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Gammon India is mulling arbitration

KOCHI: Gammon Infrastructure Projects Limited, which constructed the new Mattancherry bridge on a BOT basis, is contemplating to initiate arbitration procedures to pressure the State government to clear the backlog of annuity payment for the past five years.

Talking to reporters here on Friday, Parvez Umrigar, managing director of Gammon India, said as per the trilateral agreement entered by the company with the State government and the National Highway Authority of India (NHAI ), Kerala government was supposed to pay an amount of Rs.1.54 crore each year towards annuity payment. The government had defaulted for the past four years and hence the company had requested the government to appoint an arbitrator. The company would have to think about approaching the courts to direct the government to appoint the arbitrator if there were further delay, he cautioned.

He lauded the 1999 agreement for the Mattancherry bridge project, which was the first private-public partnership in the State, and which detailed the cost recovery based on the Wholesale Price Index which became the norm for all such projects initiated by the National Highway Authority of India.

He also allayed fears from some quarters that the toll collection at the Bridge was not scientific. He said that as per the agreement, the company is entitled to collect toll for a period of 19 years and nine months. The initial investment was about Rs.25.80 crore and the company was getting a return of Rs.2.75 crore each year. The daily collection of toll would amount to about Rs.1 lakh, of which 20 per cent went for operational expenses. The company had agreed to the government terms of freezing the toll rates as per the rates fixed in 2002 and also allowed multiple entries to private buses on the bridge. The company had submitted detailed audited reports of the toll collection with the GCDA, which is the nodal agency for the project, Mr. Umrigar noted.

Gammon has at present over 95 projects in the country, totalling an investment of about Rs.12,000 crore. Some of the major projects included the renovation at Vizag Port, construction of the National Highway portion of the Golden Quadrilateral at Rajamundhry and Dharmavaram in Andhra Pradesh, the Mumbai-Nashik express highway, Container Port at Mumbai and so on. Besides hydroelectric projects in Himachal Pradesh, Power projects using biomass in Haryana and Punjab, Bagasse units in Maharasthra are also major projects of the company.

Answering a query, he said the company has bid for the Metro Rail project in Kochi and also for the Vizhinjam Port.

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