Friday, Nov 28, 2014

On Mumbai metro fare dispute, MMRDA asks for Centre’s guidance

Written by Manasi Phadke | Mumbai | Posted: June 12, 2014 3:01 am

To ensure there aren’t more controversies in the operation of Mumbai Metro such as the one concerning its fare structure, the Maharashtra government has written to the Union ministry of urban development to include specific provisions in the Metro Act to deal with public-private partnerships.

UPS Madan, metropolitan commissioner at the Mumbai Metropolitan Region Development Authority (MMRDA), said currently the Union government’s Metro Act is framed in such a manner that it assumes that a project is either government-owned or completely private.

“We are facing problems because there aren’t specific regulations for Metro projects on PPP. The conflict over the Metro fare is now under arbitration and any change in the Act will not help us in this particular issue. But to ensure that there aren’t any such disputes in the operation going forward, we had written to the ministry of urban development last month,” Madan said

The Reliance Infrastructure-led Mumbai Metro One Pvt Ltd (MMOPL), in which the MMRDA has a 26 per cent stake, is to operate the Versova-Andheri-Ghatkopar Metro for 30 years, he said.

Madan added that according to the Act, the owner of the project becomes the designated Metro Rail Administrator, and the ministry appointed MMOPL as the administrator.

The dispute between the state government and MMOPL, escalated when the project was brought under the Metro Act in October 2013 from the Tramways Act, and the operator got the flexibility to fix the initial tariff.

Sudhir Krishna, secretary at the urban development ministry, said, “The ministry is working on amendments required in the Metro Acts, for which we are in consultation with the railways ministry and the metro rail companies. The amendments being worked on relate to a variety of issues, besides the public private partnership related matters.”

The 11.4-km Versova-Andheri-Ghatkopar line is the country’s first metro rail project to be constructed on PPP.

However, a spokesperson for MMOPL said that the Metro Act, in fact, gives a regulatory framework to the PPP format. “The Metro Act has deliberately been drafted by the central government to encourage public private partnerships. It is giving equal power to all parties,” he said.

The fare structure has been a bone of contention between the government and MMOPL for over two years now with the operator asking for a hike citing a surge in the project cost by Rs 1,935 crore over the original cost of Rs 2,356 crore. As per the provisions of the concession agreement, the state government had notified a fare of Rs 9-13.

After being appointed as the MRA, the MMOPL proposed an initial fare of Rs 10-40 in a board meeting last month. “All three directors of the state government on the board had dissented,” Madan said.

The MMOPL spokesperson said, “MMOPL has followed all applicable laws; the matter is subjudice.”

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