After reaching a speed of 105 kilometres per hour, then slowing to 40 km/hr, before finally coming to a screeching halt, the Rs 5,800-crore Delhi Airport Metro Express line’s journey towards a close-down has been the fastest among infrastructure projects in the country. Although the showcase project was the first public-private partnership (PPP) model to take off in the metro segment, it has also become the first metro line to close, though temporarily.
The build-up to the final halt on July 8 started almost two months ago when on May 17 Delhi Airport Metro Express Private Limited (DAMEPL), the special purpose vehicle of Anil Ambani-controlled Reliance Infrastructure, informed the Delhi Metro Rail Corporation (DMRC) of defects in the civil structure. DAMEPL needed to do this under the concession agreement it had signed with DMRC, which was responsible for conducting the civil work before handing over the site to the concessionaire, an industry term used for a company implementing a project on lease. In an emailed response, a DMRC spokesperson said the inspection of the viaduct concerned was delayed and carried out “after many reminders” to the private operator.
DAMEPL claims that these defects were not apparent when the site was taken over by the company in September 2010. Soon on May 23, 2012, DAMEPL requested design details from DMRC to carry out further inspection but the request was not met. By the end of the month, DAMEPL reduced the metro speed to 40 km/hr, less than half the average speed of vehicles running on the adjoining expressway. This slowdown occurred after DMRC permission was taken under the terms of the contract. The final call to shut operations came during a meeting of both sides with the ministries of railway and urban development, and the Delhi government on July 4. After examining the details, the Railway’s representative, in fact, commented that they would have shut down the line much earlier, hinting that commuter safety was compromised at some point.
Structures like this one, which gave way within a year of operation, should normally withstand the impact of running trains for 100 years. It is not only the viaduct; even the girders and bearings are in unsafe condition. Part of the blame is being directed to Mangu Singh, then director (Works) and now DMRC managing director.
Coming as it does soon after hosts of controversies over other PPP projects – Delhi Airport, the Krishna-Godavari basin, the Gurgaon-Delhi expressway being prominent among them – this episode has once again raised doubts about PPP. First, whether the PPP model to develop India’s infrastructure is workable at all and, second, about the durability of relationships between public and private corporations.
“We always wanted to work with DMRC amicably since the partnership has to last for 30 years but then this controversy happened,” admits an RInfra executive, who requested anonymity. Though DMRC, on its part, dismisses the mistrust theory between the two partners with a “no comment”, E Sreedharan, former DMRC managing director and an iconic figure in the sector, and Mangu Singh himself have publicly expressed their reservations about the PPP model and RInfra’s ability to run the project.
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In an interview with Business Standard a month before the line became operational in February 2011, Sreedharan had described DMRC’s partnership with RInfra as one that has “not been a very happy experience”. He was confident that after executing civil work worth 60 per cent of the cost, they could have also done the other 40 per cent at a much cheaper cost.
Since DMRC carries Sreedharan’s legacy with much pride, it is natural that the distrust with the PPP model continues. M Ramachandran, former urban development secretary, during whose tenure the PPP model for Airport Metro was approved and executed, says, “Sreedharan never liked PPP. DMRC, therefore, does not like PPP. Naturally, the two partners are not positively inclined and, therefore, the problems.”
There were serious differences even at the time of commissioning. “In the absence of a regulator for the sector, DMRC behaves like a lord from the very beginning,” says Ramachandran. He is, however, doubtful about RInfra’s capability too, since the company is also struggling with the metro project in Mumbai. Besides, there are murmurs that it suited DAMEPL to close operations since it is currently making losses. This theory does not hold ground because infrastructure projects, by their very nature, have long gestations and, in line with the globally established models, the company was looking to open up the associated retail business.
One of the factors that could have led to this breakdown was the constitution of the concession agreement. Ramachandran says problems, nevertheless, crop up in every construction. One has to deal with them. Here there is no one national regulator in the sector and the main partner has to facilitate business for the other partner — in Mumbai, the Mumbai Metropolitan Region Development Authority has to do this job, and in Delhi it is DMRC. But what has emerged is a trust deficit between DMRC, the public partner for the project, and DAMEPL. This issue has, however, taken a back seat. Whenever a project of such scale runs into problems, the immediate question is whether it is squarely the fault of one of the partners. In Ramachandran’s view, the first task should, therefore, be to fix the responsibility. Since DMRC was in charge of design and construction, it has to take responsibility. DMRC has already sought an explanation from IJM (India) Corporation. The other question is whether the stretch was the right one for a PPP arrangement.
As far as the larger issue of whether or not a PPP model will work in the future is concerned, experts unilaterally disregard Sreedharan’s anti-PPP stance. “The problem is that PPP had to be adopted because there was no option. One has to find funds. A decision had to be taken,” explains Ramachandran. Sure enough, the writing on the wall for future PPP projects is clear: the rules of the game have to be unambiguous right from the beginning. The contract has to be consistent and the partners must be reliable. Besides, the dominant player – in this case DMRC – should not be allowed to act like a regulator, technical or otherwise.