Operate expressline or pay fine, govt tells Rel Infra
The board of directors of the Delhi Metro Rail Corporation, which met on Friday under the chairmanship of Sudhir Krishna, secretary, urban development, Government of India, directed Delhi Airport Metro Express Private Limited (DAMPEL) to either operate the airport line or face penal consequences.
The meeting was held because Reliance Infra, the concessionaire for the project, on 27 June intimated DMRC that it would stop operating the airport line from the night of 30 June.
According to a government source, ‘The board concluded that the above notice is in violation of the concession agreement and the ongoing arbitration proceedings. The board decided to reject the notice and call upon them to continue the operations of the line in terms of the agreement. If, however, they do not do so, DMRC shall step in and operate the line in larger public interest.’
However, on 8 July, 2012, the line was closed on the pretext of technical defects. The operations were restarted in January 2013. When the operation was suspended, the DAMEPL expressed inability to operate the corridor citing financial non-viability and issued notice for termination of concessionaire agreement which was disputed by the Delhi Metro.
According to sources, DAMEPL is incurring losses of over Rs 50 crore a month. They are supposed to pay Rs 64 crore as rent to Delhi Metro every month, but their total revenue collection is around Rs 22 crore a month. The revenue expected to be generated in 2013-14 from the operation is estimated at Rs 1,730.85 crore.
According to a Reliance spokesperson, the company has already given the termination notice and does not believe it is a breach of contract. It claims that around Rs 2,800 crore, inclusive of bank loan of around Rs 1,700 crore, has been invested. According to the agreement, if it is proved that Reliance is responsible for honouring the contract they will get back only the bank loan portion and not their equity investment. But Reliance is hopeful of getting back the entire money from the government by hook or crook, suspects the government source.
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