As the financial year 2024-25 kicks off, the Ministry of Road Transport and Highways is steering a massive road construction initiative with a goal of completing 20,000 kilometers of National Highways (NHs). This ambitious plan includes ongoing and newly awarded projects, with a significant push toward streamlining processes and overcoming obstacles to expedite progress.
Strategic Roadmap for Enhanced Connectivity
The Ministry’s strategy involves a multi-faceted approach, focusing on the review and resolution of bottlenecks in active collaboration with state governments and stakeholders. This partnership aims to clear roadblocks in ongoing projects swiftly and ensure timely approvals and clearances for new projects. Despite these efforts, no specific annual rate of increase in construction has been set.
The Hybrid Annuity Model: A Game Changer
To accelerate highway construction, the Government has embraced the Hybrid Annuity Model (HAM). This model is designed to rekindle private sector interest in highway projects by sharing the financial risks and responsibilities. Under HAM, the Government contributes 40% of the project cost during the construction phase, mitigating the financial burden on private developers. The remaining financial risk, particularly related to traffic and revenue, lies with the Government, thus creating a balanced risk-sharing environment.
Boosting Financial Health under Atmanirbhar Bharat
Aligned with the Atmanirbhar Bharat initiative, the Ministry has implemented several relaxations for contractors and concessionaires to ensure robust cash flow and reduce working capital requirements. These measures are crucial for sustaining momentum in road construction projects.
Innovative Financing: InvIT and Beyond
In addition to traditional funding sources like budget allocations and toll revenues, the Ministry has adopted innovative financing methods, such as Infrastructure Investment Trusts (InvITs). InvITs have unlocked the value of completed road assets, providing an alternate source of capital and attracting greater private sector participation in operations and maintenance.
Official Announcements
Union Minister for Road Transport and Highways, Nitin Gadkari, shared these developments in a written reply to the Rajya Sabha, highlighting the Government’s commitment to enhancing India’s road infrastructure. These initiatives are set to pave the way for improved connectivity, economic growth, and sustainable development across the nation.
As the nation gears up for an infrastructure overhaul, the collaborative efforts between the Government, private developers, and stakeholders will play a pivotal role in driving the successful completion of these highway projects, ensuring smoother and faster travel for millions of citizens.
