Roads plan hits speed breaker

NEW DELHI: The government���s plan to build 20 km of highway every day will be delayed again as the Planning Commission has opposed a proposal by the ministry of road, transport and highways to change the system for awarding road projects that could have facilitated the execution. The model concession agreement favours the build-operate-transfer (BOT) model for building highways, under which the operator recoups his expense by collecting a toll for a designated period once the highway is completed.

The ministry now wants to adopt annuity method to develop more road projects, which has been rejected by the Plan panel, according to a top government official. Under the annuity model, an open tender is called and the project is awarded to the lowest bidder, only if it fails to get a developer through the BOT model.

���The commission has said the ministry should set a realistic target for construction of roads. It should not aim at something for which it needs to break the rules,��� the official said on the condition of anonymity. The Planning Commission is flexible but there are not enough funds for building all roads on annuity basis, he added.

The ministry has proposed that the nature of contract, BOT or annuity, should be decided at the time of awarding a project to a developer. However, the Planning Commission says that commercial viability of a project can be best decided by the market.

���And this can happen only if bids for a project are invited on the basis of BOT,��� the official said. The ministry is, however, positive that it is possible to build 20 km of highways every day. ���We may not achieve this target in the first year but eventually it will happen,��� said RPN Singh, minister of state for road transport and highways.

The highways sector requires investment of Rs 3,50,000 crore in the Eleventh Plan (2007-12) to complete projects of about 70,000 km. State spending on these projects is limited to Rs 2,50,000 crore and the balance has to be mobilised from the private sector under the public-private partnership (PPP) route.

The highways ministry is in a hurry to complete road projects as it has already missed several deadlines. The ambitious Golden Quadrilateral of highways still remains incomplete and the National Highways Authority of India (NHAI) was unable to award a single project in 2008-09.