up to the article from November, the Business Standard published another article
saying that the Indian Railways had asked State governments to provide equity funding for urban rail
transit systems in cities with a population of over 3 million in the country. The Indian Railways could not
entirely fund such projects because their freight revenues had fallen due to shift to road transportation. The
examples of international cities showed that they too relied on local bodies to fund suburban systems. The
Central and State governments were partly funding both the Delhi and Bangalore MRTS. The involvement
of state governments also became important in ensuring that more passengers used the MRTS by reducing
competition.
Tariffs for passengers are expected to be worked out on a cost recovery basis, though such
recoveries will tend to be heavily back-loaded in order to allow load factors to improve. Improved
load factors imply better utilization of suburban networks, which normally happens when bus
routes are discontinued on rail corridors. This could be done only by the State governments, the
sources said.
182

In November 2002, The Financial Express published an article that followed up on the MOUD
minister, Ananth Kumar’s announcement that the Metro Bill would ultimately apply to 35 other cities. It
tried to establish that the MRTS was not a financially viable project.
Mr Kumar said his government was keen on having such systems in 35 other cities with more than
one million population...The ordinance is expandable, he said when asked by FE whether it would
be feasible for the Centre to administer systems in all such cities. Senior officials say that initially
the Urban Development Ministry, through this ordinance, wanted to have a law in place for all
metro systems likely to come up in the country. But on legal grounds cited by the Railway Board,
this was made applicable only to the Delhi Metro. This is why the official press note on the day of
the Cabinet clearance called it a Metro Railways Ordinance, whereas the Minister referred to it as
the Delhi Metro Railway Ordinance two days later. Legalities apart, an official closely associated

180
Delhi Metro- A catalyst for Metro Construction in India. the Indian express, New Delhi, 10 September, 1999.
181
Metro rail service will start in capital from 2002, officers are reassured with the first phase of the project. Jansatta,
New Delhi,1 October, 1999.
182
Rlys tell state governments to help fund MRTS projects, Delhi Mass rapid Transit System Projected As Mordel. C
Shivkumar. Business standard, New Delhi, 6 December, 1999.
205
with the project cites two reasons why the DMRC model cannot be replicated in most other
cities- the project cost for three corridors is Rs 10,500 crores that no State government can afford
on its own or seek from a private company, which is not ensured of returns. Second, even if such a
system does come up, it will largely ride on debt...There are cheaper options available, like light
rail transport system and road-based bus systems. A decision should be made on the basis of
traffic, topography and cost effectiveness, says the official. There are many who contradict DMRC
Managing Director, E Sreedharan’s claims that this project will be viable. Transport experts say
that the world over, operation of such systems is subsidised by the government...DMRC has
projected a Rs 600 crore revenue from real estate development which it feels can cross subsidize
operations. But even if this revenue is realized fully, it does not help much considering that the
bare project cost is about Rs 10,500 crore, says an official.
183

The day after the Metro rail’s inauguration in Delhi, it was reported that ‘buoyed by the successful
launch of Delhi Metro, the Centre on Wednesday said it is considering to provide similar Mass Rapid
Transport System in other metropolitan cities like Bangalore, Hyderabad and Ahmedabad.’
184

Two days after the inauguration of the first section of the first phase of the Delhi metro, an article
in the Financial Express reported on the inclusion of Metro transport systems in other cities of the country
in the urban transport policy of the 10
th
Five-year plan.
Tenth plan suggests central corpus for urban transport-
With a view to channelise Central assistance into Urban transport systems in various cities, the
10
th
Five-Year Plan has suggested setting up a National Urban Transport Development Fund with
an initial corpus of Rs 3000 crore. An equal amount is to be raised through taxes and cesses taking
the total amount available to Rs 6000 crore.
The fund will be primarily aimed at making urban rail-based transport systems a reality. Such
systems are best suited for cities with a population of 3 million or more. The plan documents calls
for city wise specific projects for rail-based and urban transport systems together with funds
requirement. Central assistance at par with assistance given to the Delhi Metro project is a
commitment to be fulfilled as and when projects get started, the Plan document says.
According to industry sources, the fund is too less to be of much use specially since rail-based
systems are highly capital intensive and required long tenure loans besides equity.
The World Bank in its recent report on the transport sector has also recommended creation of non-
lapsable transport funds with contributions from user charges and from central, state and
municipal agencies.
The Tenth plan suggests a comprehensive legislation covering construction, operation and
maintenance of metro railways in all cities. Legislation on this line has already been cleared by
Parliament for the Delhi Metro. This legislation can be extended to other cities.
Noting that financial and managerial capabilities of the private sector are not being put to good use
in urban transport systems, the Plan talks of de-nationalizing the sector. This will mean doing
away with the prevailing system of transport permits and appointment of a regulator for fixing
fares and determining subsidies.
Road-based public bus systems serve lower income commuters and there will be a need to
increase their capacity while reducing congestion on city roads, the Plan points out.
185

183
Will Delhi Metro Model live up to expectations? Jyoti Mukul. The Financial Express, 4 November, 2002.
184
Centre for Rapid Transport Systems in Other Metros. The Financial Express, 26 December, 2002.
185
10
th
plan suggests Central Corpus for Urban Transport. Jyoti Mukul & Amiti Sen. The Financial Express, 26
December, 2002.
206
Because of news of diminishing passenger numbers on the Metro rail and of losses being
incurred, the MOUD minister, Ananth Kumar, issued a statement saying this was wrong since the line from
Shahdara to Tis Hazari was only the first line and it was being seen as the first test run. He said the MRTS
was picking up its speed and that after seeing the Delhi Metro, Karnataka, Andhra Pradesh, Kerala, UP and
Gujarat’s chief ministers had shown interest in starting metros in their states. He also reported that
construction on the Bangalore Metro rail would start that year. Chandrababu Naidu, Chief Minister, Andhra
Pradesh wanted to start it from Hyderabad to Secundarabad. The MOUD had received requests for metros
between Lucknow and Kanpur in UP and Ahmedabad to Gandhinagar in Gujarat. He once again said the
MOUD wanted to start Metro rails in 35 cities of the country.
186

Antagonism between Ministry of Urban Development and Railways Ministry
On 16
th
June, the Economic Times reported that the DMRC was seeking protection ‘against
criminal prosecution from owners of buildings acquired by the company, by asking for legal cover under
the Metro Railway (construction of works) Act, 1976 framed by the Indian Railways.’ The Railways
concluded that since DMRC was a private railway, it could not be offered protection under the Act. It also
pointed to the fact that the Delhi government, an equity partner in the firm, could cover the DMRC since it
had ‘the right to acquire land and buildings as the city planner and in public interest through the powers of
the Delhi government.’ It went on to say that ‘in pre-independence days, the safeguards were provided to
the Railways to take over management of rail companies in case of mismanagement or default.’
The Metro rail act allows those covered by it, to divert water or sewage lines without seeking
approval of the owners. It provides for payment of direct loss to the owner whose building has
been acquired. Importantly, it grants the power to enter property, make surveys and take photos to
ensure that in case of any damage during construction, they are liable to compensation only to the
extent of repair or damages and not for consequent losses.
In a follow-up article of the DMRC’s requests to be included under the Railways Act to protect it
from litigation for land acquisition, it was reported that the MOUD had notified Delhi under the Act on
June 5, 2000 and the Railways called this ‘irregular’ and ‘illegal’. ‘Railways are of the view that under no

186
It is not appropriate to expect a profit from metro right now: Ananth. Navbharat Times, 29 January, 2003.
207
circumstances can any Ministry other than the Railways or possibly the Ministry of Law and Justice
issue any notification under any Railway Act.’
187

In December 2001, news of the Metro Railway (Operation and Maintenance) Bill drafted by the
DMRC was first released. The Bill stipulated that ‘the intentional wreckage of a Metro coach or sabotage in
the network would be punishable by death.’ The second level punishment included ‘five years of
imprisonment or a fine of Rs 5000 for disobeying a Metro employee, which could lead to endangering of
life.’ The bill also included no separate lady’s compartment to avoid litigation and no restrooms with the
explanation that ‘the journeys will be very short.’
The Law Ministry had approved the Metro Bill in principle and ruled in favor of the MOUD for
the conflict over it bringing the Metro rail under the Metro Railway (Construction of Work) Act 1978. It
was reported that the Railways Act (Operations and Maintenance) was not extended to the Delhi MRTS but
that the Metro Railway (Construction of Work) Act 1978 that had been made for the Calcutta Metro,
covered the project during construction.
188
This is exactly what the Ministry of Urban development wanted
till such time that the Metro Bill was enacted.
A year and a half later, the Railways again protested against the Metro Bill that the MOUD had
drafted to provide a legal framework for the Delhi Metro rail project under its aegis, as it would give power
over the project to the MOUD versus the Railways. The DMRC too was hoping that the Metro Railway
(Operation and Maintenance) Bill would be enacted before the first phase was started in November 2002
and that it would be under the MOUD for all other issues except technical and safety concerns. However,
the Law Ministry had given two contradictory legal opinions about who held jurisdiction over the DMRC.
On the one hand was GoM’s decision that ‘the Railway Ministry’s opinion was the final one’ during the
gauge controversy. On the other hand, a source from the Railway Ministry was quoted as saying, “this is
contradictory to the Law Ministry’s decision that the Union Urban Development Ministry is the main
authority to deal with the Metro Railways.” The Railways Ministry was saying that there was no need for a
new Bill and that the Calcutta Metro Railway Temporary Act (O & M) 1985 could be modified for the
Delhi metro. They were also against the appointment of a separate Safety Commissioner for the Metro Rail

187
Railways resent extension of Calcutta metro act to Delhi. Nazneen Sharif. The Economic Times, 16 August, 2000.
188
Metro and act with teeth on anvil. Devirupa Mitra. The Statesman, 23 December, 2001.
208
that the DMRC and MOUD were demanding. However, with the passing of the new Bill, the power
over DMRC would lie with the MOUD. The DMRC was trying to clarify the issue by pointing out that the
Railways should “read the allocation of business rules. It states all safety and technical aspects lie with the
Railway Ministry, while the Urban Development Ministry decides all the non-technical issues. What is
technical about drafting an Act?” Even though the Railways right from the beginning wanted regulatory
control, it denied this by saying “we have thousands of kilometers of rail track to worry about. A 40 km
stretch is too small for us to create a controversy.”
189

Conflict between Delhi and Central Government
The Metro Ordinance conflict started in March 2000 after the draft bill was circulated and the
Delhi government protested on five clauses in the draft bill.
The main issue of contention is filed sections of the bid which in view of Delhi government will
put DMRC under operational control of the Centre. Sections 13 and 2 (1) (b) says Centre should
appoint Commissioner of metro rail safety. Section 4 (2)(9) says the fare structure cannot be
determined by the Delhi government without approval of the Centre and vice versa. Sections 5 (1)
and 5(8) says no portion or section of Delhi Metro can be opened for operation without permission
from the Centre for public carriage. Taking strong exception to these clauses, Transport Minister,
Ajay Maken, in a letter to the Central government, had said...the draft legislation puts all levers of
control in the hands of Railway Ministry without paying fundamental regard to differences in the
system between Metro rail and the Railways. Transport Minister Ajay Maken pointed out 14
differences between the Metro and Railways to make a counter argument to the Centre’s claim
that it would be controlling the Metro as Indian Railways, under the Central government, was the
expert. The Delhi government charged that it was a project in Delhi and hence responsible to the
citizens of Delhi.
190

Ajay Maken also said
This legislation will confine the authority of Delhi government regarding operation and
maintenance of Metro trains to peripheral areas. The Delhi government will have to bear the
legislative accountability and also accountability to the public without administrative leverage to
live up to people’s expectations...It is strange that the Ministry Of Urban Development is piloting
a Bill for the Ministry of Railways. This also indicates that the matter does not pertain to the
Ministry of Railway. Proposal to the Government of India is that the legislation should be piloted
by Delhi government in Delhi legislative assembly. The government is equipped with the
authority to effectively discharge its responsibility and accountability in the DMRC. Again DMRC
as an operational system has a legal framework geared to the needs of Metro rail system, which is
different from national rail system.
191

189
Metro bill: DMRC keeps fingers crossed. Devirupa Mitra. The Statesman, 9 January, 2002.
190
Control of Metro rail: Centre, Delhi government at loggerheads. Chetan Chauhan. Hindustan Times, 7 March,
2002.
191
Delhi Metro Billruns into rough weather. S K Jha. The Pioneer, 11 March, 2002.
209
Metro Railways (Maintenance and Operations) Bill listed the penalties for certain offences
including being drunk, smoking, fine for travelling ticketless, carrying dangerous goods or obstruction of
functioning of the rail.
192

After a period of quiet, the topic of the Metro (Maintenance and Operation) Bill again made an
appearance in August 2002. The Delhi government on receiving the Bill called it ‘unacceptable’ and
proceeded to constitute a high-level committee with the Transport Minister, Chief Secretary, Transport and
Law Secretaries as its members to amend the Bill. The Transport Minister said
We are definitely in a defiant mood. It is the Delhi government, which will have to deal with
complaints and problems of those who will use the Metro rail, but the Centre didn’t even bother to
take our opinion before preparing the Bill. We are going to send it back to the Centre.
193

In another article the specifics of the objections of the Delhi government were described as ‘the
Central government holding the powers to frame rules as well as to delegate its powers to any office or
authorities subordinate to it.’ The Delhi government was reasoning that ‘it is the government of NCT of
Delhi that is answerable to the people of Delhi and therefore should have a say in how it should be run.’
The papers though pointed to the conflict as being not between the two governments but between the
different parties in power.
194
Soon after the Delhi government constituted a five-member committee headed
by the Delhi Transport Minister Ajay Maken to
formally bring out a draft on the control and powers of the Delhi government vis-a-vis the Metro
rail and its authority to frame rules and guidelines accordingly. It was felt that at many places in
the draft, the name of the Delhi government should be mentioned along with that of Indian
Railways and that at certain places the name of Railways should be deleted and replaced by that of
the Delhi government.
195

The Centre’s Metro draft Bill was rejected in the Delhi legislative assembly. The Delhi
government said that it had prepared a plan to connect the MRTS to other modes of transport and was
facilitating the project by its active cooperation without which it would run into problems. If the Centre
controlled the DMRC then the situation might become like that of the DDA. It pointed to the Centre’s

192
Death Penalty mooted for Metro rail saboteurs. Chetan Chauhan. Hindustan Times, 19 March, 2002.
193
Delhi government refuses to accept centre’s metro bill. The Statesman, 13 August, 2002.
194
‘Unilateral’ drafting of Metro bill decried. The Tribune, 13 August, 2002.
195
Maken to head control panel. Metro rail/ Delhi warns a larger role. The Hindu, 13 August, 2002.
210
inability to resolve the Compressed Natural Gas (CNG) crises
196
and questioned its ability to take on the
MRTS.
197
The Transport minister, Ajay Maken, said that the Centre was using the Railways to keep the
project with the MOUD.
The Centre has explained to the Delhi government that the Metro rail project will come under
Railway Ministry. In such a situation, we are really wondering why the Urban Development
Ministry is the nodal agency for this project if the entire project falls under Railway Ministry...The
Delhi government is angry with the Centre’s decision to frame the fare structure for the Metro
Railways which will affect the welfare measures of the Delhi government for the lowest sections
of the society.
198

It was reported that the Railway Minister, Nitish Kumar, had said that only the seven-member
GoM could take decisions on the project. Any other committee, like the one formed by the Delhi
government, was inconsequential. The GoM also included the Chief Minister and Lieutenant Governor of
Delhi. Ajay Maken, however, pointed out that the Metro rail was different from the Railways as it ran
within the city and hence most of the control should go to the Delhi government with the Centre being
responsible for safety.
199
He quoted from the constitution, saying, “the Constitution clearly says all modes
of transport operating within the state boundaries are subject to state governments control. Delhi Metro, by
this definition, should be operated by the State government.”
200

It was reported that the Centre wanted control of the project because the BJP government at the
Centre, with an eye on the upcoming legislative assembly elections for the Delhi government, wanted to
make sure that it and not the incumbent Congress government in Delhi, received credit for the metro rail
project. It planned to win the Delhi legislative assembly elections by using the Delhi Metro rail as an
election issue. The Congress government in Delhi was arguing that the Delhi MRTS came under

196
This refers to a shortage of Compressed Natural Gas in Delhi after legislation was passed for converting buses and
some private vehicles to run on CNG and the Supreme Court had refused to extend the deadline for conversion.
However as the deadline approached there were not enough CNG stations to meet the demands of the converted
vehicles. The Central government was, according to the Delhi government, unresponsive to this crisis.
197
Metro hasn’t even started running yet and clash between Centre and Delhi government’s begun. Navbharat Times,
13 August, 2002.
198
Metro project Fracas; Delhi, centre on collision course. S.K.Jha. The Pioneer, 13 August, 2002. The Asian Age
referred to this issue as a fight to take credit for the Metro. There were seven articles on the ordinance on August 13,
2002 with four in Hindi newspapers.
199
Clash over Metro rail between central and Delhi. Jansatta, 15 August, 2002.
200
Delhi Govt demands control over Metro. The Times of India, 15 August, 2002. Delhi government asks for right to
make rules regarding metro rail. Rashtriya Sahara, 15 August, 2002. There were 11 articles on 15 August on the Delhi
government’s opposition to the Metro Bill sent to it by the Central Government for review. All the articles in which the
Delhi government protest was the main subject were in the ‘Politics Controversies’ section as classified by the DMRC.
211
Transportation Sector, which was entirely under Delhi government jurisdiction. The Transport Minister,
Ajay Maken, pointed out that if the Bill were passed, then the Delhi government would have to ask for the
Centre’s permission on every small matter pertaining to the MRTS. Since the Delhi government was an
equal contributor and member of the DMRC, it was necessary that it be equally involved in drafting the
bill. The article also said that at a glance it was clear from the Bill that the Centre wanted full control of the
project.
201

An editorial on the political developments surrounding the Metro Bill questioned whether the
Delhi government was capable of managing the MRTS project given its record of handling the Power, DTC
and public transport issues in the past. For these projects and for even minor expenses of the MCD, the
Delhi government looked to the Centre for financial aid. On the other hand the Indian Railways was an
established organisation that had a proven operational record. For the Delhi government to politicize the
project would be toying with the benefits of Delhi’s citizens.
202

BJP member Madan Lal Khurana challenged the Sheila Dikshit government to go a step further
and ask for statehood for Delhi if it had decided to politicize the MRTS project that was started when the
BJP was in power in Delhi.
203
The leader of the BJP opposition in Delhi’s legislative assembly, Jagdish
Mukhi, also said that Sheila Dikshit was politicizing the issue because she wanted to take credit for the
project even though it was started when the BJP was in power. He said that the project was related to
Railways and the latter had decided on the use of broad gauge. Approximately 111 km of surface corridors
would be run on railway track and hence the project had to be under the Railways.
204
The retired MCD
commissioner Mahindra Nagpal, criticised the Sheila Dikshit government saying it would run the MRTS to
the ground just like the DTC. He too claimed that the MRTS was started when the BJP was in power in
1998.
205

201
Delhi government disagrees with the Centre’s Metro rail ordinance. Dainik Jagaran, 15 August, 2002. On August
15 there were nine articles on Delhi government’s demands including five Hindi articles. There were in 11 total articles
on the topic.
202
Politics over metro rail. Dainik Jagaran, 16 August, 2002.
203
‘Why only the Metro rail, ask for position of statehood for Delhi.’ Dainik Jagaran, 17 August, 2002 up a.
204
Chief Minister wants to take credit for the Metro rail project: Mukhi. Jansatta, 17 August, 2002.
205
Criticism of Congress’ attitude over the Metro rail. Rashtriya Sahara, 18 August, 2002.
212
Jagdish Mukhi pointed out the Centre’s role in the MRTS and therefore its right to keep the
project within its power. He said Central government had jurisdiction over land and this directly affected
land acquisition and relocation of people. It was also responsible for getting the 56% loan from the OECF,
taking on the exchange-rate risk and providing the guarantee for the loan. Since Delhi did not have full
statehood it could not enter into a loan agreement with another country. He accused the Delhi government
for wanting to get power over land but not police and law and order from the Central government- the three
areas that were under the latter’s jurisdiction. Instead, he said, the Delhi government should ask for full
statehood with which the citizens’ problems would be solved.
206

The Congress government Transport Minister, Ajay Maken, responded to Mukhi’s claims that the
Centre was in charge of land acquisition and its financial contribution, by saying that the Central
government was a lot slower than the Delhi government in releasing funds and the idea of the Delhi
government partaking in the project financially was part of the liberalization policy of 1992.
We (the Congress) are the ones who have had to bear the financial and political brunt of
rehabilitating those whose land was used for the construction of the Metro. And it is Madan Lal
Khurana who wants to take credit for it... it is the State government that has funded it (15%) from
out of badly needed resources. The centre’s contribution also 15%, is small in view of the kitty of
resources available to it.
207

Ajay Maken met with the MD, E Sreedharan regarding the Delhi government being kept
uninformed of the developments regarding invitation of the Deputy Prime Minister, LK Advani to
inaugurate the trial run on September 17. He said the BJP was trying to take credit for the project.
208

An article in Dainik Jagaran informed that it was not just the Delhi government that was upset
over the Metro bill but also the MOUD that felt that the project with which it had been associated right
from inception may now move under the Railways Ministry jurisdiction. They were against this move and
said it was inappropriate to do so at this juncture when the trial runs were to start. Meanwhile the Law
Ministry told the Delhi Transport Ministry that the MRTS was not directly under either the State
government and that therefore the Central government had the right to draft the ordinance, a precursor of

206
The Delhi government’s demand for control over Metro rail inappropriate: Mukhi. Dainik Jagaran, 18 August,
2002. Mukhi flays CM for demand on Metro transfer. The Statesman, 19 August, 2002. Delh government will also
introduce an ordinance on Metro’s maintenance and operations. Rashtriya Sahara, 3 September, 2002.
207
Parties fight for Metro rail credit; political wrangling over who will inaugurate project. Aditi Phadnis. Business
standard, 20 August, 2002.
208
Metro rail flag off fuels controversy. Sujay Mehdudia.The Hindu, the 21 August, 2002.
213
the Bill, on the project. It advised the Delhi government to take the middle path on the draft ordinance
by giving suggestions on how to improve it and, according to the article, the Delhi government agreed to
follow this advice.
209

However, this did not happen and towards the end of August, it was reported that the Delhi
government had decided to draft its own Metro Bill. After being rejected by the Law Ministry, the Delhi
government had approached the High Court, that had pointed out that the Delhi government had full power
to make laws about any subject except 1, 2, 18, which did not include transportation. Encouraged by this
and the reasoning that not only was Delhi contributing 15% of the funds for the project but that Delhi
citizens would be paying back the loan to JBIC through the fare, the Transport Minister, Ajay Maken, said
it was entirely under the Delhi government jurisdiction to draft the Metro bill.
210
In another article it was
informed that the Supreme Court judges, R.K.Jain and B.P.Singh, on being asked had advised the Delhi
government to pass its own metro bill.
211

The Delhi government in its legislative assembly decided to invite the President to inaugurate the
Metro line in December, to counter LK Advani’s invitation to inaugurate the trial run and Prime Minister
Atal Bihari Vajpayee’s invitation to inaugurate the Metro. It also decided to ask for more power over the
project in deciding the routes, setting the fares and choosing the officers of the DMRC. It pointed out that
the loan by the OECF would be ‘repaid by the money extracted from Delhiites. So the residents of the
capital should have representation in the project through the Delhi assembly.’ For the sake of a
comprehensive intermodal transport system for Delhi, they felt the Delhi government should control the
project. They invoked the Constitution and Railways definition to show that the Metro did not fall under
the latter’s jurisdiction.
The Delhi government also sought legal opinion on this issue and reached the conclusion that
railway does not include any line of communication in a municipal area...This term has also been
negatively defined in article 366 (two) of the Constitution and reads as follows: railways does not
include a tramway, wholly within a municipal area or any other line of communication situated in
one state, the Council of Ministers quoted the constitutional definition of railway.
212

209
MOUD also upset over the Centre’s decision. Dainik Jagaran, 21 August, 2002.
210
Delhi government, in the mood for confrontation with the centre, decides to draft its own ordinance. Dainik
Jagaran, 29 August, 2002.
211
The decision to invite President to inaugurate metro rail. Dainik Jagaran, 3 September, 2002.
212
Metro rail: Delhi takes on Centre. S K Jha. The Pioneer, 3 September, 2002.
214
In another article it was pointed out that the main difficulty for the Delhi government was that
its ‘Union Territory status mandated prior permission of the Centre to introduce any legislation.’
213
The
Transport Minister also pointed out that ‘it was the Delhi government that bailed out DMRC when it was in
a financial crunch.’
214
In the Metro Bill drafted by the Delhi government, the Transport Minister, Ajay
Maken said that the responsibilities of the Central government would include
aspects concerning safety, accident claims, appointment of claims commissioners and deciding on
the technical matters for operations of metro rail...while the Delhi government’s responsibilities
would include...fixing metro rail fare, finalization of rail corridors and day-to-day operations of
the Metro rail.
215

Next, Ajay Maken talked about how the loan would be repaid by taxes collected from the Delhi
government over and above the fares.
The centre is only paying for 15% of the cost of the project. The rest is being borne by the Delhi
government and foreign loans, which will ultimately have to be repaid by taxes collected from
taxpayers in the capital.
216

In yet another article it was reported that the Delhi government was ‘piqued’ that it was the
MOUD and not the Railways Ministry that was bringing forth the metro legislation. The Transport
Minister, Ajay Maken, was quoted as saying, “We are as capable in running the Metro as is the Urban
Development Ministry.”
217
It was also reported that the Centre wanted to pass the Metro bill in the Union
Cabinet before the operations of the Metro rail started.
218

Next it was reported that the Delhi government was aware that the Metro bill it was drafting had
no legal standing, but it had decided to do so for ‘moral accountability to the people of Delhi’. It would be
void if the Central government rejected it while the Metro Bill proposed by the Centre could be cleared by
the Union Cabinet without needing any input or consent from the Delhi government. The difference
between the State metro bill and Central metro bill was that the former wanted a regulatory body to decide
the fare structure and performance standards. Whereas the latter called for a three member committee with

213
Cong, Center tussle to showcase metro. The Tribune, 3 September, 2002.
214
Delhi government tries to go one up with Metro. Hindustan Times, 3 September, 2002.
215
City government to go ahead with own legislation. The Times of India, 3 September, 2002.
216
Delhi government to oppose bill on Metro rail. The Statesman, 3 September, 2002.
217
DMRC: whose baby is it? Centre, Delhi government argue. Sangeet Kumar. The Indian Express, 3 September,
2002.
218
Confrontation over control of Delhi Metro. Punjab Kesari, 3 September, 2002. There were 14 articles on Delhi-
Center conflict over the project on September 3, including five Hindi articles.
215
one representative each from the Central and State government as well as a High Court judge to decide
the fare structure. In the Delhi Metro Bill, the authority to run the Metro would be given to the DMRC,
“which would function directly under the State government.”
Jagdish Mukhi, leader of the opposition in Delhi, again said that the Delhi government did not
have enough funds to run the project on its own as it was being heavily subsidised by the Central
Government and that it lacked the power to take loans from a foreign bank.
219
“I stand by this even if there
was a reversal of roles for the two parties at the Centre and the State.”
The transport minister, Ajay Maken, responded to Mukhi’s statements by saying,
If dependence of metro on Railways is being cited as a reason for Central control, then why is the
Metro under the Urban Development Ministry and not the Railway Ministry? Why is the Metro
not being covered under the Indian Railways Act? Why is the definition of railways in Railways
different from what it is in the Operations and Maintenance Bill drafted by the Centre?
Regarding the Central government giving guarantee for the project, he again said, “but it is the
people of the State who would be paying back the money. So what is more important? Guarantees or
payments?” The article also pointed out that the opposition had talked of the Delhi government’s disinterest
in the second phase of the Metro. The Transport Minister responded to this by saying, “the Cabinet has
already approved the routes fixed for the second phase.”
220

Another article mentioned that the Metro Bill, though had been forwarded to the Delhi
government for input, would be applied to all the cities in the country where the MRTS would be
constructed.
221
Jagdish Mukhi, talking of BJP’s involvement in the history of the project said that it was the
BJP government in Delhi in 1998 that had helped in difficult task of land acquisition for the first phase of
the Metro rail.
222

In September the Home Affairs Ministry sent a directive to the Delhi government that said that
any decisions made by the Delhi government would have to be approved by the Lieutenant Governor.

219
Delhi government to table Metro Bill. The Times of India, 4 September, 2002.
220
BJP dismisses state legislation for Metro. ‘Stand exposes opposition doublespeak’. Sreelatha Menon The Indian
express, 4 September, 2002.
221
Metro rail project will not be successful without the Centre’s help: Mukhi. Jansatta, 4 September, 2002.
222
If the Metro project goes in the hands of the Delhi government, it will never be completed: Mukhi. Navbharat
Times, 4 September, 2002. There were 8 articles covering this issue on September 4, 2002 including 4 Hindi articles.
216
The Chief Minister, Sheila Dikshit, gave a statement to the press after receiving the directive
and called it an attack on Delhi government’s autonomy and accused the BJP of politics in which it was
trying to take credit for the Metro project.
223

But now the centre has unilaterally decided to withdraw those powers without taking the views of
the Delhi government. Thus, every decision by every minister will be seen and ratified by the LG.
We will have to fight for getting everything cleared. They (the centre) are trying to stop all the
good work we are doing. This will result in slowing the development work. As elections draw
close, they are trying to curb our powers.
The BJP member, Madan Lal Khurana was also critical of the decision but instead blamed it on
confusion because the Sheila Dikshit government had not asked for full statehood, land and police
control.
224
Sheila Dikshit protested and pointed out the blatant power play by the Central government over
Delhi.
Why would people vote to elect a government and the Delhi legislative assembly, when the
powers of the institutions have been stripped off... he ( the Lieutenant Governor) is a nominated
head of Delhi, and is not accountable to the people of the city. By clipping the wings of an elected
government and passing all powers to the LG, the centre has shown that it has scant respect for
democracy... instead of continuing their farce, the Centre should say categorically that they do not
want an elected government in Delhi... since Congress’ landslide victory in the municipal
elections, the BJP had been jittery. With the assembly poll approaching, they thought they would
be able to stop us from performing by curbing power... we may be down, but not out.... whether it
has been through direct interference or through the Lieutenant Governor, they have tried to scuttle
or delay all our major developmental works... earlier, when we sent files to the Lieutenant
Governor and he would not act on them for many months. Now that with Centre’s recent order it
has become essential to send all files to LG for approval, there would be a massive slowdown in
administrative affairs.
225

On September 6, an article reported on the Chief Minister, Sheila Dikshit’s announcement that the
DMRC would have a regulatory commission for maintenance and operation that would ensure better
coordination between governments.
226
The regulatory commission would be able to monitor the activities
of the DMRC more regularly than the GoM. At the same time while inspecting the Metro coaches, she
denied any conflict with the Central government over the metro rail. In another article it was reported,
Delhi Chief Minister Sheila Dikshit’s hopes of cornering the glory for the prestigious Metro rail
project have grown faint with the Union Home Ministry bringing in amendments in the transaction

223
Confrontation over reduction of authority between Delhi and Centre. Dikshit said, the BJP is trying to interfere in
Delhi government’s decisions through the Lieutenant Governor. Jansatta, 5 September, 2002.
224
Centre playing spoilsport: Dikshit, review of Delhi government decisions by LG. The Statesman, 5 September,
2002. There were five articles on September 5 on the Metro ordinance including one Hindi article.
225
Dikshit: BJP mocking Delhi. Shivani Singh. The Times of India, 6 September, 2002.
226
Commission to control Metro operations. The statesman, 6 September, 2002
217
of business rules for the city government. These amendments would mean that if the Delhi
government wants to bring in an ordinance or a bill it would have to first seek the approval of the
Centre through the Lieutenant Governor (LG) even before it is introduced in the Delhi Vidhan
Sabha-legislative assembly. This in turn means that if the city government tries to introduce an
ordinance to wrest the Metro rail from the centre’s authority, the proposal would need a nod from
the Centre. A no-win situation.
227

The main problem that the Delhi government had with the Central governments Bill was that it
gave the Centre control over deciding the route and fare structure of the metro rail. It was also reported that
the Delhi government was making the political issue of the Bill currently even though it had received the
draft bill a year back. According to the article, the Delhi government by preparing its own Metro bill and
then sending it to the LG for approval, was making a symbolic gesture ‘to convey to the people of Delhi
that politics has prevailed over Administration and the pride of Delhi has been snatched away from
Delhiites through a well thought out political conspiracy.’
228

Another article reporting on the Metro Bill said that the GoM was currently making decisions
about the metro rail project that the day-to-day issues were taken care of by the DMRC board with the
MOUD secretary as Chairman.
A group of ministers (GoM) chaired by Deputy Prime Minister LK Advani, is currently taking all
the decisions relating to the Delhi Metro. Chief Minister Sheila Dikshit and Lieutenant Governor
Vijay Kapoor are special invitees to the GoM that includes Union minister Nitish Kumar,
(Railways), Ananth Kumar, (Urban Development) and Jaswant Singh (Finance). The nitty-gritty is
taken care of by a 13-member Board headed by the Union Urban Development Secretary. The
Board has equal representation from the Centre and Delhi.
229

Another article called the move by the Centre as a ‘noose being tightened around the Metro rail by
the Central government.’
230
The Hindi newspapers were much more critical of the Centre. It was quite the
opposite in English newspapers.
The Union Cabinet cleared the Metro Operations and Maintenance Bill as an Ordinance on
October 28. The Ordinance gave full authority for the operations and maintenance of the metro rail to
DMRC that was referred to as the ‘Metro Railway Administration’ (MRA) under the directive of the
Central government.

