Private investors’ interest in road development projects is witnessing an uptick, with the government awarding highway development projects for 750 km on build, operate, transfer (BOT-Toll) basis in the first two months of FY16. This is in sharp contrast to the 700 km of road projects awarded on this mode in the entire duration of FY15.Given the response, the government is now aiming at awarding about 3,000 km of projects on public-private partnership basis out of the total FY16 target of 10,000 km. So far this fiscal around half a dozen projects have received multiple bids from private players. The stretches for which the government has received bids include Solapur and Bijapur, Shivpuri and Devas, Raipur and Bilaspur, Hospet and Chitradurg, Reva and Jabalpur. All these projects have been stuck for at least three years.
A senior official in the ministry of road, transport and highways said, “We have taken several decisions in the last few months to enthuse private interest in roads projects. Developers can now take out their entire equity in finished projects to undertake new ones. We have awarded 750 km on BOT basis already compared to 700 km awarded on this model in whole of last financial year.”
Hemant Kanoria, CMD, Srei Infrastructure, said, “The government has shown all intentions to see things moving. In fact the projects that were stuck because of clearances for few years now, are getting sorted and several of them have been cleared.” During the UPA regime, 20,000 km of roads projects were awarded during 2010-12. However, most of the projects did not take off due to unavailability of land, delay in getting clearances and slowdown. When the NDA came to power last year, work on 9,000 km of roads was held up. Till now 39 projects for 4,700 km have been cancelled or letters of appointment have been withdrawn.
As many as 16 projects for 1,360 km need capital to start work. The CCEA has now authorised the National Highways Authority of India (NHAI) to loan resources from its corpus at a pre-determined rate of return to kickstart such projects, stalled due to lack of equity or inability on part of the concessionaire to disburse funds further.
“However, projects that are stuck for lack of ability of the developer to continue it or complete it have yet to find a solution. While it has been proposed that such projects be allowed to be taken over by new players, the government has not yet decide on it. Such projects are important because they are large in numbers,” Kanoria added.
Last month roads minister Nitin Gadkari said, “Infrastructure plays a pivotal role in bolstering the economy and finance minister Arun Jaitley has requested us to increase our targets to award Rs 3.5 lakh crore worth of highway projects in the next six months.” As many as 1,231 projects for 37,000 km have been readied for award in this fiscal.
The government has given the go-ahead to the Bharat Mala project aimed at developing 5,600 km of new roads in border areas at an estimated cost of Rs 56,000 crore. Another 4,700 km to connect religious and tourism centres and to enhance connectivity in backward areas is expected to come up at a cost of Rs 44,000 crore. World-class highways will also be developed to link 100 of the 676 district headquarters in the country.