Union Cabinet approves New Metro Rail Policy

New Delhi, Aug 16: The Union Cabinet on Wednesday gave its nod for a new metro rail policy that has been framed by the Urban Development Ministry. The new policy is expected to promote 'Make in India' initiative in metro rail projects.

Currently, metro rail services are operational in seven cities covering an area of 370 kilometers. As many as 537 kilometers in 12 cities are under construction and proposals for as much as 600 kilometers are under consideration, the Union Finance Minister, Arun Jaitley, told reporters after a Cabinet meeting.

The new metro rail policy seeks to enable realisation of growing metro rail aspirations of a large number of cities in a responsible manner. This policy also opens a big window for private investments across a range of metro operations.

It makes PPP component mandatory for availing central assistance for new metro projects.

The policy makes a shift from the present 'Financial Internal Rate of Return of 8 per cent" to "Economic Internal Rate of Return of 14 per cent" for approving metro projects, in line with global practices.

The new Policy mandates setting up of Urban Metropolitan Transport Authority. It also mandates evaluation of other modes of mass transit to ensure selection of least cost mass transit mode for public transport.