227
... And she wants to ride it... but centre won’t give at the ticket. Ayswaria Venugopal. Today, 6 September, 2002.
There were 12 articles on September 6 on Sheila Dikshit visit to view the trains, including 4 Hindi articles.
228
LG may reject metro bill. The Hindu, 24 September, 2002.
229
Metro: who will take the driver’s seat? The Tribune, 28 October 2002.
230
Centre wants to tighten hold over Metro rail. Rashtriya Sahara, 28 October, 2002.
218
MRA would be vested with the statutory powers to use any kind of rolling stock for operation
with the prior approval of the Central government. It will have adequate powers to enter into
working arrangement with other agencies in connection with the working of metro railway.
It set up a Commissioner of safety to inspect and clear the project before the Central government
cleared it. The latter reserved the right ‘to issue directions to the MRA.’ It also decided to form a fare
fixation committee for a maximum of three months duration at a time to decide the fare structure. The
decision to keep the fare structure within the control of the Central government was described as a ‘jolt’ for
the Delhi government and the Transport Minister’s announcement for a fare slab of Rs 4 to 7.
231

Following the release of the news of the Metro ordinance, the Chief Minister Sheila Dikshit
criticized the Central government as “another attack on the democratically elected State government.”
232

She also said that the Congress member Jag Parvesh Chandra first suggested the Metro.
233
The Hindi
newspapers carried more information on the day Sheila Dikshit and her government protested against the
Centre’s attempt to diminish the State government’s powers. Once again, it was called an attack on the
autonomy of the State government.
234
Sheila Dikshit announced that she would write to the Prime Minister
and Deputy Prime Minister after she received a copy of the ordinance.
235

On 30 October, the DMRC, having gained autonomy as well as classification under the Center,
appealed to the Central and Delhi governments to stop politicizing the project for the sake of its success. It
pointed out that it was the DMRC that had been empowered by the ordinance. Talking about why the
Centre drafted the ordinance, the DMRC said that, ‘it was required as there was “no legal cover in the
country for operating a Metro. Since Metro rail is different from normal railways, the legislation is
required.” And since Railways is a Central subject as per the Constitution, the sources said the Metro
Railway Act could only be passed by the Centre.’ It also pointed out that the Delhi government nominated
8 of the 13 members in the DMRC board. Regarding the fare structure, the DMRC said that the three-

231
Metro to be run by MRA under centre. Delhi government left out in the cold. S K Jha. The Pioneer, 29 October,
2002. There were 18 articles on the clearance of the Metro Bill by the Union Cabinet on October 29, 2002 including 7
Hindi articles.
232
Dikshit flays Centre’s decision on Metro ordinance. The statesman, October 30, 2002.
233
Centre is in metro rail’s driving seat: chief minister agitated. Punjab Kesari, 30 October, 2002.
234
Criticism of centre over its grasp of Metro rail. Jansatta, 30 October, 2002. Decision about metro ordinance is
unfortunate. Rashtriya Sahara, 30 October, 2002. There were 9 articles about this issue on October 30, including 6
Hindi articles.
235
Dikshit to write to PM, Advani on ordinance. The Indian express, 31 October, 2002.
219
member fare fixation committee would include a member of the Delhi government and therefore had a
fair representation.
236
The MOUD minister, Ananth Kumar, also announced the same.
The first draft of the proposed legislation was sent for comment to the Government of National
Capital Territory of Delhi (GNCTD) as early as September, 2000. We then waited for the
comments of GNCTD for nearly one and half years and when we received those we got it
examined by the Law Ministry...In addition the GNCTD has the right to have its nominee as the
Managing Director who has been delegated most of the authority over the General Administration
of Metro Railway...The railway network like the airports and the telecom network are important
communication lines and have to be governed by the Central government’s legislation.
In response the Chief Minister Sheila Dikshit said that if the MOUD wanted control of the Metro
Railway, then it should take up garbage collection for Delhi as well. She questioned why the project was
under the MOUD when it did not have any expertise in Railways.
237
Even though the Centre was claiming
the draft of the ordinance was sent to the Delhi government for comments in 2000, Sheila Dikshit
countered that the Centre had not consulted the Delhi government before releasing the Ordinance. The
Congress continued its criticism of the Central government. The Congress party spokesman Abhishek
Singhvi was quoted as saying,
It was the Delhi government of Miss Sheila Dikshit that had done the earlier groundwork for the
Metro. It was this government that had acquired the land needed for the ambitious project. It was
an unpopular decision at the time...but it had to be taken for the larger good of the people.
238

The MOUD minister requested the Delhi government to work together with the Central
government to produce an international level MRTS project.
239
The MOUD minister also said that the
Ordinance was passed in a hurry because the MRTS could not be made operational without a legal
framework. He talked of similar projects that were to come up in 35 other cities with a population of over
10 lakhs with 13% State and 13% Central participation and 74% private investment. He informed that the
MOUD was preparing an Urban Transport Bill for these projects to provide the legal framework.
240

236
‘Set aside differences over Metro.’ The Hindu, 31 October, 2002.
237
Powers will be with DMRC: Ananth. The Indian express, 31 October, 2002. ‘Take-up garbage collection as well.’
238
Shiela to take up Metro ordinance with Vajpayee; Congress: ordinance on Metro retrogressive. National Herald, 31
October, 2002.
239
There is no room for anyone to get an ‘upper hand’ in metro ordinance: Ananth. Dainik Jagaran, 31 October, 2002.
240
Delhi government has appropriate authority in Metro rail: Centre. Navbharat Times, 31 October, 2002. There were
18 articles on the Metro ordinance on October 31 including eight in Hindi.

220
Sahib Singh Verma also brought up his role when he was Chief Minister of Delhi in 1996, in
clearing hurdles in the path of the project and getting it approved by the Union Cabinet.
He said that the BJP-led government with the help of the Central government formulated the
project. He said in 1997, it seemed the project would not take off till he arranged a meeting
between the then Home Minister LK Advani and the Japanese ambassador. Only after that did it
seem to take form. The Delhi government had not shown any interest in this project or other
projects like the Yamuna action plan and express highways that he had started.
241

Sheila Dikshit responded first to the MOUD minister, Ananth Kumar’s claims that he had
consulted with the Delhi government on the ordinance by saying, “he said he had held consultations with
us. Nothing of the sort happened. How can they misrepresent facts?” In response to Sahib Singh Verma’s
allegations about the Delhi government, she listed her achievements including ‘power sector reforms, clean
environment, new transport policy, Stree Shakti (Woman power) health camps and Bhagidari
(partnership).’
242

News coverage of the ordinance having slowed down in the media, on November 9, it was
reported that the Delhi government would take up the issue in the winter session of Parliament.
243
The
Transport Minister responded to the issue of the Delhi government not responding to the draft for the Metro
ordinance sent to it by the Central government in 2000, by saying, “we had sent our opinion to the Centre at
the time, stating that the metro rail should come under the purview of the Delhi government.”
244

The Delhi government will provide power for the project; its Transport Department will prepare
the feeder routes for the Metro rail; it would ensure that competitive transport is not run along the
metro routes, a common ticketing system would be worked out between the DTC and MRTS. So
then how could the centre decide the fares? Delhiites would help pay back the OECF loan but the
authority lies with the Central government. If the authority over DMRC is with the centre it will
not be accountable to the Delhi government similar to the DDA and Delhi police. If the centre is
fully responsible then it should take over hundred per cent of the project cost.
245

He said that if the Metro rail became a Union subject, MPs of other states would have nothing to
contribute over the day-to-day functioning of the Metro in Delhi. At the same time the Delhi MLAs would
not have enough information to be able to answer to queries in Delhi’s legislative assembly. The Delhi

241
Sahib also surrounded Chief Minister over Metro rail conflict; said, Delhi’s BJP government had started the project.
Jansatta, 1 November, 2002.
242
Metro ordinance still hangs heavy on Dikshit’s mind. The Indian express, 7 November, 2002.
243
Delhi to discuss metro rail role. The Asian age, 9 November, 2002.
244
Delhi trains its guns on Centre’s Ordinance. Central-State tussle over Metro. The Statesman, 9 November, 2002.
245
Metro cannot run without help from Delhi: Maken. Said, Mukhi’s accusation is wrong, the government is ready to
give electricity at lowered rate. Jansatta, 9 November, 2002.
221
government ‘had received the draft of the Metro Railways (Operation and Maintenance) Act, 2000
about two years back but it was rejected by the Delhi government.’
246

It was now reported that the Delhi government having taken offence at the formulation of the
Metro Ordinance by the Centre was planning ways for creating problems in the project, for example by not
providing feeder bus services to the metro stations. In response to this development, the Central
government bureaucracy, not the politicians, scoffed at the Delhi government’s attempts to create hurdles
for the project, saying that doing so would end up causing problems for the government itself by gaining
unpopularity with the electorate.
The bureaucracy at the Centre says there are no genuine grievances to be re-dressed and if the
Congress government wanted some political mileage out of the controversy, they were free to go
right ahead. As for veiled threats of creating hurdles, the official suggested the State government
would do well to remember that it would lose as much as the centre would...The Delhi government
and the centre are equal partners in the project...Ironically, this is exactly what the Delhi
government has been crying hoarse about for the last few weeks, demanding power and credit
commensurate with the money it contributed.
The following is an extract from this article, which points to the complete breakdown of
communication between the Delhi and Central governments.
Mr Ajay Maken complained on Friday that his government did not even have a copy of the
Ordinance. The Ministry today said he would do well to check with his Chief Secretary’s office. A
copy of the Ordinance was sent to the Chief Secretary’s office on an informal request a day after
the ordinance was promulgated...How is the ministry to be blamed if their officials keep it a secret,
the official asked...A similar communication gap could be responsible for Mr. Maken complaining
that his government was not consulted when his bureaucracy sat on the draft Ordinance for 18
months before responding in March this year to say that it opposed the draft without giving any
reasons. The State government was promptly asked to submit its response, clause by clause, which
it did...But they wanted all the powers...That was something that the Law ministry had said earlier
the Delhi government could not aspire to have. Officials assert that though the Delhi government
and the centre have equal representation in the board of directors, the former practically had a
majority as the three functional directors, reported to its appointee, the Delhi Metro Rail
Corporation managing director. But if the Congress did not see reason, it could still block the
ordinance in the Rajya Sabha? Technically yes, an official said. Only this time, the Congress
government would not only lose money spent in constructing the metro rail but to find itself
branded a villain. That might cost the Congress some votes too.
247

Another article reported that though publicly the Delhi Congress government was protesting the
Ordinance, internally it was working towards its success in being cleared in the Rajya Sabha as it was

246
Maken slams centre over Metro rail takeover attempt. National Herald, 9 November, 2002.
247
Metro tug of war in Delhi, hitch in Kolkata. The Statesman, 12 November, 2002.
222
afraid of public outcry if the project was stalled and subsequently its unpopularity in the upcoming
elections. A functionary in the CM office was quoted as saying
We might ask our partymen to seek amendments in the ordinance so as to give more powers to the
State government (while debating the issue in the parliament). But if the centre is adamant on the
original shape of the ordinance, we cannot afford to go to the extent of voting against it – surely
not in the Rajya Sabha, where the government does not enjoy a majority and we are in a position
to stall it.
248

An article reported that after going on the defensive over the Central government’s amendments to
the constitution and the Delhi metro ordinance, the Delhi government had failed to follow through and may
lose political support for it.
249

The Delhi government had now reviewed the Ordinance and was against 14 clauses, some of
which excluded it from policymaking, deciding the fare structure and allowing running the metro rail
without previous sanction of the Central Government.
250
An article on November 20 reported that when
the draft Ordinance was compared to the cleared Ordinance, many additions and modifications had been
made vesting total control of the project with the Central government. ‘Not only is the Ordinance different
from the Bill sent to the Delhi government, it is also far more damaging to Delhi’s interests.’
251

Almost immediately after two articles reported that the final bill was different from the draft bill,
newspapers carried articles on the punishable offences on the Delhi metro as listed in the ordinance, saying
that the DMRC and Delhi Metro police had ‘vested enormous powers’. The idea of the death penalty
initially suggested for vandalism had been changed to life imprisonment.
252

Another article on November 25 gave a little piece of history when it reported that it was the
bitterness between the first Prime Minister Jawaharlal Nehru and first Chief Minister of Delhi Brahm
Prakash, on the issue of the authority over Delhi, that had ended Delhi’s statehood. Since then the Congress
had been against giving statehood to Delhi.

248
Delhi government court in Ordinance web. Abhigya Hans. The Statesman, 14 November, 2002.
249
Sheila government on the defensive. Sujay Mehdudia. The Hindu, 18 November, 2002
250
Metro ordinance: Delhi government seeks amendments. Chetan Chauhan. Hindustan Times, 19 November, 2002
251
Centre does U-turn; metro railway bill. The Hindu, 20 November, 2002.
252
Fool around Metro at your own risk. The Indian express, 21 November, 2002. Today, Rashtriya Sahara, Punjab
Kesari Jansatta, Dainik Jagaran, Hindustan, Navbharat Times, The Statesman. There were 10 articles on this topic from
November 21-23 including 6 Hindi articles.

223
It was only after Madan Lal Khurana’s pressure that the issue of statehood for Delhi was
cleared in its legislative assembly. However, after this, the matter has been left hanging. Even after
agreement between the BJP and Congress, the Delhi government has not sent the prototype of
statehood ordinance, to the Central government. That’s the reason that this ordinance was not
being presented in the winter session. Three members of the BJP will propose power supply to
DMRC from Transco.
On the other hand the Congress accused BJP of double standards. Sheila Dikshit’s issues were that
whether it was the circular on transaction of business rules, passed by the Central government to further
curtail Delhi’s powers or proposing a Delhi Metro Bill, the BJP was following double standards. Sheila
Dikshit was in ‘constant conversation with the party’s Lok Sabha members in relation to blocking the
Metro bill in the winter session.’
253

The Metro Railways Operations and Maintenance Bill 2002, however, was passed in the Lok
Sabha.
254
The Congress in the Lok Sabha raised objections about the method by which the Ordinance had
been passed, rather than its contents. The deputy leader of the Congress, Shivraj Patil said,
What we object is to the ordinance route as the government could have framed the bill. The
legislation could have been made after being sent to a standing committee and taking into account
the recommendations of the committee.
255

On the objection by the members of the Lok Sabha to the ‘government promulgating an ordinance
just a little ahead of the Lok Sabha session’, the MOUD Minister Ananth Kumar said, “to ensure that this
momentum (of the metro rail project) is maintained, the government was left with no option but to come
out with an ordinance.”
256

On 26
th
November it was reported that the Delhi government had decided to continue running
buses on the roads parallel to the Metro rail route, even after the service began. It also refused the idea of
creating a metro fund by levying taxes on the citizens of Delhi.
257

In December, the Metro Maintenance and Operations Bill 2002 was passed in the Rajya Sabha
with the Delhi Metro featured a precedent of 35 other metros that would be coming up in the rest of the

253
Signs of commotion over position of Metro and government. Rashtriya Sahara, 25 November, 2002.
254
Lok Sabha passes Delhi Metro Bill. The Indian Express, 26 November, 2002. The Times of India, Veer Arjun.
255
DMRC bill passed in Lok Sabha. The Asian age, 26 November, 2002.
256
Delhi metro railway bill gets LS clearance. National Herald, 26 November, 2002.
257
Maken Rams bus into metro row. Ayswaria Venugopal. Today, 26 November, 2002.
224
country. If there was to be a uniform urban transport policy, the power to make laws had to reside with
the Union government.
As per the 2001 census, there were 35 metros in the country, with a population of more than 1
million each. It was desirable to have some mass rapid transit system in the cities to avoid the
problems of traffic congestion and pollution...the Urban Development Ministry had also decided
to formulate and announce a national urban transport policy within one year.
258

In fact the 35-city MRTS plan was the only issue announced in Today.
259
The Financial Express
revealed yet another aspect of why the bill gave power to the centre.
Parliament on Monday passed a landmark bill which would set the ball rolling for taking metro
railway systems away from the Railways purview into the Union Urban Development Ministry’s
fold. This means that in the future, whenever the Centre wants, it can have MRTS have a
‘dedicated right-of-way’ in any city under its wings.
260

Beginning January 2003, the MD, DMRC announced that more MRTS’ would be coming up in
other cities with populations of over 30 lakhs over the 10
th
Five-year plan including Bangalore and
Mumbai. He said that the DMRC would be the nodal agency for MRTS’ in cities in Karnataka, Andhra
Pradesh, Kerala and Maharashtra and would give technical and financial advice. The Bangalore Metro
report by the DMRC would be ready by March. In the next budget session, the Bangalore Metro would be
started and he would appeal to do so. The DMRC had started the survey to prepare a report for the Mumbai
Metro.
261

It was reported that in yet another putdown for the Delhi government, the Prime Minister Atal
Bihari Vajpayee was chosen to inaugurate the Delhi Metro on December 24. By this time, however, the
controversy was dying down with the Minister of State in Prime Minister’s Office of Statistics and
Programme Implementation, Vijay Goel saying that ‘the Delhi Metro was an example of the joint success
of the efforts of the Union Urban Development Ministry and the Delhi government and no single authority
could make a sole claim over it.’
262
The Delhi government pointed out the politics by the BJP central
government in not having received any information about the inauguration and no invitation being received

258
Bill passed, way cleared for metro. The National Herald, 3 December, 2002.
259
Delhi Metro bill. Today, 3 December, 2002.
260
The Metro system is no more under railway fold. The financial express, 3 December, 2002.
261
Commission will decide on topic of electricity to metro. Jansatta, 11 January, 2003.
262
METRO ready for December 24 launch. The pioneer, 3 December, 2002. There were eight articles on this subject
on December 3, all in English.
225
by the Congress president, Sonia Gandhi.
263
The Delhi government demanded adequate reservation for
its members in the inaugural ceremony and said that the Delhi government may not participate in the
inauguration if the opposition leader in the Lok Sabha, Sonia Gandhi, was not invited officially to the
December 24 ceremony.
264

In The Times of India article devoted to getting responses from experts on the performance of the
Delhi government, the following observation was made by K.T.Ravindran, Head of Urban Design, School
of Planning and Architecture: “This government’s intentions have been good. But as urban development
and law and order lies with the centre, many of its progressive intents have remained on paper.”
265

An article on June 5, revealed how the Metro Bill caused further rift between the Delhi and
Central governments. As mentioned earlier, the Delhi government refused to stop plying buses along the
metro corridor. The Delhi government now said that the Centre had retained power on the Metro project
with the Metro Bill but was not taking on financial responsibility as well as the Delhi government.
While the central government has paid only 40% of the amount for Barakhamba Road and
Dwarka, city government has not only released 50% of its shares to the Delhi Metro Rail
Corporation (DMRC) but also decided to give the tax exemption of Rs 460 crores.
The article also reported that in a meeting between the Delhi government and E Sreedharan, the
MD of DMRC, the Chief Minister Sheila Dikshit told the MD that the DMRC should approach the
Lieutenant Governor of Delhi and the Central government for land acquisition along Line 3.
266

In what was to become a repeated power struggle between the Municipal Corporation of Delhi
(MCD) and DMRC, the MCD asked the DMRC to pay taxes on all the properties it had acquired and was
developing. The DMRC contended that since the Indian Railways Act protected it, it was exempt from such
taxes. MCD replied that the DMRC would only be exempted if its administration were under Railways
whereas clearly it was a private company. The DMRC then said that since it was a Joint State-Centre
venture and only the Centre could direct it to pay taxes. The MCD persisted until finally the matter was

263
Delhi government is being sidelined in metro rail inauguration ceremony. Dainik Jagaran, 13 December, 2002.
264
Sonia must be invited for Metro function: Govt. The Hindu, 13 December, 2002.
265
The Delhi government scores 5 out of 10. The Times of India, 8 December, 2002.
266
Metro: Center’s stake high, but share, low. National Herald, 5 June, 2003. There were 10 articles, including four
Hindi articles, on June 11 regarding the conflict between the BJP and Congress over the Metro project.

226
taken to the High Court that was going to listen to both sides on April 23, 2002. The total taxes for
DMRC stations, offices, headquarters, staff quarters and office wing came to approximately Rs 50 crores –
a substantial amount both for the MCD as revenue and for the DMRC as subsidy if it was exempted.
267

On 20
th
September, 2002 another conflict between the DMRC and MCD was reported in the
newspapers. The MCD had sent a Rs 50 crores bill as property tax to DMRC for development of properties
around stations based on treating them as private and commercial. The DMRC, in turn, filed a case in the
High Court against this, saying that it should be treated like the Railways from whom the MCD collected
only a service charge. This would reduce the Rs 50 crores property tax to a lot less Rs 7.45 crores. The
MCD in turn asked the Union government and the Railways to clarify the status of the DMRC. ‘Officials
said, when completed, the massive DMRC properties across the capital would become a major source of
income for the MCD.’
268

Apart from the MCD asking for property tax from the DMRC, in April 2003, the New Delhi
Municipal Council (NDMC) also demanded tax from the DMRC for the six underground stations that were
passing through its jurisdiction. Since the stations would be developed for commercial use by the DMRC,
NDMC expected some sort of compensation.
According to sources, top officials of the two bodies are in touch for the finalization of such a
deal... The spokesperson of the corporation, Mr Anuj Dayal, when contacted by the Asian Age
denied that any such proposal was in the offing.
269

Metro Act Update
It is to be recalled that the Metro Bill 2002 that had been moved by the MOUD in the Union
Cabinet had been limited to Delhi after protests from the Railways Ministry asserted its jurisdiction over
Railways in the rest of the country. This issue arose again in September 2008 when the MOUD wanted to
introduce the Delhi Metro Rail Amendment Bill 2008, in the forthcoming parliament session so that it
would include the NCR and other cities in the country. The Railways Ministry protested saying that this
was their prerogative.

267
Metro rail takes MCD to court over property tax. Kavita Chowdhury. The Indian Express, 19 April, 2002.
268
Bid to clear up metro status. The Hindu, 20 September, 2002.
269
NDMC demands share in Metro profits. The Asian age, 12 April, 2003.
227
Since we are providing safety and technical planning to the proposed extension of Delhi Metro
to other cities, it is also our responsibility to introduce the Bill in Parliament, said a senior Railway
Ministry official...When pointed out that the Delhi Metro Operation and Maintenance Act, 2002,
was piloted by the Urban Development Ministry, the official said, It was confined to Delhi only.
But here it is going beyond Delhi...The enactment of a central legislation is required to provide
legislative backup to all metro operations in the country, including NCR zone, said the urban
development ministry official. It will be a smooth operation once a central law is enacted, he
added...Since the government is allowing private players to invest in the Metro system, the act is
essential to provide protection to them. It would provide legislative support for construction,
operation and maintenance of the system in cities.
270

Since the Metro Act 2002 had not been extended to the entire country and the conflict over gauge
between DMRC and the railways had publicized the latter’s interference in technical specifications for the
project over and above the Metro authority’s recommendations, as had been reported at the time, other
cities were building their metro systems under the Tramway Act.
In the MOUD, the Railways had successfully blocked the extension of the Delhi Metro Operations
and Maintenance Act 2002 to the rest of the country. Out of the approximately 35 studies done so far for
metro rail systems in the rest of the country only one other had started construction, the Bangalore MRTS,
while there was a possibility of two other Mumbai and Hyderabad starting soon. The Urban Transport
section of the MOUD reported once again that many Detailed Project Reports were in various stages of
completion and the Delhi and Bangalore MRTS were being implemented.

Discussion
There was infighting and struggle for power within the Central government between the MOUD
and Railways Ministries with the Law Ministry acting as arbitrator. While the Railways Ministry wanted
control over the project it had repeatedly made it clear that it did not want to take on any liability for the
project by bringing it under the purview of the Metro Railway (construction of works) Act, 1976 that would
have helped DMRC avoid litigation for land acquisition. Nor did it want to take on the financial burden for
suburban or urban transportation railway projects because they were loss making though it was willing to
work together with state governments if the latter would contribute through funds and subsidies towards
such projects.

270
METRO expansion Bill caught in turf war. Business standard, 10 September, 2008.
228
The Railways were using the Railway Act to prescribe the gauge of MRTS but were using the
same excuse to avoid responsibility or liability for the DMRC in the case of land acquisition. Similarly the
DMRC was resisting the Railways decision to go with broad gauge while at the same time seeking Indian
Railways’ protection to protect itself from litigation as its name was being attached with the Delhi
government in land acquisition lawsuits. Once under the act, the DMRC would be free from such litigation
and could also acquire land more easily.
In the case of the Delhi Metro rail, the Railways had no financial stake and had also found itself
being sidelined after the conflict over the gauge. Subsequently the rolling stock contract was given to a
non-railways company. Yet the Railways wanted the Metro rail to be under the Calcutta Metro Railway
Temporary Act (O & M) 1985, as that would ensure that all railway projects public or private remained
under its fold. The Ministry of Urban Development, on the other hand, was actively pursuing to bring urban
transportation projects under its jurisdiction through the new Metro Bill. Despite the railways’ protest that
only the Railways ministry could classify a project under the Metro Railway (Construction of Works) Act,
1976, the MOUD went ahead and did just that. When the railways approached the Law Ministry to clarify
the point, the Law Ministry ruled in favor of the MOUD.
In the case of the Delhi MRTS, the major portion of control over this quasi-government railway
project was outside the Railway Ministry’s jurisdiction. More such railway projects were on the way. It was
a shift in the management style of public sector undertakings towards privatization. The DMRC also
wanted to be classified under the MOUD rather than the Railways, as it would provide it far more
autonomy. This was the basis for the Delhi government later pointing out, once the Bill was passed and the
control of the project was with the MOUD, that if the project had to be under the MOUD, then why did the
Central Government talk of it being a Railways issue.
Not only was there a struggle within the Central Ministries of Railways and Urban Development
over ownership of the Bill but also between the Central and Delhi governments. As far as the Delhi
government was concerned, the Central government had gained authority without accountability. For
example, Delhi said that it wanted control over the fare so it could introduce subsidies such that the project
benefited the poor. It wanted a regulatory body that would help in coordination not only between the
different transport agencies but also all the other affected agencies. Arguments given in the National
229
Development Council meetings by the Chief Ministers regarding statehood and more power were being
resumed over the Metro rail project and the struggle was continuing in 2002.
Even though it seemed that the ownership of the project depended more on the parties in power at
the Centre, if the Centre had future plans of controlling urban transport projects in the country, the Delhi
government would still have not been involved in the Metro Bill proposed by MOUD, though it may have
gained a little more power. If the Congress had been at the Centre, the Delhi Congress government may not
have protested so much. Contrarily, the Central government may have given more control to the Delhi
government if the BJP was in power in the Union Territory.
Whether or not the issue of control over the project would have been resolved had there been a
reversal of the party’s roles at the Centre and State, was questionable since the main issue would still have
remained the same- gaining control for the union territory versus retaining control by the Centre. If the
political parties did not hold as much sway as the regulatory institutions at the centre, then the actual
control of the decision over the project lay with the bureaucracy. It was the bureaucracy that was a constant
in the Central government. The Central government told as much to the Delhi government by saying that
the Metro Bill was part of an urban transport policy for the entire country and was not specific for Delhi.
Therefore the Centre was being considerate in asking for the Delhi government’s input, when the policy
would cover cities in the entire nation.
The arguments given by the BJP that they had helped in land acquisition for the first phase of the
Metro rail and they were the ones who had initially been responsible for moving the project through the
Union Cabinet, could have been used to justify the Congress’ stand that the Delhi government should hold
more power over the Metro, since it was the Delhi government, regardless of which party was in power,
that facilitated land acquisition or project approval, in spite of it being a Central government issue. There
were no editorials covering this issue and the media played it out as a conflict between the political parties
rather that one that dealt with jurisdiction and power of the Union Territory versus Central government.
Even though the Central government was providing the exchange risk and guarantee for the loan,
the Delhi government was helping in land acquisition and would ultimately help in paying back the loan
through subsidies of property development, taxes and levies. The importance of the Delhi government in
land acquisition for the project was revealed in an article where it was reported that 120 lawsuits had been
230
filed against the Delhi government and DMRC for the same. The DMRC project and planning director,
C B K Rao said that it was the Delhi government that had prepared the land acquisition and resettlement
policy a few days ago. Delhi was going ahead with the resettlement policy and had another reason for
asking for more power in the Metro Bill.
271

Taxes and levies had been part of the announcement when the Union Cabinet approved the project
in 1996, as the last resort for funding if the project faced financial difficulties. The DMRC MD, E
Sreedharan had approached the Delhi government even before the first line of the project was inaugurated,
to create a metro fund, a ‘non-lapsable fund’ as a had been suggested in a World Bank report earlier, that
would be funded by taxes and cesses on the citizens of Delhi. Even if the Central government had provided
a guarantee for the loan, in case the project ran into trouble, it would repay the loan with taxes collected
from the NCTD. If ultimately the citizens of Delhi were paying for the project, then the Delhi government
had the right to be, at least, an equal partner in drafting the bill. In this case, the Delhi government’s
contribution to the project was being totally disregarded in the legal framework for operation and
maintenance of the MRTS.
The Delhi government argued that because the Delhi metro rail was entirely a subject of NCTD
per the constitution, the latter should have the power and authority to make rules regarding the project. The
Central government was refusing to give it more power even though it expected the Delhi government’s
economic contribution and support. When the Delhi government said that it was preparing its own Delhi
Metro Bill for moral accountability to the citizens of Delhi and the Central government issued a letter
modifying the transaction of business rules such that any bill to be introduced into the Delhi legislative
assembly would first have to be approved by the centrally appointed Lieutenant Governor, its almost non-
existent power as a union territory and in demanding participation in drafting the Metro Bill with the
Central Government, became evident.
The Central government claimed that it had made ample provision for representation in the project
by the Delhi government but in terms of the legal and constitutional framework, the Central government
had the right to revoke those powers at any time, very similar to what it did with the Transaction of

271
Metro rail Corporation is also not untouched by litigation. Hindustan, 16 October, 2002.
231
Business Rules to ensure that the Delhi Metro Bill drafted by the Delhi government would never reach
the Delhi Legislative Assembly that held a Congress majority. The revocation of the Transaction of
Business Rules that required the Lieutenant Governor, a Central government appointee to sign off any bill
before it could be presented in the Delhi legislative assembly, was a pressure tactic to get clearance for the
Metro Bill and curtail the Delhi government’s bid for more control over the project. The opposition also
claimed that Delhi did not hold the powers to negotiate a loan directly with a foreign country. This rule was
part of its status as a Union Territory and even though it had repeatedly asked for powers as a state even in
the National Development Council meetings, the Centre was not willing to grant it this status. It was being
accused of not having a status that only the Central government had the power to grant it. The BJP
opposition in the Delhi government facilitated the Central government in maintaining its control over the
Union Territory once in power at the center even though when the BJP was in power at the Delhi
government, it had strongly advocated for statehood for Delhi.
The power of the project started to emerge over the Metro Ordinance. Its popular support
essentially paralyzed the Delhi government to take any actions for more control over the project with the
Center saying that by doing that the Delhi government would end up getting blamed for any delay or harm
to the project. The Delhi government having backed down because of perceived loss of popular support
continued to say that they would protest by being uncooperative with the Metro rail project, had sent their
recommendations on the Metro bill to the MOUD and had also decided not to stall it in the Rajya Sabha
where the Congress held a majority. Rather than taking these into account in preparing the final Metro Bill,
it was announced that after the Bill was cleared in the Union Cabinet, it in no way resembled the draft
metro bill and had been modified to give the Central government, total control of the project.
272

The BJP government also did not follow the process of giving the Metro Bill for review to a
standing committee before introducing it in the two houses and the Congress opposition though agreeing to

272
One can speculate that since it would be the bureaucracy that drafted the Metro bill, they would have made the final
changes with the knowledge of the Minister of Urban Development. This whole incident resembled the one that took
place in 1996 concerning Ram Jethmalani, where the bureaucracy had modified Law Ministry approved guidelines that
defined the range from which the Chief Vigilance Commissioner would be selected, to exclude anyone from outside the
Indian civil service, which made sure that the person appointed to be CVC for the ICS came from within the ICS, a
glaring conflict of interest.
232
give it its support, criticized the government for passing the ordinance in a hurry and circumventing due
process.
Earlier on in the project, the informal agreement between the Central and Delhi governments over
the project avoided any conflict during construction of the first line. When it had to be inaugurated, the
legal framework was necessary and would set the precedent for any future urban rail transit. At this critical
moment, it was the MOUD at the Centre that retained control of the project and used it as the basis of
increasing its power at the local level in urban areas throughout the country. The only opposition came
from within the Central government from the Railways Ministry that stalled extending the Bill, in
December 2002, to other urban rail transit projects in the rest of the country, citing legal reasons
273
.
Had the Metro Bill not been passed before the MRTS became operational, it would have had to
come under the Calcutta Metro Railway Temporary Act (O & M) 1985 with the Railways Ministry. When
the Bill was passed in the Rajya Sabha it would cover 35 Metros that were envisaged for the rest of the
country. The Ministry of Urban Development wanted a uniform urban transport policy, which it planned to
formulate within the next year. The Railways were sidelined and the MOUD consolidated its power over
urban railway projects throughout the country that allowed Central government presence at the local level.
The DMRC was very much involved in this plan. In a press conference the DMRC MD in January
2003 announced that Metro rail systems would be coming up in other cities with a population of over 30
lakhs as part of the 10
th
five year plans and DMRC would be the nodal agency for technical and financial
advice. The DMRC was about to complete its report for the Bangalore Metro and had started the survey for
the Mumbai Metro. If this was the case than it was in the DMRC’s interests to be under the Ministry of
Urban Development rather than the Delhi government. The Metro Bill that would be extended to other
cities of the country and would help the DMRC grow as the main consulting agency for Urban Metro
systems in India and subsequently other countries.
However this was not the only reason that the DMRC wanted to be classified under the Central
government. The Municipal Corporation of Delhi, acting independently of the Delhi government’s claims
that it was totally supporting the Delhi metro rail project, had asked the DMRC to pay property tax for

273
These would probably have included its own jurisdiction over railway projects in the country.
233
development around stations as far back as April 2002. Being an organisation similar to the DMRC but
within the jurisdiction of the Delhi government, it would fight against losing revenue for property
development to DMRC. The DMRC refused to pay the property tax saying that it was classified under the
Central government and should be given tax concessions accordingly. However, still no legal framework
had been established for the Metro rail project. The MCD tax issue would lead to questioning of the status
of the DMRC, whether it was a state or central undertaking. After the Metro Bill was passed the DMRC
used it repeatedly to ward off property tax bills presented to it by the MCD. The MCD on its part continued
to press the DMRC to pay up property tax and fought against the exemption it was being given by the
Union government. The conflict between the MCD and DMRC continues even though both the Central and
State governments have had the same party in power since 2004.
The Delhi government did not initiate the MRTS project but since there were no other options
offered by the Center, it had supported it. The Center maintained control over it even after getting more
than its equity contribution, from the Delhi government through the well-established regulatory and
institutional structure that gave it the authority to exercise control over any decision made by Delhi. The
DMRC worked with the MOUD in the Central government but after the Bill was passed in the parliament,
it asked that the two governments should cease their battle over the Bill as the Center had the right to draft
the Bill and the real autonomy lay, as specified in the Metro Bill, with the Metropolitan Transport
Authority; the DMRC with equal representation by the two governments. Everything that the DMRC
claimed was true. The Metro rail project did need a legal framework and only the Centre could have passed
the framework. But this did not preclude equal participation by the Delhi government. Even if the
managing director of DMRC and 8 of the 13 members of the DMRC Board were Delhi government
nominees, legally they were accountable not to the Delhi government but the Central government.
Therefore, their commitment to Delhi government’s interests or proposals would be based solely on trust.
As long as the project was going well, the Delhi government would not take the risk of opposing or
criticizing it, in light of maintaining popular support. The Delhi government, other than publicly
announcing its opposition, had no real option but to go along with the Central government. As discussed
earlier it would show its opposition in other ways.
234
These developments were a reflection of the history of the Indian republic. In the NDC
meetings, the State governments’ struggle for independence and allocation of resources from the Centre,
had increased. On the other hand, the Centre though moving towards decentralization still maintained
maximum power at the level of the nation state until the economic crises reached a critical point in 1992
leading to economic, regulatory and institutional reforms. In the MRTS project itself one could see this
happening. Approved in 1996 when the reforms and economic crisis were still fresh in the memory of the
Central government, the project was approved with equity participation of State and Central governments
with each sharing the risk of the fluctuating rate of the yen loan from the OECF and envisaged to have
equal say in the project, as part of the new liberalization policy. The establishment of an independent body,
the DMRC, was a move towards privatization that was seen as necessary to remove the inefficiencies of
public sector undertakings.
However the Central government’s monopoly over the legal framework for the metro rail project
clearance of the Metro Bill was a continuation of centralization policies with the Center deciding the Urban
Transport Policy, as was recorded in the Five-Year Plans, at a local scale for cities in the entire nation. In
fact it had taken centralization a step further by coercing the Delhi government to partake in financial and
other contributions towards a project that it would control. The MOUD had succeeded in promoting this
particular kind of transportation development that it had been nurturing in the five-year plans for over 50
years. A large number of cities decided to initiate feasibility studies after the MOUD set up the Urban
Transport Consortium Fund in 1989. The Delhi government actively participated in facilitating the project.
Delhi was the testing ground as it was a union territory that lacked full state powers. This may not
have been possible if this project would have been in a city in a state with full state powers. The Chennai
MRTS had been constructed before the Delhi Metro rail but the MOUD in the Central government would
have found it difficult to pass the Metro Bill over that project as it was under the state of Tamil Nadu and
the Indian Railways. The state of Tamil Nadu would not have allowed the Central government to gain the
amount of control over an urban transport project as it had done with the Delhi MRTS.
If the Metro Bill drafted by the Central government were extended to the rest of the country then it
would kick in as soon as the Central government became an equity partner in the funding of the project
with it holding major control of the project but with the local governments aiding financially and
235
administratively. The Financial Express, described this very succinctly when it said that ‘this means
that in the future, whenever the Centre wants, it can have MRTS have a ‘dedicated right-of-away’ in any
city under its wings.’
Finally and most importantly, the Metro Bill not only gave autonomy to the Metro Railway
Administration, in this case the DMRC, as an independent corporation but also from the Railways and in
making decisions about the project regarding property development and award of contracts.
Even though the Metro Act 2002 brought the Delhi metro rail under the MOUD and its Urban
Transport Policy was expanded so eventually it would cover 35 cities in the country, over the next 6 years
only one other metro project had started construction. Other directions in Urban Transport policy were
evolving that did not focus on urban rail transit.

