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Ministry to revive 34 highway projects worth Rs 26,000 crore

The Economic Times:  November 07, 2014

New Delhi: The highways ministry has showcased revival of 34 projects worth more than Rs 26,000 crore in its latest presentation on infrastructure targets to Prime Minister Narendra Modi, saying the projects spanning over 4,084 km are being restructured or converted from public-private partnership to engineering, procurement and construction (EPC) mode to get them going.

Of these, five projects have been handed over to the state governments concerned while another 18 will be awarded in EPC mode.

"The ministry can sanction projects up to Rs 1,000 crore in EPC mode without the cabinet approval. The strategy now is to divide projects into smaller parcels wherever possible and speed up the execution," said a senior National Highways Authority of India official, who did not wish to be identified.

The Prime Minister has set a target of awarding projects for the construction of 8,500 km of highways by the end of March 2015. Against a target of 9,638 km during 2013-14, the previous government managed to award projects for only 3,169 km.

Several restructured projects are awaiting clearances from competent authorities such as the PPP appraisal committee for award under the build-operate-transfer (BOT) mode on toll basis.

Most of the projects will, however, be awarded in EPC mode after inviting bids since the private sector investment in the highway sector is losing its sheen.

The Centre has terminated contracts for 36 highway projects over the past two years. The delays in the projects due to lack of clearances and land acquisition escalated the costs, rendering them unviable for most companies. The highways ministry is also trying to estimate the escalation in the cost of these projects due to the delays.

Road transport and highways minister Nitin Gadkari recently said that the government is preparing to attract investment of Rs 5 lakh crore in the next five years and approve nearly 500 road projects to be awarded. About 189 highway projects involving investments of nearly Rs 1,80,000 crore are stuck due to problems of land acquisition, delays in forest and environment clearances, non-transfer of defence land and hurdles in rail overbridges. Officials of the ministries of highways and railways had met last month to resolve interministerial issues which had delayed highway projects across the country.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

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