The NHAI asked the roads ministry to reconsider its decision to construct the proposed 265-kilometers Expressway, which was earlier envisaged on the lines of Yamuna Expressway and came up recently for fast-track clearance in the steering committee for infrastructure set up by the prime minister.
In a letter written to the secretary-roads, Vijay Chhibber , NHAI chairman R P Singh said: "The original idea of construction of the expressway with development of townships alongside is unworkable. Keeping in view the present scenario, it is unlikely that expressway will get favourable response from the market."
The expressway was part of the government's original plan of constructing 10 expressways by 2006-07.
The prime minister's steering committee on infrastructure asked the roads ministry to work on the financial model for the Delhi-Jaipur Expressway and complete the pre-feasibility study by August 15 so that the proposed project could be awarded at the earliest.
However, with the difference of opinions between NHAI, road ministry and Planning Commission, the pre-feasibility study is yet to be completed and the financial model is still not decided.
Singh said in his letter that even the per kilometer construction cost of this expressway projected is estimated to be upwards of Rs 50 crore.
"In the present juncture it is very unlikely that the private sector will be interested in making such investments."
Singh said that even after several meeting with merchant bankers, institutional lenders and developers "implementing the expressway through BOT, would be a big challenge."
He has also cited that the fall in the traffic has also raised questions on the viability of the project "even with high levels of viability gap funding."
"Out of the cess/toll allocated to NHAI, there is no likelihood of any surplus being available for expressways. In fact, for the past two years, a part of the share of the cess revenue of NHAI has been withheld by the government as also the plough-back of toll revenue, premium etc. The NHAI, therefore, has no financial resources to think of expressway projects," Singh said in the letter.
Sources said where NHAI is totally against the project citing lack of finances, road ministry is yet to decide any one particular financial model -- whether to explore the model suggested by the Planning Commission to monetize real estate along the sides of the expressway or to take a loan from Japan.
The pre-feasibility study is now at early stage, the estimated net present value of the project is said to be pegged at Rs 7,691 crore.
"NHAI has directed the ministry to also talk to the CEO DMICDC Amitabh Kant to look into the possible financial models. Ministry officials have met him and he has suggested us that a loan from Japan can be availed for 40 years at a 0.4% interest rate with a commitment that 30% of the contracts have to be given to Japanese firms or a 30-year loan at a 1.4% interest rate with some conditions. So it is now for the ministry to decide," said a senior official from the ministry of road transport and highways.
The Planning Commission recommended the model adopted by states in the case of Ganga and Yamuna Expressway for Delhi-Jaipur Expressway also. In case of Ganga and Yamuna expressways, the land along the sides of the expressway are sold to real estate players for developing townships to fund the deficit amount of the construction.
Sources said given the difference of opinion among the various government departments, it is unlikely the Delhi-Jaipur Expressway would be awarded anytime soon.
Vishwas Udgirkar, senior director at Deloitte said, "We already have an expanding national highway on the same (Delhi-Jaipur) stretch, that itself is taking a lot of time in construction. The traffic projections are also slipping, so I do not think the idea of developing an expressway on the same route makes sense now."