Guidelines for Investment in Road Sector - National Highways ...
Guidelines for Investment in Road Sector - National Highways ...
Guidelines for Investment in Road Sector - National Highways ...
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Government of India<br />
M<strong>in</strong>istry of Shipp<strong>in</strong>g, <strong>Road</strong> Transport and <strong>Highways</strong><br />
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong><br />
<strong>Road</strong> <strong>Sector</strong><br />
Not just roads... build<strong>in</strong>g a NATION
Index<br />
Executive Summary 4<br />
Current Scenario 5<br />
F<strong>in</strong>anc<strong>in</strong>g <strong>National</strong> Highway<br />
Projects 7<br />
Public Private Partnership <strong>in</strong><br />
Highway Development 10<br />
Revenue Risks and Mitigation 26<br />
Overview of Successful Projects 29<br />
Work Plan-II (2010-11) 31<br />
Policy Framework 35<br />
Foreign Direct <strong>Investment</strong> Policy 37<br />
Tax Environment 39<br />
Repatriation of <strong>Investment</strong>s<br />
and Profits Earned <strong>in</strong> India<br />
45<br />
Adm<strong>in</strong>istrative Framework 47<br />
About NHAI 49<br />
Annexure 51<br />
KPMG <strong>in</strong> India<br />
<strong>for</strong><br />
<strong>National</strong> <strong>Highways</strong> Authority of India<br />
The <strong>in</strong><strong>for</strong>mation conta<strong>in</strong>ed here<strong>in</strong> is of a general nature and is not <strong>in</strong>tended to<br />
address the circumstances of any particular <strong>in</strong>dividual or entity. Although we<br />
endeavor to provided accurate and timely <strong>in</strong><strong>for</strong>mation, there can be no<br />
guarantee that such <strong>in</strong><strong>for</strong>mation is accurate as of the date it is received or that<br />
it will cont<strong>in</strong>ue to be accurate <strong>in</strong> the future. No one should act on such<br />
<strong>in</strong><strong>for</strong>mation without appropriate professional advice after a thorough<br />
exam<strong>in</strong>ation of the particular situation.
4<br />
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong><br />
Executive Summary<br />
The <strong>National</strong> Highway network of the country spans<br />
about 70,548 km. The <strong>National</strong> Highway Development<br />
Project (NHDP), cover<strong>in</strong>g a length of about 55,000 km<br />
of highways, is India's largest road development<br />
programme <strong>in</strong> its history. In many ways, this ambitious<br />
and path-break<strong>in</strong>g <strong>in</strong>itiative of the Government of<br />
India, which began <strong>in</strong> the last decade acknowledged<br />
the importance of private sector <strong>in</strong> India's<br />
<strong>in</strong>frastructure development.<br />
The consistent policy and <strong>in</strong>stitutional framework,<br />
which has been the backbone of the INR 3,00,000<br />
1<br />
Crore (USD 60 billion ) NHDP, also conveys the <strong>in</strong>tent<br />
and commitment of successive governments<br />
to encourage <strong>in</strong>creased private sector participation<br />
<strong>in</strong> develop<strong>in</strong>g the arterial road network of the country<br />
to world class standards. More than 60 percent of the<br />
estimated <strong>in</strong>vestment requirement is expected to be<br />
privately f<strong>in</strong>anced.<br />
The early success of Public-Private-Partnerships (PPP)<br />
<strong>in</strong> the NHDP, arguably, set the tone <strong>for</strong> similar<br />
<strong>in</strong>itiatives <strong>in</strong> other <strong>in</strong>frastructure sectors and has<br />
provided the s<strong>in</strong>gle largest opportunity <strong>for</strong> private<br />
f<strong>in</strong>anc<strong>in</strong>g and management of <strong>in</strong>frastructure services.<br />
Build Operate Transfer (BOT) concession contracts<br />
with an estimated value of USD 9.2 billion (<strong>in</strong>clud<strong>in</strong>g<br />
2<br />
BOT/DBFOT -Toll and BOT-Annuity contracts) have<br />
been awarded under various packages till date<br />
and these projects are expected to be fully operational<br />
by 2015-16.<br />
With several key projects on the anvil (<strong>in</strong>clud<strong>in</strong>g<br />
6- lan<strong>in</strong>g of 4-laned roads, expressways and<br />
port connectivity projects) and the <strong>in</strong>creas<strong>in</strong>g<br />
<strong>in</strong>terest ev<strong>in</strong>ced by domestic and <strong>for</strong>eign players <strong>in</strong> the<br />
sector, NHAI is happy to present to you, the <strong>Guidel<strong>in</strong>es</strong><br />
<strong>for</strong> <strong>Investment</strong> <strong>in</strong> the <strong>Road</strong> <strong>Sector</strong>, with specific focus<br />
on NHDP.<br />
NHAI believes that this document would serve as a<br />
useful guide <strong>for</strong> potential <strong>in</strong>vestors, developers and<br />
stakeholders <strong>in</strong>terested <strong>in</strong> participat<strong>in</strong>g <strong>in</strong> India's<br />
ambitious highway development programme.<br />
1. INR 50 = 1 USD : figures approximated<br />
2. Design Build F<strong>in</strong>ance Operate & Transfer<br />
(DBFOT)
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong> 5<br />
Current Scenario<br />
India has an extensive road network of 3.3 million km –<br />
the second largest <strong>in</strong> the world. The <strong>National</strong><br />
<strong>Highways</strong> have a total length of 70,548 km and serve<br />
as the arterial road network of the country. It is<br />
estimated that more than 70 per cent of freight and 85<br />
per cent of passenger traffic <strong>in</strong> the country is be<strong>in</strong>g<br />
handled by roads. While <strong>Highways</strong>/ Expressways<br />
constitute only about 2 per cent of the length of all<br />
roads, they carry about 40 per cent of the road traffic<br />
lead<strong>in</strong>g to a stra<strong>in</strong> on their capacity. The number of<br />
vehicles on roads has been grow<strong>in</strong>g at compounded<br />
annual growth rate (CAGR) of over 8% <strong>in</strong> the last 5<br />
years (2003-04 to 2008-09).<br />
The development of <strong>National</strong> <strong>Highways</strong> is the<br />
responsibility of the Government of India. The<br />
Government of India has launched major <strong>in</strong>itiatives to<br />
upgrade and strengthen <strong>National</strong> <strong>Highways</strong> through<br />
various phases of the NHDP. NHDP is one of the<br />
largest road development programmes to be<br />
undertaken by a s<strong>in</strong>gle authority <strong>in</strong> the world and<br />
<strong>in</strong>volves widen<strong>in</strong>g, upgrad<strong>in</strong>g and rehabilitation of<br />
about 55,000 km, entail<strong>in</strong>g an estimated <strong>in</strong>vestment<br />
of INR 3,00,000 Crore (USD 60 billion).<br />
The <strong>National</strong> <strong>Highways</strong> Authority of India (NHAI) is<br />
mandated to implement the <strong>National</strong> <strong>Highways</strong><br />
Development Project (NHDP). Most of the projects<br />
have been developed or are under development on<br />
Public Private Partnership (PPP) basis through Build<br />
Operate and Transfer (BOT)-Annuity and BOT-Toll<br />
mode (these have been expla<strong>in</strong>ed <strong>in</strong> detail <strong>in</strong> later<br />
section of the brochure). Typically, <strong>in</strong> an annuity<br />
project, the project IRR is expected to be 12-14% and<br />
equity IRR would be 14 -16%. For toll projects, where<br />
the concessionaire assumes the traffic risk, the<br />
project IRR is expected to be around 14-16% and<br />
3<br />
equity IRR around 18-20% .<br />
The NHDP is be<strong>in</strong>g implemented under several<br />
phases:<br />
4-lan<strong>in</strong>g of the Golden Quadrilateral (GQ) and North-<br />
South and East- West (NS-EW) Corridors-(NHDP I & II)<br />
Phase I ma<strong>in</strong>ly <strong>in</strong>volves widen<strong>in</strong>g (to 4 lanes) and<br />
upgrad<strong>in</strong>g of 7,498 km of the national highway<br />
network and has four component packages:<br />
1.<br />
2.<br />
3.<br />
4.<br />
Highway network l<strong>in</strong>k<strong>in</strong>g the four metropolitan<br />
cities <strong>in</strong> India i.e. Delhi-Mumbai-Chennai-Kolkata,<br />
cover<strong>in</strong>g a length of 5,846 km, popularly known<br />
as the Golden Quadrilateral (GQ) project.<br />
<strong>Highways</strong> along the North-South (NS) and East-<br />
West (EW) corridors, cover<strong>in</strong>g a length of 981 km<br />
Port connectivity projects cover<strong>in</strong>g a length<br />
of 356 km; and<br />
Other highway projects, cover<strong>in</strong>g a length of 315<br />
km<br />
Phase-II <strong>in</strong>volves widen<strong>in</strong>g and improvement of the<br />
NS-EW corridors (not covered under Phase-I) cover<strong>in</strong>g<br />
a distance of 6,647 km, besides provid<strong>in</strong>g connectivity<br />
to major ports on the east and west coasts of India and<br />
some other projects. This <strong>in</strong>cludes 6,161 km of NS-EW<br />
corridors and 486 km of other highways. The total<br />
length of the NS-EW network under Phases I & II is<br />
about 7,200 km.<br />
4-lan<strong>in</strong>g of the GQ has almost been completed. Phase<br />
II is expected to be largely completed by December<br />
2010.<br />
3. CRISIL Research
6<br />
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong><br />
Upgradation of 12,109 km (NHDP-III)<br />
NHDP-III <strong>in</strong>volves upgradation of 12,109 km (ma<strong>in</strong>ly 4-<br />
lan<strong>in</strong>g) of high density national highways, through the<br />
Build, Operate & Transfer (BOT) mode at a cost of INR<br />
80,626 Crore (USD 16.1 billion).<br />
The project consists of stretches of <strong>National</strong><br />
<strong>Highways</strong> carry<strong>in</strong>g high volume of traffic, connect<strong>in</strong>g<br />
state capitals with the NHDP network under Phases I<br />
and II and provid<strong>in</strong>g connectivity to places of<br />
economic, commercial and tourist importance.<br />
2-lan<strong>in</strong>g of 20,000 km with paved shoulders (NHDP-IV)<br />
With a view to provid<strong>in</strong>g balanced and equitable<br />
distribution of the improved/widened highways<br />
network throughout the country, NHDP-IV envisages<br />
upgrad<strong>in</strong>g of 20,000 km of such highways <strong>in</strong>to 2-lane<br />
highways, at an <strong>in</strong>dicative cost of INR 27,800 Crore<br />
(USD 5.6 billion). This will ensure that their capacity,<br />
speed and safety match m<strong>in</strong>imum benchmarks <strong>for</strong><br />
national highways. The government has already<br />
approved strengthen<strong>in</strong>g of 5,000 km to 2-lane paved<br />
shoulders on BOT (Toll/ Annuity) under NHDP-IV A at a<br />
cost of INR 6,950 Crore (USD 1.4 billion).<br />
6-lan<strong>in</strong>g of 6,500 km (NHDP-V)<br />
Under NHDP-V, 6-lan<strong>in</strong>g of the 4-lane highways<br />
compris<strong>in</strong>g the GQ and certa<strong>in</strong> other high density<br />
stretches, will be implemented on BOT basis at an<br />
estimated cost of INR 41,210 Crore (USD 8.2 billion).<br />
These corridors have been 4-laned as part of the GQ <strong>in</strong><br />
Phase-I of NHDP. Implementation of <strong>in</strong>itial set of<br />
projects has already commenced and the entire<br />
package is expected to be completed by 2012. Of the<br />
6,500 km proposed under NHDP-V, about 5,700 km<br />
would be taken up <strong>in</strong> the GQ and the balance 800 km<br />
would be selected on the basis of predef<strong>in</strong>ed eligibility<br />
criteria.<br />
Development of 1,000 km of expressways (NHDP-VI)<br />
With the grow<strong>in</strong>g importance of urban centres of<br />
India, particularly those located with<strong>in</strong> a few hundred<br />
kilometers of each other, expressways would be both<br />
viable and beneficial. The Government has approved<br />
1,000 km of expressways to be developed on a BOT<br />
basis, at an <strong>in</strong>dicative cost of INR 16,680 Crore (USD<br />
3.3 billion). These expressways would be constructed<br />
on new alignments.<br />
Other Highway Projects of 700 km (NHDP-VII)<br />
The development of r<strong>in</strong>g roads, bypasses, grade<br />
separators and service roads are considered<br />
necessary <strong>for</strong> full utilisation of highway capacity as<br />
well as <strong>for</strong> enhanced safety and efficiency. For this, a<br />
programme <strong>for</strong> development of such features at an<br />
<strong>in</strong>dicative cost of INR 16,680 Crore has been approved<br />
by the Government. Apart from the high density<br />
corridors, a substantial part of the <strong>National</strong> <strong>Highways</strong><br />
network would also require development dur<strong>in</strong>g the<br />
11th Plan period. These sections are characterised by<br />
low density of traffic. Some of these stretches fall <strong>in</strong><br />
backward and <strong>in</strong>accessible areas and others are<br />
of strategic importance. The development of these<br />
categories of <strong>National</strong> <strong>Highways</strong> would be carried out<br />
primarily through budgetary resources.<br />
4<br />
Current Status of NHDP<br />
50000<br />
48829<br />
40000<br />
35000<br />
30000<br />
25000<br />
25549<br />
20000<br />
15000<br />
14250<br />
10000<br />
9030<br />
5000<br />
0<br />
Completed Work <strong>in</strong> Progress To be Awarded Total<br />
th<br />
4. As on 30 April, 2010.
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong> 7<br />
F<strong>in</strong>anc<strong>in</strong>g <strong>National</strong> Highway Projects<br />
Traditionally, f<strong>in</strong>anc<strong>in</strong>g <strong>for</strong> development of <strong>National</strong><br />
<strong>Highways</strong> <strong>in</strong> India was from the budgetary resources<br />
of the Government of India. In order to augment the<br />
available resources, loans have also been raised from<br />
multilateral agencies like World Bank, Asian<br />
Development Bank (ADB) and Japan Bank of<br />
International Cooperation (JBIC).<br />
NHAI has earlier received loans directly from<br />
multilateral agencies (highway project). These loans<br />
are expected to be repaid through the toll <strong>in</strong>come from<br />
the project. The <strong>in</strong>terest rate <strong>for</strong> the project is<br />
determ<strong>in</strong>ed accord<strong>in</strong>g to ADB's pool based variable<br />
lend<strong>in</strong>g rate system <strong>for</strong> US dollar loans. Around 80 per<br />
cent of the external assistance is provided to NHAI as<br />
a grant by the Central government. The balance is<br />
made available as long-term loans to NHAI, with the<br />
Centre bear<strong>in</strong>g the <strong>for</strong>eign exchange risk. Such loans<br />
are usually provided <strong>for</strong> 15-25 years with a moratorium<br />
of 5 years.<br />
Summary of Externally Aided Projects<br />
Category<br />
Awarded<br />
Awarded<br />
Completed<br />
No. of Contracts Length <strong>in</strong> km Cost (INR Crore) No. of Contracts Length <strong>in</strong> km<br />
World Bank Funded Projects<br />
NHDP Phase I<br />
18<br />
983<br />
5538<br />
14<br />
699<br />
GQ<br />
18<br />
983<br />
5538<br />
14<br />
699<br />
Others<br />
-<br />
-<br />
-<br />
-<br />
-<br />
NHDP Phase II EW Corridors<br />
12<br />
482<br />
3208<br />
-<br />
-<br />
Sub-Total A<br />
30<br />
1465<br />
8746<br />
14<br />
699<br />
ADB Funded Projects<br />
NHDP Phase I<br />
13<br />
766<br />
2374<br />
10<br />
615<br />
GQ<br />
12<br />
718<br />
2315<br />
9<br />
567<br />
Others<br />
1<br />
48<br />
59<br />
1<br />
48<br />
NHDP Phase II NS & EW Corridors<br />
31<br />
1636<br />
7565<br />
14<br />
848<br />
Sub-Total B<br />
44<br />
2402<br />
9939<br />
24<br />
1463<br />
JBIC Funded Projects<br />
NHDP Phase I<br />
7<br />
150<br />
634<br />
7<br />
150<br />
GQ<br />
5<br />
111<br />
333<br />
5<br />
111<br />
Others<br />
2<br />
39<br />
301<br />
2<br />
39<br />
Sub-Total C<br />
7<br />
150<br />
634<br />
7<br />
150<br />
Grand Total (A+B+C)<br />
81<br />
4017<br />
19319<br />
45<br />
2312
8<br />
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong><br />
Presently, the development and ma<strong>in</strong>tenance of<br />
<strong>National</strong> <strong>Highways</strong> is f<strong>in</strong>anced by follow<strong>in</strong>g modes:<br />
1.<br />
2.<br />
3.<br />
4.<br />
Government's general budgetary sources<br />
Dedicated accruals under the Central <strong>Road</strong> Fund<br />
(by levy of cess on fuel)<br />
Lend<strong>in</strong>g by <strong>in</strong>ternational <strong>in</strong>stitutions:<br />
• World Bank<br />
• ADB<br />
• JBIC<br />
Private f<strong>in</strong>anc<strong>in</strong>g under PPP frameworks<br />
• Build Operate and Transfer/Design Build<br />
5<br />
F<strong>in</strong>ance Operate and Transfer (DBFOT) -<br />
<strong>Investment</strong> by private firm and return through<br />
levy and retention of user fee<br />
• Build Operate and Transfer (Annuity) - BOT<br />
(Annuity) - <strong>Investment</strong> by private firm and<br />
return through semi-annual payments from<br />
NHAI as per bid.<br />
• Special Purpose Vehicle – SPV (with equity<br />
participation by NHAI)<br />
• Market Borrow<strong>in</strong>gs<br />
NHAI also has a provision <strong>for</strong> provid<strong>in</strong>g grant upto 40%<br />
of the project cost to make projects commercially<br />
viable. However, the quantum of grant is decided on a<br />
case to case basis and typically constitutes the bid<br />
parameter <strong>in</strong> BOT projects generally not viable based<br />
on toll revenues alone. The disbursement of such<br />
grant is subject to provisions of the project concession<br />
agreements (please refer CD <strong>for</strong> provisions <strong>in</strong> the<br />
Model Concession Agreement).<br />
st<br />
Approved F<strong>in</strong>anc<strong>in</strong>g Plan of NHDP (as on 31 March, 2009)<br />
Phase Particulars<br />
Projected For (Kms) INR Crore<br />
Cess and Market Borrow<strong>in</strong>gs<br />
18,846<br />
NHDP-I<br />
External Assistance<br />
BOT/SPV<br />
7862<br />
3592<br />
Total (At 1999 Prices)<br />
7498<br />
30300<br />
NHDP-II<br />
Cess and Market Borrow<strong>in</strong>gs<br />
External Assistance<br />
23420<br />
7609<br />
BOT/SPV<br />
Total (At 2002 Prices)<br />
6647<br />
3310<br />
34339<br />
NHDP-III<br />
Budgetary Support<br />
Cess and Market Borrow<strong>in</strong>gs<br />
12809<br />
17688<br />
BOT/SPV<br />
Total (At 2004 Prices)<br />
12109<br />
50129<br />
80626<br />
NHDP-IV A<br />
Private <strong>Sector</strong><br />
Government Spend<strong>in</strong>g<br />
4608<br />
2342<br />
Total (At 2006 Prices)<br />
5000<br />
6950<br />
NHDP-V<br />
Cess and Market Borrow<strong>in</strong>gs<br />
BOT/SPV<br />
Total (At 2006 Prices)<br />
6500<br />
5519<br />
35691<br />
41210<br />
NHDP-VI<br />
Cess and Market Borrow<strong>in</strong>gs<br />
BOT/SPV<br />
Total (At 2006 Prices)<br />
1000<br />
7680<br />
9000<br />
16680<br />
NHDP-VII<br />
Cess and Market Borrow<strong>in</strong>gs<br />
BOT/SPV<br />
Total (At 2007 Prices)<br />
700<br />
6302<br />
10378<br />
16680<br />
5. The developer has flexibility <strong>in</strong> project design so long as the build and service quality is <strong>in</strong> l<strong>in</strong>e with<br />
prescribed standards set out <strong>in</strong> the Standards and Specification Manuals.
