Mumbai Metro One

Indian Institute of Management
Ahmedabad IIMA/ CIPR0024
Mumbai Metro One

Fare Fixation
Introduction
It was April 17, 2015. The first meeting of the Fare Fixation Committee (FFC) was
being held in Mumbai. Retired Justice E Padmanabhan was pondering over his
role as the Chairman of the three-member FFC to decide the fate of the much
debated Mumbai metro fares [1] and the predicament of future decisions thereof.
The FFC had to decide the fare structure whether to slash them back to the
fares proposed by Mumbai Metropolitan Region Development Authority (MMRDA)
in the Rs 9 to 13 range, continue in the current Rs 10 to 40 range, or have an
altogether new fare structure. Justice Padmanabhan knew very well that the fare
recommendations and the approach to be given by FFC would be used to settle
this debate of fare fixation. It would also have implications for metro fares in
other cities. It could also cause public unrest and political blame games. They
were considering seeking analytical inputs from consultants/academic
institutions.
Flipping through reports on the original Concession Agreement (CA) and the
rulings of the Bombay High Court post the amendments to the Metro Railways
(Operations & Maintenance) Act 2002 (Metro Act) by the Central Government in
2009, Justice Padmanabhan felt the pressure since as per a recent Supreme
Court order, the FFCs decision was due by end of April 2015. However, as per
the Ministry of Urban Development (MoUD), they had three months until July 7,
2015. To resolve the conflicting deadlines, the FFC had approached the Supreme
Court for extension beyond the end of April. The hearing for this was due on May
6, 2015.
The Phase I of the Mumbai Metro was being built by the Special Purpose Vehicle
(SPV) Mumbai Metro One Private Limited (MMOPL) formed by Reliance Energy
Limited (REL), Veolia Transport, and MMRDA. After issuance of Letter of Intent
(LOI) in June 2006, the SPV had been formed in December 2006. The CA was
signed in March 2007.
As per the Detailed Project Report (DPR) prepared by Delhi Metro Rail
Corporation in February 2005, the fare structure was estimated at 1.5 times the
Brihanmumbai Electric Supply and Transport (BEST) bus fares in 2009. The 2009
BEST bus fares were estimated by assuming a 10% increase from the 2003
levels. As per this, the fares were expected to be in the Rs 5 to 12 range in 2009.
Prepared by Abhinav Gupta, Arushie Mangla, Mayank Tibrewala, Nishant Naveen, Udit
Kejriwal, and Professor G Raghuram, Indian Institute of Management, Ahmedabad
Cases of the Indian Institute of Management, Ahmedabad, are prepared as a basis for
class discussion. They are not designed to present illustrations of either correct or
incorrect handling of administrative problems.
2015 by the Indian Institute of Management, Ahmedabad.
2 of 27 IIMA /CIPR0024
In the CA, the base year had been taken as 2003-04. The metro fares were
specified to be in the Rs 6 to 10 range, with a provision for 11% increase every
four years. This implied fares in the Rs 9 to 13 range in 2014-15.
With the subsequent amendment in 2009 to the Metro Act, the project came
under the purview of the Centre. The Metro Act gave the initial fare fixation right
to MMOPL, with an FFC to examine and grant subsequent changes. Mumbai
Metro fixed the fare in the Rs 10 to 40 range, still keeping the peg of 1.5 times
the 2013 prevailing BEST fares which were in the Rs 6 to 25 range. They also
justified this on the basis of cost escalation caused by delays due to land
acquisition and design changes due to MMRDA. This was unacceptable to MMRDA
and the State Government. After a series of litigations, the Bombay High Court
directed the authorities to constitute an FFC to revise the fares.
Public Transit in Mumbai Need for a Metro
Mumbai was the financial, commercial and entertainment capital of India. It was
the wealthiest city of India with GDP higher than any other in South, West, or
Central Asia. The fifth most populous city in the world, with an estimated
population of 11.9 million as per Census 2001,[2] Mumbai was heavily supported
by public transportation for daily commuting, though in not the most efficient of
ways. In 2005, public modes of transport, including railways and bus constituted
78.1%[3] of the total morning peak period (0600 to 1100) demand. The share was
estimated to sustain at 72.7%[3] in 2031 (See Exhibit 1 for morning peak modal
share). Given the expected increase in the number of trips, the number of public
transport trips was expected to double. Clearly, public transport was the lifeline
of the city.
MMRDA was established as an autonomous body in 1975 under the MMRDA Act
1974 for balanced development of Mumbai Metropolitan Region (MMR). [5] The
role of the MMRDA included, inter alia, achieving balanced development of the
region, preparation of perspective plans, promotion of alternative growth
centres,strengthening of infrastructure facilities, and provision of development
finance.[5]
In 2001, as many as 10.5 million people in Mumbai used public transport daily. [3]
In the last decade, although the suburban rail traffic increased six times, [3] the
capacity increased only by 2.3 times.[3] Many areas in the city and suburbs were
not yet served by the rail based system. The Mumbai Railway Vikas Corporation
Ltd. (MRVC) had added approximately 18% capacity, [3] but there still was a
mismatch in the demand and supply. This led to overcrowding on the rail based
transport. Around 4500-5000 passengers travelled per nine car train [3] against
the carrying capacity of 1750.[3] This resulted in an occupancy of 12 passengers
per square metre[3]which was way beyond even the unacceptable standard (eight
passengers per square metre) [3]in the US Federal Transit Administration Report
(See Exhibit 2 for details on overcrowding in Mumbai suburban rail). It was also
categorized as super dense crush load (11-12 people per square meter) by
Indian railway standards.[34]
Given the existing conditions of the public transportation system and estimated
future demand, the MMRDA conceived the Mumbai Metro as the solution to the
citys public transport woes as it was an efficient, economically viable, and
environment-friendly Mass Transit System. The major objective of the metro
would be to augment capacity along the main travel axis by providing more
North-South (NS) corridors and East-West (EW) connectivity. [6] The idea was to
improve overall mobility by serving areas not served by the existing rail based
systems and constructing stations accessible at walking distance. While
the Mumbai Suburban Railway connected Mumbai from north to south, the east
to west connectivity was poor, leading to a greater need for a corridor in that
region. MMRDA carried out a detailed feasibility study in association with DE-
Consult GmbH and Tata Consultancy Services (TCS), during 19972000, under
the Indo-German Technical Co-operation to explore options for the same. [6] After
studying a number of corridors and alignments, the study recommended a mass
transit corridor from Andheri to Ghatkopar as potentially bankable and
economically viable.
Conceptualisation of the Metro: Line 1
In May 2003, MMRDA roped in the Delhi Metro Rail Corporation (DMRC) to
prepare the master plan and the DPR for Mumbai Metro. DMRC was assisted by
IIT Bombay and TCS for population and employment forecasts and for travel
demand forecast.[6] Nine corridors were identified to be implemented in three
phases for the Mumbai Metro (See Exhibit 3 for Mumbai Metro Master Plan). The
Phase-I of the Mumbai Metro was envisaged to develop in three corridors or lines
(See Exhibit 4 for details on Phase-I of Mumbai Metro Master Plan). Line 1 was to
provide EW rail connectivity between the Eastern and Western suburbs of
Mumbai.[6] The Andheri-Ghatkopar corridor was chosen as the first line in the
master plan to be implemented.[3] DMRC recommended extending the Andheri-
Ghatkopar section to Versova as part of the master plan and identified it as a
priority corridor for implementation.[6] This was because the Versova-Andheri-
Ghatkopar (VAG) route had no suburban rail link and was serviced by BEST
buses, autos or taxis.[6] It was also to facilitate interchange between the Mumbai
Suburban Railways and Mumbai Metro at Andheri and Ghatkopar stations.[6] The
line would significantly reduce the journey time from Versova to Ghatkopar from
90 minutes to 21 minutes,[6] and would bypass about 45 traffic signals. [6] It also
aimed to provide rail connectivity to the Maharashtra Industrial Development
Corporation (MIDC), Santacruz Electronics Export Processing Zone (SEEPZ), and
other commercial hubs.[6]
In May 2004, the MMRDA finalized the project with an updated study by GR
Madan, Director, Mass Rapid Transit System (MRTS) in MMRDA. Based on the
Comprehensive Transport Study (CTS TRANSFORM), the Mumbai Urban
Transport Project (MUTP) and Mumbai Urban Infrastructure Project (MUIP),
MMRDA suggested augmentation plans of the transport network, which included
capacity addition on existing rail corridors by MRVC, new rail corridors, metro
corridors in Mumbai and MMR monorail corridors, Bus Rapid Transit System
(BRTS) etc.[4] One of the objectives was to attain modal integration as well. As a
result of this study, the State Government declared the project as a public vital
infrastructure project and designated the MMRDA as the Project Implementation
Agency (PIA).[6]
Line 1 was an 11.40 km elevated track with twelve stations (See Exhibit 5 for
details on Line 1 VAG corridor). [6] The salient technical features are given in
Exhibit 6. The VAG corridor connected the densely populated areas of western
and eastern suburbs and two important suburban railway stations. [6] This
provided EW connectivity and also made important industrial and commercial
areas more accessible.[6] The daily ridership was forecasted (See Exhibit 7 for VAG
Corridor: Expected Daily Ridership) and fares were set (in 2006) according to the
distance covered, benchmarked to the predicted 2009 BEST fares (See Exhibit 8
for MMRDA Proposed Fare Structure). The initial projections included a capacity to
handle six lakh commuters per day which would eventually rise up to 11 lakh,
which would require a train every two minutes and 40 seconds. [7][8]
The VAG corridor of the Mumbai Metro was to be the first Metro project under
implementation on PPP basis and under Build Own Operate Transfer (BOOT)
format in India.[8] The scope of the project included financing, designing,
construction, testing, commissioning, operation and maintenance. The CA was
drawn on the basis of the CA implemented by the National Highway Authority of
India (NHAI) for road projects, and was modified and adopted to suit the
requirements for implementing a rail based system. Excerpts from the
agreement are given below.
The nature of the concession to be granted could be classified into two broad
heads:
1. To investigate, study, design, engineer, procure, finance, develop,

