Coal scam-tainted highway project promoter seeks funds from State

Cash strapped firm seeks money for work done so far

 Even though the Hassan-Chikkanayakanahalli State highway development project was stalled due to lack of funds six months ago, the company which promoted the project has now asked the government to release money under the Viability Gap Funding (VGF) for work completed so far.

Abhijit Infrastructure, which is mired in the multi-crore coal scam, recently requested the Karnataka Road Development Corporation Limited (KRDCL) to release money under the VGF for the proportion of work already completed.

“If the request is acceded, the company stands to gain Rs 8 crore as it has completed about 10 per cent of the Rs 246-crore project,” official sources said. As per the original agreement between KRDCL and Abhijit Infrastructure, however, money under the VGF share can be released only after 50 per cent of the work is completed.

The company began the project on January 5, 2012. Work proceeded smoothly till July 2012, when the allegation of the company’s involvement in the coal scam surfaced.

The CBI, which is investigating the scam, is learnt to have frozen the accounts of the company, officials explained, causing work on the highway to come to a halt.

The KRDCL is authorised to impose a fine of Rs 1.19 lakh per day against Abhijit Infrastructure for delays. But officials explained that the KRDCL is reluctant to take action against the company despite delays in the project’s implementation. “It is not resorting to such a step,” an official said, “Lest the project gets entangled in legal issues.”

But pressure has been mounting against the Corporation to ensure that the project is completed at the earliest. Travellers on the route and villagers along the stretch of the road complain of serious inconveniences. A major problem is that a large portion of the highway area has been dug up, leaving vehicles with no option but use the mud road.

Despite its frozen assets, sources told Deccan Herald that Abhijit Infrastructure has promised to finish work on the highway at key places to reduce problems — if the KRDCL releases the money. When contacted, KRDCL Managing Director R Srinivas only said the company will resume the work soon. He added that it has already taken steps to mobilise resources for this purpose.

The project was taken up on Public Private Partnership (PPP) model with KRDCL’s share being 39 per cent (as the VGF). Abhijit Infrastructure was to recover its share of the investment by collecting toll from commuters for a period of 28 years. If implemented, the Hassan-Chikkanayakanahalli road will become the first concrete road in the State.