Reliance Infra-led Delhi Airport Metro Express has been suffering loses as it was not able to reach its intended targets in terms of profit and ridership
New Delhi: Reliance Infrastructure-led Delhi Airport Metro Express will close down from Sunday for an unspecified period apparently due to technical problems and financial losses, a move that would affects hundreds of passengers who were relying on this corridor to reach the airport without any hassles, reports PTI.
The country's first Public-Private-Partnership Metro project has had a tumultuous journey in the past 16 months after it first began operations in February 2011.
"The Delhi Metro has received a communication from the concessionaire this evening that they intend to stop services from Sunday," Delhi Metro spokesman Anuj Dayal said.
However, he did not give any reason why the Reliance Infrastructure took the extreme step of closing down the Metro services for an unspecified period.
The Reliance Infra-led company has been suffering loses as it was not able to reach its intended targets in terms of profit and ridership. However, there was no word from the concessionaire.
Efforts made by PTI to reach Reliance Infra officials failed. It is understood that the company would come out with a public notice on Saturday, specifying reasons for its step.
Dayal said the Delhi Metro would be asking them to intimate the date by which they would be resuming services after carrying out the rectifications required on the line.
The Line has also been encountering several technical problems and was not able to run trains at the promised speed of 120 kmph. While it was run at 105 kmph in the beginning, the speed was brought down to 90 kmph due to some technical issues a few months back.
The high-speed Metro corridor, the country's first Public-Private-Partnership Metro network, connects the city centre of Connaught Place with the swanky Terminal-3 of the Indira Gandhi International Airport in just 18 minutes.
The Airport Express Metro currently has a ridership of over 15,000 passengers a day and is popular among thousands of fliers who used the Metro to reach the airport and nearby areas without any hassles.
Ever since the Airport Metro was opened to public, the Delhi Metro has been very vocal in criticising it and its former chief E Sreedharan had once even threatened to take over the Line if the Reliance Infra did not improve on a number of aspects within a limited period.
The Airport Metro was not able to attract the number of commuters it intended to in the past one year and thus suffered losses.
During an interaction with media in May, Delhi Metro chief Mangu Singh said the Delhi Metro was not happy with the performance of the Airport Express as it feels that the network is being run in a "commercial manner".
"Yes, there are many shortcomings and they are not up to our expectations and there is no doubt about that. But there is recession and their business model is really not working," he had said.
The Airport Express Corridor, that connects New Delhi with the IGI Airport, is mainly based on property development, real estate and retail.
A close below 5,290 followed by a break of 5,265 during the week will be bearish
The Indian stock market closed with modest gains, mainly supported by domestic triggers and global cues. While factory output and the services sector showed a positive outcome in June, India's exports for May declined by 4.16%, year-on-year. Reforms aimed at boosting foreign investment, announced on Friday, lifted the Nifty to its best close since 19th April. All eyes will now be on the key economic indicators like industrial output numbers and inflation data as well as the quarterly earnings season, which kicks off next week.
The Sensex closed the week at 17,521, up 91 points (0.52%) and the Nifty gained 38 points (0.72%) at 5,317. A close below 5,290 followed by a break of 5,265 during the week will make the market bearish; else we may see the upmove going up to the level of 5,450.
The range-bound market closed lower on Monday as fall in exports for the month of May offset the rise in June manufacturing output. While the market opened on supportive global cues on Tuesday, selling in FMCG and IT stocks capped gains. The indices settled with marginal gains on Wednesday on reports of the expansion of the country's services sector in June.
The government's moves aimed at boosting foreign investment lifted the market half a percent higher on Thursday. However, cautiousness ahead of the earnings season saw the Sensex and Nifty closing marginally lower on Friday.
During the week, sectoral indices like BSE Realty jumped 5% and BSE Consumer Durables climbed 4% while BSE IT and BSE Fast Moving Consumer Goods settled 2% lower.
The top gainers among Sensex stocks were Bharti Airtel, Sterlite Industries (up 5% each), HDFC, Maruti Suzuki and ICICI Bank (up 4% each). The key losers on the index were Jindal Steel & Power, Hero MotoCorp (down 3% each), TCS, ITC and Infosys (down 2% each).
DLF (up 6%), Bharti Airtel, Jaiprakash Associates, HDFC and Sterlite Ind (up 5% each) were the top performers on the Nifty. Asian Paints (down 4%), Jindal Steel & Power, Hero MotoCorp, Infosys and ITC (down 3% each) settled at the bottom of the index.
The HSBC India Manufacturing Purchasing Managers' Index (PMI)-a measure of factory production-improved slightly to 55 in June 2012, from 54.8 in May 2012. The June data also signals continued inflationary pressures in India's manufacturing sector as input and output prices rose at a faster pace than in May, keeping inflation high by historical standards.
India's exports declined by 4.16% year-on-year in May 2012 to $25.68.billion, mainly due to demand slowdown in the western markets. Imports too dipped by (-)7.36% in May to $41.94 billion, leaving a trade deficit of $16.26 billion.
The HSBC India Services Purchasing Managers Index (PMI)-an index of Indian services sector activity-rose to 55.7 in June, slightly up from 55.3 in May-registering the fastest expansion of output in four months. The index has moved up for eight months in a row.
Mauritius foreign ministry officials on Thursday said that the Indian government will not take any steps which would hinder Mauritius economic interests. This apart, the finance ministry is working on a proposal to reduce the incidence of withholding tax on external commercial borrowings (ECB) to encourage Indian companies to raise funds from overseas markets.
Earlier this week, Australian brokerage house Macquarie downgraded the Indian IT and financial sector stocks to 'underweight' from 'overweight' due to weaker growth prospects. The move is a bit surprising considering that the better-run IT companies, which leveraged on offering low-cost solutions was once considered a sunrise sector. The brokerage house also reduced financials sector to underweight as it feels that restructuring of assets is likely to continue and may peak only after six months.
On the global front, the US economy created just 80,000 jobs in June while the unemployment rate was unchanged at 8.2%, reflecting continued slow growth in the economy. Corporate earnings and the developments in Europe will be keenly watched by investors in the coming week.
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