complete, commission, operate and maintain the MRTS project facility
2. To levy, demand, collect and appropriate fare from commuters and

persons liable to payment of fare using the MRTS Project facility
The period of concession was to be 35 years including 5 years of construction

period commencing from the Appointed Date, i.e. date of signing of CA. [8]
The Government of Maharashtra (GoM), vide its order dated August 19, 2004,
sanctioned the project for implementation under PPP framework and designated
MMRDA as the Project Implementation Agency. It was further sanctioned that the
project construction be completed in five years and thereafter the project cost be
recovered through revenues for a period of 30 years.
Bidding Process
The bidding was planned as a two-stage evaluation process where, in the first
stage, the technical proposals were evaluated, and in the second stage, the
financial proposals.[8] The selection criterion was the stated Viability Gap Funding
(VGF) required.[8] The bidder asking for minimum capital contribution was to be
selected as the Preferred Bidder. The bids were invited in August 2004. [8]
The eligibility criteria which were set for a company to bid are detailed below:
1. The company should either be an Indian Company or a Company

authorized to carry out business in India or a Joint Venture with an Indian
Company.
2. The net worth of the bidder should be more than Rs 5,000 million or US$
112 million.[8]
3. The annual turnover for the last three years should be more than Rs 3,650
million or US$ 81million.[8]
4. The company should have relevant experience in developing, constructing

or operating a Mass Transit System with minimum capacity of 20,000
PHPDT. [8]
A total of five bids[8] were received in May 2005 for the first round and were
evaluated for financial capability and technical competence. These bidders were:
1. Mumbai Metro consortium led by L&T and Gammon Infrastructure Ltd, with
Siemens and BEML
2. Mumbai Metro One consortium led by REL, with Veolia Transport (formerly
Connex) France
3. IICCU consortium led by Infrastructure Leasing & Financial Services

