The government proposes to spend the R6,500-7000 crore that it makes from higher excise duties on auto fuels on the roads sector, reports
fe Bureau in New Delhi.
That could come in handy for NHAI which is in the process of bidding out some 5,000 km of roads, the bulk of which, almost 60%, will be built via the EPC mode. While road projects are picking up pace — NHAI is understood to have already awarded 1,500-1,600 km so far this fiscal — the target of constructing 25 km a day is ambitious and unlikely to be achieved in the next few years. That’s because many promoters are strapped for cash with existing projects bogged down by the lack of timely clearances.
Even if projects are taken up via the EPC route, the amounts involved are large—to build 5,000 km would require roughly Rs 50,000 crore. And even if 2,000km is constructed in the EPC mode, that would require Rs 6,000 crore of equity. Given that not all infra players aren’t able to raise money in the capital markets, the projects could go abegging. However, EPC projects, for which NHAI has modified some of the terms should find takers.
