CSE responds to comments on its recent analysis of affordability of urban transport and commuting

Says this is a welcome debate in the city on costs of urban commuting and public transport, and on who pays for the much-awaited modernisation of public transport systems 

• CSE released this analysis, which is part of an ongoing study, at an international conclave in New Delhi
• Hopes this discussion will lead to policy solutions to questions of affordability of urban commuting and funding strategies for sustainability of both rail- and bus-based public transport systems (including Delhi Metro and DTC)
• Says that while Delhi Metro will continue to play an important role in meeting commuting demand, the targeted improvement in share of public transport ridership will not happen on its own -- well thought-out fiscal and other policies for all systems will be needed
• CSE study is not about trip cost of Delhi Metro,but about the total journey cost of commuters who, because of poor integration of different systems, poor connectivity and frequent interchanging of modes, end up paying a lot for commuting. Door-step connectivity is required
• If not addressed immediately, Delhi and other cities will continue to suffer losses in public transport ridership. People will keep shifting to two-wheelers and cars. Not acceptable in cities facing serious public health and liveability crisis 

New Delhi, September 7, 2018: Centre for Science and Environment (CSE) has responded to the questions raised by the DMRC in the media, on its recently released analysis (ongoing) of affordability of urban transport and commuting and sustainability of public transport systems. 

CONTESTED: CSE’s conclusion that Delhi Metro is the second most unaffordable system among select nine global cities -- selection of these cities for comparison is biased, says DMRC. Other cities like London and Paris should have been considered. 

CSE’s response: In its analysis, CSE has cited the affordability index for transport systems from an UBS study (https://www.ubs.com/microsites/prices-earnings/en/intro/);UBS is a well-known and credible global financial services institution that analysesthe cost of living in cities around the world. For comparison, CSE has applied the criteria of selecting cities with systems that have fares less than half a dollar for a 10-km trip.These are all rail-based systems. These nine cities are largely from developing countries with similar social and economic realities;they are different from cities in developed countries,which have much higher income levels and different kinds of affordability levels that are not directly comparable with levels in Indian cities. 

However, in response to DMRC’s objections to this selection of nine cities and suggestion to look at other cities with large Metro networks, CSE used the same UBS data to examine the percentage of income spent on rail-based systems in some of these cities. It has found that other cities with larger networks -- even in developed countries -- are still far more affordable than Delhi. 

In Delhi, the percentage of income required to use the Metro system stands at 14 per cent. Compared to this, it is 2.9 per cent in Hong Kong, 6.6 per cent in Paris, 5.3 per cent in Beijing, 5.2 per cent in Seoul, 5.7 per cent in Shanghai and 4.6 per cent in New York. Even London is marginally better than Delhi with affordability of Metro at 13.4 per cent. Thus, the DMRC’s argument about Delhi being more affordable than cities with large Metro networks doesnot hold much ground. 

In fact, the DMRC should also note that in most of these cities, there is no interchange (changing modes during journey) penalty for journey costs, with the second trip being free on another mode once the fare has already been paid to a system. Their policy recognizes the value of journey cost and does not penalize the passenger for doing an interchange to reach the destination. Can Delhi’s commuters also benefit from such an integrated system? 

CONTESTED: Journey cost and affordability estimates computed by CSE. DMRC has given its alternative calculation to say that the expense for Metro commuters (considering two trips per day for 22 days) constitutes only 5.5 per cent of the average per capita income, and claims that even for minimum wage earners, Metro travel does not cost more than 10 per cent.  

CSE’s response: While the DMRC has calculated the cost of only Metro trips,CSE has computed the overall daily commuting cost of travel by different modes as well as combined modesincluding the Metro – the expenditure an individual makes while using different systems in Delhi, Bengaluru and Ahmedabad. This also includes the cost for accessing a system.Journey for most residents of these cities is not only about two Metro trips a day, but also includes interchanges and the additional cost that commuters incur to access public transport systems. The DMRC has not accounted for that. 

To assess the basic commuting cost,CSE has considered at least three trips per day per individual (two trips for to-and-fro commute plus one added trip related to either non-work activities or that of a dependent) over 26 days per month (most daily-wage earners work for at least six days a week). It has also taken into account the first and last mile journeys, which are often not short enough to be conducted on foot in all weather conditions. These first and last mile journeys for accessing a system – Metro, or a bus, or the BRT – can hike up the travel cost by up to 25 per cent. The DMRC has not considered these additional costs that commuters incur to access a Metro system or to interchange to other systems. 

