Two projects awarded by the NHAI in May and July last year have been terminated after failure to achieve financial closure. This is the first time that highway projects awarded by the NHAI have failed to achieve financial closure even after an extension of 120 days, after the 180-day period elapsed. The
authority had awarded two projects worth about Rs 2,450 crore to DSC Ltd and Gannon-Dunkerley Co Ltd last year.
DSC Ltd, in its reply, said the delay was because of certain points of disagreement between the NHAI and the West Bengal government. “It appears there are some points of disagreement between the West Bengal government and the NHAI regarding the location of the toll plazas and date of commencement of collecting toll,”.
View:- The failure raises concerns whether banks are finding NHAI projects, a lot of them awarded at a premium, as unviable. A company gets 180 days to financially close a project. If it is unable to do so, it gets a grace period of 120 days, with a penalty.
If the company is still unable to complete it, the project award is cancelled. It is either rebid or awarded to the second lowest bidder. This is positive for larger players like ITNL, IRB, R-Infra, L&T as now consolidation would step in the road BOT space.
....more info
authority had awarded two projects worth about Rs 2,450 crore to DSC Ltd and Gannon-Dunkerley Co Ltd last year.
DSC Ltd, in its reply, said the delay was because of certain points of disagreement between the NHAI and the West Bengal government. “It appears there are some points of disagreement between the West Bengal government and the NHAI regarding the location of the toll plazas and date of commencement of collecting toll,”.
View:- The failure raises concerns whether banks are finding NHAI projects, a lot of them awarded at a premium, as unviable. A company gets 180 days to financially close a project. If it is unable to do so, it gets a grace period of 120 days, with a penalty.
If the company is still unable to complete it, the project award is cancelled. It is either rebid or awarded to the second lowest bidder. This is positive for larger players like ITNL, IRB, R-Infra, L&T as now consolidation would step in the road BOT space.
....more info