MEL Anticipated to Face Rs158 Million Loss in 2025/26

For the fiscal year 2025/2026, Metro Express Ltd (MEL), the operator of Mauritius’ metro system, is projected to face a significant loss of Rs 158.03 million. The metro service officially launched on January 10, 2020.

The financial plan shows that MEL’s total expected revenue for the year is Rs 574.34 million. Of this, Rs 510 million will come from ticket sales, and Rs 34.34 million from non-fare sources such as advertising.

Despite this, revenues are not enough to cover operational costs and capital investments.

Operational expenses are estimated at Rs 752.01 million. These include Rs 284.37 million for staff, Rs 163.21 million for maintenance and operations, and additional costs for security, utilities (such as CEB and CWA), and improvement projects.

Capital expenses are projected at Rs 61.81 million, bringing total spending to Rs 813.82 million. This results in an operational deficit of Rs 177.66 million, which grows to Rs 239.47 million after capital costs.

The company’s financial burden is worsened by high debt costs. Interest on letters of credit and bonds totals Rs 298.10 million, while principal repayments amount to Rs 145.45 million.

Interest on a government loan is Rs 68.30 million, making the total debt-related expenses Rs 511.85 million.

To help cover these costs, the government plans to contribute Rs 525 million in capital, which will reduce the shortfall but still leave a remaining deficit of Rs 158.03 million.

Experts describe the debt, especially loans from Exim Bank of India and the government, as a “huge burden” that strains MEL’s finances.

The report indicates that MEL is struggling to meet its financial commitments, particularly loan repayments.

One possible solution is converting some debts into equity and renegotiating terms with Exim Bank. However, this approach depends on negotiations and remains uncertain.

The Metro Express project was launched to modernize public transport but required large investments, partly financed through international and local loans.

While ticket revenue is increasing, it does not yet cover operational and financial costs. To avoid a liquidity crisis, Mauritian authorities may need to inject additional funds or adjust loan structures.

Regarding Phase IV of the project, the government’s inter-ministerial committee canceled the tender process in September 2023, following recommendations from Exim Bank of India. The project is currently on hold.

Source: Defi Media