To resolve the issues of stalled highway projects across the country, Union Finance minister Arun Jaitley and Transport Minister Nitin Gadkari on Thursday met with the bankers, contractors and the builders. The meeting came a day after Prime Minister Narendra Modi chaired a cabinet meeting taking the stock of the progress of key infra projects.
As per the latest data available with the ministry of Road Transport and Highways, nearly 421 National Highway Projects are delayed due to cost escalation, unavailability of projects and row between bankers and concessionaires.
Discussing the terms of execution of the stalled projects, both the ministers — Arun Jaitley and Nitin Gadkari — also agreed to make changes in the mandatory Model Concession Agreement between the banks and borrowers to simplify the loan approvals.
Stressing that the growth in transport sector will have spiral effect on all sectors, Jaitley asked the bankers and contractors to expedite the pending projects as early as possible.
“We have simplified the procedures, made alternative options of flexibilities available for bankers, contractors. We are hoping to award 10,000 Km of highways by march”, Jaitley told the press after the meet.
Both the ministers also explained the newly taken cabinet decisions where government has decided to fund 40% of project cost of high way projects bid on PPP mode.
Earlier on Wednesday, the Cabinet Committee on Economic Affairs, chaired by Prime Minister Modi approved Hybrid Annuity Model for implementing the Highway Projects bid on PPP mode.
Under the Hybrid Annuity Model, road projects under Public-Private Partnership (PPP) mode will receive 40% of project cost from the Government to the concessionaire or contractor. Remaining 60% has to be arranged in form of debt and equity.
KK Kapila, CMD of Intercontinental Consultants and Technocrats Pvt Ltd. (ICT) has welcomed the move and told RSTV that “the approved model will reduce the risk fear of concessionaires and allows banks to give loans to contractors”
On Wednesday, PM Modi also took stock of the progress of vital infrastructure projects in the road, railway, coal, power and renewable energy sectors, spread over several states.
“Discussions were held on significant projects like Mumbai Trans-Harbour Link, DMIC & Jal Marg Vikas Project from Allahabad to Haldia” PM Modi said on a micro blogging site Twitter.
During the cabinet meeting, the Prime Minister sought the review of key government decisions of all ministries in coming weeks.