Mumbai's lifeline – its massive suburban train system – has seen its losses climb by a whopping 12000% between 2005-06 and 2014-15 – from Rs 12 crore to Rs 1,426 crore. The railway experts tabulating the performance of the system for 2015-16 believe the loss for the year could go over Rs 1,700 crore, a straight increase of about 20% in losses when compared to the previous year, and a massive 14000% when compared to 2005-06.
There is more bad news in store. These experts believe the numbers could get starker in the years to come as the suburban system is staring at almost the same circumstances – a new Pay Commission and the introduction of more services – now as was the case in 2006.
"It was around 2006 that we started getting new rakes under Mumbai Urban Transport phase-1, which gradually allowed the suburban system to increase its daily services by almost 60% in one decade. This hugely increased operations cost as more trains increase overhead costs, maintenance charges, traction bills etc. Secondly, the 6th Pay Commission recommendations increased salaries – which account for 50% of all expenses – by about 20%. Suburban system started to make losses from here on," explained Prabhat Sahai, chairman-managing director of the Mumbai Rail Vikas Corporation.
Under MUTP phase-1, Mumbai's suburban system got 909 new Siemens coaches. Western Railway and Central Railway began increasing services and running longer 15-coach trains. The current situation is much the same. The suburban system is getting 864 Bombardier coaches of which 528 coaches have already arrived. On the Harbour line, 584 services, which were run with 9-coach rakes, have all been upgraded into 12-coach services in April this year. "It actually means that while we previously ran 584 Harbour services with 9 coaches each – that is 5,256 coaches for the commuter every day – we are now running 584 services with 12 coaches – i.e. 7,008 coaches every day. This is a 33% increase in services and in turn an increase in operational costs, which will reflect when we make calculations for 2016-17," explained an official.
The other big hit that the Railways is expecting is the 7th Pay Commission recommendations. "The Mumbai suburban system is massive with 2,965 services every day. It has over a lakh employees. Mumbai being among India's costliest cities, means salaries have to be on the higher side. This, in turn, means the recommendations would bring in that much more load as far as arrears are concerned since the Pay Commission recommendations have to be paid with retrospective effect from the date fixed by the government," said an official.
The third hit is of course season pass rates, said officials. Since Mumbai travel is subsidised – a pass charges the commuter for only 15 journeys a month – the rise in passenger count always increases the losses on this account. "More than 70% of suburban commuters use passes which they use for at least 50 trips per month. Obviously that increases the losses," explained the official.
Precarious finances of Mumbai suburban (WR/CR cumulative)
Year Expenses Earnings Loss/Profit
2005-06 Rs 1006 crores Rs 894 crores Rs 12 crores (L)
2006-07 Rs 1086 crores Rs 1036 crores Rs 50 crores (L)
2007-08 Rs 1149 crores Rs 1168 crores Rs 19 crores (P)
2008-09 Rs 1507 crores Rs 1179 crores Rs 329 crores (L)
2009-10 Rs 1774 crores Rs 1207 crores Rs 567 crores (L)
2010-11 Rs 1913 crores Rs 1287 crores Rs 626 crores (L)
2011-12 Rs 2004 crores Rs 1344 crores Rs 660 crores (L)
2012-13 Rs 2248 crores Rs 1392 crores Rs 856 crores (L)
2013-14 Rs 2609 crores Rs 1503 crores Rs 1106 crores (L)
2014-15 Rs 3067 crores Rs 1641 crores Rs 1426 crores (L)
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