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The NHAI has terminated the concession agreements of two Special Purpose Vehicles (SPVs) of highways infrastructure developer IRB Infrastructure.
In a filing to the exchanges on November 2, IRB Infra, which recently got ₹4,400-crore investment from Singapore sovereign wealth fund GIC, said the authority has terminated concession agreements to its two SPVs — IRB PP Project Pvt Ltd and IRB PS Highway Pvt Ltd.
The SPVs had bagged Hybrid Annuity Model projects for 4-laning of Puducherry-Poondiyankuppam and Poondiyankuppam-Sattanathapuram highways.
IRB, however, did not comment on the reasons for the projects getting terminated.
The concession period for both the projects were 15 years after completion of the four-laning. During a concession period, the concessionaire pays an annual concession fee to NHAI from the revenues generated.
A typical commercial contract usually contains a mechanism for exiting or terminating the contract, in the eventuality of not obtaining clearances within specific timelines. In this case, reliable sources told BusinessLine that the NHAI failed to obtain land-related clearances from the Tamil Nadu government. Recently, KNR Constructions’ project in TN worth ₹450 crore project got terminated, as the NHAI failed to acquire land.
The quantum of negative cash flow from the cancellation of the two projects on IRB’s balance sheet is not clear. IRB has ₹25,757-crore of Build Operate Transfer (BOT) assets, up from ₹22,085 crore in fiscal 2019.
In the September-ended quarter recently, IRB said the Ahmedabad-Vadodara project received award from High Court for continuation of relief from payment of premium to NHAI till the outcome of proceedings under arbitration comes through, thus eliminating negative cash-flow for the project.
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