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    Road projects have to be built on EPC mode, response on PPP tepid: Nitin Gadkari

    Synopsis

    The government should opt for building projects on EPC mode, and monetising them, instead of depending on the private sector to bring funds, which delays these projects, he said.

    Road projectsAgencies
    Gadkari said that NHAI has been trying to offer projects on the build-operate-transfer (BOT) mode, but has not been successful.
    Road projects in the country should be entirely government funded, built on the engineering, procurement and construction (EPC) mode to ensure faster execution, at a time when private players are facing difficulties in raising finance, union minister of road transport and highways Nitin Gadkari has said.

    The government should opt for building projects on EPC mode, and monetising them, instead of depending on the private sector to bring funds, which delays these projects, he said.

    “In the infrastructure sector, we tried encouraging PPP. But those who have gone for BOT projects, they have faced several difficulties, the reason why banks are (now) not friendly towards them, and a lot of their time is wasted in raising finance,” Gadkari said at an Assocham webinar on Covid-19 impact and investment opportunities in roads and highways sector on Tuesday.

    Gadkari said that repeated attempts to ease the funding process for road projects have yielded no results, owing to corruption, indecision and bureaucratic processes.

    “Looking at the banks, the funding situation is very difficult right now. In this situation, we should build projects on EPC mode and monetise road assets with banks,” Gadkari said.

    Gadkari said that NHAI has been trying to offer projects on the build-operate-transfer (BOT) mode, but has not been successful.

    In FY 2020 alone, the government planned to award around 800 km of highway projects on BOT basis, which has long been a vehicle of private investment in the roads sector. The response on these projects had been tepid.

    “Banks, funds are ready to lend to NHAI and are more comfortable as compared with private sectors,” he said.

    Gadkari said that while there are suggestions on building projects on the Public-private partnership mode, there has to be a positive response on these projects.

    “It is market driven. We have to award projects basis the response from the market at a given time,” Gadkari said.

    The government will have to award more infrastructure projects to resolve the liquidity crisis in the country now, Gadkari said. The highways ministry has set itself a target of awarding 20,000 km of road projects in FY 21, while keeping the construction target to 15,000 km.


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