Centre to award new road projects on PPP, hybrid model: Gadkari

MUMBAI, June 4: Even as state-run National Highways Authority of India (NHAI) received tepid response from the private sector for road projects, Union Road Transport and Highways Minister Nitin Gadkari today said the government wants to award more projects on Public-private partnership (PPP) and hybrid model. "No one (private players) was ready to participate in the PPP-based projects as they had lost faith (in the previous government). However, to encourage private participation, we have also introduced a hybrid model, where we will share the risk with them," Gadkari told reporters here. He said there is a renewed interest among private players, which was visible in the recent bidding for three road projects worth Rs 4,000 crore. "The situation has changed in the last two months when we saw a number of companies bidding for three road projects - 97.7 km Shivpuri-Guna (Madhya Pradesh), 20 km long Hospet- Chitradurga (Karnataka) and Solapur-Vijapur (Maharashtra) - which were awarded on premium. This shows their faith has been reinstated," he said. Gadkari said the government will, in the next 15 days, finalise the bids for another three Build-Operate-Transfer (BOT) road projects, including Agra-Etawah road project in Uttar Pradesh, Raipur- Bilaspur in Chhatisgarh and Mukarba Chowk to Panipat in Haryana. In the hybrid model, he explained, the government will share 40 percent of the cost, while the remaining will be contributed by the developer. The government will provide all the approvals and clearances including land acquisition, environment clearance, utility shifting and approvals from the railways. "The project will be awarded on annuity basis and we will also share two percent profit on bank interest. As we are ready to share the risk, we are hopeful of private participation. We will adopt any model to ensure that infrastructure is developed," Gadkari said. He further said the government has set a target of awarding road projects worth Rs 3.5 lakh crore in the next six months. "In the last one year, we have cleared nearly 80 projects worth Rs 3.8 lakh crore, which were stalled due to various reasons like land acquisition or environment clearance. We even terminated 44 projects. In next six months, we plan to award projects worth Rs 3.5 lakh crore on war footing basis. This will result in giving employment to 36,000 people," the minister said. He said the government has already signed agreements for nearly Rs 1 lakh crore worth projects. "Awarding Rs 3.5 lakh crore worth projects is a challenging target but there is a need to invest more in railway and infrastructure sectors for the growth of economy. We also plan to invest Rs 5 lakh crore over the next five years for developing road infrastructure," Gadkari said. He further said he will call a meeting of top bankers early next month to deliberate on ways to attract foreign investors as well as pension and insurance funds to invest in nearly 5,000 km of projects worth over Rs 1 lakh crore awarded on Engineering, Procurement and Construction (EPC) basis.