NHAI in pact with banks for funds to revive projects
Agreement with State Bank of India, others to revive and complete 3 comatose schemes
 "NHAI in pact with banks for funds to revive projects")
Under the arrangement (there are other lenders, too), the government would put in about Rs 1,100 crore while the banks would put in upwards of Rs 200 crore. Promoters of the three projects would give around Rs 100 crore.
SBI has to give up its first claim on the projects and its revenue stream; NHAI will be allowed to first recover money. The banks already have exposure of about Rs 2,000 crore in the three projects. In two cases, the disbursed sum is more than the originally estimated cost. Now, the banks will specify a standard operating procedure for each.
NHAI would recover the funds it would put in these projects within the lifecycle of these projects. It will charge the developers an interest rate of 2 per cent above the bank rate.
“In each of these, the bank is taking a minor haircut, though I would not like to call it so, since the project would have been stuck in litigation if the lenders did not agree to the arrangement,” Raghav Chandra, chairman of NHAI, told Business Standard.
Soon after engaging SBI in the revival of these projects, the government was hoping to close such arrangements with other public sector lenders like Canara Bank, Central Bank of India and Punjab National Bank for another 17 projects. Private sector ICICI Bank and YES Bank might also be persuaded to join. "The three projects will set a template for the other projects that are languishing," said Chandra.
Biggest among the three is the Panvel to Indapur project in Maharashtra. It will now get Rs 540 crore from NHAI and Rs 76 crore from banks and promoters. The project was being implemented by a joint venture between Supreme Infrastructure India, Mahavir Road and Infrastructure and China State Construction Engineering Hong Kong. The 84-km build, operator and transfer (BOT) toll project was started in December 2011 and was scheduled to get completed this December.
Then there is a project for the stretch from Chhapra to Hajipur in Bihar, awarded in 2011 but delayed due to land acquisition hurdles. The 67-km BOT annuity project would now be completed in a year. The original cost was Rs 575 crore and it would now need another Rs 388 crore, said Chandra. It was earlier scheduled to be completed by this December. The road is being constructed by Madhucon Projects.
Another highway project connecting Krishnagar with Behrampur in West Bengal had been languishing as the state government was unable to complete the land acquisition process. Work on the 78-km stretch had reached 51 per cent completion. NHAI would put an additional Rs 404 crore, the banks Rs 35 crore and promoters Rs 40 crore. The original cost was Rs 702 crore.