After two years of legal battle between the National Highways Authority of India (NHAI) and the gurgaon toll plaza developer --Delhi Gurgaon Super Connectivity Ltd (DGSCL), the government is likely to have a peaceful termination of the concession, which will give the rights of substitution to NHAI. According to sources, it was late on Friday when the lenders IDFC, concessionaire - DGSCL and the highway authority had a discussion where the latter two agreed to hand over the toll plaza to the government.
"Both IDFC and DGSCL have written to the ministry and the NHAI that they are ready to terminate the contract and give away the claims of termination, which according to them to are to the tune of over Rs 900 crores," the source said.
DGSCL and IDFC will now submit a similar declaration in the Delhi High Court on Monday as well, sources added.
However, will it be a smooth ride for the commuters at the Gurgaon border, it is still a far fetched dream. Once the court accepts the self declaration of both the lenders and the developers, highway minister Oscar Fernandes will have to give his final consent to decide the fate of the project.
As per the plan of NHAI, they would remove the toll plaza at Delhi-Gurgaon border and have only one toll gate at Kherki Dhaula for the passengers crossing NH-8.
With DGSCL agreeing to exit the expressway project, lenders led by IDFC will now set up a new company to operate the 28-km expressway which sees nearly two lakh vehicles cross the congested toll gate at the entrance of Gurgaon every day. During peak hours, cars constitute 72% of the traffic and even during the wait time if invariably over five minutes.
As per the estimates, senior officials see that once the toll collection from Kherki Dhaula start it would be enough to service the loan of Rs 1,600 crore that lenders have extended to DGSCL. Once the main toll plaza is removed traffic passing through the Kherki Dhaula toll plaza will have to pay the user charge for the entire stretch.
But a detailed plan to keep in consideration the rights of the lenders, public convenience and the governments rights will be chalked out later, the source said.
Experts say that once the termination takes place, a lot of litigation matters will be withdrawn and only then a solution is likely.
Spokespersons for the highway operator refused to comment on the issue.
The dispute between NHAI, the highway operator and the lenders has been going for over close to two years including several rounds of termination and show cause notices being sent to the developer and the lenders.
DGSCL had earlier placed claims of Rs 988 crore related to the project work, which the government till now has not agreed to.
The understanding between and DGSCL and IDFC comes at a time when both NHAI and highways ministry have refused to entertain any charges being raised by the developer and the lenders. Alleging that the consortium of nine banks led by IDFC had refinanced the project without getting mandatory approval from NHAI, the authorities have termed this as a financial fraud and have also refused to recognize them as lenders. If the court upholds this stand, lenders may end up taking a hit of around Rs 1,400 crore.
Fe was the first to report that the IDFC-led consortium’s to the Delhi-Gurgaon expressway project may land up in jeopardy as its loan agreement does not allow it to substitute DS Construction.
IDFC had sought an approval from NHAI to buy out 74% of the project’s equity — IDFC was to take on the project’s entire debt and buy 74% of DS Construction’s equity for a token R1 in January 2013.
The project has an interesting history, with an initial loan of R383 crore given by a Hudco-led consortium. In January 2009, however, DS Construction had approached NHAI to substitute this consortium with one led by SBI — the loan component was then raised to R1,275 crore. NHAI’s consent was required, since under such concessions, NHAI agrees to pay most of the debt in case a project is terminated.