Land blip delays Rs 1,235 cr plans of Gayatri

Gayatri Projects, the Hyderabad-based developer, may face a 6-12 months delay in the completion of its three build-operate-transfer (BOT) highway projects as the
right of way for them has not been granted, a company official said.

All three four-lane projects, together worth Rs 1,235 crore, are in Uttar Pradesh.
While one is an 83-km project between Meerut and Muzaffarnagar worth Rs 535 crore, the other two are in Jhansi and Lalitpur, each 50-km long.

“The Meerut project will be operational next June, a delay of almost a year, and the other two, scheduled for completion this September, will be delayed by six months,” K G Naidu, director, finance, said.

Gayatri Projects bagged the Meerut project on a toll basis in September 2005 and Jhansi and Lalitpur projects a year later. “For each of the three projects we are yet to receive 15% of the land. We hope to get the land in 2-3 months,” Naidu said. The company is to get 7-8 kms for the later projects. Naidu said that the right of way is to be granted by the National Highways Authority of India (NHAI) for forest and agricultural land.

A BOT toll project is one where a developer builds the project, operates it for a specified period, earns revenues through toll and returns it to the government.
An annuity project, on the other hand, is the one where the developer, instead of charging toll, gets paid by the government periodically.

“We are going to begin tolling for 50 kms of the Meerut project in December,” Naidu said.

This will be Gayatri’s first BOT project. The firm has two other BOT projects worth Rs 800-900 crore, both on an annuity basis, in Hyderabad.

Land acquisition is one of the major issues plaguing BOT projects.

Developers have for a while now been telling NHAI to acquire a substantial portion of the land before the project is up for bidding which will ensure speedy completion of the project. Gayatri Projects has an order book of Rs 5,800 crore, out of which 60% is in irrigation and 30% is in contracting jobs for BOT projects, including its own.