The wait for premium restructuring for the private road developers, unable to pay dues to the Government, is unlikely to end any sooner as the Finance Ministry has passed the buck to the Prime Minister's Office.
last week, the Finance Ministry sent the proposal to Prime Minister Manmohan Singh's office for the approval of the much-awaited bailout policy for the roads and highways sector. The policy is aimed at providing relief to financially stressed projects.
The move will help breathe life into over 40 highway projects, which have been stuck for want of funds. Because of unavailability of fund in the stretched economy, the private developers have failed to pay the minimum premium amount promised by them to the Government at the time of bagging the project. The Cabinet had given an in-principle go-ahead to the bail out policy in October and set up a panel under PM's Economic Advisory Council Chairman C Rangarajan to finalise the new premium restructuring policy.
The panel had recommended that the policy would only be allowed to roll out by the Ministry of Roads on getting the nod of Finance Minister P Chidambaram, but he has now asked the PM for intervention. "The shortage of funds between the toll revenue collected by the highway developer and expenses incurred, by way of operations, maintenance costs, debt servicing and premium payments, could be restructured," said a highways Ministry official.
"The dispensation under the new relief policy would be evaluated on a yearly basis and only those who continue to face "economic stress" would be permitted to continue," said the official.
Ministry of Roads, Transport and Highways has been pushing for rescheduling of premium for the private road developers as it feels will relieve the financial stress that the sector is facing and help bring in much need equity.