Government announces major highway development program worth US$ 93 billion

highway development program

New Delhi (TIP) (Secondary Research): The Government of India has announced highway projects worth US$ 93 billion, which include government flagship National Highways Building Project (NHDP) with total investment of US$ 45 billion over next three years. NHDP envisages development of existing National Highways (NHs) into world-class roads in different phases. It is one of the largest government-led PPP development programmes in the world. There are 26,000 kms of NH projects, of which 20,000 kms are NHDP projects. Opportunities for investors include Bharat Mala project of US$ 12 billion for 6,000 kms, scheme for providing connectivity to 123 district headquarters for US$ 15 billion, construction of 350 bridges/Road over bridge (ROBs) in two years for US$ 8 billion, ‘Char Dham’ connectivity for 2,500 kms in mountainous terrains for US$ 8 billion and a strong network of roads in the North-East and Border areas for US$ 5 billion. The government plans to provide incentives like right of way (ROW) for project land being made available to concessionaires free from all encumbrances. The National Highway Authority of India (NHAI) will provide capital grant (Viability Gap Funding) up to 40 per cent of project cost to enhance viability on a case to case basis. The government will also provide 100 per cent tax exemption for five years and 30 per cent relief for next five years, which may be availed over a period of 20 years. The government is already facilitating investments through policy initiatives that include use of long-term sources of funds like pension and insurance funds in the sector in consultation with Ministry of Finance and RBI besides encouraging long-term debt re-structuring. Besides, government measures include regulatory clearances to 80 stuck projects and railway clearances for 85 projects with railway over-bridges, golden handshake with developers for 34 projects worth US$ 5.5 billion and fast-track dispute resolution which has resulted in reduction of disputed amount from US$ 2.3 billion to US$ 0.2 billion.

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