Road ministry wants subsidy to get over Bihar, N-E bumps

Barely three weeks after Chief Minister Nitish Kumar assured National Highways Authority of India (NHAI) officials that his government would...

Barely three weeks after Chief Minister Nitish Kumar assured National Highways Authority of India (NHAI) officials that his government would provide necessary security to executives and engineers working on highways in Bihar, a note drafted by the Ministry of Road Transport and Highways indicates this might not be enough to kickstart the stalled projects in the state.

The note that the ministry has prepared for the Cabinet Committee on Economic Affairs (CCEA), which it is planning to send this week, asks the government to enhance subsidy component or narrow down road size to get stuck private projects going in Bihar and the North-Eastern states. As many as 20 road projects, running into 1,000 km, have been stuck here, with promoters unwilling to come forward due to law and order problems, which also portend difficulty in recovery of large investments through toll collection.

The Road Transport Ministry is asking the Centre to either sweeten the projects by raising the subsidy to 60 per cent from 40 per cent or to scale down the project scope from four-laning to two-laning, with tolling entrusted to the NHAI. Subsidy, in other words, is a grant given by the government to the promoter to make the project viable for the latter.

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The ministry has claimed that private firms would start work if the funding pattern is changed and a caveat is issued to the state asking it to provide land for these projects.

The ministry is approaching the CCEA for a political verdict following objections by the Planning Commission and the Finance Ministry to increase in subsidy—known as gap funding—to 60 per cent.

If this request is turned down, the ministry is touting a scaledown to two lanes, citing low traffic flow along these stretches. Paring the size would lessen capital requirements for the project.

However, officials say the Bihar government is keen on retaining the project size to four lanes as some roads—such as the Patna-Muzaffarpur stretch—are important links to the North-East.

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These roads fall under the third phase of the National Highway Development Programme and the Special Accelerated Road Development Programme for the North-East.

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