Tuesday, July 21, 2015

Mumbai's suburban railway system is deep in the red. Cumulative losses over the last six years have touched Rs 4,150 crore, and losses for the year 2013-14 alone amounted to Rs 1,112 crore. The situation has sparked fears that the quality of services may be affected if a turnaround does not happen.

In the previous six-year period from 2002-03 to 2007-08, the suburban railways recorded a cumulative profit of Rs 30 crore.

The situation has been deteriorating at an alarming rate since 2008-09, reveals a white paper on the suburban system­the Western, Central and Harbour lines­that the Mumbai Railway Vikas Corporation is preparing and that TOI has seen.

The losses had not breached the Rs 50-crore mark till 2006-07, but they zoomed to Rs 329 crore in 2008-09, the year in which the central government announced payment of Sixth Pay Commission salaries with retrospective effect from January 1, 2006. An MRVC official said, “This dealt a body blow to the finances of suburban railway .“

After that, it has been all downhill, and according to the official, “from a profit of Rs 80 crore in 1999-2000, we are bleeding by more than Rs 1,000 crore per year. I suspect the losses may cross the Rs 1,400-crore mark for the financial year 2014-15.“

The introduction of more rakes and services over the years and the fact that the suburban system's non-fare revenue is only 6.5% of its total revenue are among the factors that have contributed to the losses.

Another reason for the losses is the absence of political will to increase fares at periodic in tervals. For example, there have been only three fare revisions since 1999: in 2003, in January 2013 and June 2014.

The white paper is being prepared on the directions of railway minister Suresh Prabhu, who himself is from Mumbai.

According to railway officials, the benefits of important projects like the Mumbai Urban Transport Project (MUTP-I) began to accrue around the same time as the losses mounted, but it has proved to be a costly affair.The first MRVC rake under the MUTP-I arrived in July 2007 and was put into service by November that year. “In 1999-2000, there were only 123 12-car equivalent rakes. As the MUTP-I rakes began rolling out, the railways began not only to augment more 9-car services into 12-car and 15-car ones, it also introduced more services, increasing operation and maintenance costs,“ an official said.

In 2008-09, the capacity of 12car equivalent rakes increased to 148. The fleet strength is now 197, a 60% rise in rakes since 19992000. The number of services too has jumped from 1,544 in 1999 to 2,679, an increase of 73%.

Railway officials said the lack of finances is posing a problem for the upkeep of the system.MRVC's chairman and MD Prabhat Sahai said, “We need innovative solutions to shore up finances. Not only a fare hike, but other options of beefing up finances are also necessary to increase passenger comfort.“


Mumbai's lifeline cannot be crippled by a lack of finances. The railways should look at ways in which to boost non-fare revenue in particular as that comprises only 6.5% of its total revenue.Lessons must be drawn from Hong Kong, where 41% of the metro network's earnings are non-fare. And at no cost, literally, should passenger comfort be compromised.


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