 "Gurgaon e-way to be toll-free")
The Delhi-Gurgaon expressway issue has come to an end, with consensus between the National Highways Authority of India (NHAI), IDFC and DSC Limited on Monday, which would make the Delhi-Gurgaon commute toll-free.
The high court is likely to approve the consent agreement on Tuesday. According to the agreement, DSC Limited, major shareholder in the special purpose vehicle (SPV) formed to undertake the project, would meet any open-ended liabilities that could arise in the future, while IDFC would pay dues to the highways authority and the Delhi municipality.
“The agreement would be submitted to the court on Tuesday and all the concerns raised in the court last time are being agreed upon. The toll plaza, which provides entry to Gurgaon from Delhi, will be removed,” an NHAI official said. According to the consensus, DSC Limited would walk away from the project and withdraw all its claims. DSC Limited had claimed Rs 990 crore from NHAI.
Last week, there was a tiff between the lenders and concessionaire over the terms of liability payment, raising doubts on a speedy solution over ownership of the project. IDFC, the lead lender, had informed the court it was not willing to take over the project as DSC Limited had not agreed to bear liabilities that could arise in the future, which were not paid in the past.
The high court is likely to approve the consent agreement on Tuesday. According to the agreement, DSC Limited, major shareholder in the special purpose vehicle (SPV) formed to undertake the project, would meet any open-ended liabilities that could arise in the future, while IDFC would pay dues to the highways authority and the Delhi municipality.
“The agreement would be submitted to the court on Tuesday and all the concerns raised in the court last time are being agreed upon. The toll plaza, which provides entry to Gurgaon from Delhi, will be removed,” an NHAI official said. According to the consensus, DSC Limited would walk away from the project and withdraw all its claims. DSC Limited had claimed Rs 990 crore from NHAI.
Last week, there was a tiff between the lenders and concessionaire over the terms of liability payment, raising doubts on a speedy solution over ownership of the project. IDFC, the lead lender, had informed the court it was not willing to take over the project as DSC Limited had not agreed to bear liabilities that could arise in the future, which were not paid in the past.
NHAI had awarded the build-operate-transfer project to Jaypee DSC Ltd in 2002 but Jaypee Group exited in 2004. While the concession period started in January 2003, the project was completed in 2008 and the company (now called Delhi Gurgaon Super Connectivity Ltd) owns the rights to operate the expressway and collect toll till 2023.
DGSCL, an SPV set up to undertake the landmark project, was initially funded by a consortium led by Hudco, later replaced by SBI. The SPV then raised loans from IDFC and, in violation of its concession agreement, did not inform the government. The IDFC-led consortium has Punjab national Bank, Oriental Bank of Commerce and State Bank of Bikaner and Jaipur.
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If NHAI had terminated the project, these lenders would have had to incur a combined loss of Rs 1,400 crore, as the highways authority would refund only Rs 175-200 crore. This prompted IDFC to start negotiations with the government.
Close to 600 employees of the project are likely to lose their jobs; IDFC is set to retain only 400 of the existing 1,000. The expressway was the first project to be awarded on a premium by the government, in 2002. However, traffic congestion at the toll gates and allegations of financial mismanagement against DSC saw the case landing at the court. NHAI had sent a termination letter to the concessionaire in 2012 and maintained the lenders could take over the project if it removed the toll plaza.