Government announces highway projects worth $93 billion to woo investors

NEW DELHI: Projecting the country's highways sector as a "unique opportunity" for investments, government has rolled out projects worth $93 billion, including the $45 billion flagship road building programme NHDP.

Investment opportunities include "new models being rolled out both for greenfield (hybrid annuity) and brownfield projects (monetisation)," according to the Road Transport and Highways Ministry which has come out with a list of such projects.

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

National Highways Building Project (NHDP) is government's flagship road building programme which envisages development of existing National Highways (NHs) into world-class roads in different phases.

It is among the largest government-led PPP development programmes in the world.

It said it intends to award 26,000 kms of NH projects, of which 20,000 kms are NHDP projects.

The government, releasing a document on highways sector, said the opportunities comprise "Bharat Mala project of $12 billion for 6,000 kms" scheme for providing connectivity to 123 district headquarters for $15 billion and construction of 350 bridges/ROBs in two years for $8 billion.

Besides, it includes 'Char Dham' connectivity for 2,500 kms in mountainous terrains for $8 billion and a "strong network of roads in the North-East and Border areas for $5 billion."

It said it intends to award projects for construction of 10,000 kms this year alone and had done significant reforms to create financially attractive projects to offer "unique opportunities to investors" based on their "risk/return appetite."

Elaborating on fiscal incentives, it said right of way (ROW) for project land is being made available to concessionaires free from all encumbrances, while NHAI is providing capital grant (Viability Gap Funding) up to 40 per cent of project cost to enhance viability on a case to case basis.

Besides, it would provide 100 per cent tax exemption for 5 years and 30 per cent relief for next 5 years, which may be availed of in 20 years.

It said the Ministry is facilitating investments through policy initiatives that include use of long-term sources of funds like pension and insurance funds in the sector in consultation with Ministry of Finance and RBI besides encouraging long-term debt re-structuring.

Besides, government measures include 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 which resulted in reduction of disputes from $2.3 billion to $0.2 billion.

India has the world's second-largest road network at 4.80 million kms and NHs comprise 2 per cent of total road network bearing 40 per cent of total traffic and 65 per cent of freight and 80 per cent of passenger traffic.