Road project dispute: Om Metals claims Rs. 523 cr from Rajasthan govt.

Bhilwara Jaipur Toll Road Private Ltd., a special vehicle floated by Om Metals Infraprojects, formed for execution of a road project, has served a termination notice on the concession agreement signed with the Rajasthan government due to “material breach of terms and conditions”.

Bhilwara Jaipur Toll Road (BJTR) , which held 49 per cent in a special purpose vehicle (SPV), completed development of 212-km Jaipur-Bhilwara road project on build, operate and transfer basis in December 2014 at a total project cost of Rs. 410 crore.

The project has been operational since December 2014. From April this year, the State government has allowed private vehicles to use the highway toll-free even while the company is in discussion with the National Highway Authority of India to convert it into a national highway. It was also in talks with the State government for allowing compensation for loss on account of exempted vehicles.

In a statement, the company said that as per the termination clause of concession agreement, the Rajasthan government is liable to pay full debt due on the project and 150 per cent of the adjusted equity. The Rajasthan government has to pay 1.5 times of equity, debt and compensation as per the concession agreement. The total claim sought by BJTR is about Rs. 523 crore, out of which lenders outstanding dues work out to Rs. 205 crore. Vikas Kothari, President and Director, Om Metals Infraprojects, said that with the termination of the contract, there will be a fresh cash flow and the company will be able to take up more irrigation and hydro mechanical projects.

HBL