In a strong criticism of NHAI giving undue benefits to Reliance Infra for six-laning of a national highway...
In a strong criticism of NHAI giving undue benefits to Reliance Infra for six-laning of a national highway, CAG today said the company diverted toll money to a Reliance mutual fund and an important clause in the concession agreement was deleted.
Anil Ambani-led Reliance Infra has formed a special purpose vehicle in the name of DA Toll Road Private Ltd for six-laning of Delhi-Agra highway in 2010 and began collecting toll from October 16, 2012.
“In this project, clause available in other six-laning CA’s (Concession Agreement’s) for withholding the toll collection in case of failure to achieve milestones, was deleted from the agreement.
“By the end of August 2013, the concessionaire had collected toll amounting to Rs 120 crore and utilised an amount of Rs 78.32 crore in investment in liquid funds,” it said.
CAG tabled its audit report on ‘Implementation of Public Private Partnership (PPP) Projects In National Highways Authority Of India (NHAI)’ in the Parliament today.
Pulling up the the road sector regulator, CAG said its action to fix toll collection day even though environment clearance as well as no-objection from the Pollution Control Board was pending ‘premature’.
In a reaction to the report, Reliance Infra in a statement said: “The allegations made in the CAG report are completely baseless and devoid of any facts. We have not violated any law/concession agreements. All investments and expenses are made in full compliance of the agreements signed with NHAI and lenders.
As per the concession agreement clause, the toll collected from the day of default to achieve the milestones should be withheld in an escrow account and transfer of funds from such account should only be used for project related works.
A part of the toll collected was invested in Reliance liquid funds during October 16, 2012 to February 21, 2013 and April 1, 2013 to May 31, 2013.
“Concessionaire collected toll of Rs 120 crore till end of August 2013 and has been utilising the same for its ancillary objects rather than focusing of project construction,” said the report.
Reliance Infra said the amounts invested in liquid mutual funds at any given point of time were Rs 3 to 5 crore, and not the inflated figures alleged in the CAG report.
It does not represent any “diversion” of funds, as the MF accounts were of the SPVs themselves, the company added.