New Delhi, Jan. 14: Infrastructure firm GVK has pulled out of a 330km highway project in Madhya Pradesh.
The Hyderabad-based company, the second private contractor to have pulled out of a road project in a matter of days, today said in a communication to the Bombay Stock Exchange that it had terminated the concession agreement it executed with the National Highways Authority of India (NHAI).
The firm had got the contract a year ago for the Rs 3,200-crore project to expand an existing two-lane highway connecting Shivpuri and Dewas.
Recently, GMR Infrastructure had terminated a contract with the NHAI to build a highway across the Rajasthan Gujarat border connecting Kishangarh, Udaipur and Ahmedabad.
"I cannot say why private firms are backing out of projects…. Of course, the economy is down and they are finding it difficult to get finances for their projects. At our end, we are sorting out problems we are facing," NHAI chairman R.P. Singh told The Telegraph.
Sources said GVK had sent the termination notice based on clause 34.8 of the concession agreement. Under the agreement, the highway authority was to arrange for land and obtain environmental and forest clearances.
Sources in GVK claimed it could not get environmental clearance. But sources in the ministry of road transport and highways said the clearance came through last week.
"The environment clearance came too late in the day. Without the clearance, the firm could not get bank loans to start work," said a senior official in the highways ministry.