But it is doing so in violation of its business plan, says RTI activist
Mumbai : In a business plan submitted to the Mumbai Metropolitan Region Development Authority (MMRDA) while bidding for the Versova-Andheri-Ghatkopar metro project, Reliance Infrastructure (RInfra) has projected and provisioned for losses for eight years of operations. On the other hand, in a bid to hike ticket fares on the line and seek operational and capital subsidies from the state government, RInfra-led Mumbai Metro One Pvt Ltd (MMOPL) has claimed that it has incurred significant cash losses since the operations started.
According to RTI activist Anil Galgali, whose RTI revealed this information, RInfra is now working against its own planned projection and “harassing” Mumbaikars for earning high profits.
RInfra, the successful bidder for the Mumbai Metro project, had acquired the project by projecting reduced expenses of about Rs 1,048 crore to get this important PPP project from MMRDA. Two consortiums — Reliance Infrastructure and an IL&FS-led consortium — had bid for the Mumbai metro project under the PPP model. The financial bid of RInfra was a projected cost of Rs 2,356 crore and it sought a viability gap funding (VGF) of Rs 1,251 crore, whereas IICU-IL&FS submitted their bid by projecting a cost of Rs 3,404 crore and seeking VGF of Rs 1,296 crore. As per the agreement executed between RInfra and the MMRDA in 2006, the project was to be completed by 2010.
Meanwhile, MMOPL has refuted the claims. An MMOPL spokesperson said, “The Fare Fixation Committee has considered all the aspects of the cost to operate the line, including the long-term sustainability of the project. In our final financial bids to MMRDA at Rs 650 crore (of) VGF, we had not envisaged any cash loss even in the first year of operation.” Sources in MMOPL added, “Legally it is incorrect and inappropriate to say that financial statements are part of the concession agreement. The bids were for VGF, so whatever is mentioned in the financial statement is a totally different story.”
But Galgali said, “Instead of sticking to its business plan, RInfra, right from day one, has started cribbing about the losses. The commuters of the city should not suffer due to this fare dispute between MMRDA and RInfra.”
