It’s time NHAI...
Stress on the existing road infrastructure loan portfolios of financial institutions. Reduced revenue realisations affected debt servicing by concessionaires as the contracted debt servicing obligations could not be met. This caused widespread default in debt accounts. When the entire industry got affected, the lenders’ debt portfolio for roads came to have a disproportionately high level of default. Hence, the road sector lending was red flagged by lenders.
Corporate debt restructuring has been affected in many SPV debts. Concessionaires unable to service debt had to propose to the lenders restructuring of debts. While the first restructuring exercise is permitted by lenders without any adverse asset classification, any second such exercise automatically affects the asset classification in the books of lenders. Any second restructuring necessarily requires that the debt be classified as nonperforming.
Yet another challenge in the reduced growth of traffic on account of economic slowdown, restrictions on mining, decline in manufacturing and exports. Judicial activism resulted in mining activity in many places coming to a standstill. Many stretches got affected by the sudden ban on mining activities and the resultant drop in cargo traffic.
The Central government let it be known that the revised land acquisition policy is in the anvil. However, finalising this took considerable time. The affected land owners refused to part with possession and land hence became unavailable, the White Paper says.