Instead of the mandatory process of awarding road projects under Public-Private-Partnership, the Ministry of Road Transport and Highways is now working on a plan to dole out projects under the EPC (Engineering, procurement and construction) mode, where the financial onus will be on the Government and performance obligation will be on the player bidding for the project.
The Highways Ministry is preparing a wish list for the new Government to have a greater leeway and choose between PPP and EPC modes while awarding projects instead of compulsorily trying out the PPP option, which has led to massive delays in two dozen highway projects.“We, at the Ministry, are currently following the recommendations of the BK Chaturvedi committee report, on executing road projects. Under their proposals, BOT (build-operate-transfer)-toll must be tried first, followed by BOT -Annuity and then the EPC, depending on the traffic density along the project stretch,” said the official.
“In the current situation, private sector participation has waned drastically, causing delays in awarding projects. With the new Government, we are hoping to ask for an overall increase in public-funded projects as well as streamlining the mandatory and complicated environmental clearances processes,” said an official from the Ministry.
“The sector has been facing a lot of difficulties in awarding and implementing projects through the PPP mode, primarily due to the financial downturn. At the moment the safest bet is to undertake the public-funded under the EPC mode,” he said.According to the official in the Ministry of Roads, the switch over to EPC — at least till the financial markets gain momentum - is important as it will help give the highway construction sector the much needed boost.In due course of time, as the existing two dozen projects on the PPP mode near completion and the new EPC projects get going, we could gradually shift back to the PPP award,” said the official.
In 2012-13, the Government managed to award projects amounting to just 1,116 km and 13 of the 22 PPP projects put on the block could not find any taker. This year, the Ministry has awarded only 1,436 km, for which developers have bid for only two PPP projects.