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Plan to monetise National Highways to fund road construction projects on Cabinet table today
With Nitin Gadkari setting a huge target of building 100 km of roads per day, his Ministry of Road Transport and Highways has proposed that a bulk of the money required for construction, especially the Bharatmala project, be raised through monetisation of public funded national highways projects.
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In a proposal to be taken up by the Cabinet on Wednesday, it has suggested that toll collection from 75 operational national highways be put on auction for bidding by private firms. These projects have been in operation for at least two years and currently generate toll of Rs 2,700 crore per year.
Successful concessionaires would be given toll collection rights for next 30 years in exchange for an upfront payment of a lump sum amount to the government. “We are looking at a revenue mop up of about Rs 80,000 crore,” said sources.
The proposed Toll-Operate-Transfer (TOT) bidding would be for 75 projects that were completed under the engineering, procurement and construction (EPC) route where the government provided the money and a developer executed the project.
The idea is to generate immediate resources while ensuring that operation and maintenance of constructed highways is more efficient. “The private sector is also better in terms of toll collection,” they said.
Operation and maintenance has been a concern area because of staff limitations of the National Highways Authority of India. Moreover, it’s a global practice to hand out O&M, including tolling rights, to private sector after completion and stabilisation of projects. “The existing operation-maintenance-transfer model works only for the short term, say 6-9 years, and the proposed transfer would ensure that O&M obligation of these roads would lie with the concessionaire until the end of the term,” sources added.
India plans to develop road projects spanning 50,000 kms and entailing investments of about $250 billion over the next five to six years.
Prime Minister Narendra Modi has put infrastructure development, mainly road construction, on top of his agenda. Sheldon Richardson Jersey
