Fund crunch has forced Ministry of Road, Transport and Highways to backtrack on their offer to build the Eastern Peripheral Expressway under the Equipment-Procurement- Construction (EPC) mode. In the EPC mode, the Ministry would bear all financial obligation and the developer has to execute the project at the agreed cost.
The 135-kms long Eastern Peripheral Expressway project for connecting Uttar Pradesh and Haryana, bypassing Delhi, was expected to be launched by year-end. It will have to wait once again. The project first received Cabinet nod in July 2013, but could not take-off due to lack of private sector interest and viability gap funding requirements.
The EPC offer was lapped up by the fund-starved developers and as many as 167 submitted bids for different stretch of the `4,500-crore project. But now the Ministry says it will re-invite bids under the traditional format of public-private-partnership as it has no funds.
The Ministry had invited bids for smaller stretches of the under the EPC mode, as it failed to receive a single bid under the PPP mode in 2013. “We will be calling for fresh bids under the PPP mode soon. After studying the bids, we realised that there were a lot of dichotomies and overlaps. We also realised that the Ministry is currently not in the position to take up so much financial burden,” said a senior official from the Ministry.
“It is a long project and we see no reason to rush it. We have to be certain on all fronts before we start awarding projects this time to avoid delays,” he said. The 135-km long expressway connecting Sonipat in Haryana to Uttar Pradesh at the estimated cost of `4,500 crore was planned in 2006 following a Supreme Court order to form a ring road outside Delhi for channelling non-Delhi bound traffic bypassing the National Capital.
In order to hasten the project, the National Highways Authorities of India (NHAI) had split the Eastern Peripheral project Expressway into six packages. It had floated separate bids of shorter packages covering the 135-km distance between Haryana and UP.
The project was so far stuck due lack of private players coming forward with bids.“Seeing the declining interest from private players to participate in the build -operate- transfer (BOT mode), where the financial risk on the developer alone, the government doled out bids under both the Engineering, Procurement and Construction (EPC) mode but we realised it is not feasible,” said the official.
“Moreover the markets are positive and we are seeing a renewed interest in the developers. Since we will be giving out smaller stretches this time, we are expecting smaller players to come forward too,” he said.
Earlier this month, the Minister for Roads and Highways Nitin Gadkari met with the Haryana Chief Minister Monahar lal Khattar to sort out financial issues with the lenders for the Western Peripheral expressway, which is stuck midway. Khattar was also asked to sort out issues with the current contractor and find a substitute developer to ensure that the project got moving at the earliest.