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NHAI clears contractors' bills worth Rs 25,000 crore

The National Highways Authority of India (NHAI) has cleared bills worth Rs 25,000 crore owed to contractors in March 2020, expediting the process in the last one week after construction activity came to a grinding halt due to the national lockdown post Covid-19.

, ET Bureau|
Last Updated: Apr 01, 2020, 10.15 AM IST
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NHAI-BCCL
NEW DELHI: The National Highways Authority of India (NHAI) has cleared bills worth Rs 25,000 crore owed to contractors in March 2020, expediting the process in the last one week after the nationwide lockdown owing to the Covid-19 outbreak brought construction activity to a grinding halt.

“We have launched a drive to ensure all pending payments are cleared,” NHAI Chairman Sukhbir Singh Sandhu told ET. “We have cleared all the bills that the contractors have submitted to us so far.”

A second official in the know said the amount disbursed in March this year is close to Rs 25,000 crore.

Till February this year, the amount disbursed was Rs 80,000 crore, the official added. Total expenditure of NHAI has been pegged at around Rs 1,05,000 crore to Rs 1,10,000 cr.

Major component of this amount is towards works, which includes civil construction cost of around Rs 60,000 crore, and land acquisition cost of RS 25,000 crore, as per details shared by the official.

“Payments are being released timely to contractors so they are able to disburse salaries further,” the official said, asking not to be identified. “This is being closely monitored at the highest level.”

While there were issues pertaining to delivery of cheques at bank branches once the nationwide lock-down was announced, the authority has reached an understanding with banks on the issue, the official said.

“We have also had to take some exemptions internally since most of us are working remotely,” the official said.

Meanwhile, the highway authority is expecting contractors to invoke the ‘Force Majeure’ clause which is likely to increase its liabilities. NHAI’s project award activity came to a standstill as the Covid-19 threat started emerging in India in March.

In case of projects on Build-Operate-Transfer (BOT) mode and tolling operation, NHAI will have to bear the loss of revenue since stopping of toll operations has come as a result of an order from the ministry of home affairs, making it a political event under the Force Majeure clause.

For projects under construction, extension of timeline will be given, the second official quoted above said. “Contractors have intimated us by a letter that a Force Majeure event has happened. When the closure of projects happens, we will get to know the impact,” the official said.
(Catch all the Business News, Breaking News Events and Latest News Updates on The Economic Times.)

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