12.7.09

Roadmap 2009

In what comes as a massive boost for highway projects in the country after years of sluggish progress, the government said it plans to raise a whopping Rs 1 lakh crore for construction of 12,000km of highways in the current financial year itself. Road transport and highways minister Kamal Nath made this announcement on Friday, days after finance minister Pranab Mukherjee’s Budget had signalled a 23% increase in central allocation for the flagship National Highways Development Project (NHDP). That, however, amounted to a mere Rs 8,578 crore. Nath said he would embark on international tours to raise at least 50% of the required funds from overseas investors. The rest would be raised from domestic investments. The ministry has set an ambitious target of building 20km of highways per day, a 10-fold increase from the present rate of 2km per day. Talking to reporters, the minister said, “We have to address problems in power, ports and airports, but unless you have a road connecting to them it will not work.’’ He added that the government was also looking at various innovative financing instruments to fund road projects and attract both the domestic and foreign investors. A release issued by the ministry said that the ministry, along with ICICI Bank, plans to conduct international road shows in Asia, Europe and USA for attracting investments in the sector. Nath said his ministry was also making an effort to involve pension funds, sovereign wealth funds and equity funds, besides other investment channels like banks to fund the road projects which would require an investment of over Rs 2 lakh crore from the private sector over the next five years. “About 60% of the projects will be on toll-based revenue models while the remaining would be on annuity and EPC (engineering, procurement and construction) contract models,’’ the ministry said in its release. Meanwhile, the National Highways Authority of India (NHAI) is preparing a work plan for 2009-10 which includes invitation of bids for 38 projects under NHDP involving an investment of Rs 42,331 crores. A senior NHAI official said, “We have prepared a work plan to construct 21,000km roads per year but we feel we can realistically achieve a target of 7,000km annually. That works out to 20km per day. Even with the most streamlined land acquisition process and monitoring, it would take us at least nine months to complete the process and only then the projects can be awarded.’’ Although official figures on how much land has been acquired for the planned 12,000km were not available, sources said “major work’’ is yet to be taken up. To accelerate the land acquisition, which is the seen as one of the major impediments in completion of highway projects, NHAI has now constituted a specialised team under the leadership of a chief general manager (land acquisition).

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