The Hindu : Road projects to be awarded on annuity basis

Online edition of India's National Newspaper
Tuesday, Dec 24, 2002

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Business

Road projects to be awarded on annuity basis

By Our Special Correspondent

NEW DELHI DEC. 23. To address the major roadblock to private sector participation in the roads sector on the huge upfront capital investment and high risks of revenue collection, the Government has decided to offer some projects on annuity basis.

Making this announcement at a conference organised by the Associated Chamber of Commerce and Industry (Assocham) on private sector participation in roads and highways, N. K. Sinha, Director General (Road Development), Ministry of Road Transport and Highways, said this would completely take away traffic risk. In fact eight projects valued about Rs. 2,400 crores had already been awarded on annuity basis.

Mr. Sinha further said 12 proposals valued about Rs. 750 crores had also been identified for taking up under BOT. Identification of some more proposals especially on north-south and east-west corridors will be made shortly.

The Government hoped that through these initiatives, private sector participation in the road sector, would substantially increase in the coming years. In addition, a proposal for maintenance of the National Highways on BOT was also under formulation and the existing facilities would be improved by value addition and the entrepreneur would be allowed to retain user fee for a specified period, he said.

Mr. Sinha said the dedicated fund created in 1998-99 through levy of a class of Re. 1 per litre on diesel and petrol provided revenue of about Rs. 6,000 crores per annum which was expected to increase significantly in the coming days.

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