Private entities make a beeline for road projects

January 23rd, 2007

New Delhi: Will competition in the highway sector ultimately translate into lower user charges? As 2007 begins, private companies are jostling for road projects with renewed gusto. The National Highways Authority of India (NHAI) has been deluged by a staggering 143 pre-qualification (PQ) proposals for just eight BOT (toll) projects under NHDP Phase V.

As many as 49 firms (in various combinations) have submitted proposals to expand 1,405 km of identified highway stretches to six lanes. The total value of these projects is approximately Rs 9,133 crore and the entire bidding process is expected to close by the end of March. The Chennai-Tada stretch has attracted maximum attention with 25 proposals, followed by Gurgaon-Jaipur with 21 bids.

“The robust interest in NHDP V projects is very encouraging,” says chairman, NHAI, Pradeep Kumar. But this is just the start. Between Jan-March 2007, 996 km of projects in NHDP Phase 1 and 111 worth Rs 6,474 crore will be awarded, with bids being invited for 1,225 km worth Rs 7,766 crore in Phase V. Additionally, another 5,506 km of projects worth Rs 35,792 crore in Phases 11, 111 and V will be awarded in 2007-8, generating bids for a total of 9,132 km worth Rs 59,165 crore for 2007-08.

“The ability of the highway sector to generate competition among so many technically competent bidders is a good sign, likely to ensure both better quality roads and reduced user charges,’’ says Umesh Gupta, assistant V-P, Gammon India. Gammon is a key player in the highway sector. Presently, toll rates are fixed at 40 paise/km for passenger vehicles with tolled stretches fetching the government staggering amounts from the private sector by way of negative capital grants.

For example, L&T recently paid a negative grant of Rs 471 crore to NHAI to six-lane 83.3 km on the Vadodra-Bharuch section of NH-8, while Rs 504 crore was paid for the Bharuch-Surat section in December last year.

However, NHAI officials rule out any reduction in toll rates on grounds that toll rates are already among the lowest globally. “Besides, only a few high traffic density stretches attract negative grants, while a majority are contracted on positive grants,’’ says an official.

Source: TOI(Delhi-epaper)

Entry Filed under: Delhi Traffic News

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