Lakhs of commuters braving massive traffic snarls on the 28-km Delhi-Gurgaon Expressway almost every day can expect some relief soon.
The National Highways Authority of India (NHAI) board on Wednesday evening approved a proposal to transfer 74% equity in the expressway project to infrastructure finance company IDFC from Delhi-Gurgaon Super Connectivity Limited (DGSCL), the original concessionaire.
IDFC was one of the lead lenders for the project. The DGSCL will continue to hold the remaining 26% stake till a further decision is taken.
“The NHAI Board has approved the transfer of 74% equity to IDFC,” RP Singh, NHAI chairman told HT.
The need to change the ownership was felt as over the last year, DGSCL had failed to operate and maintain one of the busiest expressways in the country to the desired standards.
Massive traffic snarls had become routine. The NHAI had last year even terminated DGSCL’s contract to operate the expressway after which the latter approached the court.
Sanjay Grewal, group head, IDFC, while confirming the board’s decision, said, “We decided to take over the project as we want to ensure smooth traffic flow and better road condition.”
Though IDFC won’t be responsible for the day-to-day management of the expressway, Grewal said they would hire an expert operations and maintenance team to run it.
The highways authority had originally wanted to transfer 100 % equity in the project to IDFC but the board shot it down.
A DGSCL spokesperson said, “We were not present in the board meeting. We are yet to hear from NHAI.”
The highway body had on February 2012 terminated DGSCL’s contract for violating the terms of agreement, which included the concessionaire’s failure to decongest the expressway, failure to finalise the operation and maintenance programme and fraud in obtaining financial assistance to the tune of R1,600 crore without NHAI’s approval.
The transfer will ensure the passing on of all liabilities, including the R1,600-crore debt, to IDFC. Sources said the move will help bail out the lenders, including IDFC, who otherwise would have found it difficult to recover the debt had NHAI decided to terminate the project.