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COVID-19 impact | No services for 4 months, Delhi Metro suffers Rs 1,000 crore revenue loss

DMRC’s tenants’ businesses, including retail and commercial properties, too, have been hit. Tenants are asking for rent payments to be deferred

Shut for more than four months following the coronavirus outbreak, the Delhi Metro, the lifeline of the National Capital Region, has lost Rs 1,000 crore in revenue, sources have told Moneycontrol.

“The DMRC (Delhi Metro Rail Corporation) earns Rs 10 crore every day. The total revenue loss so far has been over Rs 1,000 crore ever since the lockdown,” sources said.

The country went into lockdown on March 25 to curb the spread of the coronavirus that has known to have infected more than 14.8 lakh people. At least 33,425 people have died while there has been a spike in new cases in recent weeks.

The DMRC, which has 300 trains running on eight lines that make 5,000 trips a day carrying around 1.8 million passengers, hasn’t earned a penny in the past four months. 

Its income through other sources such as commercial and retail leases has also dried up during the pandemic.


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“DMRC’s tenants’ businesses, including retail and commercial properties, too, have been affected badly. They have written to us asking us to defer rental payments. We are looking at government guidelines on this," Anuj Dayal, Executive Director, Corporate Communications, DMRC, told Moneycontrol.

The government has been easing restrictions since late May and opening up the economy in a staggered manner. 

Unlock 3.0, or Phase 3 of relaxing restrictions, begins August 1 but it is not clear if the Metro will be allowed to resume operations though Delhi has seen a drop in coronavirus infections.

The decision to reopen the network lies with the government, said Dayal. “As and when they decide, we are on standby. We should be in a position to open the metro within two to three days as soon as the government takes the decision,” he said.

Protocols are in place for social distancing and sanitisation procedures, he said.

In its Unlock 3.0 roadmap, the industry body Ficci has suggested that the government reopens multiplexes, cinemas and metro rail, and allows international flights, among others while adhering to safety precautions.

Trains should not stop at stations that fall in containment zones and security personnel should ensure adherence to safety guidelines, it said.

Metro services may start with less than 50 percent capacity initially that can be increased gradually, along with contactless ticketing as far as possible. 

In Mumbai, suburban train services resumed from June 15 but only for workers providing essential services.

Infrastructure experts said it would be difficult to maintain social distancing in the metro. Though metro networks had reopened in several countries, there were few takers for public transport.

“Most global metro systems have reopened with 60 to 100 percent of running capacity but passenger patronage has been a dismal 20 to 25 percent. The reason is that people are still wary of using public transport,” said Ajay Sharma, Managing Director, Valuation Services at Colliers International India.

What about the losses?

 It will be some time before services can resume and DMRC will have to come up with a plan to recover losses.

Any metro project has two sources of revenue – farebox, which accounts for almost 80 to 90 percent that includes ticketing, passes, sales and non-fare box revenue, which accounts for 10 to 20 percent. It is recovered through commercial and retail leases on DMRC land.

Though trains have not been running there are fixed costs-- maintaining the network and salaries, said Sharma.

Operational losses cannot be made up of non-fare revenue. Also, metro systems cannot recover losses completely. 

They can at best offset a certain percentage of the loss by increasing ridership, enhancing frequency and speed up construction work on new corridors, Sharma said.

Some of the other options recover losses is through the Value Capture Finance mechanism, wherein additional taxes can be levied on properties located around new lines and through Transit-Oriented Development, wherein additional floor space index can be provided for land parcels close to the station.

But both these methods are for the long term and new lines. In the short term, the metro could shore up revenue by improving density, increasing the frequency of trains and higher ridership, he added. 

On July 26, the Delhi Metro cast its first pier on the under-construction Janakpuri West-RK Ashram Marg corridor. The 28.92km-long corridor is an extension of the Magenta Line and will have 22 stations. 

It has also been reported that DMRC may not be able to pay this year’s instalment of the Rs 35,198-crore soft loan it has taken from Japan International Cooperation Agency for construction. 

Reports in a section of media have said that DMRC has requested the Centre to bail it out by deferring the payment to next year.
Vandana Ramnani
first published: Jul 28, 2020 11:11 am
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