Delhi’s Initiative in Transport Development, MRTS criticism and alternative developments
Before and after the approval of the MRTS in the Union Cabinet in September 1996, there was not
only criticism in the media and academic circles for the project but also suggestions for alternate
transportation strategies. As recalled the High Capacity Bus System was part of the IMMRTS proposal by
RITES but only the rail component of the IMMRTS had been chosen for implementation by the MOUD.
In May 1996, The Times of India published an article called ‘IIT study promises to bail Delhi out
of its transport problem - High Capacity Bus System is a better alternative to the Mass Rapid (railway)
Transit System’, which introduced the idea of a High Capacity Bus System (HCBS) for Delhi and reported
on a presentation of the Indian Institute of Technology (IIT) study commissioned by the Pollution Control
Board that attempted to show that the HCBS was a better alternative to the MRTS. The team recommended
cycling tracks as way of reducing the accident rate of cyclists, to bolster the declining number of cyclists
and encourage cycling as a means of transport. It pointed out that the HCBS was cheaper than the MRTS
and requested that the report be made public to open it for discussion. The article said that the team
emphasized modification, ease of construction and a less expensive solution than the MRTS.
The much publicised Mass Rapid Transport System (MRTS) which is yet to take off, was termed a
‘status symbol’, which was said to be not only too expensive to be feasible but also insufficient to
cater to the masses. Dr. Tiwari’s data showed that the underground railways systems were
functioning smoothly only in countries where the per capita income exceeded 3,000 dollars...It is
not even 300 dollars in India, said Dr Mohan. The emphasis of the team was to make do with the
236
present infrastructure, and make ‘practical’ additions to it. The HCBS was said to be just the
thing that fitted the bill... The HCBS, it was said, would cost very little compared to the MRTS,
and a convoy would carry more people than any other system of transport per hour... Mr
Deshmukh also stressed the need to relieve people of the anxiety, which overcomes them while
they wait for public transport. This would be done by an information system using the technology
presently available... Sunil Kale of the Mechanical Engineering department presented a startling
fact, aimed to show that using a personal vehicle results into huge wastage of energy. A scooterist
(alone) uses 1,542 kilojoules. In comparison, a Boeing 747 aircraft, which is generally believed to
be a guzzler, uses only 912 kilo joules per person with 300 passengers on board. The point of this
was to reveal that efficient public transport was necessary to prevent an increase in personal
ownership of vehicles... Rajeev Saraf from the Department of Biomedical Engineering said the
belief that the infrastructure Delhi had, would not be able to cater to cyclists and that the roads
were too congested were myths... The parting shot came from Professor Morgan, who
recommended that an independent committee should be formed to handle modernisation of public
transport...They should not consist of government officials on transfer, but people as capable as
my colleagues, he said.
274

On another project, the High Speed Tram System (HSTS) that had been proposed in 1994 by the
then Chief Minister of Delhi, Madan Lal Khurana and the Union Surface Transport Minister Jagdish Tytler,
it was reported that the project was abandoned.
In January 1997, an article on Bangalore revealed that the Karnataka State Road transport
Corporation had signed two Memorandums of Understanding with the Swedish transportation company
Volvo to conduct a joint feasibility study for setting up of mass public transport systems on the lines of the
Brazilian model in the city of Curitiba and to build bus bodies on Volvo chassis at its workshops. The
article described the Curitiba system as the use of dedicated bus lanes, priority signaling at traffic lights,
parking facilities and bus bays at roadsides for an efficient High-Capacity Bus System. Volvo would
transfer its technology to the Karnataka State Road Transport Corporation and the buses would be either bi-
articulated or double-deckers.
275

Perhaps the most insightful editorial on the MRTS, the article entitled ‘MRTS2, Pressure On
Roads Will Not Decrease’ drew on academic studies to illustrate that the MRTS would not help in
decreasing traffic on the roads. The following is the English translation.
The article cited two studies. The first was a1990 report by R.L.Elport and J.M.Thomson that
researched MRTS modes in developed countries. According to the report there has been no
reduction in traffic congestion in any place where an MRTS had been constructed. The two
authors had also compared cities with and without an MRTS. Some in the former included Sao

274
IIT study promises to bail Delhi out of its transport problem, ‘High-Capacity Bus System is a better alternative to
the Mass Rapid (railway) Transit System’. The Times of India, 6 May, 1996.
275
Volvo, Karnataka plan feasibility study on MR TS. Anil Budur Lulla. The Times of India, New Delhi, 15 January,
1997.
237
Paulo, Rio de Janeiro and Hong Kong and in the latter included Delhi, Jakarta and Lima.
According to them, in 9 out of 10 cities in which this transportation mode was started, there was
no reduction in number of vehicles or congestion on the roads. They said that initially, there may
be a slight reduction in the latter, but it soon balances itself out. For example in Sao Paulo there
was a slight decrease in traffic but it soon went back to its previous state. And the situation is still
not clear in Manila. Hence the aim of reducing traffic on the streets is not fulfilled by the MRTS.
Most of the MRTS riders are people who have switched over from buses. However this shift is not
proportional to the reduction in the number of buses on the roads. The explanation is that the
moment there is even the slightest bit of vacancy on the streets; private vehicles take over this
space. Private vehicle owners especially do not switch to using an MRTS. There has been some
proof that the number of buses and crowding in them has decreased.
Alternatively the MRTS instead of reducing the population in Delhi may actually end up
increasing it. Attention also should be given to the fact that it is natural to have crowds around
major stations. Similarly, the number of buses and private vehicles to carry passengers to and from
the stations will also increase. Apart from this, opportunities for businesses increase around metro
stations. In fact, this factor about the MRTS is being exploited by the government in its proposal
to generate funds for the project through property development around stations. Actually the
MRTS is dependent and based on carrying the maximum number of passengers. The reason that
the Hong Kong MRTS is benefiting from passengers is high-density residential development
around stations. On the other hand in Port Alger when stations were constructed further away from
the main centres, the number of passengers travelling on the MRTS was not adequate. The nature
of this mode is that it is contradictory to decentralisation, whereas all planners are in agreement on
the matter of decentralisation as the solution for all problems surrounding Delhi.
It is important to pay attention to the fact that in planned cities, MRTS may well be able to provide
the solution to problems. However, Delhi has traditionally been a combination of illegal colonies,
jhuggi-jhopris and slum settlements. The efforts to solve the problems of three-fourths of Delhi
that is outside a planned structure can turn the MRTS project into a mirage. Despite such practical
and other experienced problems, the entire government establishment is pushing for the
construction of the MRTS. In a report related to political issues connected with the MRTS for the
World Bank by Michael A. Ridley and based on experience...In many developed countries,
industries related to MRTS are being affected by the decrease in demand. To provide support for
these depressed industries, their countries are willing to give loans to other countries on easy
terms...It is important to remember that Rs 4860 crores loan given by the government of Japan for
the Delhi MRTS, that is 56% of the total cost of the project, is also on soft terms. After exposing
the reasons behind the connection of developed nations to such projects, Ridley questions the
reasons why developing countries are interested in such projects. He says governments in
developing countries are also interested in such projects because1) such projects generate a large
number of jobs, 2) this type of Metro system especially is visually modern and 3) till such time
that the project is not ready, the funds or loans do not have to be returned. Ridley’s concluding
statement is that a policy that promotes a bright political future and leaving a mark by constructing
memorable monuments or projects during their tenure, are two main reasons for inspiring
planners/founders to support such projects.
276

In an editorial in the Pioneer, the transportation condition of the city was discussed in detail and
the government was asked to take responsibility of improving the current situation, as the MRTS would
only be operational after three years. The article criticized the government’s inability to regulate the blue
line and kilometer scheme buses that endangered people’s lives every day and the auto rickshaws that

276
MRTS 2, pressure on roads will not decrease. Arun Anand. Dainik Jagaran, New Delhi, 23 July 1998. English
translation by author.
238
tampered the meters to charge more fare. It said that many schemes to improve the transport situation in
Delhi had been studied, for example the Ring Rail revitalization, cycle tracks, dedicated bus lanes and
tramways but none of them had been implemented. The Ring Rail especially was to be integrated with the
MRTS but with the new government in place, it had been forgotten. The article called for the government
to respond to ‘tax-paying citizens’ and the need for a good urban transportation system.
277

A summary piece on the MRTS talked about the recent problems faced by the project and award
of the contract to the ‘Japanese cartel.’ There was opposition from the NCRPB that ‘dubbed the scheme
impractical; it favors a regional rapid transit system encompassing Delhi and all its satellite towns.’ More
criticism came from Indian Institute of Technology (IIT), Delhi that said that ‘the MRTS is unviable for
Delhi and it should instead opt for a High-Capacity Bus System coupled with segregated bicycle lanes.’
The article then said that everyone though agreed that ‘there was a need for a viable and urgent alternative
to Delhi’s crumbling public transport system’ causing problems like accidents, pollution and congestion
that the MRTS was supposed to cure. On the other hand the example of Calcutta’s Metro was given with its
the ballooning costs and low ridership and the lack of suitably integrated transport modes that brought into
focus the viability of such a project. In the end the article said that ‘the social benefits of such a project was
well worth subsidizing.’
278

The BJP Central Tourism and Parliament Affairs Minister Madan Lal Khurana while inaugurating
a bridge said that Delhi’s citizens do not have an alternative public transport other than buses and the metro
rail would be completed in ten years. Therefore a High-Speed Transport System including the Ring
Railway was needed as an immediate solution to Delhi’s traffic and pollution woes.
279

While addressing the press in Bhopal, the Chief Minister of Delhi, Sheila Dikshit, said that the
Delhi MRTS would be available for entire Delhi by 2012 and its work was going at a very rapid pace. She
also mentioned that 20 flyovers would be completed in Delhi by the year 2000.
280

277
Chaos rules roads as inactivity jams government. Rahul Pandey. The Pioneer, New Delhi, 1 February, 1999.
278
Back on track. The Times of India, New Delhi, 14 September, 1998.
279
It will take a lot of time yet for the metro to start: Khurana. Jansatta, 13 December, 1998. High Speed Transport
Service should start in Delhi: Khurana. Dainik Jagaran, 13 December, 1998.
280
20 new flyovers in Delhi by 2000: Sheila Dikshit. Hindustan, 5 March, 1999.
239
Rashtriya Sahara in March 1999 published an article on an IIT report called ‘Delhi on the
move: 2005 future traffic management scenario’. The following is the English translation.
The report said that Delhi’s MRTS would not be able to solve its traffic problems and may end up
increasing pollution rather than reducing it, as was claimed. It said that only cities with the per
capita income of over $ 3,000 could afford Mass Rapid Transit Systems in order to make them
viable. A study of different cities in the world that had MRTS’ including Mumbai, Calcutta and
Madras had shown that they would have to be heavily subsidised by the government in order to
keep the fare low so that people would be able to afford to use it. It also said that businesses and
commercial activity would increase around stations, which went against the Delhi Master Plan. At
the moment the MRTS looked attractive but it would lead to serious problems in the future. If one
looks at the power situation a lot of the pollution being caused in Delhi was due to fly ash created
by power plants. The MRTS would require 400 MW of additional power resulting in production
of even more fly ash. Power plants also required immense amounts of water and in the city where
there was severe lack of this utility, was it sensible to spend such amounts of water for the MRTS?
Already in the capital, noise pollution had increased over the acceptable 90 dB beyond which it
affected mental health. The MRTS would cause noise pollution of 60-80 dB and may be a cause of
serious harm when it passed next to some of the major hospitals. Because roads had to be widened
in order to make space for the pillars of the elevated MRTS, thousands of green trees would have
to be cut and it would be impossible to replace them. Not only that, by the time the MRTS started
running, traffic would have increased manifold and the MRTS would still prove to be insufficient.
The only lasting solution to Delhi’s traffic woes would be to move offices and commercial
enterprises outside the city to help decrease the population pressure within it. IIT has presented
ways of improving existing roads, which would cost a mere 20% of the amount being spent on the
MRTS. Compared to the MRTS many more people would be able to travel on it.
281

An editorial remarked on the oft-repeated problems and solutions for Delhi’s traffic by the
politicians and civic authorities. These included increasing fines, staggering office hours, removing
inconsistencies in traffic rights, car pools, quarter system and disciplining bus drivers but none of these had
been enforced and Delhi continued to suffer because of the poor traffic sense of its citizens. The article
went on to say that the MRTS would provide ‘a long-term solution to a problem that has reached menacing
proportions,’ but that it would have to be augmented with ‘parking policy, regular checking of licenses and
inculcation of traffic sense’ as traffic congestion ‘were costing the exchequer an annual loss of over Rs 75
lakhs in terms of wasted fuel.’
282

The Hindu carried an article titled ‘Integrating Metro with city’s agenda’ that reported on a
seminar called ‘Moving the people of Delhi: Public transport, Now and Future’ attended by heads of
organizations. DMRC MD E Sreedharan talked about the necessity of feeder services, intermodal

281
Transportation at the cost of environment, editorial. Today, it is more important to decrease the weight of
population in Delhi than increasing number of vehicles on nurturing the white elephant of trams. It is better if it starts
with government action. Pankaj Chaturvedi. Rashtriya Sahara, New Delhi, 22 March, 1999. English translation by
author.
282
Endlessly jammed. Hindustan times, New Delhi, 19 April, 1999.
240
interchange facilities and suburban services. DTC Chairman G.S.Cheema said, “The Government
should promote use of mass transport and non-motorized modes and take measures to discourage use of
personalized motor vehicles. Application of low cost transport system management measures, provision of
adequate road infrastructure and integrated land use transport planning are other steps that can be taken.”
President of the Institute of Road Traffic Education (IRTE) Rohit Baluja talked of a transport strategy
involving various fields and development of NCR for decongesting the city, school transport safety and
pedestrianization. Additional Commissioner of Police (Traffic) Kanwaljit Deol talked of a pilot project to
optimize traffic flow through area traffic control at 47 intersections in the city and increasing enforcement
by empowering lower rank officers and increasing traffic staff. Principal Advisor RITES, Bharat Singhal
said that modal integration interchange facilities and ‘fiscal measures to curb growth of personalized
transport’ should be introduced. Chairman of the PHD of Commerce and Industry, Anil Bhargava, talked of
introducing an ‘Intelligent Transport System capable of adjusting to traffic flow patterns and event
management, constitution of an apex traffic body’ and phasing out of older vehicles.
283

On 4 July, the Economic Times ran an article with interviews from various people who were
critical of or opposed the MRTS as well as the many flyovers planned for the city. Dr. J.P.Singh of the
Urban Arts Commission said, “We can’t do without the MRTS, but the planning for Delhi has been
intrusive... It needs better coordination. Especially since it will completely change land values and increase
commercialization.” In agreement with this statement, Dr. Sarita Das of the NCRPB also said, “It is a
stand-alone system not connected with the National Capital Region or dovetailed into the Railway System.”
The Joint Secretary, Ministry of Surface Transport, K.R.Bhatia was reported as being in favor of the project
and he thought that there was no surface land available for roads and flyovers and said “urban planning
should follow transport planning... in Delhi it works the other way round.” S.M.Mittal, Adviser, DMRC
and a founder of the project, said that
the MRTS was conceived after detailed studies by consultants Rail India Technical and Economic
Services Ltd. (RITES)...Delhi was divided in 215 zones and sample surveys conducted in 92, 93
and 98 to find out more about travel, destination, length etc... Corridors where the number of
commuters moving in the peak hour exceed 20,000 in one direction need a railway system.

283
Integrating Metro with City’s agenda. The Hindu, 12 April, 1999.
241
According to the newspaper the RITES studies suggested that ‘the trend of traffic growth is 3-
4% annually and 75% use the mass transport system (Buses) while 25% use cars.’ A JNU academic, Duno
Roy, said that the government first decided on an MRTS and then justified it.
This is supply-side planning. The data that they have used is questionable. Our own data (from the
Hazard Institute) has shown very different results: 30% travel by bus, 30% by cycle, 38% walk
and 2% drive their own cars. That means 68% of the population can’t afford any mass transport
system – not even buses. How will they use the MRTS which will be more expensive?
Along the same line, the project coordinator, transport planning, Dr. Geetam Tewari of the Indian
Institute of Technology, Transportation Research and Injury Prevention Programme (TRIPP) said,
Research has shown that a higher per capita income is necessary for the viability of an MRTS
because of the extremely high capital costs involved in construction, running and maintenance.
Client, high occupancy rates curve when the number of non-work trips are also high which is
found in societies where income levels justify leisure trips.
The article went on to report that TRIPP had suggested many alternative and existing low-cost
solutions like the ‘High-Capacity Bus System that is working on improved road designs with dedicated
right-of-way for fast moving bus traffic.’ Dr. Geetam Tewari’s research complemented that of the Hazard
Institute wherein it was found that ‘the proportion of cycle traffic is more than 30% of total traffic during
peak hours on many arterial roads. This justifies the provision of dedicated bicycle paths and better
management of pedestrian traffic.’ The article also talked about how there were other issues involved in the
MRTS, like parking fees, commercial spaces, changing land use along the corridor adding to the
congestion, connectivity between stations, cost escalation and disaster management. Prof. K.T.Ravindran,
School of Planning and Architecture, said, “Imagine an MRTS station at CP. There is so much congestion
already. If there is a fire or disaster on the ground, how will they rush ambulance and fire services.” The
article then went on to describe similar issues in the building of flyovers in Delhi. Dr Sarita Das said, “The
ring road is 44-45 km long. If we have 37 flyovers that means after every ¼ km there will be a camel hump.
The NCRPB had, instead, recommended an elevated ring road – one more deck on top of the existing one
which would have been a much cheaper option with no land acquisition costs.”
284

On 5
th
August, in an article on the Buch report for the Lutyens building zone that called for a
complete building moratorium in the LBZ area, it was reported that the committee said, “There is

284
Train of thought. Is the MRTS a solution about a problem? The Economic Times, 4 July, 1999.
242
possibility of totally eliminating any kind of metro routes within this area by operating environment
friendly buses on the concept of Bus Way Transits.”
285

On 22
nd
November, an article with comments from various leaders on the MRTS revealed that
they did not think that the MRTS would be successful because of the long gestation period of the project
unless there was an extensive network reaching all parts of the city. Geetam Tewari, Project Coordinator,
TRIPP, said that the MRTS would not help at all in congestion or pollution and that Delhi had enough road
space for an effective bus system to be developed which would also avoid ‘wasting crores of rupees.’
286

An article on 7 December 1999, described political criticism by the erstwhile BJP Transport
Minister Rajendra Gupta on the current Congress government led by Sheila Dikshit and with Parvez
Hashmi as the transport minister. He said that the current Delhi government had failed to generate enough
revenues in spite of doubling the DTC bus fares he said this was “the law of and diminishing returns” and
that the fare should only have been increased 30-35%. He said when the BJP was in power they had
increased the number of buses under the kilometer scheme from 900-2500 and yet “the institution that was
slowly being nursed to health is fast moving towards sickness.” He also said that the Congress government
had failed to follow up on the many schemes initiated by the BJP government for example the need to form
a Unified Metropolitan Transport Authority, special corridors for cycles and buses for which a master plan
had been prepared under Professor Dinesh Mohan of IIT and the linkage between the Metro rail and the
Ring Rail. “Under the present scheme of things, the Metro rail will only cater to a specific area which
would not serve its purpose.” This last a bit of the article was highlighted by the DMRC.
287

In April 2000, the Indian Express published an article that included opinions from three experts.
The former Chief Planner of Government of India, Syed S. Shafi said that a Metro would not work in a
radial city like Delhi. Instead a multimodal system should be adopted including a light rail system. He also
pointed to the impact of the different transportation modes on the aesthetics of the city. Geetam Tewari,
Project Coordinator, TRIPP, IIT, who was later involved in the HCBS project, said that the money spent for
one kilometer of MRTS would provide upgraded road systems of 25 km for buses and cycles. She said

285
No offices, metro in Lutyens zone: Panel. Sanjiv Sinha. The Indian Express, 5 August, 1999.
286
Plain speak, Rail Ruckus. The Indian Express, New Delhi, 22

November, 1999.
287
BJP slams Delhi transport ministry on fare hike issue. The Indian Express, 7 December, 1999, Hindustan.
243
MRTS were only viable in cities with a per capita income of $3000. Gautam Bhatia, writer and
architect, said that existing non-motorized modes of transportation like tongas and rickshaws should be
employed at least for short distances since there was a lack of expertise and acumen for conducting a large-
scale town planning exercise.
288
Another article covering a conference on public transport, pointed to the
inability of the MRTS to solve Delhi’s traffic problems, owing to its limited coverage. It said that the
solution for the traffic problem lies only with HCBS. The Chief Minister of Delhi, Sheila Dikshit, talked
about the idea of the High-Capacity Bus System for Delhi in the international seminar during the Auto
Expo on January 20, 2002. Referring to what the IIT team had suggested, she said that the HCBS would
cost Rs 2 crores per kilometer versus Rs 300 crores per kilometer in the case of the MRTS.
289

In the Inauguration session, Sheila Dikshit pointed to the citizens’ distrust in buses for public
transport. She said that the HCBS would help in re-gaining their trust by providing a public transport
system that would take people from their doorsteps to their offices. She also said that it would help in
traffic management, reduce accidents and that more people would then switch to using buses versus private
vehicles. Ajay Maken announced that an HCBS corridor would be started from Tilak Nagar to Safdarjung.
The DTC chairman Rakesh Mehta said that the HCBS and MRTS would be complimentary in solving
Delhi’s traffic problems. He said it should not be seen as competition for the MRTS. He also announced
that 200 DTC buses had been fitted with GPS that would constantly send their location data to the control
centre and their position would be determined on the digital map prepared using GIS. The commuters at
bus stops would be informed of the time left for a bus to arrive.
290
The former mayor of, Bogotá, Colombia,
Enrique Penalossa, said that the HCBS was not just a transportation mode but a political issue. If people
were given a cheap, efficient and well-spread bus system, then car owners would themselves remove their
vehicles from the roads. It was very important to have a strong political will and desire to accomplish
this.
291

288
Rail blunders: ‘the Delhi Metro rail interferes with the real character of the city”, “Socio-economic status makes
Metro rail a wrong option”, “We lack resources to exercise the Metro rail in Delhi”. The Indian Express, 19 April,
2000.
289
High-capacity bus system cheaper than Metro. The Economic Times, 21 January, 2002.
290
Metro rail and high-capacity bus system will complement each other. Rashtriya Sahara, 21 January, 2002.
291
High-capacity bus system is the solution for transportation problem. Dainik Jagaran, 21 January, 2002.
244
Early in January 2002, after the transport conference, the HCBS was seen as a solution for
improving bus transport in Delhi. Ajay Maken, along with the HCBS, proposed the Electric Bus Trolley
Service that would run on the central verge of roads.
All technical details have been completed on the proposal and some final touches are being given.
We propose to put it to the Cabinet next week...BHEL has already carried out a techno- feasibility
study of the entire proposal and has recommended it as an ideal way to get rid of the pollution
leading buses that thunder along Delhi’s roads. The elaborate study includes citing various plus
points of the service along with the argument that this service will be an ideal feeder service for
Delhi Metro and other transport services. Since the bus service will run around the ring road – at
least in its early stages – the EBT will be able to cover wider sections of the capital without getting
into congested areas and still providing passengers with greater connectivity... The elaborate plan
of this project will get a start off by the pilot project that will run from Tilak Nagar to Dhaula
Kuan. This pilot plan itself is expected to cost around Rs 25 crore... The first sign of work
commencing on the project will be removing of streetlights from the central verge and shifting
them at roadsides instead... Transport Ministry sources say that on the spot checks will be
conducted in places like Kathmandu, Beijing and Bagota where these buses run effectively to
assess what its plus and negative points are.
292

In March 2002, another critical article described the MRTS as the wrong project for the traffic
problems in the capital. Professor Dinesh Mohan was quoted as saying,
Metro in the capital would push the need for building high-rise structures near the station’s...more
people would migrate to the city than they do so now, resulting in further pressure on the basic
communities in the NCT... The capital required by low capacity, high-density transport system.
With better management, the existing road capacity can be tripled. High-capacity bus system
should be the main thrust of the public transport system in the capital. The high-capacity bus
system would incur a cost of Rs 3 crore per kilometer compared to Rs 300 crore for the Metro.
This in fact was one of the ways that the DMRC was thinking of generating revenue through
property development around the metro stations. Regarding slums in Delhi, he said that ‘slum clusters
occupied only 3% of the land in the capital and their existence amidst the social haves was a necessity to
avoid social upheaval and an upswing in crime.’
293

Another article talked about the necessity of HCBS in solving the transportation problems of Delhi
versus the Metro rail, which would not be able to have an influence for over 7% of the area of Delhi. The
HCBS on the other hand would make use of the existing road network in the city and streamlining and
organising it with better traffic management to increase the efficiency of public transport through buses.
294

292
Ajay Maken’s central verge bus service! Transport minister moots a proposal for another bus service. Mid-Day, 30
January, 2002.
293
Much-hyped Metro is not what the capital needs. The Tribune, 20 March, 2002.
294
An alternative to Metro rail. Business standard, 20 June 2002.
245
An editorial in the Times of India on 28
th
of July was critical of the MRTS with quotes from
Dinesh Mohan, who said, “I don’t think the Metro will be able to survive till 2021 when all the five phases
are slated to be completed. It will not be able to sustain itself.” Talking about how it would need to be
heavily subsidized by taxpayers, he said “or else the city will go bankrupt and have no money for public
infrastructure like schools and hospitals. Funds being scarce for these as such.” K T Ravindran, Urban
Planner from the School of Planning and Architecture said,
It’s important to ask who will pay for the Metro. The Delhi Metro Rail Corporation (DMRC) is
flush with funds at the moment but it is after all a loan, which we will have to pay back...On top of
it, the State transport ministry has declared the ticket is going to cost only Rs 4. On the surface it
may appear cheap but someone will have to pay the remaining cost incurred. Metro will spend Rs
30 per trip.
295

The Delhi Congress government had been moving forward with streamlining transportation in the
capital. A study conducted by Tata Energy Research Institute (TERI) in its report to streamline DTC also
suggested formation of a Delhi Unified Metropolitan Transport Authority (DUMTD), to formulate
transport policy and act as the regulatory body for fixing tariffs for buses, autos, taxis and coordination with
the MRTS. The Congress Delhi government felt this was a good time to introduce and set up this authority
that would also remove political interference in setting tariffs and give incentives to private investors.
296

The plan for an integrated transport system and authority emerged again as the Chief Minister,
Sheila Dikshit announced the Delhi government’s formulation of a comprehensive transportation policy
which would ‘set time-bound goals for the Transport Department,’ including short term, mid-term and
long-term goals to be achieved in six months, one year and five years respectively. The short-term goals
included rerouting buses to cater to the Metro and avoiding competition, a scheme for auto-rickshaws and
buses and helpline numbers displayed on buses. Mid-term goals would include running electric trolley
buses on two routes- Hari Nagar Clock Tower to Central Secretariat and Badarpur to Pragati Maidan.
Long-term goals would include projects like the metro rail.
297

The Delhi government was moving ahead with an upgradation of its bus system and introduction
of the HCBS, Electric Trolley Buses and an integrated transport network and policy. An Integrated

295
It’s costly and unsustainable. Anurudha Mukherjee. The Times of India, 28 July, 2002.
296
Transport body route to a smooth privatisation drive. Delhi government wants to give potential investors in public
transport a ‘fare’ deal. Ayswaria Venugopal. Today, 25 September, 2002.
297
CM to unveil 3-phase transport policy soon. The Indian Express, 4 October, 2002.
246
Metropolitan Transport Authority would be set up (IMTA) and till such time it was in place, a Delhi
Transport Planning Group under the chairmanship of the CM would administer the transport plan. It also
revealed that 25% of the city’s budget would go to the state transport department, Rs 2,938 crores out of
which Rs 1,441 crores would go towards the metro rail.
Figure 7: Listing Delhi’s transport policy and HCBS plan. Source: The Times of India, 23 October, 2002.
Ajay Maken said,
Along with an increase in buses, their efficiency, punctuality and a better carrying system are also
important for the convenience of commuters... the routes, timings and parking of the buses, autos,
taxis have been designed to supplement the movement of mass transit...About 4000 CNG buses on
chartered and premium services will also be introduced...The routes, timings and parking of the
buses, autos, taxis have been designed to supplement the movement of mass transit system...New
technology vehicles, like electric trolley buses and high-capacity buses plying over 100 km will be
put on the road. Buses will be given road space so that they move quickly and efficiently. Autos,
taxis and the slow-moving cycle rickshaws will be used to provide feeder services to the bus
system and the Metro...This segment of intermediate public transport will continue to play a
crucial role as it will bridge the gap between the commuters homes and the nearest mass transport
centres.
298

298
Buses key to Delhi’s future. The Times of India, 23 October, 2002.
247
By end November 2002, the Chief Minister announced that South and West Delhi ‘would have
High Capacity and Electric Trolley Bus Systems within a very short span...The Delhi government had
decided to introduce these two systems on an experimental basis.’
299

After the Metro Bill 2002 was passed in December 2002, the Delhi Government’s transportation
policy became even more driven. In yet another political move by the BJP Central government, Madan Lal
Khurana, an MP from Delhi and president of the Delhi BJP, was appointed the chairman and director of the
DMRC four days before the inauguration of the Metro. The announcement was made by the MOUD. The
newspapers all reported that this would increase the animosity between the Central and State governments
over the metro project.
300

The Prime Minister and Deputy Prime Minister’s decision to back Madan Lal Khurana for the post
of chairman of DMRC was made keeping in mind the upcoming Delhi elections. The decision had
been made a while back, but because of Parliament sessions, the announcement had been
delayed.
301

The Statesman reported that ‘DMRC officials were too stunned to react initially while the Chief
Minister, when asked for her reaction, “welcomed” the appointment but not without commenting, “I do not
support Mr. Khurana but I welcome him.”
302
Madan Lal Khurana now changed his stand about the Metro
rail that he had opposed earlier, by saying, “I’m extremely happy to get an opportunity to serve the people
of Delhi. Metro was my dream and it was our government, which started the work. Now I have the
opportunity to be associated with it.”
303
In response the Congress floated full-page ads in newspapers of the
metro rail project as their achievement under the Congress government before the BJP could do so.
In a smart move, Chief Minister Sheila Dikshit and Transport Minister Ajay Maken made it a
point to remind the citizens that the wonder was achieved thanks to the efforts of the Congress
government, by splashing full-page ads in newspapers, much before the BJP could come out with

299
High-capacity buses, electric trolleys to hit city roads: CM. Chetan Chauhan. Hindustan Times, 30 November,
2002.
300
Khurana made Metro rail chairman. Hindustan, 21 December, 2002. Rashtriya Sahara, National Herald, today, the
Indian express.
301
Khurana becomes chairman of governing body of Metro Rail project. Navbharat times, 21 December, 2002.
302
Top DMRC post for Khurana; Centers tactical move to take credit. Arun Anand and Nitin Mahajan. The Statesman,
21 December, 2002.
303
Khurana said to bask in metro glory. The Indian express, 21 December, 2002. There were nine articles, including
three Hindi articles on December 21, 2002 on Khurana’s appointment as DMRC chairman.
248
their own quota. Their smiling pictures reminded everyone that they are the ones who make
Delhi’s dream of a good transport system possible.
304

The Delhi government questioned the legality of Khurana’s appointment as Chairman of DMRC
while he was a Member of Parliament, since it could be an ‘office of profit.’ This article also reported on
the Transport Minister, Ajay Maken’s response to Khurana’s announcement that the work on the third line
of the Metro would begin in February. “The work on the line has already started and what Khurana is
saying is political gimmickry.”
As the Delhi government Transport Minister dug up the history of the MRTS and HSTS to show
how Khurana had tried to ‘sabotage’ the very project whose organization he was now chairing, Khurana
talked about his own association with the MRTS and said that he would still like to introduce the HSTS on
corridors where the MRTS could not be run. He wanted to introduce supplementary modes of transport,
revive the Ring Railway project and have a comprehensive transport policy for the capital.
305
Khurana
alleged the Congress government at the Centre had squashed the project till 1996 when the BJP helped
clear it in the Union Cabinet.
306
A side effect of the MRTS project and its politicization was the spotlight on
transportation issues of the capital. It also highlighted what the Congress was going to campaign for in the
upcoming elections; more power for the NCTD and a comprehensive transport policy.
307

In January 2003, the Sheila Dikshit government formed a Delhi Transport Planning Group that
would ultimately lead to the formation of an Integrated Metropolitan Transport Authority that would “look
into Mass Rapid Transport Systems other than the Metro, like the High-Capacity Bus System (HCBS) or
Electric Trolley Buses (ETB). Together, these will be linked to the existing bus and auto services.’
308
The
members of the group included the Chief Minister, Sheila Dikshit, Chief Secretary, Shailaja Chander,
transport experts Dinesh Mohan and O P Aggarwal. The BJP led by Khurana came up with its own plan
including the Ring Rail system, High-Speed Tram System, taking Metro to more areas and the Sky rail.
309

304
Advantage Congress. The Week, December 2002- January 2003.
305
Metro was conceived before Maken was born: Khurana. The Pioneer, 7 January, 2003.
306
M L Khurana turns the table on Congress in metro row. The Asian age, 7 January 2003.
307
Hit by Metro mania, BJP dumps statehood issue. The Tribune, 7 January, 2003.
308
Maken competes with high-tech buses; Even Metro MD derailed sky rail, says transport minister; Ajay Maken’s
high-tech buses. The Indian Express, 15 January, 2003.
309
Khurana jams Maken’s transport plan. The Pioneer, 15 January, 2003.
249
An article in the Hindustan Times made a comparison of what was happening in public
transport in cities of other countries in the world. It pointed out that it would take a long time for the Delhi
Metro to come up or be seen as an alternative public transport system. The HCBS and electric trolley buses
may help solve the traffic problem in Delhi in the near future. The article mentioned Los Angeles and said,
‘If Los Angeles is stuck in traffic gridlocks, it is because the Metro system there just refused to take off and
the public transport system is nothing to write home about.’
310

