NHAI awardes 180 PPP projects to road builders but most are distressed projects

MUMBAI: Road builders are upbeat about contracts the government is about to award, but past troubles continue to haunt them as National Highways Authority of India is insisting that they should curb claims for delays, and authorities have told them not to expect bailout of distressed projects.

While NHAI is gearing up for big bang tendering of orders worth Rs 60,000 crore in the next three months, it continues to be a challenging customer for road developers who are executing projects. Claims of dues are going for longwinding arbitration and the NHAI is even asking developers to sign a “supplementary agreement” forgoing claims if they want to start toll collection on newly commissioned projects.
“There are projects that were delayed at NHAI’s end or where there were variations that have led to cost escalation.

But we are being pressurised by NHAI to forego our rightful claims by signing an agreement if we want to start collecting toll on our projects. We lose revenue if we don’t start toll collections and we have debt to repay. It is putting us in a tough position,” said Ankineedu Maganti, MD of Soma Enterprises.“The government’s stance on new projects is very positive but problems on ongoing projects too need to be resolved to revive the sector,” he said.

At least four companies confirmed to ETthat they were made to forgo dues on price escalation to get a green signal from NHAI to commission the projects. They said that while the sector has a new minister, NHAI administration is the same and the decision making process on ongoing projects is slow.

Three industry players said the ministry has told them and others that they will increase tendering, facilitate execution and even work to tweak agreements in future but they have are staying away for old disputes and issues.

The government is not keen to consider any bailout for projects that were bid aggressively and our suffering due to low toll collection.