Innovative value capture based rail transit financing: an opportunity for emerging transit cities of India. © 2016 Satya Sai Kumar Jillella and Peter Newman. This is an Open Access article distributed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), permitting all non-commercial use, distribution, and reproduction in any medium, provided the original work is properly cited. 56 RESEARCH ARTICLE Innovative value capture based rail transit financing: an opportunity for emerging transit cities of India Satya Sai Kumar Jillella * and Peter Newman Curtin University Sustainability Policy (CUSP) Institute, Curtin University, Building 209, Bentley, Perth 6845 WA, Australia Abstract: Emerging cities of the 21 st 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 ap- proved 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 ex- periences 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 under- standing of the challenges in emerging transit cities of developing countries. Keywords: unlocking land values, value capture, transit cities, Indian cities, land use, rail transit funding, metro rail, urban rail, active VC mechanisms, passive VC mechanisms *Correspondence to: Satya Sai Kumar Jillella, Curtin University Sustainability Policy (CUSP) Institute, Curtin University, Building 209, Bentley, Perth 6845 WA, Australia; Email: s.jillella@postgrad.curtin.edu.au Received: February 16, 2016; Accepted: April 11, 2016; Published Online: June 2, 2016 Citation: Jillella S S K and Newman P, 2016, Innovative value capture based rail transit financing: an opportunity for emerging tran- sit cities of India. Journal of Sustainable Urbanization, Planning and Progress, vol.1(1): 56–65. http://dx.doi.org/10.18063/JSUPP.2016.01.003. 1. Introduction ost emerging cities of the 21 st century in developing countries are poised for accele- rated growth and have the kind of densities that are ideal for transit systems. Many are thus con- templating rail transit-driven sustainable urban mobil- ity solutions as one of the key drivers to address a range of urbanization challenges. There is a growing recognition among cities across developed and devel- oping nations that urban rail transit system is a key driver to maintain any city’s economic competitive- ness and helps catalyze livable and sustainable com- munities around station areas [1] . Transit Oriented De- velopment (TOD) options are designed globally to integrate rail with built environment, energy, economy and other transportation services in a way that ad- dresses sustainable city development goals [ 2 ] . There is a second urban rail revolution trending across the world. Newman et al. [3,4] noted that the ‘trend back to rail’ is perhaps to be expected in rela- tively dense cities and countries in Europe, the Mid- dle-East and Asia. However, perhaps the more sur- prising trends have been in the US, Canada and M