MINISTER OF STATE FOR ROAD TRANSPORT & HIGHWAYS (SHRI R.P.N. SINGH)
(a) and (b) : Yes, Madam. A committee headed by Shri B.K. Chaturvedi, Member, Planning
Commission has been constituted by Hon’ble Prime Minister to resolve procedural impediments
to the National Highways Development Project (NHDP) as well as the need to take a holistic
look at the financing need and arrive at a financing plan that balances the needs of the road
sector and other priority areas of Government.
(c ) to (d): Yes, Madam. The Government has accepted the recommendations of the Committee
with the proviso that the financing plan for 2010-11 onward would be considered by an Empowered
Group of Minister (EGoM) for further action including such changes to the work plan as may
become necessary.
(e) to (f): The details of the recommendations made by the Committee as approved by the
Government are summarized in a statement enclosed as Annex-I, and have since been conveyed
to all concerned including the NHAI.
ANNEX-I
Subject: Statement indicating summarized details of the recommendations of the Committee
headed by Shri B K Chaturvedi given in his report on – “Revised strategy for implementation
of the National Highways Development Project (NHDP) - Framework and Financing†approved by
the Government.
(1) (i) Modifications to the existing MCA, RFQ, and RFP documents for the road
sector, as per details given below:-
a. Termination Provisions in Road Concession Agreements (Para 5.1.1).
b. Exit Policy for (Developer) Concessionaire in MCA. (Para 5.1.2).
c. Issue of Security to Lenders in MCA (Para 5.1.3).
d. RFP Provisions – Forfeiture of bid security of bidders on account of non-responsiveness
(Para 5.1.4).
e. Eligibility of applicants/conflict of interest as per RFQ provisions-common shareholding
levels (Para 5.1.5).
f. Eligibility of applicants /conflict of interest as per RFQ provisions – Continuation of
conflict of interest (Para 5.1.6).
g. Associate – definition in RFQ thereof (Para 5.1.7).
h. “Threshold technical capability†“Eligible projects†(TTC) in latest RFQ (Para 5.1.8).
i. Increase in Equity Grant (VGF) to 40% by merging 20% equity and 20% O&M Grant into Equity
Grant (Para 5.1.9).
j. RFQ process – project wise pre-qualification be substituted with annual/periodic pre-
qualification (Para 5.1.10).
k. Premium provisions under RFP /MCA (Para 5.1.11).
(ii) Issuance of the RFQ and RFP for the road sector projects after incorporating the
recommendations made by the Committee in the Model RFQ and RFP documents issued by the Ministry
of Finance, as referred to at clause 1
(i) above.
(iii) Further amendments to RFQ and RFP provisions, where necessary, will be carried out by the
Ministry of Road Transport and Highways (MoRTH) on the basis of recommendations of the NHAI
Board.
(iv) Setting up of an Inter-Ministerial Group (IMG) under the Chairmanship of Secretary, MORTH
with representatives of DEA, Department of Expenditure, Planning Commission and Ministry of
Law and Justice to consider issues relating to MCA. Where there is unanimity in the decision,
the same will be then put up to the Minister, Road Transport & Highways for approval. Where
there is no unanimity in the decision, the matter will be placed before the Empowered Group
of Ministers (EGoM) comprising the Finance Minister, Minister of Road Transport & Highways and
Deputy Chairman, Planning Commission. The EGoM will also consider and take decision on all
issues where there is no unanimity in committees at the level of officers and which do not
require approval of the Cabinet/CCI.
