NHAI: Kishangarh-Udaipur-Ahmedabad stretch
Reports suggesting that National Highway Authority of India’s (NHAI) decision to allow highway developers to collect toll from the highway users first and pay later to NHAI was overturned by the Law Ministry, have recently surfaced.
The road ministry has vocally confirmed that the affair of permitting road companies to collect toll now and pay the government later would be done under the legal framework.
GMR Infrastructure Ltd was earlier permitted by the NHAI to make payments to the tune of Rs. 32,508 crores. To facilitate affordable payments in the initial years of the concession period and higher sums later. This in turn allows the company to maintain the net present value while keeping the premium unchanged.
The board of NHAI failed to reach at a decision on a GMR Infrastructure’s proposal of seeking financial relief to help restart work on the Kishangarh-Udaipur-Ahmedabad project. GMR Infrastructure bagged the 555 km project in June 2011 on a premium. In December 2013 GMR had aborted the project after waiting sixteen months for environmental clearance.
Road widening is involved in the projects of GMR and other road development companies like GVK and IRB. The collection of toll begins from the four-lane stage. These companies can reduce and regulate the outflow of their cash by spreading the premium over the concession period during the initial years within which they have to spend on the construction of the roads.
According to the observations of the Planning Commission, any amendment would mean all the contracts would be open to review and renegotiation. Permitting rescheduling of payment might open a Pandora’s box of similar requests from various other equally situated road development companies. The Law Ministry rejected GMR’s proposal on the basis of the agreed contract signed by both the parties, suggesting it would not be wise and appropriate for renegotiation of the contract at the belated stage. Furthermore, making fresh changes in favor of the concessionaire (GMR) may affect the other players who did not participate in the tenders due to the same clause.
Many of the issues that the road sector faces are part of the entire tangle in which the infrastructure sector finds itself. Until the new Bill is passed there will not be any clarity on land acquisition, and even then there could be procedural problems. Environmental approval needs to be obtained regardless of the time it might take, and forest permission or clearances to use railway land would inevitably run into turf problems with the departments involved.
However, the one area within which the government is comparatively absolved to take speedy decisions is the matter of tolls.
Related Infrastructure News:
NHAI road bidding chaos
NHAI is Lagging Behind the Pace
GMR Infrastructure Ltd, Kishangarh- Udaipur-Ahmedabad project, Law Ministry, National Highway Authority of India, Planning Commission, road ministry, road widening
