The Hindu Business Line : Delhi Metro raises fares; all set to start Noida service

New Delhi, Nov. 11 Commuters in the National Capital region have a mix of good and bad news. The good news is that the Delhi Metro Rail network is all set to start its service to Noida, a satellite town of Delhi. The bad news is Delhi Metro Rail Corporation (DMRC) has decided to increase fares by an average of 36 per cent with effect from November 13. The metro fare revision comes a week after the Delhi Transport Corporation (DTC) increased the bus fares.

The minimum increase is Rs 2 for short distances over an existing base of Rs 6 and Rs 8. The maximum increase is Rs 8 over existing base fares of Rs 19, Rs 20, Rs 21 and Rs 22. The present scheme of 10 per cent discount on smart cards will continue. The rate of tourist card has been increased to Rs 100 for one day validity (from Rs 70) and to Rs 250 for three days validity (from Rs 200).

The Delhi Metro fares have been revised after almost four years (three years and ten months). Meanwhile, in the last two and half years, DMRC has added 100 km of additional metro network.

Expansion of network

“The necessity of revising fares has arisen due to expansion in network from 65 km to almost 165 km in the last two and half years. Since the last time the fares were revised, there has been increase in all cost components as well as the Consumer Price Index,” Mr R.N. Joshi, Director-Finance, DMRC, said in press conference here today.

“The fare fixation committee, while fixing the revised fares, have taken into account two basic factors — affordability of fares by public and long-term sustainability of the metro system. As in the earlier committees, attempts have been made to strike a balance between the two,” Mr Joshi said.

“The committee also took note of the fact that DMRC has huge debt repayment commitments in the ensuing years. Its interest and loan repayment shall be in the range of Rs 500 crore to Rs 600 crore per year after the opening of Phase-II sections,” he said. Currently, DMRC has outstanding loan of Rs 11,000 crore. “The DMRC accesses Japanese loan, which has long tenor (20 years) with a moratorium on repayment for the first ten years. It has a cost of 1.3 per cent,” Mr Joshi said.

DMRC also has to provide for huge depreciation, which is approximately Rs 700 crore a annum.

On the impact of increase in fares on the corporation’s performance, Mr Joshi said that DMRC would be able maintain its operational profitability, while continuing to post net loss – if the ridership projections are met.

“In 2010-11, DMRC is projected to have an operational revenue of Rs 1,026 crore, and non-operational revenue of Rs 205 crore. The operational expenditure is expected to be Rs 987 crore, with interest of Rs 200 crore and depreciation of Rs 777 crore.”

Operational revenue

In 2008-09, DMRC had posted operational revenue of Rs 392 crore and non-operational revenue of Rs 244 crore.

“The non-operational income of 2008-09 was a one-time payment and is unlikely to be sustained in the future,” he said adding that the non-operational income is usually about 20-25 per cent levels of operational income.

He added that despite the fare increase, the per kilometre fares are either same or lower than the Delhi Transport Corporation’s fares for air-conditioned (AC) buses for most of the distances. The only exception will be in longer distances, where Delhi Metro has higher ceiling of Rs 30, while DTC AC buses have a ceiling of Rs 25.

According to the provision of Delhi Metro Rail (Operation & Maintenance) Act, 2002, the fares are to be fixed and revised by a regulatory authority (fare fixation committee) constituted by the Government of India. The fare fixation committee is a three-member committee and is chaired by an existing and /or a retired judged of the High Court and representatives from Central Government and State Government.

The first fare fixation committee was constituted in December 2003 (after the opening of first section in December 2002) and the revised fares were adopted with effect from March 31, 2004, after a gap of one year and three months.

The fare recommended by the second fare fixation committee was made effective from December 31, 2005 (after a gap of one year and nine months). The third fare fixation committee was constituted in June 2009.

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Delhi Metro raises fares; all set to start Noida service