Overview
- NHBF has written to Finance Minister Nirmala Sitharaman and Road Transport Secretary V Umashankar seeking sector-specific guidance and exclusion of ongoing contracts from the new regime.
- The Road Transport Ministry’s Jan. 12 circular, referencing a 2024 Finance Ministry order, removes arbitration for high-value disputes and routes them to mandatory conciliation with potential civil court appeals.
- The industry body argues the shift undermines bankability by raising the cost of capital, reducing bid appetite, and slowing project execution.
- Builders warn that applying the change to active contracts could disrupt cash flows, risk covenant breaches, and create refinancing and InvIT exit pressures.
- NHBF has alerted banks and lenders to assess portfolio exposure under revised BOT, HAM, and EPC agreements and cites internal data of roughly 2,600 arbitration awards from 2015–2025 with over ₹30,000 crore awarded on about ₹90,000 crore in claims.