Two days after the Cabinet took a call on re-scheduling premium payments for highway developers, there is still no clarity on the exact import of the decision. The decision will have an impact on many road projects awarded two-three years ago on public-private partnership basis.
In fact, even Transport, Road and Highways Minister Oscar Fernandes declined to comment on the issue till Finance Minister P. Chidambaram or Information and Broadcasting Minister Manish Tiwari gives an official briefing on the subject. The media was not briefed on Tuesday after the Cabinet meeting, or a press statement issued.
“A decision has been taken. I will speak only after the Finance Minister or Information Minister briefs the media on the issue,” is all that Fernandes told
Fine-tuning
An official of the Highway Ministry on Tuesday said the Cabinet had approved premium re-scheduling for highway developers, but it requires fine-tuning which will be done by a Committee.
The Highway Ministry is waiting for the minutes of the Cabinet meeting to be able to clarify on the exact content of the approval given, as the proposal contains multiple options of premium re-scheduling.
Premium is the amount quoted by developers to the National Highways Authority of India to bag the rights to design, widen, finance, operate highway stretches and collect toll from the users over a long period of time. Meanwhile, highway developers are also being cautious while reacting to Cabinet decision, as only limited information is available. For them, it is a case of once bitten twice shy. In July, developers had hastily welcomed a decision of the Cabinet regarding relaxation of the exit clause for highway projects, only to be unhappy later with the details.
“We would like to know the details before giving a formal reaction,” said M. Murali, Director-General, National Highways Builders Federation (NHBF).
On Wednesday, with reference to the July decision, Highway Ministry’s Joint Secretary Rohit Singh conceded that the “lenders substitution” policy had not found many takers, while speaking at an infrastructure conference.
Harmonious substitution by lenders was what the Cabinet cleared in lieu of developers demand on relaxing exit policy.
The Government has been considering a proposal to permit highway developers to postpone their premium payments in a manner that the net value of these obligations are constant over the entire contract period.
Road developers had bagged many highway projects by quoting high premiums to develop or widen highway stretches, maintain these and collect toll from users over a pre-determined period of 20-30 years. Now, they want the projects’ premium payment postponed in a manner that the net value remains the same.