Telangana Govt turns down proposal for Metro Rail fare hike

While L&T Hyderabad Metro Rail Limited (L&THMRL) was pressuring the government for a fare hike to help it weather the financial challenges caused by Covid-19 lockdown, the state government appeared to be in no mood to oblige and flatly rejected the demand.

Instead, the government could consider other options for bailing out the Metro Rail management from its financial crisis. Sources said the state government pointed out inadequacies in the Metro Rail management's commitments under the concessionaire agreement, particularly those relating to improving passenger facilities, increasing the number of bogies on the trains, and so on, in order to put its demand for fare increases at bay.

Prior to the Covid-induced lockdown, Hyderabad Metro Rail had a footprint of approximately five lakh people per day, which significantly reduced when services were restored. Coupled with the Covid shutdown, the low daily commuter footprint is believed to have impacted Metro management's cash flows.

Sources in the municipal administration and urban development (MA&UD) division claimed that L&THMRL was successful in persuading the Centre to constitute a three-member fare fixation committee (FFC), headed by retired judge Gudiseva Shyam Prasad, to look into the proposed fare



revision.

Apart from Justice Prasad and MA&UD secretary Arvind Kumar, the committee also includes Union urban affairs ministry additional secretary Surendra Kumar. Since October 2022, the three-member panel has had a series of meetings on fare revision and recently submitted a report to the Centre. The report has not been made public and its recommendations are now know.  

Following the directives of Chief Minister K.Chandrashekar Rao and minister K.T. Rama Rao, Arvind Kumar opposed any fare hike at this point.

One of the reasons the state government opposes fare hikes is the belief that commuters use the Metro Rail for its convenience, timeliness, safety, and reliability, particularly for long journeys, despite the fact that its fares are slightly higher than other modes of transportation. Increased use of Metro Rail services has reduced the number of private cars on the roads, reducing traffic congestion marginally.

With these factors in play, the state government has reservations about Metro Rail management's proposal for fare increase  at a time when commuters prefer the service to private transportation and fears it could negatively impact commuters’ preference for the service.