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Business News/ News / India/  Covid-19: Govt to offer bailout for contractors to ease highway construction
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Covid-19: Govt to offer bailout for contractors to ease highway construction

Based on the request of National Highways Builders’ Federation (NHBF), National Highways Authority of India (NHAI) has urged union road ministry to extend the contract period up to six months

These steps are extension of relied measures for contractors who have been facing severe liquidity-related challenges due to a temporary shutting of project sites. Photo: Aniruddha Chowdhury/MintPremium
These steps are extension of relied measures for contractors who have been facing severe liquidity-related challenges due to a temporary shutting of project sites. Photo: Aniruddha Chowdhury/Mint

The road transport and highways ministry will soon offer bailout for road contractors, including extension of time for construction period without imposition of any cost or penalty and timely payment to vendors, to support them amid covid-19 crisis.

Based on the request of National Highways Builders’ Federation (NHBF), National Highways Authority of India (NHAI) has urged union road ministry to extend the contract period up to six months, provide survey data collected by detailed project report consultants and ensure timely payments to vendors, submission of bills related to project payments.

“The suggestions made by NHBF were deliberated by NHAI for proper redressal and the authority has agreed to 25 suggestions which were related to NHAI. NHAI has assured that all good suggestions shall be positively considered in future too," NHAI said, adding that it has been taking various initiatives from time to time to support concessionaires, contractors and consultants, which also instilled confidence in the bidders in the road sector.

These steps are extension of relied measures for contractors who have been facing severe liquidity-related challenges due to a temporary shutting of project sites, and the disruption caused due to the imposition of the nationwide lockdown starting March 25.

The May, the finance minister Nirmala Sitharaman had said that all central agencies such as railways, ministry of road transport and highways and central public works agencies, among others, will give extension of up to six months for completion of contractual obligations, including construction work, extension of concession period in public private partnership contracts, among others.

The highway authority said that in March, it disbursed 10,000 crore payments online and ensured that there no pending payments due to the closure of the office during the lockdown. In April-June NHAI disbursed more than 15,000 crore to its vendors.

“Additionally, steps such as monthly payments to the contractors were taken to ensure cash flow to the contractors. Such moderations resulted in spiraling effect on the growth of the road sector," an official statement said.

NHBF—the apex organization of all builders of national and state highways--had also urged the government to offer relief measures pertaining to bidding process, contract management, improvement of concession Agreement of hybrid annuity model (HAM), improvement of concession agreement based on build operation transfer (Toll), among others.

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Published: 25 Sep 2020, 08:59 PM IST
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