CAG pulls up NHAI for favouring Reliance Infra, L&T, IRB

Putting NHAI in the dock for favouring private players, CAG today said Reliance Infra, L&T, IRB and other companies have been unduly allowed to collect over Rs 28,000 crore as additional toll on nine major national highways including the Delhi-Agra stretch.
Road users will have to suffer this "extra burden" due to NHAI fixing longer concession periods for private operators to collect toll.
Besides, the special purpose vehicle created by Anil Ambani-led group's Reliance Infra was found to have diverted a part of the toll funds to invest in Reliance's own mutual fund.
The CAG in its report submitted in Parliament today said NHAI also gave undue benefits to Reliance Infra SPV for six-laning of a National Highway project as an important clause was 'deleted' from the agreement. The company termed the allegations as "baseless and devoid of any facts".

The CAG audit report on 'Implementation of Public Private Partnership (PPP) Projects In National Highways Authority Of India (NHAI)' said toll amount of Rs 902.89 crore collected in three six-laning projects was released prematurely to developers despite failing to meet milestones.
In Delhi-Agra project, an important clause in 6-laning concession agreements for withholding the toll collection in case of failure to achieve milestones was deleted.

"By the end of August 2013, concessionaire (R-Infra SPV) had collected toll amounting to Rs 120 crore and utilised an amount of Rs 78.32 crore in investment in liquid funds," the report said.
Reliance Infra had formed an SPV in the name of DA Toll Road Private Ltd to collect toll from October 16, 2012.

A RInfra spokesperson, however, said: "The allegations made in the CAG report are completely baseless and devoid of any facts. We have not violated any law/concession agreements. All investments and expenses are made in full compliance of the agreements signed with NHAI and lenders."
The amounts invested in liquid mutual funds at any given point of time were Rs. 3 to 5 crore, and not the inflated figures alleged in the CAG report, and the same do not represent any "diversion" of funds, as the MF accounts were of the SPVs themselves, he added.
An L&T spokesperson refused to comment, while no comments could be sought from IRB Infrastructure.