Decision on discounts to road builders in a week: NHAI

October 11, 2013

Warning: Undefined variable $thumb in /var/www/web/indiantollways.com/wp-content/plugins/digg-digg/include/dd-class.php on line 887

The Cabinet on Tuesday approved a proposal for postponement of premium payments that highway developers have to pay to the NHAI in build, operate and transfer (BOT) projects.
RP Singh, Chairman, NHAI

(RP Singh, Chairman NHAI )

Our view is that anything beyond debt service and the operation and maintenance (O&M) should come as premium. RP Singh Chairman NHAI The National Highways Authority of India (NHAI) will decide on the rescheduling of premium payment for road projects in a week or two.

Speaking to CNBC-TV18, RP Singh, chairman, NHAI says the company’s board will meet next week to decide on on the quantum of discount to eligible road builders. The Cabinet on Tuesday approved a proposal for postponement of premium payments that highway developers have to pay to the NHAI in build, operate and transfer (BOT) projects.

The Cabinet on Tuesday approved a proposal for postponement of premium payments that highway developers have to pay to the NHAI in build, operate and transfer (BOT) projects.

Below is the edited transcript of Singh’s interview to CNBC-TV18.

Q: On what principles will you decide who will get the rescheduling of their premium?

A: I am yet to get the exact formulation and we have to see what is the final decision on this. But one thing is clear that it will apply to all the projects which are stretched and the board will decide.

Q: Since you have been neck deep in this and you know the troubles of the sector best. What might be the principles on which approximately the board will decide to reschedule?

A: We are not clear of the exact contours. The crucial thing will be what is going to be the discount rate. I am not very clear about it whether it’s 12 percent or 10 percent.

Q: We understand finance ministry said 12 percent and developers want 10 percent. So, it will be your board to decide the discounting?

A: Board will not decide. It will be the decision of the government. They are likely to form a committee which is going to go into other aspect. There are some condition which we were not willing to accept because we thought it will be a sub optimal solution.

The committee will give a decision with a period of week or one week or two weeks perhaps after that the board will go into the individual cases as to what are the cases which deserve this kind of rescheduling. So, our view is that anything beyond debt service and the operation and maintenance (O&M) should come as premium.
Source_http://www.moneycontrol.com