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong> 9<br />
NHAI projects, with higher traffic volumes, have also been bid out on the basis of Negative Grant (upfront<br />
payment payable by successful bidder to NHAI). However, under the revised MCA, projects under BOT/<br />
DBFOT framework have also been awarded on a revenue share basis, where the bidder offer<strong>in</strong>g the highest<br />
revenue share (subject to technical qualification) is awarded the project.<br />
Projects awarded on Negative Grant<br />
<strong>Road</strong> Section<br />
Length (Km.)<br />
Estimated<br />
Cost<br />
(INR Crore)<br />
Estimated<br />
Cost<br />
(USD Million)<br />
Grant<br />
(INR Crore)<br />
Grant<br />
(USD Million)<br />
Delhi-Gurgaon<br />
28<br />
710<br />
142<br />
61<br />
12<br />
Rajkot Bypass-Jetpur<br />
36<br />
388<br />
77<br />
59<br />
12<br />
Panipat elevated <strong>Highways</strong><br />
10<br />
270<br />
54<br />
96<br />
19<br />
Salem- Karur<br />
42<br />
253<br />
51<br />
46<br />
9<br />
Krishnagiri - Thopurghat<br />
62<br />
372<br />
74<br />
140<br />
28<br />
T<strong>in</strong>divanam-Ulundurpet<br />
71<br />
480<br />
96<br />
152<br />
30<br />
Thirssur-Angamali<br />
40<br />
312<br />
62<br />
84<br />
17<br />
Jalandhar- Amritsar<br />
49<br />
263<br />
60<br />
7<br />
1<br />
Ambala-Zirakpur<br />
36<br />
298<br />
60<br />
106<br />
21<br />
Dhule-Pimpalgaon<br />
118<br />
556<br />
111<br />
59<br />
12<br />
Vadodara Bharuch<br />
83<br />
660<br />
132<br />
471<br />
94<br />
Bharuch-Surat<br />
65<br />
492<br />
118<br />
504<br />
101<br />
Projects awarded on Revenue Share Basis<br />
<strong>Road</strong> Section<br />
Length (Km.)<br />
Estimated<br />
Cost<br />
(INR Crore)<br />
Estimated<br />
Cost<br />
(USD Million)<br />
Revenue Share (%)<br />
Surat-Dahisar<br />
239<br />
2600<br />
619<br />
38%<br />
Gurgaon-Jaipur<br />
225<br />
1900<br />
452<br />
48%<br />
Panipat-Jalandhar<br />
291<br />
2200<br />
523<br />
20%<br />
Chennai-Tada<br />
42<br />
317<br />
76<br />
17%<br />
Vijayawada-Chilkaluripet<br />
85<br />
1173<br />
280<br />
2%
10<br />
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong><br />
Public Private Partnership <strong>in</strong><br />
Highway Development<br />
Public Private Partnerships (PPP) are go<strong>in</strong>g to be the<br />
ma<strong>in</strong> mode of delivery <strong>for</strong> future phases of NHDP.<br />
While there are a number of <strong>for</strong>ms of PPP, the<br />
common <strong>for</strong>ms that are popular <strong>in</strong> India and have been<br />
used <strong>for</strong> development of <strong>National</strong> <strong>Highways</strong> are:<br />
•<br />
•<br />
•<br />
Build, Operate and Transfer (Toll) Model<br />
Build, Operate and Transfer (Annuity) Model<br />
Special Purpose Vehicle (SPV) <strong>for</strong> Port<br />
Connectivity Projects<br />
NHAI is also propos<strong>in</strong>g to award projects under a long<br />
term Operations, Ma<strong>in</strong>tenance and Transfer (OMT)<br />
concession.<br />
BOT (Toll)<br />
Private developers/ operators, who <strong>in</strong>vest <strong>in</strong> tollable<br />
highway projects, are entitled to collect and reta<strong>in</strong> toll<br />
revenues <strong>for</strong> the tenure of the project concession<br />
period. The tolls are prescribed by NHAI on a per<br />
vehicle per km basis <strong>for</strong> different types of vehicles.The<br />
Government <strong>in</strong> the year 1995 passed the necessary<br />
legislation on collection of toll. (Refer the <strong>National</strong><br />
<strong>Highways</strong> Fee [Determ<strong>in</strong>ation of Rates and Collection]<br />
Rules 2008).<br />
A Model Concession Agreement (MCA) has been<br />
developed to facilitate speedy award of contracts.This<br />
framework has been successfully used <strong>for</strong> award of<br />
BOT concessions.The MCA has been revised recently<br />
and current projects are be<strong>in</strong>g awarded under the<br />
revised MCA (refer enclosed CD <strong>for</strong> overview of MCA<br />
framework).<br />
BOT (Annuity)<br />
The concessionaire bids <strong>for</strong> annuity payments from<br />
NHAI that would cover his cost (construction,<br />
operations and ma<strong>in</strong>tenance) and an expected return<br />
on the <strong>in</strong>vestment. The bidder quot<strong>in</strong>g the lowest<br />
annuity is awarded the project. The annuities are paid<br />
semi-annually by NHAI to the concessionaire and<br />
l<strong>in</strong>ked to per<strong>for</strong>mance covenants. The concessionaire<br />
does not bear the traffic/ toll<strong>in</strong>g risk <strong>in</strong> these contracts.<br />
Operate, Ma<strong>in</strong>ta<strong>in</strong> and Transfer (OMT) Concession<br />
NHAI has recently taken up award of select highway<br />
projects to private sector players under an OMT<br />
Concession. Till recently, the tasks of toll collection<br />
and highway ma<strong>in</strong>tenance were entrusted with toll<strong>in</strong>g<br />
agents/ operators and subcontractors, respectively.<br />
These tasks have been <strong>in</strong>tegrated under the OMT<br />
concession. Under the concession private operators<br />
would be eligible to collect tolls on these stretches <strong>for</strong><br />
ma<strong>in</strong>ta<strong>in</strong><strong>in</strong>g highways and provid<strong>in</strong>g essential<br />
services (such as emergency/ safety services).<br />
Special Purpose Vehicle <strong>for</strong> Port Connectivity<br />
Projects<br />
NHAI has also taken up development of port<br />
connectivity projects by sett<strong>in</strong>g up Special Purpose<br />
Vehicles (SPVs) where<strong>in</strong> NHAI contributes upto 30%<br />
of the project cost as equity.The SPVs also have equity<br />
participation by port trusts, State Governments or their<br />
representative entities. The SPVs also raise loans <strong>for</strong><br />
f<strong>in</strong>anc<strong>in</strong>g the projects. SPVs are authorised to collect<br />
user fee on the developed stretches to cover<br />
repayment of debts and <strong>for</strong> meet<strong>in</strong>g the costs of<br />
operations and ma<strong>in</strong>tenance.<br />
International Competitive Bidd<strong>in</strong>g Process<br />
General procedure <strong>for</strong> selection of concessionaires<br />
adopted by NHAI is a two-stage bidd<strong>in</strong>g process.<br />
Projects are awarded as per the model documents-<br />
Request <strong>for</strong> Qualification (RFQ), Request <strong>for</strong> Proposal<br />
(RFP) and Concession Agreement - provided by the<br />
M<strong>in</strong>istry of F<strong>in</strong>ance. NHAI amends the model<br />
documents based on project specific requirements.<br />
(Please refer CD <strong>for</strong> these model documents). The<br />
processes <strong>in</strong>volved <strong>in</strong> both stages are set out as<br />
follows:
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong> 11<br />
Stage 1: Pre-qualification on the basis of Technical and<br />
F<strong>in</strong>ancial expertise of the firm and its track record <strong>in</strong><br />
similar projects which meets the threshold technical<br />
and f<strong>in</strong>ancial criteria set out <strong>in</strong> the RFQ Document.<br />
Some of the recent significant amendments <strong>in</strong> the pre<br />
qualification document are set out below:<br />
1. Determ<strong>in</strong>ation of technical and f<strong>in</strong>ancial capacity of<br />
consortium applicants <strong>in</strong> proportion to the<br />
committed equity hold<strong>in</strong>g of each consortium<br />
member <strong>in</strong> the project SPV. For illustration-<br />
- If Company A has been assessed to have an<br />
experience score (measured <strong>in</strong> terms of<br />
payments made/received and/or revenues<br />
received <strong>for</strong> eligible projects) of 5000 and<br />
Company B has been assessed to have an<br />
experience score of 2500, <strong>in</strong> a Consortium with<br />
sharehold<strong>in</strong>g of A as 60% and B as 40%, then<br />
the weighted experience score of the<br />
Consortium shall be:<br />
5000*60%+2500* 40%=800<br />
- If Company A with a net worth of INR 1000<br />
Crore (USD 200 million) & Company B with a<br />
net worth of INR 500 Crore (USD 100 million)<br />
are bidd<strong>in</strong>g together as a Consortium with<br />
sharehold<strong>in</strong>g of A as 60% and B as 40% then<br />
the weighted f<strong>in</strong>ancial score of the Consortium<br />
shall be:<br />
1000*60%+500*40%= INR 800 Crore (USD<br />
160 million)<br />
2. In case of <strong>for</strong>eign companies, a certificate from a<br />
qualified external auditor who audits the books of<br />
accounts of the Applicant or the Consortium<br />
Member <strong>in</strong> the <strong>for</strong>mats provided <strong>in</strong> the country<br />
where the project has been executed shall be<br />
accepted, provided it conta<strong>in</strong>s all the <strong>in</strong><strong>for</strong>mation<br />
as required <strong>in</strong> the prescribed <strong>for</strong>mat of the RFQ.<br />
3. Applicants/Bidders would need to provide an<br />
undertak<strong>in</strong>g to NHAI that the EPC works of the<br />
project would be executed only by such EPC<br />
Contractors who have completed atleast a s<strong>in</strong>gle<br />
highway project of more than 20% of the<br />
estimated project cost of the project or INR 500<br />
Crore (USD 100 million) which ever is less <strong>in</strong> the<br />
preced<strong>in</strong>g 5 f<strong>in</strong>ancial years from the application<br />
due date.<br />
Notice <strong>in</strong>vit<strong>in</strong>g tenders is posted on the web site and<br />
published <strong>in</strong> lead<strong>in</strong>g newspapers<br />
Stage 2: Commercial bids from pre-qualified bidders<br />
are <strong>in</strong>vited through issue of RFP. Generally, the<br />
duration between Stage 1 and 2 is about 30-45 days.<br />
Wide publicity is given to NHAI tenders so as to attract<br />
attention of lead<strong>in</strong>g contractors/ developers/<br />
consultants.<br />
The Government has put <strong>in</strong> place appropriate policy,<br />
<strong>in</strong>stitutional and regulatory mechanisms <strong>in</strong>clud<strong>in</strong>g<br />
a set of fiscal and f<strong>in</strong>ancial <strong>in</strong>centives to<br />
encourage <strong>in</strong>creased private sector participation <strong>in</strong><br />
road sector.<br />
Summary of recent policy changes <strong>in</strong> the project<br />
development and award process are set out<br />
below:<br />
1. All applicants meet<strong>in</strong>g the threshold technical and<br />
f<strong>in</strong>ancial experience criteria set out <strong>in</strong> the RFQ shall<br />
be eligible to participate <strong>in</strong> the RFP stage. Earlier<br />
only the top 5-6 applicants shortlisted based on<br />
qualification criteria were eligible to submit<br />
f<strong>in</strong>ancial bids <strong>for</strong> projects.<br />
2. NHAI is empowered to accept s<strong>in</strong>gle bids based on<br />
assessment of reasonableness of the bids.<br />
3. Overall cap on Viability Gap Fund<strong>in</strong>g (VGF)<br />
<strong>in</strong>creased from 5% to 10% <strong>for</strong> the entire six-lan<strong>in</strong>g<br />
programme (5080 km).<br />
4. For <strong>in</strong>dividual projects with low traffic <strong>in</strong> the Golden<br />
Quadrilateral (GQ) corridors, VGF cap has been
12<br />
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong><br />
<strong>in</strong>creased upto 20% of the project cost with an<br />
overall cap of 500 km of roads <strong>in</strong> the project<br />
network.<br />
5. Equity Support under VGF has been <strong>in</strong>creased to<br />
40% of project cost. Earlier, 20% of project cost<br />
was provided as equity support <strong>in</strong> construction<br />
phase and 20% as Operations & Ma<strong>in</strong>tenance<br />
Support<br />
6. Modifications <strong>in</strong> Standard RFQ, RFP and<br />
Concession Agreement structures <strong>for</strong> <strong>National</strong><br />
Highway Projects<br />
a. Term<strong>in</strong>ation provisions under capacity<br />
augmentation situations modified to give more<br />
com<strong>for</strong>t to <strong>in</strong>vestors and lenders. The<br />
concession period can be extended upto 5<br />
years to yield a post tax equity IRR of 16%, <strong>in</strong><br />
the event of capacity augmentation option<br />
exercised by the concessionaire.<br />
b. Exit option allowed <strong>for</strong> pr<strong>in</strong>cipal promoters of<br />
road SPVs after two years from commercial<br />
operations date (COD). Promoters were earlier<br />
required to hold a m<strong>in</strong>imum of 26% of the<br />
SPV’s sharehold<strong>in</strong>g at all times dur<strong>in</strong>g the<br />
tenure of the Concession.<br />
c. Threshold limit <strong>for</strong> common control<br />
(sharehold<strong>in</strong>g) of entities <strong>in</strong> compet<strong>in</strong>g<br />
Applicants and/ or their Associates <strong>for</strong> the<br />
purposes of determ<strong>in</strong><strong>in</strong>g Conflict of <strong>in</strong>terest,<br />
raised from 5% to 25%. Any such conflict of<br />
<strong>in</strong>terest aris<strong>in</strong>g at the prequalification stage<br />
shall be deemed to subsist at the bidd<strong>in</strong>g stage<br />
only if such applicants attract<strong>in</strong>g the conflict of<br />
<strong>in</strong>terest provisions submit their bids.<br />
d. Threshold technical capability <strong>for</strong> claim<strong>in</strong>g<br />
eligible project experience has been reduced to<br />
a range between 5-10% of estimated project<br />
cost of the subject project <strong>in</strong> lieu of 10-20% of<br />
estimated project cost of the subject project<br />
earlier.<br />
e. The threshold technical experience score <strong>for</strong><br />
the purpose of prequalification will be equal to<br />
the estimated project cost of the earlier subject<br />
project. This was, earlier equal to twice the<br />
estimated project cost of the subject project.<br />
f. Where the projects are bid out on a revenue<br />
share basis, the base premium (fixed amount)<br />
(revenue share proposed by the successful<br />
bidder) will be <strong>in</strong>creased at the rate of 5 per cent<br />
year on year with respect to the immediately<br />
preceed<strong>in</strong>g year <strong>for</strong> the entire tenure of the<br />
concession.<br />
6<br />
The a<strong>for</strong>esaid changes are expected to further<br />
<strong>in</strong>centivise private <strong>in</strong>vestment <strong>in</strong> road/highway<br />
projects.<br />
Opportunities <strong>for</strong> Private Investors/ Developers<br />
More than 60% of the projected <strong>in</strong>vestment<br />
requirement <strong>for</strong> the NHDP (USD 60 billion) is expected<br />
to be privately f<strong>in</strong>anced, primarily through the<br />
BOT/DBFOT (Toll) route, offer<strong>in</strong>g enormous<br />
opportunities. With a large number of new projects on<br />
offer under PPP <strong>in</strong> the road sector, there exists several<br />
<strong>in</strong>vestment opportunities <strong>for</strong> <strong>in</strong>vestors and companies<br />
with diverse bus<strong>in</strong>ess l<strong>in</strong>es such as eng<strong>in</strong>eer<strong>in</strong>g<br />
companies, civil work contractors, O&M contractors,<br />
toll operators, construction equipment manufacturers<br />
etc. and other stakeholders such as advisors,<br />
f<strong>in</strong>anciers and sector professionals. Only about 15 per<br />
cent of the total highways <strong>in</strong> India are 4-laned and the<br />
sheer potential <strong>for</strong> <strong>in</strong>vestments <strong>in</strong> this sector is likely<br />
to create opportunities <strong>in</strong> the core construction<br />
<strong>in</strong>dustry which may also be attractive <strong>for</strong> <strong>for</strong>eign<br />
players.<br />
The opportunity <strong>for</strong> private players <strong>in</strong> the road sector<br />
can be broadly categorised <strong>in</strong> two segments:<br />
a) Infrastructure Development<br />
6. As per recommendations of B K Chaturvedi Committee
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong> 13<br />
Development<br />
Projects<br />
BOT/<br />
DBFOT - Toll<br />
BOT -<br />
Annuity<br />
OMT<br />
SPV<br />
Construction<br />
Equipment<br />
Material<br />
Technology<br />
Ma<strong>in</strong>tenance<br />
Toll<strong>in</strong>g<br />
Services<br />
Equipment<br />
Infrastructure Development<br />
<strong>Road</strong>s<br />
Urban<br />
Transportation<br />
Pvt Bus<br />
Service<br />
Truck<strong>in</strong>g<br />
Perishables<br />
Conta<strong>in</strong>ers<br />
Bulk<br />
Logistics & Services<br />
Tourism<br />
Luxury<br />
Buses<br />
Risk Framework of Model Concession Agreement<br />
The MCA has been developed <strong>in</strong> consultation with all<br />
stakeholders based on <strong>in</strong>ternationally accepted<br />
pr<strong>in</strong>ciples and best practices. Throughout, it seeks to<br />
achieve reasonable balance of risks and rewards <strong>for</strong> all<br />
the participants.<br />
As an underly<strong>in</strong>g pr<strong>in</strong>ciple, risks have been allocated to<br />
the parties that are best suited to manage them.<br />
Project risks have, there<strong>for</strong>e, been assigned to<br />
the private sector to the extent it is capable of<br />
manag<strong>in</strong>g them. The transfer of such risks and<br />
responsibilities to the private sector would <strong>in</strong>crease<br />
the scope of <strong>in</strong>novation lead<strong>in</strong>g to efficiencies <strong>in</strong> cost<br />
and services.<br />
Model Concession Agreement (MCA) <strong>for</strong> PPP<br />
Projects<br />
The highways sector <strong>in</strong> India has witnessed significant<br />
<strong>in</strong>vestment <strong>in</strong> recent years. For susta<strong>in</strong><strong>in</strong>g the <strong>in</strong>terest<br />
of private participants, a clear risk-shar<strong>in</strong>g and<br />
regulatory framework has been spelt out <strong>in</strong> the Model<br />
Concession Agreement (MCA). The MCA has been<br />
developed to facilitate speedy award of contracts. This<br />
framework has been successfully used <strong>for</strong> award of<br />
BOT concessions. The MCA has been revised and<br />
current projects are be<strong>in</strong>g awarded under the<br />
revised MCA. This framework addresses the issues,<br />
which are typically important <strong>for</strong> PPP, such as<br />
unbundl<strong>in</strong>g of risks and rewards, symmetry of<br />
obligations between the pr<strong>in</strong>cipal parties, equitable<br />
shar<strong>in</strong>g of costs and obligations, and risk mitigation<br />
options under various scenarios <strong>in</strong>clud<strong>in</strong>g <strong>for</strong>ce<br />
majeure and term<strong>in</strong>ation, under transparent and fair<br />
procedures.<br />
With the <strong>in</strong>troduction of the MCA, the risks <strong>in</strong>volved <strong>in</strong><br />
project and contractual issues, hitherto, have been<br />
assuaged, and the entire process from <strong>in</strong>vitation to bid<br />
to implementation of the project is transparent.<br />
MCA's risk framework is briefly discussed below:<br />
The commercial and technical risks relat<strong>in</strong>g to<br />
construction, operation and ma<strong>in</strong>tenance are<br />
allocated to the concessionaire, as it is best suited to<br />
manage them. Other commercial risks, such as the<br />
rate of growth of traffic, are also allocated to the<br />
concessionaire.<br />
Key Concessionaire Risk/Obligations<br />
• Construction Risk - The concessionaire is required<br />
to commence construction works when the<br />
f<strong>in</strong>ancial close is achieved or earlier date that the<br />
parties may determ<strong>in</strong>e by mutual consent. The<br />
concessionaire shall not be entitled to seek<br />
compensation <strong>for</strong> any prior commencement and<br />
shall do it solely at his own risk.<br />
• O & M Risk - Concessionaire to operate and<br />
ma<strong>in</strong>ta<strong>in</strong> the project facility (<strong>in</strong>cludes road and<br />
road <strong>in</strong>frastructure as specified <strong>in</strong> the concession<br />
agreement). Failure to repair and rectify any defect<br />
or deficiency with<strong>in</strong> specified period shall be<br />
considered as breach of responsibility.<br />
• F<strong>in</strong>ancial Risk -The concessionaire shall at its cost,<br />
expenses and risk make such f<strong>in</strong>anc<strong>in</strong>g<br />
arrangement as would be necessary to f<strong>in</strong>ance<br />
the cost of the project and to meet project<br />
requirements and other obligations under the<br />
agreement, <strong>in</strong> a timely manner.
