Centre to rejig payment method for NH projects

Centre to rejig payment method for NH projects

In a big relief to private infrastructure firms, the Centre is likely to consider a proposal for restructuring of premium payment for companies building highway projects.

The Cabinet Committee on Economic Affairs is likely to take up on Friday a Ministry of Road and Transport proposal that says companies can pay less premium in initial two-to-three years and the remaining amount in subsequent years.

However, there will be no change in the value of the premium but companies can pay lesser amount initially, which is like a breather for the firms, sources said.

At present, the companies that have bagged a project under build operate own through competitive biding, have to pay some amount of premium to the government in the first year of the project which keeps on increasing in the subsequent years.

The move was proposed after some of the private infrastructure firms pulled out of road projects due to delays in regulatory clearances like land acquisition and environment. Earlier, the companies also urged the Ministry of Road Transport to restructure the premium payment method as a relief to the financially stressed infrastructure sector.

It may be noted that due to the issue of premium, some private companies have terminated their contracts with National Highway Authority of India.