NEW DELHI, 16 JUNE: Highway developers will soon be allowed to exit projects as the ministry of road transport and highways is finalising a proposal that might enable them to leave “harmoniously”, without attracting punitive measures.
“There is a clause of Substitution (Agreement) in the Model Concessionaire Agreement under which the developer can exit the project and the lender will decide how to go about it as it is their money,” a road ministry official said.
Under the new norms, lenders of the project (bank, financial institution) will have a say in deciding the developer’s exit. The ministry may even do away with the punitive measure clause proposed earlier if the developer wanted to leave, the official added.
The developer will be replaced by another firm which will be chosen by the lender. The proposal has been sent to the finance ministry by the ministry and it is with them, he added.
The official said the proposal is likely to go to the Cabinet Committee on Economic Affairs. Substitution agreement is between National Highways Authority of India, lenders and the Concessionaire (developer). pti