Delhi Metro under loss; hike in fare necessary: DMRC

Pic Courtesy: ANI

New Delhi: The Delhi Metro Rail Corporation (DMRC) on Saturday clarified that hike in the metro fare is necessary to meet the input costs and to keep providing world class service to the passengers commuting through it.

The DMRC in its release stated that since 2009, there has been no increase in fare whereas the input cost for metro service has increased by over 105 percent in Energy, 139 percent in staff cost and by 213 percent for repair and maintenance.

"To continue to provide a world class service, it is essential to operate as a healthy organisation. Keeping this in view, the provision has been made for the periodic revision of fares through a Fare Fixation Committee (FFC) in the Delhi Metro Operations & Maintenance Act, 2002," read the statement of the DMRC.

The release further stated that apart from this the DMRC has taken a huge loan from the Japan International Cooperation Agency (JICA) and a payment of Rs. 26,760 crore is still outstanding.

"Moreover, the DMRC has to provide for depreciation and replacement of various assets such as the trains (Rolling Stock) which have a life of 30 years and will have to be replaced subsequently and for this provision has to be kept," the letter read.

The metro corporation stated that in spite of operating efficiently, the metro service is making a net loss of Rs. 378 crore in view of the above factors.

"The long gap of over eight years in the formation of FFC has resulted in the fare hike in percentages, which if seen on yearly basis, is in the reasonable range of 7-8 % per annum taking into account the two phase of the fare Hike (Phase-I: May 2017, Phase-II; October 2017)," the letter read.

Further defending their decision, the DMRC said that it constantly making efforts to reduce its operating cost by going for solar power projects and increasing the energy efficiency at its stations. It is also introducing new initiatives on Property Development and Property Business front.

The DMRC said that it is consistently increasing number of trains, AFC gates, lifts, escalators and other passenger services which also result in the increase of input cost but are essential for providing a world class service.

"Once Phase-III of the Delhi Metro is fully operational, commuters on many routes will have to travel shorter distances and they will be paying lesser fares (see Annexure-I). A comparison of metro fares of many Metros in India shows that the DMRC's maximum fare level is either less or comparable with other metros which are operating In India inspite of a higher per capita income in Delhi," the letter stated.

"As the metro system is getting older, more maintenance procedures, preventive & corrective checks, safety & reliability checks, replacement of electrical fittings(such as insulators), base plates, rail testing etc. are required which is essential for providing a world class service, and which also leads to increased cost in overall operations and maintenance," it added.

Recently, Delhi Chief Minister Arvind Kejriwal wrote to the Centre urging them to withheld their decision raise the fare of the metro service in Delhi and asked to review its decision.

The Delhi Metro fares were last revised in May. If the fare is revised again it is expected to go up by a maximum of Rs 10 from October 10.