CAG to probe Mumbai Metro, Mono project costs to establish Metro fares

Mumbai: In a setback to the Reliance Infrastructure-led Mumbai Metro One Private Limited (MMOPL), the state government has decided to conduct special audit of the books of Mumbai Metro by the Comptroller and Auditor General of India (CAG) to ascertain the claims made by the company for fare hike. While the state is locked in a tussle with Reliance Infrastructure-led MMOPL over Metro fares, Chief Minister ordered a special audit by the Comptroller and Auditor General of India (CAG) into the Metro and Mono railways. The announcement was made by chief minister Devendra Fadnavis in the Legislative Assembly on Monday.

The chief minister also announced that all the upcoming Metro projects in the city would be underground henceforth.

The cost of the 11.4-km project, which runs from Versova to Andheri and Ghatkopar, was originally pegged at Rs 2,356 crore but shot up to Rs 4,321 crore. The project is being executed by the MMOPL, a special purpose vehicle set up by the Mumbai Metropolitan Region Development Authority (MMRDA), Reliance Infrastructure and Veolia Transport of France.

Based on this, Reliance Infrastructure (RInfra) had increased fares of Metro rail multiple times, leading to a dispute between MMRDA and the company.

The chief minister, while replying to a special debate on the issues of Mumbai, said that the fare fixation committee had been formed and application for fares would be made by MMRDA, but before that the state government had decided to conduct a special audit of Mumbai Metro.

“We will conduct special audit of the books of Mumbai Metro by CAG before going to the fare fixation committee to finalise fares. The objective is to find out the reasons for the losses of Mumbai Metro which has been made the base for the fare hike,” Mr Fadnavis said.

The dispute over fare hike turned into a legal battle when MMRDA challenged the fare hike in the Bombay high court. However, the court had allowed RInfra to fix the initial fares at Rs 10, Rs 20, Rs 30 and Rs 40.

The MMOPL has claimed that it was suffering losses of over Rs 80 lakh on a daily basis and the average daily passenger traffic too was low by over 30 per cent than the estimates.

How will the auditor help?

The CAG will investigate whether claims by the consortium over the project cost are valid, thus establishing whether the hike they are demanding is justified. The probe will go into the costs of the 11.40-km-long Versova-Andheri-Ghatkopar Metro.

Speaking in the state legislative assembly on Monday, Fadnavis pointed to how the state government and the Metro railway developers were in a dispute over increasing ticket fares. “The developer is making one claim, and the state government is making another,” noted Fadnavis, adding that though a committee had been set up to examine the matter, it would fix the fares based on the accounts placed before it.

“So, we have decided to undertake a special audit of the Metro and Mono railway projects by the CAG,” said Fadnavis, adding that this probe would go into the developers claims about the costs of the project and the resultant fare hike. “After the special audit, the CAG will decide if these claims are correct or not,” said Fadnavis.

He added, “There were problems in the construction of the first and second (Charkop-Bandra-Mankhurd) Metro. So all the proposed Metro lines in Mumbai will be underground. The MMRDA has approved this, and we will also give our nod.”

Why did RInfra hike the fares?

Reliance Infra-led Mumbai Metro One Private Limited (MMOPL) has claimed that project costs for Maharashtra’s first operational Metro railway line have increased from the original Rs 2,356 crore to a higher Rs 4,350 crore and are using this rise as a justification for hiking fares.

What is the jump in fares?

The consortium hiked the fares from the initial range of Rs9-13 to the Rs10-40 range for the 11.04 km route after the Bombay high court allowed the enhancement. The Supreme Court also did not stay the hike, and asked the Centre-appointed fare fixation committee to decide on the slab by April-end.

MMOPL spokesperson said, “CAG audits are part of the standard procedures for projects where Government of India has invested funds, including VGF funding. MMOPL will welcome all actions as admissible to the project.”