On 3 May, 2003, the Transport Minister, Ajay Maken announced that
For one of the HCBS corridors, RITES has finalized the pre-feasibility report from Dr Ambedkar
Nagar, Masjid Moth, MoolChand, Sunder Nagar, Appu Ghar, Delhi Gate, Lal Quila and Inter
State Bus Terminal (Kashmiri Gate) (Total Length 19 km). The total cost will be Rs 69.7 crores.
311

He denounced the BJP’s attempts to talk about a sky train and other transport projects as ‘an effort
to derail the HCBS.’
312
The Congress at the Delhi government and the BJP now had two parallel
transportation plans for Delhi. Maken called the Congress government’s transport plan as an operating plan
and criticized Khurana for suggesting the sky train that had already been rejected by the MD DMRC. The
Transport Minister was using the views of a technical expert of the established metro rail system to gain
support for the HCBS project. The Delhi government’s transportation planning included ‘setting up of a
complaint redressal system for buses, taxi scooters, rickshaws, implementation of a unified timetable for
buses, verification of certified fare charts, installation of standardized fare meters for auto-rickshaws,
comprehensive and additional thrust on shifting road traffic on railways.’ Whereas Khurana’s transport
policy included a five-year action plan starting with the setting up of a committee that would also
recommend ‘preponing the existing MRTS schemes and extension of bus corridors to the NCR towns of
Ghaziabad, Meerut, Hapur, NOIDA, Faridabad, Palwal, Gurgaon, Rohtak, Sonepat and Panipat.’
313

310
Traffic needs a breather, badly. Soni Sangwan. Hindustan Times, 17 February, 2003.
311
CM gets the better of Khurana. The Pioneer, 1 may, 2003.
312
Khurana trying to derail Metro: Maken. The Hindu, 1 May, 2003.
313
Roadblock. The Delhi government and the State BJP disagreeing about the city’s transport policy. Initially the
people will suffer. Santosh Singh. The Statesman, 8 May, 2003.
250
With the Congress winning the elections again in the Delhi government, the HCBS corridor
was well on its way. The project was to be implemented by RITES and its management was a joint venture
between the Delhi Government and Infrastructure Development and Finance Corporation (IDFC).
314

The BRTS/HCBS corridor was officially cleared in January 2003 by the Chief Minister and
Council of ministers and it was decided that the consortium of RITES/TRIPP would start work on 7
proposed corridors followed by the appointment of a Project Management Consultant (PMC). A Core
Group consisting of Chief Secretary: Chairperson, Pr. Secretary (Finance), Pr. Secretary to Chief Minister,
Commissioner MCD, Secretary Planning, Chairman-cum-Managing Director, Delhi Transport Corporation,
Joint Commissioner of Police (Traffic), Engineer in Chief (PWD), Pr. Secretary-cum-Commissioner
Transport, O.S.D. to Chief Secretary, Sh B.I.Singal, Consultant was formed to monitor the implementation
of the recommendations of the committee on sustainable transport that had met in 2002 and recommended
the public transport policy. In the Delhi Annual Plan 2004-05, Rs 100 crores ($ 20 million) were allocated
for “development of alternative mode of transport”. RITES was to ‘develop conceptual guidelines and
design details for the BRT system’ with advice from the TRIPP team from IIT Delhi. By March, the design
parameters had been approved and it was decided to set up a Special Purpose Vehicle (SPV) to implement
the project. RITES would act as the Project Management Consultant (PMC). The Delhi government
established a Delhi Integrated Multimodal Transit System (DIMTS) as joint venture of Government of
National Capital Territory of Delhi with the Infrastructure Development Finance Co Ltd. The next three
years were spent in coordinating meetings with the Public Works Department (PWD), Traffic Police,
Municipal Corporation of Delhi (MCD), Expenditure Finance Committee (EFC), utility agencies, Delhi
Police, Delhi Development Authority (DDA) for input and approval. In December 2005, the Delhi
government held another workshop on the BRTS/ HCBS system attended by stakeholders, the different
civic and utility agencies and businesses, and experts and it was announced that 5 HCBS corridors out of 14
would be implemented in the first phase of which the 16 km Ambedkar Nagar- Delhi Gate would be the
first. The DMRC was conspicuous in its absence in the meeting.
315

314
Is Delhi Missing the Bus. Umesh Anand. Civil Society, May 2008 Edition.
http://www.civilsocietyonline.com/May08/may081.asp
315
First Delhi BRT Corridor: A Design Summary, Ambedkar Nagar to Delhi Gate. Transportation Research and Injury
Prevention Programme, Indian Institute of Technology, December 2005. Ps. 66 to 69.
251
Finally in October 2006, construction on the first corridor of the project was inaugurated with
the Chief Minister, Sheila Dixit laying the foundation stone. During the construction of the corridor and
especially after it was opened in April 2008, there was heavy criticism in the media because of the
inconvenience caused to private vehicle users, mainly car users. People using bus transport and cycles
appreciated the new system, but did not receive the same media coverage.
316

Transportation in Delhi became an extremely politicized issue, a direct consequence of the
publicity received by the Delhi metro rail, the Metro Bill 2002, the criticism of the MRTS and finally
alternative transport strategies pursued by IIT academics. The HCBS has been implemented along the first
corridor and plans are to cover 204 km of city roads by the system. As of now BRTS and HCBS are being
actively adopted by cities across the country.

Delhi Government in the NDC meetings after the approval of the MRTS project
The change in Delhi’s transportation strategy was seen in the NDC meetings and in the 49
th

meeting in September 2001, the Finance Minister of Delhi, Mahinder Singh Sathi, presenting Sheila Dixit’s
report to the NDC talked about the preparation of ‘a 20-year perspective titled “Delhi Urban Environment
and Infrastructure Improvement Project”’ prepared with the Ministry of Environment and Forests, the Govt.
of Delhi and financed by the World Bank.
In her circulated speech in the 49
th
and 50
th
NDC meetings, Sheila Dixit, argued for the Center
granting full statehood to Delhi. Pointing to the issues of land, wherein public land under the central
government and to be protected by it, was settled by JJ Clusters or slums and was being provided services
and improvements by the Delhi Government. Relocation for people in these areas was also sought from the
Delhi government instead of the Central government that had full jurisdiction over it. She also mentioned
that other states that were a part of NCRPB were not participating fully in developing the NCR.
317
Saying

http://web.iitd.ac.in/~tripp/delhibrts/brts/hcbs/hcbs/BRTdesignsum.pdf, Background on the development of the BRT
Project.
http://web.iitd.ac.in/~tripp/delhibrts/brts/hcbs/BACKGROUND%20ON%20THE%20DEVELOPMENT%20OF%20T
HE%20BRT%20PROJECT.pdf
316
BRT corridor: The great Delhi divide. NDTV Correspondent. NDTV, 1 May, 2008.
317
And, this was the case as in the previous meeting Bansi Lal, the Chief Minister of Haryana, had pointed out that
despite NCRPB’s constitution in 1985, ‘no significant development had taken place in the region’. He requested the
Central government to direct Delhi to stop pursuing policies that congested Delhi rather than Haryana contributing to
252
that Delhi was contributing its share to DMRC, she added that improvement of public transport in Delhi
would require further improvement through provision of electric trolley buses. She mentioned that the
financial condition of Delhi was good and Rs 200 crores had been earmarked for development of railway
lines in the NCR for a regional rail network and requested financial assistance from the center and
participating states for its implementation.
In her speech in the 50
th
NDC meeting in December 2002, she went over the same issues as the
circulated speech but under achievements for Delhi she added that the entire fleet of buses under the Delhi
Transport Corporation (DTC) had been converted to Compressed Natural Gas (CNG) and institutional
restructuring of the DTC as a modern corporate body was underway.
The Government has approved the outsourcing of major works in priority sectors. This will enable
faster project execution. A new excise policy has been announced. She opined that Government
must get out of areas in which it has no business to be, and concentrate on delivering governance
in core areas where it matters.
318

She talked about Delhi government’s implementation of the Right to Information (RTI) act
enforced in October 2001 and its encouragement of citizen participation through government and
neighborhood Bhagidari (partnering) schemes. She mentioned fiscal support from the central government
for ‘implementing plan programmes meant for the poor residing in JJ clusters and timely allotment of land
for rehabilitation of these clusters to alternate project sites’ and the need for Delhi to be included in the
Finance Commissions recommendations.
319

By the 50
th
meeting Delhi Government was seen taking full advantage of the economic reforms. It
prepared a long-term planning document for the next twenty years with financing from the World Bank.
Sheila Dixit was actively pointing out the problems resulting from overlapping state and center
jurisdictions and using them to demand statehood and resource assistance from the center especially for
slum and squatter settlements. Reforms in the government structure were being actively pursued with the
right to information act, the bhagidari scheme and ‘outsourcing’ of important functions. The need to

the development of the region in order to take the pressure off Delhi. Saying that Haryana had substantially developed
the infrastructure in its region, any further development should be funded by the central government or Delhi
government. In the 50
th
meeting Chautala, now the Chief Minister of Haryana urged the Ministries of the Central
Government to hasten the preparation of their ‘sub-componant plans’ that had been requested for preparation of a
fiscal plan by NCRPB.
318
http://planningcommission.nic.in/reports/genrep/50NDCs/vol5_45to50.pdf 50th NDC meeting, p.428
319
http://planningcommission.nic.in/reports/genrep/50NDCs/vol5_45to50.pdf p.168
253
increase efficiency was being underscored and business vocabulary used to describe the ‘modern
corporate’ vision streamlining of public sector undertakings. Planning had taken a totally different direction
at the state level with states actively taking on the responsibility of planned development. Issues of
resettlement were also related to the MRTS. Land acquisition for the first phase of the project was
underway and the Delhi government found itself being held responsible for relocation and resettlement
even thought land was a Central subject.
Regional development in the 10
th
Five Year Plan from 2002 to 2007
320
, was part of the chapter on
Urban Development. In itself, it was not emphasized but it was understood or a given in the objectives of
urban development. Instead the focus was on further development of smaller towns and looking at urban
problems but always from a regional point of view.
In the 10
th
Five-Year Plan from 2002 to 2007, there was further development in transportation
issues and the focus was on reform of State Run Transportation Undertakings (SRTUs). In the Policy
Issues, the need for strengthening Public Transport Services now searched for solutions beyond the Mass
Rapid Transit System, which was stated as having ‘proved to be inadequate in meeting the growing traffic
demand.’ Further plans recommended high capacity bus systems (HCBS) for high-density corridors and
electric-based transportation system for congested areas. The section on Delhi transportation had changed
its direction to the need for traffic management, including establishing ‘high traffic zones’ with restrictions
on vehicles and fees for permits to bypass these restrictions, thus generating revenue for the government.
The private sector was to be encouraged and it was suggested that a regulatory body by the government be
set up for safety, scheduling and tariff standards.
321

In December 2005, the Jawaharlal Nehru Urban Renewal Mission (JNNURM) was established
under the Ministry of Urban Development and its aims were ‘Urban Infrastructure and Governance’ and
‘Basic Services to the poor.’ Urban infrastructure and governance included the need for development of the
urban sector and investment requirements. Several reforms were initiated and these were to be an extension
of the 74
th
Constitutional Amendment in the early Nineties for decentralisation. Sustainable infrastructure

320
Also the land ceiling act was revoked in 2001 to ease land development.
321
http://planningcommission.nic.in/plans/planrel/fiveyr/10th/volume2/v2_ch8_3.pdf Volume II, Chapter 8-
Infrastructure, p.961, 962.
254
development was seen as one of the key areas for this initiative.
Mission statement: the aim is to encourage reforms and fast track planned development of
identified cities. Focus is to be on efficiency in urban infrastructure and service delivery
mechanisms, community participation and accountability of Urban Local Bodies (ULBs)/
Parastatal agencies towards citizens.
The strategy of the mission required every city to prepare a city development plan that would
include policies, programmes, strategies and financing plans that would then help identify projects for
which detailed project reports would be prepared.
In order to seek JNNURM assistance, projects would need to be developed in a manner that would
insure and demonstrate optimization of the life-cycle costs over the planning horizon of the
project... the funds for identified projects across cities would be disbursed to the ULB/ Parastatal
agency through the designated State-Level Nodal Agency (SLNA) as soft loan or grant cum loan
or grant. The SLNA/ ULBs in turn would leverage additional resources from other sources.... In
order to maximise optimise the life-cycle costs over the planning horizon, private-sector
inefficiencies can be inducted in development, management, implementation and financing of
projects, through Public-Private Partnership (PPP) arrangements.
322

The City Development Plan for Delhi included a chapter on ‘A Review of Road Network and
Transport System’ that stressed the formation of a Unified Transportation Authority that would oversee the
connections between Delhi, DMA and NCR. Other agencies in the Transport Sector included State
Transport Authority, PWD, MCD, DTC, DDA, NHAI, DMRC and Delhi Integrated Multimodal
Transportation System (DIMMTS), which currently looked at new public transport systems. The plan
called for integration of mass transit including city buses, rail services including suburban rail, ring railway
and metro rail, HCBS, LRT, Monorail and IRBT and these were to be further supported by Intermediate
Public Transport like mini buses, RTV, phat phat sewa, cycle rickshaws, three wheelers and taxis.
The Road Network and Transportation System had the highest budget of Rs 13,487 crores ($ 2764 million)
over five years from 2007 to 2012 and this was four times higher than the next in line sewerage that was
under appraisal by the Sub-Mission Directorate for Urban Infrastructure and Governance. The operations
and maintenance cost over five years for Road Network and Transportation System was Rs 3173.2 crores
($ 650 million), nine times above the next in line Water Supply.
323
Delhi’s Transport Policy included the
same framework however the outlay for Transport Department included in Delhi’s Tenth Five Year Plan

322
Jawaharlal Nehru National Urban Renewal Mission, Ministry of Urban Development, Government of India. Mission
Overview. http://jnnurm.nic.in/nurmudweb/toolkit/Overview.pdf
323
JNNURM City Development Plan, Delhi. Department of Urban Development, Government of Delhi, IL & FS
Ecosmart Limited, New Delhi. October 2006.
255
allocated the maximum amount Rs 144141 lakhs ($ 295 million) to the MRTS with DTC getting Rs
61800 lakhs ($ 127 million), Interstate Bus Terminals Rs 6000 lakhs ($ 12 million) and Other schemes Rs
81950 lakhs ($ 168 million).
324

In the Urban Transport Section of the Ministry of Urban Development, the focus of a National
Urban Transport Policy had shifted to schemes under the JNNURM and other Sustainable Transport
Alternatives.
A national urban transport policy (NUTP) has been approved by the government in April 2006. It,
inter-alia, seeks to promote integrated land use and transport planning in, greater use of public
transport as non-motorized modes of travel, use of cleaner technologies. It offers guidelines for
central financial assistance for investments in public transport, infrastructure for greater use of
non-motorized modes, as well as in the construction of parking facilities, including demonstrative
pilot projects. It encourages capacity building and at institutional and individual level, innovative
financing mechanisms, institutional coordination, association of the private sector and launching
of awareness campaign for public awareness and corporation to adopt green travel habits... and the
ministry has also initiated a proposal for capacity building in sustainable urban transport planning
at national, state and city level as well as institutional levels so that a well coordinated and
integrated transport systems get built-up. The Bus Rapid Transit System (BRTS) is a sustainable,
flexible, quickly implementable and most economic mode of providing mass rapid transit system.
Accordingly, proposals for bus rapid transit system (BRTS) have been approved for Ahmedabad,
Bhopal, Indore, Pune, Vijaywada, Vishakapatnam, Jaipur and Rajkot cities are under the
JNNURM to provide better public transport and ease congestion. Considering the low cost, ease of
implementation, wide area coverage, flexibility, scalability and overall sustainability, a number of
other cities are also coming up with BRTS proposal to be funded under the JNNURM.
325

Other projects were being undertaken under externally aided urban transport projects for example
the UNDP/ global environment facility (GEF) funded project – “cleaner mobility in urban areas” that
would get a grant of US $2,25,000 to help lower emission of greenhouse gases from the transport sector by
facilitating shift of use of personal vehicles to public transport and Non-motorized modes. This project had
been initiated in Ahmedabad, Hyderabad, Pune, Raipur and Thiruvanthapuram and there was a suggestion
by the GEF secretary that the project may be merged with the World Bank/ GEF assisted sustainable urban
development project. The MOUD was seeking assistance from the World Bank for project proposal for
sustainable urban transport programme (SUTP) to support the National urban transport policy (NUTP),
capacity building support and complement activities of the JNNURM.
The objectives of the programme to be implemented in nine cities would be (i) to support capacity
building efforts in India’s urban transport sector to help city planners; state and national level
officials and decision-makers to understand the difference between planning for intracity transport

324
Tackling Urban Transport- Operating Plan for Delhi. http://delhigovt.nic.in/trans-pol.asp
325
Annual report 2007-2008, Ministry of Urban Development, Government of India.
256
and intercity transport. (ii) Provide guidelines for the development of comprehensive plans for
improved and sustainable mobility in Indian cities. (iii) To provide a modern state of the practice
methodology and toolkit to formulate and evaluate particular investment projects. (iv) To provide
guidelines that would help local and state officials to optimally involve the private sector in the
urban transport sector. This effort would be expected to provide guidelines to effectively
implement public-private partnership and a toolkit for assessing the fiscal impact of various
concessions. (v) Develop competence amongst functionaries in the concerned departments and
agencies of the Central and State governments for improved formulation and evaluation of urban
transport plans and projects.
The World Bank, Government of India Urban Transport Planning Professional Services, was
funding this project and the consultant for the contract would be M/s Wilbur Smith Associates, one of the
participants in the HCBS Workshop held in December 2005 in Delhi. There was also going to be assistance
from the Asian Development Bank for developing an urban transport strategy and providing technical
assistance.
326

Discussion
Some of the aspects that were not discussed at all, especially in the critical articles that repeatedly
questioned the subsidies being provided to the project, was how private vehicles were being subsidized by
the government with 2% of private vehicles occupying most of the road space and being the main source of
pollution for the city. The focus of IIT that suggested the HCBS system especially was that huge subsidies
were being given to a project that would serve only a small percentage of the population and a much larger
area could be upgraded to the HCBS at a fraction of the cost. Another reason given was that urban rail
transit systems worked in countries with a much higher per capita income level. In Delhi, a majority of the
people used cycles as they could not even afford to ride buses, therefore, it was imperative to provide a safe
road environment for them; something that could be accomplished with the HCBS. The focus on
sustainable transport also meant that the ultimate aim was to promote public and non-motorized modes of
transportation for all, including people currently using cars. The focus on the MRTS instead of private
transport caused a major rift between the two systems and though the criticism was justified it was always
in opposition the HCBS system. The IIT team rarely mentioned cars that were reaping the benefits of heavy
investments in road infrastructure or two-wheelers that were cited as the highest source of pollution in the

326
MOUD Annual Report 2007-2008

257
city by the Centre of Science and Environment.
327
This was warring between two groups on the same
side of the spectrum and could not initiate a dialogue that would benefit the city’s transportation system
overall.
This oversight of ignoring private vehicle owners or creating a public awareness and relations
programme beforehand to initiate change in public behaviour for owners of private vehicles created a huge
outcry amongst them when the BRTS was opened and space on the road for them became limited. The
media relentlessly criticized the HCBS revealing its own bias and as recently as November 2008, just
before the Delhi government elections, a prominent Hindustan Times columnist Vir Sanghvi declared that
he would not be voting for the congress as his commute by car had become a nightmare because of the
HCBS. There were a few traffic problems that had emerged in the first stretch of the HCBS that they were
being worked out as was the case with the metro rail, when it had been prepared for the power fluctuations
in India. Unlike DMRC’s excellent public relations as well as its chairman, Madan Lal Khurana’s support
that controlled the story, the HCBS system was declared a total failure by a majority of the media. Only a
few stories were from viewpoints of the bus travelers and cyclists for whom the system had made travel
easier and safer.
This local movement was initiated by IIT academics and critics in the media and became part of
Delhi Government’s Urban Transport Policy. The plan was one of the most progressive transport plans at
the local level but it also showed that the budget was heavily skewed towards the transport sector. This was
a city government initiative and was also a contrast to the MRTS, in the kind of project being pursued. The
MRTS megaproject had always been a Central Government and MOUD project while the Delhi
government decided to pursue a project that was part of an alternative movement in transportation in
developing countries. This change also had an effect on the Urban Transport Policy. By the 9
th
and even
more so by the 10
th
Five-Year Plan, the National Urban Transport Policy in the Five Year Plans had shifted
to alternate systems like the HCBS, electric trolleys and traffic management for solving transportation
issues in urban areas. The MRTS was no longer seen as adequate for meeting transport demands and

327
The Leapfrog factor, Clearing the Air in Asian Cities. Center for Science and Environment, Delhi, 2006. Perhaps a
better argument would have been that all people should have to pay their fair share based on the amount of resources
they used and subsidies they were being given- hence subsidies for car manufactures, petrol, pollution, maintenance of
roads etc. would have been revealed.
258
regulatory changes were being seen as necessary for solving the increasing traffic congestion in cities.
With the formation of the JNNURM, funding became available to cities with City Development Plans and
projects that urban local bodies and parastatal agencies had to initiate and prepare and that no longer had to
be dictated by the Central government. This was reflected in the urban transport policy prepared by the
MOUD with the focus shifting to sustainable urban transport strategies not only through the use of systems
like the BRTS but also by focusing on changing traffic behaviour. Unlike the Metro rail this change had
been accomplished in the government within ten years. It was also an example of bottom up transport
policy, a definite change from the previous approach. Another system of public private partnership was also
being encouraged at the local level and a number of International Aid agencies like the World Bank and
Asian Development Bank were funding projects that empowered local governments to pursue sustainable
urban development strategies with a focus on mass transit and non-motorized modes. There was a changing
funding pattern in international funding agencies along with the local government defining the agenda. The
World Bank had as far back as 2001 helped the Delhi government prepare a twenty-year development
perspective that included some of the components of the Delhi’s Urban Transport Policy.
The Delhi government’s focus shifted to the urban transport policy, partly because of the DMRC
and the Metro rail project. The IIT team also used the project as foil to highlight the advantages of the
HCBS system. The idea of an Integrated Metropolitan Authority had been initiated before the passage of
the Metro Bill 2002 and it had in mind the integration of the Metro rail, the regional rail network, bus
transit and other modes of traffic in Delhi. After the Metro Bill was passed and Khurana was made
chairman of the DMRC, Delhi’s transport policy became an even more popular subject for the election
agenda of the Congress and BJP. Though the Congress had already started working on the plan, because of
the Metro Bill 2002, the DMRC remained an outsider. Criticism by the IIT team also alienated the
relationships between the newly formed DIMTS and DMRC and the HCBS and MRTS. The Delhi
government is still pursuing an integrated multimodal transportation policy under the JNNURM City
Development Plan. An Integrated Metropolitan Transport Authority is yet to be formed and it remains to be
seen whether these different modes of public transit and supporting intermediate public modes can be made
to work together to benefit the citizens of Delhi.

259
Chapter 5- Award of Contract for General Consultants, Gauge Conflict and Project Design

Soon after the DMRC appointed the General Consultants (GC) for the project, a part of the loan
conditions, controversy over the appointment of the GC arose when Ram Jethmalani, the Union Minister of
Urban Development brought up a number of questions. Two of these surrounded the general consultancy
contract. Jethmalani questioned the bid process in selection of the GC and its recommendation of standard
gauge for the project. He also questioned the routes that had been decided for the first phase of the project,
saying that they were duplicating existing suburban railway corridors. The first section discusses the
controversy surrounding the general consultancy contract. The second section goes into detail about the
choice of gauge for the project and the third section discusses in detail the issue of the MRTS routes.
The story regarding the MOUD Minister, Ram Jethmalani’s objections to the appointment of the
General Consultants really picked up in end August- early September 1998 when across-the-board almost
all the newspapers in this study were following the events as they unfolded. It ended with the dismissal of
Jethmalani’s claims as well as doubts being raised about his stand on other issues such that his questions
about the contract for the MRTS General Consultants were totally sidelined. It is significant that the articles
selected by the MRTS at this time and related to Ram Jethmalani, not only had to do specifically with the
MRTS but also all controversies surrounding him. Hindi newspapers covered most of the stories
surrounding the change in rules and the appointment of the General Consultants more thoroughly in July
and August. Only in beginning of September did the English newspapers start continuously reporting it.
Even before Ram Jethmalani first gave an update to the press about the MRTS project, he had started
raising questions on the award of the General Consultancy contract in which the MOUD secretary Kiran
Agrawal was also involved. He felt that she had not followed constitutional guidelines in appraising the
consultancy bids. He questioned the entire bidding process for the general consultancy contract and wanted
the process to be done afresh in a transparent manner per the constitution’s Transaction of Business Rules
and Law Ministry overview. Soon after the stories regarding a rebidding process for the General
Consultants of the MRTS started appearing in the media, a ‘major controversy’ surrounding the MOUD
Minister Ram Jethmalani hit the news. He was accused by an opposition party member of illegally allotting
a guesthouse to a private company and for unnecessarily delaying the MRTS project. All the newspapers in
260
the first ten days of September carried over a 100 articles covering the stories of accusations as well as
conflicts between bureaucrats and politicians. The latter directly had to do with Ram Jethmalani reassigning
his Secretary Kiran Agrawal, also on the DMRC board, to other Departments in the Ministry Of Urban
Development, over his disagreement on her decisions on the MRTS General Consultancy contract and the
land allotment case. Most of the newspapers did not portray him in a very good light, calling him
contentious and irreverent towards the Ministry employees, officers from the bureaucracy, the Indian
Administrative Service. There were some newspapers that lauded his candidness and transparency with the
press. Mostly, however, the developments around this time were sensationalized.
After the controversy over the appointment of the general consultants had died down, one major
issue related to it remained in the public eye. The MOUD Minister Ram Jethmalani had pointed out that the
General Consultants had specified using the standard gauge for the metro rail and that this would mean that
India would have to rely on imports from Japan. The second section follows the story about the gauge for
the Metro rail that played out as the conflict between the Railways Ministry and Central government
recommending broad gauge and the DMRC and Delhi government recommending standard gauge. There
was never direct interference from the JBIC but the threat of it withdrawing its loan for the project always
lingered overhead. It was felt in the conflict over the gauge but the outcome of the conflict was a surprise,
with broad gauge being chosen for the project. In the award of contracts, a majority of the foreign consortia
that were awarded construction contracts for the project included a Japanese partner. The rolling stock
contract, which again became an issue of controversy, went to a Japanese-Korean consortium even though
there were some misgivings about the financial health of the Korean company. The conflict between
Railways Ministry and DMRC continued over this issue and the antagonism grew further when a Defense
Ministry public sector undertaking was given the contract for transfer of technology of the rolling stock
over the Indian Railways manufacturing units. The Railways’ safety inspection organisation refused to give
a safety clearance to the Metro rail prior to its inauguration in December but it received clearance from the
Chief Safety Commissioner under the newly passed Metro Bill that brought the project under the purview
of the Ministry of Urban development. The influence of JBIC was revealed constantly in the award of
contacts but the Central Government, its regulatory and institutional structure and philosophy also
influenced the outcome.
261
The third section examines the Metro rail project as it was developed in 1969 up to the time
when the project was being implemented. Academic papers of the Central Road Research Institute and
RITES reveal that the research and suggestions that were being put forth for Delhi’s transport issues in
general and based on the studies initiated by the planning commission. The section focuses on the routes
that were proposed and modified over the years and integration of the project with existing transportation
networks and modes. Initially the project was to be a part of a larger plan combining existing suburban
railway lines, the ring railway in Delhi and a network of feeder buses. RITES had proposed an Integrated
Multi-Modal Rapid Transit System (IMMRTS) that included both rail and high Capacity Bus Systems. Of
these, the first two were never integrated with the Metro rail network. Feeder buses that were to come from
the DTC are still not in place. Instead the DMRC has started its own feeder buses as a separate project. The
chapter also looks at the connection of the project to the national capital region and how it has partially
replaced the integrated rail and bus transit system that was simultaneously being developed by the NCRPB,
the Delhi government and the states of Haryana and Uttar Pradesh.

Beginning of the General Consultancy controversy
On 2 June, 1998, the Times of India announced that the DMRC had hired a consortium led by the
Japanese firm Pacific Consultants International as the GC for the MRTS project. The other companies in
the consortium included United States’ Parson BrinkerHoff, Japanese companies Tonichi and Taica and the
Indian Company RITES. According to the article, sources had said that with the appointment of the
consultants, the DMRC would now be able to ‘tap a soft loan (56% of the total cost) from Japan’s OECF.
In exchange the Japanese company will get an attractive consultancy fee of about 4% of the total cost.’ The
open acknowledgement of the unofficial agreement between the OECF/JBIC and the Union Government
was reported but there was no criticism or opposition to this information.
1

On 12 June 1998, the MOUD Minister, Ram Jethmalani announced in a press release that the
MRTS project was to be completed by 2005, the General Consultants of the project had been selected and

1
Mass transport system for Delhi gets on the rails, Japanese company to act as consultant for the Metro project. Arun
Kumar Das. The Times of India, 2 June, 1998.
262
the Center had released Rs 172.8 crores for the project out of which Rs 50 crores would be used for
land acquisition.
2

On 24
th
June it was reported that in a Meet-the-Press program organized by the Ernakulum Press
Club in Kochi, the DMRC MD, E. Sreedharan, gave details of the MRTS project in Delhi. Though the
newspapers had already covered most of what he said there were six new points. The first was that the MD
talked of the Delhi MRTS as a model for other cities in the country that ‘were suffering from traffic
bottlenecks.’ Secondly, he talked about the vehicular pollution that made Delhi the fourth most polluted
city in the world and the traffic accidents caused by poor road discipline and road and vehicle conditions, as
the basis for the MRTS proposal. Thirdly, the first phase of the project that was to be completed in 10
years, would now be completed in 7 years by 2005.
3
Fourthly, the DMRC had ‘sensing the popular mood of
the residents in the national capital’ decided, on its own, to start construction after the monsoons on the first
eight km stretch of rail from Shahdara to Tis-Hazari that would cost Rs. 400 crores, carry 3.2 lakhs people
daily and be completed in three years in 2002. They had already sent out the invitation of tenders for this
stretch. Fifthly, the OECF had verbally assured the DMRC that its loan would not be affected by the
sanctions after India’s nuclear test. Sixthly, Sreedharan said the fact that the DMRC was not a Public Sector
Undertaking, but a private enterprise gave him the autonomy to select the General Consultants without
interference from the government, as had been the case in the Konkan Railway Corporation. ‘The
DMRC...was a private company which could take decisions and he could award the contract of Rs 208
crores to a private consortium without much hassles, he pointed out.’
4

In July, the Times of India also reported that three tenders for the first stretch of the MRTS would
be finalized soon and the project would have reached ‘an advanced stage.’ The three contracts included a
Rs 40 crores contract for a bridge across the river Yamuna, a Rs 35 crores contract for the elevated section

2
First Phase of MRTS will be ready by 2005. The Times of India, New Delhi, 12 June, 1998. MRTS phase-I
completion by 2005. The Hindu, New Delhi, 12 June, 1998. Delhi News in Parliament, MRTS. The Statesman, New
Delhi, 12 June, 1998.
3
The OECF had agreed to the soft loan for the project on the condition that the project would stick to a schedule of
eight years starting from April 1997 for Phase-I per an article ‘Government may issue notification on land acquisition
for MRTS soon’ in The Times of India, New Delhi, 15 January, 1997. The DMRC would explain the reduction in time
period as a result their efficiency, rather than a loan condition by the JBIC.
4
Delhi Metro project to be over by mid-2005. The Hindu, New Delhi, 24 June, 1998. Work on Delhi Metro Rail to
begin soon. The Statesman, New Delhi, 24 June, 1998.
263
of the tracks from Yamuna to Tis Hazari which employed single pillars and that took up very little
ground space requiring lesser land acquisition and finally a Rs 25 crores contract for filling work of a 40 ha
area at Shastri Park in trans-Yamuna. The actual construction work was to commence in September, earlier
than the anticipated end of the year.
5

After the Letter of Acceptance (LOA)/ Letter of Invitation (LOI) had been given to the General
Consultants and before the final letter of contract was approved in September, the PCI led consortium and
the OECF were expressing their unhappiness at the proposed change in MRTS routes by the Delhi
government, the delay in the finalization of the General Consultants (GC) contract and consequently the
plan to start construction without the GC in place.
It was reported that the Consultants would not be given a formal letter of appointment till the
proposed change of routes was resolved, even though they had been given a Letter of Acceptance earlier in
the year. The OECF expressed its disproval of the developments around route changes. ‘Being the primary
funding agency, the OECF is none too happy about the way things are going at the implementation stage of
the megaproject.’ The matter was to be decided in a meeting of the Empowered Committee headed by the
Urban Development Minister, Ram Jethmalani in the coming days.
6

While the developments around the consultancy contract were taking place, the OECF threatened
to pull out of the project. The controversy was not only over the investigation into the contract, the OECF
was also concerned as mentioned in earlier articles, over the Delhi government’s move for ‘realigning the
routes in popular interest and even changing some to appease religious groups.’ In a meeting including the
MOUD Minister, Ram Jethmalani, Delhi’s Chief Minister, Sahib Singh Verma, DMRC’s MD, E
Sreedharan, Delhi Transport Minister, Rajendra Gupta and Urban Development Secretary, Kiran Aggarwal
the matter of routes was discussed but no resolution was reached. Ram Jethmalani said, “as far as possible
we are trying to avoid a further delay.”
7

5
Work on MRTS project may take off in September, three tenders to be opened next week. Vinay Pandey. The Times
of India, New Delhi, 18 July, 1998.

6
Proposed route change raises hackles of PCI–led consortium; project likely to be delayed, Govt -Pacific Consultants
face off over MRTS imminent. Mukul Chandra Gogoi. The Economic Times, New Delhi, 20 July, 1998.
7
Delhi government’s attitude upsets MRTS financers. The Statesman, New Delhi, 19 August, 1998.
264
The OECF continued to threaten to pull out from the MRTS project because of route changes
that they said would further delay the project, the delay in appointment of General Consultants as well as
plans to start construction on the Tis-Hazari- Shahdara section and Yamuna Bridge without the General
Consultants in place.
8

RITES had prepared the detailed report for the bridge design in this section.
9
This was notable
because it showed that the Indian partner of the PCI led consortium was quite capable of preparing the
necessary specifications for construction of the MRTS. The DMRC also showed confidence in going ahead
with the construction without the General Consultants. The question arises that given this progress were the
General Consultants necessary for the project?
The DMRC went ahead with the first phase of construction that included the line from Shahdara to
Tis-Hazari. At the end of August, the first contract for the MRTS Bridge across River Yamuna was
awarded to an Indian firm, Larsen and Toubro at a cost of Rs 37.6 crores for which work was to be started
after the monsoons. The DMRC was carrying out this work without the General Consultants and had ‘kept
this section outside the scope of general consultants, whose appointment is embroiled in controversy and is
awaiting the approval of an Empowered Committee headed by the Cabinet Secretary.’ The article informed
that the contracting company had ‘given a “unique design” of an incrementally-launched, box-shaped, pre-
stressed concrete girder continuous for a length of 554 m, a technology used for the first time in the
Konkan railway project’, the project that had also been headed by the DMRC MD, E Sreedharan.
10

Ram Jethmalani and the contract of General Consultants
Towards the beginning of August, the story about trouble for the MRTS was breaking out in most
newspapers. The issue was the enquiry by the MOUD Minister, Ram Jethmalani, into the selection of the
General Consultants for the MRTS project. Among the English newspapers, the Pioneer had reported on
the issue of contract to General Consultants in beginning August.

