The Delhi Airport Express is back on track with its usual traffic resuming on January 18. However, will the country's first airport metro serve its purpose in the long run?
After lot of hiccups, the country's first airport express metro resumed its commercial operations in its regular timing from January 2013. The Airport Express line functions on a public-private partnership (PPP) model. Delhi Airport Metro Express Pvt Ltd (DAMEPL), a Special Purpose Vehicle (SPV) between R-Infra (95 per cent stake) and CAF, Spain (5 per cent stake) was created to implement the Airport Metro Express project on a build-own-operate-transfer (BOOT) basis. The consortium bagged the project from the Delhi Metro Rail Corporation (DMRC) in 2008 through competitive bidding and awarded on a 30-year concession period.
The DMRC was in charge for design and construction of the civil structures of all types including viaduct, tunnels, station civil works in the metro project. However, one year after operations, DAMEPL inspected the structure and found shockingly poor quality of civil structure workmanship by DMRC.
According to Lalit Jalan, CEO, Reliance Infra, DAMEPL has been struggling to run the line ever since the operations were launched in February 2011 and the operations were suspended on July 8 last year after defects were found on civil structure.
“It was severe defect in civil works from DMRC's part. There are bearings which are put between viaduct and the peer caps and out of 2,200 bearings, we found 2,000 were defective. It is an event where we have claimed for our material loss too.”
DAMEPL also informed DMRC through letters and meetings about the defects and sought advice with respect to safety of operations. Meanwhile, DAMEPL engaged structural consultant Shirish Patel & Associates (SPA) soliciting their opinion on the matter.
Since then, the DMRC and DAMEPL have been at loggerheads over the corridor and a letter war between the two seems to have culminated with a communication from DAMEPL in early October that they want to terminate the Concession Agreement. On July 6, 2012 after getting consent of key stakeholders, DAMEPL announced temporary suspension of its services from
July 8, 2012.
According to media reports, Akhileshwar Sahay, Strategic Advisor at DMRC in September 2012 said that before the line shut down on July 8 for repairs, passenger traffic, which was to bring in 25 per cent of Reliance's revenues, was half the 40,000 daily estimate on which its business case rested. Real estate is supposed to deliver the other 75 per cent, but Reliance has leased out only 5 per cent of the space it has. Also, between March 2010 and March 2011, the equity capital of DAMEPL has fallen from Rs 467 crore to just Rs 1 lakh, with the remaining being converted into a form of debt.
If it wants to exit, ideally, Reliance would want to do so without bearing any liabilities of DAMEPL. That is, the project's accumulated losses of Rs 341 crore, or its own debt share of about Rs 2,800 crore. But, conversely, DMRC would not want to pick up those large liabilities, making this an unlikely scenario. A wholesale departure of Reliance might also not hold before the arbitration panel. Besides, in a letter dated July 9, DAMEPL blamed DMRC for defects in the civil works and issued a notice of material breach. Replying to this, DMRC said, as per the concession agreement, the repair cost and damages would be recoverable from DAMEPL. With such differences, it's unlikely any one partner will concede everything. This would involve DMRC approving a financial restructuring for DAMEPL, which then continues to run the line. DAMEPL sought a five-year moratorium on payment of concession fee of Rs 51 crore in year one and increasing by 5 per cent every year, for 30 years. Now, after the line was stopped on July 8, this also involves the cost of repairs.
Meanwhile, DAMEPL held interaction with all stakeholders namely Ministry of Urban Development, Government of Delhi and also with DMRC, apprising them of the issue through meeting and documentary evidences. Later, DMRC at its own cost and risk has undertaken the rectification works. The entire rectification work has been overseen by the Ministry of Urban Development. These defects have since been rectified by DMRC and the line was offered for re-inspection to the Commissioner Metro Rail Safety (CMRS) in December 2012. The line was inspected by CMRS on January 15 and 16, 2013 and a formal clearance for commercial operation was given on January 18, 2013.
Sumantra Das
Leave a Reply
You must be logged in to post a comment.