The C Rangarajan Committee, formed by the Union Cabinet to suggest ways to revive stuck roads projects awarded on premium, has ruled against any deferment in premium payments for projects that are being able to service its cost through revenues.
In its recommendations to the road transport ministry, the committee has said that the premium reschedule for projects should happen only if the toll revenues collected at a particular project is not enough to meet the annual cost.
“The cost for a project, awarded on premium, includes committed premium payment to the government, operations and maintenance cost and debt servicing cost,” said a senior road transport ministry official.
The official added that these recommendations would require approval from the road transport minister Oscar Fernandes and finance minister P Chidambaram.
The committee has also rejected proposal sent by the National Highways Authority of India (NHAI), which suggested offloading of premium payments to the extent of 75 per cent for projects without affecting the revenues of the government in terms of net present value.
The recommendations are for all widening projects that include two- to four-lane and four- to six-lane projects and around 48 road projects in these category are stuck due to one reason or the other.
The recommendations also say that the developer will have to pay an interest equal to bank rate plus 2 per cent on the premium amount deferred. The road developer will also have to clear the due premium collected due to years of deferment a year before its concession period gets over.
The recommendations also propose penalty for projects, where it has been delayed due to the fault of the project developer.