GMR's exit from Kishangarh-Udaipur-Ahmedabad highway project flouts norms: NHAI

NEW DELHI: The National Highways Authority of India (NHAI) has hit back at infrastructure major GMR on its termination notice for the country’s biggest highway project worth at least Rs 6,000 crore. The authority, in its reply to GMR, has said that the company did not give a 90-day cure period (to rectify and address the deficiencies), and how it is in violation of the norms laid down in the concession agreement.

The NHAI was to respond to the GMR notice to exit from the Kishangarh-Udaipur-Ahmedabad project by January 4. GMR has cited the NHAI’s failure to get an environmental clearance for the project and to notify the revised toll rate on this stretch being widened from four to six lanes.

“The notice served on us had several deficiencies, and we have spelt them out clearly. The revised toll notification has been done and the environment clearance will be obtained in the next few days,” said a senior NHAI official. Sources said that the toll notification was done after highways minister C P Joshi held ameeting on Monday and the ministry of environment and forest has been approached to convene a meeting of the Forest Advisory Committee to grant clearance.

The project has huge significance considering it being the country’s first mega highway project. In addition, if the contract gets cancelled, the NHAI would lose revenue of Rs 636 crore annually, which increases 5% every successive year. The authority’s own estimate shows the total revenue during the entire contract period would be at least Rs 9,000 crore at net present value.

Indications abound that in case GMR opts out, the NHAI would forfeit the company’s bank guarantee along with other harsh steps. “We don’t want this to be a precedent for other concessionaires who would cite a delay in environment clearance to exit from the project,” said a senior ministry official.

The NHAI seems to use this case to highlight laxity on the MoEFs’s part to grant such nods. NHAI chairman R P Singh wrote to MoEF secretary V Raja Gopalan on December 24, “Any delay on our part in giving green clearance can be construed as an indirect support to the contention of the concessionaire” while seeking a special FAC meeting.