GMR KUAEL: The longest road PPP

Description

GMR Infrastructure Limited (GMRIL) had to make a decision on its continued role in the 555.50 km Kishangarh Udaipur Ahmedabad (KUA) Expressway Project, India's then longest road public-private partnership (PPP) Project. GMR had terminated the contract citing NHAI's failure in fulfilling Conditions Precedent (CP) of providing (i) environment clearance (EC), (ii) revised toll free notification and (iii) 80% orequired land. The case intends to educate the reader on concessionaire-authority dynamics in typical Indian infrastructure PPPs in the context of a dynamic economy, aggressive bidding, highly leveraged company balance sheets, obligations to fulfill contractual conditions, alleged apathy in government offices, political blame-games, disputed land acquistion status, issues in obtaining environment clearance and litigation to avoid a possible encashment of the concessionaire's performance guarantee. Taking into account its internal strategy, extant unfavourable investment climate, Central Governments's steps to revive private interest in the highways sector and NHAI's quick turnaround in fulfilling CP, GMR had to decide how to respond.

Publication Date

1-1-2017

Keywords

Public-private partnerships, PPP, Conditions precedent, Performance guarantee, Land acquisition, Environment clearance

Conference

3rd International Conference on Law and Economics, 19th November, 2017, GNLUIIMA-IITK, Ahmedabad

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