Public fund, private profit!
12 Jan 2013 10:53 PM GMT
Finally there seems to be some hope for the fliers coming and going out of the city with the likelihood of the Delhi Airport Metro Express resuming service from 26 January, the 63rd Republic Day. According to the Commissioner of Metro Rail Safety (CMRS) a safety check would be carried out on the 23-kilometre-long corridor between New Delhi Railway station and Terminal 3 of Indira Gandhi International Airport on 15 and 16 January. If the corridor passes the safety test, it can resume operations.
It’s in public interest that the service resumes at an early date on the Rs 5,700-crore project, touted as an urban infrastructure show piece, as its suspension in July last year, unilaterally by the operator Reliance Infrastructure, had raised a question mark on the very feasibility of private-public partnership (PPP) in the infrastructure sector. It’s common knowledge that Reliance Infrastructure was incurring losses to over Rs 50 crore a month and was seeking a financial package to run this in future. Though while suspending the service Reliance Infra had pointed towards structural defects, it was also seen as a ploy to wriggle itself out from a hugely loss-making operation. Reliance’s true intent behind not operating the service became clear when it expressed its inability in operating the high-speed corridor citing ‘financial non-viability’. For the past three months several announcements have been made about the resumption of the operations, however, nothing materialised in the absence of any such announcement by the operator. The big question is, has the operator agreed to restart the operations and the bigger question is what kind of an arrangement is made to subsidise the losses incurred by Reliance Infra.
There is no doubting the fact that the government should take all necessary steps to resume the service, but what made the operator agree to restarting the service should also be brought in to public domain. Union urban development minister Kamal Nath had at one point of time indicated that he too was in favour of financial restructuring of concessionaire agreement to allow Reliance breathe easy. If that happens it would amount to allowing the private partner to renege on legal agreements. In the name of public interest siphoning public money to fund private operations cannot be acceptable and will make a case for financial impropriety. If Reliance wants to go, it should be allowed to leave as per the provisions of the agreement and hand over the operations to Delhi Metro, which would help restore people’s confidence in the project.
It’s in public interest that the service resumes at an early date on the Rs 5,700-crore project, touted as an urban infrastructure show piece, as its suspension in July last year, unilaterally by the operator Reliance Infrastructure, had raised a question mark on the very feasibility of private-public partnership (PPP) in the infrastructure sector. It’s common knowledge that Reliance Infrastructure was incurring losses to over Rs 50 crore a month and was seeking a financial package to run this in future. Though while suspending the service Reliance Infra had pointed towards structural defects, it was also seen as a ploy to wriggle itself out from a hugely loss-making operation. Reliance’s true intent behind not operating the service became clear when it expressed its inability in operating the high-speed corridor citing ‘financial non-viability’. For the past three months several announcements have been made about the resumption of the operations, however, nothing materialised in the absence of any such announcement by the operator. The big question is, has the operator agreed to restart the operations and the bigger question is what kind of an arrangement is made to subsidise the losses incurred by Reliance Infra.
There is no doubting the fact that the government should take all necessary steps to resume the service, but what made the operator agree to restarting the service should also be brought in to public domain. Union urban development minister Kamal Nath had at one point of time indicated that he too was in favour of financial restructuring of concessionaire agreement to allow Reliance breathe easy. If that happens it would amount to allowing the private partner to renege on legal agreements. In the name of public interest siphoning public money to fund private operations cannot be acceptable and will make a case for financial impropriety. If Reliance wants to go, it should be allowed to leave as per the provisions of the agreement and hand over the operations to Delhi Metro, which would help restore people’s confidence in the project.
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