Infrastructure Leasing and Financial Services (IL&FS) has filed a writ petition with the Ranchi High Court, demanding Rs 775 crore in unpaid annuities and interest from the Jharkhand government.
IL&FS had an agreement with the state government to develop five roads under the Jharkhand Accelerated Road Development Project. Despite this agreement, the government has not paid the semi-annual annuity of Rs 775 crore, which IL&FS claims is overdue.
The partnership involved concession agreements signed between 2009 and 2011 to build and maintain 1,500 km of roads in Jharkhand using a public-private partnership model known as build-operate-transfer (BOT).
The first agreement in 2009 was for constructing the Ranchi Ring Road. Other agreements that year included the Ranchi Patratu Dam Road and the Patratu Dam-Ramgarh Road. In 2011, agreements were made for the Chaibasa-Kandra Chowk Road and the Adityapur-Kandra Road. All these projects were on a BOT annuity basis.
The process began with securing funding, hiring subcontractors, and preparing for construction. After completion, IL&FS was to operate and maintain the roads for 15 years. Funding came from a mix of debt from creditors and equity from promoters.
The semi-annual payments were set at Rs 58 crore for the Ranchi Ring Road, Rs 25 crore for the Ranchi Patratu Dam Road, and Rs 31 crore for the Patratu Dam-Ramgarh Road. IL&FS asserts that all projects were completed on time, negating any reason for reducing the annuities.
An independent consultant also confirmed that there were no suggested reductions for the annuities, which the government has withheld, according to the petition.
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