Construction had approached NHAI to substitute this consortium with one led by SBI — the loan component was then raised to R1,275 crore. NHAI’s consent was required, since under such concessions, NHAI agrees to pay most of the debt in case a project is terminated. Later, DSC took a R1,600-crore loan from the IDFC-led consortium, without the NHAI's consent.
Chhibber stated: “Increasing or imposing financial liability and/or obligations on NHAI with respect to termination payments, insufficient operation and management funds, etc, in the case of this project has put it to jeopardy, leading to termination. Further inflated project/ cost/claims of EPC contractor, diversion of project funds to parent company in form of loan/ICD, and IDFC's questions of the limited financial liability of NHAI in the absence of its knowledge that the change of lenders is not the prerogative of NHAI is also answered in a detailed submission of views to the PMO by the road ministry.”
On the point raised by Lall on the risk to the exposure of PSU banks and the adverse impact on infrastructure financing by banks and financial institutions, the ministry has stated that though it does not want that to happen, after the failure of an MoU signed in 2011 and the backtracking of IDFC to buy out the project, the ministry is left with no other option.
Reaching out to PMO was IDFC's last-ditch effort to save the consortium from a loss of around R1,400 crore. IDFC contends that since NHAI and the road ministry have rejected all their applications for the negotiation on termination, it had no option but to go to the PMO.
The Delhi High Court is slated to hear the NHAI-DSC-IDFC case on Wednesday.