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: With an aim to give fillip to the highways building finance minister Pranab Mukherjee has increased allocation for the National Highways Development Programme (NHDP) by 23% to Rs 13,646 crore. Increased allocation for NHDP will mean that the National Highways Authority of India (NHAI), the implementing agency for the highway development, can use the money to provide viability gap funding (VGF) to the private developers who develop the projects.
NHDP envisages development and upgradation of the national highways in seven phases. The 5,846-km Golden Quadrilateral, which is almost complete, and 6,647 North South East West connectivity corridor form the first two phases of the mega highways construction scheme.
Reacting to the increased allocation in the budget, a top NHAI official said, “Enhancing the funding for the NHDP is a welcome step. The funding will be primarily used to make upfront payments in form of VGF to kick start the projects. With this a larger number of projects will be leveraged.”
“The move will reduce the dependence of NHAI on market borrowings and subsequently help the authority implement more projects,” said Vishwas Udgirkar, partner, infrastructure, PricewaterhouseCoopers. Highways construction body has welcomed the move. “Allocation is a welcome step but it requires proper management and planning to give impact to the existing as well as the future projects,” said M Murali, director general, National Highways Builders Federation.
The enhanced allocation will be put towards investments in NHDP-Phase III and phase V, which are currently under implementation by NHAI. NHDP phase III envisages upgradation and four laning of 12,000 km of national highways on a build operate and transfer basis. While phase V envisages six-laning of 6,500 km of national highways, including Golden Quadrilateral.
Incidentally, a total of 60 projects worth Rs 70,000 crore in both the phases could not be bidded out in the targeted timeframe of December last year owing to the credit crunch caused by global economic meltdown. However, the pace of highway development has not been very affected. In fact the numbers show that the growth of highway upgradation has gone up from 636 km in 2006-07 to 1,683 km in 2007-08 and further up to 2,203 km in 2008-09. In addition to the increased allocation for national highways, the government has also provided for a grant of Rs 1,988 crore to the states. This will be funded from the Central Road Fund. NHAI will...
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