Road projects worth Rs13k cr awarded under PPP mode this fiscal

Barely Rs 6,300-cr worth projects could be awarded in FY15; while the number of projects awarded was only two in FY14

At a time when PPP projects in highways sector had taken a backseat, government's renewed focus on it has revived developers interest with projects worth about Rs 13,500 crore either awarded or in advanced stages of finalisation this fiscal so far.

In sharp contrast, barely Rs 6,300-crore worth projects could be awarded in 2014-15; while the number of projects awarded was only two in 2013-14.

"Over-leveraged financials due to excessive exposure to highways and other infrastructure projects, equity crunch, constraints like banks reaching the ceiling as per sectoral exposure norms coupled with regulatory and other hurdles had resulted in developers shying away from PPP projects but continued efforts to boost the sector have revived their interest," an official said.

Further, inadequate project preparation and lack of land acquisition on the part of NHAI had also resulted in discouraging prospective bidders to participate in new project bids, the official said.

To address these issues, the government is taking conscious steps including emphasis on better project preparation and land acquisition, simplified procedures for appraisal, exit policy for concessionaires, amicable settlement of disputes, operationalisation of IMGs, amendments to the model concessionaires agreement and one-time infusion for languishing projects, he added.

Besides, innovative project innovation models like hybrid annuity model was introduced and multi-lateral funding agencies like World Bank, ADB were roped in.

"As a result, participation of the Private Sector in PPP (public-private-partnership) highway projects has started showing signs of recovery...In 2015-16, one BOT (Toll) project has been awarded and bids received and are under process for five. The length of these 6 projects is around 665 km and estimated cost is Rs 9,200 crore," the official said.

These include Solapur-Bijapur project in Maharashtra, Raipur-Bilaspur in Chhattisgarh, Mukarba Chowk-Panipat in Haryana, Agra-Etawah bypass in Uttar Pradesh and Biaora-Dewas and Guna-Biaora in Madhaya Pradesh awarded to builders like Uniquest Infra, Essel Projects, Essel Infra, IRB Infra, Oriental Structural and Dilip Buildcon.

Besides, IL&FS Transportation Networks has emerged as the lowest bidder for two highways projects worth Rs 4,174 crore in Maharashtra, bids for which were invited by the National Highways Authority of India (NHAI).

Both the projects were earlier awarded to Larsen & Toubro but NHAI's inability to acquire required land had led to the developer exiting from the project.

The official said in contrast to the current trend, in 2014-15, only five BOT (Toll) projects worth Rs 6,300 crore involving 734 km could be awarded.

The projects were Aurangabad-Yedishi in Maharashtra, Kaithal-Haryana/Rajasthan border project in Haryana and Rajasthan, Bikaner-Phalodi in Rajasthan, Shivpuri-Guna in Madhya Pradesh and Hospet-Chitradurga in Karnataka.