Nath seeks World Bank loan widen one-lane ‘highways’
11 Sep 2009
The ministry of road transport and highways is in talks with the World Bank for a $3 billion (Rs15,000 crore) loan to to convert 6,376 km of single-lane national highways into to two-lane roads, surface transport minister Kamal Nath said in New Delhi on Thursday.
Addressing newspersons before leaving for New York on a seven-day visit, the minister said the low-interest loans would cover 80 per cent of the cost of the projects. He would be meeting World Bank president Robert Zoellick to take up the issue. He said the loan would be tied up in six months' time.
Nath said he would also meet pension fund managers as well as the United States India Business Council, among others. Nath had said earlier that India hopes to attract $10 billion worth of foreign investment for the sector over the next two years. (See: Road projects may have foreign investors)
The ministry has already approved 20 per cent equity for the project. Nath said the work would be carried out on cash contract basis. ''We are pushing the project and are hopeful of taking it up in next few months,'' he added.
The projects would be awarded as 'engineering-procurement-construction' or EPC contracts. This is a departure from the government's preferred build-operate-transfer or BOT model, where the developer finances and builds the project. In EPC contracts, the government awards the contract for a specified fee.
The country at present has nearly 19,702 km of national 'highways' which are single lane. These stretches don't fall under the national highway development project. Talking about the need to improve these, Nath quipped, ''Roads create wealth. Wealth does not create roads.''
