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Rediff News  All News  » Business » Private sector roped in for roads

Private sector roped in for roads

May 28, 2005 14:28 IST
The government has decided to rope in the private sector for a project to widen road stretches of 2,200 kilometres.

This is in step with the emphasis on public-private partnership for road construction, National Highways Authority of India officials told Business Standard.

This means private investment in phase II of the national highways project will increase to nearly Rs 4,000 crore (Rs 40 billion), compared with Rs 1,600 crore (Rs 16 billion) earlier.

About 30 per cent of a total 7,500 km of the north-south and east–west corridors will now be developed through public-private partnership.

Officials said of the 2,200 km, about 1,400 km would be taken up on a Build Operate Transfer basis, while the balance 800 km would be on an annuity basis.

Under a BoT contract, a private operator takes the traffic risk and recovers investments over the concession period by levying tolls on roads developed by it.

In an annuity contract, the risk is borne by the government. The progress of work on the corridors has been slow and is expected to pick up this year. In April itself  contracts for 13 road stretches have been awarded.

All the stretches were funded either by NHAI or the Asian Development Bank. Officials said new schemes for widening roads would be through the private-public route.

These include four-laning of 10,000 kilometres on a BoT basis, strengthening stretches of 20,000 kilometres on an annuity basis, and six-laning 5,000 kilometres stretches and 1,000 kilometres of expressways.

For the expressways project, the government has tentatively identified 400 kilometres of the Vodadara-Mumbai expressway.

For the six-laning project, NHAI officials said the existing four-lane corridors in the Golden Quadrilateral were proposed to be taken up.

While NHAI has decided on about three stretches for six-laning, the rest would be identified after a feasibility study is conducted. Delhi-Agra, Delhi-Jaipur and Bangalore-Chennai could be taken up for six-laning.

Vishaka Zadoo in New Delhi
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