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Hit by losses, DND Flyway operator seeks rejig of contract
Hit by a revenue loss on account of suspension of toll charges and embroiled in litigation, Noida Toll Bridge Corporation Ltd (NTBCL), which owns the Delhi-Noida-Delhi (DND) Flyway, now wants to renegotiate its contract with the government. It is also looking to raise revenue from other sources.
NTBCL Vice-Chairman Pradeep Puri told BusinessLine the company will consider making DND toll-free provided the Centre extends the contract period and allows shareholders to get revenue from other avenues, such as ads or installing solar panels, which can be used to generate 10-15 MW.
Legal wrangle
The DND Flyway became toll-free following a decision by the Allahabad High Court. The Supreme Court has now asked the Comptroller and Auditor General (CAG) to verify the costs.“I am ready to live without toll, provided you do some other things for me. You have some ad revenues there…I have 15 years of balance of concession (contract) period. Consumer interest and public safety should not be compromised…,” Puri said.
The Allahabad High Court has not called for contract cancellation, he said, adding: “We can find a way to have a shareholder return without taking recourse to toll. We can put in a solar power facility along the carriageway and the buildings.”
“If the revenues were to go up, instead of receiving (toll), I may even end up giving some value back to the government,” he said, adding that the contract was signed during the days when the cost of capital was 16 per cent and it was one of the earliest projects of its kind. The bid documents had been vetted by ADB, SBI Capital and the World Bank at that time.
“We are conscious of the fact that in the public eye, the 20 per cent compounding and 20 per cent return is not palatable…. It was an experiment and the first project of its kind. But, it prevented us from being thrown out,” said Puri. The contract has a clause under which the extent of the company’s revenue shortfall will be added to the project cost in the subsequent year while calculating 20 per cent return to the project cost.
Claiming that the increase in users in the past few months, after the booths were made toll-free, is marginal, Puri said: “Earlier, there were 1,30,000 lakh daily users. After the tolls were done away with, there are 1,40,000 lakh users.”
“About 73 per cent (of NTBCL) is owned by the public. My concern is the welfare of about 82,000 shareholders,” he said. “We have raised funds abroad based on this contract. The sanctity of the contract will have to be maintained.” NTBCL is owned over 70 per cent by IL&FS. LIC, Abu Dhabi Investment Authority and Orix hold stakes in it. Connor Brown Authentic Jersey
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