Metro fares result of wrong application: MMRDA | mumbai news | Hindustan Times
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Metro fares result of wrong application: MMRDA

It is not a project to carry a lakh of air-conditioned car users, it is meant for the general public, MMRDA tells Bombay high court

mumbai Updated: Oct 02, 2016 00:37 IST
Kanchan Chaudhari
mumbai metro

The fares fixed for the Ghatkopar-Versova metro corridor are a “wrong outcome on a wrong application”, the Mumbai Metropolitan Region Development Authority (MMRDA) said on Saturday.

Senior advocate Aspi Chinoy told a division bench of Chief Justice Manjula Chellur and justice MS Sonak the the metro rail operator — Mumbai Metro One Private Limited – sought to convert the public utility project into a commercial, profit-making affair by including at least five items of expenses in the application to fix fares for the city’s first metro corridor.  

It is not a project to carry a lakh of air-conditioned car users, Chinoy said. “It is meant for the general public.”

The bench is conducting the final hearing on a bunch of petitions — including one filed by MMRDA — challenging the fares fixed by the committee for the metro corridor. Another petitioner is Congress leader Sanjay Nirupam. 

The Fare Fixation Committee fixed fares for the corridor in the Rs 10-110 band. After it submitted its report, MMOPL announced it will increase the fares by Rs5 from December 1, 2015 and had proposed five slabs — Rs10, 20, 25, 35 and 45, instead of the current four of Rs10, 20, 30 and 40. This proposed fare hike was withheld after the MMRDA approached the high court.

Section 33 of the Metro Rail Act says the fares for the metro should be fixed by a Fare Fixation Committee appointed by the Central government. MMRDA said while this certainly overrides the clause in the Concession Agreement between MMRDA and Mumbai Metro One, it does not wipe out the entire agreement. 

According to MMRDA, the metro operator was bound by other terms of the agreement, which clearly sets out the metro operator was not supposed to earn anything except operational costs and depreciation through the fares till 2019. The authority argued that Mumbai Metro One had included items such as reasonable returns on the capital employed by share holders and interest of loans taken for the project, among other things. 

Chinoy said while the agreement envisaged charging fares at one-and-a- half times the fares of ordinary BEST buses, in its application to the Fare Fixation Committee, the metro operator sought fares at a par with air-conditioned BEST. Chinoy pointed out the five items covered expenses to the extent of Rs470 crore of Rs692 crore shown by the metro operator in its application, and because of such application, the majority members of the Fare Fixation Committee have held the metro service should be placed above the air-conditioned BEST buses, and fixed higher fares.