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Road transport and highways ministry will soon set up empowered committee to clear stalled road projects

Road transport and highways ministry will soon set up empowered committee to clear stalled road projects

NEW DELHI: The road transport and highways ministry has proposed setting up an empowered committee to clear stuck road projects worth Rs 30,000 crore while seeking a huge bump up in allocation in the upcoming budget.

The ministry will soon move a Cabinet note on the panel, a senior government official told ET. The proposal figured in road transport and highways minister Nitin Gadkari’s pre-budget meeting with finance minister Arun Jaitley on Friday. Gadkari has sought Rs 85,000 crore as budgetary allocation for 2016-17, almost double of what it received in the current fiscal year. “The ministry expects that finance ministry will increase its budgetary allocation as the receipt from toll collection is also going to be high in the current year. Since, the private investment is still low, we need to push public spending,” the official said.

Gadkari has also called a conference of bankers and concessionaires in Delhi on January 28 where Jaitley is also expected to be present. Road construction has been among the top priorities of the Narendra Modi-led government. It allocated Rs 45,800 crore for road and highway construction in the 2015-16 Budget.

Gadkari has a target of awarding 30 km of road construction contracts per day from the current pace of 18 km. There are over 19 road projects that are stuck due to various problems including cost escalation, unviability of projects and spat between bankers and concessionaires.

“Despite all the policy changes in recent times, there still are stuck projects that can’t be rolled out as they need special attention and project-wise decisions. We’ll be proposing a committee for those projects,” the official said.

According to officials, some of these projects need special mediation between banks and concessionaires as cost escalation has been as much as 30% and the traffic projections were shown really high in the Detailed Project Report (DPR).

The government in recent months has taken several steps to streamline clearances, allowing the National Highways Authority of India (NHAI) to compensate developers for delays not attributable to them and putting in place an exit policy that allows private players to sell off their projects after two years of completion.

It has also empowered the road ministry to approve projects on its own if civil construction cost of projects is less than Rs 1,000 crore. In recent months, the ministry has been able to roll out over 200 stuck projects worth over Rs 3 lakh crore.

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