Business

Fare increase required for passenger benefit, too: Mangu Singh

Delhi Metro Rail Corporation (DMRC) Managing Director Mangu Singh tells Sudheer Pal Singh in an interview the company is in need of a fare increase to maintain healthy operations and that DMRC is hopeful of continued funding from the Japan International Cooperation Agency (JICA) in future. Edited excerpts:

Are we on track to meet the 2016 deadline for Phase-III?

In terms of physical work, Phase-III is equal to the first and the second phases put together. This is because 140 km is being added to the network in Phase-III and it has a higher underground component. Many corridors are being constructed in difficult areas and it has to be completed in just five years, as compared to the 12 years taken to develop the first two phases. Work has been going on at a brisk pace on all fronts and now we have arrived at the stage where we can start opening all the corridors in Phase-III one by one. We will shortly open the line to Faridabad and the extension to Badli. And, then, starting from the period between March and December next year, we will open the rest of the corridors.

There have been reports of delay in Phase-III?

There has to be a distinction made between slow progress and work getting held up. If out of 140 km we are held up at two-three locations of 70-80 metres each, it does not mean that the progress of the project is slow. These are locations where jhuggis and other residential units are involved and these need to be relocated. We have dealt with these constraints. The underground (UG) component in Phase-III is 55 km — 33 per cent. This is significantly higher than the UG component in the first two phases. DMRC is required to take clearance from the railways on technical issues. At times, this leads to procedural issues which causes delays.

DMRC’s losses, which were declining for the past few years, have started rising again. You registered an 11 per cent rise in net loss at Rs 100 crore in 2013-14. What is the outlook for the current year?

There has been a slight increase in losses in 2013-14. Our input costs have gone up drastically, including electricity cost (accounting for 40 per cent of the total), staff salaries, etc. But the positive aspect is that our ridership has also increased. So the increase in revenue has offset the rise in expenditure to that extent.

Is DMRC in need of a fare increase? You recently asked for the setting up of a fare fixation committee

The last fare increase was done in 2009. We have now asked the government for the setting up of the committee. It is yet to be nominated. But this is the government’s prerogative and I would not like to comment. But there is one more dimension to the issue of fare revision and why we need it.

We are facing a severe shortage of coins at our stations, which leads to consumer complaints. So our intention is to rationalise fares so that the coin requirement is reduced.

On the recent issue of Rs 4,600-crore Hyundai contract — where DMRC alleged Hyundai hid information on it getting debarred by the Airports Authority of India — DMRC had earlier said necessary action will be taken against the company. What is the status?

The contract is in an advanced stage of execution and the delivery of coaches will start this year. At this stage, it is difficult to meet the deadlines without the coaches and the opinion we have received is also on similar lines.  

What is the cost per km for Phase-III and how much is the loan component?

For the underground component, the cost per km is between Rs 400 crore and Rs 500 crore. It is Rs 210 crore per km for the elevated corridor. For the entire 140 km, the cost is slightly less than Rs 300 crore per km. JICA loan accounts for almost 52 per cent, roughly Rs 21,000 crore, of the total cost of Phase-III of Rs 42,000 crore. This is compared to 60 per cent loan in Phase-I and 55 per cent in Phase-II. The funds had come via a soft loan from JICA at the rate of 1.3 per cent.

Is JICA funding likely to continue in Phase-IV also? What happens in case it is not available?

We have proposed JICA funding in Phase-IV. But we have not yet approached them. Though JICA, I am told, is now saying its funding may not be available going forward, we are very hopeful that they will continue to fund. They cannot get a better client than DMRC and we are banking on that. Phase-IV is still in the sanctioning stage. When the project is sanctioned and the in-principle approval is obtained from the government, we will approach JICA. And a formal response will come only then.

The fourth phase will be built at an estimated cost of Rs 50,000 crore, including escalations. It is estimated to be completed by 2021. In case JICA loan is not available, we will find other options – internal borrowing, etc. But we are very hopeful of receiving it.