Pay Rs 3,000 Cr to DMRC Yearly to Stop Fare Hike: Centre to Delhi

If the Delhi Metro fare hike is effected, fares will go up by a maximum of Rs 10 from 10 October.

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File image of Delhi Chief Minister Arvind Kejriwal.

The Centre on Saturday informed Delhi Chief Minister Arvind Kejriwal that the Metro Act does not allow him to put the proposed hike in Delhi Metro fares on hold. In addition, the Centre told Kejriwal that setting up a fresh Fare Fixation Committee could be considered if Delhi government agrees to give over Rs 3,000 crore to the Delhi Metro Rail Corporation every year.

On Tuesday, Aam Aadmi Party lawmakers had urged the DMRC to refrain from increasing the travel fare, saying doing so would violate the law as the DMRC cannot hike the tariff twice within six months.

A delegation of AAP legislators met DMRC Managing Director Mangu Singh and said the corporation should find other means to increase its revenue. The party threatened to stage protests if the DMRC went ahead with its decision to hike the fare.

According to the 2002 Delhi Metro Railway Act, recommendations made by the fare fixation committee have to be binding on the metro administration.

"What is disturbing is that the DMRC is violating the law by which it was set up in 2002, through its wrong decision of hiking fare twice within six months," they said in a memorandum to the DMRC.

Centre to Look into Kejriwal’s Concerns on Metro Hike

On Sunday, Union Housing and Urban Affairs Minister Hardeep Singh Puri had said his ministry would "examine the issues" raised by Kejriwal over the proposed fare hike.

"The chief minister has written a letter to me which I received yesterday. We are going through the letter in different ways...There has been no increase in metro fare for last eight years.

"Our priority is to see that the passengers of Delhi Metro can get proper facilities," he told reporters.


Earlier on Saturday, Chief Minister Arvind Kejriwal wrote to the Centre, demanding that the decision be withheld and reviewed, calling the proposed fare “unacceptable”.

In a letter to Union Minister for Housing and Urban Affairs, Hardeep Singh Puri, Kejriwal on Saturday said the proposed hike, to be effected from 10 October 2017, would be in violation of the recommendations of the fare-fixation panel.

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.
Arvind Kejriwal, in a letter to Union Minister Puri

Will Delhi Residents Accept The Fare Hike?

The committee, comprising representatives of both the state and the Centre, which have equal stakes in the Delhi Metro Rail Corporation (DMRC), is entrusted with recommending fare hikes.

The Delhi Metro fares were last revised in May. If the hike is effected, the fares will go up by a maximum of Rs 10 from 10 October 2017. After the new fare hike, 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.

An official statement quoted Kejriwal as saying that “the chief minister has pointed out that the residents of Delhi are still reeling under the impact of the previous steep fare hike by the DMRC in the month of May and the proposed second fare hike from 10th October will be simply unacceptable in this time of economic distress. [sic]”

The Aam Aadmi Party (AAP) chief urged Puri to use his official capacity under section 86 of the Delhi Metro Railway (Operation and Maintenance) Act 2002 and issue directions to the metro officials, asking them to put the fare hike on hold.

He also demanded that a board meeting of the DMRC be convened to review the decision. The AAP has threatened to launch protests against the proposed fare hike. A delegation of AAP MLAs is scheduled to meet DMRC chief Mangu Singh on Monday with a demand to put the decision on hold.


Why Are the Delhi Metro Fares Being Hiked?

The existing fare structure is Rs 10 for up to 2 kilometers, Rs 15 for 2 to 5 kilometers, Rs 20 for 5 to 12 kilometers, Rs 30 for 12 to 21 kilometers, Rs 40 for 21 to 32 kilometers and Rs 50 for journeys beyond 32 kilometers.

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. According to the DMRC, the operating ratio, which was Rs 55 in 2008-09, went up to Rs 74 in 2016-17 due to a rise in the energy, staff and repair or maintenance costs.

While the cost for energy has increased from Rs 3.21 per unit to Rs 6.58 per unit, staff cost from Rs 1.17 crore per km to Rs 2.80 crore per km and repair and maintenance cost from Rs 1 crore per km to Rs 3.13 crore per km, as per a DMRC report.

“As on March 31 2017, DMRC has taken a loan of Rs 26,760.28 crore from JICA (Japan International Cooperation Agency) and re-paid only Rs 3770.79 crore (interest of Rs 2263.67 crore and repayment of a principal amount of Rs 1507.12 crore) till March 31” according to the report.


Hong Kong Model as Solution?

In his letter, Kejriwal referred to the financial model of the Hong Kong Metro and suggested that following it would significantly improve DMRCs 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. In his statement he said:

The fare-fixation committee has advised the DMRC to raise funds through real estate development from the large number of properties allotted to it by the government. If this is done efficiently and transparently, the resultant income will help reduce the fare of the ordinary commuter, as in the case of the Hong Kong Metro.

(With inputs from PTI.)

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