The Union government on February 19 deliberated on providing compensation to road project developers for delays in obtaining environment clearances and land acquisition, besides providing early exits to highway developers. The issues were discussed in a meeting between the Prime Minister's Office, the Ministry of Road Transport and Highways and the National Highways Authority of India.
Many issues, including the compensation to concessionaires for delays in getting environment and other clearances, were discussed in the meeting. The compensation would not be for a particular project but all road projects in general, an official concerned said, without divulging the nature of the compensation.
The government has been able to award only close to 1,500 km of road projects against a target of 9,600 km set by the PMO for 2012-13. The target was later revised downwards to 8,800 km. Also, the concessionaires were stressed due to unavailability of financing options that led to a few projects getting terminated due to delays in financial closures.
GMR Infrastructure terminated a Rs.7,700 crore road project recently citing delays arising from environmental and land clearances. GVK Power and Infrastructure also exited a Rs.3,300 crore road project citing similar reasons. However, NHAI had maintained that the exits were due to viability issues of the developers.
The meeting also contemplated allowing early exits to developers from the projects. NHAI is already in the process of formulating an exit policy that would enable concessionaires to make early exits from the projects. The existing policy allows complete disinvestment after two years of commissioning of project, while they have to maintain 26 per cent equity in those two years.