Highway projects worth Rs 1 lakh cr to move soon: Fernandes
Dec 22 2013 , New Delhi
"I am hopeful that highway projects worth over Rs 1 lakh crore would be on stream next month onwards. The report of C Rangarajan Committee on premium rescheduling is likely to be accepted by month-end," Road Transport and Highways Minister Oscar Fernandes told PTI.
The government has constituted a panel, headed by Prime Minister's Economic Advisory Council C Rangarajan, to look into the issues pertaining to bailout of highway developers.
The government had approved a proposal in October for the postponement of premium payments by highway developers and has referred the matter to the Rangarajan panel.
The move is likely to provide relief to a large number of players such as GMR, GVK and Ashoka Buildcon.
Their projects have been facing delays on account of high premium - the payment made by developers to the National Highways Authority of India under the build, operate and transfer (BOT) mode.
The premium, which is offered by companies during the bidding stage, is based on projected returns from tolls.
Fernandes said that this move will pave way for many upcoming infrastructure projects.
The ministry had sent a proposal to the Cabinet seeking its nod for rescheduling premium of about Rs 1 lakh crore involving 23 BOT (toll) projects.
Meanwhile, sources said one of the proposals made by the Rangarajan panel is that 75% of the premium amount payable to the government will be restructured in the first three years of the contract.
At present, companies pay some amount of premium to the government in the first year of the project which keeps increasing in the subsequent years.
The minister also said that the government's focus will now be on EPC (Engineering, Procurement and Construction) projects, a chunk of which are likely to be awarded this financial year (2013-14).