This loss is preliminary on account of increase in project cost because of delay in receipt of unencumbered Right of Way/Land by Government & Mumbai Metropolitan Region Development Authority.
Reliance Infrastructure-owned Mumbai Metro One Pvt Ltd, which on June 8 completed two years of operations of the 11.4 km Versova-Andheri-Ghatkopar metro line, faces a major financial crunch because of a pending high court order on fare revision and lack of any commitment from the Maharashtra government for assistance.
This is despite a 10 per cent rise in the average weekday ridership to 3,08,000 in June 2016 from 2,79,000 in June 2015.
'MMOPL is incurring annual loss over Rs 300 crore and cash loss of about Rs 175 crore (Rs 1.75 billion) per annum.
This loss is preliminary on account of increase in project cost because of delay in receipt of unencumbered Right of Way/Land by Government & Mumbai Metropolitan Region Development Authority.
Further, 100 per cent unencumbered RoW/Land was to be given to us by September 2007 as per the Concession Agreement, but was finally handed over to us in February 2014, a month before we applied for CMRS (commissioner of metro railway safety) certification,'' MMOPL spokesperson told Business Standard.
The project cost surged to Rs 4,026 crore (Rs 40.26 billion) from Rs 2,847 crore (Rs 28.47 billion).
MMOPL on July 9 last year in its communication to the state government had sought the one time grant of Rs 1,000 crore (Rs 10 billion), monthly subsidy of Rs 21.75 crore (Rs 217.5 million) and the commercial exploitation of real estate along 12 metro railway stations.
However, the spokesperson said, "We have time and again approached officials of MMRDA and the Maharashtra government with the proposal and any other amicable solution for the long term self-sustainability of the project in the larger public interest.
"But in the absence of any response from MMRDA and the state government, no progress has been made and the cash losses are being supported by the Group."
As far as the fare revision is concerned, the spokesperson said it has followed in letter and spirit the provisions of Metro Act. Subsequently, the government appointed Fare Fixation Committee to look into all aspects in totality and recommends the fare.
Subsequently, FFC recommended a price band of Rs 10 to Rs 110 instead of the existing price band of Rs 10 to Rs 40. The company wanted to increase fares from December 1 last year.
However, the Bombay high court in an interim order, had stayed both the proposals advocating the hike in fares.
The stay is extended up to July 12. However, the spokesperson opined that as per Metro Act, the recommendations of the first FFC are applicable and binding on it.
Notwithstanding the present financial crisis, the spokesperson said that MMOPL has no plans to exit Metro business.
"Rather, we want to leverage the deep organizational strength we have developed while building and running Mumbai Metro One with such great success.
"We are looking for more opportunities in EPC, O&M and consultancy services in upcoming Metros, across the country," he added.
Image: Mumbai Metro I. Photograph: Hitesh Harisinghani/Rediff.com
