News / Indian government to consider supporting stuck highway PPP projects

Indian government to consider supporting stuck highway PPP projects

🕔 February 27, 2013

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Indian newspapers reported today that the Indian finance ministry has agreed to consider helping stuck highway PPP projects. Quoting government officials, the newspapers stated that this help could include the possibility of developers backloading payouts to NHAI in the latter years of the concession period to offer relief early phases of the contract.

Due basically to delay in approvals from the government and the lack of project financing, around 20 projects have not been able to wrap up their financial closure and are in the extension period (every project gets 180 plus 120 days extension to complete their financial closure).

This announcement comes after GMR Infrastructure walked out of 555-km Kishangarh-Udaipur-Ahmedabad project and GVK Infrastructure walked out of 330 km Shivpuri-Dewas project citing that the delays in approvals had rendered the project unviable.

This is the first time the government is discussing ways to compensate PPP highway projects for the delay in approvals. Till now, increase in project cost of EPC projects due to delay have been compensated though.



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