With the government ensuring 55% of the total km to be put up for bidding this year will be financed by private players, the country's highways could soon witness fast-tracked road construction, said official sources, adding that on an average per km cost of road construction is about Rs. 13cr, the government has targeted projects worth Rs.3.25 lakh-cr for bidding this year. About 40% of the 25,000 km to be awarded in 2016-17 would be on the hybrid annuity model and another 15% would be on Build, Operate and, Transfer (BOT) basis. In both hybrid annuity and BOT, investments are made by private developers. The remaining 45% projects would be on EPC basis where the government pays for the construction of highways. According to an industry insider, this number would be around 40-45% in 2016-17. Under the hybrid annuity model, 40% of the project cost is borne by the government and the rest by the developer. Under the public-private partnership mode executed through BOT, a road developer builds a highway, operates it for a stipulated amount of time and then transfers it back to the government. This model is implemented on an annuity or toll basis. Of the aggregate projects awarded in 2014-15, totaling a length of 7,980 km, EPC projects contributed a lion's share of 7,246 km, sources added.
📅Published on:
10 July 2016
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