The National Highways Authority of India (NHAI) on Friday allowed the operators of nine of the stressed 39 road projects to reschedule their premium payments to help them complete their projects by first meeting their debt obligations.
The decision by the NHAI board to help these projects comes after the approval of the policy earlier by the government to defer the premium of those developers who were facing a revenue shortfall or the gap between toll revenue and other expenses, including debt and taxes.
According to NHAI officials, the total project cost of the nine projects that have had premium rescheduled stood at R9,254 crore and a total premium of R5,960 crore has been deferred. During the current fiscal the premium rescheduled stands at R652 crore.
Though there is a total of 39 projects, only 15 have come so far to the NHAI for rescheduling of premium. “These projects were taken up on a case-by-case basis and each project’s premium payment has been restructured as per the demand,” an official said.
The nine projects belong to companies such as IRB, Reliance Infrastructure, L&T and Sadbhav Engineering.
The projects include widening the Ahmedabad-Vadodara stretch to six lanes, the Beawar-Pali-Pindwara section to four, the Rohtak-Panipat section to four, the Tumkur-Chitradurg to six, etc.
Analysts welcomed the move, saying it would boost investor sentiment towards the roads sector. “This will send a positive message to road sector players at large. This might restart activity in this standstill sector and hopefully will able to attract investments,” said Vishwas Udgirkar, senior director, Deloitte India.
The ministry of road transport and highways had earlier sent a Cabinet proposal seeking approval for rescheduling the premiums of the 39 stressed projects awarded on a build-operate-transfer basis, valuing the projects collectively at around R1 lakh crore.
The Cabinet had allowed delayed premium payment after taking into consideration recommendations of a panel headed by Prime Minister's Economic Advisory Council chairman C Rangarajan.
Last year, GMR Infrastructure exited the Kishangarh-Udaipur-Ahmedabad project 16 months after securing the order ostensibly on account of regulatory hurdles, including delays in environment clearance and land acquisition.