Airport line: Delhi Metro rejects R-Infra's pull-out offer

Delhi Metro today said it has rejected an offer by Reliance Infrastructure to quit the showcase Airport Metro Express project citing financial non-viability. The two are now headed to arbitration for the 23-km airport express line project. It has also asserted that the corridor would soon be thrown open to public after due repairs are completed.

Delhi Metro Managing Director Mangu Singh admitted that Reliance Infrastructure-led Delhi Airport Metro Express Private Limited (DAMEPL) had sent a notice for terminating the Concession Agreement signed between the two, thereby exiting the corridor. “Termination of the concession agreement has been disputed and the issue has been referred for resolution through arbitration proceedings.”

[caption id=“attachment_504856” align=“alignleft” width=“380”]  Reliance has served a termination notice to the Delhi Metro Rail Corporation (DMRC) and said it will not be able to run services at the Airport Metro line[/caption]

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Singh also admitted that issues were raised by R-Infra on the financial infeasibility of the project, and that their demand for restructuring the agreement had been rejected by Delhi Metro. The call for arbitration comes after DMRC has completed repair work on the 22.7km high-speed line, which was shut down in July this year.

DAMEPL has been struggling to run the line ever since the operations were launched in February, 2011. The operations were suspended on July 8 after defects were found on the civil structure.

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Since then, the DMRC and DAMEPL have been at loggerheads over the corridor and a letter war between the two seems to have culminated with a communication from DAMEPL in early October that they want to terminate the Concession Agreement.

However, Delhi Metro rejected the offer and based on a suggestion from DAMEPL the issues will now head for arbitration. According to the Concession Agreement (clause 36.2.3), Delhi Metro has written to the DAMEPL that a panel of five arbitrators will be appointed within the next 30 days. In deciding so, Delhi Metro rejected DAMEPL request for setting up the arbitration panel in 15 days.

It is learnt that the DAMEPL raised several issues regarding the financial non-viability of the country’s first Public-Private Partnership Metro project with the Delhi Metro and even sought for some restructuring of the model under which the corridor was being run.

DAMEPL refused to comment on the termination notice issue.

A spokesperson merely said: “The repair work executed by DMRC is nearing completion. We will recommence the operations of Airport Metro line soon after getting the necessary safety clearances. DAMEPL, as the Concessionaire will run the line.”

Agencies