Infrastructure-led operator of the city’s first Metro corridor has decided to keep the tariff unchanged until October 31 and consider hikes in a phased manner after that. The Fare Fixation Committee (FFC) constituted by the government has recommended a sharp increase in the Metro fares.
The Mumbai Metro One Pvt Ltd (MMOPL), which has built the Versova-Andheri-Ghatkopar corridor on a public private partnership model, currently charges Rs 10-40, which the FFC said could be raised to Rs 10-110. The company now plans to approach the Maharashtra government to seek capital and operational subsidies, and allow real estate development to enhance non-fare box revenue to avoid a sharp spike.
Abhay Kumar Mishra, chief executive at MMOPL, said, “While at the business level, MMOPL continues to make significant cash losses, considering the interest of commuters it is decided to maintain the existing fare for the time being while we engage with the Maharashtra government and other authorities to progress on leads given by the FFC and experts.” A statement issued by the MMOPL said experts consulted by the FFC had suggested that the government should grant the MMOPL a Metro operational subsidy to keep the fares affordable, and should also fully monetise the potential of real estate available at Metro properties to ensure business viability. The non-fare revenue of MMOPL is currently about 8 per cent. Quoting the opinion of IIM-Ahmedabad Professor G Raghuram, the MMOPL statement said it had been suggested that the company be granted either a yearly subsidy of Rs 100 crore or a one-time payment of Rs 1,000 crore.
To support the project, the cost of which swelled to Rs 4,321 crore from Rs 2,356 crore, the Centre and the state government had so far given a total viability gap funding of Rs 650 crore to the MMOPL. While Reliance Infrastructure holds a 69 per cent equity stake in MMOPL, Mumbai Metropolitan Region Development Authority (MMRDA) holds 26 per cent, and Veolia Transport has 5 per cent.
Meanwhile, the MMRDA, which has been in a dispute with MMOPL over the 11.4-km Metro corridor’s fares, plans to file a writ petition in the Supreme Court challenging the FFC’s recommendations. The MMRDA was insisting on a fare structure of Rs 9-13 as per the concession agreement, while the MMOPL being designated as the ‘Metro Rail Administrator’ as per the Metro Act, under which the project was brought midway, fixed the tariff at Rs 10-40. The MMRDA had challenged the MMOPL decision in the Bombay High Court and subsequently the Supreme Court, which set a deadline for the FFC to come up with its recommendations. The three-member FFC comprised Justice (Retd) E Padmanabhan, former law secretary T K Vishwanathan and former Maharashtra chief secretary J K Banthia.