State highways get a PPP boost

NEW DELHI: After national highways, it is now the turn of state highways to get an impetus through public-private partnership (PPP). The Centre has proposed a model concession agreement (MCA) for PPP projects in the state highways sector in response to requests from several state governments for the same. It has set out clear obligations of the state government and concessionaire so as to expedite road construction and clearly define each party’s role.

The MCA directs the concessionaire to ‘make reasonable efforts’ to facilitate the acquisition of land required as well as procure the appropriate licences, proprietary rights and permissions for materials and methods used in the project highway. Projects constructed on build-operate-transfer (BOT) basis will be transferred to the state government on termination of the agreement.

The state government, on its part, is under obligation to ‘provide all reasonable support and assistance’ to the concessionaire in procuring applicable permits required from any government department for implementation and operation of the project. It is also the duty of the government to see that no local tax, toll or charge is levied on the use of the project highway.

The issue of removal of utilities, which has been a point of argument and delay in national highways, has been addressed, with the responsibility jointly entrusted to the concessionaire and government. While the concessionaire will undertake actual shifting, the cost of such shifting will be borne by the government or by the entity owning such utility if the government so directs.

Construction companies often hesitate to undertake work if there is a fear of a competing road being built near the site of their project highway.

To this end, the MCA has directed the government to refrain from constructing a competing road before ten years of the project’s operation. However, the restriction will not apply if the average traffic exceeds 90% of its designed capacity in any year.

State highways constitute 4% of the total road length and measure 1,31,899 km in length. State highways provide linkages with the national highways, district headquarters, important towns, tourist centres and minor ports and carry the traffic along major centres within the state.