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Delhi metro reports losses for 2nd year in a row
Gurgaon: The revenue figures for the fiscal year 2004-05 reveal losses for the Delhi Metro Rail Corporation, even when it has got permission to expand its network in the city.
ROME WAS NOT built in a day. Perhaps because its rulers were intelligent enough to understand that it could not be built in a day. For all those who aspire to see Delhi become a picture perfect European city by the Commonwealth Games in 2010 can think hard again. The Delhi Metro Rail Corporation (DMRC), arguably the frontrunner project in making the capital a European replica, has reported losses for the second year in a row.
This highly ambitious project of Delhi in financial year of 2004-05 has been able to manage meagre revenue of Rs 72.26 crore against the expenditure of Rs 148.59 crore, which takes the total loss of the project to Rs 76.33 crore. It may be recalled here that the loss for the last fiscal year was Rs 32.45 crore. Hence, the loss this year stands to notable 135.24 per cent greater.
This Rs 400 billion DMRC project will spread over 350 kilometres in the coming decade. Out of the entire 350 kilometres length of the project, about 205 km will be covered through elevated corridors, despite the fact that today elevated tracks for metro rails are considered to be an obsolete technology in the world.
The DMRC is said to be earning revenues not only from operations, but also from consultancy services and the rental of properties. However, these back-to-back financial failures have not been able to deter government from proceeding further with this project. Recently, the government has borrowed more money from a Japanese bank to go ahead with the next phase that runs from the IIT to Mehrauli in south Delhi. Plans have been made to build bridges over the Yamuna and take the metro train upto Ashok Vihar and Anand Vihar.
Moreover, the practicality of such a massive project based on public money can be questioned, as the metro will support only a mere 1,30,000 passenger daily out of a total state population of 19 million. Hence, it is pretty obvious that the DMRC has no hope to make profit even in the near future.
The Municipal Corporation of Delhi (MCD), to add to the woes of the DMRC, has blamed the metro that it is using about one lakh square feet of land for commercial purposes. These plots have been illegally rented to several promoters for developing shopping malls and other commercial structures. While this has resulted in a loss for the MCD, the metro management is said to have drawn income from it. It must be recalled here that the MCD has earlier failed to get property taxes from the DMRC. As if this is not enough, the Comptroller and Auditor General (CAG) has accused the DMRC of tampering with its balance sheets, which rested into the understatement of current liabilities.
However, with a tremendous cost of Rs 270 crores per kilometre for underground and Rs 110 crores per kilometre for elevated corridors, the DMRC will continue misusing public money. And, also do not be surprised if the massive failure does not hit the headlines in all national dailies at least till 2010.
Rome was not built in a day because its rulers never tried to do so. But, then there were no Commonwealth Games in Rome.
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Nisha M. John
Hey Sudipto! Well I have few points againts ur article. No metro is earning "profits" in the world. I think its either Singapore or Hongkong metro that is earning profits.(I think its Hong Kong and the main source of revenue in HK is non operating revenue....n in case of Singapore, this is so because owning cars there is bloody expensive n so using public metro is a viable solution for them) Secondly, even if a metro is able to meet its operating costs, its a BIG success...I think not even 80% of the metros in the world are able to meet its operating costs. Delhi has been planning metro for past 20 years. Its really commendable of E.Sreedharan to get the metro completed on time (and if I am not wrong before time).the operation of the metro is also commendable. I also doubt the validity of ur statement that "metro will support only a mere 1,30,000 passenger daily out of a total state population of 19 million." I really cant comment on that. And finally the objective of metro is NOT to earn profits...its objective is to provide public service. Why dont u look into various implicit cost saved like decrease in air n noise pollution, accidents prevented, fuel saved (because less vehicles will be plying on the road), property development, more employment opportunities. In short, I would like to say that such huge govt infrastructure projects cannot be analysed through ONLY economic feasibility....though economic feasibility is an important doubt about it... And finally, this article looked like a report to me...a good report...but I like your previous seems that you are changing your style. I didn't get the same feeling that you r talking n giving ur opinions...
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