Gadkari moots equity for farmers in road projects

Farmers must be allowed up to 10 per cent equity in road projects in return for their land acquired, to address land acquisition hurdles delaying infrastructure projects, road transport and highways minister Nitin Jairam Gadkari said on Friday.

The government would soon award development of 18 roads projects on the hybrid-annuity model, he said.

''Five to 10 per cent equity sharing with the farmers can be done. Oppression of the poor will not happen. Villages, poor persons, labourers and farmers are this government's priorities,'' Gadkari said, addressing investors at a Confederation of Indian Industries (CII) summit on public-private partnership (PPP). Farmers in rural areas would also get compensation equal to four times the land value.

He asserted that the developers' costs on account of interest rates on loans and land acquisition would not come down. ''So, rather than wasting time on asking for reduction in rates and litigation and claims, you must focus on innovative methods to cut down costs,'' he said.

However, the minister's suggestion on equity sharing with farmers failed to cut ice with investors and developers.

''It is the public sector that has to worry about social security and livelihood. I am all for direct transfer to an individual (farmer), but to invite an additional party into the partnership (between government and developer) would be a disaster,'' Arjun Dhawan, president and chief executive officer of HCC Infrastructure, said at the event.

Gadkari also announced his ministry had awarded three projects based on the new hybrid model of PPP project development and tenders for 18 more such road projects would be floated soon. ''This model has been planned only to give more clarity to the contractor, as land and environment clearance are the responsibility of the government. Also, 40 per cent investment comes from our side and 60 per cent from the contractor on annuity basis. So, there is no risk factor involved.''

The minister announced the government would soon finalise a policy to scrap commercial vehicles that are over 10 years old, to check rising pollution, but there was no immediate plan to ban trucks and buses more than 15 years old.

''For example, the policy will provide tax exemptions and discounts of up to Rs2.5 lakh on vehicles purchased for Rs10 lakh at the time of new purchase. More than 10-year-old vehicles will be scrapped and the scrap will be valued at 10 per cent cent of original cost,'' he said.

Gadkari also said his ministry will facilitate a meeting of key banks and financial institutions with finance minister Arun Jaitley within a fortnight in order to address their concerns over funding for roads and highway projects. He also said he has asked multiple state governments to prepare Detailed Projects Reports (DPRs) to speed up the pace of road construction that must be ramped up from the existing 18 km per day to 100 km per day. Of the DPRs for 35,000 km length of road projects to be awarded next financial year, DPRs for projects of 20,000 Km length would be prepared by state governments including Maharashtra, Madhya Pradesh and West Bengal.

The minister also pitched for increasing the capacity of inland waterways to take up additional freight loading. He said his ministry is working on 30 projects to develop waterways on 11 rivers in the country, including a project designed for coal evacuation from Mahanadi Coalfields' mines through barges that could save up to Rs10,000 crore.