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Delhi Metro facing financial distress owing to Covid pandemic

Delhi Metro facing financial distress owing to Covid pandemic
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Delhi Metro facing financial distress owing to Covid pandemic

The Delhi Metro Rail Corporation (DMRC) has been facing financial stress with losses to the tune of Rs 1,500 crore in the course of the heydays of the pandemic induced lockdown. Metro operations have been halted throughout lockdown for a interval of roughly six months, which drastically affected income from passenger journey.

At the identical time, working bills together with Operation and Maintenance (O&M) prices had to be repeatedly paid for the maintenance of the metro community which spans 285 stations and a complete monitor size of 389 km. Additionally, there had been a decline within the non-fare income garnered from the commercial in addition to store leases for the months when metro operations had been suspended.

The DMRC has round 400 stores at its stations. Owners of those retail outlets have expressed their incapability to pay lease to the DMRC on account of no gross sales. Even now, when the metro providers have been resumed, it has been carried out with sub-optimal capability on account of following strict social distancing norms.

In addition, the Delhi Metro had taken a tender mortgage of Rs 35,198 crore from Japan International Cooperation Agency (JICA) at a concessional charge of 1.2-2.3 per cent for 30 years. For the financial yr 2020-21, DMRC is required to pay Rs 1,242.8 crore of which Rs 434.1 crore is the curiosity whereas Rs 808.7 crore is the principal quantity. However, until July 2020, DMRC had been in a position to pay solely Rs 79.2 crore as curiosity fee.

In the wake of financial distress, the DMRC has turned to search financial help from the Central Government, Delhi, Haryana, and Uttar Pradesh governments. It is learnt that the DMRC has written to the Central and state governments requesting financial assist. It is but to be seen whether or not the Central and the state governments come to the rescue of the DMRC since they too are reeling underneath a excessive fiscal deficit.

This is for the primary time that the Delhi Metro is facing operational losses. Since 2002, the DMRC has by no means confronted an operational loss owing to effectivity in operations and world-class service requirements.

To tide over its financial stress, the Delhi Metro is brainstorming revolutionary strategies of income technology. The DMRC is following a two-pronged technique of curbing expenditure wherever attainable and deferment of non-essential expenditure. It has determined to scale back perks and allowances of its staff to about 50 per cent within the coming financial yr and in addition requested the Centre to defer the fee of its mortgage installment to JICA for the yr 2020-21.

A Parliamentary Committee report had advised revolutionary strategies of income realisation for the DMRC. The common non-fare income of Metro, internationally, comprising of income from commercials, property leasing and consultancy is shut to round 40-50 per cent of whole visitors income. However, for the DMRC, non-fare income accounts for less than 15 per cent, which is abysmally low.

In order to deal with this problem, the committee advised leasing of current property i.e. monitor and rolling inventory, leasing of economic areas at stations, commercial price, parking price in addition to income technology by levying a cess on residential property growth of close by areas which have seen an enhancement in worth owing to metro operations.

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