Published On : Thu, Oct 5th, 2017

CM’s major push to development, invites global firms to build roads worth Rs 30,000 cr in State

Fadnavis
Nagpur/Mumbai: Giving a major push to development of road infrastructure, the Chief Minister Devendra Fadnavis has invited global firms to build 10,000 km roads worth Rs 30,000 crore in Maharashtra

The Chief Minister’s Office (CMO) has sent out invites to global firms such as the Blackstone Group, Carlyle Group, KKR and Co Ltd, Brookfield Asset Management, Infrastructure Development Finance Company (IDFC) for a meeting to discuss the project under which contracts worth Rs 30,000 crore will be handed over for construction of 10,000 km roads in State. A meeting between Chief Minister Devendra Fadnavis and representatives of these firms is being worked out for next week.

The state’s public works department is undertaking these works under the Centre’s Hybrid Annuity Model (HAM), which is a balance between a public-private partnership contract and an engineering procurement contract. In this model, the government puts in 40% of the funds while the concession raises the remaining 60%. This investment is recovered by the private firm over the next 15 years in instalments from the government. The state government is planning to allocate nearly Rs 12,000 crore as its share of the 40% payment over the next two years for these road projects.
It is hoping these firms will take a stake in the road works.

“The State is putting up road contracts worth Rs 30,000 crore. It makes sense to call the biggest investment firms to be a part of this asset creation. A partnership with these firms will also bring greater credibility to our works” said a senior official. “Many of these big funds have invested in roads and infrastructure projects through their subsidiaries and companies. We are hoping they pick stake in developing our roads too. It’s a good bet. We can give them good returns for less risk. The risk of inflation, traffic estimation is all picked by the government.”

The State’s Public Works Department is hoping to change the nature of road construction works done until now by allotting larger contracts for roads measuring 100 km, instead of handing over of multiple small contracts of 2 km road length. This road rejuvenation project, officials claim, will end the ongoing saga of bad roads and potholes. The tenders for some of these projects are likely to be issued in November this year.