With Reliance Infrastructure expressing its inability to operate the Airport Express Metro corridor, Delhi Metro will take over the operations of the much-hyped express corridor from next month. The issue was discussed during an emergency board meeting of Delhi Metro Rail Corporation held on Friday evening.
The development came following intimation from DAMEPl, the private operator, to stop train operations from the night of June 30. The Airport Express Metro was the first PPP project undertaken by the DMRC; though it proved to be a failure with the operator violating the concessionaire agreement citing financial inviability to stop the operation.
The Board of Directors have however rejected the private operator's notice citing inability to operate the corridor saying it violates the terms of the contract agreement. “The Board of Directors of Delhi Metro Rail Corporation (DMRC) met on Friday evening to discuss the Reliance (DAMEPl) letter, dated June 27, intimating that they would stop operating the Airport line from the night of June 30. Board concluded that the notice was 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,” said Sudhir Krishna, Secretary, Ministry of Urban Development.
The issue of the termination of the Concession Agreement has been disputed and the same has also been referred for resolution through arbitration. With the issue of monetary penalty yet to be decided, the properties including trains that are owned by Reliance Infrastructure is likely to be forfeited along with other operational components. According to the officials, the value of the Reliance owned property on the Corridor is pegged over Rs 2,800 crores.
As per the concessionaire agreement between DMRC and Reliance, the party which expresses its wish to terminate the agreement will be levied the penalty. “Reliance however, has not wished to terminate the contract and wishes to handover the entire property to DMRC. Apart from this, the decision on Rs 300 crores, which are in arbitration process, will be settled after the arbitration concludes,” said an official.
According to top sources, DAMEPl, which is responsible for running the high speed Airport Express line, is incurring losses of over Rs 50 crore a month. They are supposed to pay Rs 64 crore as rent to DMRC every month but their total revenue collection is around Rs 52 crore a month. The expenditure of the Airport Express line is now going up to Rs 23.17 crore per month in the year 2013-14 as against the projected expenditure of Rs16.56 crore.
In its letter to DMRC on June 27, DAMEPl had expressed to stall the operations on the corridor citing non-viability of the project. As per the concession agreement, the DAMEPl, the concessionaire of the high-speed corridor is supposed to run the line for 30 years and share the revenue generated with DMRC. The line was built on the PPP model, where the civil construction was carried out by Delhi Metro and the system installations as well as Rolling stock was supplied, installed and operated by a private partner or the Concessionaire, which for the Airport Express line is a joint venture of Reliance Infra and CAF (a Spanish company).