How has the DMRC reached its 5.5 per cent estimate? It has extrapolated from only its fare revenue and related it to the average per capita income of the city to claim that the Metro commuting cost is only 5.5 per cent of income. This does not take into account the income inequalities in the city. Various studies support the threshold of 10-15 per cent of income that can be spent on transport as an upper cap for a system to be accepted as affordable. Using the 15 per cent yardstick, CSE finds that a sizeable number of households in lower income bracket can find it difficult to afford the Delhi Metro on a regular basis. 

Income classification and distribution has to be considered by the government to see how much the population earns, and what is its affordability level for using public transport. Only then can suitable strategies and system integration be adopted to address the concerns.

CONTESTED: City Metros should look at alternative sources of revenue, other than fare revenues -- the DMRC says there is limit to that. 

CSE’s response: This is a larger policy question that CSE is raising; it is not blaming the DMRC.It is quite clear that all individual system operators – Metro or bus-based transport including AC buses, electric buses, or BRT systems –would need to recover their costs of investments to make further investments, reduce inefficiencies  and maintain quality services. A periodic fare hike, therefore, is needed in all systems to keep them solventand upgraded. While individual systems will try to balance their fare and non-fare revenues to meet their operational and fixed costs, especially with the rising pressures of modernisation, the government will also have to come up with strategies for urban transport funds, and more enabling policies to increase ridership for the systems. 

Policies will have to provide answers to the questions of who will pay for the modernisation and what should fares be used for. Fares can recover operational costs; but can they used to pay even the fixed costs like depreciation and loan repayment? These are serious issues today. CSE’s research shows that public transport transition will have to be paid for by the users, the larger society benefitting from it, as well as the polluters. 

Such solutions may also help the DMRC and other systems. Many bus transit agencies in India have legal sanction to revise their fares periodically.Despite this, some agencies like Janmarg --the Ahmedabad BRT-- are avoiding fare hikes for fear of becoming unaffordable and losing patronage. While individual systems may address this internally through fare hikes, or balancing fare and non-fare revenues (which the DMRC is also doing), the government will have to step in to mobilise resources, create urban transport funds and create the right regulatory framework for private operators and diverse public transport systems.  

This is precisely the reason why CSE is urging the government to find strategies to address the challenges of affordability as well as sustainability of public transport systems. India needs Rs10,900 to 18,500 billion by 2031 to fund its urban transport system (as per the National Transport Development Policy Committee chaired by Rakesh Mohan); almost 55 per cent of this estimatedamount is to be earmarked for public transport. This actually translates into creating many more Metro systems, putting more buses on the roads, getting E-buses, and making BRTs on a scale that is locally appropriate. 

There is no doubt that this will have to be done. But where is the policy to decide who will bear the costs and how? This is the question that CSE is raising,which cannot be ignored. 

What is the way ahead?

• The DMRC’s response has helped to stoke a much-needed debate in the city to address the real issues and concerns around urban commuting. This should be taken forward to find policy solutions to the mobility crisis in cities. Instead of being defensive, the DMRC should also play a more proactive role in promoting physical and system integration in the city. Enable fiscal solutions that can be replicated across cities.
• CSE would strongly urge the government to address the economics of urban commuting and financial sustainability of public transport systemson a priority basis for scaling up of modern, integrated, accessible and diverse public transport systems with public and private sector investments. Also, leverage its own spending to tie with deeper systemic reforms and more holistic interventions and diverse public transport systems.
• Both Central and state governments will have to adopt strategies to guarantee increase in public transport ridership in cities. It is ironical that when travel demand is explosive in cities, several bus- and rail-based systems are losing ridership. This requires urgent interventions.
• Neither the Central nor the state governments can look away from the fact that 34 per cent of Delhi’s households – one third, that have a monthly income of less than Rs 12,500 -- face hardships in affording a basic non-AC bus as they have to spend more than 15 per cent of their income for it. The higher income groups on the other hand will use public transport for comfort, speed, convenience and connectivity. And therefore, to retain them and increase more riders, investment will have to be made continually to give them a desired level of service. Public policy has yet to figure out who pays for that.
• The bottom line is that in Delhi, both Central and state governments need to rise up to the challenge of providing sustainable modes to move a staggering four crore travel trips that are generated daily– Delhi, in fact, generates more trips than Kolkata and Chennai combined. It is about meeting the Delhi Master Plan target of 80 per cent public transport ridership by 2021.

For clarifications, interviewsetc, please contact ParulTewari of The CSE Media Resource Centre – parul@cseindia.org / 9891838367.