Delhi Metro’s maximum fare rises to ₹50

COSTLIER COMMUTE DMRC says fare hike was imperative in the wake of rise in input costs, cites rise in operating ratio to 69% in 2015 from 48% in 2011 as reason

In 2011, the Delhi Metro Rail Corporation (DMRC) saved 52% of the money it earned from Metro operations but last financial year, the margin reduced to around 25%.

The money saved by the DMRC is largely used in clearing the debt of ₹45,000 crore. Due to increase in the operating ratio over the years, the Delhi Metro is unable to dedicate enough funds for maintenance.

“The necessity of revision in fares was on account of increase in the cost of inputs — the staff cost, the cost of energy and the cost of repair and maintenance. Since constitution of the third fare fixation committee, there has been an increase in the rate of industrial dearness allowance (DA) by 95.5% (from 16.90% to 112.40%), rate of Central DA by 103% (from 22% to 125%) and average increase in the rate of minimum wages by 156.2%. The last fare revision took place in 2009 and the fourth committee was set up after almost seven years in 2016,” said a DMRC spokesperson.

The operating ratio of DMRC increased to 69% in 2015 from 48% in 2011. The operation ratio means that if DMRC earned Rs 100 in 2011, it spent Rs 48 on maintenance of infrastructure.

According to DMRC director finance, KK Saberwal, losses will still be there but through extra fare collection, they hope to reduce the loan burden.

The DMRC has been requesting for an increase in fare since 2009. It faced obstacles as the Centre had failed to constitute a fare panel, which was finally set up in 2016.

Since 2009, electricity tariff has gone up by over 90%, accounting for almost 30% of DMRC’s total operating costs.

Fare fixation committees are temporary in nature and are set up by the Centre only when a Metro Rail Corporation requests a fare hike.

The Delhi Metro fare panel was headed by justice ML Mehta, a retired judge of Delhi high court. The other two members were Delhi chief secretary KK Sharma and additional secretary in urban development ministry DS Mishra.

Concerned that non-revision of fares may compromise quality of service, NITI Aayog, the government’s top think tank, had earlier this year written to the Prime Minister’s Office to take a call on increasing the fare of one of the city’s most popular mode of public transport.

In a letter to Nripendra Misra, principal secretary to PM Narendra Modi, NITI Aayog chairman Arvind Panagariya said that “at the current level, the fares are inadequate for the provision of high quality services and maintenance”.

The necessity of revision in fares was on account of increase in the cost of inputs — the staff cost, the cost of energy and the cost of repair and maintenance... The last fare revision took place in 2009 and the fourth committee was set up after almost seven years in 2016.