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Construction : Web Exclusive | March 2014 | Source : Construction Update

Finance ministry approves deferment of premium payment for highway projects

RP Singh, Chairman NHAI has said that as many as 21 highway projects are likely to benefit after the Finance Ministry decided to reschedule premium for roads. The deferment of premium payment was recommended by the Rangarajan Committee. The policy provides for relief to highway developers through a mechanism, called revenue shortfall loan, under an article of the model concession agreement between developers and the government. The Highway developers can defer premium payment in case they are left with not enough funds to pay the amount after servicing debt and incurring cost on operation and maintenance of the highways. In the times of economic slowdown and tight monetary policy implemented by RBI, the projects that are facing economic stress would now be eligible for this provision and premium payments.
 
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