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The model concession agreement could not be cleared owing to Finance Ministry's concerns on certain taxation issues.

New Delhi , Sept. 28

THE Government has decided to widen 6,500 km of four-lane highways into six-lane ones at a cost of Rs 22,750 crore as per the new model concession agreement (MCA) for road sector.

The new MCA, which was expected to be cleared by the Prime Minister's Committee of Infrastructure on Tuesday, would now be taken up by the Committee of Secretaries (CoS) meeting on October 13.

"All the new NHAI projects, including the widening of 6,500 km highways, would be awarded as per the new MCA. The MCA could not be cleared today as the Finance Ministry had some concerns regarding taxation issues," said the Minister of Shipping, Road Transport and Highways, Mr T.R. Baalu, on Tuesday.

The MCA proposed that in case there are changes in the taxation policy during the concession period that would hit the revenue stream of the road operator to an extent of over Rs 50 lakh per annum, then the operator would be compensated.

The 6,500 km road stretch consists of 500 km of Golden Quadrilateral and 800 km of select sections of highways. All these projects would be taken on a public-private participation basis, with design, build, finance, operate and transfer as the norm, the Deputy Chairman of Planning Commission, Mr Montek Singh Ahluwalia, said.

"The MCA would now be discussed in the Committee of Secretaries meet slated for October 13," the Secretary of Department of Road Transport and Highways, Mr L.K. Joshi, said.

The Planning Commission Adviser, Mr Gajendra Haldia, pointed out that each sub project would be of 100 km or more and the detailed project reports would be replaced by feasibility reports.

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