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HindustanTimes Sat,23 Aug 2014

Govt needs to act fast to get jinxed project back on track

Hitender Rao, Hindustan Times  Chandigarh, April 24, 2014
First Published: 10:53 IST(24/4/2014) | Last Updated: 10:57 IST(24/4/2014)

Running behind schedule by nearly five years, the jeopardised Kundli-Manesar - Palwal (KMP) Expressway project may get a fresh lease of life if Haryana government acts fast in exploring the options, including the termination of concession agreement to get the 136-km project completed. The prevailing political scenario and the impending assembly elections could influence the decision-making process.

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While the government is yet to make up its mind on the issue, preliminary discussions indicate government’s inclination to go in for substitution of concessionaire by the lenders, a move which will also be a kind of a bailout measure for the concessionaire. The physical progress of the project is less than 70%.

The IDBI bank, which is the lead banker for the project, has already served the concessionaire — M/s KMP Expressways Limited — with a substitution notice.

This meant that the lenders have decided to step in for substitution of the concessionaire on account of its flagrant and continued defaults in performance of its financial and other obligations under the Common Rupee Loan Agreement.

Additional chief secretary, finance, Rajan Gupta, who is a member of the high powered committee (expressways) headed by the chief secretary, however, has insisted on getting all the available options examined for completion of the project.

“The committee needs to consider all the pros and cons from the technical, commercial and legal viewpoints before deciding what is the best available option,” said a member.

M/s Feedback Infra Pvt Ltd, the independent consultant engaged by Haryana State Industrial and Infrastructure Development Corporation (HSIIDC), the executing agency for the development of the expressway, subsequently listed out available seven options before the committee.

As per the available options listed out by the consultant, the HSIIDC can substitute the concessionaire with lenders nominee under clause 2 of substitution agreement or with a corporation nominee as per clause 3.5 of the substitution agreement.

The third available option is to go in for the termination of the concession by the HSIIDC.

Besides, the HSIIDC can also take over the concession under clause 3.4 of the substitution agreement. A fifth option available is to go in for substitution of concessionaire with lenders nominee after revising the terms and conditions of concession agreement and concession period.

Substitution of the concessionaire under provisions of capacity augmentation clause of the concession agreement and finally substitution by lenders and bankers.


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