The National Highways Authority of India (NHAI) board has cleared the IDFCís proposal for a 74 per cent takeover in Delhi-Gurgaon Super Connectivity (DGSCL), the company that built and operates the Delhi-Gurgaon expressway project.
An NHAI board member confirmed that the board has cleared the proposal for a 74 per cent takeover by IDFC, while DGSCL would retain 24.8 per cent and the rest 1.2 per cent would be with Jaypee.
The expressway had been in news for bad traffic management at the 32-lane toll plaza causing long waiting hours for consumers.
With the takeover by IDFC, the problems of commuters is expected to improve, as the company has announced the outsourcing of operations and maintenance of the project.
Under the deal, IDFC will pay Re 1 for all the shares of the concessionaire of the Delhi-Gurgaon expressway, and take over the entire Rs 1,600 crore debt of the company and will get the rights to collect toll until 2023 to recoup the funds.
IDFC is the lead lender to the project followed by two public sector undertaking banks that include Punjab National Bank and Bank of India.
The stake sale is according to the model concession agreement (MCA) that governs a public-private partnership project.
The MCA says that the contractor can reduce its share from 100 per cent to 26 per cent in two years after toll collection starts and it has to report to NHAI in case of any change in the shareholding pattern.
DGSCL has been blamed for the bad traffic management at the Gurgaon expressway. The mismanagement forced NHAI to send a termination notice in February last year to the concessionaire for violating the terms of agreement, and failing to improve services at the 32-lane toll plaza.
The notice was challenged by DGSCL in the Delhi High Court, which stayed the termination order and directed both the parties to resolve the dispute amicably, which was done.
The project then faced the Punjab and Haryana High Courtís ire in September, which restrained toll tax collection on the Delhi-Gurgaon expressway for the next 15 days, saying the concessionaire had failed to avoid chaos and free flow of traffic on the highway.
The court, on August 16, had asked the company to put additional collection windows and deploy personnel with hand held collection machines for the smooth flow of traffic.