Highways in making, Government announces $93 billion for their development

National Highways comprise 2 per cent of India’s total road network, which is world’s second-largest road network at 4.80 million kms. NHs bear 40 per cent of total traffic and 65 per cent of freight and 80 per cent of passenger traffic. Indian government has launched projects worth $93 billion, which includes NHDP road building programme, worth $45 billion. This move has been made by projecting highways sector as a "unique opportunity" in terms of investments.

As per the Road Transport and Highways Ministry, which came out with a list of projects, these investment opportunities incorporate "new models being rolled out both for greenfield (hybrid annuity) and brownfield projects (monetisation)".

To attract bidders, it said a "peep into opportunity" unfolds "20,000 kms of NHDP length with total investment of $45 billion over next three years."

The flagship road building programme of government is the National Highways Building Project (NHDP). It contemplates development of existing National Highways (NHs) in various phases, to meet standards of world-class roads. NHDP is one of the world’s largest government-led PPP development programmes, which intends on awarding 26,000 kms of NH projects, out of which 20,000 kms are NHDP projects.

Government commented that the opportunities constitute "Bharat Mala project of $12 billion for 6,000 kms" scheme, which will provide connectivity to 123 district headquarters for $15 billion and construction of 350 bridges/ROBs in two years for $8 billion. It includes a "strong network of roads in the North-East and Border areas for $5 billion” and  'Char Dham' connectivity for 2,500 kms in mountainous terrains for $8 billion. It was further added that it intends on awarding  construction projects of 10,000 kms in this year  and has carried out prominent reforms to create financially pleasing projects, which will offer "unique opportunities to investors" based on their "risk/return appetite."

It also said, while elaborating on the fiscal incentives, that Right Of Way (ROW) free of all encumbrances for project land is being made available to concessionaires, while NHAI is providing capital grant (Viability Gap Funding) up to 40 per cent of project cost to increase viability on a case to case basis.

It will also give 100 per cent tax exemption for 5 years and 30 per cent relief for the next 5 years, which can be availed in 20 years.

It was also said that the Ministry is facilitating investments through policy initiatives that comprise use of long-term sources of funds like pension and insurance funds in the sector in consultation with Ministry of Finance and RBI, in addition to promoting long-term debt re-structuring.

Additionally, the government measures also encompass regulatory clearances to 80 stuck projects and railway clearances for 85 projects with railway over-bridges, golden handshake with developers for 34 projects worth $5.5 billion and fast-track dispute resolution that amounted in settling disputes from $2.3 billion to $0.2 billion.

Source: ET