The National Highways Authority of India has identified 15 languishing road projects, to which it will provide a one-time financial assistance for completion, says Satish Chandra, Member Finance, NHAI.These include 12 Build Operate Transfer (Toll) projects and three annuity projects.The Cabinet Committee on Economic Affairs Wednesday had said stalled projects where 50 percent of the work was completed by November 2014 would be eligible for the assistance.Chandra said these projects require around Rs 1350 crore for completion, and that NHAI would have the first right of recovery.In an interview to CNBC-TV18, Chandra says the NHAI has also identified 17 projects to be awarded in Hybrid Annuity mode in FY16Under this model, the government would provide 40 per cent of the project cost to the developer to start work, and the remaining investment will have to be made by the contractor. The National Highways Authority of India (NHAI) will collect toll and refund the amount in installments over a period of 15-20 years.Such an arrangement lowers the upfront investment required to be made by the government. Below is verbatim the transcript of Satish Chandra’s interview with Sonia Shenoy and Reema Tendulkar.
Reema: Could you tell us which projects will be applicable for this loan from the government and what will be the total quantum of assistance from the government?
A: We have identified 15 languishing projects. 12 are build, operate, transfer (BOT) toll, three BOT annuity.
Reema: So, 15 in all. 12 are BOT and three of them are annuity?
A: BOT annuity, yes and 12, BOT toll.
Sonia: Can you tell us what are the total quantum of projects that are currently facing cost overruns and have high implementation risks?
A: There were about 30 projects and 16 projects, we have sorted out the issues and they would be completed but with some delay and the work was standstill in these 15 projects 12 of which are BOT toll and three BOT annuity, so government in May, 2015, notified a policy of fund infusion in BOT toll projects. Yesterday, Cabinet extended this policy to BOT annuity projects. And out of these 12 projects, four concessionaires have requested for fund infusion and out of three BOT annuity projects, two concessionaires have requested for fund infusion.
Reema: So overall, six concessionaires have asked for fund infusion?
A: Yes.
Sonia: What is the total additional budgetary support that the industry needs over and above the budgeted estimate of Rs 45,000 crore?
A: It will be adjusted within the allocated budget.
Sonia: So, there will not be any additional support that you will get?
A: Yes.
Sonia: By when could this fund infusion take place?
A: This fund infusion would be 1,350 crore.
Sonia: And by when will that come in?
A: Now, we have requested the lenders and the concessionaires to arrange for a no objection certificate (NOC) from the lenders that NHAI would have the first recovery. As soon as the projects are completed, the toll income would go to the authority and thereafter the repayment on interest would get paid.
For entire interview, watch accompanying video.
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