NHAI had issued a Letter of award dated 29th March 2023 to GR Infraprojects for the project “Construction of 4/6 lane Bypass for Belagavi city from km 11.773 (km 11 Goa side of NH-4A) to km 46.253 (km 516 Pune side of NH-4) (design length 34.480 km) in the State of Karnataka on HAM Mode Package 1” but now the NHAI has decided to cancel LOA dated 29.03.2023.
GR Infraprojects has received a letter from National Highways Authority of India dated 16.05.2024 informing “that due to administrative reasons, Competent Authority of NHAI has decided to cancel LOA dated 29.03.2023 for subject project and annual bidding process without any liability/claims of any account against this LOA as per cited clauses of REP”.
Details of the projects are as under:
Start Point – Ch. 11.00 Km (Goa side) of NH-4A near Zadshahapur Village
End Point – Ch. 516.00 Km (Pune side) of NH-4 near Bennalli Village
Construction of 4/6 lane Bypass for Belagavi city from km 11.773 (km 11 Goa side of NH-4A) to km 46.253 (km 516 Pune side of NH-4) (design length 34.480 km) in the State of Karnataka on HAM Mode Package 1.
Estimated Project Cost: 897.37 in Hybrid Annuity Mode (HAM) Completion Period & Operation Period Completion Period: 730 days from Appointed Date.
The Company GR Infraprojects has also bagged GR Belagavi Raichur (Package‐5) Highway and GR Belagavi Raichur (Package‐6) will undertake construction activities on the Belagavi-Hungund-Raichur section of the National Highway (NH) 748A at bid project costs of Rs 716.5 crore and Rs 740.8 crore which will continue.
Hybrid Annuity Mode (HAM) projects are designed on long period payment option to the project proponent out of the toll/commercial revenue like adds, eateries, parking and hotels etc.,
The revenue model and cash flow models of the DPR and the feasibility report should sustain the annuity payment to the concessionaire..
In this project parameters what went wrong is a matter of argument…
Cancellation of Letter of Acceptance (LoA) attracts payment of pecuniary damage liability …
NHAI should find a via media to solve the arbitration risks…
Since the traffic load and CPU( car per unit) is oh higher side on this highway, NHAI should quickly resolve or reissue Eo I immediately.