The Road Transport and Highways Ministry today said it may be able to utilise by next month the unspent Rs 8,500 crore - raised by NHAI through tax-free bonds - if it gets clearances for award of projects through the EPC mode.
"If we get the procedural permission for award of 4,000 km on EPC mode timely, then committed liability will be there. We will be able to exhaust the funds within this fiscal," Road Transport and Highways Minister C P Joshi said.
The Finance Ministry has expressed concerns over National Highways Authority of India's (NHAI) inability to utilise funds raised through tax-free bonds last fiscal. The authority has parked about Rs 8,500 crore with banks.
Joshi said the Ministry intends to award projects for construction of 4,000 km through engineering, procurement and construction (EPC) mode and was hopes to get procedural clearances soon.
"Finance Ministry's concern is that we should see to it that maximum number of projects are successfully bid. We are going to EPC where 100 per cent funding is by the Ministry. We are expecting clearances soon," Joshi said.
The Ministry has pinned all hopes on EPC mode for award of road projects to pick up momentum as it has been able to award barely 1,000 km of projects so far against a target of 9,500 km for the fiscal.
Under the EPC model, the government spends the entire money required to build roads so as to attract builders who are shying away from highways projects for want of funds.
"Looking to the award at this juncture, it is not possible to meet the target. If everything goes as per our expectations and if we get the procedural permission for award of 4,000 km on EPC mode, we will award more than 6,000 km," he said.
The government in August last year had approved the EPC model agreement document for construction of highways.
As per the EPC document, all national highways works which are not done on PPP mode [BOT (Toll) or BOT (Annuity)] would be done primarily through EPC mode.
The EPC document has been structured in a manner that time overrun and cost overrun in implementation of national highways works shall be minimised to a great extent and there will be optimisation of design and quality construction.
As bidders are not coming forward to take highways projects, NHAI has been forced to park about Rs 8,500 crore raised through tax-free bonds in banks as fixed