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DMRC rubbishes Reliance Infra’s claims for termination payment, blames private player for losses

Reliance Infra on Monday blamed DMRC's ‘persistent’ failure to cure defects in the civil structure for termination of the concession agreement to run the Delhi Airport Metro Line and claimed termination payment from it.

The Reliance Infra-owned Delhi Airport Metro Express Private Limited (DAMEPL), had written a letter to Delhi Metro Rail Corporation (DMRC) on 27 June, expressing its inability to continue operations of the line.
DMRC has, however, rejected the notice given by Reliance Infra, terming the move as a ‘violation’ of the concession agreement and the ongoing arbitration proceedings. It has, however, decided to take over the operations of the 22.7 km-long link from Monday. DMRC also blamed Reliance Infra for the losses incurred.

In a statement, Reliance Infra said DMRC is now liable to pay DAMEPL a termination payment equal to 130 per cent of the adjusted equity and 100 per cent of the debt due for the project. In statement, Reliance Infra claimed, ‘As per the terms of the concession agreement, Delhi Metro Rail Corporation is now liable to pay DAMEPL.’

Sources said this could translate to Rs 2,800 crore, though Reliance Infra did not specify the amount. It argued that the termination has arisen owing to DMRCs event of default. It further said that despite the lapse of nine months and repeated requests by DAMEPL, DMRC failed to make alternate arrangements for taking over the operations of the metro line, even after the termination of the concession agreement in October 2012.

The Airport Metro line, which is the country's first Public Private Partnership (PPP), has had a tumultuous run beset with controversies after it began operations in February 2011.
Meanwhile, DMRC said on Monday that its priority was not revenue but to run the service without inconveniencing commuters.

‘As soon as DAMEPL (Delhi Airport Metro Express Pvt. Ltd.) had given notice on 27 June that they cannot run the AMEL, our first concern was to run the service from 1 July without causing any inconvenience to people and later look into increasing the revenue of the line,’ Sharat Sharma, director (operations) of Delhi Metro, said. Talking about the operational cost of AMEL, Sharma said, ‘As per the last month’s balance sheet, the operational cost of AMEL for a month is Rs 7 crore and the revenue is Rs 3 crore.’

‘We have just taken over the operations. DMRC has to look into the contracts issued by (DAMEPL) and we will see what to do to increase the revenue,’ Sharma added.
‘We cannot replace the staff overnight. They will work with us for another month, then we will decide on deputing our own staff for operations.

As of now Delhi Metro has replaced the management, but the staff will be the same. We will pay their salary,’ Sharma said.
Services on the 22.7-km corridor began as usual at 5.15 am on Monday under the DMRC’s supervision.
The Airport Metro line was built at a cost of Rs.5,700 crore ($1.2 billion at the then exchange rate) as a public-private project.
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