Press Trust of India
New Delhi, Jan 28: To fast-track highway building, the government by March will award projects worth more than Rs 40,000 crore on the new hybrid model while 100 projects will be bid out next fiscal, Union Minister Nitin Gadkari has said. Thursday’s announcement comes a day after the Cabinet approved hybrid annuity model for building roads to fast-track highway projects, revive the Public-Private-Partnership (PPP) mode and attract more investments in the sector.
“We have already prepared 28 projects on hybrid model. Out of these, we will award four soon. We will award projects worth over Rs 40,000 crore by March,” Road Transport and Highways Minister Gadkari said. He added, “For the next year we are going to identify 100 projects on this hybrid model.” The hybrid annuity mode is set to revive the interest of investors in the sector who were shying away from bidding road projects due to equity crunch and other issues.
Under this model, the government will provide 40 per cent of the project cost to the developer to start work while the remaining investment has to be made by the developer. “Under hybrid mode 40 per cent grant in aid will be given by the government to the project with 60 per cent contribution from the contractor of which 30 per cent will be his investment and remaining 30 per cent from the bank,” Gadkari said. He said not only the government will offer the project with at least 80 per cent land acquisition but also provide necessary regulatory clearances like environment and forest besides utility shifting will be the responsibility of the government. “In this annuity we will collect the toll,” he said.
Adopting such a model for projects not found viable on BOT (Toll) mode, shall be more effective in terms of maximising the quantum of kilometres implemented within the available financial resources of the government. Gadkari said by adopting the model, all stakeholders in the PPP arrangement – the NHAI, lender and the developer would have an increased comfort level resulting in revival of the sector through renewed interest of private investors.