Government may have to fund four-lane J-K highway

Over a year after it approved the project, the Government has concluded that it may have to bear the cost of the all weather four-lane highway...

Over a year after it approved the project, the Government has concluded that it may have to bear the cost of the all weather four-lane highway to the Kashmir valley.

All bidders quoted 20 to 40 per cent higher cost of construction than what was estimated by the National Highways Authority of India (NHAI).

Now, the NHAI has suggested that the mega project would not be feasible on Build-Operate-Transfer (BOT) mode and the Government might have to pitch in.

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“The NHAI had invited bid on BOT basis in July last year, but the price quoted was so high that we had to scrap the idea. At such high construction cost, the contractors would also want to charge high toll rates and that is not acceptable as per rules. The NHAI has re-examined the project and has said that the project would be most feasible on fully Government-funded Engineering, Procurement and Construction (EPC) mode,” said a senior official from the Ministry of Shipping Road Transport and Highways.

The issue was recently discussed with the Committee of Secretaries (CoS) and it has given the go-ahead to switch over from BOT toll mode to either BOT annuity or EPC mode.

On BOT annuity, the contractor pays upfront for the construction of a project. He recovers this amount through guaranteed payment per annum made by the NHAI. In EPC mode, the Government will have to pay Rs 8,500 crore to widen the highway. The expense incurred on BOT annuity will be far higher than the EPC mode as it will be spread across the concession period and would be affected by inflation.

In case of BOT annuity, the NHAI will also have to take the project to the Public-Private Partnership Project Appraisal Committee (PPPAC) for approval.

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“We have recommended that the project be carried out on the EPC mode. The proposal is set to go to the Cabinet for approval and once it gets through, the NHAI will immediately invite bids for the project,” added the official.

The 264-km-long project route will run parallel to NH-1A from the Udhampur-Banihal-Khanbal-Srinagar section and will involve construction of the country’s longest road tunnel between Banihal to Qazigand area.

NH-1A is closed down for weeks together every year due to heavy snowfall, choking the economic lifeline to the state.

A widened highway is expected to keep access to the Valley alive in bad weather days as well.

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The NHAI is planning several bridges and road tunnels to ensure an all- weather access.

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