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Rediff News  All News  » Business » India's grand highway project needs Rs 30,000 cr

India's grand highway project needs Rs 30,000 cr

August 23, 2005 14:06 IST

The road transport and highway department has sought additional budgetary support of Rs 30,000 crore (Rs 300 billion) over the next 10 years for financing the new phases of the National Highway Development Programme.

The additional support would be used for providing to viability gap assistance for the build-operate-transfer projects besides being used for land acquisition and clearing of utilities, officials in the road transport and highway department told Business Standard.

They said depending on the extent of budgetary support, the government would finalise the extension of the Central Road Fund.

The cess on petrol and diesel is transferred to the CRF, which would be in place till 2017-18 for financing the first two phases of NHDP: the Golden Quadrilateral and the North-South and East-West corridors.

The cess is proposed to be levied till 2029 if the National Highway Authority of India has to rely on the CRF and market borrowings to fund its highway programme.

If the Rs 30,000 crore assistance comes through, roads and highways department have proposed that the cess should be levied till 2024 to take care of the construction needs.

With four more phases of the highway programme to be undertaken, the duration of the cess would be extended, officials said. This will help NHAI's market borrowing as the receipts from the cess can be securitised.

The government recently announced over the next 8-10 years, four more phases would be taken up under the NHDP at an estimated cost of Rs 170,000 crore (Rs 1,700 billion).

This included upgrading 1,000 km highway, construction of 1,000 kms of expressways and six-laning 5,000 kms, in addition to the construction of overbridges and flyovers.

The details of financing these projects has been left to the roads and highways department. The proposal for the next four phases would be put before the Public Investment Board shortly, officials said.

The government has cleared Rs 1,400 crore (Rs 14 billion) additional budgetary support for widening of 4,000 km under phase III.

Vishaka Zadoo in New Delhi