"Delhi Metro Phase-I & Phase-IIDMRC had faced a mammoth problem to raise funds for the project.The GOI had no money to fund such a gigantic project and noforeign funds were available due to the Economic Sanctions afterthe Pokaran-2 Nuclear tests. The GOI then decided to construct awhole new segment for the project by concentrating all availablefunds it had towards this project. This did the trick and DMRCproject was able to attract foreign investors, mainly from Japan.The Japan Bank for International Cooperation showed interest inthe project and lifted the gloom off the DMRC project. Phase-I andPhase-II have been completed as of now with a hefty debt amount.Almost 60% of the funding has been through debt from JICA andother subordinate financial institutes. 30% of the investment camefrom the equity and the rest has been covered up by the revenueDM has generated. Delhi Metro Phase-IIIThe phase-III of Delhi Metro will cover 159.3 km and it will cost Rs41,079 Cr. Twenty percent of the total expenditure would come asequity support in equal proportion from the Government of Indiaand GNCTD. In the Union Budget 2015, government has allocatedRs 4259 Cr to DMRC, of which Rs 1007(approx.) will be given asequity for the Phase-III. Apart from that Government has alsoallocated subordinate debt Rs 530.18 Cr to pay for LandAcquisitions and Central taxes for Phase-III which is to be repaid byDMRC after repaying all the other debts. For the first time the DelhiDevelopment Authority (DDA) will be funding nearly 25 per cent ofthe total estimated cost of the project. The Urban DevelopmentMinistry has asked the DDA to assist the DMRC with at least Rs10,000 crore for the phase-III. This will reduce dependency on theJapan International Cooperation Agency (JICA) for monetaryassistance in the form of soft loans. It is expected that the projectwill be finished by March 2016.13 Delhi Metro Phase-IVThe proposed phase-IV of Delhi metro will come up with six newcorridors. As per the Detailed Project Report (DPR) submitted toUrban Development ministry and Delhi Government, it will cover104 km, 67 new stations will come up and will be completed by2020, subject to clearance. The main purpose of phase-IV is toconnect the farthest corners of the city that will be connected withphase-I, II, III, so that the travel time will be reduced. Financial Benefits of DMRC Project:Looking at the most robust operation of DMRC the financialbenefits from the metro are the fare revenues and propertydevelopment, as reported by RITES. The main source of revenue ofthe MRTS system is the fare box collection, which is a product ofthe total passenger ridership on the MRTS as reported in belowTable:Fare rate Percentageridership(In Rs/Passenger trip) 3 100%4 90%5 75%6 50%(M N Murty, 2006)The authors have considered four rates per trip: Rs 3, 4, 5, 6 atApril 1995 prices and the fare sensitivity of ridership. Full ridershipis expected to materialize on the metro with a fare comparable tothe DTC bus fare of Rs. 3 per passenger trip. However, with higherfares, the ridership is expected to decline given that the willingness14 of passengers to travel by the metro depends on the value theyplace on time savings, frequency and safety of service, comfort andease of travel, capacity to pay, etc. The financial model consisting ofRs. 5 per passenger trip and an annual fare increase of 7.5 per centwas considered optimal by RITES. (M N Murty, 2006)Considering the estimates of financial flows of DM during the period1995-2041, the financial cost-benefit ratio is estimated at 2.30 and1.92 at 8 percent and 10 percent discount rates, respectively. Thefinancial internal rate of return of DM is estimated as 17 percent.(M N Murty, 2006)Estimates of Financial Flows of Operation and Maintenance (O&M)Expenditures by DM (Phases I and II) During its Life Time(M N Murty, 2006)Identification of Economic Benefits and Costs of Metro:The economic benefits and costs of the Delhi Metro Project can beunderstood with the identification of the changes brought out by it15 in the transport sector of the economy. Most importantly, DMcontributes to the diversion of a very high proportion of currentpassenger traffic from road to Metro and serves an integral part ofthe growing passenger traffic demand in Delhi. ? To cope up with this surge in demand, Delhi Metro wasincepted and has caused a substantial reduction in thenumber of buses, passenger cars and other vehicles carryingpassengers on Delhi. There are hefty savings in travel time forpassengers still travelling on roads due to the reducedcongestion which is also true for those travelling by Metro. ? The Metro has brought about a reduction in air pollution inDelhi because of the substitution of electricity for petrol anddiesel and a dramatic reduction in congestion on the roads.This has resulted in the reduction in number of accidents onthe roads.? If the Government of India and the private sector invest intothe Metro Project all over the country, drastic reductions inroad developments and their maintenance can be seen. Also,there would be reductions in motor vehicles’ operation andmaintenance charges for both the government and the privatesector. ? There could be cost savings to passenger car owners in termsof capital cost and operation and maintenance costs of cars ifthey switch over from road to Metro for travel in Delhi. Thefare box revenue collections by Metro is at the cost of therevenue, accruing earlier to private and the government busoperators and hence constitutes a loss in income. With the Phase-I and Phase-II, up and running successfully, theDelhi public gains substantially:- It saves travel time due to a reduction of congestion on theroads and lower travel time of the Metro. 16 "