MUMBAI (Metro Rail News): The Mumbai Metropolitan Region Development Authority (MMRDA) has decided to take over the operations and maintenance of Mumbai Metro Line-1 of route length 11.4 km connecting Versova-Andheri-Ghatkopar. For this purpose, MMRDA has approved the appointment of a Consultant to carry out the due diligence of assets before a takeover.
Mumbai Metro Line-1 is operated by the Metro One Operation Pvt. Ltd. (MOOPL) which is a special purpose vehicle (SPV) incorporated for the implementation of the project. Anil Ambani owned Reliance Infrastructure holds 69% of the equity share capital of MMOPL, while MMRDA holds 26% and the remaining 5% is held by RATPDEv Transdev Asia.
Last year, as per source, Reliance Infrastructure had written to the State Government asking to buy its stake in MMOPL, which runs the 11.5-km Line 1. It is Mumbai’s first Metro line, which was built on a Public-Private Partnership (PPP) model and was commissioned in 2014.
“Since MMRDA is constructing all Metro lines across the region, the acquisition will add synergy to the operation of other lines. Also since it is a public transport infrastructure and MMOPL is unable to run it, it is incumbent upon the government to take over,” said MMRDA commissioner R A Rajeev, adding that as a shareholder, the authority had the first right to buy R-Infra’s stake.
According to sources, Reliance Infrastructure evaluated its share value in MMOPL between INR 2,500-2,600 crores. The consultant will visit all the assets created by MMOPL, assess their value and compare against their book value, which will enable MMRDA to decide on the amount to be paid to R-Infra. The consultant’s report is expected in the next four months.
A major source of friction between MMRDA and MMOPL is the fare structure with the latter asking for a fare hike citing an increase of INR 1,935 crore in project cost over the original cost of INR 2,356 crore.
This line ridership is 4.5 lakhs commuters per day with average revenue of INR 1 crore every single day. However, the line is operating under losses and amidst the outbreak of the Covid-19, the situation further worsens as the line had been shut for several months last year due to the lockdown.