14<br />
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong><br />
• Traffic Risk - The MCA provides <strong>for</strong> <strong>in</strong>crease or<br />
decrease of the concession period <strong>in</strong> the event the<br />
actual traffic falls short or exceeds the target<br />
traffic. NHAI stipulates the target traffic dur<strong>in</strong>g the<br />
year specified <strong>in</strong> project specific concession<br />
th<br />
agreement, which is usually around the 10 year<br />
from the date of sign<strong>in</strong>g of the agreement. The<br />
target traffic is determ<strong>in</strong>ed based on 5%<br />
Compounded Annual Growth Rate (CAGR) over<br />
the base year traffic <strong>for</strong> the project. MCA also<br />
provides <strong>for</strong> term<strong>in</strong>ation of the agreement if the<br />
average daily traffic <strong>in</strong> any account<strong>in</strong>g year<br />
exceeds the design capacity and cont<strong>in</strong>ues to<br />
exceed <strong>for</strong> three subsequent account<strong>in</strong>g years.<br />
Term<strong>in</strong>ation payments under this scenario will be<br />
commensurate to those applicable under an<br />
Indirect Political Event (See table <strong>in</strong> next section on<br />
page 26).<br />
An overview of revenue risks and mitigation<br />
(<strong>in</strong>clud<strong>in</strong>g Term<strong>in</strong>ation Payment) under the MCA is<br />
provided <strong>in</strong> the next section.<br />
Key NHAI Risk/Obligations<br />
• Land Acquisition Risk: NHAI is responsible <strong>for</strong><br />
acquir<strong>in</strong>g the requisite land <strong>for</strong> the project highway<br />
• Approvals: NHAI will provide all reasonable<br />
support and assistance to the concessionaire <strong>in</strong><br />
procur<strong>in</strong>g applicable permits required from any<br />
Government Instrumentality.<br />
Key Common Risk<br />
• Force Majeure Risk - Force Majeure shall mean<br />
occurrence <strong>in</strong> India of any or all of Non-Political<br />
Event(s), Indirect Political Event(s) and Political<br />
Event(s), which <strong>in</strong>clude the follow<strong>in</strong>g:<br />
Non-Political Event:<br />
• act of God, epidemic, extremely adverse<br />
weather conditions or radioactive contam<strong>in</strong>ation<br />
or ionis<strong>in</strong>g radiation, fire or explosion;<br />
• strikes or boycotts<br />
• the discovery of geological conditions, toxic<br />
contam<strong>in</strong>ation or archaeological rema<strong>in</strong>s on the<br />
Site; or<br />
• any event or circumstances of a nature<br />
analogous to any of the <strong>for</strong>ego<strong>in</strong>g.<br />
Indirect Political Event<br />
• an act of war, <strong>in</strong>vasion, armed conflict or act of<br />
<strong>for</strong>eign enemy, blockade, embargo, riot,<br />
<strong>in</strong>surrection, terrorist or military action,<br />
• civil commotion or politically motivated<br />
sabotage which prevents collection of toll/<br />
fees,<br />
• <strong>in</strong>dustry-wide or state-wide or India-wide<br />
strikes or <strong>in</strong>dustrial action which prevent<br />
collection of toll/ fees,<br />
• any public agitation which prevents collection<br />
of toll/ fees
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong> 15<br />
Political Event<br />
• Change <strong>in</strong> Law,<br />
• compulsory acquisition by any governmental<br />
agency of any project assets or rights of<br />
concessionaire or of the Contractors; or<br />
• unlawful or unauthorised or without jurisdiction<br />
revocation of or refusal to renew or grant<br />
without valid cause any consent or approval<br />
required by developer<br />
Salient features of the MCA<br />
• Substantial part of the project site free from<br />
encumbrances would be handed over to the<br />
concessionaire till the Appo<strong>in</strong>ted Date. Additional<br />
land <strong>in</strong> case of change of scope will need to be<br />
acquired by concessionaire on behalf of the<br />
Authority.<br />
• Additional tollway will not be commissioned<br />
with<strong>in</strong> a specified year, depend<strong>in</strong>g upon the<br />
concession period. M<strong>in</strong>imum user fee <strong>for</strong><br />
additional tollway will be at least 25% higher than<br />
the toll fee on project. Any alternate road,<br />
exceed<strong>in</strong>g 20% of the length of the project<br />
highway, shall not be considered as an additional<br />
tollway.<br />
• The concessionaire will be entitled to nullify any<br />
change of scope order if it causes the cumulative<br />
cost relat<strong>in</strong>g to all change of scope orders to<br />
exceed 5% of the Total Project Cost (TPC) <strong>in</strong> any<br />
cont<strong>in</strong>uous period of 3 years immediately<br />
preced<strong>in</strong>g the date of such Change of Scope<br />
order, or if such cumulative cost exceeds 20% of<br />
the TPC at any time dur<strong>in</strong>g the concession period.<br />
• F<strong>in</strong>ancial close is to be achieved with<strong>in</strong> 180 days<br />
from date of agreement. NHAI may allow<br />
additional period <strong>for</strong> f<strong>in</strong>ancial close on a project<br />
specific basis.<br />
• Grant (upto 40% of TPC) to the concessionaire by<br />
way of equity support and operations &<br />
ma<strong>in</strong>tenance support <strong>in</strong> quarterly <strong>in</strong>stallments.<br />
(B.K.Chaturvedi Committee has recommended<br />
that the entire grant [upto 40% of TPC] can be<br />
provided as equity support).
16<br />
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong><br />
• Concessionaire to pay nom<strong>in</strong>al fee of INR 1 (USD<br />
0.02) per annum throughout the concession<br />
period.<br />
• There is an optional provision <strong>for</strong> capacity<br />
augmentation of exist<strong>in</strong>g 4-lan<strong>in</strong>g to 6-lan<strong>in</strong>g. If<br />
capacity augmentation is not done with<strong>in</strong> the<br />
specified period, the concession period gets<br />
reduced to the number of years specified <strong>in</strong> the<br />
project specific agreement. The option to excuse<br />
from 6-lan<strong>in</strong>g of the Project Highway is available<br />
with both the concessionaire and the Authority<br />
be<strong>for</strong>e the pre-specified 6-lan<strong>in</strong>g date <strong>in</strong> the<br />
concession agreement.<br />
Implementation steps of Project<br />
• Completion of preparatory works <strong>for</strong> the identified<br />
projects<br />
• F<strong>in</strong>alisation of Bidd<strong>in</strong>g Documents<br />
• Invitation of Bids<br />
• Pre bid Conference<br />
• Evaluation of Bids<br />
• Award of Concession<br />
• Sign<strong>in</strong>g of the Agreement<br />
Dispute Resolution<br />
Any dispute aris<strong>in</strong>g out of or <strong>in</strong> relation to the<br />
concession agreement, between the parties is<br />
required to be resolved as per the Dispute Resolution<br />
Procedure (see below) prescribed <strong>in</strong> the Agreement. It<br />
specifies that the parties should attempt to resolve the<br />
dispute amicably and <strong>for</strong> this purpose, the mandate<br />
has been given to an Independent Eng<strong>in</strong>eer to<br />
mediate and assist the parties to arrive at a<br />
settlement. The procedure has been laid out <strong>in</strong><br />
sufficient detail there<strong>in</strong>.<br />
However, upon the failure of such conciliatory<br />
measure, the parties shall resort to Arbitration, which<br />
shall be held <strong>in</strong> accordance with Arbitration and<br />
Conciliation Act, 1996 (based on United Nations<br />
Commission on International Trade Laws - UNCITRAL<br />
model). The seat of arbitration <strong>for</strong> all concession<br />
agreements perta<strong>in</strong><strong>in</strong>g to <strong>National</strong> <strong>Highways</strong> shall<br />
ord<strong>in</strong>arily be at Delhi, however, the place may be<br />
changed by mutual consent of the parties. Each party<br />
is free to nom<strong>in</strong>ate its arbitrator who <strong>in</strong> turn, will<br />
appo<strong>in</strong>t a presid<strong>in</strong>g arbitrator. The Arbitration Tribunal<br />
so constituted can adjudicate any dispute referred to<br />
it, and any other question of law aris<strong>in</strong>g out of such<br />
dispute, <strong>in</strong>clud<strong>in</strong>g its own jurisdiction. The award<br />
passed by such Tribunal, has the sanctity of a 'Decree'<br />
under Indian Law and can be challenged on very<br />
limited counts.<br />
Dispute Resolution Procedure <strong>for</strong> projects under<br />
BOT and Consultancy<br />
• Mediation by the Independent Eng<strong>in</strong>eer: If any<br />
dispute arises between the parties, it is <strong>in</strong> the first<br />
place resolved by the mediation of the<br />
Independent Eng<strong>in</strong>eer. Any dispute, which is not<br />
resolved by mediation of the Independent<br />
Eng<strong>in</strong>eer, is resolved by amicable resolution.<br />
• Amicable Resolution: Any dispute, difference or<br />
controversy of whatever nature between the<br />
parties, aris<strong>in</strong>g under, out of or <strong>in</strong> relation to the<br />
Project Concession Agreement (PCA) is<br />
attempted to be resolved amicably <strong>in</strong> accordance<br />
with the procedure set <strong>for</strong>th <strong>in</strong> the dispute<br />
resolution mechanism. Either party may require<br />
such dispute to be referred to the Chairman, NHAI<br />
and the Chief Executive Officer of the<br />
concessionaire <strong>in</strong> the <strong>in</strong>terim, <strong>for</strong> amicable<br />
settlement. Upon such reference, the two shall<br />
meet at the earliest mutual convenience and <strong>in</strong> any<br />
event not later than 15 days of such reference to<br />
discuss and attempt to amicably resolve the<br />
dispute. If the dispute is not amicably settled<br />
with<strong>in</strong> 15 (fifteen) days of such meet<strong>in</strong>g between<br />
the two, either party may refer the dispute to<br />
arbitration <strong>in</strong> accordance with the provisions of the<br />
PCA.<br />
• Arbitration: Any dispute, which is not resolved<br />
amicably, shall be f<strong>in</strong>ally settled by b<strong>in</strong>d<strong>in</strong>g<br />
arbitration under The Arbitration Act. The<br />
arbitration shall be carried out by a panel of three<br />
arbitrators, one to be appo<strong>in</strong>ted by each party and
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong> 17<br />
the third to be appo<strong>in</strong>ted by the two arbitrators<br />
appo<strong>in</strong>ted by the parties. The party requir<strong>in</strong>g<br />
arbitration shall appo<strong>in</strong>t an arbitrator <strong>in</strong> writ<strong>in</strong>g,<br />
<strong>in</strong><strong>for</strong>m the other party about such appo<strong>in</strong>tment<br />
and call upon the other party to appo<strong>in</strong>t its<br />
arbitrator. If with<strong>in</strong> 15 days of receipt of such<br />
<strong>in</strong>timation the other party fails to appo<strong>in</strong>t its<br />
arbitrator, the party seek<strong>in</strong>g appo<strong>in</strong>tment of<br />
arbitrator may take further steps <strong>in</strong> accordance<br />
with the Arbitration Act.<br />
The Dispute Resolution Procedure <strong>for</strong> EPC<br />
Projects does not <strong>in</strong>volve amicable settlement.<br />
The disputes are referred to the Dispute Review<br />
Board.<br />
• Dispute Review Board: The Board shall comprise<br />
of three members, experienced with the type of<br />
construction <strong>in</strong>volved <strong>in</strong> road works, and with the<br />
<strong>in</strong>terpretation of contractual documents. If, dur<strong>in</strong>g<br />
the contract period, either of the parties is of the<br />
op<strong>in</strong>ion that the Dispute Review Board is not<br />
per<strong>for</strong>m<strong>in</strong>g its functions properly, they may<br />
together disband the Board and reconstitute it.<br />
• Dispute <strong>in</strong>volv<strong>in</strong>g Foreign Contractor(s): In the<br />
case of a dispute with a <strong>for</strong>eign contractor, the<br />
dispute shall be settled <strong>in</strong> accordance with the<br />
provisions of the UNCITRAL Arbitration Rules. The<br />
arbitral tribunal shall consist of three arbitrators,<br />
one each to be appo<strong>in</strong>ted by the employer and the<br />
contractor and the third arbitrator chosen by the<br />
two arbitrators so appo<strong>in</strong>ted by the parties, who<br />
shall further act as the Presid<strong>in</strong>g Arbitrator.<br />
A “Foreign Contractor” means a contractor who is<br />
not registered <strong>in</strong> India and is not a juridical person<br />
under Indian Law.<br />
General Trends <strong>in</strong> Dispute Resolution<br />
The Courts <strong>in</strong> India have been very neutral <strong>in</strong><br />
constru<strong>in</strong>g the documents, <strong>in</strong> the cases aris<strong>in</strong>g out of<br />
tender processes and rely upon terms and conditions<br />
agreed between the parties under the tender<br />
documents. The provisions of the Contract Act and<br />
other legal provisions, cover<strong>in</strong>g the <strong>in</strong>tricate<br />
commercial aspects of the dispute are looked <strong>in</strong>to<br />
very m<strong>in</strong>utely be<strong>for</strong>e pass<strong>in</strong>g any order. The Courts<br />
have, however, been very cautious <strong>in</strong> pass<strong>in</strong>g any<br />
<strong>in</strong>junctive relief <strong>in</strong> disputes aris<strong>in</strong>g out of tender<br />
process and pays due regard to the fairness <strong>in</strong> the<br />
process of issu<strong>in</strong>g tender and selection of bidders,<br />
stage of <strong>in</strong>frastructure development and stakes<br />
(public money) <strong>in</strong>volved. Where complex f<strong>in</strong>ancial<br />
issues are <strong>in</strong>volved, the Courts also seek advice of an<br />
expert committee and consider various factors like<br />
price <strong>in</strong>dex, quality of work, past per<strong>for</strong>mance of<br />
parties, market reputation, etc. The decision <strong>in</strong> each<br />
case may however differ, depend<strong>in</strong>g upon facts of<br />
each case.<br />
OMT Concessions<br />
• The OMT concession would be <strong>for</strong> a maximum<br />
period of 9 years<br />
• The private sector will be selected on the basis of a<br />
competitive bidd<strong>in</strong>g process. The successful<br />
bidder would be the one offer<strong>in</strong>g the highest<br />
7<br />
concession fee to NHAI<br />
• The concessionaire is allowed a period of 45 days<br />
from the date of sign<strong>in</strong>g of the concession<br />
agreement to commence commercial operations<br />
• The OMT concessionaire will pay a fixed<br />
concession fee to NHAI every month and<br />
undertake tasks of toll collection and mobilisation<br />
of funds <strong>for</strong> improvement, operation and<br />
ma<strong>in</strong>tenance of highways<br />
NHAI has identified eight highway sections which are<br />
expected to be completed <strong>in</strong> the next 6 months to be<br />
awarded on OMT basis. The concession<br />
agreements <strong>for</strong> two highway sections have been<br />
signed and the pre-qualification of bidders <strong>for</strong> the<br />
rema<strong>in</strong><strong>in</strong>g six sections is under process. More<br />
sections, where project completion is anticipated <strong>in</strong><br />
the next 6-12 months, are be<strong>in</strong>g planned <strong>for</strong> OMT<br />
concessions.<br />
7. The bidder offer<strong>in</strong>g the maximum amount of first year concession fee or m<strong>in</strong>imum<br />
amount of first year quarter O&M support (<strong>in</strong> case no bidder offers the concession fee).
