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Sunday, July 21, 2024

NHAI Unveils Massive Rs 2.1 Trillion Pipeline with 53 BOT Highway Projects

The National Highways Authority of India (NHAI) has unveiled a significant shift in its resource generation strategy by identifying 53 highway projects worth Rs 2.1 trillion to be developed through the Built Operate Transfer (BoT) model. This move comes after years of low private risk capital and heightened debt burden for NHAI.

Under the BoT model, approximately 5,214 km of road stretches with high traffic density will be developed, focusing on robust Public Private Partnerships. Maharashtra leads with 14 BOT projects covering 522 km at a cost of Rs 39,477 crore, followed by Uttar Pradesh with six highways spanning 1,344 km at a cost of Rs 50,333 crore.

Jammu and Kashmir, Haryana, Punjab, Rajasthan, Telangana, and Uttarakhand will witness six new highways covering 490 km under BoT, with an investment of Rs 15,600 crore. Seven projects in Andhra Pradesh and four in Bihar are set to be developed at a total cost of Rs 28,027 crore.

Tamil Nadu will see the implementation of four BoT projects at an investment of Rs 26,061 crore. The NHAI’s move aligns with the government’s ‘Vision 2047’ plan, emphasizing the development of numerous high-speed corridors through robust PPP models in the road sector.

The government aims to rejuvenate BOT to enhance private participation in highway construction. In the BoT model, the concession winner undertakes the construction and operation of the highway, thereby saving government resources. However, some cases may involve capital grants of up to 40% in the BOT model.

Between 2007 and 2014, only BOT was employed for highway construction, but disputes and delays led to a slowdown. In 2018-19 and 2019-20, no road concessions were awarded under the BOT model. NHAI officials note that the issues faced by BOT have been addressed, and contractors are now willing to bid for highways under this model.

In recent years, the government has primarily funded highway construction through the Hybrid Annuity Model (HAM) and Engineering Procurement and Construction (EPC), resulting in increased budgetary support to NHAI. The 2022-23 budget allocates Rs 1.62 lakh crore to NHAI, compared to Rs 1.41 lakh crore the previous year.

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