Press Information Bureau

Government of India

Ministry of Finance

18-April-2012 17:45 IST

Development of physical infrastructure especially Roads and Highways needs to be expedited. Towards this purpose, there is a need to augment avenues for financing of such projects.

In order to provide a fillip to this sector as well as to further encourage public private partnerships in Road construction projects, Union Finance Minister, Shri Pranab Mukherjee in his Budget Speech 2012-13 had announced allowing ECBs for capital expenditure on the maintenance and operations of toll systems in the Roads and Highways sector provided these are a part of the original project.

This policy decision will provide an additional source of low cost capital and encourage greater investments in Road construction projects.

RBI is expected to issue relevant circular/notification giving effect to the aforesaid Budget announcement within 7 days.

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SS/SL

ECB for toll system capital expenditure allows low-cost financing to support road PPPs and project completion. Allowing ECB for capital expenditure on maintenance and operations of toll systems permits external commercial borrowings to fund toll-system capital works provided such expenditure is part of the original project; a regulatory circular/notification will be issued to operationalise eligibility and procedures.