Poorly assessed loan by IIFCL to Jaypee caused NPA of over Rs 1,000 crore
An ill-timed and loosely assessed loan of Rs 900 crore to Jaypee Infratech Ltd hit the Yamuna Expressway Project over a period of time, causing a build-up of bad assets worth over Rs 1,000 crore on the books of IIFCL, a CAG report observed. IIFCL sanctioned and disbursed the loan at a time when the real estate industry was in strain and real estate development of the project was stalled due to restrictions imposed by the National Green Tribunal (NGT) on construction activities around 10 km radius of Okhla Bird Sanctuary, the CAG said in a report tabled in Parliament on Tuesday.
“IIFCL failed to realistically assess the expected revenue from real estate development of 2,500 hectares of land along the 165 km expressway between Noida and Agra even though the real estate component in the project was critical for its viability,” it said.
It also unduly relaxed pre-commitment condition of obtaining second credit rating of the project and disbursed the loan amount despite the project company facing severe financial crunch, said the report from the Comptroller and Auditor General (CAG).
“These led to doubtful recovery of dues of Rs 1,089.89 crore,” CAG said in its ‘Compliance Audit Observations, Union Government (Commercial)’.