+
Dispute resolution: NHAI to pay Rs 1,259 cr to HCC Group
ROADS & HIGHWAYS

Dispute resolution: NHAI to pay Rs 1,259 cr to HCC Group

HCC Concessions, the infrastructure development business of Hindustan Construction Company (HCC Group), has won a case against the National Highways Authority of India (NHAI) and would receive Rs 1,259 crore from the authority as conciliation.

The two special purpose vehicles (SPVs) of HCC—Baharampore Farakka Highways Ltd (BFHL) and Farakka Raiganj Highways Ltd (FRHL) entered into settlement agreements with NHAI for a comprehensive closure of all outstanding disputes and claims between the parties.

BFHL will receive Rs 405 crore, while FRHL will get Rs 854 crore from the NHAI.

HCC said that besides the use of funds for NHAl project completion and an exit to the Xander Group, a substantial portion would be received by HCC as a settlement of cost claim.

Private equity firm The Xander Group had taken up a 14.5% stake in HCC Concessions for Rs 240 crore in 2011.

In the same year, the investor also picked up over a 5% stake in the parent Hindustan Constructions Company.

FRHL will release the settlement proceeds and further sums to HCC Group, as per the existing contractual understanding with Farakka-Raiganj Highways' buyer Cube Highways and Infrastructure II Pte Ltd.

Farakka-Raiganj Highways was sold to Cube on 22 September 2020, at an enterprise value of Rs 1,508 crore.

As a further consequence of this conciliation, Cube will release Rs 233 crore withheld as part of HCC Concessions' sale of FRHL and is also required to share a significant portion of FRHL’s growing revenue for the remainder of the concession's 20 years.

With 100% construction completion being achieved at Farakka-Raiganj Highways, toll rates will increase 70% in 2021-22. Additionally, up to Rs 100 crore is further payable by Cube in 2023, contingent on traffic projections being realised.

Farakka Raiganj Highways and Baharampore Farakka Highways are among the largest public-private partnership (PPP) projects in India. They encompass 200 km of West Bengal's main artery—NH-34 and pass through major towns such as Baharampore, Farakka, Kaliachawk, Gajol, and Malda besides being the only link over the river Ganges in the region.

Both BFHL and FRHL faced inordinate delays mainly related to land acquisition, commencing toll operations on 14 May 2014, and 19 October 2016, respectively.

The concession periods are 25 years for BFHL and 30 years for FRHL. The full completion of the corridor shall reduce the travel time from Kolkata to North Rennal by half.

Image Source


Also read: HCC closes sale of Farakka Raiganj Highways

HCC Concessions, the infrastructure development business of Hindustan Construction Company (HCC Group), has won a case against the National Highways Authority of India (NHAI) and would receive Rs 1,259 crore from the authority as conciliation. The two special purpose vehicles (SPVs) of HCC—Baharampore Farakka Highways Ltd (BFHL) and Farakka Raiganj Highways Ltd (FRHL) entered into settlement agreements with NHAI for a comprehensive closure of all outstanding disputes and claims between the parties. BFHL will receive Rs 405 crore, while FRHL will get Rs 854 crore from the NHAI. HCC said that besides the use of funds for NHAl project completion and an exit to the Xander Group, a substantial portion would be received by HCC as a settlement of cost claim. Private equity firm The Xander Group had taken up a 14.5% stake in HCC Concessions for Rs 240 crore in 2011. In the same year, the investor also picked up over a 5% stake in the parent Hindustan Constructions Company. FRHL will release the settlement proceeds and further sums to HCC Group, as per the existing contractual understanding with Farakka-Raiganj Highways' buyer Cube Highways and Infrastructure II Pte Ltd. Farakka-Raiganj Highways was sold to Cube on 22 September 2020, at an enterprise value of Rs 1,508 crore. As a further consequence of this conciliation, Cube will release Rs 233 crore withheld as part of HCC Concessions' sale of FRHL and is also required to share a significant portion of FRHL’s growing revenue for the remainder of the concession's 20 years. With 100% construction completion being achieved at Farakka-Raiganj Highways, toll rates will increase 70% in 2021-22. Additionally, up to Rs 100 crore is further payable by Cube in 2023, contingent on traffic projections being realised. Farakka Raiganj Highways and Baharampore Farakka Highways are among the largest public-private partnership (PPP) projects in India. They encompass 200 km of West Bengal's main artery—NH-34 and pass through major towns such as Baharampore, Farakka, Kaliachawk, Gajol, and Malda besides being the only link over the river Ganges in the region. Both BFHL and FRHL faced inordinate delays mainly related to land acquisition, commencing toll operations on 14 May 2014, and 19 October 2016, respectively. The concession periods are 25 years for BFHL and 30 years for FRHL. The full completion of the corridor shall reduce the travel time from Kolkata to North Rennal by half. Image Source Also read: HCC closes sale of Farakka Raiganj Highways

Next Story
Infrastructure Energy

UERC Rejects Pleas Over Cancelled 200 MW Solar Awards

The Uttarakhand Electricity Regulatory Commission (UERC) has rejected review petitions filed by 12 solar developers against the cancellation of Letters of Award (LoAs) issued under the state’s 200 MW Solar Programme.The scheme, launched by the Uttarakhand Renewable Energy Development Agency (UREDA) under the 2013 solar policy, aimed to help Uttarakhand Power Corporation Ltd (UPCL) meet its renewable purchase obligations through tariff-based competitive bidding.The projects—classified under the Type I category—had original commissioning deadlines in 2019–2020, later extended multiple ti..

Next Story
Infrastructure Energy

Solarium Wins Rs 266 Million Rooftop Solar Orders

Solarium Green Energy has secured two significant work orders valued at a combined Rs 266 million for rooftop solar projects across various locations in the Northeastern States, under the Ministry of Home Affairs.The first order, worth approximately Rs 129.8 million, was awarded by NTPC Vidyut Vyapar Nigam Limited (NVVN) for the development of a 3,319 kW rooftop solar photovoltaic (PV) project. This was tendered under the NVVN’s “Selection and Discovery of L1 Rates for Rate Contract for EPC of Grid Connected Rooftop Solar PV Projects (51–200 kW) across India”. The project is scheduled ..

Next Story
Real Estate

Omaxe Secures Rs 5 Billion From Oaktree For Expansion

Omaxe Group has raised Rs 5 billion in funding from Oaktree Capital Management LP, a global investment firm specialising in alternative investments, to fuel the development of ongoing projects and support future growth plans.In a regulatory filing dated 28 July, the company confirmed that the funds will support construction and infrastructure development across key markets, including New Chandigarh, Lucknow, Ludhiana, and Faridabad. The capital will also be directed towards flagship projects such as Omaxe State in Dwarka, an upcoming integrated township in Amritsar, and a new township in Indor..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?