The Centre has informed Delhi Chief Minister Arvind Kejriwal that Delhi Metro Rail Corporation (DMRC) Act doesn't allow it to put on hold proposed hike in Metro fare.
The Centre also informed Kejriwal that setting up a fresh Fare Fixation Committee (FFC) could be considered if the Delhi Government agrees to give over Rs. 3,000 crore every year to the DMRC.
The DMRC plans to hike fare by a maximum of Rs. 10 from October 10.
The Delhi CM on September 29 had written a letter to Minister of Housing & Urban Affairs Hardeep Singh Puri and termed the fare increase as 'unacceptable' and demanded that the decision be withheld and reviewed.
Kejriwal asked the central government to give direction to the DMRC to put on hold the proposed hike in fares to be effective from the tenth of this month, as recommended by the Fourth Fare Fixation Committee.
On Friday, Puri sent a detailed response to Kejriwal's letter.
Puri responded to the Delhi Chief Minister after detailed examination of the issues raised and suggestions made by him regarding the fare hike in consultations with the DMRC.
Puri informed Kejriwal that "your suggestion that this Ministry should direct that the fare increase be kept on hold overlooks the fact the central government does not have any such authority. Tampering with the recommendations of FFC is legally untenable".
The DMRC during the discussions and in their written response to the Ministry asserted that "The FFC's recommendations are binding on the Metro Rail Administrations as per provisions of Section-37 of this Act (Metro Act). Neither the Central Government nor the State Government or even the Board of the Company has legal power to change the recommendations made by the FFC."
Puri annexed DMRC's written response in the matter of fare hike to his letter to the Delhi Chief Minister.
The DMRC is run as per the provisions of the Metro Railways (Operations and Maintenance) Act, 2002.
Puri in his letter rebutted all the assertions made by Kejriwal which include that the Central Government can direct putting on hold the fare hike, the FFC recommended a year gap between the two fare hikes and an annual cap of 7% in metro fare hike.
Referring to the last metro fare hike in 2009, Puri clarified that the Fourth FFC itself recommended the fare hike, coming after an extended gap of seven and a half years, to be staggered into two installments of which the first one was to come into force immediately i.e May this year and the second increase from the tenth of this month (October).
"Hence, it would be wrong to claim that there were two increases in fares in a short period of five months," Puri stressed.
Regarding the cap on fare hike, Puri said, "FFC has recommended a cap of 7% for annual fare rise commencing from January, 2019" and it is incorrect to apply this yardstick for fare hike under consideration seven and a half years since last fare revision.
Referring to the suggestion of putting the fare hike on hold, Puri noted that the alternative is to provide to the DMRC grants-in-aid every year over the next five years starting from 2017-18 to the tune of Rs.3,040 cr, Rs.3,616 cr, Rs.3,318 cr, Rs.3,150 cr and Rs.2,980 cr for 2021-22 to meet loan repayment liabilities to JICA, depreciation for replacements and operational expenses with no savings to DMRC.
Pointing out that as per the Metro Guidelines, the operational loss is the responsibility of the State Government, Puri suggested to Kejriwal that "In case the State Government agrees to provide grants -in-aid of nearly Rs.3,000 cr per annum to DMRC, then another FFC may be constituted" which may also examine the financial viability of DMRC.
Puri referred to Delhi Government providing such aid of Rs.1,600 cr per year to DTC apart from meeting the gross cost model expenses for the cluster buses and the sub-optimal services being provided by the DTC.
Puri expressed concern over a 15 month delay in completion of Phase-III of Delhi Metro and the Phase-IV running behind the schedule by two and a half years on account of actions and decisions to have been taken by the Delhi Government.
He said the delay in respect of Phase-IV is depriving about 40 lakh people of Delhi of the benefits of metro services besides denting the much needed efforts to reduce congestion and pollution in the national capital.
Stating that the people of Delhi are looking for quality, efficient, reliable and punctual metro services, Puri noted that DMRC may be allowed to function as an autonomous company in the best interest of the citizens of the national capital so that it can continue to provide services which are comparable to the best in the world.
Disclaimer: No Business Standard Journalist was involved in creation of this content