Limited, with Italian Thai Development Public Company Limited (ITD),
Thailand, and Unity Infrastructure Consolidated Toll Network
4. Hindustan Construction Company and RITES Limited
5. Shaktikumar Sacheti Limited and Lingkaran Metro
The system design proposals were scrutinized for conformity with technical and
performance specifications. A confirmation from the bidders was also obtained in
order to incorporate proposed modifications, if any, so as to provide a level
playing field.[8] Only bidders with a score of 75% or above in their technical
evaluation were to be eligible to submit financial proposals. [8] Three out of the
initial five bids (Mumbai Metro consortium, Mumbai Metro One consortium, and
IICCU consortium) were found to be technically qualified to be taken to the
second round in which the business plan and other formats submitted as per
request for proposal documents were to be evaluated. [8]
In January 2006, financial proposals were received from two of the three selected
bidders the Mumbai Metro One consortium, and the IICCU consortium. Mumbai
Metro One emerged as the preferred financial bidder with a Capital Contribution
(VGF) requirement of Rs 1,251 Cr. [9] Negotiations were carried out with the lowest
bidder from January May 2006 to reduce the VGF from Rs 1,251 Cr to Rs 650 Cr.
[9]
The Bid Evaluation Committee (BEC) appointed by the Metropolitan
Commissioner evaluated the negotiated offer.[8] The revised offer was approved
by the State Cabinet in June 2006 and LOI was issued on June 20, 2006. The
timeline for the bidding process is given in Exhibit 9.
MMOPL
The PPP contract was awarded to Mumbai Metro One consortium by the MMRDA
for a period of 35 years. [8] The equity stakes of REL, Veolia, and MMRDA were
69%, 5%, and 26% respectively. An SPV named MMOPL was incorporated on
December 22, 2006.[10] The VGF constituted 28% of the total cost and the rest
was financed with the debt-equity ratio of 70:30. [10] The rupee component, which
constituted about 75% of the total debt, was contracted at 11.5% (floating) rate
of interest in the year 2008 (Basis: Benchmark Prime Lending Rate (BPLR) 200
basis points). This component was financed by a number of Indian banks led by
IDBI and including Karur Vyasa Bank, Canara Bank, Indian Bank, Corporation
Bank, and Oriental Bank of Commerce. The foreign component was financed by
India Infrastructure Financial Company, based in UK. The financing details of the
project are given in Exhibit 10.[10]
The roles of the MMRDA, besides providing the VGF, were to (i) provide necessary
land and RoW along the corridor, land for car depot and land for electric sub-
stations, free from all encumbrances, on a nominal lease charge of rupee one per
annum per square metre, and (ii) carry out resettlement and rehabilitation of all
affected persons as necessary and bear the cost of shifting of utilities. [8]
The concessionaire was required to bear the entire risk of ridership and revenue
through the SPV and maintain performance and technical standards in
accordance with best industry practices. [8] No assurances regarding parallel
competing facility had been given and the concessionaires source of revenue
were fare box collection, advertisement revenues, and 100 square metre
commercial space for passenger amenities on each station. [8] A timeline of the
work carried out post the formation of MMOPL is given in Exhibit 11.
The actual construction work for the Mumbai Metro commenced on February 8,
2008.[6] At the time of commencement of work, MMOPL had stated that it aimed
to complete the project in a record 30 months, [6] although the CA specified the
period of construction to be five years. [6] REL was named Reliance Infrastructure
(RInfra) in April 2008.
The deadline for completion of Line 1 was shifted several times. The following
months had all, at some point of time, been announced as the deadline for
completion of the project July and September 2010, July 2011, March and
November 2012, September 2013 (Phase 1: Versova to Airport Road), December
2013 (Phase 2: Airport Road to Ghatkopar), and March 31, 2014. The final
approval for the operations clearance post quality inspection was given on the 5
June, 2014 and line was opened on June 8, 2014. [11][12]
MMOPLs view was that the public partner failed to fulfill its obligations. The key
failures were as follows:
Delay and piecemeal handover of Right of Way
Depot Land: Reduction in area and delayed handover
Constraints in Right of Way (MMOPL to modify design and construction

methodology)
Delay and deduction in disbursal of Viability Gap Funding
Delay and non-release of utility shifting expenses
Switch from Tramways Act to Metro Acts
The section in the Legal Cover in the DPR stated that there was a need for
extending the provisions of the Central Metro Acts i.e. The Metro Railways
(Construction of Works) Act, 1978 and The Delhi Metro (Operations &
Maintenance) Act, 2002 to the Project. It was clearly mentioned that if the
government went ahead with this Project under the Tramways Act, it was likely to
lead to legal complications at a later stage.
Initially, various state governments, including Maharashtra, were implementing

Metro Rail projects under the Tramways Act, which had kept the Metro as a state
subject. For Mumbai, it was the Bombay Tramway Act, 1874, which allowed
complete autonomy to the state to plan and execute the project. [13]
The Lok Sabha in 2009, brought under the ambit of the Central Government, the
then ongoing metro projects even in cities outside the National Capital Region
(NCR) by making Amendments to the Metro Act. The reasons cited in the
Amendment Bill were:
There are no statutory provisions at present which may provide a legal cover for
development, construction, operation and maintenance of Metro Railways in
these cities. Therefore, it has become necessary to make suitable amendments
in the Metro Railways (Construction of Works) Act, 1978 and the Delhi Metro
Railways (Operations & Maintenance Act, 2002, so as to make the provisions of
both these Acts applicable to the Metro Railways in the NCR, metropolitan cities
and other metropolitan areas for development, construction, operation and
maintenance of Metro Railways.[14]
Hence, with the Amendment in 2009, the scenario changed. It was required that
the Commissioner of Metro Railways Safety (CMRS), operating under the Ministry
of Civil Aviation, provide the safety certification for Metro Rail projects in any part
of the country.[15] The Act also required the Metro Railway Administrator to seek
approval from the Railway Board whenever it rolled out services using a
completely newly-made train on the track. [15] Thus, the rolling stock on the
Mumbai Metro required approval from the Railway Board before operations could
begin. [15]
According to the MoUD, Kamal Nath (2009), "Since the metro rail is a central
subject, it has been decided that all such projects in the country, whether within
one municipal area or beyond, shall be taken up under the Central Metro Acts." [16]
The Bill allowed the MoUD to take complete control over the planning,
construction and functioning of Metro projects in all states. For Mumbai, this
meant that the Centre, and not the State Government and MMRDA, would control
the Mumbai Metro project.[17]
Upon this, a senior MMRDA official remarked, This amendment will allow the
railways to appoint its own General Manager for the functioning of the Metro.
Why should the railways control the project when they are not spending a penny
on it?[17]
The financial impact was going to be huge for the State. Originally, under the
Tramways Act, the civic body, Brihanmumbai Municipal Corporation (BMC), could
levy taxes (including Octroi) on the Metro for the services provided by it,
resulting in significant revenues. [13] But given that the Metro would be a central
subject, now it did not have any right to do so. MMOPL rejected BMCs claim on
these taxes, saying that it had to comply only with the amended Metro Acts and
not the Tramways Act (1874).[13]
The State Government also wrote to the Prime Ministers Office opposing the
decision, The Chief Minister has expressed his displeasure over this move by the
Centre. The State Government has requested the Centre to hold this Act in
abeyance till we find a middle ground to solve this problem. [17]
GoI, upon request of GoM, notified the VAG Corridor Metro Alignment under the
Central Metro Acts on November 18, 2013. A key concern for MMOPL was the
fare fixation clause as per the amended Metro Act. The Act gave complete
autonomy to the operator on fixing the initial fares without interference from any
government bodies. The MoUD clarified the same to MMOPL vide its letter dated
February 7, 2014. A three-member FFC would decide on the fares going ahead. [22]
The constitution of FFC had to be such that its chairperson could only be
someone who was or had been a judge of a High Court. [36] A sitting judge of a
High Court could be appointed after consultation with the Chief Justice of that
High Court.[36] Apart from the chairperson, the Committee would consist of two
other members, one each appointed by the MoUD and the state government.
Only a person who was or had been an Additional Secretary to the Government
of India or held or had held an equivalent post in the Central Government or the
State Government would be qualified to be nominated as a member. [14]
The Fare Escalation Demand
When the project was awarded in 2006, the base fare was set in the Rs 6 to 10
range.[6] This was in accordance with the 2004 BEST fares. The logic given was
that the maximum the metro could charge was 1.5 times the fare charged for
corresponding distances by the BEST buses. [6] A provision for an 11% fare
increment every four years was also provided. [6] Exhibit 8 gives the fare that
would be applicable at the time of inauguration as per the CA.
The specific provisions in the CA, regarding the revision of fare, including for
some risk mitigation, are as given below.
Revision of Fare
The regulation and revision of Fare may be done in such manner as detailed in
Schedule L annexed to this Agreement.
The Concessionaire may approach the Government of Maharashtra for any

