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Reliance Infrastructure inches closer to full control over Mumbai metro

Friday, 2 May 2014 - 6:15am IST | Place: Mumbai | Agency: dna

In one stroke, the Anil Ambani-led Reliance Infrastructure has arguably become the country's most powerful private transport utility. The state government in February recommended to the Union government to make Mumbai Metro One Private Limited (MMOPL) the metro railway administrator (MRA) for the soon-to-be inaugurated Versova-Andheri-Ghatkopar (VAG) line. Of the 11 directors on the board of MMOPL, eight belong to RInfra.

The state government's move is in accordance with relevant sections of the Metro Railways (Operations and Maintenance) Act, 2002, and makes the VAG corridor a non-government metro, thereby giving MMOPL far-reaching powers over assets of the metro. According to section 6 of the Act, the MRA has the power to "acquire, hold and dispose of all kinds of properties owned by it, both movable and immovable". Apart from this, it has the right to improve, develop or alter any property or asset held by it. Besides, the MRA could also develop any metro railway land for commercial use. Also, it can execute any lease or grant any licence in respect of the property held by it.

What's more, the Act also grants wide powers to the MRA to erect hoardings as well as to use the metro property extensively for garnering advertising revenue. The power to fix the first set of fares without the interference of any outside body will be vested with the MRA as mandated under section 34 of the Act. The subsequent revision of fares, however, will be decided by a three-member Fare Fixation Committee headed by a retired or sitting high court judge.

As reported by dna earlier, MMOPL has already tabulated huge amount of data, including risen price indices and multi-modal transport fares, to convince the government and commuters that the fares envisaged for the VAG corridor as per 2004 prices are redundant in 2014 and that the fare structure needs a major upward revision. MMOPL officials expect a whopping 11 lakh passengers to use the metro daily once it is fully operational with all its 16 rakes in service.

The Metro Railways (Operations and Maintenance) Act also extends to the Delhi, Bangalore and Chennai networks. However, since these lines are co-owned by the respective state governments and the Union government, the MRA remains a wholly government entity.

The VAG corridor was built on a public-private partnership (PPP) model. It has been in the making for almost a decade since the state's urban development department issued a government resolution in August 2004, designating the Mumbai Metropolitan Region Development Authority (MMRDA) as the project-implementing agency.

However, it seems the state has given the PPP experience a miss, especially after the serious misgivings between MMRDA and RInfra over the second metro line - Charkop-Bandra-Mankhurd. The third metro line between Colaba-Seepz and Mumbai airport will be built and operated by the Mumbai Metro Rail Corporation Limited, a company fully owned by MMRDA.

"There is a concession agreement signed between the government and private entity which cannot be ignored. Therefore, provisions of the Metro Railways (Operations and Maintenance) Act, 2002, cannot be seen in isolation... also, the Act has not foreseen certain circumstances. There is no other metro rail doing this kind of PPP and so, all details should be put together before deciding anything. There must be checks and balances in place before taking decisions on any subject," said Sanjay Sethi, MMRDA's additional metropolitan commissioner.

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