Frequent tussles over the state acquiring land for private sector projects seem to have forced a strategy rethink in the government. Raising questions on the viability of expressway projects worth over R4.5 lakh crore, the National Highways Authority of India has proposed that private companies developing expressways must acquire land on their own.
The move could hit the feasibility of over 18,000 km of expressway projects that NHAI is planning to bid out. Firms like Reliance Infrastructure, GMR Infrastructure, GVK Industries, Larsen & Toubro and HCC are believed to be keen on these projects. Officials from some of these companies have told FE that it would be near-impossible for them to acquire land without government support.
Official sources said the NHAI is also working on new bidding criteria for expressways under which bidders would be selected on the basis of lower toll rates and facilities like shopping complexes and hospitals which would be developed alongside the expressways.
Currently, the entire land acquisition for a national highway project is done by NHAI. The authority awards a project only after acquiring 80% of the land required for the project. Private concessionaires pay a part of the compensation for land acquisition after the award of the project.
Sudhir Hoshing, chief executive officer (roads), Reliance Infrastructure, said: ?It would be almost impossible for private players to acquire land directly from the market. Land owners can charge whatever they feel like. When the government acquires land, there is a standard price. If we (private companies) have to buy land, then that would indeed jack up project costs.?
A senior executive of a Hyderabad-based road developer, who spoke on condition of anonymity, echoed similar views: ?It would not be possible for us to acquire land without support from the government and NHAI. Also, state governments could be averse to land acquisition by private companies even if proper compensation is paid.?
The NHAI proposal endorses West Bengal chief minister Mamata Banerjee’s line of thought. An expert committee in the state has recommended that the government should play no role in acquiring land for industrial projects. NHAI officials maintained that the proposal was still in the discussion stage and would be applicable only in the case of pilot projects. ?Land acquisition for highways has less resistance as it does not require large amounts of space. Unlike industrial projects, they do not require relocation of a lot of people. However, there would still be many concerns raised on this proposal, which is why we have decided to restrict it to pilot projects only for the time being,? the official said.
The highways authority plans to build two expressways on a pilot basis. Earlier, the plan was to construct expressways linking Jaipur and Chandigarh to New Delhi. The projects were estimated to cost around R14,000 crore. NHAI, however, seems to have dropped that idea. It may now have a pilot project on the Chennai-Bangalore route. The NHAI official said the focus has shifted to Chennai-Bangalore because of high land prices in north India.
?Prices around Delhi, Haryana, Chandigarh and Jaipur are very high compared to the surrounding areas of Bangalore and Chennai. As it is, the construction cost of an expressway could be as high as R20-35 crore per km. If land prices are high, the project cost would go through the roof,? the official said.
The proposal was discussed at a meeting in Chennai on Monday where the representatives of companies like GMR, L&T, Soma Enterprises and Reliance Infrastructure were also present. NHAI has expressed its willingness to offer only legislative support for these projects. The companies can submit their alignments to NHAI and after the authority’s consent, they can start acquiring land for the project. ?The alignment cannot bite into the traffic of existing roads or highway in the area,? he said.
