Report on 100-metre wide high-speed corridor to be ready shortly
The first phase of the proposed 507-km Kasargod-Thiruvanathapuram Express Highway will be completed by 2006. The entire project at a cost of Rs 6,400 crore will be completed by 2012, according to Kerala public works minister M K Muneer.
Maintaining that the 140-km stretch from Malappuram to Ernakulam would be given priority and completed in the first phase as that sector has the highest rate of return, the minister said the expressway would pass through 890 hectares of agricultural land, 2,900 hectares of plantations and 238 hectares of households. More than 3,000 families will have to be rehabilitated.
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Disclosing that the report on financial structuring of this 100-meter wide access-controlled high-speed corridor is likely to be submitted within two weeks, Muneer said the work on the project would start only after preparing an action plan for rehabilitation and resettlement of those who have to be evacuated.
Around Rs 1,758 crore would be needed for land acquisition, resettlement and the rehabilitation of the displaced, out of which Rs 1,500 crore has already been provided. The cost of construction has been put at Rs 3,877 crore and overheads at Rs 765 crore, he added.
Though the financial structuring report is being prepared by the Infrastructure Development Finance Corporation of India, the Infrastructure Leasing & Finance Corporation of India and SBI Caps, the final decision on the financial structuring will be taken by the state Cabinet.
Pointing out that a study conducted by Lea Associates South Asia Pvt Ltd confirmed that the project was technically, economically and financially viable, the minister said an economic analysis by the Roads and Bridges Development Corporation of Kerala Ltd (RBDCK) had shown that the internal rate of return of the expressway could be as high as 70.73 per cent including savings in vehicle operating costs, value of time, employment in construction and gains from activity nodes to be build around 19 interchanges on the route.
Revealing that the funds required would be mobilized by a 'special purpose vehicle' to be created for implementing the project, Muneer said the Kerala government would hold a 50 per cent stake in the total equity of that company.
Revealing that the state government and the strategic partner would share the equity at Rs 696 crore each, an RBDCK official said, "The balance Rs 3,250 crore would be raised as loans and debentures.
The money to be contributed by the government is likely to be raised by charging a cess of Re 1 per litre of petrol and diesel sold in the state. The total cess accumulated over a period of 10 years would come to Rs 2,639 crore."
While the average cost per kilometer of the proposed expressway works out to Rs 12 crore, the toll rates proposed to be charged compare favourably with those charged on the Mumbai-Pune Expressway, the Coimbatore Bypass, the Udaipur Bypass and the Mordabad Bypass.
For example, the toll on the Kerala Expressway for light commercial vehicles would be Re 1 per km against Rs 1.63 per km on the Pune expressway. The toll for bus would be Rs 2 and Rs 3.10 per km respectively, he added.
To be undertaken on the Build, Operate, Transfer (BOT) principle, the project is expected to confer various economic benefits to the people of Kerala, the government says.
As much as 2.6 metric tonne rubberized bitumen and 15 metric tonne coir geo textiles have to be used for the construction. It is also expected to open up several areas hitherto unknown to tourists.
Moreover because of the backward and forward linkages this project will have with virtually every sector of the economy, it will open up new vistas of economic growth. This by itself would give a major boost to the state's economy and also provide plenty of job opportunities.
Besides, the construction of the expressway will go a long way in alleviating the tremendous growth of traffic and the resulting congestion in several parts of Kerala.
Despite its benefits, there are fears that the expressway would divide the state into two.
Maintaining that cess is not the appropriate way to finance the project, critics say the main beneficiaries would be the upper and middle class, especially the business class and a small segment of the neo-rich society who are keen to cruise in their luxury cars at 100 miles per our.
So there is little justification in making the general public pay for it. Secondly, Wayanad and Idukki districts will not benefit from the project as the highway will not touch these two districts.
As such there is stiff resistance from these two districts to the RBDCK proposal to collect cess on petrol and diesel for a 15-year period.