The ministry of road, transport and highways (MoRTH) is examining a proposal to liberalise norms and allow government-to-government funding to mobilising additional resources for road development programmes.
Under the current norms, Exim (Export-Import) Banks of foreign countries are not permitted to lend resources to concessionaires based in their home states to develop highway projects in India.
A senior official in the know said, “As per extant regulations, government-to-government funding is not possible. One has to go in for open tendering. We are examining a proposal to do away with this requirement to mobilise resources for construction of highway projects.”
As per the model being examined, economically viable stretches of highways can be identified and put up for development as per the proposed financing norm to attract foreign participation in the sector.
“We want both domestic as well as foreign infrastructure development firms to participate in highway projects to avoid cartelisation. We are examining measures so as to ease financing constraints”, added the official.
The government’s efforts to ease norms for financing highway projects come at a time when foreign participation as well as investments from domestic private-sector firms have petered out due to regulatory hurdles and weak economic sentiments. Private road developers, including infrastructure majors GVK, GMR and Larsen & Toubro, have stopped investing in road projects owing to land acquisition problems and funding constraints in the last few years.
And at the same time, the NDA government led by Prime Minister Narendra Modi has drawn up an ambitious target to award highway projects worth Rs 3.5 lakh crore in the next six months.
Last Thursday, Union minister for road, transport & highways Nitin Gadkari said, “Infrastructure plays a pivotal role in bolstering the economy and finance minister Arun Jaitley has requested us to increase our targets to award Rs 3.5 lakh crore highway projects in the next six months.”
As many as 1,231 projects measuring 37,000 km have been firmed up for award by the ministry this fiscal.
The government has given the go-ahead to the Bharat Mala project aimed at developing 5,600 km of new roads in border areas at an estimated cost of Rs 56,000 crore. Another 4,700 km of roads to connect religious and tourism centres and to enhance connectivity in backward areas is expected to come up at an estimated cost of Rs 44,000 crore. Besides this, world-class highways will be developed to connect 100 of the 676 district headquarters in the country.