The Appointments Committee of Cabinet (ACC) headed by Prime Minister Narendra Modi has rejected a proposal to constitute a fare fixation committee to decide the fares of Delhi Metro. Fares were last revised in 2009 when the minimum fare was raised from Rs6 to Rs8 with the maximum fare being raised to Rs30 from Rs22.
Top sources told The Pioneer that ACC has rejected a name of former Justice AK Srivastava for fare fixation committee. Strangely, the ACC has not given any reason for rejection of Srivastava’s name for fare fixation committee. This was the fourth time that Cabinet Committee on Appointments has rejected the proposal for constitution of fare fixation committee in the last three years. Increasing input costs and no fare revisions in the past five years has put the Delhi Metro Rail Corporation (DMRC) in a fix. It is estimated that Delhi Metro is incurring loss of Rs120 crore every year.
Delhi Metro chief Mangu Singh has written to the MoUD for the fourth time, requesting the Ministry to set up the fourth fare fixation committee in order to increase Metro fare. In a letter to Secretary (Urban Development) Shankar Aggarwal, Singh had stated that delay in the constitution of the committee will have an adverse impact on the finances of Delhi Metro and there is also a need to rationalise Metro fare as the Reserve Bank of India (RBI) has limited its produce of coins and notes in small denominations.
“The decreasing gap between cost and revenue was bound to pinch the DMRC sooner rather than later. We still have surplus. But that surplus is required to repay the loan we took from Japan. If a fare revision is done now (after a gap of five years), it will most likely be steep. There should be a mechanism to revise the fare from time-to-time so that it doesn’t hurt the public much,” said an official.
The last fare revision was in 2009, with the minimum fares fixed at Rs8. Since then, costs have gone up considerably. Expenditure on energy made up 27 per cent of DMRC’s operational costs in 2009 then. Similarly, unit cost of energy too has increased by over 100 per cent. “It used to cost Rs3.25 per unit in 2009; it costs us Rs6.89 now. Moreover, DMRC’s daily average ridership has increased from 8 lakh in 2009 and 11.5 lakh in 2010 to 25 lakh in 2014,” said officials.
According to provisions of Delhi Metro Rail (Operation & Maintenance) Act, 2002, the fares are supposed to fixed and revised by a regulatory authority (fare fixation committee) constituted by the Centre. This committee is a three-member body, chaired by an existing and/or a retired judge of the High Court. The committee also comprises representatives from the Central and State Governments.
The Act also states that the regulatory authority, while fixing the revised fares, is supposed to take into account two basic factors — affordability by the public and long-term sustainability of the Metro system. The third fare fixation committee was headed by Justice (Retired) E Padmanabhan. Dr Noor Mohammad, member secretary, National Capital Region Promotion Board (NCRPB), and VV Bhatt, principal secretary (Finance), Delhi Government, were members. The first committee was constituted in December 2003, a year after the opening of the first Metro section in December 2002. The revised fares were adopted from March 2004.