Reliance Infra wins ₹157.64 cr award in Metro 1 dispute

The dispute dates back over a decade pertaining to a loan extended by the government for the project. Reliance Infrastructure had claimed that delays allegedly caused by MMRDA resulted in the project cost rising from ₹2,356 crore to ₹4,321 crore. MMRDA disputed the revised cost, and the disagreement eventually went to arbitration

Mumbai: Reliance Infrastructure has won a ₹157.64-crore arbitration award in its long-running dispute with the Mumbai Metropolitan Region Development Authority (MMRDA) over subordinated debt for Mumbai Metro One Pvt Ltd (MMOPL), giving the operator of the 11.4-km Versova-Ghatkopar Metro 1 corridor another financial boost. The award is the second major financial relief for the Anil Ambani-led company’s metro arm within a month.

Reliance Infra wins ₹157.64 cr award in Metro 1 dispute

Earlier this month, MMOPL secured relief that will see more than ₹1,100 crore of its debt reduced and insolvency proceedings against it withdrawn in the National Company Law Tribunal (NCLT).

Reliance Infrastructure, which holds a 74% stake in MMOPL, announced the award in a regulatory filing on Wednesday. MMRDA holds the remaining 26% in the joint venture. The company said the three-member arbitral tribunal, by a 3:0 majority, awarded it ₹157.64 crore towards the cost of subordinated debt, along with interest.

MMRDA declined to comment on the development.

The dispute dates back over a decade pertaining to a loan extended by the government for the project. Reliance Infrastructure had claimed that delays allegedly caused by MMRDA resulted in the project cost rising from ₹2,356 crore to ₹4,321 crore. MMRDA disputed the revised cost, and the disagreement eventually went to arbitration.

The subordinated debt at the centre of the dispute was provided by Reliance Infrastructure to MMOPL. In a public-private partnership, such debt has a lower repayment priority than loans from financial institutions and other lenders. It is extended to bridge funding gaps to help private players finance public infrastructure.

The latest award is the second significant relief for MMOPL in less than a month. Earlier this month, more than ₹1,100 crore of the company’s debt was set to be reduced, while insolvency proceedings before the National Company Law Tribunal were also in the process of being withdrawn.

With the arbitration award and the proposed debt reduction, MMOPL’s financial position is expected to improve, easing some of the pressure on the company.