lenders extra benefit and a greater say in the projects to which they have funded. Feedback infra CMD and CII infrastructure committee head Vinayak Chatterjee said: “Besides financial delays, there are many other reasons behind a developer defaulting or in meeting the deadlines. In such cases, lenders feel they do not have any security or any say as per the current MCA. Thus, the proposed changes will give additional powers to lenders from their ability to secure their money.”
“This amendment will not just revive the interest of banks, but also make them less apprehensive to lend further to road developers,” said Vishwas Udgirkar partner, infrastructure, at Deloitte.
Lack of financing is becoming a major hindrance for road projects. With developers exhausting all avenues to raise equity financing, funding by banks and FIs remain key to projects achieving financial closure. However, banks worry their money may not be secure, with developers increasingly relinquishing or terminating projects. Last year, several road projects were bid on premium. With the economic slowdown and high interest rates, many of them are finding it tough to meet their commitments. Developers like GMR, GVK have already terminated some of their projects citing lack of clearance from NHAI.