Highway developers, which are lobbying for a policy to postpone premium payment, want the Government to extend them the same benefits given to the telecom sector that helped save costs.

The developers have suggested that the Government should adopt an interest rate of 9.75 per cent while calculating the deferred premium value, on lines of what the Finance Ministry had adopted while allowing deferment of spectrum fee for telecom operators in November 2012.

On the issue of re-scheduling premium for the highway developers, the Finance Ministry had suggested a 12 per cent interest rate. It had justified the 12 per cent rate by stating that this was the discount rate used by the National Highways Authority of India at the project feasibility level to calculate the net present value of premium, while awarding the project.

More money outgo

While a higher interest rate is good for Government, as it means more money, it is bad for developers as higher interest rate means more money outgo from highway developers to the Government.

Premium is the amount that developers had committed to the Government, while bagging the rights to develop a highway stretch and collect toll from the users over a 20-30 year period. But now many highway developers want to postpone the payment as their project finances turn awry on the back of higher project cost and lower than expected toll revenue. Also, they point out that the delays which led to higher project cost were on account of delayed regulatory approvals on the part of the Government.

The proposal to re-schedule premium, which was taken up by Cabinet, has been referred to a committee headed by Dr C. Rangarajan, Chairman, Prime Minister Economic Advisory Council. The developers have put these points in a letter written to the Prime Minister on the issue on Monday.

mamuni.das@thehindu.co.in

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