With the National Highways Authority of India and IDFC, the lead lender to the Delhi Gurgaon Expressway, agreeing to remove one of the three toll plazas on the expressway, the project looks like it could get revived and, more important from the point of view of future financing of infrastructure projects in the country, IDFC will not lose the money it has lent. The project, as is well known, had run into trouble on two counts. One, the huge delays, sometimes stretching to over two hours, on the expressway had commuters up in arms. Two, NHAI, which had given the project on concession to the DS Construction Group, refused to accept IDFC as a bona fide lender, arguing the latter had never sought its approval for lending to DS and, in any case, it had lent too much. In the event, with the project certain to be terminated for the hardships it was causing commuters, IDFC would have lost all the money it had invested?even appeals to the Prime Minister?s Office didn?t help IDFC as NHAI stuck to its stand that IDFC was not a recognised lender.
While neither side has, as yet, climbed down from its stance, agreeing to remove the Ambience Mall toll plaza means there will no longer be long queues at the plaza, taking away the need to terminate the concession. The SPV that runs the expressway can now, presumably, hire another operator to run the expressway. The exact losses due to the arrangement are difficult to quantify at the moment though estimates are that of the 60 lakh passenger car units that use the expressway every day, around a third will get tolled at the plaza after Gurgaon? s city limits, at Khet ki Daula. In which case, one way to make good the losses of the project is to hike tolls at this plaza and/or simply extend the period of the concession?now that the
immediate crisis has been staved off, these details can be worked out. The way traffic is increasing, though, it is not certain how many years this will buy NHAI. While the six-laning of the old
Delhi-Gurgaon road will certainly help take some of the traffic once it is complete, at some point, NHAI will have to look at the possibility of making other additions to the Delhi-Gurgaon expressway.
In the meanwhile, the Cabinet needs to take a call on the rights of lenders and whether NHAI needs to be endorsing each and every change in lenders to a project. As long as new lenders to the project are not asking for new securities?NHAI has a fixed amount of money to be paid in case a project is terminated?it seems unnecessary that NHAI has to recognise new lenders each time a loan is rolled over. NHAI?s only concern should be to ensure its standards of operation are strictly adhered to.
