Innovative value capture based rail transit financing: an opportunity for emerging transit cities of India

Emerging cities of the 21st century are attempting to build rail transit as a key driver to maintain their city’s competitiveness and help catalyze livable and sustainable development opportunities around station areas. Indian cities are doing this in a big way with about 50 cities embracing urban metro rail transit systems. The rail projects are approved politically but need financing to build such highly capital-intensive rail transit systems. The use of value capture (VC) mechanisms is gaining momentum across cities worldwide as a solution to transit funding and financing. The first cities in India are now deploying various VC based financing mechanisms. This paper therefore aims to review the experiences of VC based innovative financing practices in selected Indian cities. The research summarizes the key issues and lessons learned from these experiences to help define the way forward. The paper finally concludes that VC prac-tices in India are still at an embryonic stage but the results are encouraging with huge untapped potential to co-create rail transit centered sustainable growth. Moreover, the review findings and lessons learned will help enhance the understanding of the challenges in emerging transit cities of developing countries.