Noida Toll Bridge Company, which built India's first expressway under Public-Private-Partnership mode with FDI contributions (73 per cent held by foreign institutional investors (FII) and foreign individuals), has moved the Supreme Court, challenging an Allahabad High Court order that forbade the company from toll collection on the Delhi-Noida expressway.
A precursor to the golden quadrilateral project, the Delhi-Noida-Direct (DND) expressway was agreed to be constructed by the Ministry of Urban Development along with Delhi and Uttar Pradesh governments, with the aim to decongest Delhi.
A Special Purpose Vehicle (SPV) i.e. Noida Toll Bridge Company Limited (NTBCL) was formed along with Infrastructure Leasing & Financial Services (ILFS) as a major partner. The company later listed itself on both NSE and BSE and also on London Stock Exchange to bring in foreign investment in the form of debt and equity.
As part of its initial contract agreement with the UP government, the company was granted permission to carry on the concession till 2031 and was allowed to garner 20 per cent return over its overall capital investment (debt and equity).
“We have never tried to defend the agreement of 20 per cent return as perfect. In fact, five years back we expressed our intention for an early closure of the concession in writing to Uttar Pradesh government sensing the sentiment against tolled roads. We never heard from them after that,” said Pradeep Puri, chairman of NTBCL.
“The Allahabad High Court's claim that we had invested Rs 408 crore and recovered Rs 800 crore is nowhere near correct as it does not take into account cost of loans for the project,” said Puri.
“The total project cost was Rs 431 crore and with interests on loan (16 per cent to 13.5 per cent) the net expenditure on the project was beyond Rs 800 crore. Our net return on investment had been 6.9 per cent and including salary of staffers and management about 11.66 per cent vis-a-vis 20 per cent we were supposed to get every year,” added Puri.
The company approached the Corporate Debt Restructuring cell of RBI in 2004-05 and got its outstanding debts restructured to a more acceptable 12 - 14 per cent rate of interest. It claims to have made a net interest pay out of Rs 369 crore during the duration of the concession so far.
In comparison, traffic, he said, on the Noida-Delhi route, was not as per predictions drawn earlier. “Traffic was much higher in Gurgaon in comparison to Noida; this also led to slower recovery for us,” he pointed out. Today, there are 140,000 vehicles that use the 9.2km road to get between Noida and Delhi, a traffic volume projected for 2011, as per initial assessment.
Asked what is the status of the concession, Puri clarified, the Allahabad High Court, in response to a 2012 public interest litigation filed by Noida Resident Welfare Association, had ordered it to not collect any toll. “It is not the Supreme Court but us who suggested to the court to allow for CAG audit of our books and assess return on the project. The apex court acceded to our request,” said Puri.
Meanwhile, CAG officials confirmed that they had made a beginning into the audit and work is on in full steam. “We have held a number of audit meetings with NTBCL officials and our findings are expected to be coming any week now,” said a CAG spokesperson.
The CAG finding will be revealed before the Supreme Court during its next hearing in the case later in January. About 140 staffers of NTBCL, who were engaged in toll collection in three shifts, have been given the pink slip by the company as it is not allowed to collect toll. Meantime, it is garnering efforts to increase its revenue from advertising and from generation of solar power to keep available amenities like Ambulance and emergency towing services.
