GMR takes U-turn on abandoned project, asks for lenient norms

GMR Infrastructure has done a volte-face.

GMR Infrastructure has done a volte-face. The company, which walked out of the 555-km Kishangarh-Udaipur-Ahmedabad highway citing the National Highways Authority of India?s (NHAI) failure to comply with the concession agreement, has now written to the Prime Minister’s Office, saying it would consider taking up the project if the conditions are relaxed.

GMR said it would stick to the clause in the original agreement ? terminated by the company on January 8 ? mandating it to pay NHAI over R9,000 crore on a net present value basis over a period of 26 years, but sought a reduction in the annual premium amounts for the initial few years. This, the company said, would ease financial pressure on it.

However, the proposal might not find favour with the NHAI and the ministry of roads, transport and highways as sources in that ministry say that any revision of the agreement, as sought by GMR, could open a Pandora’s box as other concessionaires might start asking for similar relief. Also, the funds that are raised by NHAI through premium are cyclically preplanned for the funding of the national highways development programme and any change in the receivables will hamper the NHDP plan.

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They added that any change like this would have to come from the ?topmost authority? if at all they would. They further said a cabinet approval would also be needed to get GMR back in the project with the revision of the conditions sought by it as legal issues are involved.

The company had won the project in September, 2011, through the international competitive bidding route. It was to be implemented through the public private partnership (PPP) model on the Design, Build, Finance, Operate and Transfer basis.

GMR had terminated the project citing delays in getting clearances. Apart from failing to obtain environmental clearance for a part of the project, GMR had also said that NHAI did not notify toll rates for the highway, which was leading to delays.

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First published on: 07-03-2013 at 02:32 IST