Metroman E. Sreedharan has suggested that Kochi Metro Rail Limited (KMRL) reduce metro’s fare and also venture into consultancy to rein in the metro’s loss which has escalated to ₹310 crore in 2019-20 from the ₹285-crore loss in 2018-19.
Reduction of ticket fare will definitely help, including in the long run, since it will help attract more passengers to the system of mass rapid transport, even as revenue will not be affected, he said, while speaking to The Hindu.
‘A foolish act’
Consultancy is a field which brings in revenue and high profits. For example, Delhi Metro Rail Corporation Ltd. (DMRC) earns ₹100 crore a year from consultancy for metro rail systems within India and even outside. The Dhaka Metro too relied on DMRC for consultancy, considering the reputation it enjoyed. On its part, KMRL did a foolish thing by relying on outside consultants for Kochi metro’s Pettah-Thripunithura extension, spending substantial money for the purpose. In the process, it also lost reputation.
It can even now strive to get consultancy contracts of metro rail system mooted for Thiruvananthapuram, for which it ought to have acquired expertise over the years. Metro agencies can also provide consultancy for planning and execution of railway and bridge construction works, Mr. Sreedharan, who is Principal Advisor of DMRC, said.
“KMRL must also aggressively push for commercial exploitation of surplus land in its possession and also prime space attached to metro stations. They also provide much scope for advertisements,” he said.
On mounting losses
Speaking about KMRL’s recently published annual report citing ₹310-crore loss that the metro suffered in 2019-20, the Metroman said the annual report only shows profit and loss, as per rules. “One must not rely on book figures alone, since aspects like interest on loan will be shown as liability. Such gap between revenue and expenditure occur to all metro rail systems in the initial years since launch, until revenue earnings picks up steam,” he said.
Mr. Sreedharan termed as incorrect critics comparing KMRL with perennially loss-making KSRTC. “It is like comparing eggs and oranges. The KSRTC is incurring substantial loss, although its responsibility ends with operating its fleet of buses. It does not have to spend for upkeep of roads, street lights and allied infrastructure, all of which is done by government departments concerned. Metro agencies have to ensure upkeep of all infrastructure, including the viaduct. They have to earmark around 80% of funds for such infrastructure alone, while operating trains needs only the balance 20% of expenses. Metro agencies also have to pay 12% GST, unlike most RTCs,” he said.
