MC EXPLAINER Why Bengaluru Metro is India’s costliest

Bengaluru metro

• Bengaluru Metro fares increased by 71%, now India's costliest metro system.
• Annual fare revision of 5 percent was put on hold after public backlash
• BMRCL faces high debt, rising costs, and limited government support

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Bengaluru, among the world’s most congested cities, also runs India’s costliest metro system. After fares were raised by up to 71 percent last year, Bangalore Metro Rail Corporation Limited (BMRCL) was supposed to implement an additional 5 percent annual fare revision from February 9. The proposal has since been put on hold following public backlash.

Moneycontrol explains why Namma Metro is the country’s costliest rail-based mode of transport.

Who proposed the fare revision?

The fare revision was proposed by Bengaluru Metro Rail Corporation Limited (BMRCL), a 50:50 joint venture of Government of India and Karnataka government. Citing rising operational costs and concerns over financial sustainability, BMRCL had approached Union Ministry of Housing and Urban Affairs (MoHUA) in September 2024 to constitute a Fare Fixation Committee (FFC), as mandated under Section 34 of the Metro Railways (Operation and Maintenance) Act.

Also, read: Travellin' Blues: Congested Bengaluru now has the costliest Metro fare in India

MC Explains

Why has Namma Metro become India’s costliest transit system?

Bengaluru’s Metro emerged as the most expensive after first FFC, constituted in September 2024, recommended fare hikes of up to 71 percent. The committee cited mounting operational losses, rising costs, heavy loan repayment obligations and the need to ensure BMRCL’s long-term financial sustainability. Metro fares had remained unchanged since June 2017, even as costs escalated sharply over the years.

Also, read: Bengaluru Metro's Yellow Line: 19-km took 8 years to complete; cost escalated to around Rs 400 crore per km

Did project delays worsen the financial burden?

Yes. Former Delhi Metro Rail Corporation (DMRC) chief E Sreedharan had earlier warned that each day of delay could cost BMRCL Rs 1.5-2 crore. Delays caused cost escalations for Bengaluru Metro, with the project cost for Phase 1 (42 km) rising from an estimated Rs 6,395 crore in 2005 to Rs 14,133 crore, and that for Phase 2 (72 km) increasing from Rs 26,405 crore in 2014 to Rs 40,614.27 crore in 2024. Phase 2 is yet to be completed, so the cost is likely to rise further. These over-runs significantly added to BMRCL’s debt burden.

Also, read: After public outrage, Bengaluru Metro puts fare revision on hold: BMRCL sources

How much have operating and maintenance (O&M) costs increased?

BMRCL data show that total O&M costs rose by 133 percent, from Rs 262.94 crore in 2017-18 to Rs 613.51 crore in 2023-24. Energy costs more than doubled, staff costs rose by around 150 percent, outsourced services increased 85 percent, and repair and maintenance expenses surged more than four-fold. The increase is attributed to inflation, network expansion, ageing assets, and higher manpower requirements.

How heavy is BMRCL’s loan burden?

BMRCL has outstanding external loans of over Rs 13,106 crore, along with Rs 21,521 crore in subordinate debt. It now pays about Rs 128 crore annually as interest (charged to O&M) and around Rs 463 crore towards principal repayment. Combined interest and repayment obligations are projected to exceed Rs 2,700 crore by 2029-30, making debt servicing one of its largest cash outflows.

Also, read: Bengaluru Metro cites Karnataka's financial strain for recent fare revisions of up to 71 percent

Who provided these loans?

Government of India borrowed from multilateral agencies such as JICA, ADB, EIB, AfD, AIIB and KfW and passed the loans to BMRCL. Repayments are made in rupees and include exchange rate variations. The corporation did not hedge its foreign currency exposure. As a result, repayments on some loans have become more expensive. With the rupee weakening against the euro over the years, the rupee cost of servicing these loans has increased, adding to Metro’s financial burden

Can Karnataka government provide assistance?

Karnataka government provides Shadow Cash Support (SCS) through budgetary allocations to cover cash losses and extends interest-free subordinate debt to help with loan repayments. However, BMRCL has said such support cannot continue indefinitely, citing the state government’s fiscal constraints.Karnataka’s 2025–26 budget pegs the fiscal deficit at Rs 90,428 crore (2.95 percent of GSDP) and the revenue deficit at Rs 19,262 crore, amid pressure from guarantee spending and lower central tax devolution.

Also, read: Why Bengaluru Metro's fare hike of up to 71% has raised hackles

Why hasn’t BMRCL been able to tap full demand on existing lines?

Despite strong demand, BMRCL faces a shortage of rolling stock. Metro planning norms suggest that systems require roughly one train per kilometre to maintain optimal frequencies of three to four minutes. However, Purple Line (43 km) and Green Line (33 km) together operate with only 57 trains, while 19-km Yellow Line has just seven trains. This constrains service frequency and caps ridership potential.

Also, read: Why Karnataka govt’s flawed decisions are adding to Bengaluru’s traffic crisis

What is the Automatic Fare Revision Formula suggested by the FFC?

The committee recommended that BMRCL revise metro fares annually under an automatic mechanism, with revisions of up to 5 percent kicking in one year after the FFC-recommended fares were implemented by the BMRCL board and remaining valid until the next Fare Fixation Committee’s recommendations come into effect. All fares would be rounded off to the nearest rupee.

Also, read: Bengaluru Metro charges should not exceed 1.5 times non-AC bus fare: E Sreedharan

Did Delhi Metro implement automatic annual fare revision?

No. Delhi Metro Rail Corporation (DMRC) has constituted four Fare Fixation Committees so far. While the most recent committee, constituted in 2016, recommended an automatic fare revision formula of 7 percent from January 1, 2019, it was not implemented, though DMRC carried out a nominal fare revision in 2025.  However, Government of India primarily bears the cost of deploying CISF personnel for Delhi Metro security, covering their salaries and related expenses, while DMRC procures and maintains the security equipment.

What do experts say about the fare hike?

Urban mobility experts, including Satya Arikutharam, point to five structural issues: prolonged construction delays that stalled revenue growth, heavy reliance on foreign currency loans, failure to hedge exchange rate risks, weak non-fare revenue streams, and the state government’s limited ability to backstop operating losses.

Also, read: Why Bengaluru Metro is enforcing annual fare hikes while Delhi resists, despite similar panel recommendations