Lenders consider action against Delhi’s Airport Express metro

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By Remya Nair  http://www.livemint.com

New Delhi: With the deadlock over the Airport Express metro project in the capital threatening to become a problem of bad debt for the lenders, a consortium of lenders is considering action against the concessionaire—Delhi Airport Metro Express Pvt. Ltd(DAMEPL), a subsidiary of Reliance Infrastructure Ltd—for recovery of the dues.

The consortium has a total exposure of Rs.1,800 crore to the Airport Express metro project.
“We have reviewed the account. It is heading towards a critical account. For the last two months, there are overdues in the account,” said Harsh Kumar Bhanwala, the officiating chairman and managing director of India Infrastructure Finance Co. Ltd (IIFCL), whose UK subsidiary is a lender to the project.
“Technically, the concessionaire is still Reliance. They have themselves given a unilateral notice of termination. Legally, they have not been absolved by DMRC (Delhi Metro Rail Corp.). There is no change in the concessionaire as of now,” he said.
Anuj Dayal, DMRC spokesperson, agreed that the termination notice issued by Reliance Infrastructure, part of Anil Ambani’s Reliance Group, was unilateral. “The termination notice is under arbitration and we are running the line only in public interest,” he said over the phone.
A DAMEPL spokesperson said DMRC had taken over the entire project with effect from 1 July, including all existing contracts and employees from DAMEPL.
“Accordingly, there is no liability on DAMEPL to make any further repayment to the lenders. Instead, as per the terms of the agreement, and as legally advised, all liabilities to lenders are now to be repaid by DMRC,” the spokesperson said in an email.
An Axis Bank spokesperson refused to comment because they are in a silent period before announcement of results.

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