Rangarajan panel differs on highway projects premium

New Delhi: The Rangarajan panel on rescheduling of highway projects premium is divided as the finance ministry representative has a different view on the issue of interest payment, sources said.

The premium is the amount paid to the government by highway developers who in turn collect toll. Contractors have run into problems like land acquisition and delays in green clearances and they have been demanding rescheduling the premium.[caption id=“attachment_1327331” align=“alignleft” width=“380”]  Framing road policy. Reuters[/caption]

A panel, headed by Prime Minister’s Economic Advisory Council chairman C Rangarajan, was tasked with formulating the guidelines for restructuring the premium of stressed highway projects.

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The finance ministry is of the view that interest charged on rescheduled premium amount should be 12 percent, while the other members of the committee suggested that it should be 2 percent above the rate at which banks are lending to the project, sources said.

“The Rangarajan panel is likely to submit its report to the finance ministry in the next 48 hours,” the source said.

The committee also has representatives from Ministry of Finance, road ministry and Planning Commission.

The panel was constituted after the Cabinet Committee on Economic Affairs cleared the road ministry’s proposal for rescheduling the premium of highway projects.

At present, companies pay some amount of premium to the government in the first year of the project which keeps increasing in the subsequent years.

The move was proposed against the backdrop of some private infrastructure firms pulling out of road projects due to delays in regulatory clearances like land acquisition and environment clearances.

PTI