Highway contractors demand infra loan provisions fixed at 2%

03 Jun 2024 CW Team

Additionally, the contractors have urged that the government consider 90% of the available land for financial closure rather than the 50% that was originally indicated and that the repayment moratorium be extended from the six months that the RBI had advised to a year.

The National Highways Builders Federation (NHBF) stated in its submission to the National Highways Authority of India, the finance ministry, and the Reserve Bank of India that increasing the provisioning from 0.4% to 5% would pose the greatest challenge to project viability. They explained that this increase in provisioning would lead to higher interest costs, subsequently raising the overall project expenses for both investors and the government.

Additionally, the federation mentioned that they believed implementing a 2% provisioning could be accomplished more swiftly by 2025?26, as opposed to waiting until 2026?27 for the phased implementation of 5% proposed by the RBI.

Regarding the availability of land for the financial closure of infrastructure projects, the NHBF suggested that a land availability of no less than 90% should be deemed sufficient. They emphasised that land availability presents the most significant risk factor, often causing delays or even project terminations.

Furthermore, advocating for an extension of the moratorium period to one year, the NHBF argued that this period is frequently utilised by borrowers to meet initial cash flow needs for stabilising operations. They cautioned that restrictions on this period could strain the company's cash flow and potentially stress the project, especially concerning build-operate-transfer projects.

Instead of the 5% that the Reserve Bank of India had proposed, highway construction contractors proposed fixing the provision that lenders must make against funding their projects at 2%. They said that this would negatively impact the viability of the projects. Lenders are currently required to reserve 0.4% of loans made for highway construction. The new draft rules on infrastructure funding by the banking regulator propose a significant rise in this. Additionally, the contractors have urged that the government consider 90% of the available land for financial closure rather than the 50% that was originally indicated and that the repayment moratorium be extended from the six months that the RBI had advised to a year. The National Highways Builders Federation (NHBF) stated in its submission to the National Highways Authority of India, the finance ministry, and the Reserve Bank of India that increasing the provisioning from 0.4% to 5% would pose the greatest challenge to project viability. They explained that this increase in provisioning would lead to higher interest costs, subsequently raising the overall project expenses for both investors and the government. Additionally, the federation mentioned that they believed implementing a 2% provisioning could be accomplished more swiftly by 2025?26, as opposed to waiting until 2026?27 for the phased implementation of 5% proposed by the RBI. Regarding the availability of land for the financial closure of infrastructure projects, the NHBF suggested that a land availability of no less than 90% should be deemed sufficient. They emphasised that land availability presents the most significant risk factor, often causing delays or even project terminations. Furthermore, advocating for an extension of the moratorium period to one year, the NHBF argued that this period is frequently utilised by borrowers to meet initial cash flow needs for stabilising operations. They cautioned that restrictions on this period could strain the company's cash flow and potentially stress the project, especially concerning build-operate-transfer projects.

Infrastructure Urban

10 Mar 2026

ABB to Invest Rs 6.25 Billion to Expand India Manufacturing

ABB recently announced plans to invest approximately Rs 6.25 billion ($75 million) in India during 2026 to expand its manufacturing footprint and research and development capabilities. The investment follows more than $35 million spent in 2025 and reflects the company’s continued focus on strengthening its ‘local-for-local’ strategy in the country.The investment will support ABB’s Electrification, Motion and Automation businesses and expand manufacturing capacity for infrastructure sectors such as renewable energy, metro rail, data centres and industrial applications. Approximately 300..

Equipment

10 Mar 2026

Six WOLFF Cranes Handle 60,000 m³ Concrete for German Hospital

Six WOLFF tower cranes are playing a key role in constructing a new hospital complex in Memmingen, Germany, supporting large-scale material handling for the project. The facility is being built on a 7.7-hectare site and will feature six floors, around 480 beds and a gross floor area exceeding 75,000 sq m.Building shell works began recently in February 2025. One WOLFF 6531.12 Cross crane supported early site preparation before being dismantled in autumn 2025, while five remaining cranes continue operations. Over an average deployment period of 16 months, the cranes are expected to move approxim..

Equipment

10 Mar 2026

REC Funds Rs 115.6 Million CSR Support for Bihar Eye Hospital

REC recently committed Rs 115.6 million under its Corporate Social Responsibility (CSR) programme for the procurement of clinical and non-clinical equipment at Sankara Eye Hospital in Saharsa, Bihar. The initiative aims to strengthen healthcare infrastructure and improve access to specialised eye care services in the region.A Memorandum of Agreement (MoA) was recently signed between Pradeep Fellows, Executive Director (CSR), REC Limited, and Wg Cdr V. Shankar (Retd), Trustee and Executive Director of Sankara Eye Hospital, at the REC office in the SCOPE Complex, New Delhi.The support is expecte..