NHAI to wrap up bids for 49 projects

With the road transport and highways minister Kamal Nath setting up an ambitious target to construct highways at a pace of 20 kms a day, the National Highways Authority of India (NHAI) is stepping on gas.

The authority has initiated bidding process for 49 projects across the country worth Rs 51,148 crore.

Once completed, the projects will provide connectivity spanning 5,074 kms.
“Some of the projects are in an advanced stage of tendering process. The process of financial bidding for all the projects is likely to be over by December this year. Some of them may even be awarded by then. We are planning to award all these projects by earlier next year,” said a top NHAI official, not wishing to be named.

Some of the mega projects for which bidding is underway are the 6-laning of 4-laned highways such as Pune-Satara (costing Rs 1,725 crore), Delhi-Agra (costing Rs 2,158 crore) and Dankuni-Baleshwar (Rs 2,400 crore).

These projects are a part of the Work Plan I envisaged by Nath and will be implemented on a public-private partnership basis.

Work Plan I comprises around 125 projects to be implemented across the country at a total investment of around Rs 99,728 crore.

The time frame for the implementation of the Work plan I is 2009-10.

While a majority of the 49 projects will be implemented on a build operate and transfer (BOT) toll model of highway development, certain stretches in Jammu & Kashmir, which are not likely to elicit response from private developers on tolling model due to high construction cost, will be taken up on the (BoT) annuity model of development.

Toll and annuity are a part of the public-private partnership (PPP) models of highway development.

Under the toll model, a private developer is entitled to a grant of up to 40% from the government as viability gap funding (VGF) and earns revenues in the form of toll from the project over a concession period.

Under annuity, there is no provision for VGF and the developer gets half-yearly payments from NHAI, while toll goes to the government. Almost six packages in J&K worth Rs 9,500 crore will be taken up on annuity model.

Despite bearing the entire cost of the project in the case of annuity projects, NHAI it remains confident about its wherewithal.

“Implementing annuity projects now or in future will not be a problem as we have sound financial capability. Our revenue from cess is around Rs 8,000 crore and growing at 5% annually and tolls will take care of annuity and VGF outgo,” said another NHAI official.