A meeting of the Finance Minister Arun Jaitley and Road, Transport and Highways Minister Nitin Gadkari with bankers and road contractors on Thursday failed break a stalemate over the fate of 19 stalled highway projects worth Rs 40,000 crore.
“Road projects have been stuck in large numbers in the last 10 years. Decisions were not been taken due to various reasons. However, the stuck projects have now come down from 384 to 74. There are 19 projects where no solution could be found out,” Mr. Gadkari said after the meeting.
“It is too early to make a commitment,” Mr. Gadkari said on the completion of these 19 projects. He expressed confidence about finding solutions in five to six such projects. In the rest of the projects, the intervention of the Prime Minister’s Office (PMO) and the Finance Ministry would be sought if any issue remains unresolved.
ADVERTISEMENT
Highway concessionaires told the government in the meeting that there is an “increasing reluctance of banks to fund road projects due to mounting non-performing assets.” They also said that there is a “trust deficit between National Highway Authority of India and the banks,” according to sources who attended the meeting.
Top government officials told The Hindu that the government will take up the matter with RBI Governor Raghuram Rajan to give relief to the bankers on the stalled projects.
However, government officials blamed developers for the stalled projects. “The issue is mainly related to the managerial inefficiencies of the road builders and inordinate delays at the initial stages of these projects. Majority of the projects need capital infusion and resolving where these funds will come from might take time,” the official said.
ADVERTISEMENT
Out of 74 stuck projects, the government has terminated 39 projects. The 19 stalled road projects, all awarded in the public-private partnership (PPP) model, involve the construction of 1,600 km national highways. Only five of them have completed more than half the work.
Finance Minister Arun Jaitley, said the government, financial sector, financial services and the contractors are working together to expedite the matter. The government has simplified all the procedures for building highways and it plans to award a total of 10,000 km of road projects by the end of this financial year, he said. It has already awarded 6,800 kilometres of highway projects this year.