Three under construction national highway projects will be taken over by the government that were being executed by IL&FS Group. These concerned projects will be owned by the ministry of road transport and highways after the parties reached a settlement of about Rs 200 crore with the group’s lenders. The projects are now out of court settlement has been reached under a new framework.
The highways ministry had in March issued a set of guidelines for salvaging ‘stuck’ national highway projects under execution. Recourse may be taken for claim of an EPC agreement by a mutually agreed and executed agreement between the parties for projects awarded under the EPC mode, which qualify as stuck projects.
The concerned authority (NHAI/NHIDCL/PWD) would pay for the executed or completed work in terms of milestone payment criteria set forth in the agreement. The national highway authority of India (NHAI) is also looking at re-claiming stuck projects of IL&FS. The timing of these guidelines was not right; nobody is going to resolve these projects during elections. There are specific SOPs for different projects. Things will proceed once the new government is in place.
These projects were undertaken by the ministry of road transport and highways through state PWDs. The settlement for projects constructed by IL&FS has been reached broadly on the basis of these guidelines. The company is due to be paid close to Rs. 200 crore for the value of work done under these projects.
IL&FS declined to share details of their under construction projects. In regards to incomplete or under-construction road projects, IL&FS are in discussion with the concerned authorities to resolve them in accordance with the new framework announced by the road ministry earlier this year.