GMR Infra has terminated its contract with the National Highways Authority of India (NHAI) for building the Kishangarh-Udaipur-Ahmedabad highway after the highways authority failed to get the required environmental clearances among others for GMR to proceed with the project execution.
"GMR Infrastructure has said that GMR Kishangarh Udaipur Ahmedabad Expressways Limited, a subsidiary of the company, has terminated the concession agreement entered into with NHAI for six laning of 555 Km Kishangarh-Udaipur-Ahmedabad highway," the company informed the BSE.
According to an NDTV report, NHAI is planning legal action against the infra major after it terminated the Kishangarh Expressways pact even after achieving financial closure for this project in May 2012. A a third of the equity requirement was also ready.
"One option for NHAI is to blacklist the company for at least one year. Under the second option, GMR will have to forfeit 5 percent of the total project cost as bank guarantee," the report said.
The company had won the project in September, 2011, through the international competitive bidding route. It is to be implemented through the Public Private Partnership (PPP) model on Design, Build, Finance, Operate and Transfer basis. The infrastructure major currently has 4 annuity projects
and 6 toll projects totaling 6,685 lane kms cross under its Highways business segment.
Shares of the company closed at Rs 20.55 apiece, up 3.27 percent on the BSE.
With inputs from PTI