Press Esc to close
Sunday 24 July 2016
News updated at 8:11 PM IST
Weather
Max: 26.4°C
Min : 19.6°C
In Bengaluru
Generally cloudy
Breaking News

Fund crunch forced GVK, GMR to leave projects, says NHAI

New Delhi, Jan 17, 2013, DHNS:

GMR terminates Rs 5,700 cr project

The National Highway Authority of India (NHAI) on Thursday said that infrastructure companies  GMR and GVK are walking out of mega road contracts after failure to arrange funding for those projects, and not on account of delays in environment clearance as cited in their notices.

"GVK project in our view requires an equity of Rs 1,500 crore. GMR project may require an equity in the order of Rs 2,000 crore. In the present scenario, I think, they are over-leverged financially. For them to raise this kind of equity is not possible,” said Chairman of NHAI R P Singh on the sidelines of a FICCI conference on “Accelerating the Development of Highways in India”.

He said that arranging huge private equity is a major problem for these two companies as these are much bigger projects than what we earlier awarded on BOT (build, operate, transfer).

He was referring to two projects of the two groups that they terminated on different grounds.
It may be noted that Bangalore-based GMR Infrastructure terminated contract for the Rs 5,700 crore Kishangarh-Udaipur-Ahmedabad Expressways with NHAI on grounds of delays in environment clearance.

GVK pulled out of Shivpuri-Dewas Expressway in Madhya Pradesh on the citing "change in law" after a Supreme Court order made Environment Ministry permission mandatory even for extraction of minerals in area below 5 acres.

Singh said that the challenge of building the highway network were manifold. “For
undertaking 8000-9000 kms of roads, roughly Rs 91, 000 crore was required. If a third of this comes from equity, the balance Rs 60,000 crore would have to be debt-financed. Are banks in a position to finance such a large amount in a non risk-free situation?” he asked.

He said existence of multiple stakeholders was compounding matters when it came to clearances for such projects. While the Planning Commission and the Department of Economic Affairs should lay down policy guidelines, the nitty-gritty of implementation should be left to NHAI; its board must have full authority, he said.


Go to Top

Photo Gallery
NSUI members burn effigies of Odisha CM Naveen Patnaik and Health Minister Atanu Sabyasachi Nayak..

NSUI members burn effigies of Odisha CM Naveen Patnaik and Health Minister Atanu Sabyasachi Nayak..

Mahila Congress members holding a protest against price hike during Punjab Pradesh Congress...

Mahila Congress members holding a protest against price hike during Punjab Pradesh Congress...

Shreeganesh Biradar 4 year old, recorded India book in recites in a minute more than 51 spelling...

Shreeganesh Biradar 4 year old, recorded India book in recites in a minute more than 51 spelling...

People use a banana raft to commute in a flooded area after heavy rains in Alipurduar...

People use a banana raft to commute in a flooded area after heavy rains in Alipurduar...

People participate in 'Walk for Indian Armed Forces' rally to support them, in Kolkata...

People participate in 'Walk for Indian Armed Forces' rally to support them, in Kolkata...

Actor Sonu Gowda near a pothole art created by artist Baadal Nanjunda Swamy in Bengaluru...

Actor Sonu Gowda near a pothole art created by artist Baadal Nanjunda Swamy in Bengaluru...

Actress Aindritha Ray performing during Shatha Sambrama -University of Mysore Centenary...

Actress Aindritha Ray performing during Shatha Sambrama -University of Mysore Centenary...

School students sit in the formation of a plane as they pray for the Indian Air Force plane...

School students sit in the formation of a plane as they pray for the Indian Air Force plane...

Indian Army soldiers rescue flood affected villagers near India-Bhutan border of Chirang...

Indian Army soldiers rescue flood affected villagers near India-Bhutan border of Chirang...

Prime Minister Narendra Modi interacting with the children at the launch of the Reliance...

Prime Minister Narendra Modi interacting with the children at the launch of the Reliance...

Copyright 2014, The Printers (Mysore) Private Ltd., 75, M.G Road, Post Box 5331, Bengaluru - 560001
Tel: +91 (80) 25880000 Fax No. +91 (80) 25880523