Reliance threatens to move off of Mumbai Metro over poor revenue prospects

Q: The Mumbai Metro One Pvt Ltd has told the Maharashtra government that it would be difficult to continue the operation in case it failed to generate adequate revenue.

Vineet Tendulkar, Mumbai

7th August 2015

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mumbai metropolitan region development authority

mumbai metro one

maharashtra government

reliance infrastructure

mmopl

anil ambani

veolia transport

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Replies (3)

Hey Guys.....
Earlier, the MMOPL has also refused to increase the existing fare slab of Rs 10 to Rs 40 despite the fare fixation committee recommending increase of the fares up to Rs 110. Yes....you can say that the commuters are unable to pay the increased amount.

Sudhakar , Chennai

7th August 2015

Comment

Yes, the 4 experts appointed by the fare fixation committee to suggested increase in the fare and suggested that MMOPL must approach the Maharashtra government for grant or operational subsidy but the MMOPL has decided to continue operating at the existing fare by providing a concession of nearly 60% to commuters at least up to October 31, 2015. During this period they are very hopeful that the government shall sympathetically consider their proposal in the larger public interest.

khushisha, Mumbai

7th August 2015

Abhay Kumar Mishra, the chief executive officer of MMOPL in his letter to Maharashtra chief secretary mentioned that the business sustainability on a stand alone basis is most important as the project does not have any access to any type of concession/subvention from the government or any other source In case the business fails to generate sufficient income to meet its cost to operate the line, it would be very difficult for the operator to continue the operation.

Varun,

7th August 2015

Comment

Right Varun.......
It is a business strategy that if you are not earning better to stop doing that. Reliance Infrastructure had earlier given up the operation of Airport Express Metro in Delhi referring financial inviability. But matter is still pending, the Delhi Metro was forced to take up the operation of the Airport Metro.

Dhiraj,

7th August 2015

Remember Dhiraj...........nearly 5 lakh people use the Metro on a daily basis. Line-1 of the Mumbai Metro, also known as the Versova-Andheri-Ghatkopar corridor. It is the first part of the Mumbai's Metro system. Mumbai Metro has been a hit among the commuters and it is going to stop if the operator decides to withdraw from operating the corridor.

Shrabani Deodhar, Pune

7th August 2015

i remembered Sharbani.....The corridor was built at the cost of Rs 4321 crore and this 11.4km elevated corridor comprising 12 stations, connects Versova and Ghatkopar, the eastern and western suburbs of Mumbai. This corridor is run by MMOPL, a joint venture owned by Reliance Infrastructure with Veolia Transport and Mumbai Metropolitan Region Development Authority as stakeholders.

Varun,

7th August 2015

It's true....
Because MMOPL has demanded a minimum operational subsidy of Rs 21.75 crore/month in addition to the one-time capital grant of Rs 1000 crore to continue operating the 11.4 km Versova-Andheri-Ghatkopar corridor. The operator has asked the government to decide on the demand by October 31 this year but despite repeated attempts, the company did not respond to their queries.

Varun,

7th August 2015

Comment

Right Varun,
The company had told the government earlier that no hike in Metro fares could hold the financial losses and only financial support from the government could make sure the smooth operation of the Metro services.

Dhiraj,

7th August 2015