NHAI allows cos to rejig premium for 9 highway projects

PTI Posted online: Friday, May 23, 2014 at 0000 hrs
New Delhi : Nine stressed highyway projects belonging to Reliance Infra, Sadbhav Engineering and L&T among others were today allowed to reschedule premium payments worth Rs 5,960 crore, a move that can revive stalled road works and attract new investments in the sector.

"NHAI Board has approved 9 proposals for deferment of premium for a total value of Rs 5,959.93 crore. The period during which such deferment is considered spans the period 2014-15 till 2026-27," an official statement said. NHAI is responsible for development, maintenance and management of National Highways of India.

Premium is a payment made by the developer to NHAI in build, operate and transfer (BOT) projects. The premium, which is offered by companies during the bidding stage, is based on projected returns from tolls. Projects for which deferment has been permitted are --Godhra (Gujarat) border 4 laning, Beawar Pali-Pindwara 4 laning, Rohtak-Panipat 4 Laning, Hyderabad-Yadgiri 4 laning, Samakhiyali-Gandihidham 6 laning, Ahmedabad–Vadodara 6 laning, Tumkur-Chitradurga 6 laning, Indore-Dewas 6 laning and Hosur-Krishangiri 6 laning.

"This step would give huge comfort to the lenders as debt obligation would now get priority over the premium payable to NHAI," the statement said.

NHAI would be able to recover the deferred premium with interest in the latter period of the concession.

The deferment shall be limited to the actual revenue shortfall after meeting the debt obligation and operation expenditure, the statement said adding that the concessionaire would not be allowed to declare any dividend until the shortfall in premium is made good.

The concessionaire would also be required to share their toll collection data with NHAI on real time basis, the statement further added. '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," Vishwas Udgirkar, Senior Director, Deloitte India said.

The Ministry of Road Transport and Highways had sent a Cabinet proposal earlier seeking approval for rescheduling of premiums of 23 stressed projects awarded on BOT, valuing around Rs 1 lakh crore. These projects had been facing delays on account of high premium.