Road concessionaires allowed to sell out projects

In the highway sector, the Union government paved the way for developers to exit projects in between by diluting equity in favour of an interested company. The move would facilitate faster completion of the projects, since there are many concessionaires not interested any longer in the projects they’d taken up and/or not able to achieve financial closure as the investment climate faces a downturn. The Cabinet Committee on Economic Affairs (CCEA) approved a proposal to allow companies to buy out an existing concessionaire, provided lenders to the project agree and the substituting company takes at least 51 per cent of the equity. It has been decided that existing concessionaires, both in case of completed and ongoing projects, be permitted to divest their equity in totality, an official statement said. However, this will require consent of the National Highways Authority of India (NHAI).