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NHAI's reverse BOOT strategy for stuck Roads

The National Highways Authority of India (NHAI) will soon roll out a proposal to take over stalled projects where promoters are short of resources and can’t complete them. The idea is to run these projects for a few years to recover the funds infused before handing them back to the promoter. The decision is based on the advice of the ministry for road transport and highways, a senior official.

Under the proposal if a project comes to a halt due to the promoter not having enough funds, NHAI will obtain a no objection certificate from the lender to the project as well as the concessionaire and put in the requisite funds to complete construction. NHAI will then toll the project till it recovers its funds and, thereafter, hand it back to the concessionaire, who will operate the project for the remaining period of the concession. This way, officials say, the interests of both lenders and the concessionaire will be protected.

The rationale for the proposal is believed to have originated from NHAI’s experience with the Jaipur- Gurgaon expressway to which a consortium of lenders had given approximately INR 1,800 crore of loans.

Source-On Request