Monday, August 3, 2015

Highway projects worth `6 lakh crore announced

New Delhi: Projecting the country’s highways sector as a “unique opportunity” for investments, the government has rolled out projects worth Rs 6 lakh crore ($93 billion), including the Rs 3 lakh crore ($45 billion) flagship road building programme, the National Highways Building Project (NHDP).
Investment opportunities include “new models being rolled out both for greenfield (hybrid annuity) and brownfield projects (monetisation),” according to the Road Transport and Highways Ministry, which has come out with a list of such projects.
To woo bidders, it said a “peep into opportunity” unfolds “20,000 km of NHDP length with total investment of $45 billion over the next three years.”
Among the largest government-led PPP development programmes in the world, the NHDP envisages the development of 20,000 km of existing National Highways (NHs) into world-class roads in different phases.
The government, releasing a document on the highways sector, said the opportunities comprise the “Bharat Mala project of $12 billion for 6,000 km,” a scheme for providing connectivity to 123 district headquarters for $15 billion and the construction of 350 bridges/ROBs in two years for $8 billion.
Besides, it includes ‘Char Dham’ connectivity for 2,500 km in mountainous terrain for $8 billion and a “strong network of roads in the North-East and border areas for $5 billion.”
The government intends to award projects for the construction of 10,000 km this year alone and had made significant reforms to create financially attractive projects to offer “unique opportunities to investors” based on their “risk/return appetite.”
Elaborating on fiscal incentives, it said right of way (ROW) for project land is being made available to concessionaires free from all encumbrances, while the National Highways Authority of India (NHAI) is providing capital grant (viability gap funding) of up to 40% of the project cost to enhance viability on a case-to-case basis.
Besides, it would provide 100% tax exemption for five years and 30% relief for the next five years, which may be availed of in 20 years.
The ministry is facilitating the investments through policy initiatives that include use of long-term sources of funds like pension and insurance funds in the sector in consultation with the finance ministry and the Reserve Bank of India, besides encouraging long-term debt re-structuring.—PTI

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