‘Rangarajan panel to only formulate guidelines for road projects’

November 20, 2013

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NEW DELHI: The Rangarajan panel on premium rescheduling of road projects will only formulate guidelines and the task of implementation will rest with the NHAI .

Prime Minister’s Economic Advisory Council Chairman C Rangarajan headed panel, by this month end, will submit its report on restructuring the premium paid by the highway developers. “We are not looking at individual projects, we will prepare a framework, regulations, etc and lay down the parameters which NHAI Board will take up,” Road Secretary Vijay Chhibber, who is also one of the members of the committee comprising representatives from Ministry of Finance and Planning Commission, told report here.

When asked about the issues the panel is deliberating upon, he said all issues requiring restructuring, rate of interest for premium payment, identifying stressed projects which will be allowed to delay payments.

“Rescheduling of premium will be different for pre- construction and post construction projects,” he added. The report will be submitted to the Finance Ministry by the end of this month. The proposal for restructuring the premium for highway projects was aimed at providing relief to players such as GMR and GVK. Their projects have been facing delays on account of high premium — the payment made by the developer to National Highways Authority of India under the build, operate and transfer(BOT) mode.

The premium, which is offered by companies during the bidding stage, is based on projected returns from tolls.

Source-http://economictimes.indiatimes.com