KMP set to lose Expressway contract

The govt is also penalising concessionaire DS Construction Ltd for every lost day due to the delay

Written by Chitleen K Sethi | Published:June 17, 2013 3:19 am

With the company tasked with building the much-delayed Kundli-Manesar-Palwal (KMP) Expressway missing yet another deadline on May 31,the Haryana government is preparing the ground to cancel the nearly Rs 2,000-crore contract.

The government is also penalising concessionaire DS Construction Ltd for every lost day due to the delay. DSC,in turn,has dragged the government to arbitration and claimed damages of over Rs 900 crore.

“The project has been delayed considerably and we are exercising our rights under the agreement and have imposed damages on the company. They are yet to pay the penalty. We cannot comment on what we intend to do next,” Haryana Industries Minister Randeep Surjewala said.

The KMP Expressway is a build-operate-transfer project being executed by KMP Expressway Ltd,a special purpose vehicle formed in 2006 with DS Construction in the lead. The Haryana State Industrial Infrastructure Development Corporation’s agreement with the company had set its commercial operation date for July 29,2009.

It was considered a prestigious project for Haryana and aimed to ease traffic on the Delhi-Gurgaon Expressway and also act as a Delhi bypass for traffic going north from Agra and Mumbai.

Seven years on,only 68 per cent of the 135.65 km road is complete and work has now virtually come to a standstill. Over the last one year,the project has made less than one per cent progress every month.

DSC has also run into trouble with its lenders and the Environment Pollution Control Authority (EPCA),which is assisting a committee of the Supreme Court monitoring the project.

The lead banks financing the project have told the Haryana government that equity infusion into the project by DSC has virtually dried up. While the banks claim that they have given the company a one-month ultimatum to infuse equity before they chip in afresh,the company says banks are “supporting” the project.

The EPCA,meanwhile,is ready with a hard-hitting report condemning the tardy execution of the project and recommending cancellation of the contract.

“The company has taken all of us for a ride. It has not done anything to complete the work for the past two years. We have suggested that the state government take over the project and complete it or replace the concessionaire. If we allow this concessionaire to work at the pace it is doing now,the road will not be completed in the next four years,” EPCA chairman Bhure Lal said.

Lal also alleged that DSC was not interested in completing the project as its financial interests in the Delhi-Gurgaon toll plaza clashed with it. “This same company undertook the Delhi-Gurgaon Expressway project and if this project is completed,traffic will be diverted from NH-8 where the company has its toll plazas,” Lal said.

KMP Expressway Ltd denied the allegation. “No,there is no clash of interest between the two projects,” a spokesperson for the company said in an email response to The Indian Express.

For all the latest News Archive News, download Indian Express App

    Live Cricket Scores & Results
    Express Adda