Currently India is one of the most willing countries in the world to invest in rail. Although India has a national railway, the subway and urban transit systems that are an essential means of transportation for the citizens are still barely developed. India, meanwhile, has more than 40 cities with populations over one million and is experiencing rapid economic growth especially in the IT industry. In this environment, there is a growing divide between economic growth and the existing outdated transit systems.
The construction of the Delhi Metro is following a four-phased approach, the fourth of which is to be completed in 2021. The project was initiated to provide a solution for the chronic traffic congestion and air pollution caused by the population explosion and to increase convenience for citizens as well. The Metro partially commenced operations in 2002 upon the completion of Phase 1. For Phase 1, MC formed a consortium with Hyundai Rotem Company (rolling stock manufacturing subsidiary of the Hyundai Motor Group, South Korea) and Mitsubishi Electric Corporation. In 2001, orders for 240 rail cars were received, and by 2007, 280 cars were delivered including an additional order of 40 cars. For Phase 2, in response to a call for manufacturing to be performed in India, Indian rolling stock manufacturer BEML Ltd., which participated in Phase 1 as a subcontractor to Hyundai Rotem Company, joined the consortium, and the four-member consortium received a total order of 196 cars, including additional orders.
As the leader of the consortium, MC carried out all non-technical, commercial activities, including negotiations and coordination with the customer and the consortium partners, management of funds, and following up on contractual and tax matters. India has a unique way of doing business whereby the taxation system varies by state and domestic production is encouraged, to name a few. In the course of conducting business as a general trading company, MC has accumulated much insight and know-how about business in India. Accordingly, not only has this experience of MC been utilized for the current project, but MC is often called upon by companies with no experience in India to help in future projects.
The Kolkata Metro, constructed prior to the Delhi Metro, is an old-style system and it took at least 20 years before it was fully operational. In contrast, the DMRC (Delhi Metro Rail Corporation), which operates the Delhi Metro, is highly committed to ensuring completion of the project on schedule, and it is working closely with consultants. Through such efforts, the construction of 65 km of rail was completed in 7 years. This project is now cited in India as an example of a successful project that was completed ahead of schedule. In addition, Delhi Metro adopted regenerative brakes that utilize Japanese energy conservation technology, and as a result electricity consumption has been reduced and, in 2007, Delhi Metro became the first railway business in the world to be registered as a CDM (Clean Development Mechanism) Business.
A plan is underway for a metro (urban transit system) with a total track length of 33 kilometers in Bangalore, which has a population of about seven million and is taking full advantage of information technology. In 2009, MC, as part of the same four-company consortium working on the Delhi Metro Project, received an order for 150 cars for the Bangalore Metro Project. Shipment of the cars began in September 2010, and after onsite trials, the line was partially opened in October 2011. Currently India’s plans for urban transit systems are taking shape in the metropolitan areas with populations exceeding five million, which in addition to Bangalore includes Chennai and Kolkata. In addition to these plans, MC is expecting large business opportunities in cities with populations over one million.
In addition to rolling stock, MC expects to secure orders for signaling and communications equipment for both new projects and existing project extensions. The European and North American Big Three have secured production functions in India and have started local production. MC, on the other hand, faces the challenge of how to be price competitive. In Delhi, the introduction of the Metro has resulted in easing traffic congestion and a reduction in exhaust gases. Moreover, the Delhi Metro provides an essential and convenient means of transit for one million citizens using the system every day. MC continues to quickly respond to growing markets and to build transit systems that make life easier for the Indian people, working together with numerous expats and national staff at MC offices and project offices throughout India.
Contents Produced in Cooperation with Nikkei Business Online Special / Cross Architects, Inc.