In the Budget 2019, the budgetary allocation to the ministry of road transport and highways increased to Rs 83,016 crore in 2019-20 from Rs 78,626, rising by a significant 6 percent.
Infra spend may exceed Rs 5 lakh crore, Finance Minister Nirmala Sitharaman announced during her Budget speech. This is seen as a positive move for roads and urban infra companies.
Delhi-Mumbai Expressway is to be completed by 2023 . The government will be starting Chennai-Bengaluru Expressway as well.
To set up 9,000 km Economic Corridor, a 2,000 km Coastal Road will be created. Centre will monetise 12 lots Of Highway Bundles Of 6,000 Km By 2024.
The Road Ministry plans to allot 22 new greenfield corridors comprising six expressways and 16 greenfield corridors in 2020, covering a span of 7,500 km. The new projects are expected to generate an investment of Rs 3 lakh crore in the infrastructure sector.
The higher budgetary allocation comes in the wake of reduced risk appetite of the private sector . As per an ICRA report, BOT (Build Operate Transfer) model in its current form may not have many takers till the developers are adequately compensated for such losses on account of new competing programmes - which remained unaddressed in the recently published modified model concession agreement.
Given the subdued interest of the private sector, the government is likely to construct more highway projects via the engineering, procurement and construction (EPC) mode, in which the executing agency has to bear all expensesWhile land acquisition and financing issues prevail, the rise in budgetary allocation is will help in construction of highways and attracting further investment.
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