In a bid to gear up and enhance the country's infrastructure, major plans are underway which include roping in an advisor for asset monetization and offering attractive schemes to private players, announced Union Minister for Road Transport & Highways, Micro, Small & Medium Enterprises Nitin Gadkari on Sunday.
"We are planning to rope in an Indian expert with experience in global economy for advising NHAI on asset monetization," said Gadkari.
Other plans are set up to make the vehicle scrapping policy more attractive, besides expediting the land acquisition process which will ultimately create a vast network of expressways and highways, said Gadkari, adding:
“The chosen advisor with his global economy expertise will guide the National Highways Authority of India (NHAI) on innovative ways hence providing better insights to keep up with the funding requirements.”
The huge success of the first bundle of nine highway projects under TOT (toll,operate and transfer) totalling over 681 kms of roads in Andhra Pradesh and Gujarat fetched the NHAI Rs 9.681 crores last year. However, the next tranche which covered 586 kms was canceled in February 2019 due to a moderate response. The TOT is a model followed to monetize operational national highway projects. Investors will make a lumpsum payment in return for long-term sustainable toll fund collection rights. These rights will be backed by a sound tolling system with a concession period for up to three decades.
A divestment of about 49 percent is allowed for two years during the concession period. In addition, a 10 percent change in ownership can apply after completion of two years of contract. Under TOT, the government has planned to offer 550 km of roads. While the assets are being monetized, Gadkari also added that private contractors will be opted for building over 3,000 kms of road under the Build, Operate and Transfer (BOT) mode:
"For private sector revival in building highways, we have identified 3,000 kms of highways that have 17,000 pcu (passenger car unit) traffic. We plan to bid this out under BOT mode,"
In a report, rating agency CRISIL recommended strengthening the private sectors. The government has resorted to HAM (Hybrid Annuity Model) and BOT which ensure a mutual public-private partnership (PPP) for roads and highways projects.
Talking about the vehicle scrapping policy, Gadkari said it would be better to have inputs and suggestions from the Finance Ministry and the Prime Minister. The policy will make scrapping of old vehicles mandatory from April 1, 2020.
In May 2016, the government had floated a draft Voluntary Vehicle Fleet Modernization Programme (V-VMP) that proposed to take 28 million decade-old vehicles off the road. A committee of secretaries (CoS) had recommended- redesigning of the scheme to the ministry, for greater participation of states with partial support from the Centre.
The CoS got a revised consultation paper and a nod from the PMO. It further stated that:
"The scheme may dovetail a calibrated and phased regulatory approach for capping the life of vehicles together with stricter implementation of emission norms"
The minister also added that the land acquisition process has been expedited and it has seen a three-fold jump saying that it will facilitate the Centre's plans of fast-tracking projects besides building 22 green expressways.
He also said that there are plans being undertaken to create a highways grid on par with the power grid saying that the Delhi-Meerut Expressway is likely to be completed in the next two months. The minister has said that there are plans to take up projects worth Rs 15 lakh crore in the highways sector over the next five years.