Commuters maintaining social distance in Delhi Metro (File image: Twitter/@OfficialDMR)
City dwellers are accustomed to snarling traffic, crowded public transit, and the cacophony of ever-expanding urban infrastructure. Ever since the COVID-19 pandemic set in, the most defining visuals have been the largely empty roads and quiet urban settings, like a scene straight out of an apocalyptic film.
This was largely due to the restrictions imposed on movement and a quick shift of corporate India to adopt work-from-home policies relegating transportation needs to the list of priorities for the working class. The impact has been such that the country's crude imports for 2020 fell by 10% from 2019, which is a first in the last 20 years.
This resulted from a 9% fall in consumption heavily contributed by a fall in ATF, diesel, kerosene, and petroleum coke as air travel, interstate movement, and industrial output/logistics became casualties to prevent the spread of Covid- 19 virus.
Transportation bodies across the country reported a fall in passengers ferried from one place to another. Maharashtra State Road Transport Corporation (MSRTC), ferried only 6% of the passengers between April and August 2020 compared to the same period in the previous year.
Tamil Nadu State Transport Corporation (TNSTC) reported that it carried approximately 15% passengers in the same period compared to 2019. Andhra Pradesh State Road Transport Corporation (APSRTC) said only 17% of its fleet was the operational beginning of June 2020.
Uttar Pradesh State Road Transport Corporation (UPSRTC) reported that only 50% of passengers travelled in June 2020 compared to June 2019. These numbers from three of the top 10 state transport corporations indicate the profound impact of the pandemic on road transport.
Further, toll collections across India fell by 7% in FY 2020-21 and witnessed a 10% fall between April and May 2021 on various restrictions due to Covid-19. City transportation like Ola and Uber witnessed only 20% of rides per day between April to October 2020 compared to the same period in 2019. Only 5% of local taxis were operating in Q2 2020 in Mumbai due to restrictive measures. Mumbai local trains only had 25% of passengers per day in June 2020, given the various rules and safety norms to be followed.
It is evident that public transit suffered heavily due to Covid-19 related restrictions and only saw growth on the low base seen in the lockdown period once the regulations were relaxed. This drop in performance also is also largely due to the work-from-home policies adopted by companies. Many listed companies reported a drop as high as 50%-70% in their annual expenditure on travel and travel-related costs due to work-from-home policies and restricted travel.
Among the critical urban infrastructure developments in various cities are the metro rail projects. Metro operations in different cities were halted and were among the last set of infrastructure services to kick start once lockdown was lifted.
Delhi metro reported its first loss to the tune of Rs 1,600 crore in FY 2020-21 due to the impact of Covid-19 on both ridership and non-fare box revenues. The average daily ridership for 2020-21 was only about 18% of the volume registered in 2019-20. Chennai metro reported only 29% of the pre-Covid ridership in June 2021 compared to June 2019 though it did improve to 60% of the ridership in July 2021 compared to the same period in pre-Covid-19 times.
However, Chennai metro registered a loss of Rs 80 crore, Kochi metro registered a loss of Rs 35 crore, and Lucknow metro reported a loss of Rs 90 crore due to lockdown-related restrictions in 2020. Hyderabad metro recorded only 50% revenue, while Bengaluru metro saw only 18% revenue for FY 2020-21 as they were shut for nearly six months due to Covid-19 restrictions. The state and central government have been requested to step in with one-time grants to enable sustenance of operations till the ridership reaches pre-Covid-19 levels.
The other significant impact of Covid-19 is the delay in many metro rail development works due to lack of labour and material, which is further impacted by issues of transportation. The impact is felt both on a timeline of completion and the project costs.
Mumbai metro works on lines 2A, and 7, operational in 2021 will now become operational by early 2022. The cost of metro line 3 in Mumbai has jumped by 35% and is delayed by over 12 months from the original completion date. Similarly, Phase 4 of the Delhi metro project is delayed by three months, while the Bengaluru metro purple and green lines are delayed by three months, while the Whitefield section of the purple line and the pink line are delayed by six months.
Similarly, newlines in Nagpur, Kochi, Pune, Kanpur, and extension of Chennai metro to WIMCO Nagar are all postponed due to restricted work hours and non-availability of labor who had moved to their domicile during the allowances made in the lockdown.
Given that the metro lines across Delhi, Mumbai, Chennai, Hyderabad, Nagpur, Lucknow, Kolkata, and Jaipur have now started operations with limitations on the capacity, there shall be an impact on the ridership for FY 21.
Metro operating companies in Delhi, Bengaluru, Kochi, Mumbai have announced in late July that metro lines will be operational with 100% capacity while Chennai and Kolkata metro will be operational with 50% capacity.
However, many protocols like restrictions on standing commute, the requirement to use metro cards or vending machines for ticketing, restriction of entry into stations, and limited hours of operations are likely to discourage many commuters who used it extensively before the pandemic stuck. Given that there is a positive outcome compared to 2020 in terms of the metro operations, there will be an increase in ridership compared to 2020, and farebox revenues are likely to increase.
Further, with many stations opening up, non-fare box revenues are set to increase, enabling the metro operators to gain significant revenue gains in 2021.
With respect to the patronage of the metro, as companies are starting to open up offices, people movement is set to increase vehicular traffic, which would force people to opt for transport like metros to save the time of travel. This upward tick is already being witnessed in metros across cities where passenger traffic is up compared to 2020.
Given that restrictions have been lifted in tandem with extensive vaccination programmes, the traffic in the public transportation systems such as the Metro is only set to increase.The author is managing director, Valuation Services (India), Colliers