Bringing some relief to lenders that have financed ‘languishing’ projects, NHAI has decided to pay back major share of the loan to banks after carrying out independent assessment of the work done. Such projects will then be, under public-private partnership (PPP), taken over by the authority for their completion.
Sources said NHAI Board, the apex body with representatives from different ministries, has approved the proposal and it will soon be sent to the cabinet secretariat for its assent to carry out necessary changes in the model concession agreement (MCA). Such a mechanism is likely to bring relief for bankers in at least 7-8 languishing projects.
In the existing MCA, lenders get no compensation in case a project is terminated during construction period. They are entitled to get 90 per cent of the remaining debt only in case a contract is terminated after completion of the project.
“We have prepared a policy proposal on this to take forward the works and also to reduce chances of huge number of litigations. Some portion of the amount lent by banks will be recovered,” NHAI chairman Raghav Chandra told.
He said the payment released by NHAI, based on independent evaluation, will be transferred to the escrow account of each project and the lender will be free to decide about usage of the funds.
