The World Bank has sanctioned a Rs 1,400-crore loan to the Roads and Bridges Development Corporation of Kerala (RBDCK), a state government company floated recently to develop roads in Kerala.
According to sources, the World Bank is likely to allocate the entire amount in two years.
RBDCK and the state public works department would share the money to develop roads and bridges.
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RBDCK has pinpointed a 2,000-km road network. It has also mandated SBI Capital Markets Ltd to raise funds for the purpose and to zero in on sources from where funds could be mobilised. As per the mandate, SBI Caps will try to harmonise operations of the National Highway Authority of India (NHAI) and the state government.
The road modernisation programme also envisages private sector participation in select stretches.
Around a year back, the Kerala government had chalked out a massive plan to augment, widen and strengthen the road network in the state. It passed the Kerala Infrastructure Investment Fund Bill, 1999, which envisaged setting up a special purpose vehicle -- RBDCK -- which would be used solely for developing projects in the state.
The state government had recently raised Rs 500 crore through private placement for the initial funding of road projects.
Unlike in the case of road projects in other parts of the country, foreign participation would not be allowed. Though Malaysian firms have envisaging interest in all Indian highway projects, the government has reportedly developed cold feet about letting them participate as they insist on a traffic guarantee and a 20 per cent rate of return in dollar terms.