Highway contracts get longer
The Govt decides to offer larger stretches of roads for development to private firms, a move that will allow faster development of the country’s road network, reports Samiran Saha.business Updated: Feb 03, 2008 21:00 IST
The government has decided to offer larger stretches of roads for development to private players.
The move will allow faster development of the country’s road network as private infrastructure companies benefit from scale economics.
Till now road stretches of 50-100 km, involving investment of Rs 1,000 crore, were awarded to private infrastructure developers. The government has now set the average length of a highway contract at between 100 and 500 km.
“Earlier, the government was not confident about the abilities of indigenous road developers, thus smaller packages were offered. Now we are confident. This will also allow foreign participation as international companies were not eager on the ‘bite-size’ packages that were being offered,” an National Highways Authority of India official said.
This would also mean that the government would have to deal with a fewer number of contractors, he added.
On the 7,300 km north-south and east-west corridors--connecting Jammu and Kashmir to Tamil Nadu and Assam to Gujarat--only 1,635 km have been completed till December 31, 2007. Over 4,686 km is under implementation and the government is yet to award contracts for another 821 km.