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The Economic Times

NHAI to check on liquidity of banks before HAM projects

NEW DELHI: The National Highways Authority of India (NHAI) will soon call a meeting of public and private sector banks looking to ensure that there are sufficient funds before it awards projects under the hybrid annuity mode (HAM).

“We will call a meeting to address their (lenders’) concerns,” an official aware of the matter told ET. “We want to ensure that we have sufficient availability of funds before we award projects. Otherwise, they will get stuck for the lack of funds.”

Under HAM, the government provides 40% of the construction cost, while the rest is arranged by the developer. Land acquisition and toll collection are also the government’s responsibilities.

In July this year, road transport and highways minister Nitin Gadkari had told Parliament that the banking sector had raised concerns on account of stalled, languishing projects bid under the public-private partnership mode.

Senior officials said that NHAI will soon call a meeting with banks to ensure that banks are on the same plane as them before the authority bids out projects.

NHAI is also in talks with several banks for toll securitisation.

ET had reported in July about the authority’s plan to monetise its projects to banks against toll collection. While State Bank of India has already come forward to fund NHAI through toll securitisation, the authority is now in discussion with other leading banks for raising funds through this mode.
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