At a recent meeting between finance minister P Chidambaram and road transport minister CP Joshi, it was decided to extend concessions to stranded highway projects under the public private partnership (PPP) mode.
The concessions could include the possibility of developers backloading payouts to NHAI in the latter years of the concession period to offer relief early into the contract.
Earlier, the finance ministry was not fully in favour of helping existing troubled PPP projects, as it is not the government’s responsibility offer relief to such projects.
Around 20 projects worth around Rs 2,500 crore are struggling to attain financial closure because of the slowdown in the economy and delay in approvals from the government.
Every project gets 180 plus 120 days to complete their financial closure and the 20 projects are in their 120 day extension period.
GMR Infrastructure and GVK Infrastructure have already sent termination notices for a project each to the National Highways Authority of India (NHAI).
In another development, the government plans to make some changes in norms for PPP projects, including compensating them for delays, to generate interests for such projects. The proposal was reportedly discussed in a recent meeting held in the Prime Ministers’ Office.
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