Private Sector In Highway Projects

The government is planning to introduce 'shadow tolling whereby the private sector can undertake and develop national highway projects at their own cost and maintain the facility for a prescribed period.

In return, the entrepreneur will be reimbursed the cost along with reasonable returns on the investment through annual payment from the budget, union surface transport minister T G Venkatraman said yesterday.

Inaugurating a seminar on perspective planning for road development in India, Venkatraman said his ministry had initiated several steps for the development of national highways. Creation of Infrastructure Development

Finance Company (IDFC) and strengthening the capital base of National Highways Authority of India (NHAI) would also go a long way in facilitating private sector-funded road development programme, he said.

 

Under the shadow tolling, private sector will be allowed to develop sections of national highways including construction of bridges and bypasses on build, operate and transfer (BOT) basis with the prospective entrepreneur being allowed to charge a users fee on such sections.

This innovative method of financing could address some of the urgently needed development on the road network. At the same time, the minister cautioned that the procedures adopted should be uniform, transparent, competitive and fair.

Notwithstanding all the efforts, there was still a case for the creation of a dedicated fund for highway development, the minister said, and added that his ministry was exploring ways of creating this fund.

The two-day seminar has been organised by the Indian Roads Congress in cooperation with the surface transport ministry, other central ministries, state public works departments and leading public and private sector organisations.

Noting that the growth in the road network has not been able to match the high traffic demand, Venkatraman said the present share of road transport consisting of 60 per cent freight and 80 per cent passenger traffic is expected to grow to 65 per cent and 87 per cent respectively by the turn of the century.

He told the participants that since the situation on the state highways is none the better, the emphasis has to be on improving arterial network, especially the national highways to provide at least 2-lanes on all national highways and create 4-lane facilities on the high traffic density corridors.

He said a mere 3.5 per cent allocation for road development had adversely affected our road infrastructure and cited it as the main reason for not having kept pace with road development in the developed countries.

The seminar, being attended by about 300 experts, aims at providing a forum to planners, engineers and financiers to deliberate and share experiences and to chalk out a long term planning strategy for road development in the country.

Indian Roads Congress president M S Guram said in his address that investments in the road sector would have to be substantially increased and it would require about 25 to 30 per cent of the plan allocations.

As a first step, the allocation of road-related taxes to the road sector should be stepped up, he said.