To sort out issues related to the operation of the Airport Express Line and servicing its debt, the urban development ministry is preparing a proposal that will soon be placed before an empowered group of ministers (EGoM), which will take the final call on whether to look for a new operator.
“The EGoM will decide whether to go for a new concessionaire or not and who’ll take the burden of the debt,” a senior government official said.
A consortium of 11 banks, led by Axis Bank, has an exposure of almost R2,000 crore to the project. If the line is given to the Delhi Metro Rail Corporation (DMRC) for permanent operations, then it will be responsible for serving the debt.
“If the Express Line goes to DMRC then its promotors — the state government and the central government — will have to take the burden of the debt. The challenge before the ministry is how to make the Airport Express Line financially viable,” the official added.
Reliance Infra-led Delhi Airport Metro Express (DAMEPL), which pulled out of the project last months, said that it it is not responsible for the debt. DAMEPL has claimed a termination payment of about R2,800 crore from DMRC. The Anil Dhirubhai Ambani Group company says DMRC is obliged to pay a termination payment equivalent to 130% of equity and the entire remaining debt. However, the arbitration panel, which is supposed to sort out the dispute between DMRC and DAMEPL has not yet started its hearing. DAMEPL was making monthly losses of R4 crore on the operations.
The 23-km Express Line was built at a cost of R5,700 crore, including R2,800 crore invested by Reliance Infra promoted DAMEPL, which is a special purpose vehicle between Reliance Infrastructure (95%) and CAF, Spain, (5%). DMRC had built the civil structure on the line and the ADAG company took care of operations and maintenance under a 30-year agreement.
The services on the line were suspended from July 7, 2012, to January 22, 2013, due to technical problems and after reopening, the speed was reduced and the ticket prices were hiked, which led to a decrease in passengers.