Mumbai Metro to explore non-fare sources such as advertising, land monetisation for revenue

At a time when metros across the country are facing losses owing to the lockdown, the Maha Mumbai Metro Operation Corporation Limited (MMMOCL) is exploring at non-fare revenue sources for the Metro 2A (Dahisar-DN Nagar) and Metro-7 (Dahisar E-Andheri E) corridors, expected to be operational by May 2021.

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MMMOCL, which will be operating all metro corridors in the future, has invited bids to undertake a study of the upcoming 30 stations on the two corridors and suggest measures to “maximise the revenue”.

The documents released by the MMMOCL states, “Public transport projects like metro are capital and maintenance intensive, hence will not be financially sustainable only depending on fare box revenues. The Metro Rail Policy adopted by the government of India stipulates the exploitation of various alternate revenue sources and opportunities such as advertising, commercial utilisation of land around metro station premises, transit-oriented developments (ToD), value-captured tax/financing, digital marketing etc.”

DK Sharma, managing director, MMMOCL said, “We are expecting some out of the box ideas to maximise our revenue sources. The consultant will be expected to do a detailed study of all the stations.”

Mumbai’s first metro line (Versova-Ghatkopar) is also reeling under losses since its inception. Last week, HT reported that Reliance Infrastructure, which owns a major stake in the company, wants to sell the stakes of the metro. According to sources, the metro is facing losses worth ₹80 lakh to ₹1 crore each day.

As per a recent study conducted by a consultant appointed by the Mumbai Metro Rail Corporation, metros across India are facing losses owing to various reasons, including sub-optimal monetisation of non-fare revenue options such as commercial space leasing, advertisement space leasing, property development, land monetisation, etc. due to various constraints, including regulatory and contractual restrictions.

Sudeept Maiti, senior manager from the World Resources Institute (WRI) said, “Non-fare revenue becomes crucial for any metro, which is a very high-investment project. Many cities have started exploring ideas around non-fare revenue but have not yet been able to achieve significant revenue shares. One example would be to look at the Hong Kong model, where approximately 40% of the revenue is via non-fare box.”