SBI submitted before the committee that the projects may be approved only after ensuring 90 per cent of land acquisition is completed.
Observing
that loan disbursed by banks in excess of an estimated project cost is
“strange”, a parliamentary panel has expressed concern over a large chunk of
about Rs 75,000 crore of loans extended to the road sector turning bad. In
particular, the panel has raised questions about huge loans advanced to Jaypee
Infratech turning into NPAs.
“Some of
the banks have given information on total loan (Rs 74,088 crore) given to the
road sector… for IDBI, the NPA percentage is as high as 52 per cent of loan disbursed
for the road sector. The committee wants to know the reason why this huge
amount has become NPA, that too to a single concessionaire, Jaypee Infratech
Ltd,” the panel chaired by Kanwar Deep Singh said in its latest report.
Seeking
full details of the project awarded to Jaypee, the 33-member standing committee
on transport further observed that State Bank of India has lent Rs 19,502 crore
out of which Rs 1,986 crore has slipped into NPAs. SBI submitted before the
committee that the projects may be approved only after ensuring 90 per cent of
land acquisition is completed.
The panel
said, “The committee finds it strange as to how the concessionaire who has got
a project for Rs 1,000 crore gets Rs 1,400 crore for the same project.” It also
asked: “Why the concessionaire has been given a free hand to get the bank’s
loan as per their wish?” It instructed NHAI to keep a watch on the excess loan
amount obtained by the developer.
Incidentally,
former road transport and highways secretary Vijay Chhibber has remarked that
aggressive lending by banks which were “happily over-financing even non-serious
highway players without assessing risks has virtually killed the sector”.
He told
media, “The concessionaires and bankers are not realising that we are reaching
a stage of impatience, and people who are users of these roads are not going to
be waiting anymore.” Projecting that total NPAs of Rs 2.6 lakh crore may go up
to Rs 4 lakh crore because of defaults, the panel recommended that banks be
empowered more to make recovery of bad debt.
Asking
the government to consider empowering the banks adequately to make recovery of
bad debt easier, it said, “For example, in the case of a default, the banks may
be allowed to take over the entire company.”
It also
noted SBI’s contention that all approvals from statutory authorities and
clearances from government agencies should be obtained before a particular
project is sent for bidding. “Another area of discord is the project cost
estimated by NHAI and the concessionaires, which results in lending delay by
financial institutions,” the committee said.
