Highway Project Allocation Methodologies to change to boost growth
The government is redesigning the way highways projects are allocated based on the assessment of their viability. This step is taken to fast track the awarding of the highway projects, and thereby expediting the construction process. This move might be good for the infrastructure development of the country.
According to the sources, projects would now be bid out in three ways: in cases where no viability gap funding (VGF) is seen to be required, the build-operate-transfer (BOT) toll model will be adopted. In regards to the projects, which are likely to be viable with the support of VGF of up to 20%, the NHAI will formulate both the BOT (toll) and the EPC (Engineering, Procurement and Construction) models and leave it to the road ministry to take a final call on which way to go.
In the third category of projects, which are not going to work on the BOT (toll) model with VGF up to 20 %, the EPC model would straightway be followed. The NHAI (National Highways Authority of India) has so far this year awarded seven highway projects with total length of 798 km. Presently the focus has largely shifted to the EPC model due to lukewarm response to PPP (Public Private Partnership) projects. The NHAI authorities are in the process of inviting bids for another 394 km of projects.
Source- The Financial Express
BOT model, Build-Operate-Transfer, Development, Engineering Procurement and Construction, EPC, highways projects, Infrastructure, NHAI, VGF, viability gap funding