(v) Continuance of endeavour to award projects within the available overall budgetary ceilings,
as per the detailed Work Plan for the current year (2009-10) for 12,652 Km presented by the
NHAI to the Committee, with the break up of the proposed length for award as given below:-
Work Plan for 2009-10
Mode of Delivery Road Length BOT (Toll)
4 lane – Phase III 4,373
4 lane - Phase II 55
6 lane – Phase V 2,403
Expressways– Ph.VI -
2 lane with paved shoulders – Ph. III 1,977
2 lane – Phase IV -
4 lane – Phase VII -
BOT (Annuity)
4 lane – Phase III 524
4 lane – Phase II 380
J&K – Phase II 239
2 lane with paved shoulders – Ph. III 1,477
2 lane – Phase IV -
4 lane – SARDP-NE 394
E P C
4 lane – SARDP-NE 330
2 lane - Phase IV -
2 lane with paved shoulders – Ph. III 500 Total 12,652
(vi) Acceptance of the recommendations made by the Committee as regards the ‘Modes of Delivery’
and the ‘Financing Plan’ with the proviso that the financing plan for 2010-11 onward would be
considered by the Empowered Group of Ministers for further action, including such changes to
the work plan as may become necessary.
(vii) Carrying out implementation of road projects on all the three modes of delivery viz. BOT
(Toll), BOT (Annuity) and EPC (Item Rate Contract) concurrently rather than sequentially.
Roads below a certain threshold in terms of traffic do not merit testing on BOT (Toll) as the
process only leads to delays in implementation and award. Hence, a road not found prima facie
suitable for BOT (Toll) can be implemented directly on BOT (Annuity) subject to the overall
cap as envisaged in the Work Plan. The decision of shifting a project from BOT (Toll) to BOT
(Annuity) would be taken by the IMG chaired by Secretary, MORTH and approved by Minister,
Road Transport & Highways.
(viii) Before implementing a project on EPC basis, it will be compulsorily tested for BOT
(Annuity) and only if unacceptable bids are received then only the project will be awarded
on EPC basis. Normally, an Annuity bid working out to an Equity IRR of up to 18% will be
acceptable as per these norms. However, in the event of bids exceeding the Equity IRR of 18 %,
the same will be bid out on EPC. In case of difficult areas having law & order problems,
security, inhospitable terrain etc, a bid working out to an Equity IRR of up to 21% will be
acceptable considering the risk premium of 3 %, on case to case basis. PPPAC will be empowered
to give approval for projects to be moved from Annuity to EPC where acceptable bids have not
been received.
(ix) In case of projects under NHDP Phase IV, if the traffic is less than 5,000 PCUs, the
project will directly be taken up on EPC. For the specific EPC km lengths recommended in
the Work Plan, specific EPC packages will be presented before the existing EFC in the MORTH
for approval.
(x) Based on the feasibility report, the projects would be tried first on BOT (Toll) and in
case of non-viability/poor response, the same would be shifted to BOT (Annuity) failing which
on EPC. For the projects where NHAI is not able to get bids, the process of preparation of
detailed project report may be initiated immediately to save time in case such projects are
required to be taken up on EPC.
(xi) Empowering the Board of NHAI to accept single bids after examining the reasonableness of
the same.
(xii) Raising of overall VGF cap of 5% to 10% for the entire six-laning programme, and
consideration of individual projects in low traffic GQ stretches with VGF up to 20% within an
overall cap of 500 Km out of the 5080 Km of the Phase-V programme yet to be awarded.
(xiii) Funding of the NHDP Projects under SARDP-NE and in Jammu & Kashmir with Additional
Budgetary Support (ABS) over and above the cess that the Government provides to NHAI on a
yearly basis.
(xiv) ‘In Principle’ approval of the Government Support to the NHAI for :–
a. Issuance of Tax exempted bonds
b. Guarantee cover to the Borrowing Plan of NHAI.
c. Out of the borrowing approval of Rs.30,000 crores earlier provided to Indian Infrastructure
Finance Company Limited (IIFCL), Rs.10,000 crores under the fiscal stimulus package will be
transferred to NHAI, as per the its borrowing requirement.
d. Assistance in negotiating non-sovereign multilateral loans from World Bank, ADB, JBIC etc.
by providing back to back support, if necessary.
e. Providing a Letter of Comfort from Ministry of Finance confirming the availablity of Cess at
least till 2030-31.
