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Govt to consider alternate models to kick-start delayed expressway projects

21 May 2013 Evaluate

In order to kick-start much-delayed plan of building a series of national expressways, the government is planning to introduce alternate financial models involving low-cost foreign loans and leveraging adjoining land. However, the government has scraped the earlier deadline of 2015 for rolling out 1,000 km national expressway.

The road ministry plans to start with the Delhi-Jaipur expressway and is expected to cost over Rs 16,000 crore. The Cabinet had cleared Rs 16,680 crore for the entire 1,000 km in 2006. Though, the government's plan of building expressways continue to be stuck because of red tape and funds crunch, which has also escalated the project costs by several times.

Normally, expressways cost between five to eight times more than highways, which cost about 10 crore per km. In India, 93-km Ahmedabad-Vadodara is the only national expressway. Earlier the government was hoping for Rs 9,000 crore investments from private sector, but given the prevailing economic slowdown, it is not sure funds will come in.

Therefore, the road ministry is planning to build the expressways through the Engineering Procurement & Construction (EPC) route by using cheap foreign loans. The ministry is also working on a proposal to charge toll rates that are 1.25 times more than that on highways.

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