NHAI to put GVK's Madhya Pradesh project for rebidding.

After burning its hand with GVK Transportation, the National Highways Authority of India (NHAI) will soon put the Shivpuri-Dewas road project in Madhya Pradesh for rebidding. The project, first awarded to GVK Transportation in January 2012, was terminated by NHAI due to the company's failure to achieve financial closure for the project.

The project value, Rs. 2,815 crore at that time, would now be Rs. 4,000 crore owing to escalation in input costs, a senior NHAI official said. Even before NHAI terminated the contract, GVK had walked out of the project, citing delays in getting various clearances.

Bids would be invited again on a build-operate-transfer (BOT) mode, for four-laning the 333-km section. NHAI is hopeful there would be good response for the rebidding, because the stretch has good traffic, which means enhanced revenue potential for private players. Under BOT, a developer builds a project and operates it for a specific time period to recover its investment and earn a profit before transferring it to the government at the end of concession period, usually 20 or 30 years.

According to people close to the development, the company has renewed its bank guarantee for another year and a mutual decision between the company and NHAI was expected to be finalised soon.

BS