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Highway projects worth Rs 1 lakh crore to move soon: Road Ministry

23 Dec 2013 Evaluate

The Highway and Road Ministry expects stalled road projects worth over Rs 1 lakh crore to start getting executed from next month onwards as report of C Rangarajan Committee for restructuring the annual premium owed to the government by developers of stressed road projects is likely to be accepted by month-end. The panel, headed by PMEAC chairman C Rangarajan, was set up in November to decide the modalities of the premium rescheduling policy, while final decision could be implemented by the highways ministry after the Cabinet approval.

As per the Rangarajan panel report, 75 percent of the premium amount payable by the road developers to the government will be restructured in the first three years of the contract. Currently, developers pay some portion of premium to the government in the first year of the project which keeps increasing in the subsequent years. Companies make payment to the the National Highways Authority of India under the build, operate and transfer (BOT) mode. The move is likely to provide relief to a large number of players such as GMR, GVK and Ashoka Buildcon, whose projects have been facing delays on account of high premium.

The development of infrastructure is a most critical prerequisite to boost the economy’s growth and the ministry of road transport and highways is taking measures to revive the growth in highway road projects in the country. The government has also entered into the 'Public Private Partnership (PPP)' programme in order to bring adequate resources for setting up of a sound and efficient infrastructural base. Meanwhile, it has set the $1-trillion investment target for the infrastructure sector for the 12th Five Year Plan (2012-17).

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