Owing to delay in securing statutory clearances, the National Highway Authority of India (NHAI) allowed the concessionaire of the Kota-Jhalawar highway project in Rajasthan to take more time for financial closure.
The lenders of the highway project asked for all the clearance to be on the safer side. The approvals from several departments take at least a year. This has choked the funds and looking at this NHAI has given this relaxation, reports quoted an official as saying.
No specific timeframe has been fixed for achieving financial closure as of now. Apart from Rajasthan, two projects in Kerala and one in Odisha too have been extended for similar reasons, reports suggest.
A company is liable to gather its funds for the project within 180 days of the date of awarding the project. If it fails, it can request for a grace period of 120 days more after paying a penalty. However, beyond that, if the firm is unable to submit its sources of funds, the project stands cancelled. It is then either rebid or awarded to the second lowest bidder.
In the case of Kota-Jhalawar highway project, the concessionaire is allowed to take more than 300 days for financial closure. The NHAI has given such leniency for the first time. An official admits that the NHAI is required to facilitate a number of clearances for the project which it has been unable to get.
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