Group-6

Neha 0192/54
Swati Sahoo 0234/54

DELHI METRO RAIL CORPORATION Sahil Yadav 0284/54

Radhika Gupta
Shashank Srivastava 0444/54
Prakhar Thamke 0124/54
Priyanka Kamdar
MASS TRANSIT SYSTEM FOR DELHI-PLANNING
•The discussion of mass transit system for Delhi came around1970, when Delhi’s population crossed 3.5
million mark.
•From 1970-1990, different governments considered several different models, Government of National
Capital Territory of Delhi ran feasibility studies in 1989, which went through revisions during 1990-1995.
•By 1995, the population of Delhi had grown to 11.17 million. The increasing in number of total vehicles was
putting pressure on existing roadways and the relative share of taxis and 3-wheelers was declining.
•The number of buses operated by Delhi Transport Corporate had decreased from 4392 to 3480.
•The public transportation system was clearly ill equipped to handle the transit for projected population of 20
million by 2015
•The government had plenty of land and wide roads that could be easily acquired, this made Delhi an ideal
location for construction of metro network
•The estimations in feasibility study projected that Metro will be able to take 2.2 million commuter trips per
day off roads, reducing the bus requirement by almost 2600, thus, freeing up space for city traffic to flow
faster
•On May 3, 1995, Cabinet of Ministers cleared the proposal and DMRC was incorporated to turn the
vision of a Mass Transit System for Delhi into an operational reality
DELHI METRO RAIL CORPORATION-INCEPTION
•Partnership- DMRC was incorporated with equal equity partnership between GoI and GNCTD, out of 16
directors, GoI and GNCTD could nominate 5 each
•Funding- The cost estimation of Phase I of metro was $ 2.91 billions (₹105.7 billions), DMRC obtained
60% of the funds required in the form of loan from JBIC (Japan Bank of International Corporation)
•The project remained inactive after that up until JBIC issued an ultimatum to the GoI that they would
withdraw the loan if they don’t appoint a Chief for the project by October 1997.
•After this, an interview board consisting of CM, Transport Minister and Governor of Delhi requested Dr.
Sreedharan to come to Delhi to address the situation
•Dr. Sreedharan was assured that issues like his retirement age and the Konkan railway project that he was
currently heading would be taken care of, they needed his commitment to come on board.
•Dr. Sreedharan agreed to head the project, provided his conditions were met, which were:
• First, he would be allowed to build his own organization without interference
• Second, no bureaucratic and political interference in the functioning of DMRC
• Third, he would be given all powers to make decisions
• With the exception of certain powers that Indian Company Law prevents, all powers were granted to him
and he took over as MD of DMRC in November 1997
DR. SREEDHARAN- METRO MAN
•Dr. Sreedharan had created a reputation of meeting deadlines through various projects in railways

•In 1963, at the age of 31, he was selected the in-charge of project for the restoration of Pamban Bridge,
linking Mandapam and Rameshwaram. Although the State Government fixed a target of 6 months, he was
able to finish the project in 46 days

•Next up, in 1990 he was made the head of Konkan railway Project, a 760 km railway line that was both
engineering and financial challenge with naysayers foretelling that it was impossible to build such a railway
network over the rough Konkan terrain. Under his direction the project was completed in stipulated time of
seven years

•Dr. Sreedharan was also known for his integrity and inflexibility on certain issues. He openly criticized
granting the Hyderabad Metro Rail Project to Maytas Infra led private consortium, alleging that free of cost
government land of 296 acres given to the consortium would probably be exploited for Real estate
development

•Despite constantly being in the public eye, Dr. Sreedharan was known for his simple living and spiritual
leanings
 UNIQUE MANAGEMENT STYLE
Punctuality

•Trains having record of 99.9% punctuality

•Reverse clock in every office and on site: number of days left for that section to be completed
•Set internal deadline much closer than the delivery date promised to government
•Able to finish open sections two to three months ahead of schedule all the time
•Quick decision making process helped in maintaining deadlines

Integrity
•Zero tolerance for corruption
•Immediate action taken against anyone found guilty and his/her association with DMRC terminated
•Dr. Sreedharan interviewed each member of top management personally
•Only people that either Sreedharan had an association with or those whose integrity erstwhile colleagues had
vouched for, were brought on board
•Took responsibility for the accident of July 12, 2009 and resigned from his position
 UNIQUE MANAGEMENT STYLE
Professional Competence

