Ministry of Road Transport and Highways Current Affairs - 2020

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Union Cabinet authorises NHAI to set up Infrastructure Investment Trust

Union Cabinet approved the proposal of Union Ministry of Road Transport and Highways (MoRTH), which authorizes National Highways Authority of India(NHAI) to set up Infrastructure Investment Trust(s) (InvIT) as per InvIT Guidelines issued by Securities and Exchange Board of India (SEBI). This will enable NHAI to monetize completed National Highways that have a toll collection track record of atleast 1 year and the NHAI reserves the right to levy toll on identified highway.

Implementation

NHAI’s InvIT will be established as a Trust, named as ‘InvIT Trust’. InvIT Trust will be under Indian Trust Act, 1882 and Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014. It will be formed with an objective of investment primarily in infrastructure projects (as defined by Union Ministry of Finance) and may hold assets either directly or through an Special Purpose Vehicles (SPV) or a holding.

Significance

Infrastructure Investment Trust(s) (InvIT) as an instrument provides greater flexibility to investors and is expected to create following opportunities-

  • It would generate specialized Operation and Maintenance (O&M) Concessionaires.
  • It would attract patient capital (for about 20-30 years) to Indian highway market, as these investors are unwilling towards construction risk and are interested in investment in assets which provide long-term stable returns.
  • Retail domestic savings and corpus of special institutions such as mutual funds, Pension Fund Regulatory and Development Authority (PFRDA), among others, will be invested in infrastructure sector through InvIT.

Background:

Roads and highways are the lifeline of the economy, therefore, development of National Highways has a multiplier effect in terms of facilitating trade and enhancing overall economic development of a region. In October 2017, Union Government launched its flagship highway development programme called Bharatmala Pariyojana, for development of 24,800 km of roads for a total investment of Rs. 5,35,000 crore.

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Govt launches Pilot Project for using Fastags for Parking at Hyderabad Airport

To ensure the benefits of FASTag beyond tolling, the Union Ministry of Road Transport and Highways (MoRTH) has launched a pilot project for using FASTags for parking purposes at Hyderabad Airport. Conceptualised as FASTag 2.0, the tag would cover parking payments, fuel payments, etc. After the success of project in Hyderabad, it will be launched at Delhi airport.

Key Highlights

Pilot project has been launched in two phases. In Phase I, a controlled pilot testing is being undertaken, wherein only ICICI tags would be used, while, the Phase II of pilot would cover all other Issuer Bank tags. Other banks such as SBI, HDFC, IDFC and Axis are also in talks with airports in Mumbai, Bangalore & few of the malls to launch FASTag 2.0.

The FASTag 2.0 has many exciting use cases such as Fuel Payments, Enforcement (E-challan) payments, Access Management at offices & residence. The GST council has also mandated FASTag for all commercial vehicles which would be generating an E-way bill from 1 April, 2020. This integration will be a big boost to GSTN (Goods and Services Tax Network) as it would help in identifying leakages with respect to non-issuance/ miss reporting of E-way bill.

About National Electronic Toll Collection (FASTag) programme

It is the flagship initiative of Union Ministry of Road Transport and Highways. It has been implemented on pan India basis across National Highway toll plazas. The programme has given a major fillip to digital India initiative by converting cash toll payments to electronic and has thus enhanced transparency in entire tolling ecosystem.

Government has recently mandated to declare all lanes of fee plazas on National Highways as ‘FASTag lanes’. This has seen a much wider adoption of FASTags both in terms of new tag sales as well as higher transactions at the toll plazas. The mandate would further increase the penetration of National Electronic Toll Collection (NETC) and the higher NETC penetration will further ensure a seamless movement of traffic which would in turn bring down the overall Logistic cost in country.

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