The fund will be primarily aimed at making urban rail-based transport systems a reality. Such systems are best suited for cities with a population of 3 million or more. The Plan document calls for city-wise specific projects for rail-based urban transport systems together with funds requirement. Central assistance at par with assistance given to the Delhi Metro project is a commitment to be fulfilled as and when these projects get started, the Plan document says.
According to industry sources, the fund is too less to be of much use specially since rail-based systems are highly capital intensive and require long tenor loans besides equity.
The World Bank in its recent report on the transport sector has also recommended creation of non-lapsable transport funds with contributions from user-charges and from Central, state and municipal agencies.
The Tenth Plan suggests a comprehensive legislation covering construction, operation and maintenance of metro railways in all cities. A legislation on this line has already been cleared by Parliament for the Delhi metro. This legislation can be extended to other cities.
Noting that financial and managerial capabilities of the private sector are not being put to good use in urban transport systems, the Plan talks of de-nationalising the sector. This will mean doing away with the prevailing system of transport permits and appointment of a regulator for fixing fares and determining subsidies.
Road-based public bus systems serve lower income commuters and there will be a need to increase their capacity while reducing congestion on city roads, the Plan points out.