Infrastructure giants GMR and GVK terminated their respective highway projects with National Highways Authority of India (NHAI) because they failed to collect equity required for the projects, and not because of long delays in environment clearances, NHAI Chairman R P Singh said.

Earlier this month, GMR terminated its contract for the Udaipur-Kishangarh-Ahmadabad project. GVK followed GMR's footsteps and terminated its contract for the Shivpuri-Dewas project. Both companies backed out on the ground that they hadn't got environment clearances required for the projects.

But, NHAI Chairman argued that it was the companies' inability to raise the equity required for the projects.

Speaking on the topic, Singh said, "The basic problem in my view is the company's [GMR's] incapacity to raise the equity required for the project. Equity worth `2,000 crore is needed for the project. The reason is almost the same with GVK."

GMR and GVK had bagged the contracts by agreeing to pay the government premium of Rs 636 crore and Rs 190 crore, respectively, for their respective projects.

Singh also questioned inconsistencies in government policy and the philosophy of building highways on the PPP basis.