upward revision of the Fare beyond those permitted in the Fare Notification in
the event of any unanticipated rise in the operating cost of the MRTS Project.
Schedule L: FARE SCHEDULE
Fare Schedule means the Resolution No MUT 1004/1671/158/2004/UD-10

dated 19 August 2004 issued by GoM in exercise of the powers conferred by the
Indian Tramways Act, 1886 (Bombay Amendment Act 1948) in respect of the
levy and collection of the Fare from Commuters and a copy of which is given in
this Schedule L and includes any such subsequent notifications issued from time
to time to give effect to the provisions of this Agreement.
Fare to be charged to the users of the MRTS Project will be set and revised as
under:
Maximum Fares to be charged to the Commuters of MRTS Project (2003-04 level)
i) Rs 6 upto 3 km ii) Rs 8 between 3 km to 8 km iii) Rs 10 beyond 8 km
Fare Revision shall be indexed @ 11% every fourth year (rounded off to the
nearest Rupee)
The Fare Notification based on the above principles for entire Concession Period
is under issue by Government of Maharashtra. This will form part of the
Concession Agreement.
However in March 2012, MMOPL wrote to MMRDA requesting a fare escalation in

line with the increase in inflation and increases in the BEST bus fares. [18] The
reason given was that there had been increase in operating costs and also
increase in the project cost from the earlier anticipated Rs 2,356 Cr to Rs. 4,070
Cr.[18] As a consequence, MMOPLs debt servicing substantially increased. The
additional cost of Rs 1707 Cr had been financed from an additional debt of Rs
943 Cr from external sources and an additional contribution of Rs 771 Cr from
the lead promoter Reliance Infrastructure Limited as sub-debt. [27]
MMRDA replied in May 2012 seeking further breakup for the cost escalation
claim.[18]
MMOPL contended that the project cost had mainly increased due to delays in
acquisition of Right Of Way (RoW) by MMRDA.[25] MMOPL was supposed to have
been given a 59%RoW with land free of encumbrances in one month and 100%
within six months but MMOPL had to start work with RoW being made available
only on 45% of the land, that too after a delay of over nine months and the land
was also not unencumbered.[18] The absence of clear mapping of underground
utilities crisscrossing beneath the surface of the road had thrown up more
hurdles once the company started construction. [18] These had often necessitated
changes in original designs, thus impacting the project cost. For instance, the
earlier plan of having only eleven foundation designs for the piers to hold the
Metro viaduct had turned into 219 different types of foundation designs for the
450-plus piers.[18] Similarly, the design of a bridge that would take the Metro line
over the suburban railway tracks at Andheri had also been changed on three
occasions in order to get the permission of the Western Railway to undertake
construction in that area.[18]
After the response to MMRDA, a formal presentation on the possible fare

