Speeding up the road building process under the EPC model across the country, the road ministry in a recent move in consultation with the finance ministry has directed National Highway Authority of India (NHAI) to borrow Rs. 30,000 crore for each of the next two years from the market to fund road projects. The nodal agency currently has a borrowing limit of Rs. 9,000-10,000 crore, said sources claiming that since the private investment has become increasingly scarce in a slowing economy, the government is funding projects through the engineering, procurement and construction (EPC) model. An internal assessment conducted by the ministry showed substantially more funds will be needed to build roads under the EPC model.
The ministry has asked NHAI to prepare a plan for the market borrowing required for the next two years to be presented to the finance minister. In a related development to shore up finances to fund road projects, transport minister Nitin Gadkari called upon the finance ministry seeking the allotment of pending allocations under the 12th Five-Year Plan over the next two years to compensate a shortfall over the past three years. The ministry of road transport and highways has received just Rs.64,000 crore from the allocation of Rs.1,44,000 crore in the 12th Plan and exhorted the finance ministry that the Plan allocation be raised to Rs.40,000 crore for each of the next two years as the ministry needs funds for projects targeted to be awarded on EPC model.