`A Dedicated Fund Must For Nhs'

The National Highways Authority of India (NHAI) has in the past three years achieved success in getting the private sector initiative to finance road projects. The body has drafted the concession document after taking into account pitfalls of the power purchase agreements. NHAI chairman Deepak Dasgupta spoke to Business Standard's C Shivkumar on the authority's future plans.

Q: At what stage is the draft concession document in?

A: The model concession agreement has been submitted to the government.

Q: How many projects are expected to go through once the concession pact is approved?

A: Three projects that include Jaipur-Kishangarh on NH8, Hosur- Krishnagiri on NH7 and Chingelput-Tindivanam on NH45 for which bidders have been shortlisted are expected to go through immediately. More will follow for which feasibility studies have been initiated.

Q: Have issues on state support agreements like axle-load factors and contingent liabilities been resolved?

A: Power to frame rules for regulating traffic is largely vested with the state government. We are trying to seek an exception for National Highways so that the concessionaire can be appropriately empowered by the Centre itself. Meanwhile, the state government concerned will be requested to authorise the concessionaire to regulate traffic as per rules framed by it. The issue of axle-load factor will also fall under this category.

Q: Do you foresee the possibility of user resistance, especially in view of the multiplicity of levies?

A: So far there has been a general willingness to pay toll. This willingness is born out of realisation that users need to make a sizeable contribution for upgradation of road infrastructure.

Q: Can methods like shadow tolls or annuity-based payments be used to make projects bankable?

A: Shadow tolls or annuity-based payment projects will become a possibility if a dedicated highway fund can be created. So far a cess on petrol only has been levied. If a cess on diesel is also levied, there will be a sizeable increase in accruals. Such an approach will obviate user resistance to some extent. The question really is to generate willingness among our people to contribute more.

Q: Will you be divesting in some projects in which you are directly involved?

A: According to Section 10 of the NHAI Act, 1988, the authority is expected to work on business principles. This should logically cover possible divestment in companies in which NHAI will hold equity.

Q: Why have funds raised through toll or cess not been earmarked till now?

A: The matter is under examination of the government with a view to institutionalise the manner in which such funds are available for road sector development alone.