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The Delhi Metro Rail Corporation (DMRC) created its own team on Saturday to take over the operations of the airport metro express line from Delhi Airport Metro Express Private Ltd (DAMEPL), a Reliance Infra-promoted special purpose vehicle formed for the project.
Delhi Metro said an operations and maintenance team of 100 officials has been created under Sharat Sharma, its Director of Operations, to handle the operations of the 22.7-km-long line in case DAMEPL does not operate the project.
A DAMEPL spokesperson said, “We will hand over the line to them on June 30 and (have) already communicated to them in a letter on June 13 and June 27.”
DMRC added that DAMEPL staff employed in station management and train operations will continue to carry on with their responsibilities under the supervision of the DMRC team.
PROJECT VIABILITY
However, it remains to be seen what DMRC does to reduce the operating losses in the project or make it a viable proposition. The airport line project was making operational losses on the back of lower-than-expected passenger revenue and earnings from real estate. The actual passengers were a fourth of what was projected at the proposal stage.
Also, from DMRC’s perspective, the cost of loan for this project will be higher in case DMRC has to repay it. Till now, for all its projects, DMRC has had access to low-cost long-term funds from Japan.
Meanwhile, a few lenders to the project claimed that their interests were well protected under the concession agreement between DMRC and DAMEPL. Several banks, led by Axis Bank, have an exposure of about Rs 2,000 crore to the project. Admitting that it was a “tricky situation”, they added that till now DAMEPL had not delayed in repaying the loans.
Sources also said that the special purpose vehicle had recently sought additional funding of about Rs 400 crore from the lenders’ consortium, but the lenders declined to increase their exposure at this juncture.
Interestingly, Reliance Infrastructure had maintained earlier this year that it would achieve operational breakeven for the line in the current year. It had said that several of its claims with DMRC were at the arbitration stage and it expected closure on some of these. However, arbitration proceedings have yet to begin.
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