Languishing highway projects — where promoters have run out of funds and banks are unwilling to lend — will now get a one-time fund infusion from the government to complete the project.
However, the promoter will have to return the funds from the toll revenue to the National Highways Authority of India (NHAI) at bank rate plus two per cent. Such funds, which are already applicable in projects implemented on build-operate-transfer (BOT-toll) basis, will now be implemented in projects on BOT (annuity) basis.
The decision was approved by the Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi on Wednesday and is seen as a move to revive and physically complete languishing national highway projects.
According to an official statement, the decision will allow the provisions of the Policy Circular of NHAI issued in June on one-time fund infusion for BOT (toll) projects to be extended and made applicable in case of languishing projects on BOT (annuity) mode, subject to the condition that after completion of construction of such projects, loans are to be recovered along with interest by NHAI from the annuities payable, bi-annually, through execution of a tripartite agreement among the senior lender, concessionaire and the authority.
The infusion of fund would be a one-time dispensation for all such projects that have been languishing as on November 1, 2014, the statement said, adding that all such cases and the amount of bridge fund required in each shall be approved by the NHAI, on a case-by-case basis.