Ajit Karn
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The Union road transport ministry may reduce its stake in the hybrid annuity model to give more opportunities to private investors in road construction. Explain that the hybrid model related to the construction of roads is based on the partnership between the government and private investors, in which at present the government’s share is 40 percent and the private sector’s 60 percent.
Government can reduce stake
According to sources in the ministry, the government’s stake may be brought down from 40 to 20 per cent as there have been indications from industry that they are now willing to invest more in road projects. However, the final decision has not been taken in this regard yet. Efforts are being made by the Ministry at various levels to speed up road construction so that on the one hand, the target of constructing 12,000 kilometers of roads this year is met and on the other, infrastructure development plans are strengthened.
Emphasis on increasing investor confidence
In the same sequence, measures are also being taken to increase the confidence of investors on BOT i.e. built, operate and transfer model. It is believed that there is some skepticism in the minds of investors about this model, considering the risk involved in the estimation of toll. Looking at the pace of road construction so far in this financial year, it seems difficult to construct 12,000 km of highways.
Doubt on meeting the target on time
At the same time, the officials of the ministry are still saying that there has been a spurt in highway construction and project awarding for the last two months and the target will be completed by March 2023. Till last November, only 4,766 km of highways have been constructed, while 5,118 km of highways were constructed in the last financial year.
