Sucheta Dalal :Road transport ministry to invite bids for projects worth $20 billion
Sucheta Dalal

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Road transport ministry to invite bids for projects worth $20 billion   

October 29, 2009


The road transport & highways ministry is planning to invite bids for projects worth $20 billion over the next 8 to 10 months. This is part of the ministry’s target to achieve about 7,000 km road addition per annum, out of which about 60% would be built on private-public participation (PPP) and on a build-operate-transfer (BOT) basis. The ministry is also coming out with new specifications for road projects over the next 10 days.


“To achieve the 7,000 km per year target, we will have to invite bids for road projects worth $20 billion in the next 8 to 10 months. Over the next four years, we are looking at road development projects worth $80 billion, out of which around $42 billion would be private investments,” said Kamal Nath, union minister of road transport.


The ministry expects to add 20 km of road per day, which adds up to its target of 7,000 km of road development or addition per annum.


“In July, during the rainy season, we built over 10 km road per day. I believe, by January, we will be doing about 10 km to 12 km per day. For this we will need to have 20,000 km of road under work in progress,” the minister added. During the past three months the ministry added about 2,000 km of road.


Speaking at the India-UAE Trade and Investments Seminar in Mumbai, Mr Nath said that the new specifications will look at improved technologies for the road sector besides a host of other issues so as to attract investment in the sector.


He said the government was looking at mega-road projects worth $1 billion with a length of 500 km to 600 km, which would ensure best of technology and management practices. The minister said India would need nearly $10 billion of foreign investment through debt, equity and pension funds for various road projects in the country.


Speaking on the various road projects currently in the tender process Mr Nath said, “There are 49 projects in the tendering process. In fact, we are attempting to bid out 11,500 km in the next eight months, which amounts to about 120 projects.” He added that a number of NHAI projects are also being awarded to builders.


Commenting on the toll revision, Mr Nath said, “Toll revision will aim at no toll for the local traffic. Toll for the commercial traffic, which moves from one district to other district or from one city to another city, will be charged, from what they would save on their fuel cost.”


Speaking on the financial closure of various road projects in India, the minister added, “You will be seeing many more road projects achieving financial closure. Indian road projects are the most viable road projects because of the increase in traffic that is taking place. We will see financial closure of many projects, in fact for some taking place even before schedule. That is what is going to drive the targets that we have set.”


“Finance will not be a problem for road development in India. India is a very credible investment destination. The road sector is India is important and also a viable and bankable sector,” added the minister.
- Amritha Pillay [email protected]

-- Sucheta Dalal