21 road PPP projects without bidders in India, focus on EPC

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21 road PPP projects without bidders in India, focus on EPC

The Government of India has announced that twenty-one road PPP projects bid out by the National Highways Authority of India (NHAI) did not get a single bidder during the fiscal year 2013-2014.

At present 180 number of PPP projects under the Ministry are under construction through various agencies with total project cost of about Rs1,900 billion (US$31 billion)

The Minister of State for Road Transport and Highways and Shipping Shri Krishanpal Gurjar stated that the Ministry of Road Transport & Highways and NHAI have taken a number of steps for speedy completion of National Highway (NH) projects including streamlining of process of land acquisition and other statutory clearances, securitisation of road sector loans, introduction of revamped dispute resolution mechanism and close coordination with other ministries.

The Ministry of Environment & Forests (MoEF) has also de-linked the grant of Environment Clearance from the Forest Clearance for linear projects and treated the strengthening and widening of NH projects differently from the new projects and allowed the construction of the NH in the Non-Forest areas.

The Reserve Bank of India (RBI) has also advised all scheduled commercial banks to treat road sector debt as secured within the limits of 90 % of debt due enabling banks to allocate a larger portion of lending to road sector and also to reduce the cost thereon. Concessionaires/developers have also been allowed for harmonious substitution and re-schedulement of Premium quoted by them.

The lack of equity in the market there has also been one of the reasons of a lukewarm response from the bidders for the projects under Public-Private Partnership (PPP) mode during 2012-13 and 2013-14. During the year 2013-14, NHAI had awarded 17 projects for a total length of 1435.84 kms of which two projects are on PPP mode.

The Minister said considering the current market conditions, particularly with reference to the highway sector, focus of the Government is on implementation of highways through public funded Engineering, Procurement and Construction (EPC) mode. Once, the highways sector gathers momentum through execution of the EPC projects and current issues plaguing PPP mode are well-addressed, the focus on PPP mode including Build-Operate-Transfer (BOT) (Toll) would be restored in order to effectively take highways sector forward.

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