Relief!
ROADS & HIGHWAYS

Relief!

The dispute between HS Narula, Chairman, DSC Ltd, and NHAI over the Delhi-Gurgaon Expressway project seems to be easing with the state government planning to takeover the project from Delhi Gurgaon Super Connectivity Ltd (DGSCL), a company promoted by the DSC Group. The Delhi-Gurgaon expressway is the first project to earn NHAI a negative grant, also called a premium. Although, the expressway was to complete in 2005, it finally opened in 2008. Also, there was a cost overrun of over 100 per cent in the construction of the highway, from Rs 548 crore to Rs 1,175 crore. As of March 2010, the debt on DGSCL's books stood at Rs 1,262 crore. If the average interest on the debt was 10 per cent, this debt would result in an annual interest outgo of Rs 126.2 crore. Its annual revenue of Rs 135 crore for 2009-10 was barely enough to cover that. Little surprise then, the company reported a loss of Rs 49 crore for the year. Meanwhile, according to credit rating agency ICRA, the company contracted a new debt of Rs 1,600 crore to retire (possibly high-cost) earlier debt and fund other group investments. So, if DGSCL gets Rs 2,000 crore, it can repay this debt and cut its losses.

The dispute between HS Narula, Chairman, DSC Ltd, and NHAI over the Delhi-Gurgaon Expressway project seems to be easing with the state government planning to takeover the project from Delhi Gurgaon Super Connectivity Ltd (DGSCL), a company promoted by the DSC Group. The Delhi-Gurgaon expressway is the first project to earn NHAI a negative grant, also called a premium. Although, the expressway was to complete in 2005, it finally opened in 2008. Also, there was a cost overrun of over 100 per cent in the construction of the highway, from Rs 548 crore to Rs 1,175 crore. As of March 2010, the debt on DGSCL's books stood at Rs 1,262 crore. If the average interest on the debt was 10 per cent, this debt would result in an annual interest outgo of Rs 126.2 crore. Its annual revenue of Rs 135 crore for 2009-10 was barely enough to cover that. Little surprise then, the company reported a loss of Rs 49 crore for the year. Meanwhile, according to credit rating agency ICRA, the company contracted a new debt of Rs 1,600 crore to retire (possibly high-cost) earlier debt and fund other group investments. So, if DGSCL gets Rs 2,000 crore, it can repay this debt and cut its losses.

Related Stories

Gold Stories

Next Story
Infrastructure Urban

Ingram Micro India Earns Sixth Great Place to Work Certification

Ingram Micro India has recently received its sixth consecutive Great Place to Work® certification, recognising the company’s efforts to build a workplace culture centred on trust, collaboration and employee development.The company said the recognition reflects its continued focus on strengthening organisational culture and improving employee experience. Over the past year, Ingram Micro India has worked on employee engagement, encouraging open dialogue, building leadership capabilities and expanding learning and development opportunities.As part of its “Elevate – Soar Higher” programme..

Next Story
Infrastructure Urban

Genesys International Appoints Nikhil Alulkar as CEO

Genesys International Corporation has appointed Nikhil Alulkar as Chief Executive Officer as the geospatial technology company enters its next phase of growth across enterprise, government and international markets.Alulkar will lead company-wide operations, business execution and growth. His responsibilities will include scaling Genesys’ AI-native mapping and Digital Twin platforms, expanding its enterprise and B2B presence, strengthening government and institutional relationships, and developing the operating structure required for international expansion.The appointment comes as Genesys lo..

Next Story
Real Estate

B-Right Real Estate Targets 4.7 Mn Sq Ft Mumbai Growth by 2033

B-Right Real Estate Group has outlined plans to develop approximately 4.7 million sq ft of real estate in Mumbai by 2033 as part of its long-term Vision 2033 roadmap. The company said its expansion strategy will remain focused on Mumbai, with redevelopment-led projects forming a key part of its portfolio.Founded in 2007, B-Right Real Estate has been involved in redevelopment and Slum Rehabilitation Authority (SRA) projects across Mumbai. Its Vision 2033 strategy focuses on financial discipline, governance, design and community-oriented development as it expands its project pipeline.Founder, Ch..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement