Copyright © HT Digital Streams Limit all rights reserved. Double toll, single developer: Builders of new highways can toll on parallel roads to bring investors back to bot projects, are still a challenge, and the new step can help reduce the risk and promote private investment in the road sector. (Bloomberg) Summary In an attempt to attract PVT investors, the government plans to provide toll rights for alternative roads along new Greenfield Highways. This approach aims to reduce risks associated with traffic fluctuations, to ensure revenue stability for highway concessions and improve general infra development. Highway developers who win new projects may also be allowed to run older parallel roads and raise tolls, in an effort to reduce toll leakage and attract more investors. The Union Road Ministry has asked the National Highways Authority of India (Nhai) and other agencies to identify existing roads near new highway projects that are not yet allocated, two people who are aware of the matter said. The goal is to bundle up both the old and new roads to the same bidder as a package for maintenance and tolls, the people on condition of anonymity said. Managers tend to avoid new tolls when older roads – which are also run by Nhai and tolled – available, depressing toll collections and revenue projections on new highways. This risk is an obstacle to offering highway, and the ministry’s move is aimed at including this gap. Parcel agreement The proposed package may include the winning host of new highway projects that also get existing competitive roads under Tol Operate Transfer (Tot) mode, or to get an older operation and maintenance contract with tolls that are adjusted if traffic falls below the projected levels on new stretches, one of the two people above. This will transfer the total risk of highway construction to private developers and allow agencies such as NHAI to focus more on the maintenance and maintenance of highways and to ensure safe mobility rather than building green field projects. A query sent to the Ministry of the Road remained unanswered. The second person said the new system has already been tried in the Guwahati Ring Road project, and it will now be rolled out nationally in all places where existing roads can compete with new stretches. Bold step “This is a daring step that will attract private contractors to BOT (Build Operation and Transfer) model, as traffic deduction risk is one of the biggest concerns in the existing public-private partnership model. If we are binding competitive stretching, the predictability of income becomes clear and increases the propensity for private players in the investment,” (infrastructure). He added that the availability of such projects that could be offered under a volume depends on the existing franchise agreements living in the old project. “In cases where the toll collection rights are with the government, it will be easier to provide full toll rights for both stretches, while in others they only get work and maintenance, along with the insured annuity. The pilot projects in Assam suggest that toll rights can indeed be combined; however, it will vary from project to project, depending on traffic potential,” said. The new system to assign highways is considered the ministry of the road, decided that most projects would go under BOT (where the investor takes the total risk of building new highways), and only in cases where such awards become difficult or indisputable will other modes such as engineering, acquisition and construction (EPC) and hybrid -annuity model (HAM) use projects for projects for projects to acquire. Back to Bot to bring investors back to bot projects, is still a challenge, and the new move can help reduce the risk and promote private investment in the road sector. State -run Nhai has identified 53 highway projects worth £ 2.1 trillion to be developed by the Bot model. Several of these are expected to be awarded the current year in a phased way. In addition, another 100 roads are finalized below bone. Several of these are expected to be awarded under a bundle, including new and alternative road projects. ‘The government’s move is a smart risk mitigation step, as traffic fluctuations are influenced by various factors such as overall economic activity, fuel prices and seasonal variations. The policy will certainly reduce the risk of competition between two parallel roads, which is an important consideration in the BOT model, ‘said an expert on the highway sector on condition of anonymity. Catch all the industry news, bank news and updates on live currency. Download the Mint News app to get daily market updates. More Topics #Highway Projects Read the following story
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