GoK, KSRTC owe ‘big amount’ to GIPL
By CL Jose
KOCHI/September 01-2022: There is hardly any vehicle that passes through the Paliyekkara Toll Plaza (in Thrissur) without cursing the company for collecting ‘unjustifiably high’ toll for years together now.
One will certainly be inquisitive to know what sort of a killing this ‘infamous toll collecting company’- Guruvayoor Infrastructure Pvt Ltd (GIPL), is making every year by ‘fleecing’ the unsuspecting vehicle owners.
For Your Information – while GIPL closed the financial year 2020-21 (FY21) with a loss of Rs16.8 crore, the loss almost tripled to Rs48.7 crore for the just concluded 2021-22 (FY22).
Quite understandably, these two years have not been any lucrative period for toll-collecting companies for obvious reasons, as have been for most businesses for that matter.
GIPL is a special purpose vehicle (SPV) formed in 2005 through a joint venture between KMC and SREI.
The company took over the four-laning of the 46-km stretch of Thrissur-Angamali section of NH-47, and improvement, operation and maintenance of another 25.3 km stretch beyond Thrissur on a build, operate and transfer (BOT) toll basis.
The total project cost was Rs726 crore, which was funded by the promoter’s contribution of Rs226 crore (Rs169 crore as equity and Rs57 crore as unsecured loans from promoters) and external debt of Rs465 crore.
Rating downgraded
The leading rating agency, ICRA, has downgraded GIPL’s debt instruments by one notch and has kept them on Watch with Negative implications, meaning that another notch of downgrade will push the rating of the company’s debt instruments into the category of ‘high risk of default’.
Another downgrade is hinged on the outcome of the Central Bureau of Investigation’s (CBI) First Information Report (FIR) against the company.
The FIR had alleged criminal conspiracy and undue gain of Rs102.44 crore by GIPL during 2006 to 2016, in which it allegedly violated certain terms of the Concession Agreement (CA), the agency said.
GIPL has term loans to the tune of Rs212 crore and has outstanding non-convertible debenture (NCDs) for a value of Rs53 crore as of June end, 2022.
Government, KSRTC owe big money
GIPL has issued passes to local users giving privilege to pass the toll plaza paying discounted toll fare but on the condition that the difference in the fares will be reimbursed by the Government of Kerala (GoK).
The agency says that substantial payments from GoK and KSRTC remain outstanding as on date. In May 2022, the company received Rs27.35 crore against Rs132.79-crore claim from GoK, which is currently kept aside by the company since they have further requested for review of claims.
It’s alleged that Kerala State Road Transport Corporation (KSRTC) buses have not been paying toll from commercial operations date (COD), despite the order from the Supreme Court of India in October 2015 to obtain passes for their vehicles.
NHAI’s Rs200 cr Negative Grant claim
GIPL was required to pay negative grant worth Rs200 crore in five instalments of Rs40 crore each from FY2017 to FY2021 to the NHAI.
A negative grant is a premium a bidder offers to the NHAI to bag a contract it finds to be potentially lucrative, and this is considered a part of NHAI’s revenue stream
GIPL had requested NHAI to adjust the negative grant instalments against the pending dues from the GoK and KSRTC.
Agency said that GIPL had filed claims against NHAI for losses due to delay in project commissioning on account of factors attributable to the latter, and NHAI had also filed counterclaims.
ICRA, while assessing the credit risk, has assumed that the negative grant payable to NHAI will be adjusted against dues from the GoK and KSRTC.
“If NHAI does not allow for this adjustment, the resultant burden on GIPL’s cash flows would be a credit negative,” ICRA added.
Background
The four-laning project between Angamaly and Thrissur was secured by the consortium of KMC Construction Ltd and SREI Infrastructure Finance Ltd with equity interest of 51:49, respectively.
At present, the SPV is held by Bharat Road Network Ltd (BRNL). In FY2018, BRNL, part of SREI, took over 25 per cent stake from KMC, thereby increasing its stake from 49 per cent to 74 per cent.
Formal approval from NHAI is pending for transfer of the balance 26 per cent stake from KMC to BRNL for which the discussions are still under way.