•DMRC engaged PCI led consortium as general consultants

•Sent teams abroad to observe metro systems in other countries and learn best practices
•Set up training agreement with Hong Kong’s Mass Transit Railway Corporation
•Encouraged employees to adopt means to increase their technical competence
•Set up a training school for their staff at Shastri Park, gave drivers real life experience

Social Responsibility and Accountability

•Hired traffic expert to study the roads to cause minimum disruptive diversions, engaged retired police officers
•Community interaction
•Diverting utilities before construction; special vibration absorbing pads below tracks to negate vibrations
•Regular press releases regarding its public initiatives
•Fare Fixation Committee reducing political interference and fares to be based on actual cost considerations
•Awarded ISO 14001 Environement Management System Certification, First metro to be registered with
UNFCC
 PROBLEMS FACED
Appointing General Consultants

•DMRC invited tenders for appointment as General Consultants

•Final contract awarded at ₹ 2 billion
•PCI being in-house consultant for JBIC led to speculation about whether the appointment has been fair and
transparent
•Govt. did in-depth examination, Sreedharan shared all details leading to govt. clearing the selection process

Battle of the Gauges

•85% of metro networks across the world use standard gauge- provided better speed, maneuverability, safety
•Regular press releases regarding its public initiatives
•Ministry of Railways wanted to adopt broad gauge for interconnectivity of rolling stock between rail and metro
•Finally Dr. Sreedharan conceded to the Ministry’s demand and final decision was to use broad gauge
•Over time, he was able to persuade the Ministry to use standard gauge for the upcoming metro lines
 PROBLEMS FACED
Legal Cover

•Ordinance was promulgated two months before the metro line was opened on December 24, 2002
•Delhi Metro Operations and Maintenance Act passed during next session of Parliament
•Act: powers of Metro administration- Acquiring land and entering into contracts
•Constitution of Fare Fixation Committee, appointment of commissioner of Metro Railway Safety

Tax Concessions
•Request by Dr. Sreedharan for import and excise duty concessions was not taken up by GoI or GNCTD
initially
•First train ready to be launched ahead of time
•Convinced GoI to grant project customs and excise duty concessions amounting to ₹ 14.07 billion in 2002
•GNCTD waived sales tax and work contract tax to the extent of ₹ 3.93 billion
•GoI and GNCTD provided several other tax concessions
 PROBLEMS FACED
Land Acquisition and Realignment

•Meeting by a group of lawyers who had to relocate offices demanding realignment

•Sheila Dikshit supported Dr. Sreedharan, said realignment out of question
•Dr. Sreedharan personally visited sites, explored how DMRC could minimize disruptions without altering plan
•Making personal visits, he ensured that DMRC acquire only private land crucial to the project
•Helped curb mutinous tendencies, thereby avoiding costly and time-consuming litigation
•Solved the problem of displaced 300 shopkeepers by giving them shops at a nominal price

Tunneling Issues

•Construction contractors used Tunnel Boring Method, which could not cut through the rocks
•So, contractors switched to the New Austrian Tunneling Method
•Construction team faced challenges like reconfiguring the entire approach, water seepage within the tunnel
•DMRC used existing goodwill to convince contractors to proceed along new approach
•Had it waited to renegotiate the construction contracts, it might not be able to operationalize the line
 PEOPLE ORIENTATION AT DMRC
Knowledge session for officers on last Friday of every month with trainings on
technical and soft skills

Competit Competency building workshops for non-executive staff with focus on

ive motivation of employees
Exams
Electronic grievance redressal system with generally replies sent out
within seven days

Hiring
Deputies
No labour union but two staff councils with 10 elected member
Consulta from representatives
nts governme
nt
Salary of employees was approximately 10% more than that given by
Indian Railways. Rewards also contributed to employee satisfaction

Open collegial environment kept employee morale high by interactions

between staff and sr. management
SUCCESS BUT WITH SKEPTICISM
• Dr. Sreedharan considered the Delhi
Metro Project as a “financial success”
• Operation profit from Day 1. One
among five out of 130 metros
worldwide.
• Operating ratio reduced from 0.64 to
0.52 in 2008
• Earnings per commuter also increased
from INR 8.88 to INR 11.27
Reasons for financial viability of the project
• Tax concessions from GOI and GONCTD which amounted to 18%
of the total project cost.
• Land was also acquired on negotiable concessional rates
• Property development at key stations and then leasing out spaces
for commercial activities which was about 20% of total revenues
generated
• Consultant for other metro projects
• Received power on ‘no profit, no loss’ basis
• Steadily increased capabilities to operate with a leaner
workforce