8
OECF threatens to pull-out from MRTS, miffed over delay in GC’s selection. Nazneen Sharif. The Observer, New
Delhi, 1 September, 1998.
9
PCI consortium to the general consultants. The Pioneer, New Delhi, 13 September, 1998.
10
The first contract for MRTS awarded. The Times of India, New Delhi, 29 August, 1998.
265
The MOUD had decided to seek the Law Ministry’s opinion on taking legal action against
senior members of the Delhi Metro Rail Corporation (DMRC) for allegedly violating norms in the
consultancy contract for the rail project. The decision follows a departmental enquiry conducted
by the Urban Affairs Ministry. It is understood that the DMRC’s recommendation envisages
‘gross irregularity’ and a deliberate attempt to award the Rs 200 crore consultancy contract in
favor of a Japanese led consortium.
Ram Jethmalani said, “I consider it my duty to save the government from wasteful expenditure.”
He had stalled the Empowered Committee meeting in early July, which was to finalize the contract for the
General Consultants to the PCI-RITES consortium and had told the Chairman of the Committee, Cabinet
Secretary Prabhat Kumar that there were a lot of irregularities in the commercial and technical bids. The
MOUD had plans to hand over the details of the case to the Central Bureau of Investigation (CBI) for a
‘thorough probe, which may reveal the complicity of certain senior bureaucrats, who are members of the
committee for MRTS.’ Coming under suspicion were the Joint Secretary of the MOUD and chairman of
DMRC- Mr Hemendra Kumar, MD DMRC, E Sreedharan and Secretary of the MOUD and a member of
the DMRC- Kiran Agrawal.
It was revealed that the first phase of Rs 8000 crore was a ‘duplication’ of costs as the required
infrastructure was already existing. This was also endorsed by the Railway Ministry, which was
has agreed to reactivate the ring railway around the capital. In addition to this, the DMRC
recommended the usage of ‘special gauge’ railways tracks for the proposed scheme. The BJP
government pointed out that the change of the tracks would make DMRC dependent on foreign
supplies forever for replacement along with an additional threat of monopolistic pricing.
A number of problems emerged. The first was duplication of existing rail corridors and
infrastructure at a cost of Rs. 8000 crores. This referred to the MRTS routes running parallel to existing
suburban railway lines. The article said that the Railways had agreed to upgrade and reactivate the Ring
Railway system in the capital. Second was the DMRC’s recommendation of using ‘special gauge’ tracks
for the MRTS and the third was that the guidelines for award of the contract violated the Indian
Government’s transaction of business rules, approval by the Empowered Committee as well as guidelines
for the technical and commercial evaluation of tenders that the OECF had laid down.
However findings revealed that there have been major violations in the evaluation of the technical
bid. By keeping the evaluation criterion secret, the department has gone against the accepted
principles of transparency and basic tenets of financial code. Further the LOI (Letter of Invitation)
to bidders were not vetted by the Union Law Ministry, which by itself was a violation of Clause 4
(3) of Transaction of Business Rules, 1961. The LOI stipulates that appointments of consultants
will be done only after it has been approved by the Empowered Committee. But the DMRC has
issued the LOI without the approval of the Empowered Committee. The OECF guideline
incorporates that after evaluation of proposals, the borrowers should invite the highest consultant
to enter into negotiations on the conditions of contract between them, including costs and financial
266
terms. The guidelines also do not forbid the opening of financial bids of the consultants who
are not at all in the first rank. It presumes that all financial bids would be opened and the
negotiations started. There were three parties who quoted for the technical bid. It is learnt that the
bid document was changed after the issue of tender. This was not communicated to other bidders
and only RITES was involved in preparing the tender.
11

In yet another article almost a month later, the same irregularities were pointed out. The Union
Ministry of Urban Development had still not approved the LOA/LOI issued by the DMRC to the General
Consultants almost 2 months ago for the MRTS project. A senior official from the Ministry said that they
were examining the issue and would take a decision only after the MOUD Minister Ram Jethmalani’s
approval. Meanwhile it was reported that the project cost was increasing at the rate of Rs 2 crores a day,
creating the feeling of urgency for moving ahead with the project.
Some of the questions dogging the consultancy contract are: Did DMRC use a ‘secret criterion’
for the selection of consultants? Did the Japanese Pacific consultants International (PCI)–led
consortium, selected for the contract, have access to inside information? And, does the MRTS
experience of consortium leader PCI match with that of other bidders? PCI, incidentally, is the in-
house consultant of the Japanese funding agency, Overseas Economic Cooperation Fund (OECF),
which is providing the Rs 3000 crores soft loan for the project. DMRC officials maintained that
there was no pressure from OECF for awarding the contract to PCI. At the crux of the controversy
is the ‘secret’ evaluation criterion and approved by the DMRC board shortly before the bids were
to be opened.
According to the article, in the technical bids, 50% weightage had to be given to the
qualifications, experience and competence of the experts to be deployed by the consultancy firm’ and this
was to be reduced by half if these experts had not been on the payroll of the firm for more than six months.
RITES, the Indian partner in the PCI- consortium that had also prepared the feasibility studies and Detailed
Project Report for the project may have been aware of this criteria and kept its experts on its payroll
because of the stipulation. The article went on to say that RITES had denied being aware of this and the
DMRC officials, defending this criteria, said that it was necessary for the ‘commitment of the experts to the
consultancy firm. Otherwise there would be no guarantee they would continue with the firm.’ The DMRC
officials cited OECF guidelines to justify retaining ‘RITES as General Consultants because it was involved
with the project since inception.’ The DMRC officials also said that according to OECF guidelines, the
DMRC was only allowed to open the financial bid of the top-ranked technical bidder. The initial bid by the
PCI-consortium had been reduced from Rs 440 crores to Rs 208 crores by reducing the man month

11
Contracts norms for rail project violated, Urban Affairs Ministry to initiate legal action against erring of officials.
Soumya K Ghosh. The Pioneer, New Delhi, 8 August, 1998.
267
requirements from 14,000 to 8000 hours because of ‘a number of “loose areas” in the original
projections as well as the bid.’ After escalation this amount would come to Rs 260-270 crores. There was
no way to compare this with the other financial bids, as they were never opened. The article then went on to
quote expert opinion saying that those in the consultancy business had said that this amount should not
have exceeded Rs 200 crores ‘per the average market rates of $15,000 per month for a foreign expert and
Rs 65,000 per month ($1300 -$1600 @ Rs 50-40 to $1) for an Indian one.’ The DMRC officials justified
the ‘reasonableness’ of the fee by saying that they had compared fees being paid to foreign consultants in
Cairo and Taipei to those proposed by the PCI-consortium and had found them competitive with the
former. They added that Indian experts were ‘only being paid at government salary rates. These figures
were Rs 10.2 crores ($20,000 -$25,000 @ Rs 50-40 to $1) per month for foreign experts and Rs 1.02 lakhs
($2100 -$2500 @ Rs 50-40 to $1) per month for Indian experts.’ They went on to give information about
the MRTS experience of the PCI consortium and said that it had worked on Metro projects in Japan, South
Korea, Thailand, the Philippines and Indonesia. They commended Parsons Brinkerhoff of the US, who was
partner in the consortium, as being ‘the world’s leading firms in the field.’

They said that the DMRC had
carried out detailed negotiations with the PCI-consortium and had issued a Letter of Acceptance (LOA) in
anticipation of an approval of the decision by the Empowerment Committee of the Government of India.
12

Another article reported the DMRC officials’ reply to this information contradicted an earlier
report that the OECF guidelines did not forbid opening financial bids of other consortia.
13

Tenders were evaluated in accordance with terms laid down by the Overseas Economic
Cooperation Fund (OECF) of Japan. According to the terms, technical bids are to be opened first
and the team of specialists qualifies the companies on the basis of their technical capabilities...
While broad Evaluation guidelines are specified in the terms of the contract, the team of specialists
formulates its own formula of evaluation under the broad scheme...The OECF guidelines specify
that financial bids of only the company ranked first should be opened and detailed negotiations be
carried out with the company...The financial bids of the second company can be opened only if
there is no scope for further negotiations. The matter is then forwarded to the OECF, which gives
final approval to the opening of the second financial bid...OECF approval is required at every

12
Consultancy contract dogs Delhi Metro project. Vinay Pandey. Business Times Bureau, the Times of India, 9
August, 1998. DMRC kept to OECF rules in appointing consultants, Delhi Metro Rail Project. The Pioneer, New
Delhi, 13 August, 1998.
13
A booklet called ‘Guidelines for the Employment of Consultants under JBIC ODA Loans’ first published by JBIC in
October 1999 confirmed what the DMRC was saying but this was a year after the issue was brought up. This could
however be because the OECF merged with JEXIM in 1999 to form JBIC. Older publications were not available with
JBIC in 1999, when the above booklet was received from their office.
268
stage of the contracting process, which has to be vetted before by the board of directors on the
DMRC.
14

Initially and towards the end of July, Business Standard articles said that ‘Jethmalani was trying to
judge the MRTS tenders in accordance with the procedure prevalent in the government, but Agrawal was
within her rights to adopt the other procedure as the MRTS body is not strictly a government arm.’
However, the DMRC was answerable to the Ministry of Urban Development and it was a Government of
India and Delhi government joint venture, even though it had a certain amount of autonomy.
15

In a Union Cabinet meeting in mid-August, Ram Jethmalani said that the earlier General
Consultants contract and the Memorandum of Understanding (MoU) had been cancelled due to certain
reasons. It was reported that a Rs 150 crores contract had been given to Japan after international
competitive bidding. However with this new development, a second round of tenders would have to be
generated and as a result there would be further delay in this ten-year old project.
Even though there was major opposition in the Union Cabinet meeting against his stand,
Jethmalani’s rhetorical abilities quieted all of them. A senior Cabinet Minister said that the
Ministry of Urban Development was interfering in a project that was essentially under the
Ministry of Railways. Instead it should facilitate the project by transferring the land needed for the
project to the Railways. However, in the meeting no one had the temerity to stand up in opposition
to Jethmalani.
16

It was reported that Jethmalani had initiated a Central Bureau of Investigation (CBI) enquiry
against the DMRC MD in the matter of awarding of the General Consultants contract. This was a
particularly crucial time for the MRTS, the newspapers reported, as on the one hand the OECF was
threatening to pull out its financial support for the project because of the recent developments of change in
routes and delay in appointment of General Consultants and on the other hand the DMRC managing
director E. Sreedharan was under CBI enquiry for irregularities.
17

An article published at the end of August sourced the confrontation between Jethmalani and his
officials to ‘his rejection of the officials’ stand on the Rs 2000 crores MRTS. He called for fresh bids for

14
DMRC kept to OECF rules in appointing consultants, Delhi Metro Rail Project. The Pioneer, New Delhi, 13

August,
1998.
15
Counter-Allegations go to Prime Minister, Jethmalani clashes with secretary. Bharati Sinha. Business Standard, New
Delhi, 28 July, 1998.
16
Obstacles in Delhi metro rail. Punjab Kesari, New Delhi, 18 August, 1998.
17
CBI enquiry against managing director of Delhi metro rail. Amar Ujjala Karobar, 15 August, 1998.
269
awarding General Consultancy saying that the existing process wasn’t transparent.’
18
Another article
revealed that Jethmalani had asked the DMRC MD E Sreedharan to provide him with all the documents
concerning the bid for the GC. The latter refused to hand over the documents to him on the basis that the
DMRC was an autonomous body and instead gave ‘all the relevant documents pertaining to the General
Consultancy bid to the Empowered Committee of Secretaries headed by Cabinet Secretary, Prabhat
Kumar.’ The MOUD then took the stand that ‘DMRC, though a company floated by the government,
functioned very much under the overall supervision of the Urban Affairs Ministry and as such, it was
obliged to hand over the documents and any other information the Ministry may seek from it.’ Jethmalani
questioned the MD’s motives for not providing the documents and called his behavior ‘gross
insubordination’. Sreedharan threatened to complain to the Cabinet Secretary on Jethmalani’s use of
‘impertinent language.’
19

Clearance of the General Consultancy contract
On 28 August 1998, the Empowered Committee overrode Jethmalani’s concerns and passed the
contract for the General Consultants to the PCI–RITES consortium though this was reported in most
newspapers in September. It was announced that the Empowered Committee consisting of among others,
the Prime Minister, Home Secretary, Finance Secretary, Expenditure Secretary, Railway Board Chairman,
Urban Development Secretary, Surface Transport Secretary and the Chief Secretary of Delhi had cleared
the General Consultancy Contract for the PCI led consortium and it had been forwarded to the Overseas
Economic Cooperation Fund for final approval. It is important to note that the project was cleared by the
bureaucracy, the secretaries of the different Ministries. The Empowered Committee ‘found that the
procedure followed was proper, transparent and equitable.’ The DMRC had also stood by their stand that
no secret criteria and had been followed in selecting the bid and that it was only a ‘detailed methodology...
to ensure the commitment of the experts to the consultancy firm.’
20

18
Jethmalani earns his officers wrath, Staff present ministers stand that MRTS needs fresh bids, HUDCO breached
contract. Sanjiv Sinha. The Indian Express, New Delhi, 29August, 1998.
19
Ram now takes on Delhi Metro chief. Sanjiv Sinha. The Indian Express, 5 September, 1998.
20
Japanese cartel cleared for Delhi MRTS project. Vinay Pandey. Business Times Bureau, The Times of India, New
Delhi, 9 September, 1998.
270
The OECF cleared the General Consultancy contract on September 12. In another article on
September 14, Ram Jethmalani when asked about the government’s clearance of the ‘controversial’
General Consultancy contract for the MRTS in a press interview, said that he ‘felt that since the
Empowered Committee of Secretaries had been given the responsibility of scrutinizing the award, the
controversy should now be treated as closed.’
My job as the head of the Ministry was to bring to the government’s notice, what I felt were
certain irregularities from the legal point of view but, of course, at times the considerations
outweigh these... the important point is that the MRTS will now finally get underway and this is
no less an achievement.
21

In an article in the Hindi newspaper, Jethmalani answered a question regarding the General
Consultancy contract of the MRTS. He said that even though there had been impropriety in awarding the
contract, there had already been a massive delay in the implementation of the project therefore the
government was in favor of continuing the project even if it had to undertake a loss of a few crore rupees.
22

His opinion on this matter was repeated in another article even after the General Consultancy contract had
been cleared by the Empowered Committee.
23
Kiran Aggarwal was transferred to a different Ministry and
Ram Jethmalani appointed a new secretary. The newspaper coverage of fights between political parties,
politicians and bureaucrats overshadowed the issues of lack of accountability and lack of transparency that
Ram Jethmalani had raised over the project and the General Consultancy contract.
24
With respect to the
MRTS project only a few articles from all this coverage hinted at what had happened.

21
Staff have disappointed me: Ram. Sanjiv Sinha. The Indian Express, New Delhi, 14 September, 1998.
22
State Urban Affairs Development Minister Ram Jethmalani’s allegation, Law Ministry’s Recommendation in CVC
Affair was Suppressed. Dainik Jagaran, New Delhi, 7 September, 1998. Japanese cartel cleared for Delhi MRTS
project. Vinay Pandey. Business Times Bureau, The Times of India, New Delhi, nine September, 1998.
23
The dispute over appointment of consultants for MRTS is over. Dainik Jagaran, New Delhi, 13 September, 1998.
24
The first controversy was Ram Jethmalani’s stand on the secretive and irregular awarding of the MRTS general
consultancy contract to the PCI consortium by the DMRC. The second controversy was his reallocating a HUDCO
guesthouse to M.S. shoes that had paid HUDCO Rs. 40 crores as first installment and consequently had refused to pay
the second installment when HUDCO was not able to get clearances for the guesthouse from the DUAC and other
government bodies for completion of the project. HUDCO instead of getting the clearances cancelled M.S.Shoes’
contract and kept the Rs. 40 crores. Ram Jethmalani reinstated this contract saying that HUDCO had crossed legal
boundaries. The opposition though spun it as Jethmalani’s favor to a private party. The third controversy surrounded
the ordinance passed by Jethmalani and a committee of ministers for the selection of the Central Vigilance
Commissioner. The Law commission had drafted the bill to read ‘the choice of Chief Vigilance Commissioner shall be
wide, from among senior civil servants past and present of high integrity and others.’ However when senior bureaucrats
presented this draft to the committee of ministers, the words ‘and others’ had been removed from it. This was done to
ensure that only people from, bureaucrats i.e. civil servants could be appointed to the post of Chief Vigilance
Commissioner whose duty was to be vigilant about civil servants. The fourth controversy was about clearance for
development of 325 bighas of land by a private trust, Sitaram Bhandara Trust, that had owned the land in the first place,
271
Media report on circumstances surrounding the award of GC contract after it was cleared
After, the GC contract had been cleared, the media persisted on the story and Jethmalani spoke
more openly to the press in a number of articles on the matter. Jethmalani’s concerns regarding the General
Consultancy contract with the MRTS were not only the lack of transparency but also the reasons for award
of the contract to the PCI led consortium. He said, “...in the MRTS project I had questioned the motive
behind the awarding the general consultancy to the Pacific consultants International (PCI)- led consortium,
in which three of the five companies were Japanese.”
In an interview, which appeared in ‘The Week, Kottayam’, a magazine not based in Delhi, the Rs
23,000 crore MRTS was called the real basis of the conflict between Jethmalani and the MOUD officials.
The magazine reported that Kiran Agrawal, a member of the DMRC board, ‘had finalized a tender for a
global advisor at a consultancy fee of Rs 440 crores.’ Jethmalani had the following to say:
I smelt a rat in the whole tender process, because out of four tenders received, she opened only one
and approved it... the other three tenders were not considered. I thought this would open us to
litigation and directed that the whole matter be examined. This was not liked by anyone in the
government. I warned her that she had not gone on the right track, especially as the consultant was
going to ask us to go for a special track, which meant we forever had to depend on one Japanese
source for supply of rolling stock.
On being asked about other bureaucrats support for Agrawal as an upright officer and their
statement that the tendering process was done with the confidence of the bidders as well as the Law and
Finance ministries, Jethmalani said that it was only after he had raised objections that the Japanese led
consortium brought down the consultancy fee from Rs. 440 crores to Rs. 208 crores.
The explanation they gave me was that there would be fewer man hours... then my question was
whether they had conveyed this vital change in the project profile to the other bidders. Nobody
would answer me.
25

There was a question mark on the entire offer as the PCI subsequently brought down their
consultancy fee to Rs 208 crores from Rs 440 crores...It is surprising that such a climb down is
possible by any party if proper norms were followed in the first place.
26

had had it acquired by the government under the land acquisition act in 1959, with a second notification in1968. The
Supreme Court overruled this stand in1986 and asked a land acquisition collector to make a decision and who
recommended that the land be given back to the trust and opened up for development. Sitaram Bhandara Trust had and
received it back, and wanted to develop it but was not getting clearance by the respective authorities.
25
No, Minister! The Week, Kottayam, 27 September, 1998. Government snubs Ram, says nothing is irregular about
MRTS tender. Sanjiv Sinha. The Indian Express, New Delhi, 13 September, 1998.
26
Delhi MRTS: ministerial panel to decide on issuing letter to PCI. The Economic Times, New Delhi, 7 September,
1998.
272
Directly connecting him to the reduction in the bid from Rs 440 crores to Rs 208 crores was
an article that said that Jethmalani had decided to review the tenders for the appointment of the General
Consultants because he felt the chosen bid at Rs 345 crores was high. In the first week of September, the
article reported, this bid was brought down to Rs 208 crores.
27

The CPRO, DMRC Anuj Dayal wrote to the editor of ‘The Week’ saying that some of the facts in
the article were incorrect. He pointed out that the cost of the project given in the article was Rs 23,000
crores when in fact it was only Rs. 4,680 crores. He also pointed out that the fee for the PCI-led consortium
was brought down from Rs 345 crores to Rs 208 crores and not from Rs 440 crores as written in the article.
He again described the method of the bid selection process where the technical bids were opened first
followed by the financial bid of only the selected consultants.
The correspondent, who had written the article, replied that he did not agree with the DMRC and
that all the facts had come from the MOUD Minister Ram Jethmalani. The amount of Rs 23,000 crores was
for the entire project and not for the first phase as the DMRC was claiming. He also said that the Minister
had said that ‘the Consultants had originally proposed an exclusive rail track system so that the project
would be at the mercy of the supplier’ and that ‘the DMRC’s reply is silent on this inference of the
Minister.’ Similarly the correspondent said that the Minister had not found the tender process transparent
and he had said that the price was brought down from Rs 440 crores. Describing this issue as the basis of
the current dispute, he went on to question the fact that if indeed the process had been transparent, why had
the DMRC been unable to convince the Minister of the same. On the fact that the DMRC kept reiterating
that all the bidders had known about the bidding process he said,
The Week quotes officials close to urban affairs secretary Kiran Agrawal pointing out that all the
bidders had known about the procedure in advance. The same point is made by the DMRC in its
letter. However, the DMRC is silent about the Minister’s observation that the first bid agreed to
reduce man-hours during negotiations and thereby brought down the consultancy fee to Rs. 208
crores and whether this change was communicated to the other bidders.
In another article in the magazine ‘India Today’ with the heading ‘Battering Ram’, the entire issue
about selection of the GC was again discussed. The same facts as in ‘The Week’ were listed with the cost
of the project given at Rs 23,000 crores. Based on the cost it was called ‘the single largest project in Indian

27
Consortium of MRTS project cleared. Mid-Day, New Delhi, 12 September, 1998.
273
history. Naturally, it has the word “lucrative” written all over it.’ The article said that the GC’s role in
the project was crucial, as it would ‘choose the firm that will finally execute the project.’ This article most
directly linked the reduction in the General Consultancy fees to questions raised by Jethmalani about the
bidding process.
In August, Jethmalani studied the relevant papers and decided PCI’s selection hasn’t been
transparent enough. He blamed Kiran Aggrawal and E Sreedharan, managing director, DMRC, for
bypassing a concerned committee by the Cabinet Secretary and hastily issuing PCI an appointment
letter. He also accused them of keeping from him important DMRC documents of accepting
without a murmur PCI’s demand of Rs 440 crores fee. Jethmalani wrote to the Prime Minister
recommending the CBI look into the matter. Simultaneously, he ordered the process of finding the
general consultant, be gone through afresh. Meanwhile, PCI sent word to the Ministry slashing its
fee to Rs 208 crores.
28

In response to this article, the CPRO Anuj Dayal wrote to India Today contesting their claims.
Three letters to the editor tell a story of what was going on.
For a high-tech project like Metro construction, assistance of Consultants is necessary. DMRC
shortlisted five international consultants for this purpose and invited bids from them. Only three
bids were received and they were technically graded first as per the international practice
prevailing for selection of consultants. The financial bid of the highest technically graded
consultant, namely, a consortium of which PCI is the lead partner was opened. After protracted
negotiations with them, their bid was reduced from Rs 440 crores to Rs 208 crores. A provisional
letter of acceptance of their bid was issued, subject to the approval of the empowered committee
under the Cabinet Secretary, to enable them to start mobilising. The empowered committee has
also approved the DMRC’s action in this regard. Therefore, there was no question of bypassing
the empowered committee.
29

In the next draft the following paragraph was added.
the Hon’ble Minister had not at any stage blamed either Mrs Agrawal or Mr. Sreedharan,
managing director for bypassing the empowered committee or for keeping any important
documents from him since he had full access to whatever documents he wanted.
30

In the third letter, the overall structure had been changed with a list of six points. It was also
notable that the chronological sequence of events had been changed with the step of bringing down the
consultancy fee now placed after the issuance of the provisional letter of acceptance. The DMRC also
claimed that ‘Negotiations are part of the procedure which was followed and which has resulted in bringing
down the cost from Rs 440 crores to Rs 208 crores. The fee was reduced with the efforts of DMRC as per

28
The Nation, Urban Affairs Ministry. Battering Ram, Jethmalani strips secretary Aggarwal of authority in an attempt
to defang the adversarial IAS lobby. India today, New Delhi, 14 September, 1998.
29
Letter to the editor, India today, No. 98/DMRC/PR/16/1. 8 September, 1998.
30
Letter to the editor, India today, No. 98/DMRC/PR/16/1. 8 September, 1998, Second letter or second draft.
274
the tender procedure.’ The letter contested the magazine’s claim that the General Consultants would be
choosing the firm that would execute the project.
With regard to the General Consultants it may be clarified that the consultants will be providing
know-how on the latest technology to be used, methodology of construction and will be imparting
training to personnel so that such projects can be undertaken on our own in future. The general
consultants would not choose the firm/contract who will execute the project, as many different
contracts would be awarded depending upon the nature of construction. The contracts will be
awarded by the DMRC.
31

Other articles had attributed the role of the general consultants as providing design and technical
specifications for the project. However this role itself would be crucial as the consultants’ specifications
would determine what kind of firms would be able to bid for the project.
In yet another interview with the Indian Express on 16 September, the following was Ram
Jethmalani’s response to a question on his decision to stall the clearance for Delhi’s Metro project.
During the very first meeting held on the MRTS, it was not me but others who raised strong
objections, mainly on how and why the Metro had not been integrated with the existing ring
railway. When I questioned my bureaucrats, the only answer I got was that all this has been
considered before. I told them that this does not satisfy me since the project was for Rs 30,000
crores and that, as a lawyer, the manner in which the general consultants were selected disturbs
me. Ultimately everyone, the Railway Minister and the Chief Minister agreed to the changes but
the bureaucrats kept lobbying against it. Even the Japanese ambassador saw me. I made it very
clear to him that you’re not giving me a grant, you’re giving me a loan and that I’m getting money
cheaper elsewhere. Tell me, why is the Japanese ambassador so anxious? It is these people who
have instigated him. It’s almost anti-national.
32

DMRC MD, E Sreedharan’s views after approval of GC
The DMRC after receiving clearance for the General Consultancy contract from the Empowered
Committee pointed out that the three-month delay caused by the controversy over the General Consultants
had come at a cost of Rs 180 crores since, as repeated in almost all articles on the subject, the cost of the
project was increasing at a rate of Rs. 2 crores a day. In an interview in the Business Standard, E
Sreedharan said that funding for the project was now in place and the exchange and interest rates would not
materially affect the project cost. He said, at the time, broad gauge had been chosen for the tracks while
standard gauge used in ‘several international systems’ was being examined. The fare was to be Rs 5,

31
Letter to the editor, India today. 14 September, 1998.
32
Interview of the week, Ram Jethmalani: ‘I have complete evidence of the conspiracy a I have complete evidence of
the conspiracy against me’. Ritu Sarin. The Indian Express, 16 September, 1998.
275
yielding the maximum IRR of 2.8% and would result in 75% of the public transport trips being carried
by the MRTS.
33

In the three months that the project was delayed, the PCI led consortium was to have reviewed the
detailed project and other technical aspects of the MRTS. Contrary to what some newspapers were saying,
in this article, the managing director E Sreedharan said, “what we had done (awarding the tender to the PCI
Consortium) was correct and we stand fully vindicated.”
He further pointed out that the consultancy would amount to nearly 3% of the project cost. The
initial price quoted was Rs 440 crore, which included the cost escalation for the next eight
years...Then it was scaled down to Rs 335 crores, which, after hard bargaining and protracted
negotiations, came down to Rs 208 crore.
34

In another interview, E Sreedharan commenting on private investment in public projects or
public-private partnerships, said that private companies would only undertake a project if there was a profit
and if there was a consistent and stable regulatory and policy structure in place. He said in most projects of
this nature the ideal system for implementation would be Built-Operate-Transfer (BOT) instead of Build-
Operate-Own (BOO) because by their very nature of being too huge for a single private entity, there would
have to be government investment and participation. He said private partners could be encouraged to be
involved in such projects by offering suitable incentives. In a discussion about his experience in the
Konkan project he said
The project was unique in as much as only private funding was resorted to and not private sector
participation. Part of the cost was borne by the government as equity and the rest was raised from
the market. Besides, the execution of the project was also handled in a professional manner. The
implementing agency was given complete operational freedom and there was no backseat driving
by the government. There was no interference from any quarter and the management culture was
very professional. This was the first project with such complexities, which was completed in just
seven years. The period also included planning of the project to its implementation. The execution
was compatible to projects taken up in any developed country and it showed that even a
government organization could do such a mammoth task if given the right environment.
On being asked why the Konkan railway project was running at a loss, he blamed the losses on
inconsistency of government policies. Initially the railways had agreed to divert their trains along the new
line but after the project was completed it did not stick to its commitment.

33
Q & A: ‘Delhi MRTS has achieved financial closure.’ Business Standard, New Delhi, 15 September, 1998.
34
Review proves costly for MRTS project. The States man, New Delhi, 13 September, 1998.
276
Even now, if the railways come out of this mindset and divert trains as was agreed upon, this
route would become viable again. The experiment would have been a resounding operational
success if only the government had been consistent in its policies there is no doubt about that.
Surprisingly, in his opinion, it was not necessary to look for capital from international agencies for
funding infrastructure projects.
As far as capital requirements for infrastructure projects is concerned, we do not really have to
look towards overseas capital alone. Besides, foreign capital turns out to be very expensive
compared to domestic capital. I firmly believe that there is enough domestic capital lying idle to
be tapped for these projects. To instill confidence in domestic investors, the government will have
to ensure or give guarantee that there would be adequate returns from these projects. When the
government has gone ahead to provide guarantees to foreign investors, why not the domestic
ones? More incentives are required to attract the hidden domestic money.
He also said that government spending on such infrastructure projects would have to be increased
because many of them, for example urban transport projects like the Mass Rapid Transit System, were not
viable in and off themselves and would require government subsidies. To involve the private sector certain
incentives would have to be given to them to make the project attractive. He pointed out that it was only the
Hong Kong MRT system, in the entire world, that was profitable and this was also because of property
development. However, the government had also invested heavily in the project. Similarly, he pointed to
the Bangkok MRTS, which was subsidized by its government. When asked by the reporter if MRTS
systems were suitable for urban environments given the case of Calcutta, he replied that for megacities
‘yes, definitely, MRTS is the only option’. He stressed the importance of available capital to avoid delays
in such projects.
35

These views were contradicted by the CPRO DMRC, Anuj Dayal, in response to an article
published earlier in the Economic Times with the heading ‘Stop the Gravy Train.’ Saying that the Delhi
MRTS was being delayed because of ‘route changes, a problem of consultancy charges... the usual hassles,’
it said that it was ‘time for the nation to unitedly say: enough of political decision-making on this vital
score.’ It called for introducing the private sector for urban transport projects, saying that there were many
private companies that were eager to try their hand at urban transport projects. Delhi, already overrun by
Japanese cars, did not need any further involvement of concessional Japanese aid to finance the Metro.
Instead, the project should be done on a Build-Operate-Own (BOO) basis and no tax revenues should be

35
Tuesday interview E Sreedharan, ‘policy consistency is essential for success’. Mukul Chandra Gogoi. The Economic
Times, New Delhi, 8 September, 1998.
277
invested in it. The private sector would decide what routes it wanted to build, with the state only
involved in regulating affairs and making land transactions easier by computerizing land records. The
article called for Delhi to be an example and a precedent for 400 urban centres in the country that needed
public transportation. The article gave precedence to market forces versus state sponsored development.
36

The DMRC Chief Public Relations Officer, Anuj Dayal’s reply to this article is as follows.
Nowhere in the world Metro system has been constructed under the build-operate-transfer (BOT)
or build-operate-own (BOO) concept for the simple reason, Metro projects are highly capital
intensive and the fare box collections alone cannot make them viable. Massive subsidies from the
government or local bodies are needed to prop up any such System. The only Metro in the world,
which makes a profit, is the one in Hong Kong. This is possible because of the high ridership and
sizeable indirect subsidies through property development. With low bus fares and suburban
railway fares prevailing in this country, every metro system will have to depend on governmental
funding to cover part of the cost. The Calcutta Metro, which has been fully funded by the
government, is facing a cash loss of Rs 55 to Rs 60 crores every year and if the national funding
costs and depreciation is also taken into account, the system is incurring a loss of about Rs 400-
450 crores every year. In the case of Delhi MRTS, the two governments together are covering
38% of the cost through equity contributions and with an interest free subordinate loan. About
56% of the cost is getting covered through soft Japanese loan. Even with such concessions, the
IRR of the project is only 2.8%. It will, therefore, not be desirable to throw away the loan basket
offered by the Japanese.

