“Perform or Get Terminated” – Govt Tells Developers and Bankers Behind Pending Highway Projects

Warning all developers and bankers who have not been serious about the completion of pending highway constructions across the country, the government said that projects worth Rs. 20,000 crore will be terminated if they don’t start performing better.

Warning all non-serious developers and bankers behind pending highway projects across the country, the government said that projects worth Rs. 20,000 crore will be terminated if they don’t start performing better.

“The concessionaires and bankers are not realising that we are reaching a stage of impatience, and people who are users of these roads are not going to be waiting anymore,” Road Transport and Highways Secretary, Vijay Chhibber, told PTI.

He added that the “lack of commitment and lackadaisical approach” of these developers is a huge concern.


Source: Amar Varude/Flickr

And if they fail to work as expected, the government will start terminating contracts that are in public–private partnership (PPP) mode and will repackage them. The developers are now required to initiate corrective measures so that the projects can be rolled out by end of January, 2016.

19 out of the 77 pending projects are still stuck. Issues for the rest of them have been resolved. These are projects related to some important national highways in Andhra Pradesh, Bihar, Haryana, Rajasthan, Jharkhand, Karnataka, Madhya Pradesh, Maharashtra, Odisha, Tamil Nadu, Uttarakhand and West Bengal. A 30 day deadline has been set for the developers and bankers of these 19 projects to “perform or get terminated”. The highway sector has been burdened by delayed projects worth about Rs. 3.8 lakh crore and the government is trying to introduce policies to get them sorted.

In a meeting with bankers and concessionaires, Vijay Chhibber said that banks have been financing non-serious highway projects as well, and that has “virtually killed the sector”. The developers with pending projects include Larsen & Toubro (L&T), HCC, Gammon, Madhucon, Soma and Essel Infra and the banks financing them are State Bank of India, Punjab National Bank and Bank of India.

The National Highway Act, 1956 was amended in 1995 to encourage private sector participation in the development and maintenance of national highways. The National Highways Authority has made PPP the preferred mode for most of its projects and they are supposed to take much lesser time for completion and the Government does not have to bear cost over-runs.

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