The National Highways Authority of India (NHAI) will shell out Rs 922 crore to private highway operators for the toll revenue loss they incurred due to suspension of user charge collection from the afternoon of November 9 to the midnight of December 2.
Toll collection was suspended across all national highways in the country following demonetisation of Rs 500 and Rs 1,000 currency notes on November 8. NHAI has moved a proposal to compensate private highway operators “to boost the confidence of private investors”, give “immediate relief ” to already stressed developers and to provide a safeguard against bank loans becoming nonperforming assets.
The proposal needs the nod of the Cabinet committee on economic affairs for the fund to be released. The NHAI proposal says that the compensation payment has arisen solely on account of the government decision. The highway authority has worked out the compensation based on the average daily collection in October.
Though this works out to be Rs 1,212 crore for all the 317 toll plazas, revenue loss of projects on public-privatepartnership (PPP) is estimated around Rs 922 crore.
“The balance estimated loss of about Rs 290 crore is in respect of public funded/annuity projects, which vest in NHAI and for which the compensation amount does not have to be paid out,” the highway authority says in its proposal.
At present, the contract conditions for each project specify how interim compensation can be paid in case of such loss due to government decision and how the tolling period of a project can be extended.
But NHAI said working out such details of each project would be cumbersome and there is a fear that there would be huge claims and litigations by private players at a later stage.
NHAI added that all those operators who take the onetime compensation will execute an agreement with the authority stating that they will forgo any other claim, including that for extension of toll period. Nickell Robey-Coleman Authentic JerseyShare This