Such a significant violation of the state aid agreement signed between NHAI, the private road company and the state government in the construction of national roads has raised concerns among private investors, as the diversion of traffic to free roads undermines the viability of toll roads. «You can be sure that if someone builds a competing facility without compensating the existing highway developer, NHAI will strictly enforce the state support agreement,» Sinha said private investors and developers at a road show in Mumbai. «The agreement on state support is very weak,» said the head of a global infrastructure company that operates toll roads in India. «If state intervention is necessary to control offences such as the construction of free parallel roads causing traffic diversions, and the private developer intends to oppose it, the state aid agreement is not implemented. There is an urgent need to review the state aid agreement,» he said. Business Standard has always strived to provide up-to-date information and feedback on developments that interest you and have broader political and economic implications for the country and the world. Your constant encouragement and feedback on how to improve our offering has only strengthened our determination and commitment to these ideals. Even in these difficult times arising from Covid-19, we continue to commit to keeping you informed with credible news, relevant views and concise comments on current issues. However, we have a request. In the fight against the economic impact of the pandemic, we need your even greater support so that we can continue to provide you with superior content. Our subscription model has seen an encouraging response from many of you who have subscribed to our online content.
More subscription to our online content can only help us achieve our goals, to offer you even better and more relevant content. We believe in free, fair and credible journalism. Your support with more subscriptions can help us practice the journalism we are committed to. Support quality journalism and subscribe to Business Standard. Digital Editor Under various public-private partnership (PPP) models for the acquisition of infrastructure in different sectors, the development of a project is awarded in the form of a concession. At the time of award, a concession contract («CA») is entered into between the dealer authority and the dealer, with the dealer obtaining certain rights and obligations with respect to the value of the infrastructure, but not full ownership of the asset. Even if a dealer «owns» the asset, the «property» is returned to the appropriate government authority at the end of the concession period. However, the substitution agreements do not specify how such a substitution is applied to other agreements concluded by the concessionaire, such as the state aid agreement and the NHAI fiduciary agreement.
While the innovation agreement on the NHAI fiduciary agreement (at NHAI, the fiduciary intermediary (designated by the lenders) and the dealer are generally the parties) could be implemented at the same time as the implementation of the ca innovation agreement, the substitution agreements and certification bodies do not specify that NHAI will guarantee that the state aid agreement will also be renewed by the relevant state government at the same time as CA`s innovation. In addition to the CA and the dealer`s financing documents, lenders must also ensure the continuity of other contractual agreements of the dealer, such as engineering, acquisition and construction agreements («EPC»), operations and maintenance («O-M») and toll agreements (if applicable). The lenders` candidate may have the following options, (i) take over existing contracts for which innovation contracts are to be executed; or (ii) enter into new agreements with existing contractors; (iii) to appoint new contractors of their choice.