It’s time NHAI...

HT Estates - - HT­ES­TATES -

Re­duced lend­ing

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.

Reg­u­la­tory im­ped­i­ments

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.

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