RInfra wins Rs 200 cr arbitration against NHAI

Reliance Infrastructure (RInfra) has won an arbitration award worth around Rs 200 crore against the National Highways Authority of India (NHAI) over additional costs and revenue losses linked to its highway project in Tamil Nadu, the company said on Monday.

A three-member Arbitration Tribunal issued a unanimous award on August 31, directing NHAI to pay RInfra Rs 150 crore by November 29. If the payment is not made within the stipulated deadline, the amount will carry interest at 12 per cent per annum, according to the company.

The tribunal also awarded RInfra compensation equivalent to 13.5 per cent of the actual revenue for losses resulting from the relocation of a toll plaza. The compensation will apply from March 2017 until the end of the project's concession period on January 14, 2038.

RInfra estimated that the net present value of the future cash flow from this compensation would be more than Rs 50 crore, taking the overall value of the award to around Rs 200 crore.

The arbitration proceedings arose from a dispute involving RInfra subsidiary TD Toll Road. The company said delays by NHAI in handing over land had contributed to higher construction costs. A subsequent change in the toll plaza location also resulted in revenue losses for the project.

The toll plaza was shifted from km 360+450 to km 382+850 on National Highway 45. The tribunal upheld TD Toll Road's contention that both the construction delays and the relocation of the toll plaza had adversely affected the project's finances.

TD Toll Road had developed and operates an 87-km, four-lane stretch of NH 45 connecting Tiruchirappalli (Trichy) and Dindigul in Tamil Nadu.

Construction of the highway project was completed and commercial operations began in January 2012, according to RInfra.

The arbitration panel comprised senior professionals with experience in India's infrastructure and public works sectors, including a former Director General of the Ministry of Road Transport and Highways, an Additional Director General of the Central Public Works Department (CPWD) and an Engineer-in-Charge of CPWD.

The award provides RInfra with compensation not only for past financial losses but also for the projected impact of the toll plaza relocation over the remaining concession period.