Nitin Gadkari to deliberate on highway project funding with bank chiefs

Nitin Gadkari to deliberate on highway project funding with bank chiefs

To streamline the availability of capital in the highways sector, road transport and highways minister Nitin Gadkari will meet bank chiefs later this month. The steady flow of funds into the sector is crucial to achieve the ambitious target of building 45 km of highways a day in the current fiscal from around 27 km/day a year ago.

A recent Crisil report on the highways sector said banks have become “extremely cautious” and are shying off projects not backed by experienced sponsors with strong financial. The rating agency also said banks were limiting their exposure to 35%, compared with 70%, in the traditional build-operate-transfer (BOT) projects. They are also seeking corporate guarantees for a large number of projects to safeguard their interests, it said.

Gadkari said projects worth `3.85 lakh crore, which were under the threat of becoming non-performing assets (NPAs), have been salvaged by the the present government. “I would apprise the banks (in the proposed meeting) of the steps taken by our ministry to avoid NPAs, how loans in this sector were returned on time and why this sector is important,” Gadkari said.

The minister said his ministry is determined to complete over 300 projects till March next year. Of these, about 100 projects are likely to be completed by December 2018. Gakari has also preponed completion date for around 280 projects by three months to March 2019.

For the current fiscal, the ministry has set an ambitious target of building 45 km/day. Of the 16,418 km construction target in the whole of 2018-19, the ministry of road transport and highways (MoRTH), which builds national highways through state PWDs, will build 9,698 km, followed by the National Highways Authority of India at 6,000 km. The National Highways Infrastructure Development Corporation has been entrusted with the target of building 720 km. In the last fiscal, 9,829 km of highways was built.

Gadkari said delay in land acquisition, problem in utility shifting and getting environment and forest clearances were coming in the way of speedier implementation of highway projects. Faulty detailed project reports (DPR) have been found to be another reason for delay.

The minister said a new system of introducing the performance audit of concessionaires would be introduced whereby good performers will be rewarded with incentives while poor performers may be black listed. Gadkari also cautioned cement companies against cartelisation.

Source: Financial Express