The proposed Delhi Metro fare hike faces major roadblock with Delhi Chief Minister Arvind Kejriwal on Sunday demanding an independent audit of Delhi Metro Rail Corporation (DMRC) accounts, and the Housing and Urban Affairs Ministry agreeing to examine the issues raised by the Delhi CM.
Kejriwal has also demanded that the hike be kept on hold till the completion of the independent audit of all the income and expenditure of the DMRC. The Delhi CM said the income and expenditure details of the DMRC should be put in the public domain.
In a letter to Urban Affairs Minister Hardeep Singh Puri, Kejriwal on Saturday urged the Centre to direct the DMRC to withhold the “unjustified” proposed increase of metro fares from October 10.
Addressing a Press conference, Kejriwal and his deputy Manish Sisodia said an audit of the accounts of Delhi Metro was necessary as Delhi has already experienced how the private power distribution companies (Discoms) used to hike power tariffs by showing fake losses.
“It is only since 2015 that there have been no power tarrif hike in Delhi,” Kejriwal said, adding that there is an immediate need to maintain a balance between the operational needs of the metro and the interests of the commuters.
In his letter to Puri, Kejriwal said, “The fare-fixation committee had recommended a gap of one year between two fare hikes. This recommendation is being completely violated because the proposed second hike in October, 2017 will take place even before six months since the previous fare hike.”
He also demanded that a DMRC board meeting be convened to put a stay on the fare hike as the corporation is jointly owned by the Central and the Delhi Governments.
“There is no reason why the principles to be followed from 2019 onwards should be completely violated in 2017,” Kejriwal wrote in his letter. He referred to the financial model of the Hong Kong Metro and suggested that adopting it would significantly improve DMRC’s finances and lead to a much lower fare hike. He also mentioned that his assertion was based on the “advice” of the fare-fixation panel.
Taking note of Kejriwal’s letter, Puri has asked Housing and Urban Affairs Secretary Durga Shankar Mishra to examine the issues raised by the Delhi CM. Interestingly, Mishra was the member of the Fare Fixation Committee (FFC), which had proposed hike in metro fare in two phases.
Sources said the Minister has desired to know the statutory position regarding fare hike, and whether the Central and State Governments, who are equity shareholders in DMRC, could intervene in the recommendation of the fourth FFC.
When asked, sources said currently only three options are available with the State Government or the DMRC. First, Delhi metro may withdraw fare hike for a while to give relief to the commuters; second, both the Delhi Government and Centre should agree to give equal subsidy on metro fare hike as both have 25 stakes each in the metro; third, the Delhi Government should challenge the fare hike in the High Court.
As far as second option is concerned, the Centre will unlikely agree to bear the burden of metro subsidy as it may open Pandora’s box because other States would also start demanding subsidy from it.
HUA officials said if Delhi Government’s financial health allows to bear the burden of metro subsidy, then it should go ahead on the line of power subsidy. From October 10, for a distance of up to two kilometres, the fare will remain Rs 10, but for a distance between two and five kilometres, it will go up from Rs 15 to Rs 20. For the subsequent slabs, it will go up by Rs 10 each, which means the maximum fare will be Rs 60.
Anil Chikara, an expert in transport sector, told The Pioneer that fare amount should be used for operational purposes in metro. “It should not be used for repayment of loan to JICA. The metro loan payment should be opted from development not from passengers. Both Centre and the State Government must take immediate step to prevent fare hike,” Chikara said.
Earlier, reacting to Puri’s comment that the Centre won’t let the metro become another Delhi Transport Corporation (DTC), Sisodia said the DTC may be suffering losses, but it is at least serving the people. He said if metro ridership is coming down, as per RTI data, then its purpose to bring down use of private vehicles is lost. He said the DMRC should go for property development, food courts and advertisements to generate revenue and not just passenger fares.
The Delhi Metro, on its part, has been maintaining that it has a “huge loan liability” and a rapidly rising operating ratio, which means its expenditure as against every rupee earned is going up.
The FFC in its report said in Tokyo Metro if there is any shortfall in the revenue to meet the expenses, the Government revises the upper limit of fare without any delay. “In MTR Hong Kong metro Fare Revision is periodic (Annual). The fare is revised every year and therefore the increase in the fare is 3 - 5 per cent per year. In the present day, public transportation needs are not compromised transport system with low fare but an efficient and improved quality mode with improved air quality,” it said.
“DMRC has taken a loan of Rs 26,760.28 crore from Japan International Cooperation Agency and have re-paid only Rs 3770.79 crores (interest of Rs 2263.67 crore) and repayment of principal Rs 1507.12 crore till March 31, 2017 For every Rs .1 received from operation, the surplus available to DMRC is Rs 0.26 during 2016-17 out of which the DMRC spent Rs 0.27 towards servicing the debt i.e. JICA loan (Rs 0.11 towards interest and Rs 0.16 towards principal). Thus, no funds are left to meet the cost of replacement of assets. The net loss before tax for 2016-17 comes to Rs 378.29 crore,” it said.