Lok Sabha Question No. 1427 (UNSTARRED), answered on 2016-11-24
Subject: Defaulting Infrastructure Projects
Ministry: ROAD TRANSPORT AND HIGHWAYS
Asked by: SHASHI THAROOR

## GOVERNMENT OF INDIA MINISTRY OF ROAD TRANSPORT AND HIGHWAYS

## LOK SABHA

## UNSTARRED QUESTION NO. 1427

ANSWERED ON 24 TH  NOVEMBER, 2016

## DEFAULTING INFRASTRUCTURE PROJECTS

## 1427.   DR. SHASHI THAROOR:

Will the Minister of ROAD TRANSPORT AND HIGHWAYS

## सड़क परिवहन औि िाजमार्ग मंत्री

be pleased to state:

(a) whether the number of Non-performing Assets exist due to defaulting infrastructure projects, if so, the reasons therefor;

(b) whether any dedicated agency for infrastructure lending has been considered, if so, the details thereof, if not, the reasons therefor;

(c) whether there are differences in the project cost estimates by NHAI and the concessionaires which result in the delay of lending by the financial institutions and thereby escalating project cost and time overrun and if so, the reasons therefor; and

(d) whether institution of dispute settlement mechanism to settle disputes between the NHAI and concessionaires has been considered in this regard, if not, the reasons therefor?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF ROAD TRANSPORT AND HIGHWAYS

## (SHRI PON. RADHAKRISHNAN)

(a) and (b) Some  projects  of  National  Highways  Authority  of  India  (NHAI)  are  delayed leading  to  non-performing  assets.  The  reasons  for  delay  are  delay  in  land  acquisition,  utility shifting, non-availability of Soil/Aggregates, poor performance of contractors, delay in statutory clearances,  public  agitation,  disputes  etc.  The  Government  has  taken  various  steps  to  address fund  crunch  in  such  highway  projects.  These  include  one  time  fund  infusion  to  revive  and physically  complete  languishing  national  highway  projects  under  Public-Private  Partnership (PPP) mode and also allowed Rationalised Compensation to concessionaires, in case delays are not attributable to them. With a view to ameliorate the shortage of equity and improve liquidity, Government  has  also  allowed  Securitization  of  future  cash  flows,  Deferment  of  Premium  in stressed highway projects, Harmonious Substitution in financially stressed highway projects and 100% Equity Divestment after 2 years of construction of all highway projects under PPP mode. Various  other  steps  have  also  been  taken  by  the  Government/  NHAI  to  remove  the  hurdles affecting  the  construction  of  NH  projects  which  includes  streamlining  of  land  acquisition  and regulatory  clearances,  close  coordination  with  other  ministries,  revamped  Disputes  Resolution Mechanism etc.

(c) and (d) The  differences  in  project  cost  estimates  by  NHAI  and  the  concessionaires  are mainly due to time lag in estimation and implementation. The reasons also include freedom to the concessionaire to choose  best technology within the ambit of given specifications, considerations  on  lenders  side  etc.    NHAI  has  an  established  system  of  dispute  resolution through  Independent  settlement  advisory  Committee.  However,  there  is  no  question  of  any dispute on the difference in project cost estimates once the agreement is signed.

*****