The roads and highways ministry?s multi-billion-dollar plan to two-lane country?s single-lane highways, under national highway development programme, Phase 4, will be delayed. For, the finance ministry has shot down highway ministry?s demand for financial assistance from the World Bank. The finance ministry has informed the roads and highways ministry that financial assistance cannot be sought from the World Bank for viability gap funding (VGF) for roads built on private public partnership (PPP) basis.

Under the programme, the roads ministry headed by Kamal Nath was planning to upgrade 20,000 km of highways into two lane with paved shoulders.

?World Bank guidelines do permit assistance to be used for VGF. However, the support by the Bank may require a change in the model document approved by Public Private Partnership Approval Committee which is not desirable. We are, therefore, not in favour of recommending World Bank support for VGF,? finance ministry has informed the highways ministry.

The highways ministry had earlier sought a $2.96-billion long-term loan from the World Bank for expediting the pace of highway construction in the country. While $1 billion is already approved by the World Bank, the demand for remaining $2 billion did not find finance ministry?s support.

?Financing plan of National Highways authority of India (NHAI) must have envisaged borrowing from institutions like the World Bank. If that stream of funding is not available, the government should look for other options like levying additional cess or enhancing budgetary support,? S Vasudevan, infrastructure expert at consulting and auditing firm KPMG said. The government may also have to consider increasing the cap for raising funds by National Highways Authority of India.

Roads and highways minister Kamal Nath met World Bank chief Robert Zoellick last year to widen the scope of the Bank?s funding in the road sector to annuity-based projects. The financial assistance provided by the international Bank has largely been limited to government-funded highway projects.

Between June 2009 and May 2010, 118 projects with a combined length of 7,478 km have been awarded by the roads ministry taking the total work in progress to 12,348 km. In 2010-11, the ministry plans to award another 12,000 km.