 "DLF consortium joins others for rescheduling of road premium due")
The combined premium these developers owe the government is Rs 25,000 crore spread over the next 20 years. The NHAI board is likely to decide on the rescheduling applications only after a new government is in place, said an official.
Earlier, eight road projects — two of IRB Infra, three of Reliance Infra and one each of Essel, Larsen & Toubro and Srei Infrastructure — had approached the NHAI for rescheduling their premium after the government allowed a policy on rescheduling premium.
The new entrants to the scheme include two projects of Sadbhav Engineering, one project each of Oriental Structural Engineers, Sew-Navayuga Engineering, Transstroy India, BSCPL Infrastructure and the DLF-Gayatri consortium.
“The board of NHAI is only likely to take up the decision after the general elections. Thirty-nine projects were eligible for premium rescheduling and some of them are not likely to apply for the same or apply only after a new government comes to power,” said a senior industry official.
In March this year, a panel headed by C Rangarajan, chairman of the Prime Minister’s Economic Advisory Council, had suggested a policy to allow cash-starved road developers to reschedule their premium and the government had approved it before the model code of conduct came into force.
Road developers facing a severe shortfall on the toll expected they could avail of the scheme. Premium would be rescheduled in cases where developers were unable to service their debt, operating expenditure and the payment of premium. If the projected toll revenue fell short of the cost-plus premium, the government would consider the deferred amount as a loan to the developer; it is expected to charge an annual interest of 10.75-11 per cent.
Developers had bid aggressively over the years, promising the government a higher premium during a period in which the government bid out as many as 147 projects. The high expectation while bidding was attributed to India's high economic growth, which has slowed considerably over the past few years.
So far, companies have managed to complete only three of the 147 bid-out projects. Companies owe NHAI premia worth Rs 151,000 crore, spread over the next 20-25 years across various projects. The GMR-operated 555-km highway stretch between Kishangarh and Ahmedabad alone owes Rs 59,000 crore to the government over the next 26 years.
The government would now encourage construction of highways and national road linkages through EPC mode (Engineering, Procurement & Construction) and do away with the PPP mode since it could not tap stakeholders to put in place the desired highways in the past, V L Patankar, Director General (Roads), Ministry of Road Transport & Highways, said on Wednesday.
"The host of policy measures announced by the government over the past few years will resurrect waning investor confidence in the struggling roads sector. However, benefits are likely to accrue only in the long term. The issues have accentuated with the generally-stressed financial and liquidity profile of road developers," said India Ratings & Research.