New Development Model for Road Projects on Card

Discussion in 'Growing and Managing a Business' started by indianewprojects, Apr 2, 2014.

  1. indianewprojects

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    Mar 19, 2014
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    The Planning Commission, which has held consultations with the NHAI, state governments and the private sector, is in the final stages of developing the new model concession agreement (MCA).
    •How it will help developers: Developers would have to bring in less money and borrow as well thereby reducing financial stress in PPP model of road development.
    •Developer’s financial risk will be lot less and only undertake project risk that is design, construction and operation.
    •How it will work: In the new proposed model govt to pay 50% of project cost to developer during construction period when financial burden is generally high. Rest will be paid as annuity + interest during operation period.
    •Government will Gain too: In the new model annuity will be lower because of upfront payment. It is better than traditional EPC of cash Contracts. It would improve PPP situation.

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