The policy opens a window for private investments across a range of metro operations making PPP component mandatory to avail of central assistance for new metro projects.

The new policy seeks to ensure a focus on a catchment area of five km on either side of metro stations requiring states to commit in project reports to provide necessary last mile connectivity through feeder services, non-motorised transport infrastructure like walking and cycling pathways, and introduction of para-transport facilities.

Seeking to ensure that least cost mass transit mode is selected for public transport, the new policy mandates Alternate Analysis, requiring evaluation of other modes of mass transit like BRTS (Bus Rapid Transit System) and Light Rail Transit among others.

The policy envisages private sector participation in O & M of metro services in different ways. These include: 

1. Private operator is paid a monthly/annual payment for O&M of system. This can have a fixed and variable component depending on the quality of service. Operational and revenue risk is borne by the owner.

2. A fixed sum will be paid to the contractor for the duration of the contract. The operator will bear the O&M risk while the owner will bear the revenue risk.

3. The complete revenue generated for the services provided will be collected by the operator. The policy also provides for rigorous assessment of new metro proposals and proposes an independent third party assessment by agencies to be identified by the government.

The policy also provides for the states to take up metro projects exercising any of the three options for availing of central assistance. These include: PPP with central assistance under the Viability Gap Funding scheme of the Ministry of Finance; grant by the government of India under which 10 percent of the project cost will be given as a lumpsum central assistance; and 50:50 equity sharing model between central and state governments.