The World Bank will look at new ways to raise its funding commitment for the highways projects, Road Transport and Highways Minister Kamal Nath said on Wednesday after meeting World Bank chief Robert Zoellick.
“The World Bank has agreed to look at viability gap funding and annuity projects not only in terms of financing but in terms of institutional support as well,” Nath said.
Under the viability gap scheme, funds and concessions are provided to the developers to make the projects viable while annuity is a financing model, where the developer finances, builds and maintains the highways contract in exchange of annual grants from the government.
The ministry of road transport and highways has sought a $ 2.96-billion (Rs 13,616 crore) World Bank funding for double-laning of 6,300 km of single-lane highways, out of a total of about 19,000 km single-lane highways in the country.
The proposal envisages development of existing single, intermediate lane national highways, which are not covered under any other development scheme to two lanes.
Nath also said the $3 billion ( Rs 13,800 crore) may be provided in tranches and the finance ministry will take a final call on this since there are many projects to be financed by the Bank.
“There are so many projects on the social sector...so we may take it in tranches. But the World Bank has to look at it holistically...there is a limit to what the Bank can give to us as a whole. That appropriation is done by the finance ministry,” he said.