18<br />
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong><br />
Opportunities <strong>for</strong> <strong>Investment</strong>-State-Wise Projects Under NHDP Phase II<br />
S. No. Stretch NH<br />
Length<br />
(Km)<br />
Estimated Project Cost<br />
(INR Crore)<br />
(USD Million)<br />
STATE: Assam<br />
1<br />
Udarband to Harangajo 54 31 202 40<br />
STATE: Jammu & Kashmir<br />
1<br />
STATE: Kerala<br />
Two Tunnels on Udhampur-Banihal-<br />
Sr<strong>in</strong>agar Section<br />
1A 19 5000 1000<br />
1<br />
Walayar-Vadakkancherry 47 55 600 120<br />
STATE: Punjab<br />
1<br />
Jallandhar-Amritsar<br />
1<br />
20<br />
190<br />
36<br />
STATE: Tamil Nadu<br />
1<br />
Salem-Coimbatore Kerala<br />
Border Section<br />
47<br />
82<br />
540<br />
108<br />
STATE: Uttar Pardesh<br />
1<br />
Agra Bypass Km176-800 of NH-2 to<br />
Km 13.03.0 of NH-3<br />
23<br />
33<br />
345<br />
69
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong> 19<br />
Opportunities <strong>for</strong> <strong>Investment</strong>-State-Wise Projects Under NHDP Phase III-A<br />
S. No. Stretch NH<br />
Length<br />
(Km)<br />
Estimated Project Cost<br />
(INR Crore)<br />
(USD Million)<br />
STATE: Andhra Pradesh<br />
1<br />
Vijaywada-Machhlipatnam<br />
9<br />
65<br />
424<br />
85<br />
STATE: Bihar<br />
1<br />
Patna-Bakhtiarpur<br />
30<br />
53<br />
346<br />
69<br />
STATE: Haryana<br />
1<br />
Rohtak-Hissar<br />
10<br />
80<br />
522<br />
104<br />
STATE: Karnataka<br />
1<br />
Mulbagal-Kamataka/AP Border<br />
4<br />
11<br />
72<br />
14<br />
2<br />
Balgaum-Goa/KNT Border<br />
4A<br />
84<br />
548<br />
110<br />
3<br />
Mangalore-KNT/Kerala Border<br />
17<br />
18<br />
117<br />
23<br />
STATE: Kerala<br />
1<br />
Ottira-Thiruvananthapuram<br />
47<br />
123<br />
805<br />
161<br />
2<br />
Trivendrum-Kerala/Tamil Nadu Border<br />
47<br />
43<br />
280<br />
56<br />
3<br />
Kerala/Tamil Nadu Border Kanyakumari<br />
47<br />
70<br />
456<br />
91
20<br />
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong><br />
S. No. Stretch NH<br />
Length<br />
(Km)<br />
Estimated Project Cost<br />
(INR Crore)<br />
(USD Million)<br />
STATE: Maharashtra<br />
1<br />
Nagpur-Wa<strong>in</strong>ganga Br<br />
6<br />
60<br />
391<br />
78<br />
STATE: Orissa<br />
1<br />
Chandikhole-Duburi<br />
200<br />
39<br />
254<br />
51<br />
2<br />
Panikoili-Roxy<br />
215<br />
249<br />
1623<br />
325<br />
3<br />
Duburi-Talcher<br />
200<br />
98<br />
639<br />
128<br />
STATE: Punjab<br />
1<br />
Chandigarh-Kurali<br />
21<br />
30<br />
195<br />
39<br />
2<br />
Parwanoo-Shimla (Punjab,<br />
Haryana and HP)<br />
22<br />
110<br />
717<br />
143<br />
STATE: Rajasthan<br />
1<br />
Reengus-Sikar<br />
11<br />
41<br />
267<br />
53<br />
2<br />
Deoli-Jhalawar<br />
12<br />
178<br />
1161<br />
232<br />
STATE: Tamil Nadu<br />
1<br />
Nagapatnam-Thanjavur<br />
67<br />
74<br />
482<br />
96<br />
2<br />
Krishnagiri-T<strong>in</strong>divaram<br />
66<br />
170<br />
1108<br />
222<br />
STATE: West Bengal<br />
1<br />
Barasat-Bangaon 35 60 391 78
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong> 21<br />
Opportunities <strong>for</strong> <strong>Investment</strong>-State-Wise Projects Under NHDP Phase III-B<br />
S. No. Stretch NH<br />
Length<br />
(Km)<br />
Estimated Project Cost<br />
(INR Crore)<br />
(USD Million)<br />
STATE: Arunachal Pradesh<br />
1<br />
Itanagar-Arunachal Pradesh/<br />
Assam Border<br />
52A<br />
22<br />
143<br />
29<br />
STATE: Assam<br />
1<br />
Doboka-Assam/Nagaland<br />
Border-Dimapur<br />
36<br />
124<br />
808<br />
162<br />
2<br />
Baihata Chariali-Banderdewa<br />
52<br />
314<br />
2047<br />
409<br />
3<br />
Badardewa-Assam/<br />
Arunachal Pradesh Border<br />
52A<br />
9<br />
59<br />
12<br />
4<br />
Assam/Meghalaya Border to Assam/<br />
Tripura Boder<br />
44<br />
116<br />
756<br />
151<br />
5<br />
Silchar-Assam/Mizoram Border<br />
54<br />
50<br />
326<br />
65<br />
STATE: Bihar<br />
1<br />
Muzaffarpur-Sonbasra<br />
77<br />
89<br />
580<br />
116<br />
2<br />
Motihari-Raxaul<br />
28A<br />
67<br />
437<br />
87<br />
3<br />
Bakhtiarpur-Begusarai-Khagarai-Purnea<br />
31<br />
255<br />
1663<br />
333<br />
4<br />
Forbesganj-Jogwani 57A 13 85 17<br />
5<br />
Patna-Buxar<br />
84<br />
130<br />
848<br />
170<br />
STATE: Chhatisgarh<br />
1<br />
Kumud-Dhamtari<br />
43<br />
23<br />
150<br />
30<br />
2<br />
Raipur-Simga<br />
200<br />
28<br />
183<br />
37
22<br />
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong><br />
S. No. Stretch NH<br />
Length<br />
(Km)<br />
Estimated Project Cost<br />
(INR Crore)<br />
(USD Million)<br />
STATE: Gujarat<br />
1<br />
Jetpur-Somnath<br />
8D<br />
127<br />
828<br />
166<br />
2<br />
Gujarat/Maharashtra Border-Surat<br />
6<br />
84<br />
548<br />
110<br />
3<br />
Gujarat/MP Border-Ahmedabad<br />
59<br />
210<br />
1369<br />
274<br />
STATE: Jammu & Kashmir<br />
1<br />
Sr<strong>in</strong>agar-Baramula-Uri<br />
1A<br />
101<br />
659<br />
132<br />
STATE: Kerala<br />
1<br />
KNT/Kerala Border-Khozikode-Eddapally<br />
17<br />
451<br />
2941<br />
588<br />
STATE: Maharashtra<br />
1<br />
Kalamboli-Mumbra (6 Lan<strong>in</strong>g)<br />
4<br />
20<br />
130<br />
26<br />
2<br />
Panvel-Indapur<br />
17<br />
84<br />
548<br />
110<br />
STATE: Madhya Pradesh<br />
1<br />
Bhopal-Rajmarg Cross<strong>in</strong>g-Jabalpur<br />
12<br />
297<br />
1936<br />
387<br />
2<br />
Obaiduliaganj-Bheembetka<br />
69<br />
13<br />
85<br />
17<br />
3<br />
Jhansi-Khajuraho<br />
75<br />
100<br />
652<br />
130<br />
STATE: Manipur<br />
1<br />
Nagaland/Manipur Border-Imphal<br />
39<br />
140<br />
913<br />
183<br />
STATE: Mizoram<br />
1<br />
Assam/Mizoram Border-Aizawi<br />
54<br />
113<br />
737<br />
147
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong> 23<br />
S. No. Stretch NH<br />
Length<br />
(Km)<br />
Estimated Project Cost<br />
(INR Crore)<br />
(USD Million)<br />
STATE: Meghalya<br />
1<br />
Shillong (exclud<strong>in</strong>g Shillong Bypass)-<br />
Assam / Meghalaya Border<br />
44<br />
136<br />
887<br />
177<br />
STATE: Nagaland<br />
1<br />
Kohima-Nagaland-Manipur Border<br />
39<br />
28<br />
183<br />
37<br />
STATE: Punjab<br />
1<br />
Amritsar 15 101 659 132<br />
STATE: Rajasthan<br />
1<br />
Beawar-Pali-P<strong>in</strong>dwara 14 246 1604 321<br />
STATE: Tripura<br />
1<br />
Tripura/Assam Border to Agartala 44 195 1271 254<br />
STATE: Tamil Nadu<br />
1<br />
Madurai-Ramnathpuram-<br />
49<br />
186<br />
1213<br />
243<br />
Rameshwaram-Dhanushodi<br />
2<br />
Coimbatore-Mettupalayam<br />
67(Ext.)<br />
45<br />
293<br />
59<br />
3<br />
Theni-Kumili<br />
220<br />
57<br />
372<br />
74
24<br />
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong><br />
Opportunities <strong>for</strong> <strong>Investment</strong>-State-Wise Projects Under NHDP Phase V<br />
S. No. Stretch NH<br />
Length<br />
(Km)<br />
Estimated Project Cost<br />
(INR Crore)<br />
(USD Million)<br />
STATE: Andhra Pradesh<br />
1<br />
Chilkaluripet-Vijayawada-Elluru-<br />
Rajamundri<br />
5<br />
270<br />
1712<br />
342<br />
2<br />
Tada-Neliore Bypass<br />
5<br />
130<br />
824<br />
165<br />
3<br />
Vishakapatnam-Ankapalli-Rajamundri<br />
5<br />
200<br />
1268<br />
254<br />
4<br />
Srikakulam-Vishakhapatnam Ankapalli<br />
5<br />
100<br />
634<br />
127<br />
5<br />
Icchapuram-Srikakulam<br />
5<br />
140<br />
888<br />
178<br />
STATE: Bihar<br />
1<br />
Aurangabad-Barwa Adda<br />
2<br />
70<br />
444<br />
89<br />
STATE: Gujarat<br />
1<br />
Ahmedabad-Vadodara Expressway NE-1 95 602 120<br />
2 Udaipur-Ahmedabad<br />
8<br />
140<br />
888<br />
178<br />
STATE: Jharkhand<br />
1<br />
Barwa Adda-Panagarh<br />
2<br />
100<br />
634<br />
127<br />
2<br />
Aurangabad-Barwa Adda<br />
2<br />
150<br />
951<br />
190
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong> 25<br />
S. No. Stretch NH<br />
Length<br />
(Km)<br />
Estimated Project Cost<br />
(INR Crore)<br />
(USD Million)<br />
STATE: Karnataka<br />
1<br />
Bangalore-Tumkur<br />
4<br />
65<br />
412<br />
82<br />
2<br />
Hubli-Chitradurga<br />
4<br />
200<br />
1268<br />
254<br />
3<br />
Bangalore-Krishnagiri<br />
7<br />
55<br />
349<br />
70<br />
4<br />
Belgaum-Hubli<br />
4<br />
110<br />
697<br />
139<br />
5<br />
Kagal-Belgaum<br />
4<br />
77<br />
488<br />
98<br />
STATE: Maharashtra<br />
1<br />
Satara-Kagal-Belgaum<br />
4<br />
133<br />
843<br />
169
26<br />
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong><br />
Revenue Risks and Mitigation<br />
Revenue realisation <strong>in</strong> BOT-Toll projects is subject to<br />
some key risks <strong>in</strong>clud<strong>in</strong>g, but not limited to variation <strong>in</strong><br />
traffic, variation <strong>in</strong> toll rates, additional tollway,<br />
occurrence of premature term<strong>in</strong>ation on account of<br />
certa<strong>in</strong> events. The concession agreement provides<br />
<strong>for</strong> various risk mitigation mechanisms to the<br />
concessionaire <strong>in</strong>clud<strong>in</strong>g change <strong>in</strong> concession period,<br />
differential toll rates that are l<strong>in</strong>ked to cost of different<br />
road structures under the new toll rules (l<strong>in</strong>ear<br />
alignment, bridges, tunnels, bypasses etc.) to<br />
provid<strong>in</strong>g <strong>for</strong> term<strong>in</strong>ation payments under <strong>for</strong>ce<br />
majeure events.<br />
Variation <strong>in</strong> Traffic<br />
Type of Variation<br />
Actual Traffic <<br />
Target Traffic<br />
Actual Traffic ><br />
Target Traffic<br />
Change <strong>in</strong><br />
Concession Period<br />
For every 1%<br />
shortfall,concession<br />
period <strong>in</strong>crease by 1.5%<br />
For every 1% excess,<br />
concession period<br />
8<br />
reduction by 0.75%<br />
Cap on Concession<br />
Period Variation<br />
20%<br />
10%<br />
The concession agreement provides <strong>for</strong> extension or<br />
reduction of the concession period <strong>in</strong> the event the<br />
9<br />
actual traffic falls short or exceeds the target traffic , as<br />
10<br />
estimated on the target date .<br />
MCA also provides <strong>for</strong> term<strong>in</strong>ation of the agreement if<br />
the average daily traffic <strong>in</strong> any account<strong>in</strong>g year<br />
exceeds the design capacity and cont<strong>in</strong>ues to exceed<br />
<strong>for</strong> three subsequent account<strong>in</strong>g years. Term<strong>in</strong>ation <strong>in</strong><br />
such scenario will be deemed to happen on account of<br />
an Indirect Political Event.<br />
Variation <strong>in</strong> Toll rates (L<strong>in</strong>ked to WPI)<br />
The notification of the New <strong>National</strong> <strong>Highways</strong> Fee<br />
Rules (2008) has provided <strong>for</strong> a revision of toll rates<br />
and hence realisable toll revenues <strong>for</strong> all vehicle<br />
categories. The new toll rules are applicable <strong>for</strong> all new<br />
road projects.<br />
8. Waiver from concession period reduction can be obta<strong>in</strong>ed on payment of premium<br />
9. The method <strong>for</strong> calculat<strong>in</strong>g Actual Traffic and Target Traffic is detailed <strong>in</strong> the MCA<br />
10. Target Date is around 10 years from the date of the agreement <strong>in</strong> a 20 year concession period
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong> 27<br />
The salient features of the new toll rules are:<br />
• Increase <strong>in</strong> base toll rates by 3% every year<br />
• Increase <strong>in</strong> toll charges to the extent of 40% of the<br />
<strong>in</strong>crease <strong>in</strong> WPI.<br />
• Toll charges <strong>for</strong> new structures (bridges,<br />
tunnels)/alignments (bypass, alternate section)<br />
determ<strong>in</strong>ed based on construction cost.<br />
• Round<strong>in</strong>g off fee to the nearest five rupees (earlier<br />
rounded off to nearest 1 Rupee).<br />
While the earlier toll<strong>in</strong>g rules prescribed a standard<br />
base toll rate on a per passenger car unit (pcu)/km<br />
basis <strong>for</strong> a highway project, the new rules prescribe<br />
base toll rates also <strong>for</strong> high-cost structures (such as<br />
bridges, bypass or tunnels) separately. The base toll<br />
rates <strong>for</strong> such high-cost structures are <strong>in</strong>dexed to the<br />
estimated project cost (on INR/vehicle/trip basis).<br />
Provided below is an illustration of toll revenues<br />
earned from a Light Motor vehicle and Multi Axle<br />
Vehicle (MAV of three to six axles) as per the<br />
applicable toll rates under the old and new toll rules<br />
respectively.<br />
The toll charge at the end of fifth year has been<br />
calculated under two project development scenarios.<br />
In Scenario 1, a l<strong>in</strong>early aligned highway stretch<br />
(without bypasses and bridges) of 100 km has been<br />
considered. In Scenario 2, the highway stretch<br />
<strong>in</strong>cludes a l<strong>in</strong>ear alignment of 80 km and bypass length<br />
of 20 km. The <strong>in</strong>crease <strong>in</strong> WPI is assumed to be 5%<br />
p.a.<br />
The table above shows that <strong>for</strong> a given base toll rate,<br />
the toll charges determ<strong>in</strong>ed by the new toll rules are<br />
higher. The toll charges are significantly higher <strong>in</strong><br />
Scenario 2, where higher construction cost of the<br />
bypass is reflected <strong>in</strong> the toll charges.<br />
Complete details of the new <strong>National</strong> Highway Fee<br />
(Determ<strong>in</strong>ation of Rates and Collection) Rules, 2008<br />
are provided <strong>in</strong> the enclosed CD.<br />
Early Term<strong>in</strong>ation of Concession<br />
The concession may be term<strong>in</strong>ated be<strong>for</strong>e project<br />
completion <strong>in</strong> the event of the follow<strong>in</strong>g:<br />
• NHAI Event of Default: In the event of any of the<br />
defaults specified <strong>in</strong> the concession agreement<br />
which the Authority has failed to cure with<strong>in</strong> 90<br />
days or such longer period as has been specified <strong>in</strong><br />
the agreement, the Authority shall be deemed to<br />
be <strong>in</strong> default and concessionaire shall have the<br />
right to term<strong>in</strong>ate the agreement<br />
Old Toll Rate<br />
Rs./ trip (USD)<br />
11<br />
New Toll Rates<br />
Rs./ trip (USD)<br />
Event of<br />
Default<br />
Dur<strong>in</strong>g construction<br />
(after f<strong>in</strong>ancial<br />
closure)<br />
Dur<strong>in</strong>g operations<br />
Light Motor Vehicle Light<br />
Commercial Vehicle<br />
Scenario 1<br />
79<br />
(~1.57)<br />
128<br />
(~2.5)<br />
80<br />
(~1.6)<br />
130<br />
(~2.6)<br />
Concessionaire<br />
event of default<br />
NHAI event of<br />
default<br />
Force Majeure<br />
No payment<br />
a. the total Debt Due<br />
b. 150% of the Adjusted Equity.<br />
Payment equal to 90% of debt<br />
due less <strong>in</strong>surance claims if any.<br />
12<br />
Light Motor Vehicle Light<br />
Commercial Vehicle<br />
Scenario 2<br />
79<br />
(~1.57)<br />
120<br />
(~2.4)<br />
Non-Political<br />
Event<br />
Indirect Political<br />
13<br />
Event<br />
Payment equal 90%<br />
of the Debt Due less Insurance Cover<br />
a. Debt Due Less Insurance Cover<br />
b. 110% of the Adjusted Equity<br />
128<br />
(~2.5)<br />
185<br />
(~3.7)<br />
Political Event<br />
a. the total Debt Due<br />
b. 150% of the Adjusted Equity<br />
11. As per new toll<strong>in</strong>g rules, toll rate revision is determ<strong>in</strong>ed by the <strong>for</strong>mula - TR 1 = TR 0 (1+3%) + TR 0((1+3%)*%Variation <strong>in</strong> WPI*40%)<br />
12. Adjusted equity is equity funded <strong>in</strong> Indian Rupees adjusted suitably to reflect change <strong>in</strong> value of equity on account of depreciation and variations <strong>in</strong> WPI<br />
at different periods dur<strong>in</strong>g the Concession Period<br />
13. Includ<strong>in</strong>g term<strong>in</strong>ation due to breach of capacity as set out under traffic risk
28<br />
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong><br />
• Concessionaire Event of Default: In the event of<br />
any of the defaults specified <strong>in</strong> the concession<br />
agreement which the concessionaire has failed to<br />
cure with<strong>in</strong> the specified cure period, and where<br />
no such cure period has been specified, then<br />
with<strong>in</strong> the cure period of 60 days, the<br />
concessionaire shall be deemed to be <strong>in</strong> default<br />
and NHAI shall have the right to term<strong>in</strong>ate the<br />
agreement<br />
• Force Majeure Event: A <strong>for</strong>ce majeure event which<br />
lasts <strong>for</strong> less than 180 days will lead to a<br />
proportionate change <strong>in</strong> the concession period to<br />
compensate the concessionaire <strong>for</strong> losses dur<strong>in</strong>g<br />
such period<br />
The concession is eligible to be term<strong>in</strong>ated (by<br />
either party) if the <strong>for</strong>ce majeure event subsists <strong>for</strong><br />
at least 180 days with<strong>in</strong> a cont<strong>in</strong>uous period of 365<br />
days.<br />
Term<strong>in</strong>ation payments are made by NHAI to the<br />
concessionaire <strong>in</strong> the event of term<strong>in</strong>ation due to<br />
above mentioned reasons.
