The Union Road Trasnport and Highway Ministry has decided to speed up its proposal to allow premium rescheduling of road development projects awarded two-three years ago. The government took the decision by facing a situation that may jeopardise the fate of many road projects. The proposal will then be referred to an inter-Ministerial group headed by the Cabinet Secretary.

Premium is the amount offered by a developer to the Government for bagging the right to invest in widening existing highways and collect toll from users over 20-30 years. The premium is payable annually and goes up by 5 per cent every year.

The Highway Ministry and National Highways Authority of India (NHAI) have favoured implementation of the proposal. The future of some 26 road projects ? where developers offered a premium of Rs 96,000 crore to the Government over the pre-defined concession period of 20-30 years ? now hangs in balance.

Many developers have expressed their inability to implement projects as the actual toll revenues end up being lower since the Indian economy entered a slowdown phase, leading to project cost escalation. They have approached NHAI and have sought staggered premium payment over the project life period.

The developers want to pay a lower amount in the initial years and higher amount in later years, while keeping the net present value constant.