"Banks require security such as assets or corporate guarantees to give secured loans. In the case of road projects, developers can offer only their future toll earnings as security. This, however, is not considered a tangible security," an NHAI official was quoted as saying.

Bank loans constitute over two-thirds of a road developer's fund plan. A few banks, including SBI, do offer secured loans for road projects against a corporate guarantee from the parent firm of a special purpose vehicle taking up a particular road project.

Secured loans are available at interest rates lower by half or a quarter per cent, depending on the lending bank. Developers argue that the model concession agreement leaves them with no scope to do away with debt, along with recovery clauses in the case of default. Therefore, why can't secured loans be given to them? "There are stringent provisions in the concession agreement. These provisions give high priority to banks in case of a default by a developer," said Rajendra Prasad Maganti, chairman & managing director of Soma Enterprise. "We want all loans to be secured," Maganti added.