Projects under the first phase of BharatMala, the central government’s ambitious plan to develop over 66,100 km of highways, will start getting awarded from December 2018, with a view to complete them by 2021. This was stated by Nitin Gadkari, the Minister for Road Transport & Highways, Shipping and Water Resources, River Development & Ganga Rejuvenation on Wednesday, a day after the Cabinet Committee on Economic Affairs approved a Rs 6.92 lakh crore spending plan for highway development.

Key to the ambitious highway development plan is the BharatMala project where in the first phase alone Rs 5.35 lakh crore of public and private sector investment would be required for developing 24,800 km of new projects under BharatMala Phase-I and balance works of 10,000 km from the ongoing National Highway Development Plan. Further Rs 1.57 lakh crore would be spent by the National Highway Authority of India (NHAI) for developing 48,877 km of roads.

Gadkari, who along with his team were noticeable absentees at Tuesday’s press briefing by the Finance Minister Arun Jaitley and his team, addressed the media on Wednesday to discuss the BharatMala project in further detail.

“Our aim is that by the time we complete our current five years in office, the projects under Phase-I of BharatMala are awarded to the contractors. The good thing is that work to prepare the Detailed Project Reports had already begun before Cabinet approval was sought for BharatMala. Therefore, we are confident that the projects will be awarded we complete our term in office,” said Gadkari.

Further, Gadkari said that initially the projects will be awarded on an EPC (Engineering, procurement and construction) basis before being monetised through a Toll-Operate Transfer model. “This will be done to expedite the construction process as the contractors and investors in the road development sector are still feeling the effect of the stalled projects under the Build-Operate-Transfer model which prevailed between 2010 and 2014,” he said.

Y S Malik, Secretary, Ministry of Road Transport and Highways added that the land acquisition process will start as soon as the DPR for various projects get completed. While the Minister admitted that land acquisition is a complex subject he said that his team is finding solutions and the 15,948 km of projects awarded in 2016-17 is a testament to the fact that the land acquisition problem is not unsolvable.

The BhartMala project will have six key components. First is the improvement of national corridors like the Golden Quadrilateral and North-South-East-West corridors. Under this component, 5,000 km of highways will be developed under Phase I. Second is the development of economic corridors which would see 9,000 km of highway developed under the first phase. In all BharatMala envisions 44 economic corridors. The third component under BharatMala is the inter-corridor and feeder route development which would require 6,000 km of highway construction under Phase-I. Border roads and international connectivity is the fourth component and will see 2,000 km of roads being developed. The fifth component is the coastal roads and port connectivity which will 2,000 km of roads and finally 800 km of greenfield expressways will also be constructed.

At yesterday’s presentation by the Finance Ministry officials it was said that out of the total funding of Rs 6.92 lakh crore required for BharatMala Phase-I and NHAI’s projects, Rs 1.06 lakh crore is expected to come from private investment. On Wednesday, the Road Transport and Highways Ministry Secretary explained the funding further and said Rs 2.37 lakh crore will come from the Central Road Fund, Rs 60,000 crore will come from budgetary support, Rs 34,000 crore will come from the monetisation of the EPC projects and Rs 2.05 lakh crore will come from the market borrowings of NHAI through bonds and other debt instruments.

Gadkari also added that raising money will not be a problem. “Even today, NHAI can raise Rs 4-5 lakh crore from the market very easily. But to maintain its economic viability, enhanced budgetary support will be required. I am sure that the Finance Minister will increase our budget considering that we will be undertaking such a crucial project for the country.”

Stocks of companies in the road development sector shot up on Wednesday on the Bombay Stock Exchange. Ashoka Buildcon closed 8.71% higher at Rs 209.10, IRB Infrastructure closed 5.6% higher at Rs 226.35 and Sadbhav Engineering closed 9.23% higher at Rs 317.15.