Road projects worth Rs 13, 500 crore have been awarded under the Public Private Partnership mode this fiscal, showing a shift in market sentiment, favouring infrastructure development. This is in sharp contrast to 2014-15, when projects worth Rs 6,300 crore could be awarded.
“Public-private partnership road projects worth about Rs 13,500 crore are either awarded or in advanced stages of finalisation so far this year,” said an official from the Ministry of Road Transport and Highways.
“last year, the Government was struggling in finding takers for the road projects in the PPP mode. The NHAI could barely award Rs 6,300 crore projects in all of 2014-15,” he said. While the number of projects awarded was only two in 2013-14.
According to the official, over-leveraged financials due to excessive exposure to highways and other infrastructure projects, equity crunch, constraints like banks reaching the ceiling as per sectoral exposure norms coupled with regulatory and other hurdles had resulted in developers shying away from PPP projects.
“Continued efforts from the Government to boost the sector have finally resulted in reviving the interest of the private players,” an official said.
“The Government is taking conscious steps to better project preparation and land acquisition issues, the big reasons for dimming the interests of the private road developers,” he said.
In order to regain the confidence of developers, the Government has also simplified procedures for appraisal, developed an exit policy for concessionaires and amicable settlement of disputes. The Ministry has also made amendments to the model concessionaires’ agreement and made provisions for one-time fund infusion for languishing projects, he added.
“Innovative project innovation model like hybrid annuity mode was introduced, where the Government bore 40 per cent of the initial project cost and the developer paid the rest. The Centre also roped in multi-lateral funding agencies like World Bank, Asian Development Bank to fund projects.
In 2015-16, one Build-Operate-Transfer (Toll) project has been awarded and bids for at least five projects are under process. The length of these six projects is around 665 km and estimated cost is Rs 9,200 crore.
These include Solapur-Bijapur project in Maharashtra, Raipur-Bilaspur in Chhattisgarh, Mukarba Chowk-Panipat in Haryana, Agra-Etawah bypass in Uttar Pradesh and Biaora-Dewas and Guna-Biaora in Madhaya Pradesh awarded to builders like Uniquest Infra, Essel Projects, Essel Infra, IRB Infra, Oriental Structural and Dilip Buildcon.
Besides, Il&FS Transportation Networks has emerged as the lowest bidder for two highways projects worth Rs 4,174 crore in Maharashtra, bids for which were invited by the NHAI.
Both the projects were earlier awarded to larsen & Toubro but NHAI’s inability to acquire required land had led to the developer exiting from the project.