IL&FS to operate Gurgaon Metro till September 17

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The Gurgaon Metro will be operated and maintained by IL&FS till September 17 midnight as a licensee, while its operational cost will be borne by the Haryana Urban Development Authority (HUDA), the Punjab and Haryana High Court ruled on Monday. The Gurgaon Metro is India’s first fully privately-developed project which was built by IL&FS.

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  • The court also set September 17 as the next date of hearing in the matter related to the termination of the service contract between HUDA and Rapid Metro Rail Gurgaon Limited (RMGL) and Rapid Metro Rail Gurgaon South Limited (RMGSL), the two SPVs floated by the IL&FS.
  • IL&FS is now facing bankruptcy proceedings in the National Company Law Appellate Tribunal, putting the rail service at risk of closure.
  • The high court said in its order, till the next date of hearing on September 17, the respondent (RMGL) shall operate and manage the Rapid Metro Rail at Gurgaon on both the lines but subject to reimbursement of the insurance and operation and maintenance cost by the petitioners (HUDA) of this period.
  • RMGL would not act as a concessionaire and would rather act as an agent, even as the counsel for HUDA submitted that the respondent can act as a licensee, the court also stated.
  • The order said that the parties have also agreed to a termination of contract payment of at least 80% to be given to RMGL/RMGSL by HUDA.
  • As per the sources, this would amount to nearly Rs. 1,800 crore in payment to IL&FS.
  • The court said it has found that the dispute between the parties may be resolved by negotiation for which they both would require some time and, accordingly, it deferred the hearing of the to September 17.
  • The two parties also agreed to a time-bound handover of the project by IL&FS to HUDA, with the court seeking detailed modalities of how the transfer would work out between them.
  • The development came after the expiry of the 90-day termination notice served by RMGL and RMGSL to HUDA on June 7, which came to end on September 7.
  • HUDA had moved the high court on September 6 challenging the validity of the termination notice and sought courts directions on continuity of the public utility by these two SPVs operating the metro link.
  • The RMGL and RMGSL had on Friday last got approval from Justice (retd) D K Jain, appointed by the NCLAT to oversee IL&FS resolution process, to transfer the Gurgaon Metro Link to HUDA on September 9.

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