Road developers get nod to divest 100% in projects 2 years after completion

An official statement said, “The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, has amended its earlier approval dated May 13 for permitting 100 per cent equity divestment after two years of construction/completion for all BOT projects, irrespective of year of award.”

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The approval would allow highway developers to invest proceeds from the sale of divested equity in incomplete projects of NHAI or any other road projects besides any power sector projects or to retire their debt to financial institutions in any other infrastructure works. “This will result in physical completion of languishing infrastructure projects,” the statement added.

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There are 80 such Build, Operate and Transfer (BOT) projects awarded prior to 2009 that have been completed and the locked in equity in these projects works out to approximately Rs 4,500 crore. Once this amount is unlocked and re-invested in new projects, it could support 1,500 kms of new highways on PPP mode reviving the response to BOT projects.

In May, the CCEA had approved this ‘exit policy’. The Prime Minister’s Office had consequently asked the Ministry of Road Transport and Highways to work out the modalities based on which developers can re-invest funds acquired through divestment of equity in projects.