abhishreshthaa
Abhijeet S
GOVERNMENT POLICY
The Government has announced a road policy and a set of guidelines for development of highways, including a series of measures to attract private investment in the sector, both foreign and domestic. Key initiatives in this sector include:
The government has permitted 100 per cent foreign equity (up to US$ 306 million) in construction and maintenance of roads, highways, tunnels etc.
In order to share project risks, the government, through the National Highways Authority of India (NHAI), can acquire equity stakes up to 40 per cent in build-operate-transfer (BOT) projects.
Promoters are permitted to charge toll tax on certain projects. These toll taxes are indexed to the wholesale price index.
Road projects are entitled to corporate tax holidays for 10 years.
The government also facilitates investors with feasibility study, land acquisition, resettlement and rehabilitation, etc.
Earlier, most of the private sector investments were through the build-operate-transfer schemes. Now many of the recent projects are being bid on a toll collection system to finance the project. This new scheme has generated considerable interest among private investors and operators.
Model Concession Agreements (MCA) for large BOT Projects costing more than US$ 20 million, small BOT
Projects costing up to US$ 20 million and annuity-based projects have been finalised. It is expected that in the coming years, private sector participation will grow significantly.
Exemption from custom duty on the import of modern road construction equipment.
Private parties allowed to develop service and rest areas along the roads entrusted to them. To encourage private investment further, two model concessions agreements have been finalized, one for major road projects costing more than Rs.100 crores, and another for smaller projects costing upto Rs.100 crores.
To improve the position of availability of funds, steps have been taken in this direction like cess on petrol and diesel has been levied to make funds available for Highway
infrastructure development. Funds are also obtained from externally funding agencies like World Bank, Asian Development Bank, OECF etc. for projects in Highway sector. Amendments have been made in the National Highway Act to encourage private sector participation in funding of road projects on BOT basis.
As per Central Road Fund Act 2000, the distribution of total of 100% cess on petrol and 50% cess on diesel would be: 57.5% for National Highways, 30% for State roads and 12.5% for road over/under bridges and safety works on Rail-Road Crossing. The remaining 50% of the cess on diesel is to be used to develop rural roads.
Projects for widening of existing National Highways have been exempted from environmental and forest clearances.
Thrust to accelerated implementation of Prime Minister's National Highways Development Project (NHDP) from petrol and diesel cess and additional fund raising measures for NHAI.
The Government has announced a road policy and a set of guidelines for development of highways, including a series of measures to attract private investment in the sector, both foreign and domestic. Key initiatives in this sector include:
The government has permitted 100 per cent foreign equity (up to US$ 306 million) in construction and maintenance of roads, highways, tunnels etc.
In order to share project risks, the government, through the National Highways Authority of India (NHAI), can acquire equity stakes up to 40 per cent in build-operate-transfer (BOT) projects.
Promoters are permitted to charge toll tax on certain projects. These toll taxes are indexed to the wholesale price index.
Road projects are entitled to corporate tax holidays for 10 years.
The government also facilitates investors with feasibility study, land acquisition, resettlement and rehabilitation, etc.
Earlier, most of the private sector investments were through the build-operate-transfer schemes. Now many of the recent projects are being bid on a toll collection system to finance the project. This new scheme has generated considerable interest among private investors and operators.
Model Concession Agreements (MCA) for large BOT Projects costing more than US$ 20 million, small BOT
Projects costing up to US$ 20 million and annuity-based projects have been finalised. It is expected that in the coming years, private sector participation will grow significantly.
Exemption from custom duty on the import of modern road construction equipment.
Private parties allowed to develop service and rest areas along the roads entrusted to them. To encourage private investment further, two model concessions agreements have been finalized, one for major road projects costing more than Rs.100 crores, and another for smaller projects costing upto Rs.100 crores.
To improve the position of availability of funds, steps have been taken in this direction like cess on petrol and diesel has been levied to make funds available for Highway
infrastructure development. Funds are also obtained from externally funding agencies like World Bank, Asian Development Bank, OECF etc. for projects in Highway sector. Amendments have been made in the National Highway Act to encourage private sector participation in funding of road projects on BOT basis.
As per Central Road Fund Act 2000, the distribution of total of 100% cess on petrol and 50% cess on diesel would be: 57.5% for National Highways, 30% for State roads and 12.5% for road over/under bridges and safety works on Rail-Road Crossing. The remaining 50% of the cess on diesel is to be used to develop rural roads.
Projects for widening of existing National Highways have been exempted from environmental and forest clearances.
Thrust to accelerated implementation of Prime Minister's National Highways Development Project (NHDP) from petrol and diesel cess and additional fund raising measures for NHAI.