"Many NBFCs have shown interest in the proposed ARC and they are willing to put in funds for the stalled projects. We will shortly hold a meeting with them to finalise the structure of the ARC," a senior NHAI official told Business Standard.
He added that the NBFCs would draw up a proposal, detailing the equity sharing and funding they would be willing to put in.
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The NHAI board had in August given an in-principle approval for the setting up of an ARC in which it would have a 25 per cent stake with the remaining holding picked up by banks.
NHAI's initial investment in the ARC is estimated to be around Rs 1,000 crore. The ARC will buy loans extended to the road projects in case of a default or funds crunch and sell the completed projects to investors.
There are 20-25 projects, which can be funded through this route in the first phase. However, the ARC's structure might now be changed with new players (NBFCs) coming in and banks wary of investing, an official pointed out.
Road projects worth Rs 1.8-lakh crore have been stuck owing to various issues ranging from land acquisition, environmental clearance and other issues. Private developers had bid aggressively for projects, but their traffic estimates did not materialise. In the past few years, the award of contracts for national highways itself has slowed down.
Union road transport minister Nitin Gadkari had recently cleared projects worth Rs 40,000 crore, which were stuck at various levels. Besides, the government recently terminated 35 public-private partnership (PPP) projects worth Rs 41,000 crore, which would now be re-bid through the engineering, procurement and construction mode.
The roads ministry is in the process of revamping the model concessionaire agreement (MCA) to make it more flexible in line with the changing market conditions. The MCA spells out the policy and regulatory framework for implementation of a PPP project. At the moment, MCA norms do not give any scope for changes or additions. Because of this, earlier, the government had to come up with a policy for rescheduling premium and an exit policy for developers.