"The proposal submitted by IDFC and DGSCL on January 10 is incomplete and does not incorporate all the necessary factors. In order for the settlement to go through, there is a need that IDFC and the concessionaire should confirm to the earlier proposal of May 2, 2013," senior counsel Sandeep Sethi, appearing on behalf of NHAI, told HC. The court on Monday asked the lenders to state their stand (with respect to NHAI's views) on January 27. When contacted, NHAI officials, however, said any proposal from the lender has to be discussed at its board and in the road transport and highways ministry before taking a final call.
If IDFC's May 2013 proposal gets accepted then all the legal and arbitration claims against the operator, Delhi-Gurgaon Super Connectivity, the lenders and highway authority raised against each other will be considered as fully and finally settled. As per the IDFC proposal, the toll plazas at 24km and 42 km will continue to operate and a new plaza, at 61 km, will give a right to the new operator to collect the toll at escalated prices based on the wholesale price index every year with effect from April 1 each year, starting this April.
Also, NHAI will have to adjust the toll rates for the current fiscal to the escrow account, which has been due since the last two years, leading to commuters paying a fresh toll at 61 km as per the current rate structure.
The lenders will also have to appoint a new operator to run the operations and management of the toll plaza, substituting DGSCL with the consent of the highway ministry and the NHAI board.
IDFC had also said that NHAI's liability would remain unchanged and would not be increased in any manner.
On January 10, the lenders consortium led by IDFC and the developer expressed their intention to exit the project and hand over the toll plaza to the government.
The dispute between NHAI, highway operator and the lenders has been going on for almost two years, where DGSCL had earlier placed claims of Rs 988 crore related to the project work, which it has now agreed to let go of. IDFC has now requested for more time to get all the other lenders on board to take the settlement procedure forward. It is also understood that the government will now assess its risk, outgo and the necessary amendments to be made in the concession agreement before deciding whether to give its nod.
In case the substitution happens, then the new operator will take over the project, along with all the other concessions and liabilities with respect to NHAI and the lenders, except the dues arising prior to the appointment of IDFC consortium as a receiver of the project. The understanding between DGSCL and IDFC comes at a time when both NHAI and the highway ministry have refused to entertain any charges being raised by the developer and lenders.
Alleging that the consortium of nine banks led by IDFC had refinanced the project without getting mandatory approval from NHAI, the authorities have termed this as financial fraud and have also refused to recognise them as lenders.
If the court upholds this stand, lenders may end up taking a hit of around Rs 1,400 crore.
NHAI, which had in January last year, backed a proposal to allow IDFC to buy out 74% of the projects equity. IDFC was to take on the projects entire debt and buy 74% of DS Constructions equity for a Re 1 token. It has taken a U-turn and said it does not even recognise IDFC as a bona fide lender to the project. So, if the authority now agrees to the lender substituting the developer, it would amount to significant softening of stance. The other four in the lenders consortium are Bank of India, PNB, OBC and State Bank of Bikaner and Jaipur.Once the court accepts the settlement of both the lenders and developers, road transport minister Oscar Fernandes will have to give his final consent to decide the fate of the project.