structure was made by the top management of MMOPL to their Board, which met
quarterly. The Board comprised of three representatives from MMRDA (including
the Principal Secretary of the Urban Development Department (UDD), GoM) and
eight representatives from RInfra. [18] In December 2012, MMRDA wrote to MMOPL
saying the matter was under review.[18]
However, the MMRDA took a different view of the matter. It did not consider the
change in BEST fares as a factor because as per the CA, the consortium could
only ask for a fare hike if there was unanticipated increase in the operations
cost. While MMRDA contended that part of the increased cost was due to
inefficient borrowing on MMOPLs part, MMOPL said that it was the only short
term recourse available.[27] MMRDA was also unable to reconcile itself to the cost
estimations brought about by MMOPL. For instance, it said that MMOPL initially
estimated its rolling stock cost would be Rs 500 Cr but was now expecting it to
be Rs 700 Cr.[26] MMRDA also disagreed with MMOPLs stand that the reason for
the delay was the inability of MMRDA to provide the required RoW and other
permissions in time, as promised to the concessionaire. [28] According to the
MMRDA, one of the main reasons for the time overrun was the delay in the
completion of the Metro bridge that passed over the railway tracks at Andheri,
for which permissions were to be obtained from Railways by MMOPL. [28]
However, MMOPL had already started trying to garner support during this period.
In January 2013, MMOPL raised the issue in a meeting with Sudhir Krishna,
Secretary of the MoUD, who said the project should be financially viable for a
PPP, according to an official who was present at the meeting. [18] In March 2013,
MMOPL wrote to the Principal Secretary of the UDD, GoM, detailing reasons
behind the cost escalation and the demand for fare revision. [18] In April 2013, the
consortium wrote to Chief Minister Prithviraj Chavan requesting him to intervene
and asked for a meeting with him to discuss the issue. [18] In July 2013, MMOPL
wrote to Chief Secretary Jayant Kumar Banthia, seeking his intervention. [18]
Inauguration of Line 1
There were further delays in getting the quality clearances from the Research,
Design and Standards Organization (RDSO) during this period before MMOPL
could start operations. A ten-member team of the RDSO began conducting
oscillation trials along the entire 11.4 km stretch of Line 1 on January 31, 2014. [6]
This was done in order to test the track-worthiness of the modified design of the
rolling stock and its adherence to safety and technical specifications. [6] Based on
the RDSO inputs, MMOPL received safety clearance for the line from the
Commissioner of Metro Railway Safety (CMRS) on May 2, 2014. [6] The CMRS also
awarded the certificate for commercial operation on the same day.
The Congress-NCP government had wanted to open the line by April 24, 2014,
the voting day in Mumbai for the 2014 general elections. [6] However, apart from
CMRS, MMOPL had also to obtain approval from the Railway Board. The MMOPL
approached the Railway Board for approval of rolling stock (includes the rakes
and wheel) on April 22, 2014 but was not granted approval until late May 2014,
breaking the promise of granting it in seven days. [6] According to railway officials,
this was because the rakes and wheels used in the Metro were "of a new kind,
with newer dimensions," and required close inspection. There was a further delay
before the inauguration due to the general elections and the new government
taking over.
Meanwhile, the case of fare setting could not get resolved. MMRDA did not
comply and was adamant on retaining the original fare structure. [18] Other
associated stakeholders, especially the CM, were also interested in keeping the
fares to a minimum. In November 2013, MMOPL sent a notice to the Central
Government to set up the FFC. In an attempt to form the FFC, the Centre
appointed two members retired Justice E Padmanabhan as the Chairman, and
former Law Secretary TK Vishwanathan as a member in February 2014. [1] The
State Government was to appoint the third member but it did not do so. Finally,
MMOPL announced the new fare structure in May 2014, much to the chagrin of
MMRDA and the CM. The MMOPL proposed fare structure is given in Exhibit 12.
The new Railway Minister DV Sadananda Gowda gave the final approval on June
5, 2014, post which the inauguration took place on June 8, 2014. [6] MMOPL had
announced a flat promotional fare of Rs 10 for one month between any two
stations,[37] after which the new fares (See Exhibit 12 for fare structure since the
start of the metro) would be applicable. During the inauguration of the Metro, the
Maharashtra CM, in a packed press conference at Ghatkopar Metro station said
that MMRDA would file a petition against MMOPL over the issue of fares. [19] He
said that the change of rules governing the project from the Tramways Act,
under which the project implementation was notified, to the amended Metro Act
was causing problems.[19]
The Fare Controversy
MMRDA filed a petition with the Bombay High Court on June 9, 2014. [38] While
MMRDAs contention was that the FFC should have set the fare, MMOPL officials
spoke of how for the past two years, the demand for setting up an FFC by MMOPL
was not adhered to.[39] Secondly, MMOPL officials pointed out that Sections 33
and 34 of the Metro Act gave the Metro Railway Administrator in this case
MMOPL the right to fix the first fares without outside interference. [22] The Metro
Act said that the fare revision after this initial fixing of fares would be governed
by the FFC and these recommendations would be mandatory. [22] Thirdly, the new
act superseded the Tramways Act. [22] An MMOPL officer was quoted as saying the
following to this regard:
"There is a letter dated February 7, 2014, written by the MoUD to the UDD, GoM,
which clearly mentions that for the initial fare fixation, no FFC recommendation is
necessary. This letter also says that from November 18, 2013, the Tramways Act,
under which the project implementation was notified, stands superseded. So
what is the State Government talking about, now that the provisions of the
original concession under the Tramways Act have to be adhered to in total?
"[23]
Another contention the state government had was that the promotional fare of
Rs 10 was the first fare already fixed by MMOPL, as per the Metro Act. That would
have meant that from there on, any revisions should have been done by the FFC.
However, according to MMOPL, their initial media release clearly stated that the
promotional fare of Rs. 10 was completely different from the notified fares of Rs.
10, 20, 30, and 40.[6] These fares were put up on the MMOPL website before
announcing the promotional fare.[6][22]
One reason MMOPL had given to justify the increased fare structure to the Rs 10
to 40 range was the DPR, the basis of the CA. The DPR had estimated the fare at
1.5 times the BEST ordinary bus fare. [24] The 2013 bus fare between Versova and
DN Nagar was Rs 6 while between Versova and Ghatkopar was Rs 25. [24] Without
subsidy, the minimum and maximum fare of BEST would be Rs 7 and Rs 34. [24]
MMOPLs argument was that the minimum and maximum fare would be Rs 9 and
Rs 38 if the 1.5 times formula was applied to the subsidized fare of BEST. It was
logical to round it off to multiples of Rs 10 as MMOPL, unlike BEST, was not
entitled to any subsidy.[24] Hence, its justification was based on the fact that fares
should be based on the 2013 indices and not on the ones decided in 2004.
Meanwhile, the State Government sent to the MoUD, the nomination of Subodh
Kumar, former BMC Commissioner, as a member of the FFC on June 12, 2014. [1]
[40]
The petition by MMRDA before a single judge bench in Bombay High Court did
not go too well for MMRDA. On June 24, 2014, Justice RD Dhanuka dismissed
MMRDA's plea saying that as per the Metro Act, MMOPL had the right to fix the
initial fares till FFC decided them. Therefore, the judge refused to stay the fare
hike.[20] The High Courts observations regarding the different submissions are
given in Exhibit 13.
MMRDA appealed again in the Division Bench of Bombay High Court. On July 7,
2014, it was again refused to stay the fare hike. [41] The hearing was adjourned to
July 23, 2014.[41] Meanwhile, the one-month of flat promotional fare of Rs 10 had
ended and MMOPL proposed a discounted fare structure of Rs 10 up to 3 km, Rs

15 from 3 km to 5 km and Rs 20 beyond 5 km, to be applicable till July 31, 2014
(See Exhibit 12 for Fare Structure since the Start of the Metro). [41] The first month
saw a ridership of over 1 Cr,[42] translating to an average of 3.3 lakh passengers
per day. Over the next four months, the ridership averaged 2.66 lakhs i per day.[43]
On July 17, 2014, MoUD asked the State to reconsider Subodh Kumars
nomination to the FFC.[1] The State Government vetted the name internally and
decided to re-nominate the same person. This was communicated to the Centre
on July 28, 2014.[1]
Appointment of FFC
In the hearing of July 23, 2014, a division bench of Chief Justice Mohit Shah and
Justice MS Sonak asked the Central Government to ensure that the FFC was
appointed quickly so that ticket rates for Mumbai Metro were decided latest by
September 30, 2014.[44] They also asked the Centre to file an affidavit by
September 1, 2014, informing whether such a committee had been formed and
how it proposed to decide the fares.[44] The High Court also accepted the proposal
of MMOPL to continue the promotional fares of Rs 10 to 20 range till September
30, 2014.[44] The High Court remarked that it couldnt decide whether the fare
fixed by MMOPL, under proviso to Section 33 of the Metro Act, was reasonable or
not and the issue thus raised by both the parties on the reasonableness of fare
was kept open.[20][22]
On September 1, 2014, the Central Government asked the Bombay High Court
for more time to file the affidavit.[45] The court extended the date to September
18, 2014, to file the affidavit, explaining the procedure followed by the Central
Government to appoint the FFC, failing which the court would decide on the fare
issue and would consider the prayer on behalf of MMOPL for fare collection. [45]
The MoUD passed the three names suggested for the FFC to the Prime Minister-
led Department of Personnel and Training (DoPT) on September 18, 2014, for
approval but the DoPT did not respond. [1] As the Central Government failed to
form the FFC by end of September, extensions were given to do the same by
November 30, 2014,[46] and then till December 31, 2014. [46] The discounted fares
in the Rs 10 to 20 range continued to prevail. [46]
In an unrelated event, on November 11, 2014, GoM and RInfra mutually decided
to terminate the contract to build Line 2 of the Mumbai Metro from Charkop to
Mankhurd via Bandra, stating the reason to be the non-fulfillment of conditions
precedent by the GoM.[50] This contract had been awarded to a RInfra-led
consortium in 2009.[50]
The Centre finally responded on December 10, 2014, asking the State to revise
its nomination of Subodh Kumar as per DoPTs observations. [1] The reason given
was that Subodh Kumar was at that time associated with the private sector. [1]
The State responded on December 18, 2014, with former Chief Secretary Jayant
Kumar Banthias name.[1] The FFC now needed the Centres approval to get
formalized.
By the time of the High Court hearing on January 8, 2015, the FFC was still not in
place. A Division Bench of the High Court (following the single judge decision of
i 1 lakh = 100,000
June 24, 2014) decided the fares in favour of MMOPL. [47] MMOPL was allowed to
raise the fares to the Rs 10 to 40 range and the Central Government was
directed to appoint the FFC by January 31, 2015. [47] This was done as MMOPL
claimed to have been incurring a loss of Rs 85 lakhs per day as the daily
ridership was only 2.65 lakhs against the estimated 4.1 lakhs. [46][47] MMOPL was
expected to lose a ridership of 15-20% [49] and Rs 60 lakhs per day even with the
increased fares.[47] The Court observed that maintaining the low fares would
result in irrecoverable losses to the consortium, but if the FFC decided to reduce
the fare, the benefit could be later passed on to the commuters. [47]
This was then contested in the Supreme Court by MMRDA. The Supreme Court
issued an order dated March 16, 2015, to the effect:
FFC, shall determine the rates of the fare for the Project, as mandated by law,
by the end of April 2015.
It was further directed that the FFC shall follow the procedure engrafted under
the Metro Railways (Operations & Maintenance) Act, 2002, and the rules,
regulations and notifications framed thereunder.
Till FFC recommends the fare for the Project, MMOPL shall be at liberty to levy
and collect the fares, fixed on the initial opening of the Project.
50% of the differential amount, between the initial fare (ie Rs 10-20-30-40) and
the promotional fare (ie Rs 10-15-20-20), be deposited by MMOPL with the
registry of the Supreme Court on weekly basis. ii
The FFC was finally appointed by the MoUD vide its notification dated April 7,
2015 (Justice E Padmanabhan as the Chairperson, T K Vishwanathan as members
from the Centre, and Jayant Kumar Banthia as a member from the State) and was
advised to submit its report within three months under the provisions of the
Metro Act.
ii Source: MMOPL
Exhibit 1
Morning Peak Modal Share

