In a setback to state government, the Bombay High Court Tuesday dismissed the city development authority’s plea seeking a stay on the tariff for the city’s first Metro that the Reliance Infrastructure-led operator had fixed.
Starting July 9, commuters using the 11.4-km Versova-Andheri-Ghatkopar Metro will have to shell out Rs 10 to Rs 40 till a Central government-constituted Fare Fixation Committee determines the tariff for the corridor. Till then the corridor will continue to run with the promotional flat fare of Rs 10 that the Mumbai Metro One Pvt Ltd (MMOPL) had announced when the Metro was opened for traffic on June 8.
Reliance Infrastructure along with private firm Veolia Transport holds a 74 percent stake in MMOPL, which has constructed the Metro on a public private partnership model, while the rest 26 percent is with the Mumbai Metropolitan Region Development Authority (MMRDA).
Justice R D Dhanuka Tuesday directed the central government to “issue directives” to the fare fixation committee – comprising a retired/ serving judge, a central and state government nominees, respectively – to decide on the fixation of opening fares “expeditiously, considering the urgency involved in the matter.”
Chief Minister Prithviraj Chavan said, “The fare fixation committee should look into all issues, including the cost escalation that the MMOPL is claiming.Although we had state government representatives on the board, the company’s accounting is not very clear.”
The court also directed the parties to constitute the “Arbitral Tribunal” at the earliest and to seek expeditious disposal of the arbitration proceedings on the disputes arising from agreements between the parties.
While the state government has been insisting on an initial fare of Rs 9 to Rs 13 based on the concession agreement, the MMOPL has notified an initial tariff of Rs 10 to Rs 40, saying it is duty-bound to fix initial fare being the Metro Rail Administrator under the Metro Act. The project was earlier under the Tramways Act, 1886, and was brought under the Central government’s Metro Act late last year. The Metro Act gives the Metro Rail Administrator the flexibility to determine initial fare, while all future revisions have to be effected by the Fare Fixation Committee.
Accordingly, the MMOPL in May a board meeting, which was attended by three directors from the state government’s side, had passed a resolution fixing the initial fare as Rs 10 to Rs 40. Justice Dhanuka, while dismissing MMRDA’s petition said, “In my prima facie view, the fares fixed by the MMOPL can be in force till the fare is decided by the fair fixation committee or till validity of the resolution in question is considered by the arbitral tribunal,” the court said while dismissing the petition.
The MMRDA had contended that while insisting on a tariff of Rs 9 to Rs 13, it had only reiterated the rates fixed by the parties according to the concession agreement and this is not inconsistent with the Metro Act.
According to the MMRDA even if MMOPL was designated as Metro Rail Administrator, fixation of fare on the initial opening of metro railway by MMOPL was not mandatory.