Thursday, May 27, 2010

NHAI awards highway projects worth 7500 crores

An amount of Rupees 7500 Cr. for construction of roads spanning 817 kms has been sanctioned by the NHAI for 8 projects. The total number of projects sanctioned by the NHAI, including these newly sanctioned ones has jumped to 59 since January 2010.
Of the eight projects awarded, five are on BoT (build operate transfer) - toll basis while the remaining are on
BoT -annuity basis. Both are models of public-private partnership in highway construction.

What is BoT Toll basis?
In this model, the developer earns ROI (Return On Investment) through toll revenue over the period of construction.

What is BoT Annuity basis?
In this model, the developer gets a pre fixed sum from the government, which retains the right to levy toll..
The projects awarded include six laning of the Delhi-Agra section with an investment of Rs 1,928 Cr. The concession period for the project is 26 years.
The other major project is the Nagpur-Saonar- Betul requiring an investment of around 2500 crore. This project has been bagged by the Orientel Construction Engineering on an annuity basis.

In case of two of the eight projects recently bid out, the developers have demanded government grant close to the upper cap of 40%.

Speaking about the awarding of the projects a NHAI official at a senior positon said “The tendering process gathered steam in the fourth quarter of 2009-10. The first two months of the current financial year has seen a sustained awarding of the contracts. By March, about 38 projects were awarded and in April this year, we cleared 13 projects.”

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