In an about-turn, the National Highways Authority of India (NHAI) has relaxed its recently introduced clause, which restricted highway developers from bidding for future projects.
NHAI had last month introduced a clause barring a company from bidding for a new project if it did not complete financial closure of three projects. In effect, if a company has letter of awards (LoA) for three projects for which it has not achieved financial closure, it could not bid for more projects.
Normally, it takes six months to achieve financial closure for a project.
As per the relaxed norm, if the consortium convinces the authority about surety of arrangement of funds for the project, it can bid for more projects.
“The financial close shall be deemed not to be pending if the
applicant has executed the financing agreements,” NHAI stated in an internal circular.
For this, the applicant needs to deliver to the authority true copies,
attested by a director of the concessionaire and true copies of the financial package and the funding model, attested by a director of the concessionaire, according to the circular.
“The concessionaire shall also be required to submit an affidavit that any change in the financial documents or security conditions, as may be required by NHAI, shall be incorporated,” it adds.
A senior NHAI official said, “We have essentially explained the term ‘pending financial closure’. The new norms will be applicable on all the developers having three projects under their belt and looking out for bidding for more projects.”
Companies like Reliance Infrastructure and HCC, which have a number of projects under their belt, are some of the companies which would get benefited.
HCC bagged three NHAI projects worth around Rs 1,600 crore last month, while Reliance Infrastructure got two projects worth around Rs 2,700 crore in January this year.
Highways construction companies have welcomed the move. “It is indeed a positive and a welcome step. Everything regarding the financial closure has been clarified by the government,” said a Reliance Infrastructure official.
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