Mumbai Metro Rail Faces Endless Delays
After seven years of laying the foundation for Mumbai’s first alternate transport service in 2006, the Mumbai metro still seems to be stuck in endless delays. The 11.05 km line connecting the eastern and the western suburbs was supposed to become operational in December this year. However now, there are uncertainties looming around its date of commencement.
The first phase of Mumbai metro is to have three lines and the first line between Versova and Ghatkopar was initially supposed to become operational in October 2013, but then got pushed to December 2013. However, the date of commencement of its operations seems to be further getting delayed now. One of the key reasons for this is the hike in project cost by more than 80% due to inordinate delays. Consequentially, Mumbai Metro One Pvt Ltd (MMOPL), a consortium of Reliance Infrastructure that is building this project has proposed a hike in fare to commence and sustain operations. However, the Maharashtra government is reluctant to hike the fare prices though it is keen to roll out the project as soon as possible.
Cost escalations and fare hike
When the project was first awarded, the base fare would be between Rs. 9 – Rs. 13 for different distance slabs with a provision of increasing the fare by 11% every four years. Now, MMOPL has proposed the base far to be between Rs. 22 – Rs. 33 citing cost escalation. MMOPL claimed that as per the concession agreement, it could approach the government for an upward revision of the fare prices beyond the one permitted in the notification if there is any unanticipated increase in the project operating cost.
The consortium also said that this wasn’t a recent development though this became a a big issue only now. It had first raised the issue with MMRDA in February 2012 about the increase in project cost by Rs. 1,900 crore from the estimated Rs. 2,350 crore. However, the government did not intervene properly to resolve this issue until recently. The consortium again wrote to the present Maharashtra chief minister in April and Chief Secretary in July requesting their intervention.
Reasons for cost escalation
The primary reason for the increase in project cost has been numerous delays in acquiring right of way (RoW) by the MMRDA and various other hurdles. MMOPL was given right of way on only 45% of land when the work began while it was supposed to be given RoW of 59% with land free of encumbrances. Land for the metro car shed was given after six months of beginning the work.
MMRDA has now cleared the RoW for civil works, but there are still hindrances for acquiring land to construct staircases in five locations. If these staircases are not built in time, the project will not get a final NOC from the fire department and without the NOC, the project cannot be commissioned. Absence of clear underground facilities mapping also created more hurdles and impacted project cost. Along with all these hurdles, the falling value of rupee against the dollar also impacted the cost significantly.
