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The Union Minister of Shipping, Road Transport and Highways, Thiru T. R. Baalu today said that the Government has taken a number of steps to facilitate participation of private sector in development and maintenance of National Highways. He was speaking at the third Meeting of the Consultative Committee of Members of Parliament attached with the Ministry of Shipping, Road Transport and Highways, here. The subject for the Meeting was Public-Private Sector Participation in Road Sector.
Speaking on the occasion, Thiru Baalu said that the public-private partnership models currently being used in National Highway projects are: Build Operate and Transfer (BOT), Build Operate and Annuity and Special Purpose Vehicle (SPV). In a BOT project, the concessionaire (private sector) is required to meet the upfront cost and the expenditure on annual maintenance. The concessionaire recovers the entire upfront cost along with the interest and a return on investment out of the future toll collections. So far, 32 projects (22 by the Ministry and 10 by NHAI), estimated to cost about Rs.4694.31 crore under BOT-toll basis covering a length of 765.36 kmshave been taken up by the Ministry and the NHAI. Out of the same, 22 projects have been completed and 10 projects (5 by the Ministry and 5 by the NHAI) are under progress, the Minister informed.
In an Annuity project, the concessionaire (private sector) is required to meet the entire upfront cost (no grant is paid by the client) and the expenditure on annual maintenance. The concessionaire recovers the entire investment and a pre-determined return on investment out of the annuities payable by the client (Government/NHAI). The client retains the risk with respect to traffic (toll) since the client collects the toll. The NHAI has awarded 8 projects covering an aggregate length of 476 km under BOT-Annuity basis at an estimated cost of Rs.2353.70 crore, out of which, 2 projects aggregating to a length of about 94 km at a cost of about Rs.475 crore have been completed, the Minister said.
The NHAI has also formed Special Purpose Vehicles (SPV) for funding road projects. SPVs are separate legal entities formed under the Companies Act 1956. It involves very less cash support from the NHAI in the form of equity/debt; rest of the funds come from Ports/financial Institutions/beneficiary organisations in the form of equity/debt. The amount spent on developments of roads/highways is to be recovered in prescribed concession period by way of collection of toll fee by SPV. Thiru Baalu informed that 12 projects covering a length of 407 km at an estimated cost of Rs. 2,266 crore have been identified under Special Purpose Vehicles (SPV) funding. Out of which, 5 projects amounting to Rs.923 crore have been competed and 7 projects valued about Rs.1343 crore are in progress, he said.
The Meeting was attended by the Minister of State for Shipping, Road Transport and Highways Shri K.H.Muniyappa, Shri M.Rajamohan Reddy, Smt. D. Purandareswari, Shri Anantha Venkatarami Reddy, Shri Faggan Singh Kulaste, Dr. H.T. Sangliana, Shri S. Ajaya Kumar, Ms. V. Radhika Selvi, Shri Kamala Prasad, Dr. R. Senthil, Shri Laxman Rao Patil, Shri Hari Kewal Prasad, Shri Brahmananda Panda, Shri Lakshman Chandra Seth, Shri Silvius Condpan, Dr. T. Subbarami Reddi, Shri Manoj Bhattacharya and Dr. Alladi P. Rajkumar, all Members of Parliament, and senior officers of Ministry of Shipping, Road Transport and Highways.
NSD/BS
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