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong> 29<br />
Overview of<br />
Successful Projects<br />
PPP is gradually prov<strong>in</strong>g to be a successful<br />
mechanism <strong>for</strong> develop<strong>in</strong>g and ma<strong>in</strong>ta<strong>in</strong><strong>in</strong>g the<br />
<strong>National</strong> <strong>Highways</strong>, as is evident from the <strong>in</strong>creased<br />
private sector participation <strong>in</strong> projects till date.<br />
Source: NHAI<br />
Number of Contracts<br />
BOT Toll<br />
Awarded 121<br />
9927<br />
Completed 34<br />
BOT DBFO<br />
1834<br />
Awarded 8<br />
1034<br />
Completed<br />
BOT Annuity<br />
Awarded 38<br />
Completed 13<br />
2269<br />
804<br />
Cost <strong>in</strong><br />
INR Crore USD Billion<br />
85884<br />
12479<br />
7785<br />
21712<br />
4608<br />
18<br />
2.5<br />
1.6<br />
4.3<br />
0.92<br />
Toll collection depends on two factors - traffic volume<br />
and toll<strong>in</strong>g rate. The toll rates are pre-specified by<br />
NHAI. Estimates of traffic growth <strong>for</strong> projects are also<br />
provided by NHAI based on detailed feasibility studies.<br />
However, bidders are advised to carry out<br />
<strong>in</strong>dependent due-diligence of the traffic and growth<br />
estimates. The profitability of tolled <strong>National</strong> <strong>Highways</strong><br />
has made the sector extremely competitive and<br />
attractive. In light of the <strong>for</strong>ecasts <strong>for</strong> traffic growth on<br />
important road corridors, the Government has given<br />
first preference to Build-Operate Transfer (BOT/<br />
DBFOT) toll projects.<br />
Jaipur- Kishangarh BOT Project –NH 8<br />
Jaipur-Kishangarh is one of the earliest projects<br />
implemented on BOT framework. The project <strong>in</strong>volved<br />
4-lan<strong>in</strong>g a length of approximately 91 km from Jaipur<br />
to Kishangarh (NH-8), <strong>in</strong> the state of Rajasthan at an<br />
estimated cost of INR 644 Crore (USD 129 million-<br />
NHAI estimate). NHAI provided a grant of INR 211<br />
Crore (USD 42 million) to the project. The concession<br />
period of the project is 20 years.<br />
The project was completed 5 months ahead of its<br />
s ch e d u l e d c o m p l e t i o n d a t e ( 2 0 0 5 ) . Th e<br />
concessionaire also earned a bonus of INR 42.25<br />
Crore (USD 8.5 million) <strong>in</strong> the <strong>for</strong>m of early toll<strong>in</strong>g<br />
dur<strong>in</strong>g the period be<strong>for</strong>e scheduled completion date.<br />
Even today, the concessionaire is earn<strong>in</strong>g more<br />
revenues than those projected at the time of bidd<strong>in</strong>g.<br />
However, the excess revenue is be<strong>in</strong>g shared<br />
between the concessionaire and NHAI as per the<br />
revenue shar<strong>in</strong>g clause <strong>in</strong> the agreement.<br />
Belgaum – Maharashtra Border Section of NH-4<br />
(Annuity Project)<br />
The project <strong>in</strong>volved widen<strong>in</strong>g of exist<strong>in</strong>g two lanes to<br />
4-lane divided carriageway facility <strong>in</strong>clud<strong>in</strong>g the<br />
rehabilitation of exist<strong>in</strong>g 2-lanes on annuity basis. The<br />
estimated cost of this 78 km long road project is INR<br />
332 Crore (USD 66.4 million; NHAI Estimate). The<br />
section has two toll plazas.<br />
The project was awarded to the consortium of<br />
M/s ILFS, M/s Punj Lloyd Ltd. and M/s Consolidated<br />
Toll Network India Ltd. The concession period is 17<br />
years and 6 months. The concessionaire completed<br />
the project <strong>in</strong> October 2004, two months earlier than<br />
the stipulated project completion date, and was paid a<br />
(per<strong>for</strong>mance) bonus of INR 42.16 Crore (USD 8.4<br />
million) on account of early completion.<br />
Second Vivekananda Bridge (now Sister Nivedita<br />
Bridge)- BOT Project <strong>in</strong> Kolkota:<br />
This bridge is one of the first BOT projects, undertaken<br />
by NHAI <strong>in</strong> 1995. The concession agreement was<br />
signed <strong>in</strong> September, 2002.The consortium members<br />
are from USA, U.K, Mauritius and India. Though the<br />
f<strong>in</strong>ancial close was delayed by one year, the
30<br />
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong><br />
construction thereafter was almost on time and the<br />
th<br />
bridge was commissioned on 4 July, 2007. This<br />
bridge also won the award of excellence <strong>for</strong> the year<br />
2007 under the Foreign Bridge Project Category from<br />
the American Segmental Bridge Institute. NHAI had<br />
provided a grant of INR 120 Crore (USD 24 million) out<br />
of the total project cost of INR 640 Crore (USD 128<br />
million). The concession period of the project is 30<br />
years.<br />
Jawaharlal Nehru Port Connectivity Project <strong>in</strong><br />
Maharashtra<br />
This project has been undertaken as part of a<br />
programme <strong>for</strong> adequate road connectivity to major<br />
ports through an SPV of NHAI (Jawaharlal Nehru Port<br />
<strong>Road</strong> Company Limited). Phase-1 of the project, with a<br />
length of 30 km <strong>for</strong> 4-lan<strong>in</strong>g of NH-4/4B, built at an<br />
estimated cost of INR 177 Crore (USD 35.4 million)<br />
was commenced <strong>in</strong> February 2002 and was<br />
completed <strong>in</strong> July 2005. This project is a symbolic<br />
representation of a successful venture of NHAI,<br />
Jawaharlal Nehru Port and State Government<br />
represented by City and Industrial Development<br />
Corporation of Maharashtra Ltd. (CIDCO). Phase-II of<br />
the project <strong>for</strong> 4-lan<strong>in</strong>g of 14 km and the 6-lan<strong>in</strong>g of<br />
Panvel Creek Bridge (length: 397m) at a cost of INR<br />
143 Crore (USD 29 million) has been taken up and<br />
likely to be completed soon. Encouraged by the<br />
results, Phase –III at a cost of INR 279 Crore (USD 56<br />
million), is also be<strong>in</strong>g taken up. The concession given<br />
to the SPV of NHAI is <strong>for</strong> 20 years from December<br />
2000. The SPV made profits (after tax) of INR 16.4<br />
Crore (USD 3.3 million), INR 20.3 Crore (USD 4 million)<br />
& INR 21.7 Crore (USD 4.3 million) <strong>in</strong> 2005-06, 2006 -<br />
07 & 2007-08 respectively.<br />
Participation of Foreign Contractors<br />
Foreign contractors started participat<strong>in</strong>g <strong>in</strong> NHDP<br />
contracts (and to a limited extent <strong>in</strong> state highway<br />
projects) from 2000-01. In 2000-01, there were about<br />
20 contracts <strong>in</strong> the NHDP, where <strong>for</strong>eign contractors<br />
participated either on their own or <strong>in</strong> jo<strong>in</strong>t ventures; the<br />
number grew to about 32 <strong>in</strong> 2003. The <strong>for</strong>eign<br />
contractors tak<strong>in</strong>g part were from Malaysia, Korea,<br />
Ch<strong>in</strong>a, Russia, Turkey, Indonesia, Iran and some niche<br />
contractors from Europe <strong>for</strong> specialised jobs. It is<br />
presently estimated that about a dozen <strong>for</strong>eign road<br />
contractors are operat<strong>in</strong>g <strong>in</strong> India.<br />
Foreign companies are execut<strong>in</strong>g 27 contracts<br />
exclusively and 81 contracts as jo<strong>in</strong>t venture partners<br />
with Indian companies. Foreign <strong>in</strong>vestors are allowed<br />
100 per cent <strong>for</strong>eign direct <strong>in</strong>vestment <strong>in</strong> road sector<br />
(Please refer section on page 37). The total value of<br />
contracts with <strong>for</strong>eign participation is estimated to be<br />
more than INR 12,000 Crore (USD 2.4 billion)<br />
Construction<br />
Firms<br />
No. of<br />
Foreign Firms<br />
No. of<br />
Projects<br />
Length<br />
(<strong>in</strong> km)<br />
BOT (Toll) 26 26 2874<br />
BOT (Annuity) 8 8 645<br />
EPC Contracts 68 68 3347<br />
Country wise breakup of Foreign and JV<br />
Companies <strong>in</strong>volved <strong>in</strong> development work of<br />
<strong>National</strong> Highway Projects<br />
S. No. Country<br />
1.<br />
2.<br />
3.<br />
4.<br />
5.<br />
6.<br />
7.<br />
8.<br />
9.<br />
10.<br />
11.<br />
12.<br />
13.<br />
14.<br />
15.<br />
16.<br />
17.<br />
Ch<strong>in</strong>a<br />
Dubai<br />
Malaysia<br />
Iran<br />
S<strong>in</strong>gapore<br />
Saudi Arabia<br />
UK<br />
Indonesia<br />
Korea<br />
Spa<strong>in</strong><br />
Taiwan<br />
Thailand<br />
Turkey<br />
Philipp<strong>in</strong>es<br />
USA<br />
Russia<br />
Italy<br />
Total<br />
JV<br />
Contractors<br />
11<br />
3<br />
25<br />
1<br />
1<br />
1<br />
4<br />
2<br />
9<br />
6<br />
1<br />
3<br />
2<br />
1<br />
1<br />
8<br />
2<br />
81<br />
Independent<br />
2<br />
0<br />
10<br />
0<br />
0<br />
0<br />
0<br />
2<br />
5<br />
0<br />
4<br />
1<br />
0<br />
0<br />
1<br />
2<br />
0<br />
27
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong> 31<br />
Work Plan-II (2010-11)<br />
S. No. State<br />
Section NH No. Length km<br />
NHDP<br />
1<br />
Meghalay<br />
Jowai-Meghalaya/Assam Border<br />
44<br />
104<br />
Sub-Total<br />
104<br />
2<br />
Punjab<br />
Ludhiana - Talwandi<br />
95<br />
78<br />
Sub-Total<br />
78<br />
3<br />
Rajasthan<br />
Kota-Jhalwar<br />
12<br />
55<br />
Sub-Total<br />
55<br />
4<br />
Uttarakhand<br />
Rampur-Kathgodam<br />
87<br />
88<br />
Sub-Total<br />
88<br />
5<br />
West Bengal<br />
Barasat-Petrapole<br />
35<br />
60<br />
Sub-Total<br />
60<br />
Total NHDP III<br />
307<br />
NHDP Phase-V<br />
6<br />
Andhra Pradesh<br />
Vijayawada-Elluru-Rajamundry<br />
5<br />
198<br />
7<br />
Andhra Pradesh<br />
Ichapuram-Srikakulam-Vishakapatnam-Rajahmundri<br />
5<br />
436<br />
Sub-Total<br />
634<br />
8<br />
Karnataka<br />
Dharwad-Haveri<br />
4<br />
95<br />
9<br />
Karnataka<br />
Khangal-Belgam<br />
4<br />
77<br />
Sub-Total<br />
172<br />
10<br />
Orissa<br />
Chandikhole-Paradeep<br />
5A<br />
80<br />
Sub-Total<br />
80<br />
11<br />
Punjab<br />
Ludhiana-Chandigarh<br />
95 & 21<br />
85<br />
Sub-Total<br />
85<br />
12<br />
Uttar Pradesh<br />
Agra-Etawah Bypass<br />
3<br />
125<br />
13<br />
Uttar Pradesh<br />
Allahabad Bypass-Varanasi<br />
2<br />
160<br />
14<br />
Uttar Pradesh<br />
Aurangabad-Barwa Adda<br />
2<br />
220<br />
15<br />
Uttar Pradesh<br />
Etawah-Chakeri<br />
2<br />
157<br />
16<br />
Uttar Pradesh<br />
Chakeri-Allahabad<br />
2<br />
153<br />
Sub-Total<br />
815<br />
NHDP Phase-IV<br />
1786<br />
NHDP Phase-IV<br />
17<br />
Bihar<br />
NMuzaffarpur-Barauni<br />
28<br />
107<br />
18<br />
Bihar<br />
Chhapra-Rewaghat-Muzzaffarpur<br />
102<br />
75<br />
Sub-Total<br />
182<br />
19<br />
Chattisgarh<br />
Arang-Saraipalli-Orissa Border<br />
6<br />
150
32<br />
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong><br />
S. No. State<br />
20 Chattisgarh<br />
21 Chattisgarh<br />
22 Chattisgarh<br />
23 Chattisgarh/Jharkhand<br />
24 Chattisgarh<br />
25 Chattisgarh<br />
26 Chattisgarh<br />
27 Himachal Pradesh<br />
28 Himachal Pradesh<br />
29 Jharkhand<br />
30 Jharkhand<br />
31 Jharkhand/West Bengal<br />
32 Karnataka<br />
33 Karnataka<br />
34 Karnataka<br />
35 Karnataka<br />
36 Karnataka<br />
37 Karnataka<br />
38 Madhya Pradesh<br />
39 Madhya Pradesh<br />
40 Madhya Pradesh<br />
41 Madhya Pradesh<br />
42 Madhya Pradesh<br />
43 Madhya Pradesh<br />
Section NH No. Length km<br />
Chilpi-Simga<br />
Raipur to Dhamtari<br />
Dharmtari-Jagdalpur<br />
Pathalgaon to Gumala<br />
Ambikapur to Pathlgaon<br />
Bilaspur-Ambikapur<br />
Raipur-Bilaspur<br />
Sub total<br />
Bilaspur to Ner Chowk<br />
Ner Chowk to Manali<br />
Sub total<br />
Junction with Gov<strong>in</strong>dpur at<br />
NH-2-Dhanbad-Bokaro-Ramgarh<br />
Junction with NH-2 at Gov<strong>in</strong>dpur-Chas-Upto<br />
JHR/WB Border<br />
Jamshedpur-Kharagpur<br />
Sub total<br />
Hospet-Chitradurga<br />
Bellary-Gooty<br />
Hospet-Hubli-Ankola<br />
Hoskote to Dobespet<br />
Jozhikode (Kerala Border)-Gundlupet-Coimbatore<br />
(Kerala Border)<br />
Gulbarga-Bijapur-Homnabad<br />
Sub total<br />
Gwalior-Dewas<br />
Jabalpur-Kakhnadon<br />
Biaora-MP/Rajasthan Border<br />
Jabalpur-Mandla-Chilpi<br />
Obadullaganj-Betul<br />
Jabalpur-Katani-Rewa<br />
Sub total<br />
12A<br />
43<br />
43<br />
78<br />
78<br />
111<br />
200<br />
21<br />
21<br />
32 & 33<br />
32<br />
6 & 33<br />
13<br />
63<br />
63<br />
207<br />
212 & 67<br />
218<br />
3<br />
7<br />
12 Ext.<br />
12A<br />
69<br />
7<br />
128<br />
72<br />
222<br />
130<br />
85<br />
190<br />
112<br />
1089<br />
54<br />
119<br />
173<br />
130<br />
71<br />
150<br />
351<br />
119<br />
77<br />
271<br />
89<br />
63<br />
200<br />
819<br />
450<br />
74<br />
66<br />
189<br />
143<br />
210<br />
1308
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong> 33<br />
S. No. State<br />
44 Maharashtra<br />
45 Maharashtra<br />
46 Maharashtra<br />
47 Maharashtra<br />
48 Maharashtra/<br />
Andhra Pradesh<br />
49 Orissa<br />
50 Orissa<br />
51 Orissa<br />
52 Orissa<br />
53 Punjab<br />
54 Punjab/Haryana<br />
55 Rajasthan/Gujarat<br />
56 Rajasthan/<br />
Madhya Pradesh<br />
57 Tamil Nadu<br />
58 Tamil Nadu<br />
59 Tamil Nadu<br />
60 Uttar Pradesh<br />
61 Uttar Pradesh<br />
62 Uttar Pradesh<br />
63 Uttar Pradesh<br />
64 Uttar Pradesh<br />
65 Uttar Pradesh<br />
66 Uttar Pradesh<br />
67 Uttar Pradesh<br />
68 Uttar Pradesh / Rajasthan<br />
Section NH No. Length km<br />
Amravati-Dhule-Gujrat Border<br />
Khed-Nasik<br />
Vedishi-Osmanabad-Solapur<br />
Dhule-Aurangabad<br />
Solapur-Sangareddy<br />
Sub Total<br />
Baleshwar-Baripada-Jharpokhria<br />
(Jn. of NH-5 with NH-6)<br />
Jn. with NH-6 at Sambalpur with NH-5 <strong>in</strong> Cuttack<br />
