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NHAI seeks PMO help to recover abandoned road projects

27 May 2013 Evaluate

To restart the development of major road projects, the National Highways Authority of India (NHAI) has sought Prime Minister's Office (PMO) help to recover projects abandoned by the developers and starting those projects that have found no takers till now. NHAI has been seeking relaxations in highway contracts to create liquidity for cash-starved infrastructure developers who have been unable to find investors due to regulatory bottlenecks and stuck with high-cost debt, making projects unviable.

It has also demanded for restructuring of premium payment commitments made by private developers to prevent a stalemate in the highways sector where more projects are abandoned and new ones find no takers. Meanwhile, the government has deferred a much-awaited decision to resuscitate stalled highway projects by allowing an easier exit option for road developers.     

Thought the Cabinet Committee on Investment (CCI) was expected to discuss the issue on May 23 meeting, some ministers in the 19-member panel are learnt to have voiced concerns about making such post-facto changes in highway contracts. The CCI has directed ministries to accelerate action on such unresolved issues. Accordingly, the road ministry, finance ministry and the Planning Commission will discuss a mutually agreeable solution.

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