Lack of funds impacting 6-7 highway projects: NHIDCL
Highways developers' inability to arrange working capital has impacted six to seven projects of the National Highways & Infrastructure Development Corporation Ltd (NHIDCL).
These affected highways are part of about Rs 35,000 crore ongoing highway projects by NHIDCL, its Director (A&F) Sanjay Jaju said on Thursday.
"Of the ongoing 75 projects, there are six to seven such projects where contractors are unable to arrange 10-15 per cent of the working capital, creating hurdles for the projects," he added.
"The corporation has already issued notices to non- performing contractors for revival of such projects. In case of failure to respond to the notices already served, necessary punitive action might follow since working capital requirement is entirely the onus of the contractors and the corporation cannot fund this," Jaju said.
NHIDCL awards projects to bidders only after 90 per cent of land acquisition formalities are accomplished and therefore, those contractors that have been generating working capital capacity should only come forward for winning roads and highways projects, he added.
Earlier, inaugurating National Roads & Highways Summit 2017 under the aegis of PHD Chamber of Commerce and Industry, Jaju said some of the NHIDCL projects are turning out to be the bad performing ventures on account of contractors fault due to their inability to arrange for necessary working capital to initiate work on them.
This is despite the fact that such infrastructural projects have been awarded to various contractors after eliciting firm commitment from them to finish off the projects well within the deadline, he added.
Jaju said NHIDCL has been building about 2,000 km of roads and highways at multiple locations of the Northeastern and other bordering areas of strategic importance, with an investment of about Rs 35,000 crore.