CM Devendra Fadnavis invites global firms to build roads worth Rs30,000-crore in Maharashtra
A meeting between chief minister Devendra Fadnavis and representatives of these firms is being worked out for next week.mumbai Updated: Oct 05, 2017 10:13 IST
The state government is hoping to catch the eye of some of the biggest investment and asset management firms to develop 10,000km of the state highways under the ambitious road rejuvenation project.
The chief minister’s office (CMO) has sent out invites to global firms such as the Blackstone Group, Carlyle Group, KKR and Co Ltd, Brookfield Asset Management, Infrastructure Development Finance Company (IDFC) for a meeting to discuss the project under which road contracts worth Rs30,000 crore will be handed over.
A meeting between chief minister Devendra Fadnavis and representatives of these firms is being worked out for next week.
The state’s public works department is undertaking these works under the Centre’s hybrid annuity model (Ham), which is a balance between a public-private partnership contract and an engineering procurement contract.
In this model, the government puts in 40% of the funds while the concession raises the remaining 60%. This investment is recovered by the private firm over the next 15 years in instalments from the government.
The state government is planning to allocate nearly Rs12,000 crore as its share of the 40% payment over the next two years for these road projects.
It is hoping these firms will take a stake in the road works.
“The state is putting up road contracts worth Rs30,000 crore. It makes sense to call the biggest investment firms to be a part of this asset creation. A partnership with these firms will also bring greater credibility to our works” said a senior bureaucrat.
He said, “Many of these big funds have invested in roads and infrastructure projects through their subsidiaries and companies. We are hoping they pick stake in developing our roads too. It’s a good bet. We can give them good returns for less risk. The risk of inflation, traffic estimation is all picked by the government.”
The state’s public works department is hoping to change the nature of road construction works done until now by allotting larger contracts for roads measuring 100 km, instead of handing over of multiple small contracts of 2km road length.
This road rejuvenation project, officials claim, will end the ongoing saga of bad roads and potholes.
The tenders for some of these projects are likely to be issued in November this year.
“You can imagine the quality of work undertaken when road contracts are divided to such an extent. In current contracts, we will ask the concessionaire to maintain these roads for 15 years. They will also be liable for all repairs until then. Their returns will not be dependent on tolls also as the government will retain those rights” said a senior Public works department engineer.
In Mumbai, motorists were fed up with bad quality arterial roads such as Eastern and Western Express highway and Sion Panvel Expressway. In fact, the Sion-Panvel Expressway had become a nightmare for motorists.