Om Metals Infraprojects' Thursday said its special purpose vehicle (SPV) Bhilwara Jaipur Toll Road Ltd (BJTR) has sought termination compensation of Rs 523 crore from the Rajasthan government.
BJTR, which was formed to execute road projects, served a termination notice to the Rajasthan government citing material default, a company statement said.
As per the termination clause 37.3.2 of the concession agreement, the government of Rajasthan is liable to pay the complete debt due on the project and 150 per cent of the adjusted equity.
The Rajasthan government has to pay 1.5 times of equity, debt and compensation as permitted in the concession agreement.
From April 2018, the private vehicles were made toll free by the state government and the company was exploring with NHAI to convert the state highway into a national highway. BJTR had received this project for the development of a two-lane road from Jaipur to Bhilwara via Malpura, Kekri and Shahpura (SH-12) on DBFOT (design, built, finance, operate and transfer) basis through PPP model.
It has also been talking to the state government for allowing compensation for loss on account of exempted vehicles.
This SPV, where Om Metals has 49 per cent stake, had completed the development of 212 km road project of Jaipur-Bhilwara stretch on build-operate-transfer (BOT) basis and commercial operation date (COD) achieved in December 2014.
Om Metals has executed 100 per cent of engineering procurement and construction (EPC) work for a total project cost of Rs 410 crore.
Commenting on the development Vikas Kothari, president and director of Om Metals Infraprojects said, "With this development, there would be the realisation of deployed cash flow into the company."
"We will be able to take up more large projects in our core area of irrigation and hydro-mechanical projects. This would spur the growth rates in our business in the years to come," he said.
(With inputs from agencies.)