Speaking at a seminar on infrastructure here on Friday, he said, "Roads have been essentially a responsibility of the government, though certain laws have been amended to make private sector participation possible." The government as provider of basic infrastructure had to delve into the issues like whether supply should precede demand or the other way around, Dasgupta said. How important was privatisation was also to be examined, he added.

The financing options for the roads sector included cess on petrol and diesel, external assistance, market borrowings and private sector participation, the NHAI chairman informed the gathering.

The build-operate-transfer (BOT) system was not very simple to implement, he said, adding that the NHAI had spent considerable time in developing a proper legal and institutional framework for BOT.

BOT-shadow tolling is another mode to attract private companies with the advantage that the concessionaire bears all the risks of toll roads except toll collection risk. Further, there are no alternative toll-free routes. Users willingness to pay is not an issue under this mode. Payments are related to traffic. Regular audits of traffic levels could be done, though this was not an easy proposition, Dasgupta said.

In the annuity-based approach, bids were made on the basis of fixed annual payments by the NHAI to the concessionaire company, he said. It has the advantage of low-risk payment stream of investors. It can be used to access safe long-term investors like insurance and pension funds. On the negative side, this approach was unrelated to the traffic actually plying on the road, the NHAI chief said.

Regarding the status of BOT implementation, Dasgupta said that model concession agreement has been finalised and a separate model is being developed for smaller projects. "Financial closure for the Durg bypass has been achieved and is imminent for the Moradabad bypass."

Bids had been invited for the 93-km long Jaipur-Kishangarh project, and other projects on the anvil included the Ahmedabad-Vadodara expressway, Tumkur-Neelamangala and Chinglepet-Trivendaram highways, Dasgupta said.The government support would be provided for equity, capital grant and shadow toll and annuity payments, he said.

About Rs 1,00,000 crore is needed to upgrade the national highway system, Dasgupta said, adding that four-laning and six-laning of the national highway development project would need Rs 54,000 crore.