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Mumbai Metro was to make losses for first 8 years, claims RTI activist; MMOPL denies

In the business plan submitted along with its bid, it (Reliance Infrastructure) had projected and provisioned for losses for running the Metro for eight years of operations.

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RInfra-Veolia was the successful bidder for the Mumbai Metro project, winning it from the MMRDA by projecting reduced expenses of about Rs1,048 crore, as per RTI activist Anil Galgali
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According to information received in reply to an application filed under the Right to Information Act, Mumbai Metro was to make losses for the first eight years, but now, the Mumbai Metro One Private Limited (MMOPL) wants to make profits from the first year itself, a claim MMOPL has denied.

"In the business plan submitted along with its bid, it (Reliance Infrastructure) had projected and provisioned for losses for running the Metro for eight years of operations. That the company is now working against its own planned projection and causing harassment to Mumbaikars for earning high profits can be understood from this fact," said RTI activist Anil Galgali, who had filed the application with the Mumbai Metropolitan Region Development Authority (MMRDA).

RInfra-Veolia was the successful bidder for the Mumbai Metro project, winning it from the MMRDA by projecting reduced expenses of about Rs1,048 crore, claimed Galgali. RInfra-Veolia had estimated project cost at Rs2,356 crore, its nearest competitor had estimated at Rs3,404 crore.

After winning the project, MMOPL received Viability Gap Funding (VGF) of Rs650 crore to make it financially viable. A sum of losses in the initial eight years was Rs578 crore.

Responding to the claim, an MMOPL spokesperson said, "The Fare Fixation Committee has considered all aspects of the cost to operate the line, including long-term sustainability of the project. In our final financial bids to the MMRDA at Rs650 crore VGF, we had not envisaged any cash loss even in the first year of operation."

An MMOPL official shared that the loss was envisaged for the first eight years by not calculating VGF of Rs650 crore as the VGF quotation was the sole criteria to win the project.

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