Bombay HC green signal for Mumbai metro fare hike

The new fares, which can go up by Rs.10 - Rs. 40, will be effective from January 10.

January 08, 2015 03:41 pm | Updated 04:59 pm IST - MUMBAI:

Trains running on the Varsova-Ghatkopar corridor.

Trains running on the Varsova-Ghatkopar corridor.

The Bombay High Court on Thursday cleared the decks for metro fare hike in Mumbai. Coming down heavily on the Maharashtra Government for delaying the formation of the Fare Fixation Committee for over a year, the court said that R-Infra and MMOPL (Mumbai Metro One Private Limited) can increase the fare band to Rs. 10 to Rs. 40.

If MMOPL (joint venture between Reliance Infra and MMRDA) wants, it can now increase the fares in Mumbai metro to Rs. 10, Rs. 20, Rs. 30 and Rs. 40. This will mean that the fares might double in some cases as the current fare band is between Rs. 10 to Rs. 20.

The new fares will be applicable from January 10, a senior lawyer representing MMOPL said.

Fare Fixation Committee

The court also ordered the formation of a Fare Fixation Committee by January 31. The committee has been directed to decide on the fare issue within three months from January 31.

It refused MMRDA's (Mumbai Metropolitan Region Development Authority) plea for interim stay on its order till January 31. "We wish to take the matter to the apex court, and seek stay on this order for three weeks. Anyway, the Fare Fixation Committee will true it all up," senior counsel Aspi Chinoy who appeared for MMRDA, told the court.

But the court said that the Government had failed to form the Fare Fixation Committee for over a year, leading to the escalation of the issue. It said that the operators were already suffering losses.

Daily loss

"The respondents (R-Infra and MMOPL) have said, at the current rate (of tickets), the daily loss for the company is Rs. 85 lakh. If the fare band is increased to Rs 10 to Rs 40, the daily loss will come down to Rs. 62 lakh," the division bench of Chief Justice Mohit Shah and Justice B P Colabawalla said.

After MMRDA sought a stay on the order, the court immediately calculated the loss due to the stay. "At current rate, the loss is Rs 85 lakh. If the rates are increased to Rs 10 to Rs 40, the daily loss will be Rs 62 lakh. This means that there will be a difference of Rs 23 Lakh. Granting stay till January 31 would mean loss of Rs 23 Lakh for 23 days, which is over Rs. Five Crore," the Chief Justice said.

Operational costs

R-Infra and MMOPL too opposed MMRDA's plea for stay. They said they were struggling to meet the operational costs. "Today we are fighting to meet the operational costs. It is a loss for us who have put the maximum amount of money. We are suffering. Even after the costs are increased to Rs 10 to Rs 40, the loss will not stop, but will only come down. Moreover, the appellant has not denied our claim of losses," senior counsel Janak Dwarkadas, representing MMOPL, said.

The court, while accepting the argument, said that if the Fare Fixation Committee finds the new rates unreasonable, it will pass on the benefit to the commuters. "But if the FFC finds the rates reasonable, there is no way for the operator to recover the losses," the court observed.

It however said that the observations made in its order will not affect or prejudice the Fare Fixation Committee.

MMRDA had appealed before the division bench of the court against a single-judge order refusing the State Government the right to decide the fares of the Mumbai Metro. Justice R D Dhanuka had, in April last year, dismissed MMRDA's petition on the grounds that the Mumbai Metro One Private Limited (MMOPL) had the right to decide the initial fares till the Fare Fixation Committee arrived at a figure.

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