World Bank, ADB funds for roads likely at Rs 1,917 cr

At a time when the government is proposing to accelerate road development progarmme, the assistance from the multilateral agencies like World Bank and Asian Development Bank is likely to slip by about Rs 1,600 crore to Rs 1,917 crore during 2010-11.

The government, as per the outcome budget of the Transport Ministry expects World Bank and ADB to provide Rs 1,917 crore for road projects during the next fiscal, down from Rs 3,507 crore during FY'10. The outcome budget outlines how plan and non-plan funding would be spent.

Of the total amount, about Rs 861 crore is estimated to come from World Bank and the remaining Rs 1,055 crore from ADB in 2010-11.

As per the revised estimate for 2009-10, the funding from the two agencies would be Rs 2,703 crore, against the budget estimate of Rs 3,507.22 crore.

Out of Rs 2,703.25 crore, Rs 1,889.51 has been received till January 2010.

Transport Minister Kamal Nath has set a target of constructing 20 km of highways every day, significantly up from 2.5 km per day achieved in the previous government. Nath, thus, proposes to build about 35,000 km of highways in the next five years. 

The outcome budget also says the National Highways Authority of India is evaluating bid documents for award of two road projects for operations and maintenance.

"Eight stretches for OMT (Operations, Maintenance and Transfer) have been identified...Request for Qualification (documents) for two projects are in the process of evaluation," the outcome budget said. 

Under an OMT contract, the successful bidder collects toll and maintains the highway stretch which has already been constructed.

Out of the eight projects, one concession agreement for OMT has already been signed in October last year and a Letter of award for another stretch has been issued.

The financial projections have also been drawn with assumption that all engineering, procurement and construction (EPC) stretches will be handed over to OMT concessionaire in a phased manner.

In a EPC contract, the government makes an outright payment to the road developer for construction work and the developer does not collect toll or maintain the stretch.

Even the stretches awarded on build-operate-transfer basis, where the developer collects toll and maintains the road for a specified period, will be awarded to OMT concessionaire after the specified period is over.