Delhi Metro Rail Corporation (DMRC) may have to pay almost Rs. 1,700 crore to snap all ties with Reliance Infrastructure, its estranged partner in the Delhi Airport Express line. Reliance pulled out of the project in July.
The bill is the result of the approximately Rs. 2,200 crore that Delhi Airport Metro Express Private Limited (DAEMPL) — a subsidiary of Reliance Infrastructure — borrowed from the market, well above its sanctioned amount. The permissible debt limit, approved by the government, was just Rs. 1,247 crore.
Government sources said the urban development (UD) ministry wrote to the cabinet secretariat on Tuesday, recommending that DMRC should pay nearly Rs. 1,700 crore to DAEMPL as concession termination payment — 80% of the debt due.
The ministry’s letter is aimed at putting the issue of termination payment before the empowered group of ministers (EGoM) on mass rapid transit system led by defence minister AK Antony. “A final decision will have to be taken by the EGoM,” said a source.
A clause in the concession agreement says even if the agreement is terminated on account of DAEMPL’s default, DMRC will have to pay 80% of the debt due.
Sources said the onus was on DMRC to check that the concessionaire did not exceed the borrowing limit. “Neither DMRC nor the UD ministry sanctioned any increase in the borrowing limit,” added the source.
DMRC spokesperson Anuj Dayal refused to comment.
The case is already under arbitration but the UD ministry said DMRC should be asked to pay immediately. “As per the concession agreement, if there is a delay, DMRC will be have to pay interest — about Rs. 17 crore per month,” a source said.
A DAMEPL spokesperson said, “This project was awarded under competitive bidding. So the estimated cost of DMRC is not relevant in the present case. The estimated cost of the concessionaire was advised to DMRC at the initial stage itself and it has not escalated further. It does not require any formal approval from government or DMRC.”
DMRC had already told the UD ministry that it would not be able to pay the termination amount because of fund crunch. It said it would have to pay Rs. 50 crore every year to run the line because of low ridership.