FPJ Exclusive: MMRDA bats for metro cess, says will be major revenue generator

In an in-depth conversation with FPJ Reporter Sweety Adimulam, MMRDA Metropolitan Commissioner, SVR Srinivas, talked about the myriad challenges being faced by the agency for metro rail construction in Mumbai. He also clarified that the upcoming metro cess, which will be a major revenue source, will be applicable only on those properties which are in vicinity of metro alignment and not across Mumbai MMR.

Why was there a need for so many metro lines?

The MMRDA has a plan for 11 metro lines as after more than 75-year-old suburban rail no metro has come which connects this north south city. Metro Line one had come eight years back. The CTS study says that the population is also on the rise hence we are developing the metro network. We are commissioning two lines 2A (Dahisar -DN Nagar ) 7 (Dahisar E-Andheri E) very shortly. Also two to three other metro lines are in an advanced stage. Besides, two other lines 10 and 11 passing from Thane will be started in another six-eight months time period. Once these metro lines become operational, the travel time between Mumbai and MMR will be reduced by 30-40 minutes from anywhere to MMR. That is the main objective of creating a complete metro network.

Will the delay in completion of these lines have an impact on funding?

Delay in project and funding are both different aspects. Firstly, let us talk about delay in projects, say in Metro Line 2A and 7 initially there were delays due to technical and execution delays which possibly could have been avoided. But afterwards, there was a delay due to Covid-19. More importantly, delays were due to land acquisition and second factor was the hustle and bustle of the metropolis. Along with the metro works,the city has to run, traffic has to go through, also it was extremely difficult to get blocks crossing the railway tracks, added to its extremely dense population. Given all these, there is an additional point which is relief and rehabilitation of the project affected people(PAPs). For instance, in line 7, only on Kurar station, 75 families need to rehabilitate that, too for just one staircase construction. For Metro Line 2A and 7, over 600-700 people need to be rehabilitated.

Now talking about funds, the MMRDA have projects worth over Rs one lakh crore. These projects are in execution mode. What the MMRDA needs is a proper resource mobilization strategy. We don't need Rs one lakh crore immediately but at the same time I don't want this funding to come after seven years. We have now tied up with the SBI and other agencies to mobilise financial resources at reasonable rate of interest. We are assets rich authority but today we cannot sell all those assets so we need liquidity. In addition, we will be getting resources through metro operations. But more importantly, we are trying to get through stamp duty which is additional one percent metro cess that is most likely to kick in from April 1 and through transit oriented development (TOD) charges. For Line 7, the government is going to consider the same and we are expecting soon an order to be issued. The received cess could be reinvested in the infrastructure development.

What is the ratio that we are looking through TOD and Metro cess revenue?

Through TOD, we expect to get over Rs 6,000 crore in next five to six years. Then stamp duty, in terms of metro cess, similar amount we are expecting. Because it completely depends on how fast the registration takes place. Fortunately, city is seeing good number of property registration in last a few years and that is a good sign for MMRDA in coming days. Besides, we will get revenue through operation of metro train service and also through non-fare box revenue like for example line 7and 2A, we are getting revenue through advertising activities. In fact, recently we got Rs 25 to Rs 30 crore through commercial space within the stations. But this amount will go into salary payments among other things. Whereas Metro Cess, TOD will be used as a capital revenue.

Believing the one per cent metro cess will impact the sales ratio, developers want the government to defer it.

I believe that is a short-term view. Because, the development plan 2034 also asks for increased FSI in city and also in the Unified DPCR which has increased FSI in the MMR. Therefore, if you to sustain with that type of FSI then we do need good infrastructure otherwise it going to be a havoc. For example, the Bhiwandi which is a notified area there are more than 100 villages. Now the FSI there is 1.1 & if you load 1.5 FSI. In a village if you have 1.5 FSI and people keep on constructing the local gram panchayat doesn't have a budget of Rs 50,000 so where will they do the infrastructure. How they will fulfill the need of water, road, sewage, among other. So it is better to have a long term vision. I think it is better for real estate also to go for this Metro cess to be given to MMRDA.

Some sections are raising questions that how fair it is to charge the homebuyers for a metro project. They are also saying that it is better MMRDA charge money from the users/commuters? How you want to respond to this?

That is not correct. Why because if metro is coming in BKC and I am not charging people in Ghatkopar. The cess will be applicable within 500 mt of metro radius. In fact, our proposal was to impose development charge across but right now it has been restricted only to the limits of those properties only which are directly benefiting due to metro.

When the commercial operations will start on 20-km stretch of Metro Line 2A and 7?

The works have been completed, all tests have been done and approvals have been obtained. Commission of railway safety inspected the metro lines for almost a month. RDSO also inspected the metro lines.

After 8 years Mumbai will get another new metro? However, this particular metro line Phase1 is coming into operations post covid-19 situation. So how we are looking forward with terms of footfall?

For both these Metro lines, the footfall will be substantial. It is very simple because you see linking road is choko block and so is WEH. We will get very good numbers of footfall and there is no doubt in it. And in post Covid times, if you see Mumbai it has already come back to normalcy. Moreover, if you see it will improve the living in the city especially along those lines and secondly how the people will save there time and energy. Going in an auto rickshaw, local train is not an easy exercise. The productive of the person also goes down in the office. The time of the citizens need to be valued. I think MMRDA valued it more.

Published on: Tuesday, March 29, 2022, 08:13 AM IST