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3,000 Km Highways awarded under PPP yet to take off

<p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">UPA-II seems to be bracing for another barb from the Opposition for destroying investment sentiment of private players in highway development programme. Over 3,000 Km highways awarded under the public private partnership (PPP) mode about two years ago are yet to take off for failure of both government and private parties. </span></span></span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">With the ongoing tug-of-war among various government stakeholders- road transport, finance and environment ministries and planning commission, there is little hope of these projects taking off or getting rebid during this fiscal. Private developers are also looking to walk out of projects blaming NHAI of missing deadlines to provide promised Land parcels and getting requisite clearances. </span></span></span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">Former NHAI and road transport ministry officials, who had warned the government of &ldquo;going overboard&rdquo; on PPP and particularly the build-operate-transfer (BOT-toll) mode in 2005-06, now says that things seem to be getting out of hand. &quot;We went ahead with plan of developing 85% projects on PPP mode and so all projects whether those were financially viable, unviable or very creamy projects lined up to get loan from banks and financial institutions. Projects bid out initially were successful when banks were inviting developers to take loan and there was little check,&quot; said a former NHAI member. </span></span></span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">Now six-seven years later, things have changed completely when banks have become more stringent while providing loan and are insisting on 100% land availability as a pre-condition. Developers have blamed the dip in economic growth resulting reduction in traffic flow as one of the main reasons of projects becoming unviable. </span></span></span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">NHAI has blamed other government bodies for delay in taking policy decisions. For example, there has been an 18-month lag by the environment and forests ministry to delink clearance and over eight months for rescheduling of INR 1 lakh crore premium (earning spread over 20-30 years) for over two dozen projects due to stubborn stands of the Planning Commission and economic affairs department of the finance ministry. </span></span></span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">Though the highways ministry had initially moved the proposal of scrapping the &quot;troubled&quot; premium projects and impose fine on developers for aggressive bidding, later it agreed to NHAI&#39;s proposal of premium rescheduling. Subsequently, it became free for all projects and the number of such ventures swelled to 48 during eight months. </span></span></span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">Though the highways ministry had initially moved the proposal of scrapping the &quot;troubled&quot; premium projects and impose fine on developers for aggressive bidding, later it agreed to NHAI&#39;s proposal of premium rescheduling. Subsequently, it became free for all projects and the number of such ventures swelled to 48 during eight months. </span></span></span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">Source-On Request</span></span></span></p>