KOCHI: Kochi Metro Rail Ltd (KMRL) or Kochi Metro, saw yet another year of Red closing the financial year 2023-24 (FY24) with a net loss of Rs329 crore.
Thus the total loss accumulated by Kochi Metro since its commercial operations commenced in 2017 have grown past the Rs2000-mark to Rs2143 crore.
Loss larger than income
It may sound intriguing that Kochi Metro’s FY24 net loss exceeded its total income of Rs246.41 crore for the year. However, the total income for FY24 has improved compared with that earned in the previous year – Rs200.99 crore .
According to a report by the Ind-Ra rating agency, Kochi Metro’s net loss is expected to be higher in the current financial year – FY25.
Though the government as well as Loknath Behera, the managing director of Kochi Metro, maintained that the public utility services are not primarily expected to earn profit but to serve people, there are economists who view the huge losses handed out by the state’s public sector companies year after year with much concern.
“If public sector entities keep incurring losses, the government should explore all possible ways to make a course correction, and if needed, with the involvement of private sector, after making sure the employees are not negatively affected,” VD Satheesan, the Opposition leader, had told businessbenchmark.news
EBITDA
Kochi Metro’s earnings before interest, taxes, depreciation and amortization (EBITDA) for FY24 stood at Rs411.62 crore, which was hardly adequate to meet the debt service requirement of about Rs400 crore for the year, according to an IND-Ra estimate.
KMRL (Kochi Metro) is likely to receive Rs4,80crore as per FY25 government of Kerala (GoK) budget estimates and had already received Rs245.72 crore till September 2024.
According to a memorandum of understanding (MoU), the GoK will provide financial support to KMRL for bridging the cash losses, if any, and funding capital expenditure during the operational phase, if required.
For the current financial year (FY25), KMRL has total scheduled repayments and interest payments of about Rs460 crore, and for these payments the company will continue to rely on the GoK’s financial support in order to meet the debt service obligations timely.
Fare collection
Fare collection for the financial year under review was Rs99.88 crore, and the ridership in FY24 has witnessed improvement according to Kochi Metro estimates. During FY24, the fare collection accounted for 40.53 per cent of the total income as opposed to 37.56 per cent in the previous year.
Phase-2 at Rs1957cr
The work on Kochi Metro’s Phase-II is ongoing and the project comprises a stretch of 11.2km between Jawaharlal Nehru International Stadium Kochi and Info Park, through the Kakkanad corridor.
Phase-2 project with 11 stations is estimated to be completed at a cost of Rs1957 crore. The phase II cost is likely to be funded with a mix of debt and sponsors’ funding in the ratio of 52 per cent and 48 per cent, respectively.
The phase-I of the project with a total track length of 25.20km has been fully operational since September 2020.
KMRL had extended phase IA and Phase IB at a total cost of Rs1159.2 crore. The Phase IA had commenced its full operations in September 2022 and Phase IB in March 2024.
