Giving another push to infrastructure development, the Centre has allowed road developers to completely exit BOT (build-operate-transfer) projects two years after completion and invest the funds in incomplete highway projects, power plants or retire debt. The decision is an extension to the government’s decision three months ago of easing exit norms for completed projects.
The Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi cleared the amendment to the earlier clause which allowed for exit from a build operate transfer (BOT) projects two years after the completion of construction. The objective of the decision is to expedite award and implementation of highway projects by making additional funds available for investment.
CCEA has further stated that the facility will be provided to developers of National Highway Authority of India (NHAI) projects, any other highway development work or power sector programs to retire their debt to financial institutions. It pointed-out that most developers in the infrastructure sector are carrying highly leveraged balance sheets at their holding companies level, as they have been simultaneously supporting various infrastructure special purpose vehicles (SPVs) which are under severe stress.
Earlier, in May the government had allowed this facility to pre-2009 projects through a comprehensive exit policy framework that allowed developers to divest 100 per cent equity two years after completion of construction, now the government has said that the exit facility will be available for all BOT projects, “irrespective of the year of award”.
