Model Concession Agreement Ham Nhai
Privately funded motorway projects in the country, whose prices are few and far away over the years, but which have recently shown the first signs of recovery, will soon receive a gunshot in the arms, with a tax protection clause strengthened in the concession agreement. Under the clause, the revenue potential of an operating transfer project (BOT-Maut) is reassessed every five years during the concession period every ten years. As a result, the concession could, if necessary, be extended at an early stage of the contract term, therefore increasing the security of cash flows. Rajeshwar Burla, Vice President, Icra Ratings, said the five-year traffic testing provision is clearly positive, as projects that are fundamentally weak due to lower-than-expected base traffic would have a chance of increasing the concession period at an early stage. Revised rate forecasts allow lenders to consider extending the duration of the debt and thereby addressing developer cash flow issues. Under the revised model concession agreement (MCA) for construction and transfer projects (BOT-Maut), the production potential of a project would be reassessed every five years during the concession period compared to every ten years. As a result, the concession period is extended to an early start in the term of the contract, which increases the security of cash flow. However, the government did not follow the developers` request to pay compensation in case a competing route arrived and caused the project`s limited traffic hijackings. The official stated that, since the MCA was proposing a review of the concession period on the basis of traffic flow, the concept of competing road did not need to be considered. Virendra D Mhaiska, The President and CEO of IRB Infrastructure, who recently distinguished himself as the highest supplier for the Bot Dankuni-Palsit project (63.83 km) and reporting a 4.5% sustainability grant, told the FE that the company has a preference for the BOT toll model, which allows investors to hold assets for more than 20 years , with a stable liquidity outlook for this period.