Minister of Road Transport, Highways and Shipping Nitin Gadkari has sought to assuage the apprehension of banks about funding road projects as most of the roadblocks to the projects from taking off have been cleared. He pointed out that the ministry's arm, NHAI, has the wherewithal to raise money and support road projects.
"Three years back there was a lot of problems with contractors and banks. There were defaults. At that time 403 projects aggregating Rs. 3.85 lakh crore were stalled. And in 75 percent of the cases, the government was responsible. "
"Land acquisition, environment, forest clearance, etc., were the problems. Now, we have cleared all these things. The sector is moving fast.…. And now the position is that every project is doing well," said Gadkari at a summit organized by the Indo-American Chamber of Commerce.
In the changed situation, Gadkari said he is expecting bankers and investors to support the projects implemented in the PPP (public-private participation) and BOT (build-operate-transfer) modes. In this regard, he underscored that his department has saved banks as projects aggregating Rs. 3 lakh crore has been prevented from turning sour.
"Because of the previous record (of projects getting stalled and turning sour for banks), there is some apprehension in the mind of bankers…So, I said to bankers, please don't bother about it. Now, the situation has changed. And so you have to change your perception".
"And that is the reason we want to support PPP, BOT, and hybrid annuity models. And that is the reason we started hybrid annuity model (for financing projects). Already we have sanctioned about 60 projects costing about Rs. 1 lakh crore and they are moving fast," said Gadkari.
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Gadkari sets banks' fears at rest in road financing
By IndianMandarins - 2017-09-19 08:00:26
Minister of Road Transport, Highways and Shipping Nitin Gadkari has sought to assuage the apprehension of banks about funding road projects as most of the roadblocks to the projects from taking off have been cleared. He pointed out that the ministry's arm, NHAI, has the wherewithal to raise money and support road projects.
"Three years back there was a lot of problems with contractors and banks. There were defaults. At that time 403 projects aggregating Rs. 3.85 lakh crore were stalled. And in 75 percent of the cases, the government was responsible. "
"Land acquisition, environment, forest clearance, etc., were the problems. Now, we have cleared all these things. The sector is moving fast.…. And now the position is that every project is doing well," said Gadkari at a summit organized by the Indo-American Chamber of Commerce.
In the changed situation, Gadkari said he is expecting bankers and investors to support the projects implemented in the PPP (public-private participation) and BOT (build-operate-transfer) modes. In this regard, he underscored that his department has saved banks as projects aggregating Rs. 3 lakh crore has been prevented from turning sour.
"Because of the previous record (of projects getting stalled and turning sour for banks), there is some apprehension in the mind of bankers…So, I said to bankers, please don't bother about it. Now, the situation has changed. And so you have to change your perception".
"And that is the reason we want to support PPP, BOT, and hybrid annuity models. And that is the reason we started hybrid annuity model (for financing projects). Already we have sanctioned about 60 projects costing about Rs. 1 lakh crore and they are moving fast," said Gadkari.
