Study: Indian cities face major transportation capacity challenge

- Study suggests an economic opportunity of $8 billion for Mumbai and $9.8 billion for Delhi
- Major investment can be justified by population growth
- Transport capacity improvements are crucial for Mumbai and Delhi to realise their potential

The Indian cities of Delhi and Mumbai stand to gain up to $17.8 billion per year of economic opportunity by 2030 by upgrading their transportation networks. This is according to a study “The Mobility Opportunity” conducted by London-based consulting firm, Credo, and presented today in Singapore. Commissioned by Siemens, the study looks at transportation networks in 35 major cities around the globe and assesses how prepared cities are to meet future challenges, including population growth and higher competition. The results: If all 35 cities studied would implement relative “best in class” standards, they stand to gain an economic benefit of up to $238 billion annually by 2030. Extrapolating to all comparably-sized cities globally with a population of around 750,000 and greater, this suggests an economic opportunity of roughly $800 billion annually. This corresponds to about one per cent of global GDP. Today the potential benefit would be about $360 billion per year.

Both cities are expected to see peak hour commuting numbers increase massively by 2030 and the current transportation networks will not be able to cope, the study found. However, new live journey planning systems and clear transport development plans in both cities are set to make a big difference to travellers in the coming decades. Furthermore, transport in Mumbai is the most affordable in any city studied. For both cities investment in improving transport capacity should be the key priority. If they can do this, those potential economic benefits can be unlocked, drawing on the experience of other similar cities to their own transportation networks.

Transport is considered one of the major factors of a city’s competitiveness. However, lack of financial resources often constrains cities’ ability to invest in their transport networks. This study is unique in seeking to put an economic value on the cost of inefficient transport, thus helping cities make the case for investment. Some of the factors considered were journey times, crowding and network density, all of which impact a city’s productivity. In order to have a reasonable comparison, the study groups cities into three categories to account for different levels of wealth and development. According to Credo, the most cost-efficient cities are:
- Copenhagen, Denmark ( Category “Well-established cities”)
- Singapore (Category “High-density compact centers”)
- Santiago, Chile (Category “Emerging cities”)

Then, Credo compared cities to the leading city in their category. The comparison enabled them to quantify the economic benefits that investments in transport would bring, such as higher productivity and new economic activity. Finally, Credo has developed some key pointers on how cities can realize the potential economic uplift. Case studies show how potential investments can pay off.

"All cities can learn from the leading cities in their category in order to close the gap of their transport networks’ efficiency, reduce costs and increase productivity. Because the more efficient a city’s transport network is, the more attractive the city is to business and people", commented Chris Molloy, Partner at Credo.

"The best transportation systems are the ones that move people quickly, easily, and comfortably to their destination. The leading cities are already achieving this with efficient transport networks that feature modern infrastructure, easy connections across various modes of transportation, and, above all, a clear strategy of how to meet future needs,” said Roland Busch, CEO of the Siemens Sector Infrastructure & Cities and member of the Managing Board of Siemens AG.

Cities are the engines for future growth. They generate 80 percent of global economic output. However, in a globalized economy, with businesses and workforces increasingly able to relocate internationally, they must compete to offer the most attractive environment for economic activity. The study “The Mobility Opportunity” is geared toward city decision-makers around the world so that they may use its recommendations to achieve the greatest economic benefit.

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