In a move that could help revive at least two dozen road sections that were awarded on premium a couple of years back, the finance ministry has accorded a ‘conditional nod’ to the rescheduling of payments to be made to the National Highways Authority of India (NHAI) by the developers of these projects.
The nod, which could benefit projects worth Rs 34,000 crore, is subject to approval from the law ministry. The finance ministry also wants a penalty to be charged from developers coming for rescheduling of premium payments and wants the road transport ministry to come up with a formula for determining the penalty amount.
This move is likely to immediately benefit GMR Infrastructure, the developer of the 555-km Kishangarh-Udaipur-Ahmedabad highway, which had applied for a relaxation in the amount of premium to be paid annually without impacting the Net Present Value of the total premium to be paid over the concession period. GMR Infra, which had got the project after promising to pay a premium of Rs 636 crore with an increase of 5 per cent every year, has now promised to pay Rs 400 crore in the first year and increase it by 15 per cent. The road transport ministry and NHAI would now have to work
on determining penalty for the Kishangarh-Udaipur-Ahmedabad project.
In 2011-12, NHAI awarded 27 projects on a premium and 24 of them are stuck due to one reason or the other. Projects awarded on premium are sections where the developer builds the road and makes an annual payment to NHAI during the concession period. Among the conditions for the clearance of projects, the finance ministry has observed that NPV of the payment to be made to the government, must be maintained.
The finance ministry has also made it clear that rescheduling will be allowed only once during the concession period. “If the project gets into stress subsequent to renegotiation, the sponsoring authority should mandatorily invoke the termination clause and find a new operator for the project,” the finance ministry letter to the roads ministry has said. In case the commercial operation date (COD) has not been achieved the concessionaire would be obliged to remain in the project at least till the COD, the letter added.