NHAI invites applications for fund infusion

NEW DELHI, June 21: To accelerate highways building and salvage stuck road projects, National Highways Authority of India (NHAI) has asked developers to come forward with a financing plan and justification for the fund infusion that they are seeking from the authority. The government last month allowed the NHAI to provide funds to projects that are in advanced stages of completion but are stuck due to equity crunch. "The concessionaire seeking such relief shall approach NHAI with an application which shall clearly state the financing plan required for completing the project construction and justifying one time fund infusion," NHAI said in a communique. NHAI will provide financial assistance from corpus earmarked to any languishing highway project in BOT (build, operate and transfer) mode that has achieved at least 50 percent physical completion where infusion of moderate funding could lead to its completion. "The assistance would be provided on a loan basis at bank rate + 2 percent drawing a parallel with the provisions of ... model concession agreement. A robust third party evaluation mechanism will be developed by NHAI to determine the eligibility of the concerned project and the extent of bridge fund required to complete the project," the government has said. Of the ongoing 240 PPP (public-private partnership) projects, some are languishing due to delays on land acquisition, grant of statutory clearances, local issues and shortage of construction materials etc. In addition to steps to revive such stalled projects, the government last month approved a special intervention for the projects that are in advanced stage of completion but are stuck due to either lack of additional equity or lender's inability to disburse further. Accordingly, NHAI, inviting applications from developers of such projects, has said that acceptance of the concerned senior lenders would be sought for providing such a relief in accordance with the approved scheme. Directing NHAI to develop a robust mechanism to determine eligibility of the project as also the extent of funds required to complete projects, in time-bound manner, the government had expressed hope that about 16 such projects languishing in various parts of the country where public is facing difficulty on account of incomplete works will benefit from the decision. The government had set a target of constructing 6,300 kms of roads in 2013-14 and 2014-15 each, of which 4,260 kms and 4,410 kms, respectively, were achieved during the two fiscals. Now the government has decided to take the road building pace to 30 kms a day from existing about 14 km a day.