Bahargora-Sambalpur<br />
Birmitrapur-Palhara<br />
Sub Total<br />
Sri Ganganagar-Amritsar<br />
Jalandar-J<strong>in</strong>d<br />
Sub Total<br />
Padhi-Dahod<br />
Jhalawar-Biaora<br />
Sub Total<br />
Thanjavur-Pudukkotai-Sivaganga-Manamadurai<br />
Tiruchirapalli-Lalgudi-Chidambaram &<br />
Meenusuriti-Jayamkondam-Kootu <strong>Road</strong><br />
[km 90.00 to km 93.00 (Common stretch with<br />
km 96.80 to km 99.60 of NH 227)}<br />
Vikravandi-Kumbakonam-Thanjavur<br />
Sub Total<br />
Nepal Boarder-Varanasi<br />
Varanasi-Lucknow<br />
Varanasi-Hanumanha<br />
Lucknow-Rai Bareilly<br />
Unnao-Lalganj<br />
Morababad-Aligarh<br />
Meerut-Nazibabad<br />
Meerut-Bulandshahar<br />
Bharatpur-Mathura-Hathras<br />
6<br />
50<br />
211<br />
211<br />
9<br />
5<br />
42<br />
6<br />
23<br />
15<br />
71<br />
113<br />
12<br />
226<br />
45C<br />
& 227<br />
45C<br />
233<br />
56<br />
7<br />
24 B<br />
232 A<br />
93<br />
119<br />
235<br />
SH<br />
450<br />
180<br />
85<br />
140<br />
234<br />
1089<br />
90<br />
261<br />
370<br />
128<br />
849<br />
172<br />
350<br />
522<br />
123<br />
121<br />
244<br />
122<br />
135<br />
165<br />
422<br />
292<br />
300<br />
70<br />
82<br />
68<br />
71<br />
139<br />
66<br />
90
34<br />
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong><br />
S. No. State<br />
69 Uttar Pradesh<br />
70 Uttar Pradesh<br />
71 Uttar Pradesh<br />
72 Uttar Pradesh<br />
73 Uttarakhand/<br />
Uttar Pradesh<br />
74 Uttarakhand<br />
75 Uttarakhand<br />
76 Uttarakhand/<br />
77 Uttar Pradesh<br />
78 West Bengal<br />
79 West Bengal<br />
SARDP-NE<br />
80 Assam<br />
81 Assam<br />
82 Assam<br />
83 Nagaland<br />
Section NH No. Length km<br />
Rai Bareilly-Jaunpur<br />
Ambedkar Nagar-Banda<br />
Barabanki-Bahraich-Nanapara-Rupaidiha<br />
Gorakhpur-Ferenda-Nautanwa-Sonauli<br />
Sub Total<br />
Chutmapur-Saharanpur-Yamunanagar-Haryana/<br />
UP Border<br />
Dehradun-Chutmalpur-Roorkee<br />
Sitarganj-Tanakpur<br />
Haridwar-Kashipur<br />
Sub Total<br />
Pundlbari-Baxirhat<br />
JHR/WB Border-Purliya-Balarampur-JHR/WB<br />
border-upto junction with NH-33 at Chandil<br />
(Jharkhand)<br />
Sub Total<br />
Total Phase IV<br />
Demow-Dibrugarh<br />
Numaligarh-Jorhat<br />
Jorhat-Demow<br />
Sub Total<br />
Dimapur-Kohima<br />
Sub Total<br />
Total SARDP-NE<br />
Grand Total<br />
231<br />
231<br />
28 C<br />
29 E<br />
73<br />
72 A<br />
125<br />
74<br />
31<br />
32<br />
37<br />
37<br />
37<br />
39<br />
169<br />
287<br />
152<br />
99<br />
1885<br />
50<br />
70<br />
52<br />
167<br />
339<br />
46<br />
82.5<br />
128.5<br />
9224.5<br />
64<br />
56<br />
81<br />
201<br />
81<br />
81<br />
282<br />
11599.5
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong> 35<br />
Policy Framework<br />
<strong>National</strong> <strong>Highways</strong> Policy Initiatives<br />
The government has adopted a road development<br />
policy sett<strong>in</strong>g out the guidel<strong>in</strong>es <strong>for</strong> <strong>in</strong>vestment <strong>in</strong><br />
highways. In order to meet the huge <strong>in</strong>vestment<br />
requirements <strong>in</strong> the sector, the government has taken<br />
a number of measures to attract private sector<br />
participation.<br />
•<br />
•<br />
•<br />
•<br />
•<br />
•<br />
•<br />
•<br />
•<br />
•<br />
•<br />
The government has permitted 100 per cent<br />
<strong>for</strong>eign equity <strong>in</strong> construction and ma<strong>in</strong>tenance of<br />
roads, highways, tunnels etc.<br />
Grant upto 40% of project cost to make project<br />
viable.<br />
100% tax exemption <strong>in</strong> any 10 consecutive years<br />
with<strong>in</strong> a period of 20 years after completion of the<br />
project.<br />
Agreements to avoid double taxation with a large<br />
number of countries<br />
Concession period upto 30 years<br />
Right to charge tolls on certa<strong>in</strong> (toll) projects.<br />
These tolls are <strong>in</strong>dexed to a <strong>for</strong>mula l<strong>in</strong>ked with<br />
the wholesale price <strong>in</strong>dex.<br />
The government permits duty free import of high<br />
capacity equipment required <strong>for</strong> highway<br />
construction.<br />
Government support <strong>for</strong> land acquisition,<br />
resettlement and rehabilitation.<br />
Simplified procedure <strong>for</strong> Land Acquisition<br />
MCA <strong>for</strong> BOT (Annuity) and OMT are be<strong>in</strong>g<br />
f<strong>in</strong>alised.<br />
New rules <strong>for</strong> collection of fee <strong>for</strong> use of sections of<br />
national highway, permanent bridges, bypasses and<br />
tunnels have been put <strong>in</strong>to place. The illustration of<br />
revenue collection <strong>for</strong> new projects under the new<br />
policy is provided <strong>in</strong> the earlier section.<br />
Viability Gap Fund<strong>in</strong>g Scheme ( VGF)<br />
The VGF scheme provides f<strong>in</strong>ancial support <strong>in</strong> the<br />
<strong>for</strong>m of capital grant <strong>for</strong> PPP projects <strong>in</strong> various<br />
<strong>in</strong>frastructure sectors. VGF Scheme is <strong>in</strong>tended to<br />
support projects which are commercially unviable but<br />
have high economic benefit.<br />
The Empowered Institution sanctions projects <strong>for</strong> VGF<br />
upto INR100 crore (USD 20 million) <strong>for</strong> each eligible<br />
project subject to the budgetary ceil<strong>in</strong>g <strong>in</strong>dicated by<br />
the F<strong>in</strong>ance M<strong>in</strong>istry. The Empowered Institution also<br />
considers other proposals and places them be<strong>for</strong>e the<br />
Empowered Committee. Fund<strong>in</strong>g upto 20% of the<br />
project cost is provided. If required, an additional 20%<br />
can be made available by the sponsor<strong>in</strong>g<br />
M<strong>in</strong>istry/agency.<br />
Proposals up to INR 200 Crore (USD 40 million) will be<br />
sanctioned by the Empowered Committee and<br />
amounts exceed<strong>in</strong>g INR 200 Crore will be sanctioned<br />
by the Empowered Committee with the approval of<br />
F<strong>in</strong>ance M<strong>in</strong>ister.<br />
Capital grant <strong>for</strong> all <strong>in</strong>frastructure projects under the<br />
VGF scheme is restricted to a maximum of 40% of the<br />
project cost (<strong>for</strong> projects upwards of INR 200 Crore).<br />
Grant provided by NHAI <strong>for</strong> highway projects under<br />
the BOT route may be f<strong>in</strong>anced through the VGF route.<br />
VGF fund<strong>in</strong>g will not be available over and above<br />
NHAI's grant <strong>for</strong> projects.<br />
The Government will carry out all preparatory works<br />
<strong>for</strong> the projects identified <strong>for</strong> private <strong>in</strong>vestment and<br />
meet the cost of follow<strong>in</strong>g items:
36<br />
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong><br />
•<br />
•<br />
•<br />
•<br />
Detailed Feasibility Study<br />
Land <strong>for</strong> right-of-way and enroute facilities<br />
Clearance of the right-of-way land: Relocation of<br />
utility services, cutt<strong>in</strong>g of trees, resettlement and<br />
rehabilitation of the affected establishments<br />
Environment Clearances<br />
• Clearance from Indian Railways to allow<br />
construction of Rail-Over-Bridges under their<br />
supervision<br />
• Where design is left to the enterprise, giv<strong>in</strong>g<br />
details of standards and bore holes logs at bridge<br />
sites etc.<br />
Government Support <strong>for</strong> Major Clearances required <strong>for</strong> <strong>Road</strong> Projects<br />
CLEARANCES<br />
CLEARING AUTHORITY<br />
Cost Estimate<br />
Techno economic Clearances<br />
Pollution Clearance (water & air)<br />
M<strong>in</strong>istry of <strong>Road</strong> Transport & <strong>Highways</strong> /Public Works Department<br />
/<strong>National</strong> <strong>Highways</strong> Authority of India (NHAI)<br />
M<strong>in</strong>istry of <strong>Road</strong> Transport & <strong>Highways</strong>/ Public Works Department/<br />
<strong>National</strong> <strong>Highways</strong> Authority of India<br />
Central Pollution Control Board<br />
Forest Clearance<br />
M<strong>in</strong>istry of Environment & Forests<br />
Environmental Clearance<br />
M<strong>in</strong>istry of Environment & Forests<br />
Company Registration<br />
Rehabilitation & Resettlement of Displaced<br />
families<br />
Registrar of Companies<br />
M<strong>in</strong>istry of Shipp<strong>in</strong>g, <strong>Road</strong> Transport & <strong>Highways</strong>, State Governments and NHAI
Foreign Direct <strong>Investment</strong><br />
(FDI) Policy<br />
Introduction<br />
The FDI regime has been progressively liberalised<br />
dur<strong>in</strong>g the course of the 1990s (particularly after 1996)<br />
with most restrictions on <strong>for</strong>eign <strong>in</strong>vestment be<strong>in</strong>g<br />
removed and procedures simplified. With limited<br />
exceptions, <strong>for</strong>eigners can <strong>in</strong>vest directly <strong>in</strong> India,<br />
either wholly by themselves or as a jo<strong>in</strong>t venture.<br />
Foreign <strong>Investment</strong> (<strong>in</strong> billion $)<br />
Direct Foreign <strong>Investment</strong><br />
Portfolio Foreign <strong>Investment</strong><br />
29.3<br />
India welcomes FDI <strong>in</strong> virtually all sectors, except<br />
those of strategic concern such as defence (opened to<br />
a limited extent), atomic energy and activities/sectors<br />
not opened to private sector <strong>in</strong>vestment.<br />
The major source of FDI <strong>in</strong> India is through the equity<br />
route, which accounted <strong>for</strong> 81% of the total FDI<br />
<strong>in</strong>flows <strong>in</strong> India. Re<strong>in</strong>vested earn<strong>in</strong>gs of FDI<br />
companies accounted <strong>for</strong> 18% of the total Direct<br />
<strong>Investment</strong>. Acquisitions accounted <strong>for</strong> 17% of total<br />
FDI.<br />
11.4<br />
5<br />
4.3<br />
1<br />
2002-03 2003-04<br />
Source: RBI<br />
8.5<br />
9.3<br />
7.7<br />
15.5<br />
12.5<br />
6<br />
7.1<br />
2004-05 2005-06 2006-07 2007-08<br />
Routes For Foreign Direct <strong>Investment</strong><br />
<strong>Investment</strong> Climate – FDI Current Situation<br />
FDI <strong>in</strong><br />
Automatic Route<br />
No prior government approval required<br />
Prior Permission (Foreign <strong>Investment</strong><br />
Promotion Board)<br />
Decision generally with<strong>in</strong> 4–6 weeks<br />
FDI equity limit-Automatic Route (illustrative list)<br />
• <strong>Road</strong>s -100%<br />
• Insurance – 26%<br />
• Domestic airl<strong>in</strong>es – 49% (100% <strong>for</strong> NRI <strong>in</strong>vestment)<br />
• Telecom services – Foreign equity 49%<br />
• Private sector banks – 74%<br />
• Exploration and m<strong>in</strong><strong>in</strong>g of coal, lignite, diamonds and<br />
precious stones – 100%<br />
• Development of new airports – 100%<br />
• Development of exist<strong>in</strong>g airports – 74%<br />
• Trad<strong>in</strong>g -whole sale cash & carry & <strong>for</strong> exports-100%<br />
FDI Requir<strong>in</strong>g prior approval (illustrative list)<br />
• Defence production -26%<br />
• FM broadcast<strong>in</strong>g – Foreign equity 20%<br />
• News and current affairs – 26%<br />
• Broadcast<strong>in</strong>g – cable, DTH, sett<strong>in</strong>g up of hardware<br />
facilities-Foreign equity 49%<br />
• Test market<strong>in</strong>g – 100%<br />
• S<strong>in</strong>gle Brand Retail<strong>in</strong>g 51%<br />
Other areas (100% - Auto Route): Pharma, Non Bank<strong>in</strong>g F<strong>in</strong>ancial Services, SEZs, Food Process<strong>in</strong>g
38<br />
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong><br />
• Automatic Route - No prior Government approval<br />
is required if the <strong>in</strong>vestment to be made falls<br />
with<strong>in</strong> the sectoral caps specified <strong>for</strong> the listed<br />
activities. Only fil<strong>in</strong>gs have to be made by the<br />
Indian company with the concerned regional<br />
office of the Reserve Bank of India (“RBI”) with<strong>in</strong><br />
30 days of receipt of remittance and with<strong>in</strong> 30 days<br />
of issuance of shares<br />
•<br />
FIPB Route - <strong>Investment</strong> proposals fall<strong>in</strong>g outside<br />
the automatic route would require prior<br />
Government approval. Foreign <strong>Investment</strong><br />
requir<strong>in</strong>g Government approvals are considered<br />
and approved by the Foreign <strong>Investment</strong><br />
Promotion Board (“FIPB”). Decision of the FIPB is<br />
usually conveyed <strong>in</strong> 4-6 weeks. Thereafter, fil<strong>in</strong>gs<br />
have to be made by the Indian company with the<br />
RBI<br />
• CCFI Route - <strong>Investment</strong> proposals fall<strong>in</strong>g outside<br />
the Automatic Route and hav<strong>in</strong>g a project cost of<br />
INR 6,000 million (USD 120 million) or more would<br />
require prior approval of Cab<strong>in</strong>et Committee of<br />
Foreign <strong>Investment</strong> (“CCFI”) after obta<strong>in</strong><strong>in</strong>g the<br />
FIPB approval. Decision of CCFI is usually<br />
conveyed <strong>in</strong> 8-10 weeks. Thereafter, fil<strong>in</strong>gs have to<br />
be made by the Indian company with the RBI.<br />
<strong>Investment</strong> proposals fall<strong>in</strong>g with<strong>in</strong> the automatic<br />
route and hav<strong>in</strong>g a project cost of INR 6,000<br />
million or more do not require to be approved by<br />
CCFI.
