Govt task force calls for boosting private investment in highways; pegs road sector capex at Rs 20.33 lakh cr by 2025

The task force on NIP has stressed the need for more private investment in highways and projected the total capital expenditure in road sector at Rs 20.33 lakh crore in fiscals 2020-2025

Press Trust of India April 30, 2020 21:24:46 IST
Govt task force calls for boosting private investment in highways; pegs road sector capex at Rs 20.33 lakh cr by 2025

New Delhi: The task force on NIP has stressed the need for more private investment in highways and projected the total capital expenditure in road sector at Rs 20.33 lakh crore in fiscals 2020-2025.

To augment infrastructure and create jobs in the country, the government task force on National Infrastructure Pipeline (NIP), which in its report projected total investment of Rs 111 lakh crore in infra projects over five years, said that 18 percent of the targeted investment is expected to be made in the road sector.

"Approximately 18 percent of the Rs 111 lakh crore investment targeted over fiscals 2020-25 is expected to be made in the roads sector – the bulk of it in augmenting road length and safety features," the final report of the task force on NIP for 2019-2025 presented to Finance Minister Nirmala Sitharaman on Thursday said.

Govt task force calls for boosting private investment in highways pegs road sector capex at Rs 2033 lakh cr by 2025

Representational image. Getty images

"Given the ambitious target, increased private sector participation is critical," it added.

Crediting the Ministry of Road Transport and Highways for introducing comparatively de-risked models for the private sector, like engineering procurement and construction (EPC) and hybrid annuity model (HAM), the task force said this could result in doubling of the rate of construction of national highways since 2015.

The ministry constructed 10,855 km of national highways against the targeted 16,420 km in fiscal 2019, with an average daily construction rate of about 30 km.

"In the roads sector, the total capital expenditure of Rs 20,33,823 crore by both the Centre and states would be made between fiscals 2020 and 2025.

"About 1,820 projects have been identified to be implemented in 2020-25. The total capital expenditure for these projects by the Centre is estimated at Rs 13.8 lakh crore over fiscals 2020 to 2025," the report said.

The projects include the construction of new expressways such as Delhi–Mumbai Expressway, Bengaluru–Chennai Expressway, among others.

The Delhi-Mumbai Expressway is a 1,320-km greenfield expressway project which will be built at an estimated total project cost of Rs 90,000 crore in 40 packages under the EPC model.

Till October 31, 2019, 19 packages, amounting to Rs 24,097 crore, had been awarded by NHAI for it.

The project, to provide seamless connectivity between Delhi and Mumbai, is estimated to be completed by the end of March 2023.

Similarly, the 262-km Chennai–Bengaluru Expressway will be built at an estimated total project cost of Rs 20,000 crore. The project will be built under HAM model and is estimated to be completed by the end of fiscal 2024.

For attracting more private investment in the sector, the report stressed the need for increased investment in technology, addressing delays in land acquisition, improving road safety, besides asset recycling.

India has the second-largest road network globally, with a total network of 59 lakh km as of March 31, 2019.

Of this, national highways and expressways comprise 1,32,500 km and state highways 1,56,694 km.

Major district roads and rural roads account for the remaining 56 lakh km.

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