DMRC, Reliance Infra go for arbitration

More trouble for Airport Metro Express

Four months after it was shut for repair, following detection of cracks on the civil structure, the trouble for the showcase Delhi Airport Metro Express looks to be increasing further, with the two sides — Delhi Metro Rail Corporation (DMRC) and the concessionaire, Reliance Infrastructure Ltd — planning to go for arbitration.

Reliance Infra, a subsidiary of Reliance Anil Dhirubhai Ambani Group, had earlier requested the project be restructured. “Issues raised by Delhi Airport Metro Express (DAME) regarding financial non-viability of the project, besides their request of restructuring, have been rejected by DMRC. On DAME’s request, the dispute is now being referred to arbitration,” DMRC Chairman Mangu Singh said.

 

According to initial estimates, 40,000 people were expected to use the 23-km line on a daily basis, but the daily ridership could never cross the 21,000 mark. The average daily ridership stood at 17,000 when the line was closed for repair in July. Asked what kind of financial restructuring Reliance Infra was looking for, CEO Lalit Jalan refused to share details.

ON TROUBLED TRACKS

• Jan 2008 DMRC awards 30-year build-operate-transfer contract to R-Infra-CAF consortium for the Delhi Airport Metro Express line
   
• Sep 2010 The line fails to get safety clearances from the commissioner of Metro Rail Safety over technical glitches
   
• Feb 2011 DAME commences operation months after missing the original deadline of August 2010. Ridership remains low
   
• Jul 2012 Shut for repair after cracks appear in civil structure
   
• Oct 2012 DMRC says it has decided to go for arbitration on the request of the concessionaire

Singh also said through a statement issued today that the issue of termination of the concession agreement had been disputed and “has been referred for resolution through arbitration proceedings”. Singh, however, didn’t clarify on termination of the agreement. DAME had served a termination notice to DMRC, according to a source close to the development.

Even as Reliance Infra remained tight-lipped, a DAME spokesperson said in an email: “The repair work executed by DMRC is nearing completion. We will recommence the operations of the Airport Metro line after necessary safety clearances. DAME, as the concessionaire, will run the line.” DAME informed it was likely to meet DMRC officials next week to discuss the matter. He, however, refused to comment on whether Reliance Infra had sent a termination notice to DMRC.

The flagship Airport Metro Express line, the country’s first Metro rail project under the public-private partnership model, was built at a cost of Rs 5,700 crore. While DMRC had carried out the civil work, DAME and Spanish train maker CAF were to operate the line for 30 years, according to the original agreement. However, cracks appeared in the civil structure barely a year and a half after the line began operations.