Delhi airport metro: Reliance Infra claims termination payment

Seeks termination payment from DMRC for 130% of equity and 100% of debt dues

Delhi Airport Metro Express (DAME), a Special Purpose Vehicle of Reliance Infrastructure (RInfra), has sought a termination payment equal to 130% of the adjusted equity and 100% of the debt due for the project from the Delhi Metro Railway Corporation (DMRC) after exiting from the operations of Delhi airport metro.

In a release, RInfra on Monday said these payments by DMRC are required as the termination of concession agreement has arisen owing to the default by DMRC.

"As legally advised, DAME’s claims for the termination payment are fully justified and enforceable, and RInfra is confident of recovering its entire investment in DAME," the company added.

DAME had terminated the Concession Agreement with the DMRC for the Delhi airport metro line nearly 9 months ago through notice issued on October 2 last year.

The matter has been referred to arbitration, in accordance with the dispute resolution mechanism specified in the Concession Agreement.

"The termination clause had to be invoked by DAME, as DMRC had persistently failed to cure the substantial defects in the civil structure designed and built by DMRC, within the period prescribed under the Concession Agreement, and on account of Material Breach and Event of Default by DMRC arising under the Agreement as a result thereof,'' RInfra said.

Despite the lapse of 9 months and repeated requests by DAME, DMRC failed to make alternate arrangements for taking over the operations of the metro line, even after the termination of the Concession Agreement in October 2012.

"As a result, DAME was compelled to serve a final notice on DMRC once again to take over the operations with effect from  July 1 as it was not possible for DAME to continue the same indefinitely in the above situation. This takeover of operations has now been completed," RInfra said.