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    HomeBusinessDelhi Metro invites bids from banks for ₹2,700-crore loan

    Delhi Metro invites bids from banks for ₹2,700-crore loan


    Money & Banking

    The money is being raised to settle arbitration award in favour of Reliance Infra unit DAMEPL

    Delhi Metro Rail Corporation has invited bids from 18 banks to raise a loan of ₹2,700 crore. The money will be used to settle dues owed to Reliance Infrastructure subsidiary DAMEPL. The Supreme Court upheld an arbitration award in favour of the Anil Ambani-backed infrastructure company in a case related to the Airport Metro Express Line project.

    DMRC has already paid ₹2,444.87 crore to DAMEPL, pursuant to court orders. DMRC had written to 18 banks to submit their bids by end of May, but the deadline to submit the bids was later extended to June 10.

    The DMRC letter has gone to SBI, Axis Bank, Bank of Baroda, Bank of India, Canara bank, HDFC, ICICI, Kotak, and PNB among others. .

    In 2008, an agreement was entered into between DMRC and Reliance Infra’s special purpose entity DAMEPL for design, installation, commissioning, operation and maintenance of Airport Metro Express Line. In 2012, DAMEPL complained of faulty design and quality in the installation of viaduct bearings. A notice was issued by DAMEPL asking DMRC to cure the defects in DMRC’s works within a period of 90 days from the date of the notice, failing which it shall be treated as a breach of the agreement. DAMEPL then issued a notice terminating the concession agreement as, according to it, the defects were not cured within a period of 90 days, resulting in an event of default under the concession agreement The dispute went into arbitration and the Supreme Court upheld an award in favour of DAMEPL.

    “Based on the Arbitral Award and the related SC judgments, the present incremental interest per day for the delay in payment to DAMEPL is ₹1.15 crores. DMRC has already incurred extra interest liability of more than ₹300 crore due to the delay in payment to DAMEPL,” said an industry source.

    Published on June 09, 2022

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