RP Singh, Chairman of the National Highway Authority of India (NHAI) claimed that the change in the economic scenario and escalation of cost prompted two highway developers to exit mega projects recently.
It may be recalled that GMR Infrastructure terminated the contract for the Rs 5,700 crore Kishangarh-Udaipur-Ahmedabad Expressway with NHAI on grounds of “delays in environment clearance.”
Also, GVK Power & Infrastructure withdrew the contract for the Shivpuri-Dewas Expressway in Madhya Pradesh, citing “change in law” after a Supreme Court order made MoEF permission mandatory even for extraction of minerals in areas less than five acre.
Singh told reporters that arranging huge private equity is a major problem as these are much bigger projects than what was earlier awarded on BOT (build, operate, transfer).
GVK requires an equity of Rs 1,500 crore and GMR may need an equity of Rs 2,000 crore, for their respective projects, Singh added saying that raising this equity was “not possible” for them.
He said raising equity was a major concern for awarding road projects of 10,000 km a year, including 7,000 km of national highways.
Meanwhile, he informed that the Ministry of Environment and Forest (MoEF) had agreed in-principle to delink the environmental clearance from forest clearance as was the demand from NHAI.