Not fare: MMRDA to challenge HC order on Mumbai Metro

Written by fe Bureau | Mumbai | Updated: Jul 1 2014, 06:57am hrs
Mumbai metroThe court allowed Reliance Infrastructure-led Mumbai Metro One (MMOPL) to charge initial fares. PTI
The Mumbai Metropolitan Region Development Authority (MMRDA) will soon challenge a single-bench order of the Bombay High Court on the Mumbai Metro fares in front of a division bench.

"We will be appealing against the decision to a division bench," UPS Madan, metropolitan commissioner, MMRDA said in an Idea Exchange programme organised by The Indian Express on Monday.

Last week, the Bombay High Court had dismissed a petition by the MMRDA challenging the hike in fares for the recently commissioned Mumbai Metro.

The court allowed Reliance Infrastructure-led Mumbai Metro One (MMOPL) to charge initial fares, of between Rs 10-40, until an independent fare fixation committee takes a decision. MMOPL had notified the initial fares claiming an escalation in the operating cost but MMRDA was insistant on an initial fare of between Rs 9-13 based on the concession agreement signed between MMOPL and MMRDA in 2007 and took the matter to court.

Reiterating MMRDA's earlier stand, Madan said that there has been no revision in the cost of Mumbai Metro Line 1. "Nobody revised Reliance's cost estimate. Till today, it is their (Reliance) claim that the cost has increased. In fact, we had got it examined through an independent agency Louis Berger Group who have gone through the entire details provided by Reliance. That report clearly states that 80%-90% of this increase is due to their (Reliance) own doing on account of wrong estimations, because of market forces, increase in dollar rates as there were imports involved etc. They (Reliance) added a few things that were not anticipated, they modified a few things and so on. So, they can't blame us for that.

On June 9, FE had reported that MMRDA had appointed the Louis Berger Group to assess the costs incurred by R-Infra to understand how exactly the operating costs have risen on the metro project as claimed by the developer. R-Infra has not commented on the report received by MMRDA.

However, in the past, the CEO of MMOPL Abhay Kumar Mishra, had said that various operating cost heads like electricity, salary, depreciation, interest have shot up considerably from the earlier estimates and have gone up 125% from the 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 also escalated over 80% to Rs 4,321 crore from Rs 2,356 crore.