In what could be a shot in the arm for the National Highway Development Programme, the National Highway Authority of India is all set to receive a windfall of Rs 471 crore (Rs 4.71 billion) for the Vadodara-Bharuch six-laning project under phase-V of NHDP to be done on a build-operate-transfer basis.
According to government sources, the 83 km long Vadodara-Bharuch section on NH-8 is worth Rs 660 crore (Rs 6.6 billion), and has been awarded to Larson & Toubro Vadodara Bharuch Tollway Ltd. The concessionaire would pay Rs 471 crore (Rs 4.71 billion) upfront to NHAI. The concession period for the project is 15 years.
This is the second time in the span of a month that NHAI has received money upfront for a project. In December 2006, it had received Rs 504 crore (Rs 5.04 billion) for the Vadodara-Surat section, which is worth Rs 492 crore (Rs 4.92 billion).
This, in fact, is the highest advance funding NHAI has ever received for any of its project under NHDP. Both these sections fall under phase-V, which envisages six laning of 6,500 km of existing four lane highways in the country.
As per rules, government pays 40 per cent grant to concessionaires for highway projects, subject to competitive bidding.
However, in certain projects (normally those with good traffic density), if the concessionaire feels that he can recover his costs well within the concession period, he offers to give money in advance to NHAI for that project instead of seeking grant.
The same has happened in the aforementioned projects. According to analysts this also shows the concessionaire's confidence on the viability of the project.
After being criticised for going slow over issuing of contracts for the ongoing phases II and III A of NHDP last year, the NHAI has received a significant push.
Receipt of funds worth Rs 1,000 crore (Rs 10 billion) in a span of a month has given a headstart to phase V of NHDP, for which the Ministry of Road Transport and Highways have sought Cabinet clearance from the Centre, even as phase IV continues to lie in the deep freezer. Phase IV involves two laning with paved shoulders of 20,000 km of national highways.
The reason why the ministry is hurrying up phase V is due to the Prime Minister's special emphasis on six laning of highways. During his Independence Day speech last year, he had called for the need of six laning of national highways. Soon the ministry sought special permission for the phase's clearance, which it got in October 2006.
