Consider paying Rs.60 Crore to DAMEPL towards interest: HC to DMRC

NEW DELHI: The Delhi Metro was today asked by the Delhi High Court to consider releasing Rs 60 crore to the former concessionaire of the airport express line to pay interest for the next three months on loans taken to build it.

Justice Vibhu Bakhru asked the lawyers for the Delhi Metro Rail Corporation (DMRC) to take instructions on whether they were willing to release the amount if the concessionaire Delhi Airport Metro Express Private Limited (DAMEPL) secures them by providing a bank guarantee of Rs 60 crore plus interest.

The court said it was only considering the interim issue of release of Rs 60 crore as DAMEPL was paying Rs 65 lakh per day, amounting to Rs 20 crore per month, to the lenders to service the debt.

It was hearing a plea by DAMEPL seeking early payment of Rs 3,502 crore, which is 75 per cent of the arbitral award of Rs 4,670 crore granted in its favour on May 11.

DAMEPL, a subsidiary of the Reliance Infrastructure (Rinfra), has claimed that under the guidelines issued by NITI Aayog on September 5, 2016, public sector undertakings (PSUs) are to pay 75 per cent of the award amount even if they propose to challenge the arbitral award.

During the hearing, DMRC said the NITI Aayog guidelines would not apply in the instant matter as the award was of May 11 and it had 90 days to challenge the arbitral tribunal’s decision.

It said the guidelines would apply only after the PSU challenges the award, which it also termed as a “fraud”.

DMRC said the NITI Aayog memorandum was only a measure of protection, when enforcement of an award remains pending for long periods, and not a relief.

The court, however, observed that the DMRC “cannot be placed in a better position for not challenging the award”.

DMRC, thereafter, said the award being sought by the concessionaire was too large and it does not have that kind of money lying around. It said it would have to start selling its assets to raise such an amount.

The concessionaire had earlier told the court that it has been paying Rs 18-20 crore a month since July 2013 for servicing the debt and has already shelled out over Rs 1070 crore towards payment of interest with the initial capital still remaining as outstanding.

According to DAMEPL’s plea, the concession agreement was entered into between the two on August 25, 2008. Under the agreement the DMRC was to carry out the civil works, excluding at the depot, and the balance, including the project system works, were to be executed by DAMEPL, the plea has said.

The Airport Express line was commissioned on February 23, 2011 after an investment of Rs 2,885 crore funded by DAMEPL’s promoters’ fund, banks and financial institutions.

DAMEPL has said it had terminated the concession agreement as the DMRC had not cured some defects in the line within 90 days of the notice issued by it.

According to its plea, the agreement was terminated with effect from January 1, 2013 and the project was handed over to the DMRC on June 30, 2013. Till handing over of the project, the DAMEPL had operated the line as a deemed agent of DMRC.

Arbitration was entered into in August 2013 after efforts to amicably resolve the issues did not yield results.

DAMEPL is a joint venture of Rinfra and a Spanish construction company — Construcciones Y Auxiliar De Ferrocarriles, with a shareholding of 95 and five per cent respectively.

The concessionaire, in its plea, has claimed that “the payment of the interest to the lenders by it over the last four years in addition to the capital invested has enormously benefited DMRC and caused a financial crunch to DAMEPL”.