0600 to 1100
MODE 2005 2031
12.8% 22.1%
Private Vehicles (Car & Two wheelers)
(608,611) (2,228,200)
9.1% 5.2%
Intermediate Public Transport (Auto & Taxi)
(430,000) (520,500)
26%
Public Transport (Bus)
(1,235,260) 72.7%
52.1% (7,333,200)
Public Transport (Train, Metro)
(2,475,278)
TOTAL 100.0% 100.0%
(Figures in brackets are number of trips)
Source: Madan, G. R. (2013, February 6). Mumbai Metro Rail Project An Overview [PowerPoint slides].
Retrieved from http://www.i-cema.in/past_event/mumbai_metro_rail.pdf, accessed on August 5, 2014
Exhibit 2
Overcrowding in Mumbai Suburban Rail
Average Standees Per Coach in Mumbai Rail 12 passengers/sq.m.

US Federal Transit Administration Totally Intolerable 5 passengers/sq.m.
Report, 1996 Unacceptable 8 passengers/sq.m.
Source: Madan, G. R. (2013, February 6). Mumbai Metro Rail Project An Overview [PowerPoint
slides]. Retrieved from http://www.i-cema.in/past_event/mumbai_metro_rail.pdf, accessed on August
5, 2014
Exhibit 3
Mumbai Metro Master Plan
Nine Corridors to be implemented in 3 Phases (Total Length: 146.5 km)
Phase I (black textured lines)
1. Versova-Andheri-Ghatkopar
2. Charkop-Bandra-Mankhurd
3. Colaba-Mahim-Bandra
Phase II (black dotted lines)
4. Charkop-Dahisar
5. Ghatkopar-Mulund
Phase III (black solid lines)
6. BKC-Kanjur Marg via Airport
7. Andheri(E)-Dahisar(E)
8. Hutatma Chowk-Ghatkopar
9. Sewri-Prabhadevi
Source: (Map based on Slide 14) Madan, G. R. (2013, February 6). Mumbai Metro Rail Project An Overview
[PowerPoint slides]. Retrieved from http://www.i-cema.in/past_event/mumbai_metro_rail.pdf, accessed on August
5, 2014
Exhibit 4
Phase I of the Mumbai Metro Master Plan
Line Area Covered Planned Implementation Route length

Period (km)
1 VersovaAndheriGhatkopar 2007-2010 11.07
2 CharkopBandraMankhurd 2007-2011 31.87
3 ColabaBandra 2007-2012 19.85
Total route length: 62.79 km
Source: http://www.mumbai-metro.com/business-and-jobs/8713/after-sea-link-deal-second-metro-project-under-
threat, accessed on August 5, 2014 (Map edited to add more clarity)
Exhibit 5
Line 1 VAG Corridor
Source: Madan, G. R. (2013, February 6). Mumbai Metro Rail Project An Overview [PowerPoint slides].
Retrieved from http://www.i-cema.in/past_event/mumbai_metro_rail.pdf, accessed on August 5, 2014
Exhibit 6
VAG Corridor: Salient Technical Features
The salient features of the recommended alignment for VAG Corridor according to the MRTS
Consulting Engineering Services (CES) Report are as follows:
The alignment is fully elevated. It also crosses the (Western Express Highway) WEH on elevated
structures.
All the stations will have mid-level concourse with adequate provisions of escalators along with
lifts and other amenities for physically challenged persons.
Ghatkopar MRT Station will be located over central railway track for better integration with the
existing sub-urban station.
All stations will have good interchange facilities with other modes of transport.
The trains will have 4-coach composition, fully vestibuled and air-conditioned.
The system will have electric traction by 25 KV AC traction supply.
Modern communication facilities are planned to be provided both at stations and on train.
Stations will be provided with automatic fare collection system and will be access-controlled.
Adequate measures will be taken to protect the environment all along the corridor and provisions
of sound barrier.
Safety and security of the commuters will be given the outmost consideration in system
implementation.
Each train will have two drivers with 4-coach composition.
S.No. Item Figure for VAG

1. Main line 11.443 km
Airport line 1.265 km
Route length
Car-depot line 0.45 km
Total length 13.158 km
2. Platform length 135m
3. Length of coach 22 m
4. Width of coach 3.2 m
5. Platform length (6 coaches) 135 m
6. Ticketing system Auto fare collection
7. Train Composition Four coaches initially
expandable to six coaches
8. No. of Classes Single class
9. Environment Airconditioned
10. Max. Speed 80 kmph
11. Average Speed 33 kmph
12. Frequency (2008) 5 min
(2031) 3 min
13. Carrying Capacity/rake 1500 PAX for four coach train
14. Total Journey Time 21 min approximately
Source: Mumbai Metro Rail Project. (n.d.). Retrieved from http://www.webcitation.org/6QNOyfY9i, accessed on
August 5, 2014
Exhibit 7
VAG Corridor: Expected Daily Ridership
Year Hourly Ridership Daily Ridership PHPDT

