Union road transport and highways minister Nitin Gadkari on Friday asked bankers to suggest ways to finance 56 highway projects worth thousands of crores that have been stalled because of developers failing to secure financial closure.
The minister made the remark after meeting top bankers including State Bank of India (SBI) chairman Rajnish Kumar , Union bank MD Rajkiran Rai, private sector lenders such as IndusInd Bank as well as Life Insurance Corporation (LIC) chairman VK Sharma in Mumbai to discuss the financing issue related to the stuck highway projects.
All the stalled highway projects belong to the Hybrid Annuity Model (HAM), in which the government bears 40% of the construction cost while the developer invests the remaining 60 % of the cost of the project.
The new model not only reduces equity investments by developers, but also lowers initial capital outflow for the National Highways Authority of India (NHAI). Read More