Future potentialities of todlling Indian highways and the international experience - legal and regulatory issues Hemant   Authors: Sahai (2002)   Download PDF (Filesize: 117 kb ) This paper addresses the key legal, regulatory and policy issues in India pertaining to tolling of highways, keeping in mind the existing regulatory framework and experience, and future needs of the road transport sector. The paper examines the structures employed by a few major projects in the Indian road sector in recent past, and attempts to identify the factors behind their success or failure, and the key learnings for the future. In conclusion, the paper proceeds to suggest a broad tolling policy framework inculcating these key learnings, and including elements drawn from a case study of successful models implemented overseas.

Public-Private partnership in the road sector - different financing mechanisms for Indian Highways   Authors: Sri Kumar Tadimalla and Sunaina Kilachand (2002)   Download PDF In the context of Indian Highways, it is seen that private sector involvement is key to improving efficiency and allowing access to large-scale implementation capacity. Although private sector involvement is desired, given the difficulties associated with financing projects entirely direct user charges, the road sector will continue to require government support, mainly in the area of collecting user charges and subsequently in ensuring that such funds are efficiently allocated across various projects. Hence, the rationale for public-private partnerships. Against the above backdrop, the paper will seek to examine the overall sustainability of the NHDP by focusing on two critical issues of investor confidence and ensuring effective provision of road services for users. In this context, we will examine different financing mechanisms to identify the model that is best suited for Indian highways.

Long-term forex scenario and its impact on external loans for the road sector   Authors: Vipul Chandra and Ravi Savur (2002)   Download PDF (Filesize: 960 kb ) A large part of the road sector in India has been financed by external assistance in terms of soft loans either to the Government or directly to the project executors. In case of the loans to the Government, the same funds have been on-lent to the road sector by the Government in INR effectively immunizing the project executors from the currency risks. Given the current market conditions, where there seems to be a paradigm shift in progress on the external value of rupee and the interest rates in the economy, it is pretty uncertain whether the rupee will appreciate or depreciate in the next 3-4 years. There can be equally plausible reasons in support of either view points. In view of such un-certainties, this paper reviews the costs associated with the indirect external loans to the road sector vis-à-vis the cost of a direct external loan on a fully hedged basis or on an unhedged basis.

Strategies of medium and long term borrowing in the context of interest rate situations   Authors: Mohit Batra and Anil Ladha (2002)   Download PDF The paper examines the practical aspects of the domestic bond markets and strategies for optimal execution of debt funding for NHAI. In light of NHAI's possible revenue streams, the paper examines the range of choces available to NHAI for domestic bond issuances in various interest rate scenarios. Necessary principles and mechanism for achieving the requisite credit enhancements vis-à-vis nature, stability and sustainability of the revenues (toll, cess etc.) are also included. The strategizing involves possible use of derivatives like options, swaps in optimizing the funding solutions.  The debt instruments include various structures depending on the requirements of specific investor segments. The paper also details the necessary steps to achieve an active and liquid secondary market for the debt instruments.