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong> 39<br />
Tax Environment<br />
Taxation System In India<br />
India has a well-developed tax structure with the<br />
authority to levy taxes divided between the central<br />
and the state governments. S<strong>in</strong>ce 1991 tax system <strong>in</strong><br />
India has undergone a radical change <strong>in</strong> l<strong>in</strong>e with<br />
liberal economic policy. Brief description of taxes<br />
prevalent <strong>in</strong> India is given below:<br />
Direct Taxes<br />
Central<br />
Personal Income Tax<br />
Wealth Tax<br />
Corporate Tax<br />
Taxation <strong>in</strong> India<br />
Indirect Taxes<br />
Customs Duty<br />
Excise Duty<br />
Central Sales Tax<br />
State<br />
Other Taxes<br />
Professional Tax<br />
Indirect Tax<br />
Value Added Tax<br />
Entry Tax<br />
Octroi<br />
Rates of Taxation<br />
Domestic Companies<br />
• Taxed at worldwide <strong>in</strong>come<br />
• Taxed at 30%<br />
• If taxable <strong>in</strong>come > INR<br />
10,000,000; Surcharge<br />
applicable @ 10% of tax.<br />
(surchage @7.5% from AY<br />
2011-2012)<br />
• Education cess of 3% of tax<br />
(and surcharge if applicable)<br />
• Dividend Distribution Tax<br />
(DDT) is levied @ 16.995%<br />
(16.609% from AY 2011-<br />
2012) on the amount of<br />
dividend declared.<br />
Foreign Companies<br />
• Taxed at <strong>in</strong>come which is<br />
earned from a bus<strong>in</strong>ess<br />
connection <strong>in</strong> India or from a<br />
source/asset located <strong>in</strong><br />
India.<br />
• Taxed at 40%<br />
• If taxable <strong>in</strong>come > INR<br />
10,000,000; Surcharge<br />
applicable @ 2.5% of tax.<br />
• Education cess of 3% of tax<br />
(and surcharge if applicable)<br />
• No Dividend Distribution Tax<br />
(DDT)<br />
Direct Taxation<br />
Service Tax<br />
Tax <strong>in</strong>centive <strong>for</strong> <strong>Road</strong>s<br />
100% tax holiday is available <strong>for</strong> those who are<br />
engaged <strong>in</strong> development or / and operation and<br />
ma<strong>in</strong>tenance of roads and highways. Such tax holiday<br />
can be availed <strong>for</strong> any consecutive period of 10 years<br />
with<strong>in</strong> a block of 20 years start<strong>in</strong>g from the year when<br />
the person starts develop<strong>in</strong>g the roads/highways.<br />
Follow<strong>in</strong>g conditions needs to be fulfilled by such<br />
person:<br />
• There should be a company registered <strong>in</strong> India;<br />
• Such company is awarded a contract by the<br />
government or its agency to develop the<br />
roads/highways;<br />
• A certificate from an accountant certify<strong>in</strong>g the<br />
deduction.<br />
Both the companies may be liable to M<strong>in</strong>imum Alternate Tax (MAT) of 15%<br />
(18% from AY 2011-2012) of the book profits if the tax liability under normal<br />
provisions is less than MAT. The above rates may be subject to more beneficial<br />
provisions conta<strong>in</strong>ed <strong>in</strong> a tax treaty entered <strong>in</strong>to between India and the<br />
country <strong>in</strong> which the taxpayer is resident.<br />
M<strong>in</strong>imum Alternate Tax (MAT)<br />
The tax law requires companies to pay a m<strong>in</strong>imum tax<br />
known as MAT on the basis of profits disclosed <strong>in</strong><br />
the f<strong>in</strong>ancial statements. MAT becomes payable when<br />
tax liability under normal provision is less than MAT. In<br />
such a case, companies are liable to pay 15% (18%<br />
from AY 2011-12) of book profits as MAT plus<br />
applicable surcharge of 10% <strong>for</strong> domestic companies<br />
(surcharge of 7.5% <strong>for</strong> domestic companies from AY<br />
2011-2012) and 2.5% <strong>for</strong> <strong>for</strong>eign companies. Education<br />
cess of 3% thereon is levied <strong>in</strong> case of both domestic<br />
and <strong>for</strong>eign companies. Book profits <strong>for</strong> this<br />
purpose are computed by mak<strong>in</strong>g prescribed<br />
adjustments to the net profit disclosed by the<br />
corporations <strong>in</strong> their f<strong>in</strong>ancial statements.
40<br />
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong><br />
MAT paid by companies can be carried <strong>for</strong>ward <strong>for</strong> 10<br />
years and offset aga<strong>in</strong>st <strong>in</strong>come tax payable under the<br />
normal provisions of tax. The maximum amount that<br />
can be set off aga<strong>in</strong>st regular <strong>in</strong>come tax is equal to<br />
the difference between the tax payable on the total<br />
<strong>in</strong>come as computed under the Income Tax Act and<br />
the tax that would have been payable under the MAT<br />
provisions <strong>for</strong> that year.<br />
Dividend Distribution Tax (DDT)<br />
Dividend distributed by an Indian company is exempt<br />
from <strong>in</strong>come-tax <strong>in</strong> the hands of all shareholders.<br />
However, the Indian company is liable to pay a tax<br />
called Dividend Distribution Tax (DDT) of 16.995%<br />
(16.609% from AY 2011-2012) (i.e. <strong>in</strong>clusive of<br />
surcharge and education cess) on such dividends.<br />
This tax is <strong>in</strong> addition to the normal corporate tax<br />
liability (<strong>in</strong>come tax levied on the company). The<br />
amount of dividend declared by the parent company<br />
(i.e. hold<strong>in</strong>g more than 50 percent of capital) will be<br />
reduced by the amount of dividend received from its<br />
subsidiary company <strong>for</strong> the purposes of comput<strong>in</strong>g<br />
DDT payable by the parent company if:<br />
•<br />
•<br />
•<br />
Such dividend is received from its subsidiary;<br />
The subsidiary has paid DDT on such dividend; and<br />
The parent company is not a subsidiary of any<br />
other company.<br />
Such tax paid is a non-deductible expense.
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong> 41<br />
Withhold<strong>in</strong>g tax<br />
Withhold<strong>in</strong>g tax compliance<br />
Tax withhold<strong>in</strong>g and deposit<br />
• Tax on payment is required to be deducted at the time of<br />
credit; or at the time of payment, whichever is earlier<br />
• Amount of tax withheld is required to be deposited with the<br />
government with<strong>in</strong> 7 days from the end of the month <strong>in</strong><br />
which tax was withheld<br />
• In case the tax is paid or credited <strong>in</strong> the month of March, the<br />
same can be deposited by 30 April<br />
Requisite Challan<br />
• Tax withheld has to be deposited <strong>in</strong> Form ITNS-281. With<br />
effect from 1 April 2008, all corporate will have to pay tax<br />
electronically<br />
Quarterly statement<br />
• Payment to residents and non residents: Quarterly statements<br />
<strong>for</strong> withhold<strong>in</strong>g tax are to be filed on or be<strong>for</strong>e July 15, October<br />
15, Jan 15 and May 15.<br />
Withhold<strong>in</strong>g tax certificate<br />
• Certificate <strong>in</strong> Form no. 16A to be issued to the payee with<strong>in</strong> 15<br />
days from the due date <strong>for</strong> furnish<strong>in</strong>g the statement of tax<br />
deducted at source<br />
• Certificate <strong>in</strong> Form 16 <strong>for</strong> tax withheld on salary to be issued<br />
annually by 31 May of the f<strong>in</strong>ancial year immediately follow<strong>in</strong>g<br />
the f<strong>in</strong>ancial year <strong>in</strong> which <strong>in</strong>come was paid and tax deducted.<br />
Determ<strong>in</strong>ation of Taxable Income<br />
Profit / Loss<br />
as per<br />
Accounts<br />
Deduct taxes already paid to<br />
arrive at net taxes payable /<br />
refundable<br />
Is amount<br />
positive?<br />
Y<br />
Net taxes payable<br />
Add: Expenses Disallowed<br />
as per Income Tax Act and<br />
considered <strong>in</strong> accounts<br />
Tax payable is equal to tax<br />
under normal provisions<br />
Y<br />
N<br />
Net taxes refundable<br />
Less: Expenses Allowed<br />
as per Income Tax Act but<br />
not considered <strong>in</strong> accounts<br />
Is Tax payable<br />
under normal<br />
provisions higher<br />
than tax payable<br />
under MAT?<br />
N<br />
Tax payable is<br />
equal to tax<br />
under MAT<br />
provisions<br />
Apply applicable tax rates<br />
(<strong>in</strong>clud<strong>in</strong>g Surcharge & Education<br />
Cess) to the taxable <strong>in</strong>come to<br />
arrive at gross tax payable under<br />
normal provisions.<br />
Calculated tax payable<br />
under ‘M<strong>in</strong>imum alternate<br />
Tax’ (MAT) provisions
42<br />
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong><br />
Double Tax Relief and Tax Treaties<br />
India has a comprehensive tax treaty network. Taxpayers have the option to choose between the provisions<br />
of the tax treaty or the Income Tax Act, whichever is beneficial to them. List of countries with which India has<br />
a Double Taxation Avoidance Agreements (DTAA).<br />
List of countries with which India has a DTAA<br />
Armenia<br />
Denmark<br />
Jordan<br />
Namibia<br />
Serbia<br />
Tr<strong>in</strong>idad and Tobago<br />
Australia<br />
Egypt<br />
Kazakhstan<br />
Nepal<br />
S<strong>in</strong>gapore<br />
Turkey<br />
Austria<br />
F<strong>in</strong>land<br />
Kenya<br />
Netherlands<br />
Slovenia<br />
Turkmenistan<br />
Bangladesh<br />
France<br />
Korea<br />
New Zealand<br />
South Africa<br />
UAE<br />
Belarus<br />
Germany<br />
Kuwait<br />
Norway<br />
Spa<strong>in</strong><br />
Uganda<br />
Belgium<br />
Greece<br />
Kyrgyz Republic<br />
Oman<br />
Sri Lanka<br />
UK<br />
Botswana<br />
Hungary<br />
Libya<br />
Phillipp<strong>in</strong>es<br />
Sudan<br />
Ukra<strong>in</strong>e<br />
Brazil<br />
Iceland<br />
Malaysia<br />
Poland<br />
Sweden<br />
USA<br />
Bulgaria<br />
Indonesia<br />
Malta<br />
Portuguese Republic<br />
Swiss Confederation<br />
Uzbekistan<br />
Canada<br />
Ireland<br />
Maruitius<br />
Qatar<br />
Syria<br />
Vietnam<br />
Ch<strong>in</strong>a<br />
Israel<br />
Mongolia<br />
Romania<br />
Tanzania<br />
Zambia<br />
Cyprus<br />
Italy<br />
Morocco<br />
Russia<br />
Tazakhistan<br />
Czech Republic<br />
Japan<br />
Myanmar<br />
Saudi Arabia<br />
Thailand
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong> 43<br />
Indirect Taxation<br />
Customs Duty<br />
Customs duty is payable on import of goods <strong>in</strong>to India.<br />
The rate of Customs duty is based on the Tariff<br />
classification of the goods be<strong>in</strong>g imported as per the<br />
Customs Tariff Act, 1975 ('Customs Tariff') [which is<br />
aligned with the Harmonised System of Nomenclature<br />
(HSN) followed <strong>in</strong>ternationally].<br />
Various concessions/ exemptions are available on the<br />
basis of nature of goods, usage, status of importer,<br />
country of import etc.<br />
Name of Duty / Cess<br />
Basic Customs Duty ('BCD')<br />
Additional Customs Duty <strong>in</strong> lieu of Execise duty ('CVD')<br />
Education Cess (<strong>in</strong>clud<strong>in</strong>g the Secondary Higher<br />
Education Cess of One percent)<br />
Additional duty of Customs <strong>in</strong> lieu of local taxes ('ADC')<br />
Incentives/Exemptions<br />
• Exemption <strong>for</strong> specified projects: An importer<br />
of specified goods is eligible to claim exemption<br />
15<br />
from payment of Customs duty on fulfillment of<br />
prescribed conditions <strong>in</strong>clud<strong>in</strong>g:<br />
i<br />
ii<br />
Rate<br />
14<br />
10%<br />
10.3%<br />
3%<br />
4%<br />
The goods are imported by M<strong>in</strong>istry of<br />
Surface Transport or a person who has been<br />
awarded contract <strong>for</strong> construction of roads <strong>in</strong><br />
India by NHAI, PWD, road construction<br />
corporation under the control of State/ Union<br />
Territory Government<br />
A person who has been named as a subcontractor<br />
<strong>in</strong> the contract between NHAI and<br />
the pr<strong>in</strong>cipal contractor <strong>for</strong> construction of<br />
roads<br />
• Project Import: As per the project import<br />
regulations, the benefit under project import<br />
would be available only to those goods which are<br />
imported aga<strong>in</strong>st the specific contracts registered<br />
with the appropriate authority. Under Project<br />
Import scheme, goods can be imported <strong>for</strong><br />
specified projects (<strong>in</strong>clud<strong>in</strong>g road development<br />
project <strong>for</strong> NHAI) at a concessional BCD rate of<br />
5%. An importer of specified goods is eligible to<br />
claim exemption from payment of Customs duty<br />
on fulfillment of prescribed conditions.<br />
• Projects funded by <strong>in</strong>ternational organisations:<br />
In terms of customs laws, goods imported from<br />
outside India <strong>for</strong> execution of projects funded by<br />
<strong>in</strong>ternational organisations (like World Bank, Asian<br />
Development Bank etc.) and approved by the<br />
Government of India are exempt from levy of<br />
Customs duty subject to prescribed conditions.<br />
• Foreign Trade Policy ('FTP'): The FTP provides<br />
certa<strong>in</strong> exemptions/benefits to specified supplies<br />
of such goods manufactured <strong>in</strong> India, where such<br />
supplies qualify as 'Deemed Exports'. As per the<br />
FTP, Deemed Exports refer to certa<strong>in</strong> transactions<br />
where<strong>in</strong> the goods supplied do not leave the<br />
country and payment <strong>for</strong> supplies is received <strong>in</strong><br />
Indian rupees or <strong>in</strong> free <strong>for</strong>eign exchange. Supplies<br />
made to various specified projects/ purposes<br />
qualify as deemed exports under the FTP <strong>in</strong>clud<strong>in</strong>g<br />
supplies under the follow<strong>in</strong>g categories:<br />
I. Supply of goods to projects f<strong>in</strong>anced by<br />
multilateral or bilateral agencies/funds<br />
notified by Department of Economic Affairs<br />
under International Competitive Bidd<strong>in</strong>g<br />
('ICB').<br />
ii.<br />
Supply of goods to any project or purpose <strong>in</strong><br />
respect of which import of goods is<br />
permissible at zero-rate of Customs duty.<br />
However, <strong>in</strong> order to be eligible <strong>for</strong> Deemed Export<br />
benefits, supplies under the a<strong>for</strong>ementioned<br />
categories should be made under ICB. Further, a subcontractor<br />
mak<strong>in</strong>g supplies directly to the ma<strong>in</strong><br />
contractor or directly to the designated projects/<br />
agencies would also be eligible <strong>for</strong> Deemed Export<br />
benefits subject to prescribed conditions <strong>in</strong> this<br />
regard.<br />
Excise duty<br />
Excise duty is levied by the Central Government on the<br />
manufacture of movable goods <strong>in</strong> India at the time of<br />
14. Capital goods can be imported at the general rate of 7.5 %<br />
15. Notification No. 21/2002-Cus, dated 1 March 2002
44<br />
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong><br />
removal of goods from the factory premise of the<br />
manufacturer. The Central Excise Act, 1944 ('the<br />
Excise Act') prescribes the rate of levy <strong>in</strong> the Excise<br />
Tariff Act, 1985 ('Excise Tariff'). The general rate of<br />
Excise duty <strong>in</strong> India is 10.3% (Basic Excise Duty 10%,<br />
Education Cess 3%). Credit of Excise duty paid is<br />
available aga<strong>in</strong>st the output Excise duty liability/output<br />
service tax liability.<br />
Incentives/Exemptions<br />
A supplier or a manufacturer of goods (that are<br />
supplied to a contractor/ sub-contractor engaged <strong>in</strong><br />
construction activities) would be eligible <strong>for</strong> exemption<br />
from payment of Excise duty if follow<strong>in</strong>g conditions<br />
are fulfilled:<br />
•<br />
•<br />
Goods are supplied aga<strong>in</strong>st ICB<br />
Goods be<strong>in</strong>g supplied/ manufactured are exempt<br />
from BCD, CVD and ADC when imported <strong>in</strong>to India<br />
Also, all goods supplied to projects f<strong>in</strong>anced by<br />
<strong>in</strong>ternational organisations (like World Bank, Asian<br />
Development Bank etc.) and approved by the<br />
Government of India are exempt from levy of Excise<br />
duty.<br />
Service Tax<br />
Service tax is a federal levy on provision of specified<br />
services <strong>in</strong> India. Service tax is currently leviable at the<br />
rate of 10.3%. Relevant taxable services category <strong>for</strong><br />
construction activities <strong>in</strong>clude:<br />
•<br />
•<br />
•<br />
•<br />
Commercial or <strong>in</strong>dustrial construction services<br />
Site <strong>for</strong>mation, clearance, excavation,<br />
earthmov<strong>in</strong>g and demolition services<br />
Works contract services<br />
Management, ma<strong>in</strong>tenance or repair services<br />
Incentives/Exemptions<br />
Construction / ma<strong>in</strong>tenance of roads has been<br />
specifically exempted from levy of Service tax under<br />
the follow<strong>in</strong>g taxable categories:<br />
• Commercial or <strong>in</strong>dustrial construction services<br />
• Site <strong>for</strong>mation and clearance, excavation,<br />
•<br />
•<br />
16<br />
earthmov<strong>in</strong>g and demolition services<br />
Works contract services<br />
Management, ma<strong>in</strong>tenance or repair services.<br />
Value Added tax ('VAT')<br />
VAT is a state specific levy on sale of goods with<strong>in</strong> the<br />
17<br />
State. The rate of VAT varies from 4%/12.5%<br />
(depend<strong>in</strong>g upon the goods <strong>in</strong>volved). However, a<br />
higher or a lower rate of VAT may be notified by the<br />
respective State Government <strong>for</strong> specified goods.<br />
