Parting gift for Anil’s hatchet job
25 July 2013 9:45 PM GMT
In what appears to be a classic case of appeasing the defaulter, the UPA government’s decision to pay Reliance Infra the enormous sum of Rs 1,680 as an ‘exit fee’ of sort is a matter of shame. Despite having caused huge loss to the exchequer and inconvenience to the public with its declaration of inability to operate the Delhi Metro Rail Corporation’s Airport Expressline, it seems the government is casting a blind eye to the corporation’s utter incompetence to run our state-of-the art operations.
Reliance Infra, the concessionaire for Delhi Airport Expressline Private Limited (DAMEPL), evidently has extracted its pound of flesh from the state, even though its inefficiency has been brought to sharp relief. Despite the company’s massive underperformance, the ministry of urban development is busy ‘resolving financial issues of Reliance’s associate company’s dues’. In a baffling demand, Reliance Infra had been claiming that the DMRC, which was forced to terminate the contract with the company upon the latter’s declaration that it would be unable to further conduct the operations from 1 July, should pay the company, a ‘termination fee’, as if continuing with a company with financial problems is the way to go.
However, the DMRC’s decision to pay the termination amount, an enormous 130 per cent of the adjusted equity and 100 per cent of the debt accrued due to the project, is laughable, to say the least. In fact, although the urban development ministry’s ‘dilemma’, on how to resolve the debt burden and the dues left over by the company, is still understandable, the squeamish surrender of the DMRC and the ministry is a matter of great regret. To top it all, appeasing the defaulter in this manner clearly sets a terrible precedent for such private-public-partnerships (PPP), as the defaulters would cite this case to go scotfree even after doing a hatchet job and straining the government exchequer, stripping it off of thousands of crores of rupees.
Paying the company a sum as huge as Rs 1,680 crores would not only amount to succumbing under rampant corporate pressure, but also leave a bitter aftertaste for the public sector units, which would balk, and justifiably so, at the prospect of tying up with private enterprises and carry out gigantic infrastructure and construction projects. However, the perfunctory objections raised by the DMRC and its suggestion that the union and Delhi state government should divide the burden and pay equal amount to Reliance infra smacks of gross disregard for protocols.
Reliance Infra, the concessionaire for Delhi Airport Expressline Private Limited (DAMEPL), evidently has extracted its pound of flesh from the state, even though its inefficiency has been brought to sharp relief. Despite the company’s massive underperformance, the ministry of urban development is busy ‘resolving financial issues of Reliance’s associate company’s dues’. In a baffling demand, Reliance Infra had been claiming that the DMRC, which was forced to terminate the contract with the company upon the latter’s declaration that it would be unable to further conduct the operations from 1 July, should pay the company, a ‘termination fee’, as if continuing with a company with financial problems is the way to go.
However, the DMRC’s decision to pay the termination amount, an enormous 130 per cent of the adjusted equity and 100 per cent of the debt accrued due to the project, is laughable, to say the least. In fact, although the urban development ministry’s ‘dilemma’, on how to resolve the debt burden and the dues left over by the company, is still understandable, the squeamish surrender of the DMRC and the ministry is a matter of great regret. To top it all, appeasing the defaulter in this manner clearly sets a terrible precedent for such private-public-partnerships (PPP), as the defaulters would cite this case to go scotfree even after doing a hatchet job and straining the government exchequer, stripping it off of thousands of crores of rupees.
Paying the company a sum as huge as Rs 1,680 crores would not only amount to succumbing under rampant corporate pressure, but also leave a bitter aftertaste for the public sector units, which would balk, and justifiably so, at the prospect of tying up with private enterprises and carry out gigantic infrastructure and construction projects. However, the perfunctory objections raised by the DMRC and its suggestion that the union and Delhi state government should divide the burden and pay equal amount to Reliance infra smacks of gross disregard for protocols.
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