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All highways projects costing more than Rs 50 crore will now be taken under EPC mode with a slew of steps being taken to infuse a fresh capital in the road sector, the government today said.
"The Ministry has decided to take all projects costing Rs 50 crore on engineering, procurement and construction (EPC) mode," Minister of State for Road Transport and Hihgways Krishanpal Gurjar said in a written reply in the Lok Sabha.
Unlike PPP model where the private sector has to fund the road building, in the EPC model, the government funds a highway, with private firms designing and building the road.
Gurjar said the government has recently taken a number of steps to boost investor sentiments and encourage more investment in the road sector in order to expedite projects.
"These include formation of a high level expert settlement advisory committee for one time settlement of old cases pending in the courts; to complete all pre-construction approvals prior to award of a project; streamline the process of grant of environment clearances by the MoEF, facilitating exit to equity investors...And infuse fresh capital into the sector," he said.
The government has also recently approved policy for rationalisation of premium quoted by concessionaires in respect of highway projects that are stressed, he added.
The highways sector has recently hit a low with bidders shying away from bids in the wake of a plethora of problems including equity crunch and delays in green nods and land acquisition.
Last week Road Transport and Highways Minister Nitin Gadkari had said that as many as 189 projects with a cost of Rs 1,80,000 crore are stuck due to problems in land acquisition, delays in forest and environment clearances, non-transfer of defence land and hurdles in rail overbridges.
In a significant shift of policy, he has also said that public private partnership (PPP) model was not feasible at present for award of road projects due to a host of issues "created by the previous government" and that schemes will be bid out on EPC mode.
"Projects were bid out by previous government without even 10 per cent of the required land acquisition. Work could not start on the project where financial closure took place two years back. Banks withdrew financial closure...PPP mode is not possible now. We will work on EPC model for a few years," he has said.
