Govt won’t support payment of termination fee to R-Infra

Aam Aadmi Party (AAP) led Delhi government has decided not to lend support to the Union Ministry of Urban Development’s (UDM) proposal to pay Rs 1,820 crore as termination fee to Reliance Infra promoted concessionaire Delhi Metro Express Private Limited (DAMEPL) for the Airport Metro Express Line project.

On the direction of the cabinet secretariat, UDM had written a letter dated 16 January to Delhi chief secretary SK Srivastava seeking comments from the Delhi government on the payment of termination fee of Rs 1,820 crore to Reliance Infra-promoted concessionaire.

The ministry wants Delhi government to give bank guarantee on behalf of Delhi Metro for borrowing the money from banks and financial institutions to pay termination fee for Airport Metro Express line.

‘Delhi government cannot give consent to the proposal because the dispute between Delhi Metro and DAMEPL is under arbitration and arbitration alone will decide on the issue,’ said a source in the chief minister’s office.

Interestingly, Kejriwal government has recently ordered auditing as well as suspending of Reliance-based power distribution companies BSES (Rajdhani and Yamuna) Power Limited.

On 30 June, the Reliance Infra-led DAMEPL had expressed its inability in operating the high-speed corridors citing financial non-viability and issued notice for termination of concessionaire agreement which was disputed by Delhi Metro Rail Corporation, which took over the project.

According to sources DAMEPL, which is responsible for running the high speed Airport Metro Express was incurring losses over Rs 50 crore a month. The DAMEPL was supposed to pay Rs 64 crore as rent to Delhi Metro every month but their total revenue collection was around Rs 52 crore per month.

The official further stated that besides termination fee claim, the concessionaire is claiming Rs 1,200 crore towards several project-related work that will be decided in the arbitration.