Anil Ambani Group company Reliance Infra has stated that it will stop operating the Delhi Airport Metro from midnight on June 30. The metro line links Delhi’s international airport with central Delhi.
The public private partnership project is operated by Delhi Airport Metro Express Pvt Ltd (DAMEPL), a special purpose vehicle promoted by Ambani’s Reliance Infra. The company has been battling mounting losses, which are nearing the Rs 300-crore-mark.
Long-running saga
This is not the first time that the operator has issued such a termination notice to the Delhi Metro Rail Corporation (DMRC). The DMRC Board, which met on Friday to consider the issue, rejected the termination notice, stating that it was against the contract.
DMRC also added that it would operate the project if Reliance stepped out.
After a meeting of the Delhi Metro Board, Sudhir Krishna, Secretary, Urban Development Ministry, stated: “The notice (by Reliance Infra) 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 operations. If, however, they do not do so, DMRC shall step in and operate the line in the larger public interest.”
Meanwhile, arbitration proceedings, over who was responsible for the metro link’s closure for almost six months last year, continue. Insiders say that the operator is maintaining that the reason for the termination notice is not financial but breach of contract by Delhi Metro.
After getting the termination notice, Delhi Metro had pointed out there are three options: First, the line remains closed; second, lenders, led by Axis Bank, bring back DAMEPL or substitute the developer; and third, Delhi Metro starts operations and maintenance of the project, including absorbing the staff of DAMEPL for the time being.
Debt Repayment
However, in case the concession agreement is terminated, and DMRC has to manage the entire debt of about Rs 2,000 crore, then DMRC wants the Central Government and Delhi Government to arrange the money.
The stance of the Centre and Delhi Government on this issue is not yet clear. One view is that Delhi Metro should itself arrange for funds to operate the line and also come up with a viable plan for the line.
While Delhi Metro had projected that the line would have a daily ridership of 40,000 people, actual ridership is about a fourth of that, at around 10,000, said an official source.