The Cabinet Committee on Economic Affairs (CCEA) has approved major policy initiatives aimed at improving the availability of equity in the market.
The Committee has also authorized the National Highways Authority of India (NHAI) to intervene in languishing projects suffering from lack of funds.
The decision was taken at a Cabinet meeting chaired by Prime Minister Narendra Modi in New Delhi today.
The CCEA approved a comprehensive Exit Policy framework that now permits concessionaires and developers to divest 100 percent equity, two years after completion of construction.
This would help unlock equity from completed projects making it potentially available for investment into new projects. This decision will also harmonise conditions uniformly across all concessions signed prior to 2009 with the policy framework for post 2009 contracts which permit divestment of equity up to 100 percent, two years after completion of construction.
Out of the ongoing 240 PPP Projects, some are languishing due to delays on account of land acquisition, grant of statutory clearances, local issues and shortage of construction materials.
In conjunction with several other measures being taken to revive such stalled projects, CCEA today approved a special intervention for the projects that are in the advanced stage of completion but are stuck due to either lack of additional equity or lender’s inability to disburse further.
NHAI has been authorized to provide funds to such projects from within its overall budget or corpus on a loan basis at a pre-determined rate of return. This loan is to be recovered along with interest as the first charge from the toll receipts immediately after completion of construction.
NHAI has been directed to develop a robust mechanism to determine eligibility of the project as also the extent of funds required to complete projects, in time-bound manner. It is expected that about 16
such projects languishing in various part of the country where public is facing difficulty on account of incomplete works will benefit from this decision. This will also add momentum to the overall growth of
the highways sector in India which is already on the path of revival. (ANI)