State Support

Agreement
Issues
Gujarat

Chronology of State Support Agreement

National Highways Authority of India established under NHAI Act
1988 having principal office at New Delhi was entrusted to develop
National Highways all over India under NHDP Scheme of Government
of India.
Accordingly, during Vibrant Gujarat Global Investors Summit
2009, a MOU was signed by Government of Gujarat for development
of National Highway in the State of Gujarat (copy enclosed at
Appendix-A).
Subsequently Government of Gujarat, Revenue Department vide
resolution dtd- 19.02.2010 formed a High Level Committee
constituting, Principal Secretary (Revenue) as chairman with Chief
General Manager & RO-Gujarat NHAI as Member (Copy enclosed as
Appendix-B) along with other Member.
Again a MOU was signed by Government of Gujarat and NHAI
during Vibrant Gujarat summit in 2011 for additional projects (Copy
enclosed as per Appendix-C). As per MOU signed by Government of
Gujarat, it was agreed that the GoG would facilitate pre construction
activities like LAQ, Utility Shifting, Forest clearance and also sign the
State Support Agreement during concession period of each project for
development of National Highways in the State of Gujarat.

MoRT&H has circulated an umbrella SSA to be signed by

each State, but, Government of Gujarat has some
reservations in certain clauses and did not sign the Umbrella
State Support Agreement. The issue was addressed during
the CCI meeting on 30.03.2015,wherein Chief Secretary,
Government of Gujarat consented to sign the project specific
State Support Agreement on the lines of already signed State
Support Agreement by the State of Uttar Pradesh. Further
during CCI review meeting on 27.07.2015, the issue was
again discussed under the Chairmanship of present Chief
Secretary and the current status was appraised.
Project specific SSA has now been approved by MoRT&H.
Accordingly it has been submitted to Secretary, R&B
Department, Govt. of Gujarat vide this office letter no.F-56,dtd30.07.2015 (Copy enclosed appendix D) for further necessary
action.
You are requested to facilitate the signing of State Support
Agreement at the earliest.

Claus
e
2.2

Provision

Comments by Govt. Comments from

of Gujarat
NHAI HQ

Clause in SSA
signed by UP
Govt.

Restriction on
Competing Roads
The State Government
agrees and
undertakes that it
shall not construct or
cause to be
constructed any
competing Road .State
Government may at
the beginning of each
accounting year by
notice convey to the
Authority the
particulars of any
Competing Road that
it proposes to
construct, the
Authority shall make
appropriate provision
to enable the State
Government to
construct such road
without payment of
any damages or
compensation to the
Concessionaire

The policy of the central

Government is for
developing SEZ, SIR
designated areas for
various activities. The
N.H. length comprises
only of 4.3% of the total
network. This clause
restricts development of
State Highways.
Whenever the MoSRT&H /
NHAI takes up any road it
should be for them to
state which would be the
roads that they would not
like taken up as toll ways,
and this should be a part
of their study while
formulating & finalizing
the project this can then
be mutually discussed
and decided with State
Government.
Clause to be amended by
adding the line
This restriction shall
remain in force for 8 years
starting from Appointed
Date

Restriction on
Competing Roads
The State Government
agrees and undertakes
that it shall not
construct or cause to be
constructed any
Competing Road in
violation of the
respective Concession
Agreements

Clause 2.2 of SSA may

not be modified till the
stipulated time limit as
indicated in Clause 6.3 of
the Concession
Agreement or up to the
satisfaction of the
condition of average
traffic. If this clause is
modified, the Authority
will be liable to pay
compensation.
Therefore, 8 years
may be replaced by 10
years

Claus
e
2.4

Provision

Comments by
Govt. of Gujarat

Comments from Clause in SSA

NHAI HQ
signed by UP Govt.

Restriction on Local
Taxes
The State Government
agrees and undertakes
that it shall not levy or
impose any local Tax, toll,
or charge on the use of
whole or any part of the
Project Highways.

Restriction in SSA
including restriction
on competing roads
and on levy of local
taxes would be
limiting to States
autonomy.

We may not agree

with the deletion of
this clause pursuant
to clause no. 6.1.2(d)
of Concession
Agreement

Restriction on Local
Taxes
The State Government
agrees and undertakes
that it shall not levy or
impose any Local Tax, toll,
or charge on the use of
whole or any part of the
Project Highways

Relevant Clauses
6.1.2The Authority agrees to provide support to the Concessionaire and undertakes
to
observe, comply with and perform, subject to and in accordance with the
provisions of this Agreement and the Applicable Laws, the following:
6.1.2(d) make best endeavors to procure that no local Tax, toll or charge is levied
or
imposed on the use of whole or any part of the Project Highway;
6.3 Obligations relating to Competing Roads:The Authority shall procure that during the subsistence of this Agreement,
neither
the Authority nor any Government Instrumentality shall, at any time
before the 10th
(tenth) anniversary of the Appointed Date, construct or cause
to be constructed any
Competing Road; provided that the restriction herein
shall not apply if the average traffic on the Project Highway in any year exceeds
90% (ninety percent) of its
designed capacity specified in Clause 29.2.3. Upon
breach of its obligations hereunder, the Authority shall be liable to payment of
compensation to the
Concessionaire under and in accordance with Clause
35.4, and such compensation shall be the sole remedy of the Concessionaire.
12.5 [Six Laning] of the Project Highway (Clauses 12.5 and 12.6 may be omiitted
if two
stage capacity augmentation is not cotemplated)
12.5.4
Notwithstanding anyrhing to the contrary contained in this Agreement,
in the event
of an Additional Tollway or Competing Road being constrcuted
prior to the
Scheduled [Six-Laning] Date, the Concessionaire shall be deemed
to be relieved of its obligation to undertake construction of [Six Laning] under
this Agreement.

