Urgent meet on IGI Metro irks Antony

नयी दिल्ली New Delhi:  Defence minister A K Antony has questioned the urban development ministry’s urgency to hold Group of Ministers meeting to take a decision on whether Delhi Metro Rail Corporation (DMRC) can be directed to make termination payment to the private firm which walked out of the airport Metro project.

Antony, who heads the GoM, has reportedly asked why the ministry can’t wait for a month so that the new government can take a decision on the termination payment to Delhi Airport Metro Express Pvt Ltd (DAMEPL). Sources said the Cabinet Secretariat has sought UD ministry’s response to Antony’s queries.

This development has come as a shocker to the UD ministry since it was hopeful of the GoM taking a decision after the Election Commission had given clearance to hold the meeting. Sources said in view of the strong objection of the Delhi government, it would be politically right to defer the meeting for the time being.

But the deferment may come as a bad news for Reliance Infrastructure arm. Sources said the minimum termination payment could be Rs.900 crore in case the GoM took a decision. As per the contract provision, in case the termination is due to concessionaire’s default, the payment would be 80% of the outstanding debt. It will be 130% in case DMRC loses the case.

There has been confusion on what should be considered as the debt. While in its original financing plan, DAMEPL had quoted approximately Rs.1250 crore as debt, in the escrow agreement signed between the company and DMRC, it was increased to about Rs.2000 crore.

While DMRC had been maintaining that it’s not bound to terminate the contract, the solicitor general had opined that DAMEPL walking out of the project should be seen as de facto deemed termination. As per the concession agreement, the termination payment can only be made when the contract is terminated.