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20/12/2015 Government's ultimatum to road developers: Perform or perish The Economic Times
http://economictimes.indiatimes.com/news/economy/infrastructure/governmentsultimatumtoroaddevelopersperformorperish/articleshow/50253830.… 1/2
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By PTI | 20 Dec, 2015, 12.28PM IST Post a Comment
The government, it seems, doesn't want to leave any stoneunturned in initiating policy measures and extending supportwherever required.
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Government's ultimatum to road developers: Perform orperish
NEW DELHI: Running out of patience for their "lack of commitment and lackadaisicalapproach", the government has warned nonserious developers and bankers of terminatinghighway projects worth Rs 20,000 crore.
"The concessionaires and bankers are not realising that we are reaching a stage ofimpatience, and people who are users of these roads are not going to be waiting any more,"Road Transport and Highways Secretary Vijay Chhibber told PTI in an interview.
"If developers and bankers fail to mend their ways and initiate correctives to roll out projectsby Januaryend, the government will start terminating contracts in PPP mode andrepackage them."
Out of the total 77 stalled projects, issues have been sorted out for all barring 19, which arestill stuck.
"I had a meeting with bankers and concessionaires. I am getting a sense they had notlooked at the full package... We are no longer working on any further correction," Chhibberwarned.
"Enough is enough," the senior official said, mincing no words, adding that a 30day deadline has been set for developers and bankers of19 projects to "perform or get terminated".
The secretary's remarks assume significance as the highway sector has been saddled with stuck projects worth about Rs 3.8 lakh crore.
The government, it seems, doesn't want to leave any stone unturned in initiating policy measures and extending support whereverrequired.
At one point, Chhibber had even remarked that aggressive lending by banks, which were "happily overfinancing even nonserioushighways players without assessing risks, has virtually killed the sector".
The builders in the line of fire include big players like Larsen & Toubro, HCC, Gammon, Madhucon, Soma and Essel Ifra, among others,while the list of lenders includes top names like State Bank of India, Punjab National Bank and Bank of India.
The government has recently "offered a full package", which among other steps extends the concession period of projects where delaysare not attributable to developers.
Stating that the government has other policy options at its disposal to deal with the problem, Chhibber said: "If it doesn't work in a setupfor them, we are quite happy to cancel the projects and roll them out in EPC or some other means. Currently, we do not find any stress onour liquidity."
The projects relate to key national highways in Andhra Pradesh, Bihar, Haryana, Rajasthan, Jharkhand, Karnataka, Madhya Pradesh,Maharashtra, Odisha, Tamil Nadu, Uttarakhand and West Bengal.
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20/12/2015 Government's ultimatum to road developers: Perform or perish The Economic Times
http://economictimes.indiatimes.com/news/economy/infrastructure/governmentsultimatumtoroaddevelopersperformorperish/articleshow/50253830.… 2/2
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