Speaking to the press on the sidelines of a seminar on highway financing here on Thursday, minister of state for road transport and highways BC Khanduri said the National Highways Authority of India (NHAI) would be approaching the government for approval of Rs 35,000-crore second phase comprising the North-South and the East-West corridors.
The minister said it had been his endeavour to avoid time or cost overrun in completion of the National Highway Development Project (NHDP). The Golden Quadrilateral (GQ) was originally planned to be completed by 2004 and we are now going by that deadline. The target date for completion of the GQ was advanced to December 2003 in early 2000 and the minister had been maintaining that the project would be substantially completed by then.
There are land acquisition problems in Tamil Nadu, Karnataka, Andhra Pradesh, Maharashtra and to some extent in Orissa. Besides, law and order problem in Bihar and adjoining areas had also contributed to the delay, he said. Contract awarding procedure of multilateral agency also took some time.
Of the 5,846 km GQ, 1,327 km has already been completed while another 4,383 km was under implementation. Contracts for balance 136 km were yet to be awarded, he said.
Of the Rs 35,315 crore proposed to be spent on the phase-II, Rs 21,467 crore would come from cess on petrol and diesel and market borrowings, Rs 10,538 crore by way of loans from multilateral agencies and Rs 3,310 crore through private participation.
The North-South corridor linking Srinagar to Kanyakumari and the East-West corridor joining Silchar with Porbandar with four/six-lane highways, would be completed by the end of 2007.
The Rs 30,300 crore phase-I was financed through cess and market borrowings (Rs 18,846 crore), external funds (Rs 7,862 crore) and private sector (Rs 3,592 crore).
As part of its borrowing programme, NHAI would be signing an agreement next month with the Life Insurance Corporation (LIC) for a Rs 6,000-crore loan. The loan has been negotiated for 25 years with a moratorium of 10 years.
The LIC loan would come to NHAI at an interest rate of 100 basis point above government securities. Besides this, NHAI would also be required to pay the government an annual guarantee fee amounting to 25 basis point. The government was earlier asking for 120 basis point but it was negotiated and brought down to 25 basis point, said an NHAI official.