27.2 Revision of Fee:27.2.1

The Parties hereto acknowledge and agree that the Fee shall be revised
annually on
April 1 subject to and in accordance with the provision of the Fee
Rules; provided,
however, that no revision shall be effected within a period of 6
(six) months from the
date of the preceding revision of Fee.
27.2.2
[The Parties hereto acknowledge and agree that in conformity with the
Fee Rules, the Fee to be levied and collected upon completion of Four-Laning shall
be revised from
the date of Four-Laning.]
27.2.3
The Concessionaire hereby acknowledges and agrees that it is not
entitled to any revision of Fee of other relief from the Authority or any Government
Instrumentality
except in accordance with the express provisions of this
Agreement.
29.2.3

Notwithstanding anything to the contrary contained in this Agreement, if

the average daily traffic of PCUs in any Accounting Year shall exceed the
designed capacity of the Project Highway and shall continue to exceed
the designed capacity for 3 (three) Accounting Years following thereafter,
an Indirect Political Event shall be deemed to have occurred and the
Authority may in its discretion terminate this Agreement by issuing a
Termination Notice and making a Termination Payment under and in
accordance with the provisions of Clause 34.9.2; provided that before
issuing the Termination Notice, the Authority shall inform the
Concessionaire of its intention to issue such Termination Notice and grant a
period of 180 (one hundred and eighty) days for making a representation,
and may, after the expiry of such period, whether or not it has received
such representation, in its sole discretion issue the Termination Notice. For
the avoidance of doubt, the Parties agree that an average daily traffic of
***** PCUs [and ***** PCUs] shall be deemed to be the designed capacity
of the [Four-Lane] Project Highway [and Six-Lane Project Highway
respectively
7

34.9 Termination Payment for Force Majeure Event

34.9.2.
If Termination is on account of an Indirect Political Event, the Authority shall
make a Termination Payment to the Concessionaire in an amount equal to:
(a) Debt Due less Insurance Cover; provided that if any insurance claims forming
part of the Insurance Cover are not admitted and paid, then 80% (eighty percent)
of such unpaid claims shall be included in the computation of Debt Due; and
(b) 110%(one hundred and ten percent) of Adjusted Equity
35.4 Compensation for Competing Roads:35.4.1
Subject to the provisions of Clause 35.6, in the event that an Additional Tollway
or a Competing
Road, as the case may be, is opened to traffic in breach of this
Agreement, the Authority shall
pay to the Concessionaire, for each day of breach,
compensation in a sum equal to the
difference between the average daily Realisable
Fee and the projected daily Fee (the Projected
Fee) until the breach is cured. The
Projected Fee hereunder shall be an amount equal to the
Average Daily Fee, increased
at the close of every month by 0.5% (Zero point five per cent)
thereof and revised in
accordance with Clause 27.2. For the avoidance of doubt, the Average Daily Fee for the
purposes of this Clause shall be the amount so determined in respect of the Accounting
Year or period, as the case may be, occurring prior to such opening or operation of
an
Additional Tollway or a Competing Road, as the case may be.
35.4.2
Payment of compensation under this Clause 35.4 shall be deemed to cure the
breach of this Agreement so long as the Authority continues to pay compensation
hereunder. [In the event that the Concessionaire is relieved of its obligation to undertake
construction of Six-Laning in accordance with the provisions of Clause 12.5.4, the waiver
of Six-Laning shall be deemed to
cure the breach of this Agreement as from the
Scheduled Six-Laning Date]
8

List of Projects
Sr.
No.

Date of
signing
agreement

Status of
State
Support
Agreement

Relevant
clause of CA

Type of Agreement
applicable

25.07.2011

Not signed

47.3

Agreement between
MoRT&H and State Govt.

07.02.2011

Not Signed

47.3

Agreement between
MoRT&H and State Govt.

18.05.2009

Not Signed

47.3

Tri-party Agreement
between NHAI, State Govt.
and Concessionaire.

25.03.2010

Not Signed

47.3

Agreement between
MoRT&H and State Govt.

Four Laning of Godhra to Gujarat/Madhya

Pradesh Border Section of NH-59 under
NHDP Phase III. (Package-II)

25.02.2010

Not Signed

47.3

Agreement between
MoRT&H and State Govt.

Six laning of Samakhiyali Gandhidham

Section of NH-8A.

17.03.2010

Not Signed

47.3

Agreement between
MoRT&H and State Govt.

Four/Six laning of Gandhidham (Kandla)

Mundra Port Section under NHDP Phase-III.

10.03.2010

Not Signed

47.3

Agreement between
MoRT&H and State Govt.

Six laning of Vadodara Surat Section of NH8 incl. Construction of a new four lane Extra
Dose Bridge across river Narmada (Total
Length 6.745 Km.) Under NHDP Phase-V.

Projects Details

Six Laning of Ahmedabad to Vadodara

Section of NH-8 and improvement of
Ahmedabad Vadodara Expressway
Four laning of Jetpur-Somnath Section of NH8D NHDP Phase-III
Four/Six Laning of Gujarat/ Maharashtra
Border to Surat Hazira Port Section of NH-6
under NHDP Phase III.
Four Lanning of Ahmedabad-Godhra Section
of NH-59 under NHDP Phase-III (Package-I).

23.07.2012

Not Signed

47.3

Agreement between
MoRT&H and State Govt.

Remarks

Format given in
schedule W.

The BOT
Concessionaire
has been
terminated and
closed by MOU