The infra arm of the HCC group will get Rs 1,259 cr from NHAI after the closure of pending disputes, claims, Auto News, ET Auto

New Delhi: HCC Group Wednesday said its infrastructure arm HCON is ready to receive Rs 1,259 crore from National Road Authority of India (NHAI) following the closure of outstanding disputes and claims regarding Baharampore-Farakka Highways Ltd (BFHL) and Farakka-Raiganj Highways Ltd (FRHL), HCC Concessions Ltd (HCON), the infrastructure development arm of HCC Group, has concluded its conciliation with NHAI for all disputes regarding BFHL and FRHL, HCC said in a statement.

Two of HCC’s special purpose vehicles – BFHL and FRHL have entered into pacts with NHAI for full closure of all outstanding disputes and claims between the parties. BFHL will receive Rs 405 crore, while FRHL will receive Rs 854 crore from NHAI.

FRHL will pay the proceeds of the settlement and the additional amounts to the HCC Group in accordance with the existing contractual agreement with FRHL’s buyer, Cube Highways & Infrastructure II Pte Ltd (Cube), the statement said.

In addition, part of the use of funds for Completion of the NHAI project and an exit to the Xander Group, which owns a 14.55 percent stake in HCON, a substantial portion of the funds will be received by HCC in settlement of their reimbursement claim, he added.

“… Cube will release Rs 233 crore retained in connection with the sale of FRHL by HCON and will also demand to share a significant portion of FRHL’s growing revenues for the remainder of the 20-year concession.

“With the 100% completion of construction at FRHL, toll tariffs will increase by 70% in FY22. In addition, up to Rs 100 crore is additionally payable by Cube in 2023, in depending on traffic forecasts, ”the statement said.

In addition, BFHL’s closing of disputes with NHAI facilitates the liquidity required to expedite the completion of a much delayed bypass, which, together with the SPV’s strong free cash flow from toll operations, allows HCON to monetize this. mega project of Rs 2000 crore ahead of schedule, says the statement.

Despite the impact of COVID-19 and the partial toll, BFHL recorded revenue of Rs 168 crore in FY21, a jump of 16 percent from FY20. Upon final completion, a 67% fee increase will generate more significant free cash flow, he added.

Arjun Dhawan, CEO of HCC Group, said, “The proceeds of the conciliation will be used to accelerate the completion of our key projects and to strengthen HCC’s participation in future nation-building work.”

BFHL and FRHL are among the largest public-private partnership (PPP) projects in the country. They encompass 200 km of Bengal’s main artery, NH-34, and pass through major cities such as Baharampore, Farakka, Kaliachawk, Malda and Gajol, in addition to being the only link on the Ganges in the region.

The NH-34 provides north-south connectivity between the Capital Region and the ports of Kolkata and Haldia to the northeastern states of India.

The west side of the highway borders Bihar and Jharkhand and the east side runs parallel to the border with Bangladesh, where significant imports and exports of goods take place.

BFHL and FRHL faced significant delays primarily related to land acquisition, starting toll operations on May 14, 2014 and October 19, 2016, respectively, HCC said.

The concession periods are 25 years for BFHL and 30 years for FRHL.

Complete completion of this very important corridor will cut travel time from Calcutta to North Bengal in half.

FRHL was sold to Cube Highways & Infrastructure II Pte Ltd (Cube) on September 22, 2020, for an enterprise value of Rs 1,508 crore.


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