Hit by Covid-19 pandemic, DMRC finds it hard to pay R-Infra dues

The Covid-19 pandemic has made it harder for the Delhi Metro Rail Corporation (DMRC) to make good on the claims raised by Anil Ambani-led Reliance Infrastructure (R-Infra).

According to an email response to Business Standard, DMRC had incurred an operational loss of Rs 1,761.23 crore during the financial year 2020-21.

While DMRC has regularly been reporting a net loss after clearing the depreciation & amortisation expenses and finance costs, this is the first operational loss reported by DMRC in the last five years.

The transport major’s net loss stood at Rs 541.05 crore in the financial year 2019-20, widening from a loss of Rs 462.23 crore in 2018-19.

The largest overhang on DMRC’s profitability is the significant amount of loan it has raised for meeting expenditure requirements. In response to a query on the capital expenditure incurred by DMRC during the last five years (2015-16 to 2021-22), the mass transporter said that the financial expenditure stood at Rs 26,000 crore during the period. A large chunk of this spending is met from the monies that have been raised through a Japan International Cooperation Agency (JICA) loan that was instrumental in bringing the Delhi Metro into existence.

During the financial year 2019-20, JICA loan, amounting to Rs 707.83 crore, was received by DMRC. A repayment of JICA loan amounting to Rs 764.77 crore and interest amounting of Rs 429.97 crore was made to the Centre by DMRC.

The total repayment obligations of JICA loan up to the end of financial year 2019-20 — aggregating to Rs 6,826.97 crore — were met by DMRC. This included Rs 3,337.24 crore towards loan and Rs 3,489.73 crore as interest. The total amount of JICA loan outstanding stood at Rs 31,834.65 crore as on March 31, 2020.

During financial year 2020-21, DMRC made a repayment of JICA loan amounting Rs 808.70 crore and interest amounting to Rs 433.85 crore to the Centre.

This complicates the situation for R-Infra, which has been seeking to recover around Rs 7,200 crore from DMRC after a botched up deal for setting up and operating the Delhi Metro Airport Express Line.

The Delhi High Court ruled in favour of R-Infra, forcing DMRC to deposit Rs 1,000 crore in an escrow account on December 6. On December 17, DMRC revealed, in an affidavit before the high court, that it has total funds worth Rs 5,800.93 crore. According to R-Infra, Rs 2,945 crore is the principal amount and the rest Rs 4,305 crore includes pre and post award interests.

The two are now locked in an extended dispute with DMRC expressing inability to pay up the amount claimed by R-Infra.

While the financial burden sustains on DMRC, the third wave and curtailed operations put further strain on the earnings. With weekend lockdowns being re-imposed in Delhi, metro services are once again being constrained.

In a statement earlier this week, DMRC barred passengers from standing in metro coaches, limiting their number to just 50 per coach. The frequency of metro trains has also been lowered in an attempt to discourage non-essential travel. These measures result in longer wait times outside metro stations. Also, it means fewer passengers wanting to board the trains, further lowering potential earnings for the DMRC.