MMRDA opposes Mumbai Metro's proposed fare rise

Argues in Bombay HC it will defeat purpose of mass rapid transport & further reduce metro's ridership

The Mumbai Metropolitan Region Development Authority (MMRDA) has filed a petition in the high court here against the Central government-appointed fare fixation committee (FFC)’s report recommending a fare rise up to Rs 110 from the present structure of Rs 10, 20, 30, 40 for the Versova-Andheri-Ghatkopar metro rail corridor. MMRDA has argued the fare fixed by the FFC's majority members contains no discernible rational basis and  defeats the very purpose of a mass rapid transport system.

MMRDA also said the Reliance Infrastructure-led consortium had in the concession agreement agreed to a rate structure of Rs 9, 11, 13 for 2015-16 but the FFC members did not take this into consideration while suggesting the rise. MMRDA has sought to set aside FFC's report dated July 8 and wants a stay in its implementation.

The respondents are FFC, the Central government, the state government and Reliance Infrastructure arm Mumbai Metro One (MMOPL), which built and has been operating the corridor.

Despite FFC's recommendations, MMOPL is continuing with the fare structure of Rs 10, 20, 30, 40 till October 31. Meanwhile, MMRDA has approached the state government with a plea for an annual grant of Rs 1,000 crore, monthly subsidy of Rs 21.75 crore and permission to exploit realty estate along the railway stations. However, the government has not yet considered the company's proposal.

An MMRDA official told Business Standard, “FFC has clearly misdirected itself, proceeded to consider fare fixation on a patently erroneous basis and has acted without or in access of its jurisdiction. MMRDA has given a monetary contribution of Rs 783 crore and additional benefits of right of way, land for depot at a nominal rate of Rs 1 per square meter per annum. MMOPL's decision to hike fare during July 2014 and May 2015 has resulted in the reduction in ridership of metro coming down sharply from initial 350,000 a day to 235,000 a day — which is only 20 per cent of its capacity of 1.2 million a day. Raising fares would further reduce the ridership and defeat the purpose of the project.”

The official said if the fares are raised based on the FFC report, it would irreversibly damage the character of the metro as MRTS.  A MMOPL spokesman said, “Based on the FFC's advisory, it has approached the state government with detailed proposal on July 29, 2015. The company awaits the response.”

MMRDA's petition is significant when MMOPL board at its meeting held on July 20, 2015 had already approved FFC's recommendation. At the same meeting, MMRDA's three directors had given their dissent note.

MMOPL has taken a stand that according to the Metro Railways (Operations & Maintenance) Act 2002, there is no review mechanism prescribed after the FFC submits its recommendations. According to Section 37 of the same Act, FFC's recommendations shall be binding on the metro railway administration.

Mumbai Metro Dispute

*Fare Fixation Committee set up in April 2015 & recommended in July 2015 fare increase up to Rs 110

*MMOPL board on July 20, 2015 accepted FFC's report but MMRDA's three directors gave dissent note

*MMOPL to continue existing fare slab of Rs 10, 20, 30, 40 up to October end

*On July 29, 2015 MMOPL sent letter to the government seeking one time grant of Rs 1,000 crore, monthly subsidy of Rs 21.75 crore and permission to exploit real estate

*Government has yet to respond to MMOPL's proposal