Expert panel to conduct survey on 47 highways

November 29, 2013

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ET Bureau

(The expert panel appointed…)

NEW DELHI: The expert panel appointed by the Cabinet to examine bailout demands of highway developers has called for a traffic survey on 47 highways to ascertain the veracity of developers’ claims of financial stress due to lower toll revenues.

The group led by C Rangarajan, chairman of the Prime Minister’s Economic Advisory Council, has asked the National Highways Authority of India (NHAI) to check variations in traffic trends from the estimates forecast at the time of bidding for the highway development projects as a precursor to considering a bailout.

The highways authority is likely to complete the study this week, after which a consultant will determine the traffic trends and its findings will be sent to the highways ministry, officials aware of the development said.

The panel was set up earlier this month after the government had in October suggested a body headed by Rangarajan to decide the structure of the premium rescheduling policy whose final decision would be implemented by the highways ministry after Finance Minister P Chidambaram’s approval.

Officials said concessionaires had argued that a decline in traffic along highways had put them under stress because of which construction and debt servicing were proving difficult. The committee and the highways ministry now wants to check whether traffic has declined and if this could lead to any stress.

“The NHAI is surveying the traffic across 47 highway stretches. The data collected will then be sent to a consultant which will study past and present traffic data to analyse the trends and its findings will be sent to the highways ministry. Based on this, the committee is likely to make a decision on what parameters could be used to determine stress,” an official said.

There was some confusion over the stretches to be included, an official said, explaining the delay in the survey even as the request came in early this month. Since 2012-13, the highways ministry and NHAI have been struggling to find takers for multiple public-private partnership (PPP) projects. The government could award only 1,116-km last fiscal against the target of 9,500 km and only one PPP project has been awarded this year.

The highways ministry, which has put its plans for awarding PPP projects this year on hold till the market scenario improves, expects to kick-start several stalled projects with its premium restructuring proposal.

Source-http://articles.economictimes.indiatimes.com