Sunday, February 22, 2009

Andhra Governmant cancels proposed project in Delhi

Andhra Governmant cancels proposed project in DelhiAdversely hit by financial slowdown, another mega real-estate development in Delhi got derailed on Friday as Andhra Pradesh government cancelled Rs 1,000-crore Andhra Pradesh International Centre project, a multi-utility complex at the existing AP Bhavan and its adjoining areas in Bungalow Zone (LBZ). The government had claimed last year to get at least 40 corporate cottages and guest house ready by 2010 Commonwealth Games.

Confirming this K V Reddy, vice chairman and MD of Infrastructure Corporation of Andhra Pradesh (INCAP) said, "The Nagarjuna Construction Company-NCC Infrastructure Holdings consortium did not turn up to sign the agreement with the government even after expiry of 60 days period. We gave them another 15 days, but they still did not formed the SPV to execute the project."

The consortium was supposed to execute the development agreement (DA) and licence agreement (LA) and also failed to submit performance security of Rs 100 crore before the execution of DA and LA. Reddy did not rule out the financial slowdown as one of the reason behind the contractor failing to meet the requirement. "We have lost six months and we have to restart from ground zero. It seems the developer are finding it difficult to attain financial closure of BOT projects," said another official.

The state government had claimed to complete the project by first quarter of 2011 on this nearly 20 acres prime space.

The developer was required to pay an annual minimum guarantee amount of Rs 45 crore during the first 10 years from commercial operation, Rs 60 crore during the next 10 years and Rs 75 crore during the last 10 years of the 30-year license period.

Besides annual revenue sharing in a bracket of every 10 years, the state government will also get Rs 1,800 crores from the developer.