The Hindu Business Line : Gujarat toll road: L&T runs into a `forest'

Stumbling block
Roadside plantation declared forest in Gujarat
Forest department clearance delays project
L&T suffering losses of Rs 40 lakh a day

New Delhi June 5 A Rs 1,450-crore national highways toll road project in Gujarat has hit an environmental snag.

The Vadodara-Bharuch four-to-six laning expressway project has been in public glare as it is of the largest negative grant projects for the National Highways Authority of India (NHAI).

Negative grant is the money paid by a road developer to the Government for building a road - the Government allows the developer to collect the toll revenues for certain duration.

For widening this 83.3-km stretch, L&T paid Rs 471 crore to the NHAI.

The company will design, engineer, fund, construct, operate and maintain the road stretch for 15 years, including the construction period of 30 months.

SNAG

Since 90 per cent of the land required for the project was already acquired by the State, L&T had expected to start construction work from December 2006.

However, it then realised that the roadside plantation along the four-lane highways is considered "forest land" as per Gujarat Government rules.

Now, getting a tree-cutting approval is taking long and L&T, which had readied funds, equipment and manpower for the project, says it is taking a hit of Rs 40 lakh per day.

"We have allocated 106 engineers, equipment worth Rs 50 crore and funds for the project, all of which are idling," official sources told Business Line.

"This delay would also cut into our toll collection period that would start after construction ends."

The NHAI, which is responsible for the required clearance, would have to pay about Rs 25 lakh a month to L&T for delay as per the contract.

With the monsoon approaching, L&T fears further delay as it cannot undertake construction work during rainy season.