MoRTH formulates a new policy for resolving stalled highway projects

The Ministry of Road Transport and Highways (MoRTH) has reportedly formulated a new policy for resolving stalled highway projects, including the ones where proceedings have been initiated against the companies before the National Company Law Tribunal (NCLT). As per the policy, road development agencies including the National Highways Authority of India (NHAI) and National Highways and Infrastructure Development Corporation Limited (NHIDCL) can foreclose a contract by signing a supplementary agreement. The authority will make a full and final payment to the private player for the value of work done or 90 per cent of the debt due, whichever is lower. The value of work done will be arrived at after a detailed assessment of the progress and the debt due will be as per the contract agreement, which mentions the exact cost of the project. The stuck projects which will qualify for this resolution include projects where work has stopped due to inability of the contractor or concessionaire on account of proceedings initiated against them before the NCLT under the Insolvency and Bankruptcy Code or default on account of both the client, that is, NHAI, NHIDCL or state public works department and the private player. Once the private player exits, bids for completion of the project can be invited.