EPCs will throw a lot onto government’s turf
The other alternative, annuity is not possible given the mega road expansion plans set out in the 12th Five Year Plan. Annuity based projects are costlier and the finance ministry just cannot finance project support on such scale. The only option also supported by global experience is adopting the EPC mode. But this means awarding 4,000 km of projects in the current fiscal is impossible.
Officials claim they will be able to award projects for just about half that length in the time available till March 31, or 2,000 km but that too seems difficult, as the ministry has cleared approvals for only 140 km so far.
Beyond the pace of approval, the issue with EPC is ownership of the project, once it is completed. The contract period for the project post construction is only two years, as per the EPC model agreement. So for premium projects, the government will have to collect tolls to recover the costs. Just imagine a political party picking up
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