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Broken By COVID Lockdown, National Highway Builders Federation Urged NHAI for Compensation

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Hit hard by the suspension of toll collection during the period of lockdown, highway developers have approached the government for quick liquidity support to enable them to pay salaries of staff and vendors and meet operation and maintenance (O&M) expenses on projects where funds are not available.

In a representation to National Highway Authority of India Chairman S.S. Sandhu, the National Highways Builders Federation (NHBF)  has said that suspension of tolling and non-realisation of EPC contractors certified invoices has left highway co-concessionaires without any fund to pay even the salary of staff and therefore, the NHAI should immediately release withheld accounts to meet the exigencies of developers.

The federation has also sought compensation from NHAI for the closure of toll collection that is having a crippling effect on concessionaires.

“The closure of toll collection is covered under political force majeure conditions which have led to crippling effect on concessionaires. NHAI needs to compensate concessionaires adequately for the lockdown period until the revenue and traffic get back to January 2020 levels. We request NHAI to give compensation on net present value (NPV) basis while granting agreement extensions,” the NHBF said in its letter to NHAI Chairman.

The highway developers have also asked the government to look at their demand of getting their loan restructured by RBI as a one time measure to prevent debt from turning into NPAs in the absence of any liquidity in the sector.

It also sought flexibility from the NHAI to accept arbitration awards and do not drag disputes into the legal process. In this regard, the NHBF has said that the arbitration process could be conducted through video conferencing in the period of lockdown to expedite the process and come with results faster.

The claim settlement process through conciliation could also take advantage of the audio-video facility to ensure that liquidity among developers improves quickly for meeting their basic and most essential expenditure.

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