Despite the persisting weakness in private investments, the Modi government is on a spree to announce mega road projects, with poll-bound Uttar Pradesh and Punjab, where it wants to be seen on a development plank, in particular focus.
Iterating the objective of taking road construction to 40 km per day, almost double the current level, minister for road transport and highways said work on projects worth R1.3 lakh crore would start in Uttar Pradesh before the government’s term ends. This is in addition to projects worth over R60,000 crore currently under implementation in the state.
Gadkari said his senior colleague, home minister Rajnath Singh, would perform the bhoomi pujan on Friday for the Lucknow ring road, to be built at an estimated cost of R5,000-6,000 crore. Gadkari would lay the foundation stones for various other projects in the state over the next few weeks. “There is also a plan to build a Lucknow-Kanpur access controlled expressway, for which the detailed project report (DPR) is being readied,”the minister said. UP has an NH network of around 8,500-km at present.
Laying foundation stones for various projects in Punjab, Gadkari had said on Wednesday that projects worth R30,000 crore were in progress in Punjab and in the next three years, the investments would touch R1.5 lakh crore.
The minister added that work on three expressways — Delhi-Jaipur, Baroda-Mumbai and Delhi-Amritsar-Katra — would commence this year entailing a total investment of more than R1.25 lakh crore.
Road construction has been one of the primary focus areas of the current dispensation. Its effort has been yielding moderate results with the current pace of road construction being a just over 20 km per day from 12 km per day, when it assumed office. The target for the current financial year is, however, set at an ambitious 41 km per day.
The minister said funding projects was not a problem now, but lamented that the banks were a little conservative while lending to the highways sector.
The government has taken several steps to address the investment famine in the sector: It eased the exit policy for developers to enable them invest in new projects and introduced the hybrid annuity model, where the government bears 40% of the project cost. But with private investors remaining wary, the conventional engineering procurement and construction route is mostly being resorted to.