National Investment and Infrastructure Fund

Roads

Indian road network of 33 lakh Km. is second largest in the world and consists of Expressway (200Km), National Highways (96260.72 Km), State Highways (131899 Km), Major District Roads (467763 Km), Rural and Other Roads (2650000 Km). About 65% of freight and 80% passenger traffic is carried by the roads. National Highways constitute only about 1.7% of the road network but carry about 40% of the total road traffic. Number of vehicles has been growing at an average pace of 10.16% per annum over the last five years.

National Highways and Development Program (NHDP) is the flagship program of Government of India for development of national highways. More than 24,000 km of national highway network has been developed through NHDP across its seven phases. National Highways Authority of India (NHAI), the implementing authority for NHDP, is expected to award more than 25,000 km of national highway projects over the next 5 years (2016-20).

The government through a series of initiatives including NHDP, is working on policies to attract significant investor interest. The Indian government plans to develop a total of 66,117 km of roads under different programs such as National Highways Development Project (NHDP), Special Accelerated Road Development program in North East (SARDP-NE) and Left Wing Extremism (LWE) and has an objective of building 30 km of road a day from 2016 onwards.

Government Initiatives

• The Ministry of Road Transport and Highways plans to undertake development of about 7,000 km of national highways under Bharatmala Pariyojana at an estimated cost of Rs. 80,000 Crore (US$ 12 billion)

• Government has approved a comprehensive exit policy for roads sector, a measure that will help the stressed sector monetize assets and unlock the capital for future projects.

• Government will carry out all preparatory work including land acquisition and utility removal. Right of way (ROW) to be made available to concessionaires free from all encumbrances

• NHAI/ GOI to provide capital grant up to 40% of project cost to enhance viability on a case to case basis

• 100% tax exemption for 5 years and 30% relief for next 5 years, which may be availed of in 20 years.

• Concession period allowed up to 30 years.

• Arbitration and Conciliation Act 1996 based on UNICITRAL provisions.

• Standard concession terms amended/ relaxed to mitigate risks for the developers

• Pro-active measures taken by the government to resolve stalled projects

• Leveraging of technology for automation of tolling, traffic survey, etc.

• Alignment of financing norms by the regulator from project financing perspective

• In BOT projects entrepreneur are allowed to collect and retain tolls.

• Duty free import of specified modern high capacity equipment for highway construction

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