NHAI says Rs 30kcr projects stuck on environmental issues

The roads sector never had it so bad. While two major developers have recently walked away from road projects, all highway projects awarded in the past one and a half years are stuck because of absence of environmental clearances. In an interview to CNBC-TV18, RP Singh, chairman, National Highway Authority of India (NHAI) spoke about the environmental issues as well as the lack of private equity for roads construction.

 

Singh mentions that projects worth Rs 30000 crore have been stuck up due to lack of environmental clearances. He further adds that an investment of Rs 90000 crore is required for construction of various types of lanes.

 

Below is an edited transcript of RP Singh's interview on CNBC-TV18

 

Q: What amount of investments are still stuck due to lack of clearance from the environment ministry?

A: The projects which are stuck up because of this issue must be worth about Rs 30000 crore.

Q: Would you still go ahead with your Supreme Court petition?

A: We will certainly withdraw our petition in case they agree with our contention which is likely now. In that case there is no cause of action left for us to continue the case in the court.

Q: Would NHAI then take any action against GMR and GVK?

A: The environment clearance has been one of the reasons. The notices which they have given are not tenable. In the case of GMR they have to give us the cure period notice of 90 days. So, in this particular case we are able to fulfill both the conditions which they have alleged that we have not fulfilled within a period of one month itself.

Q: What is needed as far as project financing for road is concerned, what kind of policy intervention is needed and what are the roadblocks?

A: For a program of this size, unless we attract private equity, if it is going to be only the contractor turned concessioners, it will be impossible for them to find resources. Equity has to come from private equity sources. One thing is that we de-risk the projects and then bid in which case private equity will be in a position to participate. Second thing is we allow the parties to churn equity now.

10000 kilometer projects are being awarded. The average cost of construction if you include some two lanes, some four lanes, six lane - is around Rs 8-9 crore so investment of the order of RS 90000 crore is required. So, easily the equity portion will be about Rs 25000 crore.