Six months after the National Highways Authority of India (NHAI) announced that IDFC Ltd would buy out a 74% stake in the Delhi-Gurgaon expressway from the concessionaire DSC, the deal has come unstuck. In January, the NHAI board had approved a proposal allowing IDFC to pick up the stake. However, sources said IDFC has now lost interest in owning the expressway, in which it was to buy a controlling stake by taking on the debt of Rs 1,600 crore for a token Re 1. At one point, IDFC had wanted to buy out the project completely but the laws prevented it from doing so.
Given how NHAI was dissatisfied with the way in which the expressway was being operated and the disagreements that it had with the concessionaire, the change of ownership was seen as a solution to the problem. IDFC, also the lead lender in the consortium to the Delhi-Gurgaon Expressway, was hoping to run the project more efficiently with the day-to-day expressway management handed over to Feedback Brisa Highways OMT, a 60:40 JV between Feedback Infra and Brisa. IDFC owns 24% stake in Feedback Infra.
Other lenders in the consortium are Punjab National Bank and Oriental Bank of Commerce.
Meanwhile, problems between NHAI and the concessionaire remain unresolved with NHAI dissatisfied with at some aspects of the construction and the manner in which toll receipts were being collected by the developer; on March 8, NHAI served a termination notice to DSC. A notice was served
in February 2012, when NHAI accused the developer of being operationally incompetent and of raising loans to the tune of Rs 1,275 crore from IDFC without prior approval. Subsequently, DSC had moved the Delhi High Court challenging the NHAI move.
A court-initiated settlement was reached in which DSC was required to construct more toll plazas along the expressway to ease traffic. NHAI, however, remains dissatisfied with developer’s performance, especially on easing congestion. The next hearing is scheduled for August 22.