Highway sector targets Rs. 3,23,000cr for 12th Plan

The Indian construction and infrastructure industry is awaiting huge business potentials, as the government has set up a whopping investment plan of Rs. 3,23,000cr for the 12th Five Year Plan and more than double of which is set to flow from the private investors engaged in the road sector. In this connection, the working group for the Plan period has already recommended to the government to increase private investment in the road sector to Rs. 1,66,738cr from the current Rs. 62,630cr for the Plan period. The projected increase in private investment in the sector will raise the percentage of private sector involvement and contribution in the road sector to 51 from 41 percent currently. The overall expenditure in the road sector for the next Plan period will also be doubled from Rs. 1,52,201cr to Rs. 3,23,000cr.

According to available reports, the NHAI has witnessed increased interest for road project from private builders and has been able to award 21 out of the 33 projects on a premium. The premium income from these 21 projects would be in between Rs. 2,500cr and Rs. 3,000cr per year and will increase by five percent every year till the concession period ends. The increased premium offering means that the companies are committing to an annual payment to the government over a period of time instead of seeking grants for building the road stretches. At the same time, the increase in premium income has also slashed NHAI’s borrowing requirement by a half and in the changed scenario, the authority as per prior estimates needed to generate Rs. 191,000cr by 2030-31. But in the changed scenario, its requirement stands reduced by Rs. 1 lakhcr to Rs. 83,000cr, they said.