Although the lenders of the Airport Express line are pushing for an early debt recovery of about Rs 2,000 crore (Rs 20 billion), the Delhi Metro Rail Corporation and Reliance Infrastructure’s Delhi Airport Metro Express Pvt Ltd are in no mood to pay off the debt any time soon.
A consortium of 10 banks, led by Axis Bank, funded the Delhi Airport Express line.
DAMEPL, in its earlier statement, had denied owing any further debt service payments to the lenders.
Senior DMRC officials argued that they were not liable to pay the debt now, as the matter was under arbitration.
“The debt is payable only when the concession agreement is terminated.
"Although DAMEPL has said the agreement is terminated, we are legally contesting that termination,” said a director on the DMRC board.
Lenders have written a letter to DMRC, which senior executives claimed did not constitute as a legal notice.
“Although DMRC will end up paying 80 per cent of the debt, even if the agreement is terminated on the fault of the concessionaire, the liability arises only when the agreement is terminated,” said a DMRC executive who did not want to be named.
The concession agreement that governs the airport line has a clause which puts the debt liability burden on DMRC to give greater protection to the lenders.
Similarly, DAMEPL last Monday issued a statement, saying that upon termination of the concession agreement, and taking over of the operations of DMRC, “DAMEPL’s obligations towards the project have ceased to exist, as DAMEPL is no longer the concessionaire of the Airport Metro”.
The company also said it had made all service payments to the lenders.
The official statement further accused DMRC of blatantly violating the terms of the agreement by not depositing revenues in designated escrow account.
Earlier, the Ministry of Urban Development and lenders were in talks, as the government wanted the lenders to agree on another concessionaire.
Lenders had said they were not interested to be associated with the project any longer.
Also, the debt payment has been a bone of contention between DMRC and the ministry.
As Business Standard had reported earlier, MoUD had earlier asked DMRC to raise debt money through alternative source of funding like market borrowing or by real estate development, but DMRC had dismissed the suggestion, arguing that it was merely running the line “in the public interest” and was not liable to pay any debt.
Senior officials at DMRC pointed out that the project would not generate any further market interest because of the operational losses involved in running the line.
The current operational losses stand at about Rs 4 crore (Rs 40 million) a month.
The total debt in the project stands at about Rs 2,800 crore. The line was built at a cost of Rs 5,800 crore (Rs 58 billion).
The ‘sub-ordinate debt’ raised from other lenders stands at about Rs 800 crore (Rs 8 billion), which DMRC claimed that it was not liable to pay.
The subordinate debt had allegedly been raised by diluting the equity, which was supposed to be 30 per cent in the project.
- Rs 5,800 crore
Total cost of the Airport Express line
(50-50 partnership of Delhi Metro Rail Corporation and Delhi Airport Metro Express Pvt Ltd
DMRC built the civil structures, DAMEPL responsible for operations
Equity-to-debt ratio to be maintained
- Rs 2,000 cr
- Rs 800 cr
Subordinate debt from other lenders
- Rs 100,000 Equity
Lenders (consortium of 10 banks): Led by Axis Bank, others include Punjab National Bank, Central Bank of India, Dena Bank and Canara Bank