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Current Affairs

Dispute between Reliance and Delhi Metro

Date: 13 September 2021 Tags: Judiciary & Judgments

Issue

Delhi Metro Rail Corporation (DMRC) has been asked to pay Anil Ambani-owned Reliance Infrastructure Rs 2,800 crore plus interest.

 

Background

A two-judge Bench of the Supreme Court upheld a 2017 arbitration tribunal order reiterating the same. It was regarding termination of deal to run the Airport Express Line.

 

Details

  • The Delhi government had demanded an investigation by the CBI into alleged huge losses to the exchequer. It currently holds 50% stake.

  • The remaining 50% is owned by centre. A PPP agreement was signed by DMRC for design, installation, commissioning, operation and maintenance of Airport Express line of Delhi Metro.

 

The Airport Express line

  • The Airport Express line has been codenamed Orange line and runs between New Delhi Railway Station and Dwarka Sector-21, via IGI Airport’s Terminal 3.

  • It allows fast connection from the New Delhi Railway station to the International Airport within 20 minutes. It has 3 stops in between.

 

The dispute

  • The  DAMEPL, owned by Reliance Infrastructure, abruptly stopped services alleging technical defects in construction.

  • Due to less ridership, the company could not even raise revenue through other modes such as advertising, leasing property and property development.

  • The company said that the company would not be able to run the line from the midnight of June 30, 2013. DMRC currently runs the trains and claimed a turnaround in situation.

 

Tribunal verdict

  • The tribunal ordered DMRC to pay Rs 2,950 crore to DAMEPL as compensation along with interest.

  • The DMRC challenged the tribunal order in the Delhi High Court, and got relief from a divisional bench. Reliance infra later approached the Supreme Court.

 

Terminal clauses

  • DMRC has to pay to the concessionaire by way of termination payment an amount equal to 80% (eighty per cent) of the debt due (of the concessionaire).

  • The DMRC shall pay debt, 130% of the adjusted equity; and Depreciated Value of the Project Assets, if any, acquired and installed on the Project after the10th anniversary of the COD (commercial operations date, or date of opening).