Supreme Court allows Mumbai Metro to charge higher fare for now

NEW DELHI: The Supreme Court on Monday permitted the Anil Ambaniled Reliance Group, which operates the Mumbai Metro, to continue charging higher fares that came into effect in January on the condition that it deposits 50 per cent of the fare differential with the top court's registry.

This amount will be used to create a fund for the welfare of commuters should the fare-setting committee rule against the new prices.

The Mumbai Metro raised charges to Rs 20-40 for 11 km from Rs 10-20 on January 8, a move that was unsuccessfully challenged by the Mumbai Metropolitan Region Development Authority (MMRDA) in the Bombay High Court. The Reliance Infrastructure-led Mumbai Metro One runs services on the 11.4-km stretch between the western suburb of Versova-Andheri and the eastern suburb of Ghatkopar.

MMRDA wanted the High Court to allow it to retain the old fares for some time to allow it to move the top court in appeal, but that was denied.

The appeal was heard on Monday by a Supreme Court bench comprising justices Dipak Misra and PC Pant. KK Venugopal and KV Vishwanath appeared for MMRDA while P Chidambaram appeared for RIL.

Venugopal argued that the hike was excessive and sought a court stay until the fare committee decided on the new rates. He said this stand was backed by a foreign expert who was asked to look into the new fares.

Chidambaram said the number of commuters on the metro, estimated at around 2.6 lakh daily, was not enough for the company to break even. At the old "promotional rates", it was daily ringing a loss of Rs 85 lakh, which is now down to a loss of Rs 62 lakh, he said. He said the operator could break even only at 4 lakh commuters, adding the new fares had been approved by the board before coming into effect and were more than competitive with auto and taxi fares.

The case will be heard again on May 6. Reliance Infrastructure holds a 74 per cent stake along with Veolia Transport, while MMRDA has 26 per cent.