Close on the heels of infrastructure major GMR and GVK pulling the plug on two big-ticket highway projects worth over Rs.10,000 crore, Ashoka Buildcon, which bagged Rs.1123-crore four-laning of Cuttack-Angul highway project in Orissa, wants to exit, citing delays in land acquisition and getting environment clearances.
Ashoka Buildcon Ltd had bagged the project in November 2011 and had signed the concession agreement with National Highways Authority of India (NHAI) in March 2012 for four-laning the 112-km long Cuttack-Angul stretch on Design Build Finance Operate & Transfer (DBFOT) basis.
But even after over a year, company sources said the project is yet to take off as land acquisition and environment clearances are still pending.
“Ashoka Buildcon has written to us recently expressing their intention to exit from the project owing to delay in getting the requisite clearance,” said a senior NHAI official who did not wish to be quoted.
The company’s decision to exit does not augur well for NHAI at a time when the highway sector has been reeling under the economic slowdown.
Not only is NHAI finding it difficult to bid out projects — with developers not coming forward citing lack of fund — but bureaucratic delays in getting clearances has made matters worse resulting in huge cost overruns for projects.
As many as 33 highway projects, awarded during the last two fiscal years, has failed to attain financial closure with developers expressing difficulty in raising equity.