Bookmark Kaumudi Online  Bookmark this site  Editor@Kaumudi  |  Marketing  Print Advt rates  |  Calendar 2018        Go!    
 
 
September 24, Monday 2018 4:15 AM       

       HEADLINES: Franco Mulackal should be subjected to lie detector test, says police                                              Fr. Mathew Manavath raises allegation against Kerala BJP                                              Body of toddler found                                              Bishop brought to Kuruvilangad convent, evidence collected                                              CM reaches office                                              PM Modi to launch Ayushman Bharat today                                              PM to inaugurate Sikkim's first airport Monday                                              Japanese supply ship heads to space station after delays                                              Russia warns US it is 'playing with fire' with sanctions                                              Pak PM Imran hits out at India, calls its response "arrogant" for cancelling talks                                              Gavaskar impressed with Rohit Sharma's captaincy                                              Hasan, Asghar, Rashid fined 15 per cent of their match fees                                              Kaumudi Facebook
       BUSINESS Next Article: India has enough fire to deal with rupee volatility: Finmin  
       Gadkari wants banks to find ways to fund stalled road projects
 
         Posted on :22:20:44 Jun 29, 2018
   
A A
       Last edited on:22:20:44 Jun 29, 2018
         Tags: Gadkari wants banks to find ways to fund stal
 
Mumbai: s more than 56 large road projects are stalled for want of financial closure, Union transport minister Nitin Gadkari today asked bankers to find ways to finance these hybrid annuity model (HAM) projects worth thousands of crores.
 
The National Highway Authority of India (NHAI) has awarded 104 HAM projects including some during the previous government's term, but as many as 56 of them are stuck as developers are unable to secure financial closure, Gadkari said after a closed-door meeting with bankers, LIC, an RBI deputy governor and NHAI brass here.
 
Bankers who attended the meeting include SBI chairman Rajnish Kumar, LIC chairman VK Sharma, Bank of Baroda managing director BS Jayakumar, Union Bank managing director Rajkiran Rai and private sector lenders Uday Kotak and Ramesh Sobti of IndusInd Bank.
 
"There are 104 HAM projects worth Rs 1.25-1.5 trillion. Of these, 56 are yet to secure financial closure. We want banks to finance them and at today's meeting we've asked banks about their issues in funding these projects," Gadkari told reporters after the meeting.
 
"I have assured the banks that all their concerns will be resolved," he added.
 
It can be noted that compared to the BoT (build- operate-and-transfer) model, HAM projects are better de-risked and thus offer higher return.
 
Gadkari said the problems can be divided into two - projects awarded during the previous government and those awarded by the present government - and claimed that "there is no problem in those projects which were awarded after we came to power". But he was quick to add that he has also resolved many projects awarded before May 2014.
 
Claiming that in the last three months the road sector has contributed nearly 12 per cent to the overall growth, Gadkari said, "He wants the contribution of the road sector to overall economic growth to grow further." 
 
Explaining why banks should fund these road projects, he said banks are also stakeholders in these projects and given the poor credit pick-up, it makes sense for them to lend to these HAM projects as they offer higher returns.
 
"We can give banks secured business of around Rs 5-7 trillion. If we wanted, the NHAI could have raised money from the markets, but we want banks to get business," he said.
 
"Government, NHAI and banks are all together and we want all the stakeholders to study the issues and move forward," he said, adding he is confident there'll be progress in the road sector after "good discussion we had today".
 
Gadkari said when he assumed charge, there were 403 stalled projects worth Rs 3.85 trillion. "But since then I have already resolved 80-90 per cent of them. Still there are some problems with some of the projects awarded before May 2014," he added.
 
Promising the troubled developers that he is ready to help them, he said, "We will arrange common meetings of all the stakeholders. The roads secretary and NHAI officials will try to find a way out." 
 
Talking to reporters after the meeting, SBI's Kumar said they discussed mainly the stalled HAM projects. "We've given our suggestions to the NHAI to make the HAM model workable. We've assured the minister that if the NHAI implements our suggestions, there is a good possibility that these projects will achieve financial closure." 
 
Admitting that HAM is a highly de-risked model compared to BoT, Kumar said even though a better model, banks have made more suggestion to ensure that funding does not turn bad later on in HAM projects.
 
One of the key suggestions from banks is non-funding during the construction stage as the only assurance of payback from the HAM projects is the annuity from the NHAI.
 
"Once NHAI incorporates our suggestions, I don't see any problems in achieving financial closure. At least for SBI, I can say that we are ready to finance some of the projects," Kumar said.
 
Another banker who did not want to be named said, "We discussed the issues regarding initial payments and haircuts, among others in these projects and the government agreed and asked us to make a case, and they will try to resolve them." 
 
He also said bankers want NHAI to do some more refinement to awarding terms. "For instance, there are a few players bagging getting large chunk of projects, which means that there is some overleveraging building up. Can this be restricted? It should be evenly spread," said the banker.
 
Another banker suggested once the project is completed, it can be bundled into some bond which can be offloaded into the market.
 
A A
       BUSINESS
Next Article: India has enough fire to deal with rupee volatility: Finmin
 
 
BUSINESS HEADLINES
Fed rate decision, rupee, crude oil to drive markets this week: Experts  
"RBI unlikely to hike repo rate in Oct despite weak INR"  
OYO to hire over 2,000 tech experts, engineers by 2020  
Sensex ends in red after 1,000-pt flash crash  
OYO to hire over 2,000 tech experts, engineers by 2020  
Avis India announces free doorstep delivery, collection of self-drive cars  
Dena Bank surges 20%; BoB tumbles 14% post merger announcement  
Vijaya Bank, Dena Bank, BoB to merge: Govt  
Mother Dairy won't cut prices despite Patanjali's cheaper cow milk  
Union Bank of India exits Antwerp diamond market  
Naidu discusses bilateral cooperation in trade and defence with Serbian President  
FundzBazar crosses 2 lakh investors milestone  
Ramdev Baba’s Patanjali launches cow milk, french fries and more  
United Bank of India increases MCLR by five basis points  
RBI submitted a list of high profile fraud cases to PMO: Rajan  
Chemists call for strike on Sep28 against online medicine sale  
Rupee sinks to new low of 72.91, drops 22 paise against USD  
Skills and You develops special module 'Curio'  
Google ready to comply with RBI norms for payment services, says official  
FinMin in touch with RBI for market intervention to contain rupee value  
Sensex plunges over 400 pts as rupee breaches 72.50 mark  
Niti Aayog asks auto cos to stick to timeline to achieve full e-mobility  
FastFox registers 3x growth post rollout of revolutionary 'Open House' model  
Jio completes two years, aims to take India to 'top 5' in broadband connectivity  
Gold rises 0.46% on positive global cues  
 
Do you agree with Rahul's allegation against Modi over Rafale deal?
yes
 
no
 
no opinion
 
 
 
Home Kerala India World Business Sports Sci&Tech Education Automobile CityNews Movies Environment Letters 
© Copyright keralakaumudi Online 2011  |  Reproduction in whole or in part without written permission is prohibited.
Head Office Address: Kaumudi Buildings, Pettah P.O, Trivandrum - 695024, India.
Online queries talk to Deepu Sasidharan, + 91 98472 38959 or Email deepu[at]kaumudi.com
Customer Service -Advertisement Disclaimer Statement   |  Copyright Policy