National Highways Authority of India (NHAI) will compensate around Rs 700 crore to the infrastructure companies for the toll-free highways that motorists have been using after the demonetization of Rs 500 and Rs 1,000 currency notes announcement.
National Highways Authority of India (NHAI) will compensate around Rs 700 crore to the infrastructure companies for the toll-free highways that motorists have been using after the demonetization of Rs 500 and Rs 1,000 currency notes announcement.
On November 9, Ministry of Road Transport and Highways (MoRTH) announced that highways would be toll-free up to November 18. As the days progressed, the exemption limit was extended till November 24.
With a total of 16 days of toll-free highways in India, the government will have to foot the bill in the months to come.
"We are trying to work on the modalities for compensating the infrastructure companies. The government has to take a final call. The estimated amount of compensation would come to somewhere around Rs 700 crore, but it is a tentative assessment," said Raghav Chandra, chairman of NHAI to DNA Money.
According to Chandra, it would be ideal to pay part of the compensation amount at the earliest so that the cash flows of the companies do not get affected.
The concession agreement does state about compensation to the companies, which can be in the form of either monetary compensation or extension of concession duration. This time, the government is opting for paying the revenue to the infrastructure companies, instead of providing them with an extension in their concession period.
"The toll collection revenue will be paid by NHAI for the days when we did not collect it from motorists," said Sudhir Rao Hoshing, joint managing director of IRB Infrastructure Developers Ltd.
Explaining the calculation, Hoshing said the average toll collection of October will be multiplied with the total number of days toll-free highways. Therefore, depending upon the total number of Built-Operate-Transfer projects that each of the private players has with them, the total compensation amount would vary. For IRB Infrastructure Developers, the estimated amount during these 16 days of toll exempted highways comes to around Rs 5 crore from NHAI. Similarly, from the Maharashtra government, the compensation bill is around Rs 2.5 crore.
Industry players claim that the compensation amount can also be adjusted against the premium that is to be paid to NHAI for the toll collected.
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