Considering the usefulness to serve the economy, the intention of the Government is to involve Private Sector for taking up development of following type of projects on State Highways :

(i) Byepasses

(ii) Bridges

(iii) Railway Over Bridges

(iv) Widening of existing roads

(v) Ring Roads near big cities.

(vi) Improvement/Maintenance of existing roads.

Any facility on the existing State Highways required for safe and efficient movement of the traffic may also be offered to the private entrepreneurs, wherever feasible.

 

 

 

FEATURES OF THE BOT SCHEME

• It is proposed to seek private sector's participation including foreign investments in the development of selected stretches of State Highways to maintain and operate them generally for a period upto 30 years (concession period) after opening the facility for traffic and in return permit the entrepreneur to collect and retain toll as approved by the Government directly from the users of the facility. After expiry of the concession period, the facility will stand transferred to the Government.

• To ensure free flow of traffic, the normal checks by the authorities will be conducted at entry and exit points only. The traffic on such facilities will be normally regulated by the entrepreneur.

• To provide basic facilities for the traffic en route, provision for developing and operating highway related facilities such as restaurants, motels, fuel stations, rest/parking areas, shopping malls, transport nagars and other related facilities would be made. The income from such facilities will also enhance the viablity of the project.

• Private entrepreneurs will design, construct, maintain and operate the facility from their own resources or funds borrowed from financial institutions, banks, open market etc. In the case of Railway Over Bridges, the Ministry of Railways have also agreed that the construction of the Bridge across the railway line would be permitted to be taken up under the BOT, subject to approval of design and specifications and fulfilling safety requirements.

 

 

GOVERNMENT'S DIRECT SUPPORT

(i) The Government will identify priority projects, prepare feasibility study defining the road alignment, set standards for technical construction and allow the private sector to design, construct and operate the toll roads. The choice of entry/exit points may be mutually agreed between the Government and the Entreprenuer.

(ii) Acquisition of land by private parties may be beset with a number of problems. It is, therefore, decided that the land for highway development will be acquired by the Government and given to the entrepreneurs on certain terms and conditions for the land.

(iii) Tax holiday for five years for road infrastructure development project as per the policy decision of Central Govt.

(i) The entrepreneur will be allowed to develop and operate restaurant, motels, gas stations, rest and parking nagars at important stations to provide loading and un-loading facilities for cargo, ware houses and godowns, vehicle repair facilities, shops for spare parts, tyres and other vehicle components, restaurants, hotels, motels, insurance and medical facilities which may also generate considerable revenue for the enterprising company. It is estimated that this policy measure will add substantially to the revenues of the private sector, thus enhancing viability of the project. In principle, however, it is recognised that if the land is available at fair market price or it is provided free of cost by the Government, toll roads should be self sustaining, with non toll revenues less important in justifying the project.

(ii) A very important aspect of BOT road projects is that the private franchise holder must be given the right to directly collect the toll and retain the revenue for payment of expenses and dividends to equity holders. This aspect is being covered in the Highways Act, under consideration.

(iii) Project Implementation :

The enterprise to have full freedom to implement the project, they will have to satisfy the Government with regard to standards, specifications, safety of structures and satisfactory operation and management to be followed by them. The Public Works Department may provide infrastructure through consultants to ensure compliance of standards and specifications and can also play a major role in project approval and its implementation.

(iv) Registration of Entrepreneurs under special category :

The State Government has registered entrepreneurs in the department for carrying out the works on the B.O.T. basis. Thirty firms have already been approved under this special category.

(v) Modification in B.O.T. contracts :

The department has invited the entrepreneurs to discuss on contract Agreement to be used for B.O.T. schemes. After discussion with entrepreneurs, the contract document has been modified and made more comprehensive to facilitate the smooth working and execution of project by the entrepreneurs.

 

 FIXATION OF FEE

The basic principles for fixing the level of fee may take into consideration namely, the cost of the scheme, traffic levels, financing mechanism of the project, return expected by the entrepreneur, interest during the construction period, physical and tax concession available to the concessionaire company, the distance, fuel consumption, increased safety, less driving strain and reduced vehicle operating cost. Taking into account the above mentioned factors, the amount of fee to be charged for different categories of vehicles and mechanism for future enhancement will be prescribed in the concession agreement.