Discussion
Two opposing views emerged from the newspaper reportage of the controversy over the selection
of the General Consultants. The first was that all the processes for the award of contracts were transparent
and the consultancy fee was reduced through negotiations after the technical bid was selected per JBIC
guidelines. The DMRC is a joint venture by the Government of India and National Capital Territory of
Delhi and is an autonomous body holding major powers and accountable to the Ministry of Urban
Development, GOI only on certain issues. In an article in June it had been reported that the DMRC MD, E
Sreedharan had announced the award of the consultancy contract with fees of Rs 208 crores to a private
consortium and had said that the DMRC was not a Public Sector Undertaking, but a private enterprise,
which gave him the autonomy to select the General Consultants without interference from the government,
as had been the case in the Konkan Railway Corporation. Though the DMRC is not a private enterprise as
was reported, its status as an autonomous body, gives it the power to make decisions about the project. In

36
Stop the gravy train. The Economic Times, New Delhi, 28 July, 1998.
278
so far as this is the case, the DMRC was totally justified in selecting the GC, negotiating per JBIC
guidelines and moving ahead with the implementation of the project.
After the Empowered Committee had cleared the contract, E Sreedharan had expressed his views
about the need for the implementing agency to have complete operational freedom, no backseat driving by
the government and no interference from any quarter. An article in September 2000 gave the history of his
appointment as MD of DMRC. He was invited by the Chief Secretary of Delhi P V Jayakrishnan to
consider the post but agreed to ‘accept only if he was given full freedom and powers to choose his people.
When Tejender Khanna, former Commerce Secretary and Lt Governor of Delhi at the time, agreed to give
him a “blank cheque”, he accepted. The government, he said, has kept its side of the bargain.’
37
E
Sreedharan’s competence and devotion in implementing the project cannot be questioned as he has
managed to implement the project within the stipulated time and cost. He believes in a professional
management culture and the DMRC is held up as an example of efficiency in government organizations.
The second view is that the whole exercise of inviting bids for the contract of General Consultants
for the project was opaque and dishonest. Firstly, if RITES had been seen as a necessary and indispensable
consultant for the project, keeping in mind the fact that it was the main body that prepared the feasibility
studies, technical studies, Environmental Impact Report, Detailed Project Report and the necessary
documents to obtain the loan from the OECF, then a different process could have been used to retain it as
the in-house consultant. For example, the selected consultants could have been contractually obliged to
work with RITES if selected. This would have been a fair process rather than RITES teaming up with PCI
consultants, and giving them not only an edge over the other bidders, but important insider information.
Because of RITES involvement with the contract, if the project was realized and RITES was
guaranteed a lucrative contract, it would be prone to bias the feasibility report in favor of realization of the
project.
Thirdly, as revealed in one of the articles and admitted by DMRC, the PCI consultants were the in-
house consultants for OECF. This was yet another glaring conflict of interest. Perhaps a more transparent
process would have been to tie the PCI consultants to the project as part of the loan agreement or stating up

37
Bhaji off the beaten track. Delhi Metro’s managing director takes time out to share a frugal meal with Kanika Datta.
Metro Business Standard, , 12 July, 2000
279
front that its loan to India for this technical project was on harder terms than the soft 2.3% interest rate.
Though this may have worked out, it had the possibility of raising too many uncomfortable questions for
the government and the lending agency, with the Indian democracy questioning the terms of the loan that
ensured that the OECF would get twice its money back. Firstly by providing a loan to the Government of
India to hire and pay its in-house consultants and secondly by getting all this money back with interest on
loan repayment. In fact this may have been one of the main reasons for the soft terms of the loan as the
OECF was getting immediate high returns by creating employment for its own industries by simply
channeling its own money through another government. To be recalled here is the update in the MOUD’s
Annual Report 1998-99 that listed that the first installment of Rs 408 crores ($ 84 million) by the JBIC
would be utilized for construction of the metro corridor, general consultancy services, interest during
construction and contingencies only and that the consultancy contract had been awarded at Rs 208 crores ($
43 million) and the GC had started work on the project.
Fourthly, according to the JBIC terms of the loan, it was untied and that essentially meant that the
borrower had full autonomy on the implementation of the project but the JBIC had very specific guidelines
on selection of the General Consultants. The DMRC officials used the JBIC guidelines to award the GC
contract to the PCI consortium. The guidelines specified that the financial bids of other bidders only be
opened if negotiations with the top bidder failed and even then the JBIC had to first give its approval for
the DMRC to be able to do so. This essentially meant that the lending agency was also formulating terms
according to which the tender documents were to be evaluated and it had some amount of oversight to
ensure that its in-house consultants were getting the GC contract for the MRTS project. In what seemed
like an eyewash, the explanation for the above was that the OECF followed this process for all its projects
and it would ensure the selection of the best consultant. If in case it did do so then it exposed the bias
towards the lending agency in the GC selection process for all projects.
Also, the consultancy fee was reduced by over 50% of the original estimate and the explanation
given was that the number of hours had been reduced from 12,000 to 8000. What criterion had required
12,000 hours since this was the amount that was initially estimated to be spent for consultancy work and
would then the reduced 8000 hours of consultancy do the project justice or would it compromise the
technical bids that formed the basis of the selection. This concern had been raised by Jethmalani and argued
280
in ‘The Week’, that the PCI-led consortium’s decision to cut down the number of consultancy hours
was never conveyed to the other bidders.
The whole point of comparing and contrasting bids is to negotiate with various firms on both
technical and financial aspects. In contradiction to this best practice, the DMRC officials cited the major
international lending agencies such as the Asian Development Bank, German Bank KFW as following this
process and the World Bank as following this process when quality of the job was important. This
statement itself revealed an absurd presupposition that there were jobs funded by the World Bank where
quality was not important. The quote given by officials was “these agencies insist on having the best
professionals to handle consultancy assignments as quality is the biggest factor for them.” A question of
propriety was turned into a question of quality.
The DMRC had said that it had on its own negotiated to bring down the consultant fee to Rs 208
crores. If this was not the case then the publicity of this issue helped in bringing down the contract fee by
over 50% even though it also cut down on the number of hours that the consultants would be giving to the
project by approximately 40%. After the 28
th
August clearance for the MRTS General Consultants contract,
it was sent to the OECF for final clearance and this came through on 13
th
September. The financial bid had
been reduced from RS. 440 crores to Rs 208 crores and ‘according to ministry officials...the intervention of
the Minister has led to the PCI consortium reducing the price for consultancy services.’
38
If indeed the
reduction in the amount of the contract was brought about by intervention of Ram Jethmalani and the
widespread media coverage, which brought this issue to the people then to an extent, the democratic
process had effectively bargained to bring down the cost of the consultancy to more reasonable amount.
JBIC’s margin of profit for the loan was reduced.
From the articles it seemed, that despite discrepancies in the appointment of the General
Consultant, the media was willing to accept the government’s position that the project was well worth the
financial loss. The letter by the DMRC CPRO in response to an article showed that the government was
well aware that this project would have to be subsidized by taxes and that it would be difficult to attract
private investment because of low FRR. With this scenario and with the Indian government actively

38
MRTS contract cleared. The Statesman, New Delhi, 10 September, 1998.
281
pursuing the project, it was willing to agree to the OECF’s terms while actively concealing them from
the public. When they came to light, in this case by chance because Ram Jethmalani, a man known for his
integrity, was the MOUD minister, the matter was lost in the cacophony of political controversies reported
in newspapers and he too had to bow under the pressure. He himself admitted that continuing the conflict
over the consultancy contract might not be worth delaying the much-awaited project.
If one were to combine the two issues, then DMRC followed the correct procedures, as a quasi-
government body without a regulatory framework, in the award of the contract, per JBIC guidelines.
However, all the other issues such as the JBIC dictating the GC selection process while the GOI and
GNCTD that were funding not just the 30% of project cost but also providing subsidies, land, relocation,
loan guarantee, exchange rate risk and possibly tax rupees that raised its stake in the project above JBIC,
remaining wholly outside the process; the lack of regulatory framework holding DMRC, an autonomous
public body acting like a private firm, accountable; RITES, the longstanding MRTS consultants, being part
of the consortium; Pacific Consultants International, JBIC’s in-house consultants, being part of the
consortium etc., were never discussed in public forums or investigated in detail by the media.
The DMRC MD’s views ran contrary to the way the metro rail was being funded. He spoke of the
preference of domestic capital over foreign capital for financing urban transport projects, saying that the
Government could provide similar guarantees to domestic private capital as it was providing to foreign
investors. In fact this stand explained the award of the GC contract to Japanese consultants where even if
not enunciated, the understanding was that the JBIC had to be adequately compensated for the soft loan. In
the end, the justification would be that Japanese technology and know-how in Railways was ranked right at
the top and the DMRC would benefit from this.
Another outcome of this publicity was that the recommendation by the General Consultants for a
‘special track’ that would require India to be dependent on Japan was brought into focus and is discussed in
the next section.

282
Gauge Conflict and Award of contracts- the arguments begin
On 13
th
February 1999, the first inkling of a possible conflict between the railways ministry and
the DMRC over the gauge of the Metro rail was reported. The railways wanted to opt for a broad gauge
based on the broad gauge Unigauge system that had been adopted for the country under the leadership of
C.K.Jaffer Shareif, the Union Railway Minister in 1995. The DMRC on the other hand favored the standard
gauge because they said it was the most commonly used gauge in rail urban transit systems in the world. It
had also been recommended by the GC. The standard gauge could handle tighter turns and could support
lightweight coaches. Though the railways ministry was thinking of long-term integration between the
MRTS and other railway lines, the DMRC did not see the possibility of that happening in the future as
there was a difference in the frequency of service and ticketing system. The railways ministry pointed out
that using the broad gauge would mean using indigenous technology. The DMRC pointed out that there
would be a saving of Rs 35 crores from the initial cost and Rs 12 crores yearly with the standard gauge.
The Ministry of Urban Development also said that technology transfer was inevitable since the same
standard gauge recommendations had been made for the proposed light rail transit systems in Bangalore
and Hyderabad. The article ended with ‘though there are apprehensions about the Japanese reaction, the
DMRC says the “final decision has to be taken by the Railway Ministry.”
39

An article in Rashtriya Sahara mentioned that the lender for the project, Japan, had specified that
the MRTS should be run on standard gauge whereas the Indian government wanted to run it on broad
gauge. After describing the project and its fund structure, the article went on to say that
Once the MRTS construction had started, Japan added the condition that it should run on standard
gauge since within Japan and in other rich countries, this was the gauge being used for MRTS’.
Japan has a large number of industries that manufacture engines, coaches and other parts for
standard gauge and so it is Japan’s avarice that India buys all the above from it to keep its
industries profitable. The Indian government, however, wants broad gauge because it is being
standardized and promoted in the country with existing meter gauge lines being converted to broad
gauge. There are also 6 manufacturing plants for broad gauge engines, coaches as well as other
parts in the country and if the MRTS runs on broad gauge, everything can be manufactured
indigenously. The DMRC had chosen a consortium including an Indian firm RITES and two
Japanese firms, JARTS and TONICHI as consultants for the project and it would receive Rs 208
crores in return for its advice. Rattled by Japan’s stubborn behavior, the Ministries of Urban
Development and Railways are worried. This project is to be administered by the Ministry of
Urban Development whereas its technical clearance is under the Ministry of Railways. Today, a
meeting was held between the MOUD secretary H.S.Pahwa, President of Railway Board,

39
MRTS project likely to hang fire, row over track width. Deepika Ghosh. The Statesman, 13 February,1999.
283
B.K.Aggrawal and Managing Director, DMRC, E Sreedharan, to discuss Japan’s attitude, cost
and maintenance of standard gauge but no solution was reached as now it has become a high level
the matter.
40

On 19
th
March the Minister of State for Railways, Ram Naik announced that technical clearance
had been given to the MRTS ‘for gauge, loading standards and broad gauge schedule of dimensions as per
the sanctioned detailed project report’.
41
The disagreement over gauge between the DMRC and Railways
Ministry continued through September.
42

On 7
th
September 1999, the Railway Board Chairman, V.K. Aggarwal announced that the
Railways Ministry would not allow the use of standard gauge in the MRTS.
As the technical advisor, it is our duty to tender correct advise. We are not going to allow standard
gauge in Delhi metro rail services. The Cabinet approval for the project had been obtained on the
basis of a proposal that specified broad-gauge and they cannot change it now...If Delhi Metro goes
for standard gauge it will perpetually be dependent on imports of coaches. Also, broad-gauge
carries 15 percent more passenger load than standard-gauge.
The DMRC on the other hand said it wanted standard gauge so it could get high-tech coaches and
because these were also easily available in the international market. The Railways pointed out that it had
managed to get General Electric to modify its coaches to suit standard gauge and it would be able to do the
same for the Delhi MRTS with an initial small assignment of coaches and transfer of technology stipulation
so that ultimately these could be manufactured in the country. The importance of establishing interlinkages
between the Delhi Metro and Indian Railways was stressed. Another reason the Railways Minister pointed
out that the standard gauge would be better was due to the transportation expense since standard gauge
coaches unable to run on broad gauge would have to be transported to Delhi in a ‘completely knocked
down position.’
43

In an article on 15
th
September 1999, more pros of using standard gauge were given. Firstly, it was
pointed out that standard gauge stand-alone systems were present all over the world as ‘the need to connect
the two systems does not arise.’ Secondly, technology would have to be imported in both the case of

40
Clouds of problems over Delhi Metro Rail project, Japan keeps a requirement of 'standard gauge' for making rail
route, India wants broad gauge. Roshan. Rashtriya Sahara, 13 February, 1999.
41
Technical go ahead for metro. The Asian Age, 19 March, 1999. The Hindu, Business Standard, Dainik Jagaran,
Navbharat Times
42
Has MRTS run into wrong track? The Hindustan Times, 5 April, 1999. Conflict over technique for metro rail project.
Navbharat Times, 20 May, 1999. Metro mayhem. The Indian Express, 30 August, 1999.
43
Row over Delhi Metro Rail gauge. Saibal DasGupta. Business Standard, 7 September, 1999.
284
standard and broad gauge. The broad gauge would not be able to carry more passengers because the
size of the tunnel would limit the size of the coach. Standard gauge had already been used worldwide while
broad gauge for MRTS would require further testing. Lastly, since ‘world-over metro systems were not
profit making’ and ‘the gains are seen in the context of social benefits’ using broad gauge would increase
power usage and rolling stock would be inefficient for quick acceleration and deceleration required for such
a system.
44

On 20
th
September the CPRO, DMRC, Anuj Dayal released a statement saying that there was no
conflict over the gauge concerning the MRTS. The DMRC had prepared an internal report about the gauge
and presented it to the government and it would abide by whatever decision the government made. He said
that this topic started receiving publicity when a few newspapers published stories about a conflict. He said
that these did not have any basis and that any further discussions on this issue should be stopped.
45

In another article in Rashtriya Sahara it was announced that the DMRC had still not decided on the
gauge for the MRTS and there was a controversy with the DMRC pushing for a standard gauge and the
Indian Railways for a broad gauge.
The managing director of the DMRC when working in Indian Railways had accepted the
specifications for broad gauge. Japan had put the condition that the Metro rail should only be
constructed with a standard gauge. The Indian Railways were not in a position to accept any other
gauge except the broad gauge because they had already made a decision to standardize all tracks to
a standard gauge in the country.
46

Many Hindi newspapers ran stories that JBIC, which was giving the 56% loan for the MRTS, was
putting pressure to award contracts to Japanese firms for tracks and rolling stock, as a condition for the
loan. An article in Dainik Jagaran said that Japanese railways was running at a loss despite a dense network
and high fares and Japanese experts were looking at the Indian market to dispose their old tracks and
rolling stock to generate income. This would only be possible if the MRTS ran on the standard gauge.
47

44
Track trouble for Metro Project. Siddharth Srivastava. The Times of India. 15 September, 1999.
45
No conflict regarding metro rail project: Anuj. Munish Kumar Sharma. Veer Arjun, 20 September, 1999.
46
Gauge for Metro trains not yet decided. Rashtriya Sahara, 1 October, 1999.
47
Japanese loan to be received by Delhi Metro also entangled in the trouble. Sanjay Singh. 6 February, 2000.
285
In June 2000, after two years of the back and forth with this issue, a Group of Ministers (GoM)
including Ministers of Urban Development, Home Affairs, Railways and Finance was appointed to look
into this matter and make a decision.
What is more interesting, however, is that the group is being presented with a fait accompli of
sorts. The Railway Ministry’s argument is DMRC has already started construction with such
standards as preclude broad gauge operations. If the government’s verdict goes in favor of broad
gauge, a large part of the expenditure made so far becomes infructuous.
The article then went on to talk about the history of the controversy. In 1996, the Union Cabinet
approved the scheme with broad gauge but the DMRC wanted to change it to standard gauge. The Indian
Railways said that it would require approval by the Union Cabinet. The DMRC then said that it was an
independent body and asked the Law Ministry to clarify the point. The Law Ministry agreed with DMRC
but said that since the MRTS was a ‘railway, it came under the ‘Railway Act’ which fell under the purview
of the Railway Ministry.
The Indian Railways used a note by Lord Dalhousie to explain how the choice of going with two
tracks in the United Kingdom had created problems and he subsequently recommended a broad gauge track
for India. The DMRC argued that Metro systems across the world ran on standard gauge. The Railways
countered that in those countries the rest of railway lines were also on standard gauge. They added that a
broad gauge coach would have 15% more carrying capacity and that ‘all bidders had made it clear that no
extra time would be involved.’ They also wanted an ‘independent assessment’ of standard gauge versus
broad gauge costs and were not willing to believe in ‘figures furnished by the DMRC.’ The DMRC argued
that ‘with the standard gauge, off-the-shelf superior technology can be imported.’ The Indian Railways
countered that, with standard gauge, India would be dependent on foreign imports as ‘the requirement of
DMRC will not be large enough to sustain indigenous production.’
48
The Railways were contesting the
numbers provided by DMRC for cost of standard versus broad gauge and wanted an independent
assessment of the costs. They also countered claims of delay in the project by saying that the bidders had
said that manufacture of broad gauge rolling stock would not require extra time.

48
Railways resurrect Dalhousie to bend Delhi Metro. Vinay Pandey. The Times of India, 5 June, 2000.
286
Broad Gauge for connectivity to the NCR
The GoM was split over the gauge issue. The Railway Board Chairman wanted the broad gauge as
the single gauge for the country, for internal connectivity of rolling stock between the Metro and regular
railway service and because there could be indigenous production of spare parts. Also, V.K.Aggarwal said
that
technology would not be the issue, as technology is not gauge-specific...The railways have also
asserted that if a rail line is laid by private railways, the Railway Ministry has the legal right to
clear the technical parameters.
The Ministry’s main argument was that the use of broad gauge would allow for integration with
the Northern Railway system, which would help link the metro system to smaller towns like
Ghaziabad and Faridabad, a move that may become necessary as the National Capital Region
moves towards integration.
49

The DMRC MD thought that there was never going to be interconnectivity between the regular
railways and MRTS and the latter would be a stand-alone system. The DMRC did not believe costs would
be cut in the case of broad gauge, as rolling stock of either would have to be imported. Nor could the
coaches be larger because of restriction of tunnel size. Standard gauge technology had also ‘proved itself
worldwide’ but the broad gauge safety would still have to be tested. Because of the impasse between the
GoM, it had decided to constitute a smaller subgroup to reach a solution. The subgroup who would include
the Railways Minister, Mamta Banerjee, Urban Affairs Minister, Jagmohan, and Planning Commission
Deputy Chairman, K.C. Pant.
Another article, ‘Delhi Metro: standard or broad gauge’, attempted to show the failure of each
side’s arguments saying again that new technology would have to be imported with both the broad and
standard gauges.
The design change between standard gauge to broad gauge and vice versa is a comparatively
simple matter...The real reason behind the Board’s insistence on adopting broad gauge is its desire
to take mainline trains coming in from adjoining areas such as Ghaziabad, Gurgaon and
Faridabad, on the Metro rail system so that passengers do not have to transfer from one train to
another. For that the track gauge and the mode of traction has to be common for the Metro with
and the main line.
More reasons for why the DMRC wanted to use the standard gauge were related to the power
traction 750/600 V DC used internationally as it was the ‘most economic system for Metro trains’ due to
their sharp acceleration and deceleration and that worked with lighter coaches. Both the traction and

49
GoM fails to end Delhi metro gauge row. Nazneen Sharif. The Economic Times, 15 June, 2000.
287
lightweight coaches would inhibit running regular trains on the same track due to 25 kV AC traction. It
was also an issue of safety as Metro trains would suffer more damage in case of an accident.
There is little merit in the desire of the Board to carry main line trains from surrounding areas into
the metro system. Bulk of the traffic on Metro train will constitute intra-city passengers.
According to a study made by the Board itself, a very small percentage, only 15% of the total
traffic will comprise Inter-city passengers. This traffic too will get divided into two streams, one
going in the direction of the movement of the train and the other in the reverse direction. Those
going in the reverse direction would have to alight and take Metro trains.
The drawbacks of running regular trains on the MRTS would be scheduling issues. There was also
a loophole in the Indian Railways argument that in countries where standard gauge was used for urban
systems it was also the national gauge by pointing to the case of Japan where the national gauge was meter
gauge and its MRTS was on standard gauge. Lastly, the article pointed out that two of the coach building
factories at Chennai and Kapurthala could build lightweight coaches. ‘They would have to buy and absorb
new technology for manufacturing lightweight Metro coaches.’
50

Articles in Hindi newspapers on 11 June, pointed to the fact that the decision on the gauge was
being delayed. The same arguments were presented including the fact that the DMRC said that even with
broad gauge the transfer of technology would take approximately 2 years after which the parts could be
manufactured in India and that despite Railways claims it would not be possible to run other trains on the
MRTS network.
An editorial on the ongoing conflict over the gauge said that the possibility of delay in the project
pointed to the fact that no serious thought had been given to the capital’s problems.
In any case, in and of itself, the project was not a solution to Delhi’s traffic problems and yet even
then all kinds of issues were cropping up and these pointed to a lack of deliberation given to it
earlier. The situation of an incomplete solution costing crores of rupees would not have arisen had
deliberation of Delhi’s traffic problems been done in their entirety. Nor would this situation have
developed, where at this stage, arguments continued over the status and form of the project.
Whatever the political governance boundaries of Delhi may be in maps, Delhi was naturally
formed by the confluence of its surrounding settlements that fell within the boundaries of Uttar
Pradesh and Haryana, adjacent to Delhi. Today, almost 50% of Delhi’s traffic was related to those
states. Forget about the Metro rail in those States, the Metro rail did not even touch large areas
within Delhi itself. It is possible that the Metro rail was complete in itself, but it was definitely not
a solution to Delhi’s transport problems. In spite of this, obstacles were coming up in its path. One
could only infer from this that not enough deliberation was given at any level to fundamental
problems and their solutions.

50
Delhi Metro: standard or broad gauge? The Railway board’s argument for adopting broad gauge system for the
upcoming Delhi Metro line has no logic, says Pramod Kumar, a retired GM, Railways and consultant on railway
equipment and systems. The Observer, 10 June, 2000.
288
The article went on to say that the main obstacle to thinking of problems and solutions at a
fundamental level was the lack of a governing body that could look at Delhi and the National Capital
Region in its entirety. On the other hand there were several bodies that raised problems and created
obstacles and this itself was a problem. The MRTS had thrown light on this issue but had also raised
questions about declarations of keeping Metro rail related decisions national and independent.
51

A couple of articles in June reported on the Indian Railways’ plans to build a bullet train corridor
between Delhi and Calcutta with Japanese aid even though it was ‘practically bankrupt.’ Comments from
previous railway officials revealed that the Indian Railways was in desperate need of upgradation of tracks
and rolling stock and modernization of the signaling system.
52
This threw light on the railways insistence
on broad gauge, as that would provide a burgeoning market for the Railways manufacturing plants.

Cabinet Approval and possibility of Delay in the project
On August 4, the cabinet approved the broad gauge for the metro rail on the basis of its
compatibility with the Northern Railways system, 20% extra carrying capacity and success in other cities.
During the stormy five-hour meeting, which ended late tonight, Minister Mamata Banerjee said
that the Railways will not take responsibility of the safety of the passengers if standard gauge was
allowed.
53

In what was a ‘getting to the bottom of it’ story in mid-August, it was reported that the conflict
regarding gauge between DMRC and Indian Railways was based on the personal history between the
DMRC MD, E Sreedharan and Railway Board Chairman V.K. Aggarwal.
When Sreedharan was in the Indian Railways, V.K. Aggarwal was 6-7 years junior and his
subordinate. Now as Railway Board Chairman, he was Sreedharan’s superior. Sreedharan was
highly respected and honored as an engineer in the Indian Railways and hence given the
responsibility of the Konkan railway and subsequently Delhi MRTS even after he retired. On the
other hand, V.K. Aggarwal was never considered an expert and reached the post of Railway Board
Chairman only because of his seniority. Now he was claiming the seniority of this post in making
the decision regarding the gauge.
54

51
Conflict over Metro rail project. Dainik Jagaran, 17 August, 2000.
52
Bullet train plan may derail railways. Vinay Pandey. The Times of India, 3 June, 2000. The Indian Express.
53
Cabinet chooses broad gauge for the Delhi Metro. Bhavna Vij. The Indian Express, 5 August, 2000.
54
Moustaches are fighting over the distance between the tracks of Metro rail. Navbharat Times, 16 August, 2000.
289
Also on 24
th
of August, it was announced that there was a possibility of a three-month delay in
the Shahdara-Tis Hazari section of the MRTS because of the decision to be taken on the rolling stock bids
and requiring three months. It was not necessary that the delay would take place since bids had been invited
for both standard and broad gauge. The article then went on to give arguments for both and also reported on
the decision taken by the group of ministers (GoM) earlier in the month to go ahead with broad gauge.
55

Another article on 29
th
August 2000, it was announced that the Delhi government was worried that
the delay would now be six months because of the change to broad gauge and rolling stock that would have
to be modified for the same. The Chief Minister, Sheila Dikshit said that she was informed of this by the
DMRC and also expressed disapproval at DMRC’s oversight of this matter, saying that it should have kept
this in mind when formulating the project. She said that when the DMRC had not received approval of
standard gauge from the Central Government, there was no need for it to have gone ahead with the tenders
for coaches and tracks. She also said that the conflict between the Indian Railways and DMRC had been
going on for some time. The DMRC had started to work on the project based on standard gauge while
ultimately the Indian Railways prevailed.
56
Her statements contradicted DMRC’s claim that it had invited
bids for both standard and broad gauge in its tenders.
Another official announcement on 14 September by DMRC said that the project would be delayed
by four months and would experience a cost escalation of Rs 4 crores because of the decision to go with
broad gauge.
57

On 24 September E Sreedharan, MD of DMRC offered to resign in a meeting of the Group of
Ministers, over the gauge issue. The same issues discussed earlier were repeated and the Union
Home Minister L. K. Advani asked the MD...not to feel disheartened by the GoM’s decision and
advised him to take on the challenge of completing the project without additional costs and time
overrun.
58

The MD, DMRC was also reaching the end of his term. The animosity between the Railways and
DMRC had reached a point where it was reported that the Delhi government wanted to extend the MD’s
term whereas the Railways ministry was thinking of a possible replacement. This difference in opinion was

55
Misgivings of delay of three months for Shahdara– Tis Hazari section of Metro. Hindustan, 24 August, 2000.
56
Possibility of delay in metro because of difference in shape of coaches and tracks. Dainik Jagaran. 29

August, 2000.
57
Gauge change to delay metro project. The Hindu, 14 September, 2000.
58
Delhi metro rail MD offers to resign. The Hindustan Times, 25 September, 2000.
290
based on the conflict between the Railway Ministry and DMRC over the gauge of the MRTS, the
decision for which had been taken only in the previous month.
59

An article on land acquisition classified under the gauge issue by the DMRC, reported on change
in routes in the Ram Bagh area near Old Rohtak Road. It was said that initially land had been acquired in
certain areas for the route but when residents approached MP, Madan Lal Khurana, his intervention moved
the DMRC to angle the route avoiding some residential areas. Pillars for the track were constructed but for
a third time the residents of Ram Bagh area had received eviction notices and the discussion was that it was
because the track could not be angled. It was also because the Indian Railways were refusing to give their
land to DMRC and so private land was being acquired. Quotes from residents of the areas who had lived
here for over 50 years were given. This article is significant in the gauge issue because if the DMRC had
moved forward with construction on the basis of standard gauge then the angled route would have worked
since standard gauge could run along a tighter radius. Once the track was changed to broad gauge, the angle
would no longer work and hence the constructed columns for the MRTS would have to be discarded for
new ones.
60

Even though the GoM had earlier decided that MRTS would run on broad gauge, the issue had
still not been closed. The DMRC was not ready to accept the GoM’s decision and had requested it to
further discuss the issue. Meanwhile the MD had written to the Railway Board Chairman, saying that the
decision to go with Broad gauge had been taken because of pressure from the Indian Railways but DMRC
was not receiving any help from them. The Railway Board Chairman, Ashok Kumar replied that the
decision had been taken because the project was initially cleared with broad gauge in 1996 in the Union
Cabinet. As far as help from Indian Railways was concerned, they had not received any request from
DMRC to this end. The MD, E Sreedharan also tried to go through the Chief Minister, Sheila Dikshit, as a
medium to reach the Home Minister LK Advani regarding his request. He stated that he was not getting the
kind of support for broad gauge as he had hoped for from the Indian Railways. It was now announced by
the DMRC that they had made all preparations for standard gauge when suddenly the decision to go with

59
Retired chairman another excuse for delay of Metro. The Asian age, 18 September, 2000.
60
Ram Bagh residents sleep disturbed because of constant changes in metro rail tracks. Om Prakash Tapas. Navbharat
Times, 16 November, 2000.
291
Broad gauge was taken and its entire programme had been disturbed. DMRC claimed that it had to
reissue tenders, a process that normally took six months. This once again contradicted their earlier
statement of having invited bids for both standard and broad gauge. In evidence of this, other sources were
quoted as saying that the DMRC had received bids on broad gauge but was not opening them because it
was still trying to push for standard gauge.
61

Pressure from DMRC for standard gauge did have an effect as ‘a meeting of the Empowered
Committee, a high-powered interdepartmental group, was convened on January 12, 2001 to review the
earlier decision.’ The article said that it would make its decision next Tuesday but this did not happen and
the decision was delayed.
62

Using 100% FDI Policy change to lobby for standard gauge
On June 4, after almost 5 months of an Empowered Committee being constituted to look at the
gauge issue, it was brought up again. This time it was connected with a policy reversal by the Union
Cabinet in the first week of May, that allowed for 100% FDI in urban transport systems. This, according to
Delhi’s transport minister, Parvez Hashmi, would ‘attract large-scale FDI’s, enhance the technical standard
of the Metro rail and also expand its network in the city.’ It was announced that the gauge issue would be
decided soon as the contracts for tracks and rolling stock had been awarded and laying of tracks was to start
the following month.
63
An article reported that the DMRC MD, E Sreedharan had said that the standard
gauge would be used if there was FDI, as foreign companies would only be interested in investing with
tried and tested technology. This was after the article had said that the Delhi government was not in favor
of broad gauge. In an interview with Dainik Jagaran, the MD also said that the project would cost Rs 8400
crores, an increase in cost of Rs 300 crores.
64

An op-ed piece criticized DMRC’s insistence for the standard gauge and supported indigenous
production of rolling stock by citing the technological achievements of India. It also criticized DMRC’s

61
Matter of gauge of Delhi Metro still left hanging. Dainik Jagaran, 19 December, 2000.
62
METRO gauge issue reopens. Sandeep Phukan. The Indian Express, 13 January, 2001.
63
Delhi Metro rail may change track. Mid-Day, 5 May, 2001.
64
‘Delhi Metro will run on standard gauge only.’ Dainik Jagaran, 13 May, 2001.
292
argument that India would not get FDI if the broad gauge was used, by asking at what cost should one
attract foreign capital. The author gave the examples of Enron and Dobhal power projects as FDI failures
where initially the government bent over backwards to attract FDI and now did not know how to expel
them. Pointing to JBIC, the article said that ‘a similar fate might await the MRTS if we agreed to their
preconditions.’ It pointed out that in reality FDI was a way for foreign companies to dispose unused stock.
The example of Enron’s Rs 4.5 crores/megawatt power production versus the National Thermal Electricity
Corporation’s Rs1.5 crores/megawatt production was cited. The article finally talked of the 30% equity
funding from taxpayers money that the Delhi and Union government was paying for the project and said
that the citizens would not tolerate wastage of their money based on foreign conditions.
65

Once again on 16
th
May the issue of DMRC’s wish to reverse the broad gauge decision to standard
gauge was reported in light of 100% FDI. This time the importance of FDI for other metro projects in
Bangalore and Hyderabad was also mentioned.
66

In yet another article about reopening of the issue of standard gauge versus broad gauge, it was
reported that standard gauge was used in developed countries of the West where ‘the railways are
technologically more sophisticated and their use is limited. Broad gauge is used in Russia and China, apart
from India. In all these three countries Railway still played an important role. Russia has the largest railway
network in the world followed by India, which is ranked second.’
67

Delay in bids for rolling stock; Railways to manufacture standard rolling stock
On 4
th
July 2001, it was announced that the underground metro corridor construction had been
delayed by six months because of the higher cost of construction quoted by bidders than were initially
estimated. The Shahdara-Tis Hazari section was still to be completed by March 2002.
68

On 9
th
July, the Delhi Transport Minister, Parvez Hashmi announced that the Shahdara- Tis Hazari
section was also delayed by six months. The delay was blamed on the decision to go with broad gauge.

