Haryana’s law department has advised the state government against acquiring the toll plaza rights of the Delhi-Gurgaon toll project by invoking political force majeure clause, citing a pending litigation in the Delhi high court and huge financial implications.
Political force majeure means an event involving risks which generally relate to changes in the political environment (embargoes, riots, insurrection, blockade, terrorist actions and war) or legal environment (changes in law or licences, permits and consents necessary for the project).
For exploring the option of acquiring the toll plaza by invoking the political force majeure clause, the government had sought advice from the law department. The law department wrote the clause that provides that expropriation of compulsory acquisition of any project assets or rights of the concessionaire could be made by any government agency, including the Haryana government.
“However, the matter involves huge financial implications. Also it is pending adjudication before the HC. If the termination notice issued by the NHAI (National Highways Authority of India) is held legal, the financial liabilities shall be much less than the state invoking political force majeure clause of the agreement. It is suggested that Haryana should support the termination notice and get the matter resolved from the court urgently in public interest. So, under these circumstances, it would not be appropriate to proceed further ignoring the termination notice and stay order passed by Delhi HC,” the law department wrote.
A concession agreement was signed in 2002 between the NHAI and concessionaire Jaypee DSC Ventures Limited (later named Delhi-Gurgaon Super Connectivity Limited) for making the Delhi-Gurgaon section of the national highway-8 into an access controlled highway on built-operate-transfer (BOT) basis for a concession period of 20 years.
A state-support agreement of the project was signed among the concessionaire, NHAI, Haryana and Delhi governments. The project was put to commercial operation in January 2008. Subsequently, problems pertaining to traffic — long queues and logjams — on toll plazas started affecting the commuters.
In March this year, the NHAI had issued a notice of termination of the agreement to the concessionaire on the grounds such as non-fulfillment of various clauses, and non-maintenance of the main accessway and lanes.
Officials said the concessionaire was expected to improve the lanes at Kherki Dhaula toll and integrate the collection system at the main Gurgaon toll plaza. The notice was also issued as the concessionaire had raised loans by securitising the toll collection and without informing the NHAI.
The Delhi high court, subsequently, stayed the effect of the termination notice after the concessionaire challenged it in court.
In May, Haryana chief minister Bhupinder Singh Hooda wrote to the NHAI seeking shifting of the two toll plazas — at the entry of the Gurgaon and near Kherki Dhaula to Bilaspur.
TWO OPTIONS EXPLORED
The matter was discussed in a board meeting of the NHAI on May 14 and it was conveyed to the Haryana government that the first option was to press before the high court to allow termination of the concession agreement in the event of concessionaire’s default. In this case, the termination payment works out to be Rs. 118 crore.
The next option was to press before the high court to allow the NHAI to acquire the toll plaza, citing political force majeure in light of problems being faced by citizens and request made by the government. The NHAI though put a rider that in such an eventuality: a clear commitment should be obtained from the government that the liability on account of termination payment – around ` 335 crore and any other claim which may arise on the account of termination — will be borne by the government
HARYANA BECOMES PARTY TO THE CASE
The state government then got itself impleaded in the high court. In its application, Haryana said it supported the termination notice issued by the NHAI and requested that both existing toll plazas be removed and erected at Bilaspur on the NH-8.
It also prayed that the high court may terminate the agreement with a one-time termination payment of Rs. 118 crore or allow a Haryana’s proposal to acquire project/rights under political force majeure clause whereupon the state will bear liability on the account of termination payment. If the two options are not possible, the government may be allowed to operate a single toll plaza in Bilaspur.