Cabinet approves exit norms for NHAI projects

Published: 21st June 2013 04:32 PM  |   Last Updated: 21st June 2013 04:35 PM   |  A+A-

Roads
By IANS

The Cabinet Friday approved a long-pending proposal from highway developers allowing them to fully exit the project or partially divest equity in the road project after approval from the stakeholders.

With this step, the Cabinet Committee on Economic Affairs (CCEA) expects that implementation of road infrastructure in the country can be expedited and also NHAI will be insulated from heavy financial claims and unnecessary disputes.

"The proposal aims at revival of the sector by facilitating substitution of Concessionaire in case of both ongoing and completed projects, in both these cases, appropriate substitution of the Consortium Member(s) of Concessionaire for project, therefore, shall require to be effected by the Lenders with the consent of NHAI.

"In view of the prevailing lack of interest among prospective bidders for highway projects under the PPP mode and difficulties faced in achieving financial closure for such projects awarded in the recent past in an already subdued investment climate, it has been decided that existing Concessionaires both in case of completed and on-going projects be permitted to divest their equity in totality. This would bring about required flexibility for existing Concessionaires in terms of exit options," said an official release.

This is proposed to be made applicable both for already awarded projects that have achieved appointed date and projects to be bid out in future, as per the prescribed mechanism.

Two types of mechanisms have been adopted for substitution: Firstly, subsequent to the substitution, the leading substituting entity shall be required to maintain at least 51 percent equity holding in the project special purpose vehicle. The second one is that substitution shall require the prior approval of lenders before implementation.

Apart from this, the CCEA has also given its approval for two-laning of the Uniara-Nainwa-Hindoli-Jahajpur-Shahpura-Gulabpura section of NH-148D in Rajasthan under the National Highways Development Project (NHDP) Phase IV, on Engineering, Procurement and Construction (EPC) basis. The project cost is estimated to be Rs.774.33 crore. The total length of the road will be approximately 204 km.

Stay up to date on all the latest Nation news with The New Indian Express App. Download now
(Get the news that matters from New Indian Express on WhatsApp. Click this link and hit 'Click to Subscribe'. Follow the instructions after that.)

Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp