Banks send notice to Delhi Airport Metro for payment of dues

Banks and financial institutions have a total exposure of Rs 1,800 crore to the project

A consortium of lenders led by Axis Bank has sent a notice to Delhi Airport Metro Express Pvt Ltd (DAMEPL) for payment of loans which have turned into non-performing assets.

The banks and financial institutions, which have a total exposure of Rs 1,800 crore to the project, have served notices to Reliance Infrastructure Ltd and Delhi Metro Rail Corporation (DMRC) recently for recovery of debt, banking sources said.

The original concessionaire of the project DAMEPL was Reliance Infrastructure Ltd. DAMEPL, a special purpose vehicle of Reliance Infrastructure Ltd, in July this year had said they terminated the Concession Agreement with DMRC for the airport metro line nearly nine months ago, vide its notice dated October 8, 2012.

DMRC about five months ago took over the operations of 22.7 km-long Airport Express link along with a maintenance team of 100 officials.

According to sources, the loan was given to the original concessionaire and termination of contract does not absolve Reliance Infrastructure Ltd from repayment of debt.

DAMEPL spokesperson said, "Upon termination of the concession agreement, and taking over of the operations, assets, employees, etc. by DMRC from 1st July 2013, DAMEPL’s obligation towards the project have ceased to exist, as DAMEPL is no longer the concessionaire of the Airport Metro."

However, to ensure that lenders do not suffer owing to wilful delays in termination payment by DMRC, DAMEPL has made all debt service payments to lenders till date, and there are no over dues in any account.

As legally advised, DAMEPL is confident of recovering all such debt servicing payments, together with costs, interest and damages, from DMRC.

"It is regrettable that despite being a Government owned company, DMRC is blatantly violating the terms of the agreements, to the extent it is not even depositing revenues in the designated escrow account."

Besides Axis Bank, the consortium includes Punjab National Bank, Central Bank of India, Dena Bank and Canara Bank. IIFC (UK), a subsidiary of India Infrastructure Finance Company Ltd, is also part of the consortium as it has given a loan of Rs 54 million (about Rs 350 crore) for import of rolling stock for the project.

 

The total ridership of the Airport express line during the peak of its operations was recorded at 21,000 per day.

 

The metro line was shut down July last year after problems arose due to defects in the civil structure, which were later rectified and it resumed operations in January this year.

 

Since then its ridership has been recorded about 11,000 per day on an average.