The government has announced highway projects worth $93 billion including $45 billion National Highways Building Project (NHDP) for boosting the investment opportunity. This include Bharat Mala project of $12 billion for 6,000 kms, scheme for providing connectivity to 123 district headquarters for $15 billion and construction of 350 bridges in two years for $8 billion and a Char Dham connectivity for 2,500 kms in mountainous terrains for $8 billion and a strong network of roads in the North -East and boarder areas for $5 billion.
This investment also include new models which are being rolled out both for greenfield (hybrid annuity) and brown field projects (monetization). Government stated that the opportunity opens up for 20,000 kms of NHDP length, having total investment of $45 billion for next three years. NHDP is the government’s flagship road building programme to upgrade, rehabilitate and widen major highways in India to a higher standard.
The government has made significant reforms to create financially attractive projects, right of way (ROW) for project land is being made available to concessionaires free from all encumbrances, while NHAI is providing capital grant (Viability Gap Funding) up to 40 per cent of project cost. Besides it will provide 100% tax exemption for 5 years and further for next 5 years there will be 30% relief which may be availed of in 20 years.
The government is also making investments through policy initiatives including use of long-term sources of funds like pension and insurance funds in the sector in consultation with Finance Ministry and RBI.