2008 38004 475046 17356
2011 41067 513338 18580
2021 53176 664703 23321
2031 70603 882533 30491
PHPDT: Peak Hour Peak Direction Traffic
Source: Madan, G.R. (n.d.). Planning for Mumbai Metro Rail Project [Powerpoint slides]. Retrieved from
http://www.iitg.ac.in/mttbr/presentations/PLANNING%20FOR%20MUMBAI%20METRO%20RAIL
%20PROJECT.pdf, accessed on August 5, 2014
Exhibit 8
MMRDA Proposed Fare Structure at Inauguration
Distance Fare (Rs)

Up to 3 km 9
3 km 8 km 11
Beyond 8 km 13
Based on CA: Base fare set in 2004 and revised at the rate of 11% every 4 th year.
Source: Bhide, A. (2010), Urban Transport: Mumbai Metro Project [Powerpoint Slides]. Retrieved from
http://www.scribd.com/doc/88090186/Mumbai-Metro-Project-GR-Madan#, accessed on October 12, 2015
Exhibit 9
VAG Corridor: Timeline of Bidding
Date Event/Milestone
August 19, 2004 GoM approval
August 21, 2004 Invitation of Global Bids
November 23, 2004 Pre-bid meeting
May 16, 2005 Receipt of Technical Bids
September 15, 2005 Invitation of Financial Bids
January 10, 2006 Receipt of Financial Bids
January 2006 Evaluation of Financial Bids
February May 2006 Negotiations with the lowest bidder
May 10, 2006 Negotiated offer
June 20, 2006 LOI issued after GoM approval
Exhibit 10
VAG Corridor: Financing Details (As per the Financial Closure in October 2008)
Parameter Details
Debt : Equity (VGF reduced from the 70 : 30
Project Cost for the purpose of calculation)
Total project cost Rs 2356 Cr

VGF (28%) Rs 650 Cr
VGF: Central Government Rs 471 Cr
VGF: State Government Rs 179 Cr
Equity: Total (21.6%) Rs 512 Cr
Equity: REL (69%) Rs 353 Cr
Equity: Veolia (5%) Rs 26 Cr
Equity: MMRDA (26%) Rs 133 Cr
Debt (50.4%) Rs 1194 Cr
Debt: IDBI Rs 300 Cr
Debt: Karur Vyasa Bank, Canara Bank, Rs 607 Cr
Indian Bank, Oriental Bank of Commerce
Debt: India Infrastructure Financial (US $ 70 million) Rs 287 Cr
Company, UK
Interest Rate: National 11.5% (BPLR 200 basis points)

Interest Rate: International Libor + 340 basis points p.a. on USD 60 million and
USD LIBOR plus 420 basis points on USD 10 million
Land To be provided free of cost by MMRDA
Source:
Mumbai Metro. (n.d.). Retrieved from http://toolkit.pppinindia.com/highways/module3-rocs-mm4.php?links=mm4,
accessed on August 10, 2014
Press Information Bureau, Government of India. (2012, May 15). Development of Mumbai. Retrieved from
http://www.pib.nic.in/newsite/erelease.aspx?relid=83922, accessed on March 12, 2015
Exhibit 11
VAG Corridor: Timeline of Construction
Date Event/Milestone
December 22, 2006 SPV named MMOPL incorporated
October 26, 2007 Public Information Centre was commissionedalong the alignment
at Sakinaka
December 17, 2007 Partial RoW was provided to SPV
January 2008 Land for casting yard, electric sub-station was provided to
MMOPL by MMRDA
February 8, 2008 Actual construction work commenced
February March 2008 Land for labour camps was handed over to MMOPL at Mulund
and Malwani
August 4, 2008 Part land for car depot at D.N. Nagar handed over to MMOPL
September 26, 2008 O&M agreement between MMOPL & Veolia transport signed
October 3, 2008 Financial closure achieved
January 17, 2009 Home guard land handed over to MMOPL for casting yard
March 17, 2009 Western railway approved the GAD of major Bridge at Andheri
February 2014 100% RoW provided by MMRDA
June 8, 2014 Project commenced commercial operations
Exhibit 12
Fare Structure since the Start of the Metro
Distance Fare (Rs) Fare (Rs) Fare (Rs)

