NHAI may cancel 20 projects over delays

L&T Infrastructure, HCC, Essel Infra, MBL Infra and Soma Enterprises, among others, stare at termination of contracts

As many as 20 highway contracts, including those of L&T Infrastructure, HCC, Essel Infra, MBL Infra, and Soma Enterprises are staring at termination from the National Highways Authority of India (NHAI) over delays in implementation by the contractors.

The NHAI has fixed November 6 as the last date for making their representation over the delay.

Besides the big players, the NHAI has terminated a contract, executed in April 2012, given to Transstroy Ltd for four-laning of the Obedullaganj-Betul section on NH-69 in Madhya Pradesh, due to the extremely slow pace of work on the project.

An NHAI official said, “No new project has been terminated. According to the procedures, before the termination of the project, all defaulters have been given the chance to appeal. They have been asked to submit their objections on why their projects should not be terminated. The notice was put up on the website for three days and was removed today (Friday) because the purpose was solved.”

Some of the projects, which are being implemented in West Bengal, Bihar, Gujarat, Odisha, Karnataka, and Madhya Pradesh, received termination notices back in 2014, while many of these contractors were issued termination notices in 2016 and this year.

“The NHAI has taken a decisive step around issuing termination notices to concessionaires on some of the projects. This is positive for the sector and will help in moving past stuck/stalled projects, and in a way, act as a deterrent for any future aggressive bidding by developers. However, genuine concessionaires should not be penalised, which could caste a gloom over the sector that is just out of the woods and affect fresh investments by key players,” said Jagannarayan Padmanabhan, director and practice lead (transport and logistics), CRISIL Infrastructure Advisory.

However, some experts feel the move would hamper the growth in the infrastructure sector, which was better off than most in terms of non-performing assets (NPAs).

According to former road secretary Vijay Chibber, “If all these projects are actually terminated, the infrastructure would be flooded with NPAs, as these companies have a large presence in the sector.”

These projects were issued termination notices after April 1, 2014.