Govt Promoting Joint Sector Projects For Roads
The participation of the private sector has so far been confined to small projects like road bridges, bypasses and railway overbridges. There are only two highway projects in the pipeline, both of which are in the state sector; one is in Maharashtra and the other is in Karnataka.
The private sector stand is that the government should share the financial burden and the risks.
The government can contribute by bearing the cost of land acquisition or by picking up equity.
Another option is that the government can participate in the equity on a 50:50 basis and the joint sector venture company can then raise funds from financial institutions.
It is indicated in the draft report of the ninth plan for the road sector that 4,000 km of two-lane roads are to be converted into four-lane roads. The government will either bear the cost of land acquisition for these projects or contribute through the equity route.
National Highway Authority of India (NHAI) chairman Yogendra Narain, who disclosed this at a seminar on Integrated Development of Highways and Ports yesterday, said 50:50 equity sharing is being attempted in Gujarat.
The NHAI and the Gujarat government are forming a separate company which will raise funds from financial institutions. Studies by the NHAI have assured project viability at a certain level of traffic density.
As regards the risk factor