The Delhi Metro Rail Corporation (DMRC) has sought a sum of Rs 3,500 crore from the Government of India in the form of grant/equity interest-free subordinate debt to comply with High Court directions in the case of Delhi Airport Metro Express Pvt. Ltd (DAMEPL).
In a letter dated September 6, 2022, Vikas Kumar, Managing Director, DMRC wrote to the Secretary, Ministry of Housing and Urban Affairs stating that the total amount due under the Award was Rs 7,010 crore and that GoI should grant Rs 3,500 crore to DMRC to satisfy the Award and that DMRC would ask for an identical amount from the GoNCTD.
After DMRC’s Special Leave Petition against the Delhi High Court order dated March 10, 2022 was dismissed on September 5, 2022, DMRC changed track and now suggested that it cannot sustain a debt of Rs 4,500 crore to satisfy the Award and hence needed to receive funds from its shareholders namely GoI and GoNCTD in equal proportion to satisfy the Award.
DMRC’s Board Meeting held on September 21, 2022 discussed the issue and came to the view that DMRC would ask for funds from both shareholders.
DMRC has tried to drag on the execution proceedings indefinitely by trying to suggest different methods to comply with the Award.
Initially, in December 2021, DMRC tried to suggest that it was willing to take over the debt of DAMEPL as well as its promoter company (R-Infra) for an amount equivalent to that payable under the Award. When DAMEPL agreed, DMRC backed out saying that it cannot take over the debt of R-Infra.
DMRC wrote to MoHUA on April 24, 2022 stating that DMRC was to pay the remaining amount (of Rs 2,613 crore, as per DMRC’s calculations) to DAMEPL in two installments by April 30, 2022 and May 31, 2022 respectively, as per the Delhi High Court order dated March 10, 2022.
Accordingly, DMRC requested GoI to grant a sum of Rs 1,350 crore, and DMRC sought an identical sum from GoNCTD. Strangely, the letter was withdrawn by DMRC through another letter dated April 25, 2022 for review of the numbers.
Later, in May 2022, DMRC proposed that it was raising a bank loan of Rs 2,700 crore to satisfy the Award, though the outstanding amount was approx. Rs 4,600 crore. DMRC also wrote to MoHUA on May 18, 2022 seeking a sovereign guarantee of Rs 2,700 crore for securing the loan.
DMRC did not pursue this thereafter and reminded MoHUA only on September 1, 2022 about the sovereign guarantee only to get an interim response from MoHUA on September 5, 2022 (the next hearing in the Delhi High Court was due on September 6, 2022) that it was examining the request.
The continued non-compliance of DMRC clearly shows that it is not worried about the high interest of SBI PLR+2 per cent (which is 15.45 per cent at present) which DMRC is liable to pay under the award, which has been upheld by the Supreme Court.
Ironically, DMRC has been stating in its affidavits before the Delhi High Court that it is negotiating with banks to reduce the interest from 7.50 per cent to around 6.85 per cent, on the Rs 2,700 crores loan it was seeking from the banks. In fact, DMRC has incurred an extra amount of interest amounting to Rs 453 crore, from 10.09.2021 till 04.10.2022, just because of the delay in making payment to DAMEPL so far.