'Mumbai Metro is mired in losses, thanks to high power bills'

The Mumbai Metro One Pvt Ltd has been paying monthly electricity bills close to Rs 2.70 crore; a big hike in fares as approved by the Fare Fixation Committee may be needed to keep services on track, claims the company

Are high electricity bills one of the important reasons why the Mumbai Metro One Private Limited (MMOPL) wants to increase the fares on the 11.04-km Versova-Andheri-Ghatkopar route? The monthly electricity bills of the Metro rail are close to Rs 2.70 crore.

MMOPL faces a total loss of R24 crore per month, which includes losses due to operations and maintenance costs. File pic

A few days back, MMOPL had announced that it would increase fares from December 1 but on Monday it announced that the fares would not be hiked from this date. In a press release on Monday evening the MMOPL said, “Since the High Court has scheduled the hearing on priority basis on December 17, we have deferred the fare revision till then.”

The Fare Fixation Committee (FFC) appointed by the government has already given permission to MMOPL to increase the Metro fares by anywhere between Rs 10 to Rs 110. But MMOPL has been charging lower rates for journeys, in the slab of R10, R20, R30 and R40.

While there has been opposition in the past to any Metro fare hike by political parties, the FFC has given MMOPL the permission to increase fares after studying all the factors. Speaking to mid-day, an MMRDA official, who did not wish to be named, admitted that the operation and maintenance (O&M) cost of the Metro Line One has been on the higher side.

“It is true that the O&M cost of Metro is more, but that’s the situation everywhere. It is a known fact that public transportation systems have always been in losses as the O&M cost is more than the revenue that is generated through the sale of tickets or the footfall of the public using the particular services. That’s why MMOPL is suffering losses.”

mid-day has a copy of MMOPL’s electricity bill for September 2015. It states that the company has been paying close to Rs 2.70 crore as electricity charges for the 11.04-km Versova-Andheri-Ghatkopar Metro Line One.
When compared with the cost at which Delhi Metro Rail Corporation (DMRC) gets electricity, the cost at which MMOPL gets electricity is much higher.

The comparison of the same was also done in a report prepared by the FFC on July 8. The section of the report on electricity costs states: “The energy costs of MMOPL appear to be higher than that of Delhi Metro, when compared on the total distance travelled. A more detailed assessment would be needed to explain the differences (including whether per-train-kilometre or per-passenger-km is the appropriate metric), and to separate them into ‘controllable’ and ‘uncontrollable’ factors.

However, a high-level assessment suggests that the significant part of the difference is due to electricity tariffs (prima facie, uncontrollable), which are 78 per cent higher as compared to the net electricity tariff paid by Delhi Metro.” The FFC report also highlights how MMOPL has been successful in saving electricity. A source from MMOPL who did not wished to be named said, "Every month we are paying an electricity bill of around Rs 2.70 crore.”

High electricity bills
MMOPL pays two separate monthly electricity bills. One is a bill paid under the ‘HT V’ category for Metro and Monorail services. The amount that MMOPL paid under this category for the month of September 2015 is Rs 1.68 crore. The second bill that MMOPL pays is under the HT VI (B) category for Public Services (Others) and the amount that MMOPL paid in this category for the month of September 2015 is Rs 1.01 crore. This means MMOPL pays a total of Rs 2.70 crore as electricity charges for the 11.04-km Versova-Andheri-Ghatkopar Metro Line One.

Heavy losses
On an average, 3 lakh commuters use the Metro rail services on a daily basis. The average revenue that is generated on a daily basis is R50 lakh. Sources told mid-day that MMOPL faces a total loss of R24 crore per month, which includes losses due to operations and maintenance costs.

"Exciting news! Mid-day is now on WhatsApp Channels Subscribe today by clicking the link and stay updated with the latest news!" Click here!