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Union Minister Nitin Gadkari recently has emphasised the vital role of infrastructure in bolstering India's economic strength. The Ministry of Road Transport and Highways (MoRTH) has decided to convert 25,000-30,000 km of two-lane highways into four-lane roads, with an estimated investment of INR 10 lakh crore. To fund these projects, Gadkari mentioned that the government would encourage the Infrastructure Investment Trust (InvIT) model to attract investments from domestic sources. He also outlined plans to revise the Build-Operate-Transfer (BOT) model and implement toll systems for long-term highway maintenance. Gadkari highlighted his ambition to complete INR 5-6 lakh crore worth of road projects annually.
Union Minister Shri Nitin Gadkari recently discussed the importance of infrastructure in making India a major economic force. During a recent event in New Delhi, he revealed that the Ministry of Road Transport and Highways (MoRTH) had approved a major initiative to convert between 25,000-30,000 km of two-lane highways into four-lane highways. This project will involve an investment of INR 10 lakh crore. Advertisement
Gadkari further outlined the government's intention to promote the Infrastructure Investment Trust (InvIT) model to raise funds for highway projects from domestic investors. He conveyed that the government had taken the decision to convert 25,000-30,000 km of two-lane highways into four lanes at an investment of INR 8-10 lakh crore.
The Minister shared his vision of completing road projects valued at INR 5-6 lakh crore every year. He explained that the National Highways are being developed under various execution models, including Build-Operate-Transfer (BOT), BOT (Annuity), Engineering, Procurement, and Construction (EPC), InvIT, and the Hybrid Annuity model.
The Infrastructure Investment Trust (InvIT) model, which is similar to mutual funds, aims to pool capital from investors and invest it in long-term assets that generate consistent cash flows.
Regarding the BOT (Annuity) model, Gadkari mentioned that the government is revising its approach. He clarified that tolls would be collected by the government for a period of 15 years, with the government compensating the concessionaires on an annuity basis. Additionally, contractors will be responsible for maintaining the highways for 15 years.
He also pointed out that BOT projects involve the risks associated with financing, construction, and operation over a concession period of 20-30 years, making them a more reliable option compared to EPC projects, which often suffer from quality issues.
Further addressing concerns about toll increases, Gadkari noted that a 10% rise in toll rates would be acceptable, but if the increase exceeded that threshold, the concessionaires would be required to share 50% of the excess with the government.
Known for his candid remarks, Gadkari also expressed his intolerance for contractors who form cartels to secure highway projects, reaffirming his commitment to transparency and fairness in the bidding process.
The promotion of the InvIT model will provide a new avenue for domestic investment, while revisions to the BOT model and strict regulations on toll hikes demonstrate the government's proactive stance on ensuring fairness and quality in infrastructure projects. Gadkari's determination to combat corruption within the sector reflects a commitment to driving transparency in public projects.
Source - PTI
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