No immediate fare rise for Mumbai metro, declares MMRDA

Reliance Infrastructure arm, however, argues that fare fixation to be governed by Central Metro Rail Act

The Mumbai Metropolitan Region Development Authority (MMRDA) has clarified the rise in costs of the 12-km Versova-Ghatkopar metro phase-I project and the threefold fare increase sought by Reliance Infrastructure’s arm Mumbai Metro One Private Ltd (MMOPL) were separate issues. It added therefore, there was no question of a revision in fares as of now, when the first phase of the metro project was yet to be operational.

MMOPL is a joint venture between Reliance Infrastructure & MMRDA.

The project has missed the December deadline, as approvals from the railways are pending. MMRDA and MMOPL are yet to state the new deadline for the commencement of operations. The project cost has increased from Rs 2,356 crore to Rs 4,291 crore, largely due to delays in securing right of way (RoW), as well as various approvals from the Indian Railways.

MMOPL has been pushing for a fare of Rs 28-30 for a distance of at least eight km.

Speaking to Business Standard, an MMRDA official said, “MMOPL’s proposal has been forwarded to the Maharashtra government. There is no question of any fare hike right now, as the issue will be considered after the service is started by MMOPL. The rise in capital expenditure will not impact fares immediately.”

He added the proposal to raise fares would be considered within the parameters of the joint agreement only after the services were launched.

An MMOPL spokesperson said, “The principal reason for an increase is the inability of MMRDA to provide 100 per cent unencumbered RoW, which was contractually committed by MMRDA to be handed over to MMOPL on or before September 2007. So far, 100 per cent unencumbered RoW is yet to be handed over. The increase in fares is necessitated due to an increase in operating costs, owing to a steep increase in all economic indices; inflation, interest rate, foreign exchange, etc. These factors have also increased the estimated project cost.”

According to the provisions of the central metro rail Act, MMOPL is a metro rail administrator.

Accordingly, the statutory provisions of the central metro rail Act will be applicable for metro rail operations, including fixation and revision of fares.