• Financial model was considered to be flawed and real costs were hidden as the land obtained was on lower
than market prices
• Concessional funding from JBIC
• 50:50 partnership model was considered unsustainable
• The tension and conflicts between GOI and GONCTD were at bay only because of Dr. Sreedharan. What would
happen when he leaves?
• But he believed that he had built the organization in such a way that there are people to successfully take his
place
DECISION MAKING PROCESS AT DMRC
• DMRC had only a handful of people responsible for the
CHAIRMAN decision making process with a SINGLE point of clearance
• Overall management was vested in the BOD but the final
clearance for major decisions rested with Dr Sreedharan
• However, liberal delegation of powers at every level is
practised; consensus is of prime importance
BOARD OF DIRECTORS • Honesty & integrity is considered to be of utmost
importance which also helps speed up the decision making
process
• Since the DMRC is a government body, the decision making
MANAGING DIRECTOR has to be within the purview of the following laws
governing it:
• Delhi Metro Railway (Operation and Maintenance) Act, 2002
• Delhi Metro Railway General Rules,2002
• The Opening of Delhi Metro Railway for Public Carriage of
Passengers Rules, 2002
FUNCTIONAL DIRECTOR • The Delhi Metro Railway (notice of Accidents and Inquiries there to
rules, 2002
• Delhi Metro Railway (Prohibition of Carriage of Large-sized
Luggage, Carriage of Offensive and Dangerous Goods in the
Metro Railway, Travelling of Persons suffering From infectious and
Contagious Diseases in the Metro Railway and Value, Period of
Validity and such other particulars indicated in the Ticket issued by
the Metro Railway) Rules, 2002
EXECUTIVES • Metro Railways (Construction of Works) Act, 1978
 ORGANIZATION STRUCTURE AT DMRC
• DMRC has a lean organisation structure with efficient communication channels which enable easy flow of information
among various internal and external stakeholders. They have a collaborative and ethical work culture.

Characteristics of the organization structure at DMRC

Not a typical public • Unlike a typical government organisation DMRC is not characterised by delays in
sector organization decision making process and corruption.

Ownership in projects & • The project teams were given autonomy in carrying out their projects. Moreover the top
Consensus and middle management met frequently to ensure every one was on the same page.

• Not only the top management meet weekly and the middle executives monthly, there
Effective communication
were weekly meeting conducted with the contractors too.

• The teams have a collaborative work culture and believe in discussing and sharing ideas
Work culture and
to resolve issues at hand. Moreover they strongly believe in and enforce the values of
values
the firm: Punctuality, Integrity, Professional Competence, and Social Accountability

• Dr Shreedharan opted to have only 2 departments- Project Organisation & Operations

Lean organization
and Maintenance. This was done to avoid hierarchy and complex org. structures.
Q.3- WHAT DO YOU THINK WOULD HAPPEN TO DMRC
ONCE DR. SREEDHARAN RETIRED FROM SERVICES?
 Loss of autonomy which Dr. Shreedheran enjoyed. The same level
of control for his successor is doubtable.
 There may be bureaucratic and political influence in DMRC which
was not present during his tenure.
 Lesser sensitivity towards social responsibility & accountability- He
despite being the MD of DMRC proactively resolved issues by
meeting people personally. This legacy may not continue as top
level management is usually reluctant to personally meet people.
 Dueto political & bureaucratic influence after his retirement the
values like integrity and inflexibility could be in question.
 Dr. Shreedharan personally met with every individual who joined
DMRC to instill the work culture in them which was a unifying factor.
After his retirement this tradition may not continue which could lead
to ethical and professional values not being carrying forward to all
levels.
 He was single point of clearance for all the major decisions which
resulted in quick decision making. After his retirement this power
may get divided into various stakeholders which may delay the
decision making process.
 Meetingdeadlines- After Dr. Shreedharan, decrease in autonomy
and increase in points of clearances may lead to not timely
completion of projects.
 Currently power was vested in Dr. Shreedharan although their was
50:50 ownership pattern between GoI and GNCTD. Post his
retirement, the power may go to GoI or GNTCD, who might have
conflicting opinions on certain issues, leading to the collapse of the
strong existing structure.
 There could be disruptive acts or protests from people affected
by DMRC projects which was previously avoided due to DMRC’s
interaction with local residents & politicians even before starting
the construction. This practice was followed because of Mr.
Shreedharan empathetic nature and may not continue.
THANK YOU
⏀