 "Mumbai Metro commuters may not get fare hike shock")
Though the Supreme Court on Friday allowed Reliance Infrastructure arm Mumbai Metro One Pvt Ltd (MMOPL) to charge fares of Rs 10-110 on the rail system as recommended by the Fare Fixation Committee (FFC), commuters are unlikely to get the shock till October 31.
The company has decided to continue with the existing fares of Rs 10, 20, 30 and 40 on the 11.4 km Versova-Andheri-Ghatkopar corridor till end-October and has sought the Maharashtra government's financial assistance in this regard.
MMOPL’s board of directors had on July 20 already approved FFC's recommendation, though Mumbai Metropolitan Region Development Authority's (MMRDA) three representatives gave notes of dissent. MMOPL and MMRDA declined to comment on the apex court’s order.
A state government official, who did not want to be identified, told Business Standard: “The government might soon hold talks with MMOPL on its proposal seeking financial assistance. The timing will be decided soon.”
The official said Friday’s order was on a petition filed by the government and MMRDA against MMOPL’s decision to charge fares of Rs 10-40 since July last year. Meanwhile, the FFC recommended fares of Rs 10-110 on the route.
MMOPL, in a communication dated July 29, appealed to the state government for a one-time capital grant of Rs 1,000 crore, monthly subsidy of Rs 21.75 crore and exploitation of real estate on the metro route.
The FFC report said Delhi Metro Rail Corporation and other metro fares could not be models, as their financing and scale of services were entirely different. Further, DMRC and other government-owned metros had secured funds at about one per cent interest from various international funding agencies, due to a sovereign guarantee provided by the Government of India. However, MMOPL, being a public-private partnership project, has to raise funds from banks at 11.75 per cent (the original rate was 13 per cent annually).
Further, FFC said, it had carefully analysed the reports of the experts. The requirement for fare revision had been assessed taking into consideration the entire spectrum of project cost, equity, return on investments, servicing of debts, operating costs, rates and fare collection.
The company has decided to continue with the existing fares of Rs 10, 20, 30 and 40 on the 11.4 km Versova-Andheri-Ghatkopar corridor till end-October and has sought the Maharashtra government's financial assistance in this regard.
MMOPL’s board of directors had on July 20 already approved FFC's recommendation, though Mumbai Metropolitan Region Development Authority's (MMRDA) three representatives gave notes of dissent. MMOPL and MMRDA declined to comment on the apex court’s order.
A state government official, who did not want to be identified, told Business Standard: “The government might soon hold talks with MMOPL on its proposal seeking financial assistance. The timing will be decided soon.”
The official said Friday’s order was on a petition filed by the government and MMRDA against MMOPL’s decision to charge fares of Rs 10-40 since July last year. Meanwhile, the FFC recommended fares of Rs 10-110 on the route.
MMOPL, in a communication dated July 29, appealed to the state government for a one-time capital grant of Rs 1,000 crore, monthly subsidy of Rs 21.75 crore and exploitation of real estate on the metro route.
The FFC report said Delhi Metro Rail Corporation and other metro fares could not be models, as their financing and scale of services were entirely different. Further, DMRC and other government-owned metros had secured funds at about one per cent interest from various international funding agencies, due to a sovereign guarantee provided by the Government of India. However, MMOPL, being a public-private partnership project, has to raise funds from banks at 11.75 per cent (the original rate was 13 per cent annually).
Further, FFC said, it had carefully analysed the reports of the experts. The requirement for fare revision had been assessed taking into consideration the entire spectrum of project cost, equity, return on investments, servicing of debts, operating costs, rates and fare collection.