All highways projects costing more than INR 50 crore will now be taken under engineering, procurement and construction (EPC) mode with a slew of steps being taken to infuse a fresh capital in the road sector, the government said on Thursday.
“The ministry has decided to take all projects costing INR 50 crore on EPC mode,” minister of state for road transport and highways Krishanpal Gurjar said in a written reply in the Lok Sabha. Unlike Public Private Partnership (PPP) model where the private sector has to fund the road building, in the EPC model, the government funds a highway, with private firms designing and building the road.
The government has recently taken a number of steps to boost investor sentiments and encourage more investment in the road sector in order to expedite projects, said Gurjar.
Gurjar said that “These include formation of a high level expert settlement advisory committee for one time settlement of old cases pending in the courts; to complete all pre-construction approvals prior to award of a project; streamline the process of grant of environment clearances by the ministry of environment and forests, facilitating exit to equity investors and infuse fresh capital into the sector.”
The government has also recently approved policy for rationalization of premium quoted by concessionaires in respect of highway projects that are stressed, he added. The highways sector has recently hit a low with bidders shying away from bids in the wake of a plethora of problems including equity crunch and delays in green nods and land acquisition.
Last week road transport and highways minister Nitin Gadkari had said that as many as 189 projects with a cost of INR 1,80,000 crore are stuck due to problems in land acquisition, delays in forest and environment clearances, non-transfer of defence land and hurdles in rail overbridges.
He has said that “Projects were bid out by previous government without even 10% of the required land acquisition. Work could not start on the project where financial closure took place two years back. Banks withdrew financial closure PPP mode is not possible now. We will work on EPC model for a few years.”