65
Whose standard, whose gauge. Dainik Jagaran, 14 May, 2001.
66
DMRC changes tracks again, prefers ‘standard gauge’ now. Move to attract FDI in urban transport system. The
Economic Times, 17 May, 2001.
67
Delhi Metro, railways at war over standard gauge norms. Sugata Nandi. The Asian Age, 25 May, 2001.
68
Metro rail corridor delayed. Hindustan Times, 4 July, 2001.
293
A DMRC official said
Rolling stock for the standard gauge is a tried, tested and proven system, but this is not the case
with the broad gauge. Here everything has to be done afresh and for the first time. Once it is
designed and tested we will have to take technical clearance from the railways.
69

In an article pointing to the tension between DMRC and Indian Railways, it was reported that
Indian Railways officials had destroyed two construction machines and mishandled construction workers
along with police force at an over bridge construction site in Shahdara.
70

On July 18, in an article that belied the Indian Railways claims about the inability to manufacture
standard gauge coaches in India, it was reported that ‘the Ministry of Railways has decided to start the
process of manufacturing rolling stock on standard gauge for export. This has been done primarily to create
a situation where valuable foreign exchange can be earned and bring the country’s railways into the world
market.’
71
No one could figure out the reason why Indian Railways was insisting on the broad gauge for the
MRTS.
72

In August, the Prime Minister’s office requested the Ministry of Railways to review its decision
on deciding on broad gauge versus standard gauge for the MRTS.
73
The initiative of reviving the issue was
reported to have come from the Delhi government with the Delhi Transport Minister, Parvez Hashmi,
saying that the offices in PMO were responsive to the idea. On the other hand officials in the PMO were
quoted as saying “it is too early to say whether PMO is in favor of standard gauge or not.” It was reported
that the decision on the gauge would have to be made within the next two months to avoid delay the
project. “After that we will have to place orders for coaches and other equipment as per the final decision
on gauge. Otherwise the project will get delayed,” said the Transport Minister.
74

The Gauge controversy news was released at the same time as the news of the delay in the MRTS
by nine months from March 2000 to December 2002. At the same time it was announced that going with

69
Metro rail may arrive late. The Hindu, 9 July, 2001
70
Railways did destruction in Metro rail project. Dainik Jagaran, 16 July, 2001.
71
Railways to export standard cage stock. Mid-Day, 18 July, 2001.
72
Reinventing the wheel, Railways-style. India stubbornly sticks to a British legacy that keeps it firmly off-track from
modern technological developments. Anil Sasi & Gaurav Raghuvanshi. Business standard, 31 July, 2001.
73
PMO asks railways to review decision. The Pioneer, 4 August, 2001.
74
Gauge controversy hits Metro Rail. Hindustan Times, 4 August, 2001.
294
standard gauge would allow the Metro to be opened in October 2002.
75
The Railways, expressing their
unhappiness with the revival of the gauge issue said,
The import of standard gauge for the Delhi Metro will spark of big problems for Indian Railways
in the future. Moreover, standard gauge is three times more costly than broad gauge. Indigenously
manufactured broad gauge will not only bring down the cost, it will also help the Delhi Metro to
remain technologically self-dependent all the way. Delhi will look up to the developed countries if
anything goes wrong in the Metro. The induction of the standard gauge in Delhi Metro will soon
raise the demand that Indian Railways should switch over to that gauge, which will be a
unthinkably expensive.
76

In a follow-up of the story of animosity between E Sreedharan and the now retired Railway Board
chairman, it was reported that “a senior official of the Railway Board had opposed this for reasons best
known to him. However, with the official having retired, the DMRC is optimistic that a positive view
would be taken by the centre.”
77

Reporting on a press conference held on 3
rd
August, an article said that in a letter written by the
Chief Minister, Sheila Dikshit, to the Prime Minister regarding the gauge issue, she contended that the
Railways were neither financial partners nor operators of the project and hence their decision did not carry
weight. She also pointed out that the Railways themselves would not take the initiative to review the gauge
issue. “In the context of globalization, our country must keep pace with the rest of the world in technology
and this is possible only if we adopt standard gauge.”
78

There was not much enthusiasm from the Central Government in responding to this appeal. The
decision of the Central Government to back the Railways may have also stemmed from the fact that the
Congress party formed the government in Delhi and the BJP government at the Centre. The Centre,
however, did ask the Railways ‘to explain why they had insisted on broad gauge when internationally,
standard gauge is the most popular gauge mentioned in use’. The article said that ‘the Railways’ argument

75
Fresh row erupts over Delhi Metro rail standard gauge. The Asian Age, 4 August 2001.
76
Railwaysnot happy with Delhi’s move. Sugata Nandi. The Asian Age, 4 August, 2001.
77
PM asks for a review of metro gauge issue. The Hindu, 4 August, 2001.
78
Government wants to exclude Railway Ministry from decision-making. Arun Anand. The Statesman, 6 August,
2001.
295
in favor of broad gauge centered on “consideration of inter-operability and development of and future
dependence on indigenous capability.”’
79

This report on the Railways’ plan to start manufacturing standard gauge coaches was linked to the
MRTS in the sense that it talked of the excess capacity of the five railway equipment production centres
and the decline in orders from railways. With this background the railway’s decision to go with broad
gauge was understandable. In order to start manufacturing standard gauge coaches the Railways would first
have to overcome the problem of gauge.
80
The Transport Minister was directly quoted as saying that it was
insisting on broad gauge because “it wants to retain an upper hand on the entire project.”
81
In response to
the intervention on behalf of the standard gauge by the Delhi government, the Railways brought up the
delay of the MRTS project and yet its indecision and insistence on changing the gauge from broad to
standard. Sources in the Indian Railways said
What is extremely intriguing is the fact that DMRC managing director has brought up the gauge
controversy so late. The Metro construction should be in an advanced stage now. The gauge
controversy at this stage will further slowdown the metro project...Now if the rail is run on
standard gauge, the coaches will have to be imported from abroad. It is not possible for the Indian
Railways to provide coaches designed for standard gauge at such a short notice...Till date the
railways have always bought sophisticated equipment only to manufacture their replicas here at
home and cut down costs. Importing an entire fleet of coaches along with the tracks will mean
complete dependence on foreign manufacturers... the bulk purchase of coaches from abroad will
mean huge losses for government owned units manufacturing railway coaches...These factories are
located in Perambur, Kapurthala and Chittaranjan...These manufacturing units will get a much-
needed boost if they are given orders for the Delhi metro coaches...the introduction of foreign
coaches running on imported tracks will mean the Metro will no longer need the technical
expertise of the Indian Railways.
82

On being asked by the reporters whether the change in gauge at this time would delay the project,
the Transport Minister, Parvez Hashmi, replied that since work on the gauge had not started, it would not

79
Broad gauge plan for Delhi Metro raises eyebrows. Anil Sasi & Gaurav Raghuvanshi. Business Standard, 6 August,
2001.
80
Rlys eye overseas markets to sell rolling stock. Gaurav Raghuvanshi & Anil Sasi. Business Standard, 6 August,
2001.
81
Centre, DMRC on collision course over gauge width X. The Times of India, 7 August, 2001.
82
Railways frets over Metros standard gauge demand. Sugata Nandi. The Asian Age, 7 August, 2001.
296
affect the project.
83
Another article in the Asian Age reported that broad gauge coaches would delay
the project even further than December 2002.
84

Finally on 12 August the Railway Ministry reiterated its stand on the MRTS being on broad
gauge.
The Ministry of Railways would like to reaffirm that there is no change in its recommendation that
adoption of broad gauge for DMRTS and the manufacturer of modern coaches in the country
through transfer of technology is in the overall interest of the public and is the best techno-
economic decision.
The Railways also pointed to the MD, E Sreedharan’s support for broad gauge in the DPR for the
project prepared by RITES. They subsequently listed how each and every time the issue had been brought
up to the Railways Ministry, GoM or Empowered Committee, it had been in favor of broad gauge. It was
also reported again that the General Consultants – PCI led consortium for the DMRC was recommending
the standard gauge. An unnamed official was quoted as saying.
The group of international experts, Pacific Consultants International (Japan) and Parsons
Brinkerhoff (USA), have designed all the major Metro railway networks in the world. In their
technical opinion, they stated, the standard gauge would be a reliable and safe option...Opting for
broad gauge instead of standard gauge would lead to complete technological isolation from the
rest of the world. DMRC’s contract with the standard gauge manufacturers, says that they would
bring the technology here. So, we can also start building the standard gauge indigenously. If we
don’t opt for it, we will lose this huge export potential opportunity.
85

The remarks were not made to emphasize the pressure being applied by the General Consultants to
go with standard gauge but an example of how India was losing out on the latest technology. In another
article on the same day and related to this decision, it was reported that the DMRC had not been able to
provide proof of its claim that going with broad gauge would cost an additional Rs 800-900 crores.
Unfortunately, despite a decision at the level of the GoM, DMRC did not abandon the issue and
continued raising the matter until it was considered by the Empowered Committee of Secretaries
in early 2001 when the issue of alleged loss of Rs 800-900 crores likely to be suffered by the
project in case the decision on the gauge was not reversed, was also discussed threadbare. The
DMRC was asked to prove its contention on this score and when they were unable to do so, this

83
Topic of standard gauge for Metro rail is again hot, Metro rail’s condition will be like CNG if Railways remained
stuck on broad gauge: Hashmi. Rashtriya Sahara, 8 August, 2001.
84
Coaches may delay Delhi metro. The Asian Age, 9 August, 2001.
85
Delhi Metro to run on broad gauge... expert opinion notwithstanding. The Times of India, 12 August, 2001. National
Herald, the Asian age, The statesman, Hindustan Times, Dainik Jagaran, Rashtriya Sahara, Jansatta, Punjab Kesari,
Hindustan, Business Standard.
297
committee also decided against changing the gauge. Claims to the contrary by DMRC are,
therefore, without any logic.
86

The history of the struggle between broad gauge and standard gauge as arising from the
stubbornness and pride of the MD, DMRC, E Sreedharan and Railway Board Chairman V.K.Aggarwal,
was discussed once again.
87

In response to the Chief Minister’s questioning of the Railways’ reasoning of non-availability of
standard gauge technology and safety experience in light of the recent findings of the Railways’
involvement in a standard gauge project in Iran, the Indian Railways responded that the approval of broad
gauge had been given before the standard gauge project had been started.
88

In an editorial that lauded the Indian Railways decision, it was pointed out that broad gauge or
standard gauge was not the main issue.
The main issue is the adoption of methods of production, maintenance and other areas that were
suitable to the country. The pressure to adopt standard gauge came only from Japan in its
selfishness to provide work for its own industries. There is a lack of production in the railway
coach manufacturing construction warehouses in India because the railways itself is importing
coaches. These would be completely shut down if the government did not pay attention to them.
The ‘global outlook’ adopted by some officials, has made them dismissive of everything produced
within the country. The gauge issue was lucky to be highlighted in the media and investigated
thoroughly. However there are many issues and industries that do not receive such attention. The
arguments over ‘quality’ for such projects faces such criticism that the actual qualities or value of
the projects are never determined. This is not only unfortunate but causes economic harm to the
country as many projects and businesses shut down. The question is not of reviving dying projects
but that they should not be closed based on wrong reasoning or illogical arguments.
89

Tramway Act
The issue however had not yet been closed. On 16 August it was reported that the MD, E
Sreedharan was going to use the help of the model ‘Tramway act’ to get the MRTS to run on standard
gauge. The act had been used in the past to operate the trams run in the old Delhi Chandni Chowk area.
This was an attempt to free the MRTS from the Railway Act that brought any railway project, public or
private, in the country under the technical purview of the railways. The major reason cited for the use of

86
Broad gauge it’ll be for Delhi Metro. The Hindu, 12 August, 2001.
87
Announcement of running Delhi Metro rail on broad gauge only. Srikant Tripathi. Navbharat Times, 12 August,
2001.
88
Delhi Metro to have broad gauge: Centre. The Pioneer, 13

August, 2001.
89
Metro rail’s gauge conflict. Dainik Jagaran, 13 August, 2001. English translation by author
298
broad gauge by the Railways had been its responsibility for the safety of the MRTS under the Railway
Act. According to the Act, any future technical problems or accidents would be the Railways’
responsibility. The Railways commented that it did not have any problem with standard gauge if the MRTS
was under the Tramway Act, as it would be relieved of its responsibilities. The Railways also expressed
concern at the DMRC bringing in politics through the PM’s office in what they considered was a technical
matter.
90

On 20
th
August, an editorial in Business Standard said that other cities in the country that had been
following the gauge conflict in Delhi MRTS had learnt that they should build their systems under the
Tramway Act to avoid interference by the Union Ministry of Railways described as ‘Big Brother’. The
article said that since none of the reasons that the Railways was giving for opting for broad gauge were
valid, it simply wanted some amount of control over the project. The article also mentioned the Indian
Railways were waiting to get the rolling stock orders for the MRTS. Ultimately, the reporters said the
project and commuters would suffer by this ‘half-hearted effort’ as the problems would crop up only at a
later date when all the responsible officials had moved on.
According to DMRC’s contract with the rolling stock suppliers the Koros-Mitsubishi consortium,
only 60 coaches will be imported off-the-shelf and the rest are to be built in India. The railways
are sitting pretty in the belief that those coaches would have to be built at their production
units...Where else would they (the Korean Japanese combine) go? They cannot set up a Greenfield
project just for Delhi Metro, a railway board official said...The plans of the Koros Mitsubishi
combine are not yet known but, with no scope for exports at a later date, there would be no sense
in setting up a Greenfield unit to supply rolling stock to a single customer. An official release of
the railways 10 days ago... pointed out that DMRC managing director E. Sreedharan, a former
member (engineering) of the Railway Board, had ‘very categorically’ decided in favor of broad
gauge while the detailed project report of the Metro was prepared...While taking the view, he
(Sreedharan) had recorded that there was no case made out for bringing in yet another... gauge into
the country for Rail-based transportation, the release had said...This much is true. So why is
Sreedharan now fighting tooth and nail for standard gauge and what caused the change of heart?
His argument is that after joining DMRC, his vision was broadened as he got to see how world-
class metros are run and realized that standard gauge was the best alternative. That much should
be given to him and as the agency executing the project, DMRC’s view should be the final word
on the project but the railways are smug as they have, by default been granted the final say as the
authority was set up under the Railways Act. So they can browbeat DMRC at will.
91

90
Sreedharan will even take help of Tramway act for standard gauge. Sanjay Singh. Dainik Jagaran, 16 August, 2001.
91
Deadly Metro hits a controversial track, a technical debate on the railways has implications for other urban mass
rapid transport systems in India. Gaurav Raghuvanshi & Anil Sasi. Business Standard, 20 August, 2001.

299
In the world of design and technology, Sreedharan’s stand that his vision had been broadened
after seeing world-class metros as the reason for his insistence on broad gauge seemed very plausible. In a
technological project, it would seem natural for the designer to go with the latest technology, if available,
for the project.
After almost a year of the Railways having cited the recommendation by Lord Dalhousie for a
uniform gauge in the country, an article in the National Herald traced the history of broad gauge in India
and why the British adopted it when simultaneously in the United Kingdom, the standard gauge had
prevailed. The decision was attributed to the Governor General, Lord Dalhousie.
He had made two points; first the broad gauge would give more space for arrangement of various
parts of the locomotives and carriages, besides lowering the centre of gravity of the rolling stock.
This, he said, would reduce lateral oscillations and make the journeys pleasant. The second was
that in case running trains encounter the ‘fearful storms of wind so frequent in certain seasons in
India’, the extra 9 ½ inches would make ‘all the difference between the safety and destruction of
the trains.’ Everything would have been fine if the 1676 mm gauge was made the standard gauge
for the Indian Railway system and CK Jaffer Sharif, the Railway Minister between 1991 and 1995,
need not have launched the project Un-gauge in 1992, widely welcomed but also criticized by a
section of railway men themselves, for later variations in the gauge for many new lines mostly on
economic considerations.
92

The railways wanted to maintain its control over the immediate market. In a last attempt the Chief
Minister, Delhi wrote to the Prime Minister again requesting him to overturn the Railway’s decision on the
basis that they did not have any financial participation in the project and had adequate expertise on standard
gauge to be able to perform the safety tests on MRTS trains.
93

In December finally, the issue of gauge was closed with the Prime Minister also ruling in favor of
broad gauge.
An article on 2
nd
April reported that MRTS had missed its deadline of starting from 1
st
April. It
would now open in December 2002. The DMRC had given various reasons for the delay – the relocation of
a particular monument, the manufacture of broad gauge coaches, relocation of people and land acquisition
and removal and transplantation of trees. It also claimed that the DMRC was better, compared to the
Calcutta Metro, in construction time and the Bangalore project that had been conceived at the same time as
Delhi, but had not as yet been started. The article ended with a note on the work-culture and safety

92
Metro Railway’s standard gauge. IR’s factories are excellent organisations capable of absorbing new technology in
double quick time, says Arabinda Ghose. The National Herald, 2 September, 2001.
93
Broad gauge will derail metro, Sheila tells PM. The Hindu, 12 September, 2001.
300
standards like reflectors at construction sites, washing tires of dump trucks that was not necessarily the
concern of the common man who was waiting for the project to start. One of the main points by DMRC
was that at the start of the project, it had decided to work towards completing it in seven years, three years
less than the 10 years initially estimated for the first phase. Based on the above reasoning it was still ahead
of time.
94

Contracts to Foreign and Indian Companies
As far back as May 1999, The Economic Times announced the floating of the three main tenders
by the DMRC and mentioned that technology transfer was a prerequisite for all of them.
95
Meanwhile it
was announced on 25 January 2001 that ABB (Asea-Brown-Boveri) had been awarded the Rs 50.8 crores
($ 10 million) contract for the supply of turnkey electrification package for the rail corridor between
Shahdara and Tri Nagar and it was being funded by the JBIC.
96
Hind Construction consisting of Kumagai
Gumi Co Ltd (lead partner) Japan, (39.2%), Skansa International and Civil Engineering AB, Sweden
(39.2%), Hindustan construction Co Ltd (19.6%) and Itochu Corporation, Japan (2%) was awarded the
Delhi metro contract for construction of Delhi Metro rail corridor, package MC – 1A.
97
On 12
th
March it
was announced that the design and supply of the automatic train control, signaling and telecommunications
system for the MRTS had been awarded to a consortium led by M/s Alstom Transport Ltd, (India) with M/s
Alstom Transport (France), M/s Alcatel (Portugal) and M/s Sumitomo Corporation (Japan) as the
members.
98

It was announced on 20
th
March 2001 that the Rs 1650 crores ($ 338 million) contract for the
underground section of the MRTS had been finalized and that construction would start in June and July
2000. The corridor was proposed to be completed by 2005 and to generate a profit of Rs 2400 crores ($ 492

94
Metro misses the April 1 bus. Mayank Tewari. The Pioneer, 2 April, 2002. Sandhya Times.
95
Civil construction work on MRTS to be completed by 2000. Mukul Chandra Gogoi. The Economic Times, 20 May,
1999.
96
ABB bags order from DMRCL. The Asian age, 25
th
January, 2001. The pioneer, the financial express, business
Standard, the Hindu.
97
Hind construction gets Delhi Metro contract. Business Line, 26 February, 2001.
98
International consortium gets Metro rail contract. The Asian Age, 12 March, 2001. The Pioneer, Hindustan Times,
The Economic Times.
301
million). The consortium that was awarded the contract included Larsen & Toubro Ltd of India,
Deykerhoff & Widmann AG of Germany (Dywidag), Samsung Corporation of South Korea, Shimizu
Corporation of Japan and Ircon International Ltd.
99

So far all global contracts had been awarded to consortia with at least one Japanese partner.
On 13
th
March 2001, it was also announced that the Rs 83 crore ($ 17 million) contract for smart
card technology had been given to Alcatel of France.
100
On 20 March it was announced that the Rs 1650
crores ($ 338 million) contract for the underground corridor had been awarded to the consortium that
included Larson and Toubro Ltd, Deykerhoff and Widmann of Germany, Samsung Corporation of South
Korea, Shimizu Corporation of Japan and Ircon International Ltd.
101
On 16 June, almost all the newspapers
announced that the contract for power supply, traction and SCADA system of the underground corridor had
been given to a consortium consisting of Ircon India and the Spanish companies, Cobra and Eliop. This
news followed the announcement of the 100% FDI policy and the awarded companies did not include any
Japanese company.
102
This may have been because of confidence that the FDI would now be available for
subsequent phases of the project and the JBIC would no longer be needed.
On 19
th
October 2001, Schindler was awarded the Rs 35.5 crores ($ 7 million) contract for 50
heavy-duty escalators.
103
On the 22
nd
October an article in Rashtriya Sahara, announced that 15 of the 18
contracts for MRTS awarded so far had gone to international companies.
104

An article in February 2002 reported on renewed Japanese aid to India stated that the MRTS
project was to receive 28,659 million yen (Rs 1.6 crores or $0.3 million) as ODA from Japan.
105
On 18
January, 2003, the Statesman informed that the JBIC had extended another soft loan of Rs 580 crores to

99
L&T JV to execute Delhi Metro corridor. Business Standard, 20 March, 2001.
100
Automatic fare system. The Hindu, 13 March, 2001. Business Standard, The Financial Express.
101
L&T JV to executed the Metro corridor. Business Standard, 20 March, 2001.
102
Ircon, Spanish cos win Metro rail deal. The Economic Times, 16 June, 2001. All other Newspapers.
103
The Hindu, the financial express, the Asian age, Hindustan Times, The Statesman, the pioneer, Jansatta, The Times
of India, the Indian Express, Dainik Jagaran, Veer Arjun, Punjab Kesari. 20-22 October, 2001.
104
Majority of work for Metro rail in the hands of multinational companies. Rashtriya Sahara, 22 October, 2001.
105
Japanese loan for metro, and Japanese aid for power, rail projects. The Hindu, 13 February, 2002. The Pioneer,
Dainik Jagaran.
302
cover the revised cost estimates for extending the third metro corridor from Dwarka to Barakhamba.
106

Additionally, on 2
nd
April, 2003, it was announced that Japan would be giving a Rs 1360 crores ($ 279
million) loan for the MRTS.
107

Regarding award of contracts to foreign companies, E Sreedharan said “an important mission of
the project is that there should be complete transfer of technology once the project completes.” He
informed that an essential condition stipulated in the global tenders floated was that foreign contractors
should have an Indian collaborator or associate. Further, they should have built a manufacturing base in the
country. On being asked whether there were any problems with financing from the OECF, he denied it and
said that the DMRC had enough finances for the project for the next one and a half years.
108

On 7
th
February, it was announced that National Buildings Construction Corporation Limited
(NBCC) was the lowest bidder for the Rs 25 crores ($ 5 million) contract for the Tis Hazari station. It had
already got the Rs 13 crores ($ 3 million) contract for the Gautampur station. The Shahdara and ISBT
contracts had been awarded to Simplex and the Seelampur station to Ahluwalia Constructions.
109
Another
announcement on 28 October 2000 said that the Rs 29 crores ($ 6 million) construction contract for the
Pratap Nagar and Vivekanand Puri Metro stations had been given to M/S Kvaener cementations by
DMRC.
110
On 5
th
April it was reported that the DMRC had cancelled its contract with NBCC for building
the Tis Hazari station because of the delay in its construction. On the one hand NBCC claimed that it was
not handed over the land and drawings of the station in time and even then changes were constantly made
in the project while on the one hand, DMRC claimed that it had handed over everything to NBCC on time
and wanted the station completed by March 2002 at all costs.
111
A follow-up of the cancelled contract of
the NBCC for the Tis Hazari station announced that the contract had been given to a private company-

106
Japan to provide Res 580 crore more for extending Delhi metro phase I. The Hindu, 8 January, 2003. The
Statesman.
107
Rs 1,360 cr Japanese loan for Delhi Metro. Business Standard, 2 April, 2003. National Herald.
108
‘ Metro rail to be completed and stipulated time.’ The Statesman, New Delhi, 1 October, 1999
109
NBCC lowest bidder for metro railway station contract. Rajeev Jayaswal. Business Standard, 11 March, 2000.
110
Tender awarded for two metro stations. The Pioneer, 28 October, 2000. The Hindustan Times, the Asian age.
111
Conflict between NBCC and Metro rail. Rashtriya Sahara, 8April, 2001.
303
Simplex.
112
A Rs 4 crores ($ 0.8 million) signage design for the Metro rail project was awarded to
Mudra communications from a number of international firms.
113

Contracts- Rolling Stock
In October there were announcements in various newspapers that about 15 foreign companies had
been shortlisted for various bids for the MRTS. However all these companies had to work with an Indian
partner. C B K Rao, project director of the DMRC’s said “foreign companies have been invited since
expertise in metro work is not available in India... however, there is the condition these companies must
have an Indian partner. We have attached this condition because technology transfer is a must. According
to the bid-conditions, any foreign company hired by us will have to transfer technology to its Indian
counterpart.”
114

By beginning April, along with giving an update on the project, the MD, DMRC, announced that
the JBIC would release Rs 1600 crores ($ 328 million) as second tranche of the loan by June.
115
In
beginning May, he also said that the money from the first installment of the loan from JBIC had gone
towards payment of the General Consultant – a stipulation also mentioned in the loan conditions as stated
in the annual plans of the Ministry of Urban development.
116

Another announcement, in May 2000, was that 20 consortia had qualified in the pre-bid process
for the Rs 3200 crores ($ 656 million) contracts for construction of the underground corridor; supplier of
rolling stock, signaling and electrical works.
117
Out of these 20 consortia, the ones mentioned in this article
included Impreglio of Italy, Nesco of Spain, Kamagsi Gumi of Japan, Samsung and Hyundai of South
Korea, Dykerhoff and Widmann of Germany for the underground section; Siemens AG of Germany,
Alstom of France, Cobra of Spain, Marubeni of Japan, and BHEL of India for signaling and traction power

112
Responsibility of Tis Hazari station construction to private company. Rashtriya Sahara, 16 May, 2001.
113
Mudra arm bags Delhi Metro signage contract. Business Standard, 4 January, 2002.
114
Metro project: inviting the foreign hand. Arun Kumar Das. The Times of India, New Delhi, 25 October, 1999.
115
Delhi Metro may get Rs 1600 crore Japanese aid. Business Standard, 5 April, 2000. Jansatta.
116
Crucial Japanese loan by end of May. The Pioneer, 1 May, 2000.
117
Rs 3,200-cr contracts for Delhi MRTS to be awarded from May. Mukul Chandra Gogoi. The Economic Times, 9
March, 2000.
304
projects; Siemens AG, Adtranz and Alstom for signaling and train control; BHEL, Ircon International,
Adtranz and Alstom for the traction power, power distribution and Scada system. It was reported in most
newspapers that Siemens, BHEL, Marubeni, Alstom and Adtranz were competing for the Rs 3,200 crores
contracts ($ 656 million) for the Delhi Metro.
118
These were the companies that were being considered the
major contenders for the contracts.
In beginning July it was reported that the Delhi government had asked the DMRC to furnish a
reply regarding the discrepancy in awarding of contracts to only certain agencies. The Transport Minister
said that it was upset about the DMRC was excluding it from decision-making for the project even though
it had an equity partnership in the firm. He also said that the DMRC was withholding information from the
Delhi government and the latter wanted all papers from the DMRC regarding the JBIC loan conditions to
see whether they included giving contracts to only certain companies. If that was the case, he said, India
was not ready to accept such conditions and would break the contract with JBIC. This topic had come up
when the Delhi government received complaints of corruption and awards of contracts to only specific
firms.
119

In spite of the possibility of nuclear sanctions on India by Japan earlier in the year, in August 2000
it was announced that JBIC and Japan would continue to fund the MRTS project.
120
On 1
st
September,
JBIC cleared the second installment of Rs. 217 crores for the MRTS project loan to meet its requirements
till March 2001. It also referred to possible lifting of sanctions by the Japan government after India’s
nuclear tests.
121

An inside source from the DMRC said “the coaches which were to be produced indigenously for
Rs 500 crores are now being produced with such a high import content from Japan that they’ll cost Rs
1100-1800 crores... ($ 225-369 million) who is benefiting from this?”

118
The Economic Times, The Financial Express, Business Standard. 10 April, 2000.
119
Delhi government gives Metro rail a warning for immediate improvement in work methods. Problem in giving work
to selected firms only. Hindustan, 5 July, 2000.
120
Japan back to business with India. The Economic Times, 24 August, 2000.
121
Japanese bank okays Rs 217 cr Metro Rail loan. Business standard, 1 September, 2000. Also in The Times of India,
The Indian Express, the Hindu, Rashtriya Sahara, Veer Arjun, Dainik Jagaran, Punjab Kesari.
305
On 14 September 2000, it was announced that Siemens of Germany, ADtranz of UK and
Koros, a Japanese-Korean conglomerate were the final three bidders under consideration for rolling stock.
The MD was again quoted as saying that the broad gauge decision would cause a delay in the project since
the broad gauge prototype rolling stock would be tested and certified by the Indian Railways before
production. The decision to award the bid would be taken in October.
122

Soon after, on 21
st
September, it was reported that the Indian Railways were not satisfied with the
lack of emphasis on the transfer of technology in the global tenders floated by the DMRC for the rolling
stock for broad gauge.
Rather than stressing on technology for only coaches, which formed just 15% of the rolling
stock’s value, stress should be on key factors like propulsions, brake systems, vehicle integration
and AC systems. At the recent meeting of the group of ministers (GoM) looking into the Delhi
metro project, the Railway board stressed that Indian Railways has already obtained transfer of
technology for locos and is now capable of absorbing other technologies too. The Board and the
Ministry feel that the railway organizations like the coach factories at Kapurthala (RCF) and
Chennai (ICF at Perambur) should be in a position to take care of the future needs of metro
projects in the country along with the local factories at Chittaranjan and Varanasi.
It went on to say that indigenously manufactured rolling stock would result in huge savings as
other Metro rail systems were coming up in Bangalore, Hyderabad and Mumbai. The three major consortia
that were bidding for the contract included Daimler Chrysler rail systems of UK, Mitsubishi Corporation of
Japan and Siemens of Germany.
123

On 21
st
October 2000, the Korean-Japanese consortium Koros was announced as the lowest bidder
for supply of rolling stock. It was mentioned that ‘the final costs may change as the dollar has sharply
appreciated against the rupee since January and it may finally inflate the Koros offer.’
124

On 13
th
February, it was reported that Koros, part of the Koros-Mitsubishi consortium was in
financial trouble.
Saddled with labour problems, empty order books and dipping margins, it is likely to throw the $
1.2 billion Delhi Metro Rail Corporation Ltd, a joint venture of the Government of India and
Government of Delhi ‘completions schedule’ haywire.

122
DMRC to finalize contract by the end of October: Siemens, ADtranz, Koros in race for metro rolling stock order.
Anil Sasi. Business Standard, 14 September, 2000.
123
Swadeshi-Videshi tussel may hit yet another project worth Rs 1700 cr. The Delhi metro facing row over tech
transfer for making rolling stock. The Economic Times, 21 September, 2000.
124
Korean- Japanese consortium lowest bidder for Delhi Metro. Anil Sasi and Gaurav Raghuvanshi. Business
Standard, 21 October, 2000.
306
67% of responsibility for manufacturing the rolling stock fell on Koros whereas 8% was with
the Mitsubishi Corporation and 25% with Mitsubishi Electric Corporation. The contract had been approved
by JBIC but DMRC was still negotiating with Koros. The article went on to cite other articles in the
international media that discussed the failing of all three companies that constituted Koros– Daewoo,
Hanjim heavy industries and Hyundai to maintain business on their own. The delay in supply and quality of
coaches by Koros for the Hong Kong Metro was also cited as well as the fact that it had no experience of
technology transfer.
125

It was reported that attached to the JBIC’s approval for DMRC to start negotiations with first set
of bidders called L1 (Mitsubishi Corporation, Koros, Mitsubishi Electric Corporation) was the condition
that in case they failed, only then would DMRC invite the second set of bidders, L2 (ADtranz, Hitachi,
Itochu) for negotiations. The article went on to give all the advantages of ADtranz and its experience in
transfer of technology while working with Indian Railways and its state-of-the-art factory in Vadodra.
DaimlerChrysler of Germany and USA now owned ADtranz.
126
An article in 1998 had reported that
Adtranz was setting up a manufacturing plant in India in anticipation of getting some of the metro rail
contracts.
In another article on March 19, the financial health and other issues concerning Koros were again
discussed including the fact that its bid was low because it desperately needed the contract to avoid labour
unrest. The article also talked about how some of the conditions in the original contract were being relaxed.
These included firstly inspection as specified in the original contract of the coaches for safety no longer
required to be undertaken in India and secondly the lack of a localization strategy.
In another crucial piece of information, which revealed the influence of JBIC in awarding of
contracts, it was reported that the JBIC had a new representative in India,
to handle among other things the Delhi metro project. JBIC has conveyed that its officials will
have to be involved at the stage of prequalification negotiations itself because of a policy change it
has affected for projects aided by it worldwide. This has been resented by DMRC.
127

125
DMRC schedule may be derailed, Koros in deep financial mess. Binoy Sharma, The Bynea, 13 February, 2001.
126
Japan Bank’s ‘yes’ to DMRC. Go-ahead for L2 if talks with L1 fail. Binoy Sharma. The Pioneer, 14 February,
2001.
127
Delhi Metro will be delayed by a year. R Krishnan. Hindustan Times, 20 March, 2001.
307
Essentially the JBIC would now have the power to push for certain contracts and would also
gain information about the bidders thus giving it the power to dictate terms of awarding contracts. Soon
thereafter it was reported that the MOUD was reviewing the delay and cost increase in the MRTS project
and JBIC’s wish to be involved in the prequalification stage. The Ministry of Finance was in favor of the
latter. Meanwhile it was reported that the DMRC was looking into the financial situation of Koros and had
asked for ‘a comfort letter from Mitsubishi in the format approved by its legal expert.’
128

All this pressure from JBIC to be involved in the prequalification stage came just before it was
announced on 30
th
March that it had signed an agreement with the Indian government for Rs 720 crores
Overseas Development Assistance (ODA) including the MRTS project Phase II, at a rate of 1.8% with a
grace period of 10 years.
129

On 8
th
April it was reported that the MOUD had asked the DMRC to give explanations for
dilutions of technical specifications for award of the Rs 1300 crores contract to Koros – MC – MEC. The
Union Urban Development Secretary, Kosal Ram, raised questions about its lack of experience in coach
building, inexperience in technology transfer, use of a gas in the air conditioning system which was banned
in western countries and use of manual/ semi-manual coupling system instead of the automatic coupling
system.
Since so many scams are going around today, I do not want this contract also to run into any scam.
The full technical details may please be furnished so that I can refer the matter to railways for their
expert opinion. ‘Koros had not submitted its audited profits and loss statement for the period
ending June 30, 2000 inspite of reminders by the General Council of the DMRC’ and it had not
received a credit rating by a reputed company. Mitsubishi, which is the leader of the consortium
shortlisted for award of contract, has also refused to give a comfort letter for Koros in the format
approved by the legal experts. The comfort letter was sought from the consortium leader due to
Koros’ weak financial position. But it was not given for obvious reasons.
The most important piece of the article was DMRC’s stand on the issue that indicated the
constraints being put on it by JBIC.
The DMRC, however, is not keen on opening for discussion the issue of the consortium’s financial
health, saying that the Japan bank of International Corporation, which is the largest financier of

128
Rising costs, time prompt review of Delhi MRTS. The Economic Times, 22 March, 2001.
129
Japan grants Rs 720-cr ODA. The Economic Times, 30 March, 2001. The financial express, business line, the
Hindu, business standard, Hindustan, the Indian express.
308
the project, has expressed concern over the delay which has more than doubled the project cost
from the original estimate of Rs 4000 crores to the present Rs 8600 crores.
130

In beginning May 2001, it was announced that the rolling stock contract had been awarded to
Koros Mitsubishi. It would have been awarded in November of the previous year but had got delayed
because of concerns about the financial health of Koros, its ability to transfer technology as well as the
conflict over the decision to go with standard or broad gauge. It was reported that after the MOUD had
asked the DMRC for reassurance regarding the various issues concerning Koros, DMRC had said that
Mitsubishi had given an assurance that as part of the construction and adviser to Koros, it would help out
Koros financially if needed. The MOUD wanted written proof of this because it said that there was no
international example where an advisory company gave financial help to an advisee company.
131

Finally on 31
st
May 2001, it was reported that Koros Mitsubishi had got the Rs 1250 crores
contract for rolling stock. Regarding the previous concerns about Koros’ financial health, it was reported
that it was functioning well again with its delivery of rolling stock for the Hong Kong Metro on June 5. The
article also said the Mitsubishi Corporation of Japan was in a project management role.
132

Tension continues between the Railways and DMRC
The railways and DMRC came face-to-face again in November 2002, with the inspection for
clearance of safety for the first phase of the Metro rail to be performed by the Railways Research, Design
and Standard Organisation (RDSO). They were to inspect the Shahdara- Tis Hazari section.
133
The Central
government, to procure safety and security of commuters, made a decision to appoint a Chief
Commissioner of Metro Railway Safety (CCRS) who would inspect coaches, tracks and structure as well as
other parts of the system like stations, junctions and bridges. The Centre would only give clearance to run
the MRTS after they received approval from the CCRS. The Centre would also hold the power to make
laws – rules and regulations regarding safety standards and power of the CCRS who would also be able to
inspect the system any time or after a mishap and give recommendations. All these stipulations about safety

130
Urban Ministry questions Delhi Metro bid: Investigation. Shahid Faridi. The Asian age, 8 April, 2001.
131
1 May, 2001
132
Koros-Mitsubishi bags metro contract. Anil Sasi & Gaurav Raghuvanshi. Business standard, 31 May, 2001.
133
Metro will only run after clean chit from RSDO. Rashtriya Sahara, 3 November, 2002.
309
were part of the Metro Bill that the Centre had formulated for the MRTS and that was approved in
December 2002.
134

By the end of November it was reported that the Railway experts who inspected the Metro had
‘questioned the safety of metro coaches’ based on screeching sounds at turns. The Chief Minister, Sheila
Dikshit, when asked about this said,
The safety measures and the different aspects were decided by the Group of Ministers. There were
differences of opinion about the tracks. There were discussions whether the standard or broad
gauge should be used. These differences were sorted out taking everybody and even the Railway
Board Chairman into confidence. At all stages, we have consulted the Railway Board officials. No
problems were pointed out at that time also...We have not been told of anything. If there is a
problem, we should be told about it. But nothing has been pointed out.
135

A railway engineer was quoted as saying, “the coaches have been brought to the country for the
first time. They have serious mechanical problems. The contractor needs to do some re-engineering.” The
CCRS however labeled these problems as ‘hiccups’ and said, “I would not like to hold it (the project) up.”
The article said that the PCI led consortium were responsible for testing and commissioning of the project
even though the project was under the Railway Act. The last paragraph of the articles summarized the
situation.
Unlike the Indian Railways, which has a well-established system of testing, indigenization and
trials, Delhi Metro is yet to have a well-defined Manual for safety and trials. It has to outsource
since testing and commissioning is the responsibility of the consortium. Besides, with the Delhi
Metro Rail Corporation not under the Railways Ministry’s control, it has for all practical purposes
become the Urban Development Ministry’s fiefdom. Urban development Minister cites the
Railways Act to take the cake from the Congress, but the fact remains that it is governed by an
ordinance loosely drafted and piloted by Mr Anant Kumar. The project is being delivered when
technically DMRC is divided between the two governments but practically it is in no man’s
land.
136

Finally in December, when the safety of the coaches were under inspection by the RSDO and
CCRS and clarifications were being sought regarding safety, that it was stated in no uncertain terms that
It is believed that the purchase issue has been decided on the advice of the consortium of
consultants, which is reportedly dominated by the Japanese. It was basically this body that decided
on purchase of raw materials and other utilities, for the Delhi Metro rail. With the CRS and RDSO
raising objections on certain safety aspects, the Union government has been caught in a Catch-22
situation.

