Don’t want Metro fare hike? Then pay Rs 3,000 cr for 5 yrs: Centre to Delhi govt
Union urban development minister Hardeep Puri says the Centre has no authority to stop the fare hike legallydelhi Updated: Oct 07, 2017 23:32 IST
Union housing and urban affairs minister Hardeep Singh Puri has said the Delhi government will need to pay Rs 3,000 crore annually for five years if it wants to stop the increase in Delhi metro fares next week, setting up a confrontation with the Aam Aadmi Party-run administration.
The Delhi Metro, used by over 30 lakh people every day in the national capital region that includes parts of Haryana and Uttar Pradesh, is set to implement its second fare revision in eight years on Tuesday, a decision chief minister Arvind Kejriwal has called “anti-people”.
Puri’s position was expressed in a written response to Kejriwal on Friday. The Union minister said his administration was not authorised to stop the fare hike but could consider a suspension if the Delhi government pitches in with funds.
“In case the State Government agrees to provide grants-in-aid of nearly Rs 3,000 crore per annum to DMRC, then another FFC may be constituted, which may also examine the financial viability of DMRC,” Puri wrote, referring to the fare fixation committee, a panel that suggested the hike which is now in contention.
Sources in the Delhi government said the CM was yet to receive Puri’s response. “But from what we have heard so far, it looks like minister Puri is saying DMRC accumulated losses over the years and now people of Delhi should compensate for it,” said an official in Kejriwal’s administration, requesting anonymity.
Kejriwal’s administration and the federal government have often locked horns on several issues. The turf war between the two is also expected to play out in the Supreme Court next week when it hears a petition by the AAP government challenging the powers of the Lieutenant Governor, an authority that functions on the recommendations of the Centre. On the metro fares issue, his party has threatened to launch a protest.
The Delhi Metro’s minimum fare was hiked from Rs 8 to Rs 10, and the maximum from Rs 30 to Rs 50 in May this year. If the fares are increased on October 10, those travelling more than two kilometres will need to pay Rs 5-10 more.
The tariff is based on the recommendations of a fare fixation committee, a panel that has members from the Delhi Metro Rail Corporation and the Union and state governments that are 50:50 partners.
The FFC’s are temporary in nature and are set up by the Centre only when a metro rail corporation requests a fare hike.
The Union urban affairs minister said his department did not have the authority to suspend the hike. “Your suggestion that this Ministry 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. Also, the company will be starved of finances resulting in the deterioration of the quality of services which it stands for,” Puri has said in his letter.
Puri has further added that if the fares are not increased as per the recommendations of the FFC, the total grants in aid that the DMRC would require in the next 5 years starting from 2017-18 till 2021-22 would be Rs 3,040 crore, Rs 3,616 crore, Rs 3,318 crore, Rs 3,150 crore and Rs 2,980 crore respectively. DMRC needs this money to repay the Japanese International Cooperation Agency loans, depreciation for replacements etc.
Kejriwal had on October 2 called for an independent audit of the DMRC when he also asked for the fare revision to be put on hold till the exercise is completed. Kejriwal said private power distribution companies in the capital had earlier shown fake losses to justify a tariff hike.
The DMRC has been dealing with depleting savings and increasing operating costs, which has left it with little room for maintenance spends. In the next five years, the metro operator needs Rs 16,104 crore to repay its loan liabilities to Japan International Cooperation Agency and meet its operational expenses.
Delhi Metro were last revised in 2009, when minimum ticket prices were increased from Rs 6 to Rs 8 and the maximum from Rs 22 to Rs 30.
The DMRC has been requesting a fare increase since 2009, but hasn’t been able to do so as the Centre failed to set up a fare panel. Since 2009, electricity costs have gone up by over 90%, accounting for almost 30% of DMRC’s total operating costs.