The infrastructure arm of Gammon India, Gammon Infrastructure, and the National Highways Authority of India (NHAI) have agreed to terminate concession pacts for two road projects that have remained non-starters due to lack of land clearances despite two years since being awarded.
The two projects awarded to Gammon in 2012 include the Yamunanagar Panchkula project in Haryana and the Birmitrapur Barkote project in Orissa.
Gammon Infrastructure informed the BSE on Tuesday that the terminations were by mutual agreement between NHAI and the subsidiaries of the company incorporated for the projects.
The concession agreement on the four-laning of the UP/Haryana border Yamunanagar-Saha-Barwala- Panchkula section of 71.64 km to 179.249 km was signed in July 2012. The total cost of the Yamunanagar project was R1,375 crore, and the NHAI grant was to the tune of R279 crore.
The concession agreement for the rehabilitation and upgradation of the Birmitrapur-Barkote section of NH 23 (211.20 km to 336.81 km) was dated May 31, 2012. The total project was R1,000 crore and there was R311 crore of NHAI grant for the project.
According to a senior Gammon official, the company had achieved financial closure on both the projects. While the line of credit for the Yamunanagar Panchkula project was to the tune of R950 crore, for the Birmitrapur Barkote project it was R500 crore. However, nothing was withdrawn from these as the projects never took off.
“We realised that the time taken for land clearances was just too long. NHAI was also trying to get those clearances, but since nothing really was working out, we mutually decided to end the concession agreements,” said the official.
According to industry sources, these projects may come up for re-bidding at a later date. However, that would be some time away as NHAI may want to get substantial land clearances before it puts up these projects for bidding again.
Gammon Infrastructure Projects? share price closed up 1.59% at R7.65 on the BSE on Tuesday.
