India announces 100 road PPP projects for next year

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India announces 100 road PPP projects for next year

According to India's Road Transport and Highways Minister Nitin Gadkari, the Indian Government has plans to launch tenders for about 100 highway PPP projects during 2016.

The Minister said that the government will provide 40 percent of the total investment for each road PPP project while the private sector will provide the remaining 60 percent, which will be divided into 30% equity and 30% debt. The Minister added that 95 percent of problems pertaining to PPP projects had been addressed. The minister stated:

"All problems pertaining to the mode have been addressed and this year seven projects worth Rs.11,500 crore have already been awarded in contrast to nil last year."

We have recently reported that the National Highways Authority of India (NHAI), an agency of the Government of India, responsible for a road network of over 70,000 km, identified 15 road projects that needed funds to be completed for different reasons. These projects were awarded during the last years but the developers found rpoblems to complete them.

According to sources, the projects could receive funds through a loan basis at bank rate of 2%. NHAI has plans to develop a third party evaluation mechanism to determine the eligibility of the projects and the extent of bridge fund required to finish them.

Recently, ratings and analysis firm CRISIL informed in a report that the equity and cost overrun support required for under-construction BOT projects is about Rs285 billion. Furthermore, the government has also estimated that it will need a total of Rs4,000 billion including borrowings of about Rs1,530 billion over the following four years to finish the stalled projects under its flagship road building programme.

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