Gadkari meets top banks to seek credit for projects

Gadkari meets top banks to seek credit for projects

News:

1. The Road Transport and Highways Minister Nitin Gadkari recently met representatives from financial institutions asking them to extend credit for road development projects.

Important facts:

2. The meeting was an attempt to reach out to country’s banks and insurance companies for extending credits for developmental projects.

3. The financial institutions are reluctant to do so because of their non-performing assets.

4. The Ministry has announced 104 projects under the Hybrid Annuity Model (HAM), of which 56 have reached financial closure.

5. Remaining projects, have six months time period for arranging funds.

6. Hybrid Annuity Model (HAM):

• The HAM is a variant of public-private partnership, which was launched by the government in January 2016.
• Through this model, the government bears 40% of the cost of the project and the rest comes from the developer.
• The National Highways Authority of India is responsible for collecting toll on these projects and pays the developer a fixed annual fee for a specific period.