Reliance dumps Airport Express; DMRC to steer it

The Delhi Metro Rail Corporation (DMRC) has decided to take over the 23-km airport express line after the concessionaire, led by Reliance Infrastructure, pulls out on July 1. The Corporation will operate the New Delhi-Airport service in larger public interest, it said on Friday.

The airport express line, which started operations in February 2011, ferries nearly 15,000 people daily; it has transported 68 lakh passengers in over 70,000 trips in the last 15 months. Delhi Airport Metro Express Private Limited (DAMEPL) is a PPP model between the DMRC and a joint-venture concessionaire of Reliance Infrastructure and Spanish firm CAF. Apart from paying license fees, the concessionaire was supposed operate the line for 30 years and share the revenue with DMRC, as per their agreement.

After several hitches that led to termination of services on the line, DAMEPL sent a letter to DMRC on June 27, saying that it will stop services on the line altogether. In its reasons, the concessionaire simply said that it is unable to carry out operations. The DMRC board met on Friday evening to discuss the concessionaire’s letter, and rejected the private operator’s notice, saying it violates the terms of the contract agreement.

“The DMRC board concluded that the (concessionaire) notice is in violation of the concession agreement and the ongoing arbitration proceedings. The board decided to reject the notice and call upon them to continue the operations of the line in terms of the agreement. If, however, they do not do so, DMRC shall step in and operate the line in larger public interest,” said Sudhir Krishna, secretary, ministry of urban development.

DAMEPL refused to comment. Sources, however, said that DAMEPL has decided to stall its service because of the ‘non-viability’ of the project.

The issue of the termination of the concession agreement has been disputed. It has been referred for resolution through arbitration. With the issue of monetary penalty yet to be decided, the properties, including trains that are owned by Reliance Infrastructure, is likely to be forfeited along with other operational components.

According to officials, the value of the Reliance-owned property is pegged at over Rs 2,800 crore. As per the concessionaire agreement, the party, which expresses its wish to terminate the agreement will be levied the penalty for terminating the agreement. “Reliance, however, has not wished to terminate the contract and wishes to handover the entire property to DMRC. Apart from this, the decision on Rs 300 crores, which are in arbitration process, will be settled after the arbitration concludes,” said an official.

Operations on the airport line were suspended on July 8 2012 after faults were detected in the line’s civil structure. The Commissioner of Metro Rail Safety, which conducted a safety inspection on January 15 and 16, gave a formal clearance for commercial operations to restart on January 18.