Row over fares for the Mumbai Metro project between the Maharashtra government and Reliance Infrastructure is unlikely to be resolved in a hurry. The Mumbai Metropolitan Region Development Authority (MMRDA) is understood to be assessing the costs incurred by Reliance Infrastructure to understand how exactly the operating costs have risen as claimed by the developer. The MMRDA-appointed Louis Berger Group, an independent organisation, has submitted a report which is being studied, a senior MMRDA official told FE, without divulging any details. FE could not access the report till the time of going to the press.
The Mumbai Metro services between Andheri-Versova-Ghatkopar commenced in Mumbai on Sunday carrying 2.4 lakh passengers. The MMRDA's conclusions will assume significance as Reliance-Infra has said the fares have been fixed under slabs of R10, R20, R30 and R40, primarily because of a sharp increase in the operating costs. MMRDA has already approached the Bombay High Court on Monday asking it to hear its plea against the fare hike by Reliance Infrastructure for the Mumbai Metro, following which the court has decided to hear the matter on Friday, June 13, 2014.
“The 2007 DPR (detailed project report) of MMRDA said the operations and maintenance cost will be R100 crore in 2014, but it shot up to R240 crore. Also, these calculations were based on 2003-2004 inflation levels, which itself shot up significantly,” Abhay Kumar Mishra, CEO, Mumbai Metro One (MMOPL) told reporters on Saturday, before the launch of Metro services.
Earlier, Mishra had said that various operating cost heads like electricity, salary, depreciation, interest have shot up considerably from the earlier estimates so those costs have to be given a fresh look. He said these costs have gone up 125% from 2004 best fare that was looked at the time of the signing of the concession agreement.
According to Reliance, the project cost of the Metro has escalated nearly 70% to R4,000 crore from R2,356 crore since the concession agreement was signed in March 2007.
Reliance Infrastructure refused to comment on the report received by the MMRDA. The mail sent to the company seeking responses remained unanswered.
MMOPL is a special purpose vehicle (SPV) created to execute the first line of Mumbai Metro, with Reliance Infastructure holding 69% stake, MMRDA 26% and 5% held by French transport company Veolia.