With the New land law, the Cost for Delhi-Jaipur expressway triples to Rs 18k crore
Touted as one of the important achievements of the United Progressive Alliance (UPA) government, the new land-acquisition law that came into force this January is turning into a major obstacle in the way of a key infrastructure project being pushed keenly by the Prime Minister’s Office.
Officials said that with a sharp increase in the amount of money that needs to be paid as compensation (as mandated by the new law) to landowners for the sites on which the projects are proposed, the cost of land required for the Delhi-Jaipur Expressway has gone up three times as the new law has. He further added that the National Highways Authority of India (NHAI) has advised the highways ministry that the project would be difficult to finance given its limited resource.
The cost of land for the 272-km expressway was earlier estimated at about Rs5,000-6,000 crore not long before the new legislation. Now with the passing of the new legislation, this has now gone up to Rs18,000 crore. The entire project is now expected to cost more than Rs32,000 crore, which includes the cost for shifting utilities and financing. The government is now contemplating hard to figure out how to structure the financial model to make it doable.
An official with the knowledge of the development said, “The spike in land cost has impacted the project strongly. Any private player who comes into the project would only contribute towards the construction cost which is about Rs6,000 crore. That still leaves the rest of the financial cost to be borne by the government.”
He added, “This doesn’t make a very good PPP (public-private partnership) project,” the person added. A meeting held last week to review the status of four key proposed expressway projects decided that officials should look at various options, such as building an elevated corridor using government land or building the expressway on the existing highway.”
Another official is of the view that, “We have asked the states involved—( Delhi, Rajasthan, Haryana) to review the project and inform us of their commitments on direct financial support, cost of nodes – entry/exit points into the expressway, or sharing of revenue from land near the nodes or entry points to the expressway with the government,” The official further added that there has been no such commitment received so far.
Interestingly, this January, the Prime Minister Office released a statement saying it had directed the Union highways ministry to send the project proposal to the Cabinet for approval by the end of February and that the state support agreements would be signed by then.
The project is to be awarded by September 2014 after completing all the intermediate steps and was announced by the Prime Minister in November 2013.
Source: The Economic Times
Awards of compensation, Cabinet, Delhi- Haryana, Delhi-Jaipur expressway, Infrastructure, New Land Acquisition Act, New land acquisition law, New Land Law, Prime Minister, Right to Fair Compensation and Transparency in Land Acquisition, United Progressive Alliance, UPA
