IL&FS arm's Gurgaon metro contract stands terminated from 9 September

Topics IL&FS | Gurgaon metro

Rapid Metro Rail Gurgaon’s contract for running Metro services stands terminated from Monday. The unit of troubled IL&FS would, however, continue to operate and manage the mass rapid transit network in Gurgaon with the Haryana Mass Rapid Transport Corporation Ltd. reimbursing insurance, operation and maintenance cost under a court directive.

Till the next date of hearing (September 17), the company would operate and manage the Rapid Metro Rail at Gurugram on both the lines, but subject to reimbursement of the insurance and operation and maintenance cost for this period by the petitioners, Punjab & Haryana High Court said on Monday. 

The senior counsel for Rapid Metro submitted during the hearing that with the termination of the contract with effect from September 9, 2019, the respondent would not act “as a concessionaire rather would act as an agent”. The court, however, held the question as to whether the respondent would act for the purpose of operation and management till midnight of September 17 as a licensee or an agent would be decided on the next date of hearing.

Rapid MetroRail Gurgaon Limited (RMGL) and Rapid MetroRail Gurgaon South Limited (RMGSL) are the two SPVs running the Gurgaon Metro Rail Project since 2013 and 2017, respectively.

Due to various alleged breaches in contract by HUDA, the two SPVs served termination notices to HUDA (Haryana Urban Development Authority) on June 7, 2019, giving a 90-day notice according to the concession agreement.

Both the contracts executed for the two lines have been terminated by both the parties on August 26 and the RMGSL by giving 90 day notice with effect from June 7 which came to an end on Monday. The operations are continuing under the orders of the court. 

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