PM's road project off the ground

Work on the Rs 40,000 crore (Rs 400 billion) Pradhan Mantri Bharat Jodo Pariyojana has finally started, with the government awarding the first lot of six projects.

Construction majors Srei, Nagarjuna, Gammon, DS Constructions and Ircon have bagged a section each following the opening of bids on Monday.

The project involves the four-laning of 10,000 km of road stretches, outside the ambit of the ongoing Rs 58,000 crore (Rs 580 billion) National Highways Development Project.

Srei has bagged the project of upgrading and multi-laning of the 55-km Bharatpur-Mahua section on NH 11 in Rajasthan, while Nagarjuna has got the 79-km Meerut-Muzaffarnagar section in Uttar Pradesh. The two sections in Maharashtra -- the 100-km Vadape-Gonde and the 118-km Pimpalgaon-Dhule sections -- have been bagged by Gammon and Ircon, respectively, according to industry sources.

The National Highways Authority of India had opened the bids for the Vadape-Gonde and the Pimpalgaon-Dhule sections on March 31, but the bids were not awarded then.

The government had sought to award the first lot of seven highway contracts under the PMBJP before the end of the last financial year.

Road Transport and Highways Minister BC Khanduri had announced in January that tenders for the first lot of projects would be awarded before March 31, 2004, and the projects, totalling 622 km, would be completed by 2006.

The sections have been identified on the basis of traffic density and entail the connectivity of state capitals and important centres of tourism and economic activity with the NHDP.

The delay in the award of the projects was because the ministry, after much dithering, transferred the projects to the National Highways Authority of India. The government was earlier planning to execute these projects on its own.

Following the announcement of these projects by Finance Minister Jaswant Singh in the Budget 2003-04, the government had decided to create a three-tier organisational structure within the road transport and highways ministry for the implementation of the project.

The government, at that time, had decided that its specialised highway building body -- the NHAI -- would be kept out of the execution of these 48 high-density build-operate-transfer (BOT) sections, since the Authority was saddled with NHDP work.

The government's financial involvement in these projects, being executed entirely on the BOT model, will be restricted to providing the capital grant component for filling in the gap between the operator's estimated toll revenue and his capital costs.

The bidding was based the extent of capital grant sought by the operator, which had been pegged at an average of 25-30 per cent of the project cost, officials said.

The ministry had, in August last year, shortlisted 98 entrepreneurs to be empaneled to bid for the upgradation of these non-NHDP sections.