Apr 16 2024, 08:37
A Supreme Court judgement shines the spotlight on Delhi Metro and Anil Ambani:
This week's Supreme Court judgement in a case involving Anil Ambani and Delhi Metro Rail Corporation is the latest in a long line of setbacks for the former.
On Wednesday, the Supreme Court set aside its own judgement and held that the Delhi Metro Rail Corporation - DMRC - was not obliged to pay over INR8,000 crore to the Delhi Airport Metro Express Private Ltd, a Reliance Infrastructure firm, in pursuance of a 2017 arbitral award.
The agreement:
Delhi Metro Rail Corporation (DMRC), and Anil Ambani controlled Delhi Airport Metro Express Private Limited (DAMEPL) inked an agreement in 2008 to design, install, commission, operate and maintain the 22.7 km Delhi's Airport Metro Express Line from New Delhi Railway Station to Dwarka Sector 21 for a 30-year period.
DAMEPL is a consortium formed with 95% stake of Reliance Infrastructure Limited (R-Infra) and 5% of Spain's Construcciones y Auxiliar de Ferrocarriles (CAF).
As per the agreement, DMRC undertook the civil works for viaduct, tunnel, and stations while DAMEPL was responsible for system installations, rolling stock, and operations.
Fares on the corridor were kept higher than other DMRC routes to recover the INR5,700 crore cost.
The dispute:
The line was to begin operations from August 2010 in time for the Commonwealth Games (CWG), but the construction could not be completed by then.
In September 2010, the Airport Express Line failed to get the mandatory safety clearance from the Commissioner of Metro Rail Safety (CMRS). This prompted DMRC to slap a fine of INR37.5 lakh per day from September 30 onwards on R-Infra for missing deadlines. Operations began a few months later in February 2011 after safety clearances.
In March 2012, the airport line witnessed passenger traffic of around 20,000 per day, nearly half the initial projection. By May 2012, DAMEPL complained of issues relating to the design and quality in the installation of viaduct. Services on the express line were suspended by DAMEPL from July 2012 citing technical issues and triggering safety repairs. In October 2012, DAMEPL issued a notice terminating the Concession Agreement citing construction defects.
DMRC invoked arbitration in October 2012 seeking compensation, claiming that the termination notice issued by DAMEPL is illegal. A counter claim was also filed by DAMEPL. Services resumed in January next year, but DAMEPL stopped it by June 2013. DMRC took over operations of the Airport Express Line from July 2013.
The arbitration tribunal in May 2017 accepted DAMEPL's claim and asked DMRC to pay INR2,782.33 crore. Subsequent court orders led to DAMEPL's claims being upheld.
The arbitral award swelled to INR7,045.41 crore by 2021 when the DAMEPL approached the Delhi High Court (HC) to enforce it. In December 2021, DMRC informed the HC that it will deposit INR1,000 crore in an escrow account.
In February 2023, the HC asked the Centre to take a call on whether it wants to allow the takeover of DMRC'S assets by DAMEPL, as DMRC had expressed its inability to pay the award.
The Centre declined such a takeover as it would have resulted in the closure of DMRC services in the national capital, bringing the entire national capital to a halt. By 2024, the total amount sought with interest became closer to INR8,000 стоге.
source: et
Apr 17 2024, 08:29
- Whatsapp
- Facebook
- Linkedin
- Google Plus
0