NHAI to foreclose or revoke up to seven road contracts with IL&FS. Credit: Pratapkagitha.

The National Highways Authority of India (NHAI) is reportedly planning to terminate or take possession of five to seven road projects stuck with troubled construction firm Infrastructure Leasing and Financial Services (IL&FS).

In a recent meeting, the NHAI and IL&FS agreed to perform a valuation of the work carried out by IL&FS for a termination payment.

It will also lead the way for the NHAI to seek fresh bids for the under-construction road projects to wrap up the remaining work.

Quoting sources familiar with the development, Financial Express reported that the NHAI and IL&FS are working to settle the dispute for almost 25 road projects that are facing costs and overrunning issues regarding land acquisitions.

The NHAI is working with IL&FS to take over road projects that include Khed-Sinnar, Pune-Solapur, Patna-Gaya-Dobhi, Barwa Adda-Panagarh, Jorabat-Shillong, Chennai-Nashri, and Balasore-Kharagpur.

The publication quoted sources as saying: “It needs to be seen if IL&FS will lose complete hold over these projects, or they will transfer their stake into some other company which will take over these assets.”

In March, the Indian Ministry of Road Transport and Highways published guidelines for resolving stuck road and highway projects due to a lack of funds.

The guidelines state that agencies such as NHAI can foreclose the contract by signing a supplementary agreement.

“It needs to be seen if IL&FS will lose complete hold over these projects.”

For the expressions of interest invited in December last year, IL&FS already received approximately 30 bids from interested buyers for its 19 road projects along with three other assets and businesses.

Assets put up for sale by IL&FS include seven operating annuity-based road projects and eight operating toll-based road schemes totalling approximately 1,774km and 6,572km in length respectively.

In January, the NHIDCL terminated the contract with IL&FS for construction of the 14.15km Zojila tunnel in Jammu and Kashmir.