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Delay in Mopa works: govt faces risk of paying heavy fines



Even as the construction work of the Greenfield international airport at Mopa has come to a halt due to status quo order of the Supreme Court dated January 18, 2019, the state government faces the risk of paying fines if GMR Goa International Airport Ltd, the concessionaire, raises such a demand for breach of the agreement.

The state government had signed concession agreement with GMR on November 8, 2016 for development of Greenfield International Airport on public-private partnership basis at Mopa in Pernem taluka. Subsequently, the work of developing the airport project was started at Mopa.

However, a petition was first filed before the National Green Tribunal challenging the environmental impact assessment, which was dismissed in the month of August 2018. Later, the petitioners filed civil appeals before the Supreme Court challenging environmental clearance by the Union Ministry of Environment and Forest.

The petitioners had claimed that the EIA report, which was done for 10-kilometre radius of the airport, states that there were only bushes to be cut, but in all actuality, GMR sought permission to cut 55,000 trees from the barazen plateau at Mopa.

The counsel representing GMR tried to explain to the Bench that the bushes have now grown into trees, but the judges did not accept it and did not consider respondent’s argument that the Greenfield airport is of national importance and therefore needs to be completed by 2020 and ordered to maintain status quo on the work.

As per Article 37 of the concession agreement, in the event of the authority (government) being in material breach or default of this agreement at any time after the appointed date, it shall pay to the concessionaire by way of compensation, all direct costs suffered or incurred by the concessionaire as a consequence of such material breach or default within 30 days of receipt of the demand supported by the necessary particulars, thereof; provided that no such compensation shall be payable for any material breach or default in respect of which damages have been expressly specified in the agreement.

Further, it says that compensation payable may include interest payments on debt, operation and maintenance expenses, any increase in capital costs on account of inflation and all other costs directly attributable to such material breach.

Even as the financial condition of the state treasury has deteriorated, the government has already paid Rs 300 crore to special economic zone promoters to free the land and is also paying over Rs 350 crore to Reliance Salgaonkar Power Infra in installments after the arbitration tribunal order.

And, now if GMR raises notice for compensation for stopping work for almost a year, then it would be a big blow to the cash-strapped state government.

Senior officials in the state administration told this daily that they pray that such a situation does not arise in the case of Mopa airport.

It may be recalled that the former Deputy Chief Minister and MGP MLA Ramakrishna ‘Sudin’ Dhavalikar had urged the government to either go for re-tendering of Mopa airport work or modify the arbitrary clauses of the agreement signed with concessioner fearing Reliance Salgaonkar Power Ltd like arbitration against the state where hundreds of crores needs to paid to the private party.

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