In Budget 2024-25, loans totaling over Rs 2.4 billion are provided to Metro Express Ltd (MEL) to cover its operational costs. Since its launch in 2019, Metro Express has relied heavily on government loans. Financial dependence on the State which calls into question the long-term viability of the project.
The Metro Express, since its commissioning in 2019, has become a key element of the country's public transport network. However, behind this modern infrastructure, which connects Port-Louis to Curepipe while serving a line between Rose-Hill and Réduit, lies a worrying financial reality: the continued dependence of Metro Express Ltd (MEL) on financial loans that it contracts with the State to finance its operations.
The launch of the Port-Louis/Réduit line, for example, was made possible thanks to an initial loan of Rs 220 million granted by the government which controls the state apparatus. This financial dependence has only grown over the years, especially after prolonged lockdowns due to the COVID-19 pandemic. These confinements, covering two years with cumulative periods of more than two months, have had a major impact on MEL's finances.
The pandemic exacerbated the company's financial challenges to such an extent that it resulted in a financial loss of Rs 500 million in 2021, as confirmed in the financial report approved that same year. The financial costs, including the Rs 232 million disbursed to honor loans and other financial costs deemed “out of the control” of MEL, contributed to making this situation worse.
In addition, Rs 108 million was spent on the maintenance of fixed assets, including trains, railway track and signage. The sum of Rs 140 million was allocated for administrative needs, such as payment of employees' salaries.
The annexes to the 2024-25 Budget reveal that the government continues to support MEL financially. Under the “Public Sector Investment Program” chapter, clauses have been included to grant an additional loan of more than Rs 2.4 billion to MEL over the coming years (see box).
These amounts are in addition to loans totaling Rs 1 billion taken out by the company's management, which must be repaid over a period of 10 years. MEL's financial dependence on state loans raises questions about the long-term viability of this project.
“If the Metro Express is an undeniable asset for urban transport in Mauritius, its current financial model nevertheless requires in-depth reflection to guarantee its sustainability without systematically resorting to debt,” says a source close to the government file. According to this same source, it will be necessary to launch new innovative avenues of reflection and more robust management strategies so that the Metro Express can eventually do without continued financial assistance from the government.
The challenge is to balance the necessary network expansion with sound and sustainable financial management. In the meantime, MEL must maneuver a complex financial landscape. Each loan granted is crucial to ensure the continuity of its operations…
