Road Ministry to approach CoS on GMR highway project in 2 weeks

June 19, 2013

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By PTI

NEW DELHI: The Road Transport Ministry will approach the Committee of Secretaries for an amicable way out for the Kishangarh-Ahmedabad Highway project which is stalled after GMR’s exit.GMR Infrastructure BSE 0.50 % early this year had walked out of the project citing difficulties in taking up the project due to regulatory hurdles, including delays in environment clearance and land acquisition.

According to sources, GMR Infrastructure was ready to restart the project with some preconditions, including making piece-meal payments.

The Law Ministry, however, had already rejected the developer’s preconditions, including piece-meal payments, for resuming work on the project.

“We are going to the Committee of Secretaries (CoS) on the matter,” Road Secretary Vijar Chibber told reporters here. He said the meeting of CoS may take place in the next 10-15 days. The CoS is headed by Cabinet Secretary Ajit Kumar Seth.

The company has also said it would pay about 50 per cent of the amount to restart the work on project at present and pay the remaining sum including interest in subsequent years.

The Ministry and the company are already in discussions to rescue the project.

Sources added that the proposal from the Ministry is to ask the company to make requisite payments in time and to seek its guarantee to ensure that the project is not abandoned mid-way, leading to financial burden falling on government.

The project is estimated to have required an investment of Rs 5,387 crore. The Bangalore-based group had won the project in western India through international competitive bidding in September 2011 at Rs 636 crore annual premium for 26 years.

NHAI had said that the company exited the project on account of financial hurdles in arranging finance for the project and not due to lack of regulatory clearances.

It is to be implemented through the Public Private Partnership (PPP) model on Design, Build, Finance, Operate and Transfer basis.

Source-http://economictimes.indiatimes.com