Resource detail

The much-awaited bail-out policy for the highways sector is ready but the terms are likely to be more stringent than initially proposed. Prime Minister Dr Manohan Singh mandated-committee has drawn up a broad framework for the deferment of premium payments by stressed highway developers.The committee is headed by Mr C Rangarajan, Chairman of the Prime Minister's economic advisory council. The earlier draft report had proposed allowing developers to defer most of the premium committed - 75 per cent in the first three years and 50 per cent thereafter. Instead, the committee is now likely to provide relief within the provisions of the model concession agreement, said a government official familiar with developments. Under the MCA, relief is available through the 'revenue shortfall loan' mechanism. It allows developers to reschedule the shortfall between necessary expenses and toll revenue due to political events or default by the National Highways Authority of India.