NHAI to intervene in the maintenance of roadways projects
Many developers had offered to pay high premium to the government during the high economic growth period between 2010-2012, to win the bids in projects of road widening, maintaining, and collecting toll from road users over a 20-30 year concession period. However now National Highways Authority of India (NHAI) has intervened in these projects and has added additional conditions like audits and even cancellation of contracts midway during the concession period in an event if the developers are unable to show satisfactory results.
Measures to be taken by NHAI
Premium is the money offered by a developer to the Government for any roadways project, be it development or maintenance of national highways and flyovers. Many developers had quoted aggressively and had agreed to pay a high premium a few years back to bag such projects anticipating high profits. However due to lower than expected toll collection, high inflation and finance costs, the developers have requested for delay in premium payment to NHAI. After the audits if NHAI finds that even a premium deferment does not improve the project’s financials, they will cancel the entire contract and find another suitable vendor.
Source- The Hindu Business Line
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