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Public-Private Partnerships in India’s National Highways
Sept. 15 – The Indian government foresees Rs. 50,000 crore (US$10.54 billion) in private investments in the highways sector this fiscal as it awards contracts for building 7,300 kilometers (4,536 miles) of roads.

According to India’s Ministry of Road Transport and Highways, bids for about 4,600 kilometers have already been received or invited this year and the Ministry will award concessions for 7,300 kilometers before the year ends.

In the first four months of the current year, the government has awarded public-private partnership (PPP) projects with an investment of over Rs. 21,000 crore. The bids received are far better than estimated bids for these projects. This will give the government additional revenues of more than Rs. 10,000 crore.

Also, out of India’s 71,000 kilometer national highway network, up gradation projects for about 16,000 kilometers have been concluded, while about 15,000 kilometers are in different stages of projects being awarded.

As a result, about 40,000 kilometers will be left, which may be overlooked by the government. Specifically, 20,000 kilometers including single-lane roads which are more often than not in less developed regions.

Now, the government is planning to make these single-lane highways into two-lane highways through turnkey engineering, procurement, and construction (EPC) contracts to ensure timely construction without cost overruns. The Ministry is also planning concessions for expanding about half of the Golden Quadrilateral – which connects the metropolises of Delhi, Mumbai, Kolkata and Chennai – into a six-lane highway.

The government of India also initiating the steps to construct expressways in high density corridors and the Ministry is in dialogues with budding investors and concerned states to find innovative ways of financing these projects.

Regarding state highways, the Planning Commission will work closely with states to change these into world-class roads. So far 77 projects for a length of 7,801 kilometers have been fulfilled. The Ministry also showed confidence that the ambitious target of building 20 kilometers of roads a day will be achieved soon. The UPA-11 government has set up a goal of constructing 35,000 kilometers of highways by 2014.

The Prime Minister of India Manmohan Singh also insisted that government agencies should avoid of any favoritism while awarding projects to private players under the PPP mode.

The Planning Commission will be working in close collaboration with state governments to guarantee that state highways become world class. Projects have been able to draw investments of Rs. 21,000 in the first four months ending July 2011.
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