There are a few proposals for the highway sector which may be taken up by the Cabinet Committee on Investment (CCI) soon.
The proposal relates to relaxing the exit clauses of highway developers that would enable developers to exit early and make way for investors with deep pockets.
At present, there are limits on when a highway developer can exit and to what extent he can exit.
The idea is to let investors with deep pockets to come in and replace current developers who are struggling with finances; and are unable to build roads, said sources from the Highway Ministry.
The only condition is that firms that replace current developers should meet the net-worth criteria to bid for the project.
Another proposal under consideration is to permit investors in those projects that have achieved financial closure but are stressed due to lack of equity funding.
In a related move, speaking at an Assocham conference on infrastructure financing, Asha V. Katyal, Associate Director-Transaction Advisory services, Ernst and Young, said, “It is not that foreign investors are not interested in road projects. But they have become cautious and have increased their due diligence that they do for projects.”
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