IL&FS mess: Centre seeks update on stalled highway projects from new board

The Union road ministry would soon approach the board of IL&FS for an update on the delayed highway projects. In case the new board wants to abandon the construction, the Centre would award these projects to other contractors.

“We want to know whether they are willing to finish the projects that they started and have been delayed for the last couple of years, otherwise we will find new contractors for those contracts,” a senior road ministry official told Business Standard.

According to the official, the four-laning project of Kiratpur-Ner Chowk Section of NH-21 in Punjab and Himachal Pradesh is 60 per cent complete but no work has been done in the last 18 months.

The Centre wants to know whether IL&FS is keen on completing these projects, otherwise they would be tendered to other concessionaires as delays in execution may escalate their cost.

Road construction is undertaken by IL&FS mainly through special purpose vehicles floated by its subsidiary IL&FS Transportation Networks (ITNL) which has 27 road projects, including those of national highways, city and state contracts, that are completed.

IN LIMBO

• A project to make a section of NH-21 into four lanes is 60% complete but has stopped since 18 months

• Some other projects are — Barwa Adda-Panagarh (West Bengal), Patna-Gaya-Dobhi (Bihar), Amravati-Chikli (Maharashtra) and Fagne-Maharashtra/Gujarat border

• The Cabinet in 2016 approved a proposal under which government agencies would pay 75% of the amount of the contract to clear cases that were stuck due to regulatory issues

Some of the other delayed projects of the company are — Barwa Adda-Panagarh (West Bengal), Patna-Gaya-Dobhi (Bihar), Amravati-Chikli (Maharashtra) and Fagne-Maharashtra/Gujarat border, costing Rs 68.64 billion.

The Cabinet in August 2016 approved a proposal under which the government agencies would pay 75 per cent of the amount of the contract to clear the cases that were stuck due to contractual, land acquisition or other regulatory issues.

The idea behind the move, besides attracting private investment, was to enable recovery of loans by banks and allowing construction companies to speed up execution of the ongoing projects. The newly appointed board of IL&FS would soon submit a resolution plan for the company within a fortnight.
 

The Union government on Monday asked the National Company Law Tribunal (NCLT) to replace the existing board of IL&FS with its own nominees, led by Uday Kotak, managing director and CEO of Kotak Mahindra Bank.

The other members of the board are Vineet Nayyar, a former vice-chairman of Tech Mahindra, G N Bajpai, former chairman of the Securities and Exchange Board of India, G C Chaturvedi, chairman of ICICI Bank Ltd, and former IAS officers Malini Shankar and Nand Kishore.