The Delhi Metro Project: Effective Project Management in the Indian
Public Sector
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ICMR HOME | Case Studies Collection
Case Details:
Case Code : PROM005
Case Length : 21 Pages
Period : 1998-2006
Pub Date : 2006
Teaching Note :Not Available
Organization : DMRC
Industry : Construction
Countries : India
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PROM005) click on the button below, and select the case from the list of available cases:
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts
The Delhi Metro Project
In order to implement the Delhi Metro project, the GoI and the GNCTD set up a 50:50 joint venture company called the Delhi Metro Rail Corporation Ltd. (DMRC). The company was incorporated under the Companies Act in May 1995. The DMRC was to complete Phase I of the project within 10 years, i.e., by the end of 2005...
Funding the Project
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Globally, most urban MRTS projects were financially unviable because the fares
could not be fixed solely on a commercial basis. If the fares were fixed too
high, the passenger numbers would remain low, thereby defeating the very purpose
of setting up the system. Therefore, the concerned governments generally bore
the capital costs of an MRTS system. In the case of the Delhi Metro project too,
the GoI and the GNCTD bore the capital costs.
The total cost of the first phase of the project was initially estimated at Rs.
60 billion, at April 1996 prices. Later in 2002, with the cost of the project
rising by approximately 10% per year, the estimate was revised to Rs. 89.27
billion...
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The Project Team
With the funding for the project being finalized, the next step was to
constitute a project team. Sreedharan was appointed as project manager and
managing director of the DMRC in November 1997. A technocrat, he had had a
long stint in the Indian Railways (IR) and had retired in 1990. During his
service with IR, he had earned a reputation for completing major projects on
time and within the budget...
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Planning the Project
In India, major infrastructure projects are often stalled because of a
lack of funds, political interference, lack of professionalism and
accountability, property disputes, corruption, etc. Therefore, even
before the commencement of the project, the DMRC attempted to put in
place effective systems to ensure the smooth progress of the project.
Funding was not an issue in the case of the Delhi Metro project because
it was settled even before the project commenced. |
In order to steer clear of political interference, the DMRC
sought autonomy on all major matters and the GoI promised to give it this
autonomy. "Financial powers were vested in the managing director. Also, the
managing director was the last authority on tenders," said Anuj Dayal (Dayal),
chief public relations officer, DMRC...
Excerpts
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