Mumbai: Faced with poor response from construction giants for its hybrid annuity model for roads construction, the State government has scaled down several conditions in the model to bring more contractors on board.
The original hybrid annuity model envisaged 40% funding by the government and the rest by the contractor; this has been reversed, which means the government will provide 60% funding. The private investment was to be recovered over 15 years; this has been reduced to 10 years.
Also, road works were to be divided into 100-km. packages; now, packages will be of 50 km to include smaller contractors.
Maharashtra has over three lakh km. of roads, including National and State highways, major district roads and village-level ones. The Public Works Department (PWD) maintains over 90,000 km. of roads. To overcome maintenance issues, the government had adopted the hybrid annuity model for 10,000 km. of roads maintained by the PWD at a cost of ₹30,000 crore. It had hoped to bring on board construction giants like L&T and Shapoorji Pallonji Group. It had made presentations on the model as well.
The State Cabinet has also decided to undertake road improvement works on Engineering, Procurement and Construction (EPC) basis if contractors don’t respond positively to the 50-km packages as well. A special High Power Committee under PWD Minister Chandrakant Patil and Finance Minister Sudhir Mungantiwar has been formed to monitor progress.
In September, Chief Minister Devendra Fadnavis and Mr. Patil had met top officials from several financial institutions, and made presentations seeking funding for the hybrid annuity model besides the CM’s pet project, the Mumbai-Nagpur expressway.
