Roads Ministry mulls sops for road developers

To allow private road builders to exit from projects soon after construction, the Union Highways Ministry will make an appeal to the Union Cabinet in this regard.

The move comes after the proposal mooted by the National Highways Authority of India (NHAI) remained unresolved even after several rounds of discussion in an inter-ministerial group on highways.

NHAI has formulated the plan to speed up the exit of contractors, who take up projects under the build-operate-transfer (BOT) route, claiming that this would unleash substantial capital kept in finished projects as companies' equity. It has also claimed that this flow of capital would help cash-strapped developers take up new highway stretches.

New rules introduced in 2009 allow developers to exit two years after a project is completed. Now, NHAI wants developers to be allowed to sell their stake as soon as tolling on the stretch starts. Developers of around 100 projects, which run into thousands of crores, do not have this option for projects bagged before 2009.

In case of projects awarded before 2009, developers had to keep at least 26 per cent stake in projects till the contract ended. If they are allowed to exit from the projects, firms of similar net worth specialising in operation and maintenance would take over for the rest of the contract period.