Multiple schemes <strong>for</strong> payment of VAT are available<br />
under the State VAT laws.<br />
Central Sales Tax ('CST')<br />
A transaction qualifies as an <strong>in</strong>ter-state sale, where the<br />
sale entails movement of goods from one State to<br />
another. Inter-state movement of goods is liable to<br />
CST under the Central Sales Tax Act, 1956 ('the CST<br />
Act') at the rate of 2 percent aga<strong>in</strong>st statutory<br />
declaration <strong>for</strong>m ('Form C'), which can be issued by<br />
the buyer <strong>for</strong> specified purposes, or at the VAT rate<br />
applicable on local sale of goods <strong>in</strong> the dispatch<strong>in</strong>g<br />
State (i.e. the State from which the movement of<br />
goods commences pursuant to the sale). The EPC<br />
contractor can issue Form 'C' <strong>for</strong> purchase of goods at<br />
the concessional rate.<br />
Further, it is pert<strong>in</strong>ent to note that the CST borne on<br />
account of <strong>in</strong>ter-state procurements and paid <strong>in</strong> other<br />
State will not be available as credit aga<strong>in</strong>st any output<br />
liability.<br />
Goods and Service tax - Proposed<br />
In the Union Budget 2008-09, the Government of India<br />
has signaled its <strong>in</strong>tention to <strong>in</strong>troduce a nation wide<br />
Goods and Service tax ('GST') with effect from 1 April<br />
2010. GST is now slated to be <strong>in</strong>troduced with effect<br />
from 1 April 2011. GST would be <strong>in</strong> lieu of Excise duty,<br />
VAT, Entry tax,, CST and Service tax.<br />
GST <strong>in</strong> India would be a dual GST with Center (CGST)<br />
and State (SGST) levy<strong>in</strong>g GST at each transaction.<br />
Inter-state transaction would attract Integrated GST<br />
(IGST) which would be sum of CGST and SGST. Credit<br />
of CGST, SGST and IGST would be available. No credit<br />
of Central GST is likely to be available aga<strong>in</strong>st State<br />
GST and vice-versa.<br />
16 Notification No. 17/2005-ST, dated 7 June 2005<br />
17 Some states have <strong>in</strong>creased the rate
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong> 45<br />
Repatriation of <strong>Investment</strong>s and<br />
Profits Earned <strong>in</strong> India<br />
Type of Income streams<br />
Dividend<br />
Interest<br />
Royalty<br />
Technical<br />
Fees<br />
Rates of<br />
taxation<br />
Domestic law<br />
(a)<br />
NIL<br />
Best treaty<br />
rate 5%*<br />
Domestic law<br />
20%*<br />
Best treaty<br />
rate 10%*<br />
Domestic law<br />
10%*<br />
Best treaty<br />
rate 10%*<br />
Domestic law<br />
10%*<br />
Best treaty<br />
rate Nil<br />
Notes:<br />
a. Tax free <strong>for</strong> all shareholders but Indian company declar<strong>in</strong>g the dividend is subject to Dividend Distribution Tax<br />
(DDT) at 16.995% (16.609% from AY 2011-12) of the dividend declared.<br />
* the above rates are exclusive of surcharge and education cess.<br />
M<strong>in</strong>istry of commerce and Industry vide Press Release dated 5 November 2009 has permitted payments <strong>for</strong><br />
royalty, lumpsum fee <strong>for</strong> transfer of technology, payments <strong>for</strong> use of trademark/brand name under automatic<br />
route.<br />
• Royalties and Technical Know-how Fees:<br />
Indian companies that enter <strong>in</strong>to Technology<br />
Transfer Agreements with <strong>for</strong>eign companies are<br />
permitted to remit payments towards know-how<br />
and royalty under the terms of the <strong>for</strong>eign<br />
collaboration agreement, subject to limits.<br />
• Dividends: Dividends are freely repatriable after<br />
the payment of Dividend Distribution Tax by the<br />
Indian company declar<strong>in</strong>g the dividend. No<br />
permission of RBI is necessary <strong>for</strong> effect<strong>in</strong>g<br />
remittance, subject to specified compliances.<br />
• Interest: Payment of <strong>in</strong>terest borrowed from<br />
overseas would be governed by the regulation<br />
regard<strong>in</strong>g external commercial borrow<strong>in</strong>gs.<br />
• Buyback of shares: A maximum of 25% of<br />
equity share capital permitted to be repurchased<br />
<strong>in</strong> a f<strong>in</strong>ancial year. Buyback is possible only from<br />
free reserves, share premium and proceeds<br />
Dividends are not allowed as deduction. Royalty/ fee <strong>for</strong> technical services/ <strong>in</strong>terest are allowed as<br />
deduction subject to transfer pric<strong>in</strong>g norms
46<br />
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong><br />
Repatriation of capital<br />
Buy back of shares<br />
Redemption of<br />
preference share<br />
Capital Reduction<br />
Liquidation of company<br />
from fresh issue of shares. Post repurchase, debt<br />
owed by company should not to exceed 2 times<br />
of (capital + free reserves). There will be no tax<br />
implication <strong>in</strong> the hands of Indian company.<br />
However, s<strong>in</strong>ce buy back is considered as<br />
transfer of shares (capital asset), there<strong>for</strong>e,<br />
shareholder will be liable to capital ga<strong>in</strong> tax. No<br />
DDT to be paid by Indian company/ shareholders.<br />
• Redemption of preference shares: Foreign<br />
capital <strong>in</strong>vested <strong>in</strong> India is generally repatriable,<br />
along with capital appreciation, if any, after the<br />
payment of taxes due on them, provided the<br />
<strong>in</strong>vestment was on repatriation basis. Preference<br />
shares are similar to equity shares carry<strong>in</strong>g<br />
preferential right towards payment of dividend.<br />
Profits on redemption of preference shares<br />
taxed are to be taxed as capital ga<strong>in</strong>s. This may<br />
not be applicable <strong>for</strong> non-resident <strong>in</strong>vestors as<br />
preference shares can be redeemed only at par.<br />
DDT @ 16.995% (16.609% from AY 2011-12)<br />
would be payable on coupon on preference<br />
shares.<br />
• Capital reduction: The company law provision<br />
provides <strong>for</strong> a detailed procedure where<strong>in</strong> the<br />
capital of company can be reduced and money<br />
c a n b e r e p a t r i a t e d b a ck . A s p e c i a l<br />
permission/resolution is to be passed at general<br />
meet<strong>in</strong>g of shareholders authoris<strong>in</strong>g capital<br />
reduction process. Thereafter, a capital reduction<br />
process has to go through a court process which<br />
would could <strong>in</strong>volve obta<strong>in</strong><strong>in</strong>g creditors approval,<br />
no objection certificate from all creditors etc.<br />
Cash paid to the extent of accumulated profits<br />
(<strong>in</strong>clud<strong>in</strong>g capitalised profits) would be liable to<br />
DDT @16.995% (16.609% from AY 2011-12) <strong>in</strong><br />
the hands of Indian company.<br />
• Liquidation of company: Cash can be<br />
repatriated by way of liquidation of Indian<br />
company. Both the shareholders can exit out of<br />
the project simultaneously and get entire funds<br />
back. Liquidation is complicated and time<br />
consum<strong>in</strong>g.
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong> 47<br />
Adm<strong>in</strong>istrative Framework<br />
The road sector <strong>in</strong> India is a concurrent subject. The<br />
jurisdiction of Central Government is limited to<br />
<strong>National</strong> <strong>Highways</strong>, while the jurisdiction of State<br />
Governments is across State <strong>Highways</strong>, Major District<br />
<strong>Road</strong>s, Village <strong>Road</strong>s and Other <strong>Road</strong>s. At the Central<br />
Level, the overall policy, programme development and<br />
plann<strong>in</strong>g is done by the Plann<strong>in</strong>g Commission <strong>in</strong><br />
consultation with the M<strong>in</strong>istry of <strong>Road</strong> Transport and<br />
<strong>Highways</strong> (MoRTH) and M<strong>in</strong>istry of Rural<br />
Development (MoRD).<br />
At the State Level, the overall policy and programme<br />
development and resource plann<strong>in</strong>g is done by the<br />
State Plann<strong>in</strong>g Cell <strong>in</strong> consultation with Central<br />
Plann<strong>in</strong>g Commission and State M<strong>in</strong>istry <strong>in</strong> charge of<br />
<strong>Road</strong>s.<br />
Adm<strong>in</strong>istrative Framework by Category of <strong>Road</strong>s<br />
<strong>Road</strong> Network Coord<strong>in</strong>at<strong>in</strong>g Agency Connectivity To<br />
Expressways<br />
<strong>National</strong> <strong>Highways</strong><br />
State <strong>Highways</strong><br />
Major District <strong>Road</strong>s<br />
Rural and Other <strong>Road</strong>s<br />
M<strong>in</strong>istry of <strong>Road</strong> Transport and<br />
<strong>Highways</strong> (MoRTH), <strong>National</strong> Highway<br />
Authority of India (NHAI) and State <strong>Road</strong><br />
Development Corporations<br />
MoRTH, NHAI, BRO<br />
(Border <strong>Road</strong>s Organisation)<br />
State Public Works Departments ( PWDs)<br />
State PWDs<br />
M<strong>in</strong>istry of Rural Development (MoRD)<br />
State capitals and tier 1 cities<br />
Union capital, state capitals, major ports,<br />
strategic locations<br />
State capitals, district centres, important<br />
towns, national highways, other states<br />
State Capitals, district centres,<br />
important towns, national highways<br />
Production centres, markets, highways,<br />
railway stations etc<br />
Project <strong>Road</strong>s<br />
State PWDs/Project Organisations<br />
Projects like irrigation, power, m<strong>in</strong>es, etc<br />
Urban <strong>Road</strong>s<br />
Municipal Corporations<br />
Intra city network<strong>in</strong>g<br />
Village <strong>Road</strong>s<br />
Zilla Parishads/State Governments<br />
Villages, district roads, highways,<br />
railway stations, riversides etc
48<br />
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong><br />
Adm<strong>in</strong>istrative Framework <strong>for</strong> <strong>Road</strong>s<br />
Institutional Advisory Framework<br />
Facilitated by<br />
Committee on Infrastructure<br />
Plann<strong>in</strong>g Commission<br />
F<strong>in</strong>ance M<strong>in</strong>istry/PPP Cell<br />
Central Level<br />
MoRTH<br />
(allocation of funds <strong>for</strong> the development and<br />
ma<strong>in</strong>tenance of highways)<br />
MoRD<br />
(allocation of funds <strong>for</strong> the development<br />
and ma<strong>in</strong>tenance of rural roads )<br />
Department of <strong>Road</strong><br />
Transport & <strong>Highways</strong><br />
NHAI<br />
(NHDP implementation,<br />
operations and<br />
ma<strong>in</strong>tenance)<br />
Plann<strong>in</strong>g, Policy<br />
and Budget<strong>in</strong>g<br />
Secretary<br />
Panchayat Raj<br />
State Level<br />
State PWD<br />
(NH-W<strong>in</strong>g)<br />
State PWD<br />
State <strong>Highways</strong><br />
MDRs,ODRs, Village<br />
<strong>Road</strong>s<br />
Rural Redevelopment<br />
& Panchayat Raj<br />
(Rural <strong>Road</strong>s)<br />
<strong>Road</strong> Development Corporations<br />
(Construction, Ma<strong>in</strong>tenance and<br />
Operation of <strong>Road</strong>s)
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong> 49<br />
About NHAI<br />
The <strong>National</strong> <strong>Highways</strong> Authority of India ( NHAI) was<br />
constituted by an act of Parliament, the <strong>National</strong><br />
<strong>Highways</strong> Authority of India Act, 1988. The Authority<br />
was operationalised <strong>in</strong> Feb, 1995.<br />
NHAI is the nodal agency responsible <strong>for</strong> the<br />
development, ma<strong>in</strong>tenance and management of<br />
<strong>National</strong> <strong>Highways</strong> entrusted to it and <strong>for</strong> matters<br />
connected or <strong>in</strong>cidental thereto. The USD 60 billion<br />
<strong>National</strong> <strong>Highways</strong> Development Project (NHDP) has<br />
been entirely managed by the NHAI under the<br />
mandate of the M<strong>in</strong>istry of <strong>Road</strong> Transport &<br />
<strong>Highways</strong> (MoRTH), Government of India.<br />
Besides implementation of the NHDP, NHAI is also<br />
concerned with implementation of road safety<br />
measures and environmental management and IT<br />
<strong>in</strong>itiatives <strong>in</strong> construction, ma<strong>in</strong>tenance and operation<br />
of <strong>National</strong> <strong>Highways</strong>.<br />
For projects related <strong>in</strong><strong>for</strong>mation k<strong>in</strong>dly contact :<br />
General Manager (F<strong>in</strong>ance)<br />
Phone : + 91(011)-25074100 & 25074200, Extn : 1418<br />
The charter of NHAI is set out <strong>in</strong> the <strong>National</strong><br />
<strong>Highways</strong> Act, 1956 and <strong>National</strong> <strong>Highways</strong> Authority<br />
of India Act, 1988:<br />
•<br />
•<br />
•<br />
•<br />
•<br />
Delegation of power and functions of the highway<br />
adm<strong>in</strong>istration to NHAI<br />
Enhanced powers <strong>for</strong> land acquisition<br />
Right to collect tolls <strong>for</strong> road projects on its own or<br />
through third parties <strong>in</strong> accordance with specified<br />
government guidel<strong>in</strong>es<br />
Authorisation to borrow from capital market<br />
through bonds, debentures and other <strong>in</strong>struments<br />
Situation where Central Government will have<br />
powers to override NHAI and its officials
50<br />
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong><br />
Organisation Structure of NHAI is set out below:<br />
NHAI CORPORATE<br />
OFFICE<br />
NHAI<br />
Technical F<strong>in</strong>ance Adm<strong>in</strong>istration<br />
Project<br />
Management<br />
Corridor<br />
Management<br />
NHAI FIELD<br />
OFFICES<br />
Project<br />
Implementation Unit (PIU)<br />
Corridor<br />
Management Unit (CMU)<br />
The adm<strong>in</strong>istrative framework at the Head Office is set out below<br />
Chairman<br />
Central Vigilance<br />
Officer<br />
Member<br />
F<strong>in</strong>ance<br />
Member<br />
Adm<strong>in</strong>istration<br />
Member<br />
Technical (1)<br />
Member<br />
Technical (2) &(3)<br />
Member<br />
PPP<br />
CGM (F<strong>in</strong>ance)<br />
CGM (HR &<br />
Admn)<br />
CGM (LA)<br />
CGM (IT)<br />
CGM (CM)<br />
CGM (Legal)<br />
CGM (S R&D)<br />
CGM (Safety)<br />
CGM (Technical)-<br />
(2) & (3)<br />
CGM (PQ)
<strong>Guidel<strong>in</strong>es</strong> <strong>for</strong> <strong>Investment</strong> <strong>in</strong> <strong>Road</strong> <strong>Sector</strong> 51<br />
Annexure<br />
List of CD Contents<br />
1. Overview of the Model Concession Agreement (BOT-Toll)<br />
2. Model document of Request <strong>for</strong> Qualification<br />
3. Model document of Request <strong>for</strong> Proposal<br />
4. Arbitration Act, 1996<br />
5. Central <strong>Road</strong> Fund Act<br />
6. Land Acquisition Act<br />
7. The Indian Tolls Act<br />
8. New <strong>National</strong> <strong>Highways</strong> Fee Rules<br />
9. Motor Vehicles Act<br />
10. NHAI Act, 1988<br />
11. Environment Protection Act<br />
12. Manual and Specification <strong>for</strong> 6-lan<strong>in</strong>g<br />
13. Manual and Specification <strong>for</strong> 4-lan<strong>in</strong>g<br />
14. Manual and Specification <strong>for</strong> 2-lan<strong>in</strong>g<br />
15. <strong>Road</strong> Transport Policy<br />
16. Reserve Bank of India Policy<br />
17. Soft Copy of the Brochure
Useful Addresses<br />
<strong>National</strong> <strong>Highways</strong> Authority of India<br />
G 5&6, <strong>Sector</strong>-10, Dwarka,<br />
New Delhi - 110 075<br />
Phone: 91-011-25074100 & 25074200<br />
Fax : 91-011-25093507, 25093514<br />
www.nhai.org<br />
M<strong>in</strong>istry of F<strong>in</strong>ance, Government of India /<br />
Department of Economic Affairs<br />
North Block, New Delhi<br />
www.f<strong>in</strong>m<strong>in</strong>.<strong>in</strong><br />
Department of <strong>Road</strong> Transport and <strong>Highways</strong><br />
Transport Bhavan<br />
1, Parliament Street<br />
New Delhi 110 001<br />
www.morth.nic.<strong>in</strong><br />
Department of Industrial Policy and Promotion<br />
Jo<strong>in</strong>t Secretary<br />
Secretariat <strong>for</strong> Industrial Assistance (SIA)<br />
M<strong>in</strong>istry of Commerce & Industry<br />
Udyog Bhavan, New Delhi-110 011, India<br />
www.dipp.nic.<strong>in</strong><br />
Reserve Bank of India (RBI)<br />
Foreign <strong>Investment</strong> Division,<br />
Shaheed Bhagat S<strong>in</strong>gh <strong>Road</strong>,<br />
Mumbai-400 001, India<br />
www.rbi.org.<strong>in</strong><br />
Registrar of Companies<br />
Department of Company Affairs<br />
M<strong>in</strong>istry of F<strong>in</strong>ance<br />
'B' Block, IInd Floor, Paryavaran Bhawan<br />
C.G.O. Complex, New Delhi-110 003, India<br />
www.dca.nic.<strong>in</strong><br />
Border <strong>Road</strong>s Organisation<br />
Seema Sadak Bhawan<br />
R<strong>in</strong>g <strong>Road</strong> Nara<strong>in</strong>a<br />
Delhi Cantt 110010<br />
www.bro.nic.<strong>in</strong><br />
Central Institute of <strong>Road</strong> Transport<br />
Bhosari, Pune - 411026, India<br />
www.cirt<strong>in</strong>dia.com<br />
<strong>National</strong> Portal of India<br />
www.<strong>in</strong>dia.gov.<strong>in</strong>/<br />
Directory of Indian Government Websites<br />
www.goidirectory.nic.<strong>in</strong>/<br />
Press In<strong>for</strong>mation Bureau (PIB)<br />
www.pib.nic.<strong>in</strong>/<br />
Foreign <strong>Investment</strong> Promotion Board<br />
M<strong>in</strong>istry of F<strong>in</strong>ance<br />
Government of India<br />
North Block, Lok Nayak Bhavan,<br />
New Delhi<br />
Not just roads... build<strong>in</strong>g a NATION<br />
http://www.nhai.org