New Delhi: Government of India on Wednesday approved one-time financial assistance for “physically incomplete and languishing” national highway (NH) projects in the country.
“The Cabinet Committee on Economic Affairs (CCEA) approved a one time fund infusion to revive and physically complete languishing NH projects,” Communications and IT Minister Ravi Shankar Prasad said after the Cabinet meeting.
The NH projects where construction has been 50 per cent completed till November 2014 will be eligible for this one time financial assistance, the minister said.
“This will be a tripartite agreement between the funding agency, the NHAI and the builder,” he added.
The highways sector is struggling to roll out stuck projects worth Rs 3.8 lakh crore but the developers in many cases are now shying away.
Road Transport and Highways Secretary Vijay Chhibber has said last week that banks which have been “happily over- financing” road projects without necessary due-diligence were also to be blamed for this problem and there are nearly 70 projects that have got funding at escalated costs.
After steel sector, roads account for the second largest amount of bad loans for the banking sector.
Chhibber had said that the problem compounded because banks released large upfront amounts to the developers who used the money in other sectors without worrying about delays in the road projects.
A recent Crisil study showed that nearly half of the road projects being constructed under the build, operate and transfer model with a sanctioned debt of Rs 45,900 crore are at a high risk of not being completed.