134
Metro will only run after recommendation by safety commissioner. Aditya Awasthi. Sandhya Times, 25 November,
2002.
135
Railway board objection leaves metro in the dock. The Asian age, 30 November, 2002.
136
Metro may take some time yet to meet safety norms. Jyoti Mukul. The financial express, 2 December, 2002.
310
The possibility that this was connected to the gauge issue was brought up again.
It is pointed out that the objections have more to do with the ego-clash politics rather than merits.
It is no secret that Mr. Sreedharan has been at loggerheads with the Railway Board and does not
have many friends in the railways either. It is believed that this could be precisely a ploy to show
him in poor light and get even with him as he and the Delhi Chief Minister were strong votaries of
the standard gauge for the Metro rail, a contention which was rejected by the GoM and Railways,
which opted for the broad gauge.
137

Meanwhile the representatives of the Korean company Koros were also called to look into the
safety matter as the MRTS would not be able to run till the RSDO and Commissioner gave a clearance.
138

On December 12, Today reported that the Metro rail had failed the second round of oscillation trials.
139
The
next and final inspection for the MRTS was scheduled on December 16. Excessive braking was one of the
problems and customization of coaches for broad gauge was given as a possible underlying reason.
140
The
RDSO said that the problems were cracks in the brake blocks during trials and substandard wheels.
141
A
press release by the DMRC defended and tried to clear itself regarding safety of coaches against the
coverage in newspapers regarding problems in the Metro.
142

The media persisted and in another article, the problems were listed as cracks in the coaches brake
blocks while applying emergency brakes, the rate of deceleration on loaded coaches exceeded the
maximum design limit and the trains overshooting the braking distance and a high jerk value that would
cause discomfort to passengers. The DMRC once again reassured the reporters that the brake blocks had
cracked because the brakes were applied 154 times in two days whereas in real life circumstances they
would only be applied 2 or 3 times a month.
143
The DMRC throughout protested against the RDSO’s
claims, saying that the Metro trial runs were well within the safety limit and that

137
DMRC clarification on safety issue sort. The Hindu, 2 December, 2002.
138
Dainik Jagaran, 11 December, 2002.
139
Brake breaks metro speed! Crucial meeting today as trains flunk second trial too. Atir Khan. Today, 12 December,
2002.
140
Delhi Metro inauguration awaits safety clearance. The Economic Times, 12 December, 2002.
141
Metro rail has many defects: Railway security commissioner will do inspection on Monday. Punjab Kesari, 13
December, 2002.
142
Metro Railway claims –coaches are fully safe for commuters. Veer Arjun, 13 December, 2002.
143
METRO inauguration on schedule. Tanu Jain. The Pioneer, 13 December, 2002.
311
It is unfair to compare them with high-speed Indian Railways trains, which are meant for long-
distance journeys. Also it cannot be established that the wheels with 0.6% carbon content will
have a greater tendency to crack.
144

The braking distance achieved in a trial is fully conformed to the design specifications prescribed
which are as per the international Metro standards. The brake-jerk rate of the Metro coaches is
controlled electronically whereas in coaches already running in India, there are no such devices
and this is purely dependent upon the skills of the driver.
145

Meanwhile, the MOUD Minister was avoiding meetings with the DMRC and Chief Secretary of
Delhi over the issue of failure of trial runs.
146

An article in the Hindustan Times reported the RDSO’s stand that the Rs 1500 crores coaches
should be ‘junked’. The article urged that this might be too drastic a measure as also one that created fear in
the minds of the commuters. Instead, it advised the DMRC and Railways to ‘mend the gap’ or mend their
relationship.
147

On December 17, it was reported that the Commissioner was satisfied with tests performed the
previous day lasting eight hours and would give his official clearance report to the Member (Electrical) of
the Railway Board. It was also reported that the earlier objections came from the mechanical side of the
Railways because they had not been accommodated in it. “The power to give safety clearance vests with
them and it is here that they can throw their weight.”
148
The DMRC on 16 December came down on the
media for what Sreedharan called “unsubstantiated and baseless media reports raising apprehensions about
the safety of the rolling stock of Delhi Metro... Metro system is absolutely safe.”
149

In an article revealing the tension between the different ministries of the Centre, it was reported
that after the RDSO’s report on the trials of the Metro rail, the Railway Board had requested the MOUD to
be relieved of any connection with the safety standards of the MRTS and said that the MOUD should take
its own decision on the matter. It did this to protect itself from any further responsibility of possible
accidents. The Chief Commissioner of Northern Railway also the CCRS inspected the Metro rail and

144
METRO men slam brakes on rumours about defects. The Statesman, 30 December, 2002.
145
Metro coaches safe and sound, claims DMRC. The Asian age, 13 December, 2002. There were eight articles on
December 13 on tests and reassurances by the DMRC.
146
Minister cancels meeting over Metro trial run. The Hindu, 13 December, 2002.
147
Mend the gap. Hindustan Times, 16 December, 2002.
148
Metro gets the green signal. The Hindu, 17 December, 2002.
149
METRO safe and will roll on December 24: Sreedharan. Mid-Day, 16 December, 2002.
312
recommended it be run at less than 50 km/h but said that the RDSO’s report had to ultimately be taken
into account.
150

Finally on December 17, articles in 12 newspapers reported that the CCRS had given safety
clearance for the MRTS as long as it did not go over 50 km per hour. The CCRS, G.P.Garg said, “although
the coaches are yet to be cleared by the Board, the standards to which the design and functioning comply
are much superior to the ones used by the Indian Railways.”
151
The speed of the trains was limited to
below 50 km/h because the emergency brakes at this speed would not be used at all since they only kicked
in over this speed limit and there would no possibility of derailment. However, the main reason given for
doing so was that the modern signaling system had not yet been installed metro rail would function on the
Indian railway signal system till it was installed.
152

Another article went into a little more detail on the signaling issue and the CCRS’
recommendation to install a ‘CAB’ system for signaling that would automatically relay information about
the train to a central control system and back, versus the color system to be used till the Tri Nagar section
of the Metro was opened and that relied on the driver’s eyesight.
153

An article on May 7 2003, reported that the DMRC would ignore the RDSO’s recommendations
to not run trains at over 50 km an hour by running trains on the Shahdara-Tis Hazari section at 80 km/h.
After the Delhi Metro Act 2002 was passed the DMRC no longer had to abide by RDSO’s
recommendations. The DMRC had also installed the CSC and ATP signaling system. Only the CCRS
would be inspecting the MRTS and his or her advice would be followed.
154

150
Railway Ministry finished with Metro rail. Dainik Jagaran, 17 December, 2002.
151
Coaches and tracks to be examined daily; All systems safe to run, says test. The Indian Express, 17 December,
2002.
152
CRS and not to Metro rail operations. Chetan Chauhan. ...but Railway board will take final decision. Sridhar
Kumaraswami. The Hindustan Times, 17 December, 2002. The Times of India, Navbharat Times, Today, Rashtriya
Sahara, Hindustan, Jansatta.
153
New signals may take a while. Anurudha Mukherjee. The Times of India, 19 December, 2002.
154
Metro put aside standards of RDSO. Jitendra Kumar. And guru Warner andRashtriya Sahara, 7 May, 2003.
313
Indigenization of Coaches
An article on 16
th
April 2003 in the Times of India reported that the DMRC was paying five times
the price for a rake of six coaches from Koros then what it would have had to pay the Integral Coach
Factory (ICF), India’s biggest coach manufacturer. The difference in cost was Rs 33 crores versus Rs 5.75
crores. The article then informed that ICF was not able to bid for the DMRC because it was not given
clearance by the government to do so. The ICS and rail coach factory, Kapurthala had not been chosen for
transfer of technology of rolling stock for the MRTS and the contract had instead gone to Bharat Earth
Movers Ltd (BEML), a public sector company under the Defence Ministry that had tied up with the South
Korean Koros. Meanwhile, the ICF had received a massive order for 700 rakes from World Bank aided
Mumbai Rail Vikas Company. The Railways, seeking aid from the World Bank, had presented a reform
agenda, which made production units like ICF ‘into PSU’s with the possibility of privatization.’ The ICF
general manager Ramani said that imported coaches were more expensive because they were ‘designed for
a higher class of passengers than what our passengers can afford.’ He also pointed out that in Europe and
US 2.5-5% of the turnover was spent on research and development while ‘India can only afford to seek
technological collaboration with firms abroad.’
155

On April 17, 2003, it was reported that the ‘Delhi Pradesh Congress committee president Subhash
Chopra had accused the BJP leadership of perpetuating the big scam in the import of the metro coaches,’ by
buying them at 5-7 times higher prices than could have been manufactured indigenously at the Integral
Coach Factory (ICF) in Chennai.
156

This was an attack on the BJP led Central government by the opposition Congress party.
The DPCC president said it was shocking to learn that ICF and rail coach factory, Kapurthala, had
lost out on the technological collaboration even for the manufacture of spare parts of DMRC.
When the profit-making companies are being sold for throwaway prices on flimsy grounds in the
name of disinvestment, it was not surprising that the scam ridden NDA government had chosen to
squander away prestigious foreign exchanges for purchase of metro coaches when the same could
have been made available in India.
157

155
What price the metro coaches? Rajesh Ramachandran. The Times of India, 16 April, 2003.
156
Probe sought into metro coach import. Hindustan Times, 17 April, 2003. National Herald
157
Congress demands probe into purchase of metro coaches. The Hindu, 17 April, 2003.
314
Subhash Chopra pointed out that the ICF was not allowed to bid for the project even though it
was capable of manufacturing the desired coaches.
158
This point had also come up when the contract of the
coaches was awarded in December 2001.
The BJP member of Parliament, Madan Lal Khurana and chairman of DMRC, E Sreedharan,
responded that Subhash Chopra was politicizing the project and that the Congress, as part of the Delhi
government, was as responsible for the decision to get Korean – Japanese coaches as was the BJP central
government.
159
Khurana then asked the DMRC MD to give a full report on this matter.
160
He said that he
would support a CBI inquiry into the matter if Chief Minister Sheila Dikshit initiated it. He attributed the
matter to politics, turning the tables on the Congress by saying that it was an internal matter between the
Chief Minister and the president of the DPCC. “A senior Congress functionary told me that by raising the
issue of metro coaches, the Delhi Pradesh Congress Committee president, Subhash Chopra, was trying to
embarrass the Sheila Dikshit government.”
161

Another article meanwhile reported that ‘according to ICF, it was done because BEML lacked the
capability to manufacture the coaches resulting in more coaches being purchased from Korea.
’162
Though
there was no indication that this was the case as BEML was participating in transfer of technology.
The CPRO, Anuj Dayal responded to the ICF manager’s allegations by saying that award of
rolling stock was based on competitive bidding on a global tender. BEML had been awarded the contract
‘to manufacture 180 coaches based on technical capabilities and commercial considerations’ for
indigenization and BEML engineers were being trained in Korea. He added that the order ICF had received
from the World Bank aided Mumbai Rail Vikas Company was for suburban coaches whereas the metro rail
had special features.
163

158
Allegation of scam in metro rail coaches. Punjab Kesari, 17 April, 2003.
159
The Delhi government also responsible in the import of metro coaches: Khurana. Dainik Jagaran, 20 April, 2003.
160
Waiting for report on sale of metro coaches. Amar Ujjala, 20 April, 2003.
161
Khurana ready for probe into coach deal. The Hindu, 20 April, 2003.
162
New turn in Delhi Metro coach conflict. Dainik Jagaran, Chennai, 21 April, 2003.
163
Hi-tech coaches. The Times of India, 23 April, 2003
315
On 29
th
April 2002, it was announced in many newspapers that BEML had been awarded the
contract for the design, manufacture and supply of two 700 diesel electric locomotives.
164

The possibility of corruption in the purchase of coaches from the Korean-Japanese consortium as
well as the award of the indigenization contract was covered by 12 newspapers including five Hindi
newspapers. The main report was that this was a result of tension between members of the Congress, the
president of DPCC, Subhash Chopra and Chief Minister Sheila Dikshit. It was Subhash Chopra who had
called for a CBI enquiry into the matter. Sheila Dikshit denied the allegation along with the MD, DMRC.
165

The DMRC MD said that the coaches were state-of-the-art adapted to the Indian climate with automatic
doors and if an Indian company could deliver such a product then DMRC would welcome it.
166

However, since the BJP member, Madan Lal Khurana was the chairman of DMRC, it seems more
likely that a member of the Congress party alleged corruption by the DMRC and called Khurana for
accountability. Khurana countered this attack by alleging there was infighting in the Congress. “Mr.
Khurana has taken over the charge five months ago. And therefore, Mr. Chopra’s charges point fingers
more at Ms Dikshit, than at the BJP,” said party office bearer Jagdish Mamgain.
The DMRC chief wrote a letter to Subhash Chopra saying, “perhaps you are not aware that the
suburban coaches made by the ICF are not fit and safe for metro operations.”
167
Essentially after the Central
BJP government control of the DMRC in December 2002, the project was politicized and now the
Congress was fighting back first by saying it would run buses along the MRTS route and second by
alleging the possibility of a scam for which BJP member and DMRC chairman Khurana would be held
responsible. The BJP demanded Chopra’s resignation as president in retaliation against his allegations.
168

There were 24 articles in newspapers from April 17 to 29 including 10 Hindi articles covering this issue.
On October 3, 2003, the first coach manufactured in India by BEML rolled out of a metro station.
Newspapers across the board reported excitedly on this news.

164
The Hindu, Jansatta, 29 April, 2002.
165
Accusation of scandal in the purchase of Metro coaches. Rashtriya Sahara, 29 April, 2003.
166
DMRC chief refutes allegations. National Herald, 29 April, 2003.
167
Chopra demand gets metro missive. Karuna M John. The Pioneer, 29 April, 2003.
168
BJP demands Chopra’s resignation over metro charges. The statesman, 29 April, 2003. Hindustan, Hari Bhumi.
316
Update
After the Metro Bill was passed in 2002, the DMRC was given control of all technical decisions
about the project and for the second phase of the project it decided to revert to standard gauge. In an
interview with Business Standard in August 2008, the DMRC MD, E Sreedharan mentioned that the second
phase of the MRTS project was being run on standard gauge as this would allow India to avail of the latest
technology in metro systems. He also said that it caused savings of 4-5% and mentioned that the DMRC
needed to increase its profit margins and inefficiency by earning from other sources like ‘bus fleet, even
trams, in addition to real estate and consultancy services.’
169
In developments on rail transit projects in
other cities, the conflict between standard and broad gauge continued. In Mumbai a committee under the
chairmanship of the Union Minister Sharad Pawar that had been set by the Prime Minister Manmohan
Singh to settle the issue of type of gauge for the Mumbai metro rail, decided to recommend standard gauge
despite protests by the Railways that ‘broad gauge is universal as far as Railways in India are concerned
and, as such, the railway manpower is also trained for handling the broad gauge lines. Besides, costs of
components are not an issue as equipment for Delhi metro railway, which runs on broad gauge, are
manufactured locally.’ The Mumbai Metropolitan Regional Development wanted standard gauge for its
maneuverability, space-saving design and availability of parts in the international market at competitive
rates.
170
The Hyderabad Metro rail project had also decided to go for the standard gauge. It was reported
that ‘the project will be built under the Andhra Pradesh Municipal Tramways (Construction, Operation and
Maintenance) Ordinance 2008’.
171

The Business Standard reported on October 2, 2006, that with the Railways not willing to enter the
urban rail projects in cities like Chennai, Ahmedabad and Kochi that were planning to start metro rail
projects, ‘the operator in almost every city is likely to be a private player.’. A top-level railway official
talked about the non-viability of urban rail transit projects.

169
‘DMRC needs to earn from other sources’. Bhupesh Bhandari & Biljith R, Business Standard, Mumbai, 11 August,
2008.
170
Centre favours standard gauge for metro rail, Ends the tussle between MMRDA and railways over the gauge issue.
Makarand Gadgil. Business Standard, Mumbai, 21 March, 2006.
171
AP okays Nav Bharat consortium for Metro rail project. Business standard, Chennai, Hyderabad, 5 August, 2008.
317
There is not even a single instance of a Metro service becoming a viable anywhere in the
world. Of course, if the government wants to run a Metro service as a social obligation, it can do
so. But the railways to not have the resources to fund such an expensive proposition.
172

In 1998, soon after the General Consultant controversy, the DMRC MD in an interview had said
that the ideal system for implementation would be Built-Operate-Transfer (BOT) rather than a BOO system
because, being too huge for a single private entity, there would have to be government investment and
participation.
173
After the Delhi Metro Rail project was implemented, the whole structure of building metro
rail projects was shifting to that of Public Private partnership and in the case of the Hyderabad metro rail to
a Build- Operate- Transfer (BOT) system as recommended by the DMRC. The Mumbai MRTS was being
implemented on a Public Private Partnership (PPP) format.
174
The public-private partnership was also seen
in the fast track Airport line in Delhi with the DMRC in charge of the civil structure and a consortium led
by the Anil Ambani Group, which also included CAF of Spain, in charge of financing, design, development
and operation of the line.
175
The Hyderabad Metro rail project contract on a BOT basis was awarded to
Nava Bharat-Maytas consortium in August, 2008. This too was an Indian foreign collaborative.
176
In the
public-private partnerships the central and state governments would provide the legislative support along
with suitable incentives. The framework for the incentives was not as clear in the BOT project as was seen
in the conflict between the DMRC and Andhra Pradesh government. The DMRC MD pointed out that the
Andhra Pradesh government was allowing routes for the Hyderabad rail system to be modified to suit a
private developer and his land holdings; the city was providing infrastructure that would benefit private
development. In September 2008, the Andhra Pradesh government demanded an apology from the DMRC
MD for his remarks,
...that the negative viability funding in the case of HMR resulted solely on account of 296 acres of
prime land being made available to the BOT operator for commercial exploitation. He felt “this
might lead to a big political scandals sometime later...He said it was apparent that the BOT
operator has a hidden agenda which appears to be to extend the Metro network to large tract of his
private land holdings so as to reap the windfall profit of 4-5 times that land price. The Andhra
Pradesh government responded saying that it had not made any land available to the operator and

172
Railways against Metro foray. K P Narayana Kumar. Business Standard, 2 October, 2006
173
Tuesday interview E Sreedharan, ‘policy consistency is essential for success’. Mukul Chandra Gogoi. The
Economic Times, New Delhi, 8 September, 1998.
174
http://www.mmrdamumbai.org/projects_metro_rail.htm
175
REL-led group bags IGI metro project. Business standard, 23 January, 2008.
176
AP okays Nav Bharat consortium for Metro rail project. Business standard, Chennai, Hyderabad, 5 August, 2008.
318
alleged that the DMRC MD was changing his stand on a ‘policy shift in favor of developing
Metro rail projects under BOT model.’ The DMRC denied that it was doing any such thing
however its press release pointed out that Hyderabad’s success in BOT model should not be cited
as an argument for changing the policy of the government for funding the metro projects in the
country.
177

An important issue that emerged was that other cities were now linking urban rail transit projects
directly to property development because, as pointed out by E Sreedharan, this was the only way for the
project to become viable. The accusation by the Andhra Pradesh government implied that as an operator in
Delhi, the DMRC was open to being questioned about the governmental support it was getting as other
private companies for urban rail transit projects were entering the sector on a BOT basis. E Sreedharan
wrote an article in the Indian Express clarifying this issue.
I must clarify that at no time had I stated that ‘Build, Operate, Transfer’ or BOT model is not
going to work for Hyderabad Metro. DMRC prepared detailed project reports (DPRs) for all the
metros planned across the country, including for Hyderabad. For none of those cities was the BOT
model recommended — only for the Hyderabad Metro. We still stand by our recommendation.
There were specific reasons why the BOT model was expected to succeed in Hyderabad: the low
cost of construction (since no tunnelling is involved), and the huge ridership expected. Even then,
we had expected a gap: 40 per cent of the cost would need to be funded to make the BOT model
work.
What transpired later was that the Government of Andhra Pradesh offered 269 acres of prime land
in the city to the BOT operator, which would enable him to exploit more than 20 million square
feet of commercial space. DMRC had never recommended this nor were we a party to this. This is
what I had termed as ‘selling the family silver.’ When we discovered that the Metro lines were
altered and extended (DMRC had objected to this) to areas where the successful BOT operator had
extensive private land holdings — a Metro connection would enhance the market value of these
plots four or five times — we began to feel that the tendering process was clearly not transparent
enough and we withdrew from our role as prime consultants.
In this connection, I must put on record that DMRC was not involved in the pre-qualification of
tenderers nor in the selection of the BOT operator. What I had mentioned in my letter to the
Planning Commission was that these alterations to the DPR which benefited a particular party may
lead to a political scandal later. We had seen in this country, whenever there is a change of
government, the next Government rakes up many issues pertaining to the previous government’s
regime. This has happened in Kerala, Karnataka, Tamil Nadu, UP, and elsewhere: it might happen
in Hyderabad also.
Hyderabad Metro has succeeded in the BOT experiment solely because of large areas of prime
land made available to the concessionaire for commercial exploitation and because this particular
concessionaire grossly benefited privately even otherwise. None of the other cities has such prime
land available to be offered as sweetener to a BOT operator. Therefore, what I had written to the
Planning Commission was that the success of BOT experiment in Hyderabad should not be cited
as an argument for ensuring that all the other metros are constructed on the BOT model.
Unfortunately, these words of mine have been distorted to say that Hyderabad Metro is not going
to work on BOT model.
Metros are highly capital-intensive. If the fare levels have to be kept low so as to be affordable to
the common citizens, they have to be offered many incentives to keep down the cost of
construction. Otherwise it would serve as a massive financial burden to the government. If the

177
Andhra Pradesh demands apology from Sreedharan. Business standard, Chennai, Hyederabad, 23 September, 2008.
319
Delhi Metro is making a profit and is not a burden on the two governments involved, it is only
because of such concessions, concessions extended consciously by the Union Cabinet. Why
should the Planning Commission or any other agency grudge such concessions being extended to
a fellow Government agency like DMRC so as to make it financially viable?
It is seen that if a metro is constructed by a private concessionaire the cost of such a system will be
at least 25 to 30 per cent more than if it is done on the DMRC model. Further, the country must
aim at standardisation and indigenisation, which would lead to a significant reduction in cost. This
cannot be achieved if each metro is executed by a private agency. I have, therefore, no hesitation
in strongly advocating that other metros in the country should be taken up only on the model
successfully used by the DMRC.
178

The DMRC was now using the same argument as used by the Railways for standard gauge for
urban rail transit systems. If the BOT model was to become successful, the government would have ensure
that it was lucrative for the private concessionaire, as in the case of Hyderabad by allowing it to benefit
from public infrastructure and public concessions. The difference in the case of the DMRC was that
property development would be a state venture. The DMRC would be leasing the property around the
stations to private developers. An editorial in Business Standard pointed out that compared to the subsidy
that the Hyderabad Metro Rail Corporation was giving to the private developer, the DMRC received much
before both in terms of tax exemptions and in the form of property.
He points out that while the Maytas consortium has agreed to pay the government Rs 30,300 crore
over the project’s life (in terms of net present value, that’s Rs 1,240 crore), much of this is due to
the fact that the government gave the Metro 296 acres of land it can use for development- had this
not been so, Sreedharan says Rs 10,000 crore more would have been required in terms of viability
gap funding. Most who read the letter, the contents of which were liberally leaked to the press,
would assume none of this apply to the DMRC – indeed, the Finance Ministry is so impressed by
the argument, it is actively examining the merits of this vis-à-vis the PPP model being pushed by
the Planning Commission...What’s important to keep in mind here is that the Delhi Metro itself
got a huge amount of land – the 2006-07 annual report talks of 960 acres of land in just one place!
In other words, whatever the Hyderabad Metro got Delhi got many times that. And while the
Hyderabad Metro didn’t get any land to lease/ sell (it can develop/lease only the space above the
Metro stations/depots), the Delhi Metro’s also transferring the leases of chunks of land for as
many as 90 years – this is tantamount to selling government land. While DMRC’s auditors have
said that this amounts to selling property and violates the law, the CAG (Comptroller and Auditor
General of India) says it’s okay- the short point, however, is that DMRC’s land deal is a lot
sweeter than Hyderabad could ever imagine. Not surprisingly then that the Municipal Corporation
of Delhi has levied Rs 452 crore property tax on DMRC, which the latter has contested, citing the
Chief Secretary’s decision that this would not be levied – the New Delhi Municipal Corporation
has followed with the Rs 33 crore demand. Not paying taxes on the land, in turn, boosts Delhi
Metro’s profits even more, and it’s unlikely the Hyderabad one will ever get any tax breaks like
this. Interesting, real estate income in 2006-07 accounted for 53% of DMRC’s total revenues,
nearly 70% of EBDIT (Earnings Before Depreciation, Interest and Taxes) profits- in terms of pre-
tax profits, real estate profits were 11.6 times the overall profits.
179

178
BOT seriously. E Sreedharan. The Indian Express, 31 October, 2008.
179
Rational expectations. Sunil Jain. Business Standard, 6 October, 2008.
320
In the MOUD Annual Report 2007-2008, it was stated that the BOT model with private
promoters was being considered with the Government of India providing funding for ‘viability gap
support.’
180

Discussion
The first round of arguments over the two gauges centered on the Uni-gauge Policy adopted by
India in 1992, integration between Urban and Suburban Rail, use of indigenous technology as pros for the
use of broad gauge. The DMRC debated that there were countries where different gauge types were used,
even Japan and that it would not be possible to integrate Urban and Suburban Rail due to technological and
logistical differences between the two, that technology transfer was inevitable in either case and that the
standard gauge was technically superior. Each side argued that its gauge would be more cost effective,
though indigenous production would tilt cost effectiveness in favor of broad gauge in the long run. As the
Railways argued, standard gauge coaches for only the MRTS would not amount to profitable production in
terms of scale and the choice would be limited to importing coaches. They suggested it was prudent to go
with broad gauge, with Indian Railways manufacturing warehouses for broad gauge ready to start
production. They also pointed out that the cost of transporting standard gauge stock would be high. An
article later informed that some of the bidders for the project had considered setting up Greenfield
manufacturing units for standard gauge rolling stock but going with broad gauge and transfer of technology
would not necessitate it. Setting up of Greenfield units for Standard gauge rolling stock by foreign firms
would do little to help the Railways Industry and even if collaboration and transfer of technology was
envisaged it would have been a long drawn out process with the possibility that the Railways would have to
start from scratch.
The recommendation of standard gauge by the GC turned out to be a major drawback for the
standard gauge. A majority of Hindi newspapers had discussed in detail the reason behind the GC’s
recommendations for standard gauge- a way to provide a market for its own Industries. They also talked
about in the context of the initial controversy about the appointment of general consultants and questions

180
Annual Report 2007-2008, Ministry of Urban Development, Government of India. p. 47.
http://urbanindia.nic.in/moud/quickaccess/ann_report/2007_2008/2007_2008.pdf
321
raised even before they were appointed, of their recommendation for a standard gauge for the metro
rail. The condition of the five Railways manufacturing units that faced excess capacity, the decline in
orders from railways and the need to bolster domestic production also featured prominently. The MOUD
and Ministry of Railways held a meeting to discuss this pressure from Japan and the cost and technological
implications of going with the standard gauge, revealing that the Indian government, the media and the
public were well aware of Japanese interference in the project. Most of the English newspapers mentioned
that the GC was recommending standard gauge and there was pressure from the JBIC to adopt the standard
gauge, though there were no discussions on the implications of this, as was done in the Hindi newspapers.
Their sympathy lay with the DMRC and using the latest technology via the standard gauge. The Indian
Railways was portrayed as the monopolizing domestic industry that was engaging in power play.
In all articles the DMRC and Delhi government talked about being at the technological forefront
of technology for the MRTS because of the prevalence of standard gauge in the world and the easy
availability of rolling stock and other features in the international market. The Congress Delhi government
and DMRC actively advocating for the standard gauge was also being politicized with the opposition leader
setting up the stage for an attack on the Congress Delhi government if the standard gauge was chosen as a
way to gain popular vote for support of domestic industry.
The impact of the decision on funding of the project was also not lost on the media and they
repeatedly mentioned the DMRC’s concerns about the Japanese reaction. This concern continued and every
time that there was intervention by the Indian government regarding award of contracts or change in
specifications contrary to recommendations by the GC, there was concern about how the funding country
and agency would react because it was funding two-thirds of the cost of the project for the first phase and
the DMRC needed funds for the consequent phases for survival of the project.
There were other reports and information that indicated other underlying reasons for the conflict
and each group’s interest in the gauge they were advocating. There were a series of stories of how the
conflict over the gauge was based on an antagonistic history between the MD, DMRC and the Railway
Board Chairman and the DMRC had hoped that after the latter retired the Railways would be more open to
the standard gauge. Since this did not happen, the decision to go with broad gauge seemed to be rooted in
deeper structural issues. The Railways till now had controlled all rail-based projects in the country.
322
Among other reasons why the DMRC would be advocating standard gauge it was reported that
the DMRC had already started construction with standard gauge specifications. This was mentioned
outright in one article but inclusion of articles in the ‘gauge’ collection of articles by the DMRC regarding
change of a route in the Ram Bagh area after columns for an elevated track had already been constructed,
indicated that this was also the case.
The DMRC announced that the decision for broad gauge would cause a 4-month delay in the
project and a cost escalation of Rs 4 crores ($0.8 million) due to modification of rolling stock, even though
DMRC had earlier claimed that it had invited bids for both standard and broad gauge in its tenders. An
article on the Chief Minister, Sheila Dikshit’s questioning of the DMRC for going ahead and inviting bids
for standard gauge when the decision on gauge had not been made, went contrary to its claim. The MD,
DMRC even offered to resign on this issue but was persuaded by the Deputy Prime Minister not to do so.
The DMRC may well have invited bids for only standard gauge. If that was the case, it would be held
responsible for the amount of delay this would cause in the project, especially after it invoked the Rs 2
crore ($0.4 million) per day cost escalation whenever any other issue emerged like cutting trees, land
acquisition, decision on contracts etc. At the end of May, it was announced that the project had been
delayed by six months due to the decision to go with broad gauge. In the case of the gauge issue, the
Railways later pointed out that the DMRC did not care as much that its insistence on keeping with standard
gauge was delaying the project. If the project had already got delayed, this would be a way to justify it and
not be blamed in light of all the publicity about how much it was costing for each day’s delay.
Next the DMRC and the MD said that the standard gauge would be better in light of the 100% FDI
policy for Urban Transport Projects that was cleared by the Union Cabinet in May 2001 as foreign
investors would be more willing to invest in the internationally tried and tested technology of standard
gauge but its implications on larger issues of foreign companies entering the domestic marketplace was not
discussed. For the DMRC it may have been because of a genuine concern for future funding for the project
but as one article in a Hindi newspaper pointed out, the failure of Enron in the power sector was a lesson
against depending on FDI. Russia and China were held up as examples of broad gauge nations.
As the DMRC persisted in its arguments for standard gauge, the Railways shifted focus on the
issue of interconnectivity as the main reason for their support of broad gauge. As mentioned by the Railway
323
Board chairman in June 200, the decision to use broad gauge was not about the technology but to allow
interconnectivity with the National Capital Region. This was undoubtedly based on the Urban Transport
Policy in general and for Delhi in particular in the five-year plans as has been discussed in the previous
chapters. The DMRC once against responded that this would not be technically feasible and said that
suburban passengers did not constitute a large enough number to justify a broad gauge. When the GoM and
Cabinet cleared the broad gauge in August 2000, it was based on need for interconnectivity, extra carrying
capacity and existence of broad gauge systems in other cities of the country. Mamta Banerjee, the Railways
Minister from West Bengal and founder of the All India Trinamool (grass root) Congress party who came
from the state with a strong communist leaning and home to the Calcutta Metro that ran on the broad
gauge, would have also had a strong predisposition for domestic industry and broad gauge. Most
importantly, responsibility of safety clearance for the project lay with the Railways and was cited as the
main reason for going with the broad gauge.
It was simultaneously reported that the Railways were going to start manufacturing standard gauge
for e

Asset Metadata

Creator Mann, Anupama (author)

Core Title A megaproject matrix: ideology, discourse and regulation in the Delhi Metro Rail

Contributor Electronically uploaded by the author (provenance)

School School of Policy, Planning, and Development

Degree Doctor of Planning and Development Studies

Degree Program Planning

Publication Date 03/24/2010

Defense Date 01/20/2009

Publisher University of Southern California (original), University of Southern California. Libraries (digital)

Tag discourse,foreign loan,funding,ideology,land acquisition,megaproject,Metro Act,national capital region,newspapers,oai:digitallibrary.usc.edu:usctheses,OAI-PMH Harvest,quasi-government body,Railways,regulation,Resettlement,urban development,urban transport policy

Place Name Delhi (city or populated place), India (countries)

Language English

Advisor Krieger, Martin (committee member), Little, Richard G. (committee member), Schweitzer, Lisa (committee member)

Creator Email amann@usc.edu,anupama_mann@hotmail.com

Permanent Link (DOI) https://doi.org/10.25549/usctheses-m2033

Unique identifier UC1140334

Identifier etd-Mann-2652 (filename),usctheses-m40 (legacy collection record id),usctheses-c127-220449 (legacy record id),usctheses-m2033 (legacy record id)

Legacy Identifier etd-Mann-2652.pdf

Dmrecord 220449

Document Type Project

Rights Mann, Anupama

Type texts

Source University of Southern California (contributing entity), University of Southern California Dissertations and Theses (collection)

Repository Name Libraries, University of Southern California

Repository Location Los Angeles, California

Repository Email uscdl@usc.edu

Abstract (if available)

Abstract 'A Megaproject Matrix: Ideology, Discourse and Regulation in the Delhi Metro Rail' is a case study based research project and contributes to the literature on the political economy of development, planning in developing countries and megaprojects, in particular Albert O. Hirschman's study of development projects. It examines through media discourse, the Delhi Metro Rail, a transportation megaproject being implemented in Delhi, the capital of India. The research is based on the extensive coverage that the project has received since 1996 by the prolific Indian newspapers as well as government documents, informal interviews, photos and videos. The study covers a wide range of issues- the relationship between India's political ideology and the choice of the megaproject, the implications of the foreign loan and its effect on domestic funding, the transformation in the institutional frameworks of public projects towards privatization and effects on project transparency and accountability, political opportunism for credit of the project, struggle over governance reform between the national and local governments, effect on transport policy and projects at the local and national levels, struggle between domestic and foreign industry as India liberalizes its economy, the meaning of environmental impact, lack of a social security network as well as social struggle and its affect on policy, existing class barriers and media bias and shortcomings of the project design. Going beyond the immediate transportation solution that the project seeks to fulfill or its suitability based on a cost benefit analysis, the study concludes that the detailed research of a megaproject is crucial for understanding political, economic, social and cultural changes undergoing in a nation as the megaproject affects and is affected by the changing environment over an extended period of time.