Indian infrastructure development and finance company, the Infrastructure Leasing & Financial Services (IL&FS) is reportedly planning to sell a dozen national highway projects that have been completed and are presently generating toll revenue. Sources from the National Highways Authority of India (NHAI) stated that the investment involved in these projects stands at INR 14,000 crore.
Reportedly, a concessionaire is allowed under the contract conditions in which the company can sell the completed projects to another entity after the lenders are taken on board. Moreover, NHAI does not object to such arrangements, cite sources.
Top-most executives of the newly appointed board of debt laden IL&FS held a meeting with the officials from NHAI on Tuesday to discuss all the issues related to the completed and on-going projects. Reportedly, the representatives of IL&FS claimed that they would soon hire a professional to assess the valuation of the stretches that are completed and the amount that can be received after selling the revenue generating projects.
An official from the NHAI reportedly commented that IL&FS currently has 17 NHAI projects and about four of them are under different phases of construction. The company has drafted a proposal which states that the NHAI can pay for the work done so far on the ground as IL&FS would no longer be able to complete the projects and wants to settle them, the official added.
According to the terms agreed in the deal, if the NHAI terminates the contract of IL&FS for poor performance, the company and its lenders would then lose all their investment in projects that are currently stuck.
An official from highways ministry was reportedly quoted stating that the ministry is considering whether it can go ahead with the same subcontractor to complete the remaining work. A contract draft is being prepared so that work can restart as soon as IL&FS relinquishes the projects, the official further elaborated.