(km) June 8, 2014 July 8, 2014 January 8, January 9, 2015 onwards
July 7, 2014 2015
Fare initially fixed by
Promotional Discounted fare MMOPL
fare
0-2 10 10 10
2-5 10 15 20
5-8 10 20 30
>8 10 20 40
Source: MMOPL
Exhibit 13
High Courts Observations
The High Court made the following observations, delivered by Justice Dhanuka on June 24, 2014,
with respect to the submissions made by the respondents and various questions raised thereof -
Did the provisions of the Metro Railways Act stand extended only with effect from 18th November,
2013?
The notifications declaring that the provisions of said two Acts should extend to the metropolitan areas
including Mumbai were with effect from the date of publication of the Official Gazette on 16th October,
2009. On 18th November, 2013, MoUD, under the provisions of Act of 1978, added the Metro
alignment of Mumbai Metro Line One to the schedule of the Act.
Whether right of fixation of fare in Concession Agreement was inconsistent with section 33 of the Act
of 2002 and if so, which of the above should apply?
Since the Fare Fixation Committee was not constituted though MMOPL had repeatedly called upon
the Central Government to constitute, such fare could be fixed on the initial opening of the metro
railway only by MMOPL. Upon constitution of Fare Fixation Committee, further fares could be fixed by
it.
Could the fares fixed under the Concession Agreement be construed as fare for the initial opening of
the metro railway?
Perusal of the Concession Agreement indicated that the rates provided therein were even for the
period prior to the execution of the agreement. Thus the fare for initial opening of the metro railway till
the fare is decided by the Fare Fixation Committee could be done only by the MMOPL and not by the
State Government.
Whether fixation of fare for initial opening of metro by MMOPL was a specified matter and whether
resolution dated 29/05/2014 could be considered duly passed?
The parties would be governed by the provisions of the two Metro Acts and not the Concession
Agreement entered into between the parties. Moreover, the definition of Business under the
provisions of Shareholders Agreement indicated that the fixation of fare for initial opening of metro
would not amount to any change in business. Though the directors nominated by the MMRDA have
voted against the resolution, the resolution should be considered as duly passed by the company.
Source: http://bombayhighcourt.nic.in/generatenewauth.php?
auth=cGF0aD0uL2RhdGEvanVkZ2VtZW50cy8yMDE0LyZmbmFtZT1PU0FSQlA4OTAxNC5wZGYmc
21mbGFnPU4mcmp1ZGRhdGU9JnVwbG9hZGR0PSZzcGFzc3BocmFzZT0xMTEwMTUyMDM3MzQ
=, accessed on August 24, 2014
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bombay-high-court-okays-r-infras-initial-fares/, accessed on March 2, 2015
36. Urban Development ministry seeks suggestion on panel to look into Metro fares. (2014,
January 2). The Economic Times. Retrieved from
http://articles.economictimes.indiatimes.com/2014-01-02/news/45799417_1_ud-ministry-
law-ministry-panel-head, accessed on March 11, 2015
37. Mumbai Metro launches concessional fare for early morning commuters. (2014, June 18).
DNA India. Retrieved from http://www.dnaindia.com/india/report-mumbai-metro-launches-
concessional-fare-for-early-morning-commuters-1996503, accessed on August 14, 2014
38. Mumbai Metro fare dispute: Bombay high court to hear MMRDA's arbitration petition on
June 13. (2014, June 10). DNA India. Retrieved from
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to-hear-mmrda-s-arbitration-petition-on-june-13-1994476, accessed on August 25, 2014
39. Sadhwani, Y., Deedwania, B. (2014, June 14). We Fixed Metro Fares Because Govt Did
Not. Mumbai Mirror. Retrieved from http://www.mumbaimirror.com/mumbai/others/We-
fixed-Metro-fares-because-govt-did-not/articleshow/36505760.cms, accessed on August
24, 2014
40. Shaikh, A. (2014, June 8). Subodh Kumar chosen as member of Metro fare fixation
committee. Retrieved from http://dnasyndication.com/showarticlerss.aspx?
nid=jyUcLqYg1T02TCqPitsYjdSAlZv1jkhAEHdCtPb0Xew=, accessed August 3, 2014
41. Mumbai Metro fares to be slashed till July end. (2014, July 7). IBN Live. Retrieved from
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237.html, accessed on August 28, 2014
42. Mumbai Metro ridership crosses 1 cr in one month. (2014, July 7). The Times of India.
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crosses-1-cr-in-one-month/articleshow/37931141.cms, accessed on March 11, 2015
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45. Form panel fast to fix Mumbai Metro fares, Bombay High Court tells Centre. (2014,
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46. Bombay High Court to pass order on Metro fares. (2015 January 7).DNA India, January 7,
2015, http://www.dnaindia.com/mumbai/report-bombay-high-court-to-pass-order-on-
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war-of-fares-soon-2056073, accessed on March 11, 2015
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Glossary of Abbreviations
1. ACC Appointments Committee of the Cabinet
2. BEC Bid Evaluation Committee
3. BEST Brihanmumbai Electric Supply and Transport
4. BMC Brihanmumbai Municipal Corporation
5. BRTS Bus rapid transit system
6. CCRS Chief Commissioner of Railway Safety
7. CMRS Commissioner of Metro Railway Safety
8. CRS Commissioner of Railways Safety
9. CTS TRANSFORM - Comprehensive Transport Study
10. DMRC Delhi Metro Rail Corporation
11. DPR Detailed Project Report
12. EW East West
13. FFC Fare Fixation Committee
14. MIDC Maharashtra Industrial Development Corporation
15. MMOPL Mumbai Metro One Pvt. Ltd.
16. MMR Mumbai Metropolitan Region
17. MMRC Mumbai Metro Rail Corporation
18. MMRDA Mumbai Metropolitan Region Development Authority
19. MoUD Ministry of Urban Development
20. MRVC Mumbai Railway Vikas Corporation Ltd.
21. MUIP Mumbai Urban Infrastructure Project
22. MUTP Mumbai Urban Transport Project
23. NCR National Capital Region
24. NHAI National Highway Authority of India
25. NS North South
26. PIA Project Implementation Agency
27. RDSO Research, Design and Standards Organization
28. REL Reliance Energy Limited
29. RInfra Reliance Infrastructure
30. RoW Right Of Way
31. RTI Right to Information
32. SEEPZ Santacruz Electronics Export Processing Zone
33. SPV Special Purpose Vehicle

34. TCS Tata Consultancy Services
35. UDD Urban Development Department
36. VAG VersovaAndheriGhatkopar
37. VGF Viability Gap Funding

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Indian Institute of Management

Ahmedabad IIMA/ CIPR0024

Mumbai Metro One

Public Transit in Mumbai Need for a Metro

Conceptualisation of the Metro: Line 1

1. To investigate, study, design, engineer, procure, finance, develop,

2. To levy, demand, collect and appropriate fare from commuters and

The period of concession was to be 35 years including 5 years of construction

1. The company should either be an Indian Company or a Company

4. The company should have relevant experience in developing, constructing

3. IICCU consortium led by Infrastructure Leasing & Financial Services

4. Hindustan Construction Company and RITES Limited

5. Shaktikumar Sacheti Limited and Lingkaran Metro

Delay and piecemeal handover of Right of Way

Depot Land: Reduction in area and delayed handover

Constraints in Right of Way (MMOPL to modify design and construction

Delay and deduction in disbursal of Viability Gap Funding

Delay and non-release of utility shifting expenses

Switch from Tramways Act to Metro Acts

Initially, various state governments, including Maharashtra, were implementing

The Fare Escalation Demand

The Concessionaire may approach the Government of Maharashtra for any

Schedule L: FARE SCHEDULE

Fare Schedule means the Resolution No MUT 1004/1671/158/2004/UD-10

Maximum Fares to be charged to the Commuters of MRTS Project (2003-04 level)

i) Rs 6 upto 3 km ii) Rs 8 between 3 km to 8 km iii) Rs 10 beyond 8 km

However in March 2012, MMOPL wrote to MMRDA requesting a fare escalation in

After the response to MMRDA, a formal presentation on the possible fare

The Fare Controversy

ended and MMOPL proposed a discounted fare structure of Rs 10 up to 3 km, Rs

Morning Peak Modal Share

Overcrowding in Mumbai Suburban Rail

Average Standees Per Coach in Mumbai Rail 12 passengers/sq.m.

Mumbai Metro Master Plan

Nine Corridors to be implemented in 3 Phases (Total Length: 146.5 km)

Phase I (black textured lines)

Phase II (black dotted lines)

Phase III (black solid lines)

6. BKC-Kanjur Marg via Airport

Phase I of the Mumbai Metro Master Plan

Line Area Covered Planned Implementation Route length

Line 1 VAG Corridor

S.No. Item Figure for VAG

VAG Corridor: Expected Daily Ridership

Year Hourly Ridership Daily Ridership PHPDT

MMRDA Proposed Fare Structure at Inauguration

Distance Fare (Rs)

VAG Corridor: Timeline of Bidding

Total project cost Rs 2356 Cr

Interest Rate: National 11.5% (BPLR 200 basis points)

VAG Corridor: Timeline of Construction

Fare Structure since the Start of the Metro

Distance Fare (Rs) Fare (Rs) Fare (Rs)

High Courts Observations

33. SPV Special Purpose Vehicle

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