Lenders, led by Punjab National Bank (PNB), are in talks with bidders to replace a special purpose vehicle (SPV) promoted by Gammon Infrastructure Projects as the concessionaire of a road project in Madhya Pradesh, sources privy to the matter said. The SPV operating the project is called Sidhi-Singrauli Road Projects and it owes its lenders Rs 564 crore.
“The last date for sending in a bid for the project has been extended to June 14 from June 7. We are talking to two-three interested parties,” one of the people said.
The concession agreement was signed between Sidhi-Singrauli Road Projects, the Madhya Pradesh Road Development Corporation (MPRDC) and the lenders on May 14, 2012. “The concessionaire has failed to fulfil its obligations as per the terms of financing agreements and the senior lenders, in exercise of their rights under the Substitution Agreement executed among the authority, concessionaire and lenders’ representative, have decided to carry out the bidding process for selection of a private entity to substitute the concessionaire,” Resurgent India, which is managing the process of substitution, said in a bid document. Apart from PNB, other lenders to the road project are Allahabad Bank and India Infrastructure Finance Company.
The total project cost envisaged at financial closure stands at `1,094 crore, up 25% from the project cost of Rs 871 crore as per the request for quote (RFQ) floated by the MPRDC. As per the agreement, the concession period is 30 years from the appointed date of September 19, 2013.
“The scope of work will broadly include completion of the balance works related to the construction of the project highway on the site set forth in the concession agreement and its schedules and the operation and maintenance thereof,” lenders said in the bid document.