Government to take over 3 stuck highway projects of IL&FS

NEW DELHI: The government will take over three under construction national highway projects that were being executed by debt-ridden IL&FS Group.

The projects in question will be owned by the ministry of road transport and highways after the parties reached a settlement of about Rs 200 crore with the group's lenders. The projects will be re-tendered for completion of the remaining work, an official familiar with the development said.

This out of court settlement has been reached under a new framework.


The highways ministry had in March issued a set of guidelines for salvaging ‘stuck’ national highway projects under execution.

As per the guidelines, recourse may be taken for foreclosure of an EPC agreement by a mutually agreed and executed agreement between the parties for projects awarded under the EPC mode, which qualify as stuck projects.

The concerned authority (NHAI/NHIDCL/PWD) would pay for the executed or completed work in terms of milestone payment criteria set forth in the agreement, the guidelines say.

"The settlement for projects constructed by IL&FS has been reached broadly on the basis of these guidelines," said a transport ministry official, requesting anonymity.

The company is due to be paid close to Rs. 200 crore for the value of work done under these projects, a person familiar with the development said.

These projects were undertaken by the ministry of road transport and highways through state PWDs.

“This is the right way to move forward on such projects otherwise these would linger on, increasing the cost of construction of the balance work,” the second official quoted above said, adding that incomplete road will not be available to the public.

Of the stuck projects belonging to IL&FS, two have been undertaken by NHAI, four by the National Highways and Infrastructure Development Corporation Ltd (NHIDCL), and three by state PWDs, one of the officials quoted above said.

IL&FS declined to share details of their under construction projects. "With regards to our incomplete or under-construction road projects, we are in discussion with the concerned authorities to resolve them in accordance with the new framework announced by the road ministry earlier this year," a spokesperson for IL&FS said.

The national highway authority of India (NHAI) is also looking at salvaging stuck projects of IL&FS. “The timing of these guidelines was not right, nobody is going to resolve these projects during elections. There are specific SOPs for different projects.Things will move once the new government is formed,” said a NHAI official.