IDFC likely to buy Delhi-Gurgaon e-way
New Delhi- Delhi-Gurgaon expressway project is likely to be taken over by IDFC Limited, formerly Infrastructure Development Finance Company Limited, from the current developer DSC.
Though the deal is still busy with negotiations, IDFC is believed to buy out the project completely, said sources. The National Highways Authority of India (NHAI) and IDFC are likely to enter into an agreement in this regard. Under the deal, IDFC would pay R1 for all the shares of Delhi-Gurgaon Super Connectivity (DSCL), the concessionaire of the Delhi-Gurgaon expressway, and will take over its entire debt of Rs 1,600 crore.
DSC was terminated by the NHAI in February 2012 alleging operational incompetence and raising of loans of Rs 1,275 crore from IDFC without seeking NHAI’s approval. Following the termination notice, DSC had moved the Delhi HIgh Court challenging the authority.
The court directed DSC to construct more toll plazas along the expressway in order to ease traffic but NHAI remained doubtful of the developer’s ability to run the project.
Earlier IDFC had written to NHAI about its interest in buying a 74 percent stake in the project, a proposal that would have kept 24.8% with DSC and 1.2% with the Jaypee Group. An official said that, NHAI asked IDFC to buy out the entire 100 percent of the project considering that the concessionaire DSC’s stake would serve no purpose when IDFC will have majority.
NHAI has scheduled board meeting on January 30 to decide on the deal and it would take some time to take a firm decision.
Meanwhile, the ministry of road transport and highways is requesting Cabinet approval for an easier exit policy for road developers which will allow the concessionaire to make a complete exit immediately after commencement of commercial operations. As per the current policy, the original concessionaire has to keep at least a 26% stake for the entire concession period. DSC can make a complete exit if new policy is in place.
Experts are of the opinion that if NHAI approves the proposed deal, all three parties- contractor, lenders and NHAI- will be benefited.
Along with the Rs 1,600 crore debt, DGSCL has a huge liability which is expected to be taken over by IDFC. IDFC has to take immediate measures to improve the traffic and road conditions.
If IDFC gets the deal, then it will be collecting toll fees till 2023 to recover the funds. For NHAI, it is very important for completing the project in order to sustain investor interest in public-private partnership projects in realty sector.
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Delhi-Gurgaon expressway, Infrastructure Development Finance Company Limited, ministry of road transport and highways, National Highways Authority of India, New Delhi
[...] inspection was carried out by stakeholders and a list containing 35 traffic-related works on the Delhi-Gurgaon expressway was prepared. Most of these works including the overlaying work are yet to be started. Even the [...]