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Government continues to approve large projects, clears way for 13 new highway projects

Government of India sanctioned 13 highway development plans, it continues the tradition of approving large project quickly. The road transport and highways minister informed that it cleared Rs. 10,300 crores proposal to building 600 kilometers of the national highway. Last week only, the same ministry cleared 18 highway projects with the length of 982 kilometers highway construction. These 18 projects are going to cost Rs. 16,614 crores.

The state wise distribution of the project shows that the new highways will cut across seven states. Maharashtra, Rajasthan and Uttar Pradesh are some beneficiaries. The ministry will personally handle eight projects while National Highway Authority of India (NHAI) will be handling remaining five. The government expects to finish the construction in 2.5 years. The construction is still going on at the snail pace despite increase in the number of sanctioned project since last year. The target of 6,300 kilometers have been already missed by the government. Last fiscal, ministry and NHAI only completed construction of 4,600 kilometers of roads.

Build, operate and transfer (BOT) model will be used to construct all 13 projects, according to Sanjay Mitra, Road transport and highways. Remaining three projects’ construction will reduce the pressure on the developer through the hybrid annuity model. Engineering procure and construction (EPC) principal will be implemented for remaining seven project. EPC projects will be entirely financed by the government.

Civil cost of any project is not more than Rs. 1000 crores. It means that the ministry doesn’t require cabinet’s green signal to award contracts for such projects. Only two projects are green-field while other remain brownfield projects. The government plans to award contracts for at least 10,000 kilometers road this year. The official data suggest that only 70% of the large projects in terms of highway have been given contracts by the government.

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