“Project not for private profit; Reliance Energy, MMOPL can’t raise fares arbitrarily”

Opposing any moves to unilaterally change the travel fares of the much-awaited Metro Rail project, the Mumbai Metropolitan Region Development Authority (MMRDA) on Thursday told the Bombay High Court that the fares were decided collectively by all stakeholders. Due procedure must be followed if any modifications were to be made, the MMRDA said.

Justice R.D. Dhanuka heard the arguments of all the concerned parties. They have been directed to suggest the names of arbitrators for the appointment of an arbitration board. The judgement in the matter has been reserved till June 24.

“The entire project is not set up for private profit. It is a joint project by the public and the private sector for the people. Therefore, they [Reliance Energy, Mumbai Metro One Private Ltd.] cannot raise the fares arbitrarily,” said senior counsel E.P. Bharucha, who represented the MMRDA.

Mr. Bharucha said the fares could be revised only by following the laid-down procedure which demands that the proposal be considered by the Fare Fixation Committee. The MMRDA submitted that the committee had already been appointed, and that it was mandated to decide such issues within three months.

“They [Reliance Energy, MMOPL] have fixed the fare. They are party to the agreement signed previously. They can’t ignore it now with the implementation of the Metro Operation Act,” Mr. Bharucha argued.

He said the agreement had allowed for an 11-percent fare hike every four years and that the rates had been revised in line with the provision.

“The petitioner [MMRDA] has a 26-percent stake. The Government of India too has given Rs.650 crore. Public money is involved. This project is for the public at large. Moreover, the government has not imposed the previous fares. It only approved them. They cannot be changed unilaterally now,” he said.

He argued that the unilateral price rise declared by Reliance Energy and the MMOPL would discourage people from using the Metro and affect the long-term viability of the project.

Reliance Energy, however, argued that the fares decided by the government were imposed on the company. Moreover, the pre-decided fares were not initial fares, but those decided for the entire concession period of 35 years, senior counsel Iqbal Chagla claimed.

“We are much cheaper compared to the BEST bus and railway. The fare of BEST bus is Rs. 25 [between Versova and Ghatkopar]. One has to pay Rs.60 for an air-conditioned bus, Rs.163 for an auto, Rs.204 for a taxi. I charge only Rs.40. Mumbai will welcome the fare hike,” he said.

“I am entitled to fix fares in case the initial opening fares are not decided,” the MMOPL’s lawyer argued.

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