News Detail

<p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">The National Highways Authority of India (NHAI) is set to recognise IDFC as a lender to the Delhi-Gurgaon expressway project, but with only limited rights, as the government does not recognise it as an official lender. The change in stance by NHAI is an about-turn as the roads ministry had earlier informed the Prime Minister&#39;s Office that the ministry and NHAI did not classify the infrastructure financier as a lender.</span></span></span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">NHAI and the roads ministry had thus not recognised IDFC as a lender because a change of lenders by Delhi-Gurgaon Super Connectivity Ltd (DGSCL) had not been approved. DGSCL had in 2010 replaced its authorised lender, State Bank of India (SBI), with an IDFC-led consortium, which has an exposure of INR 1,600&nbsp;crore in the project.</span></span></span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">As part of the proposition to be considered a lender with limited rights , IDFC will have to move one of its toll gates from the Delhi side and make the entry to Gurgaon toll free. This would provide relief to more than 250,000 vehicles passing through the toll gates.</span></span></span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">&quot;We are looking to permit them (as a lender with limited rights), if they agree to various demands, including removing the first toll plaza from Delhi. We feel the public-sector banks in the consortium should not suffer badly. Various discussions are currently on and issues like a lender running a project are being discussed,&quot; a senior NHAI official told Business Standard.</span></span></span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">If IDFC agrees to the terms, NHAI would recognise it as lender with limited rights and not a senior lender. This would bind IDFC to the concession agreement that DS Construction had signed with the government. DGSCL, a special purpose vehicle (SPV) set up to undertake the landmark project, was initially funded by a consortium led by Hudco, which was later replaced by SBI. The SPV then raised loans from IDFC and, in violation of its concession agreement, did not inform the government.</span></span></span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">The IDFC-led consortium includes Punjab National Bank, Oriental Bank of Commerce and State Bank of Bikaner and Jaipur. If NHAI had terminated the project, these lenders would have had to incur a combined loss of INR 1,400 crore from the project, as the highways authority would refunded only INR 175-200 crore. This prompted IDFC to start negotiations with the government.</span></span></span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">Source-On Request</span></span></span></p>