In a first, UP outsources roads at a premium; to make money from toll
The Yogi Adityanath’s government in Uttar Pradesh has outsourced its first road construction project at a premium. Through this, for the first time, the state government will make money through toll collection.
On Tuesday (April 19), Uttar Pradesh Cabinet gave the nod for the project to a private company. It approved the tender for widening/upgradation/maintenance of State Highway 46 (Pukhraya-Ghatampur-Bindki) under the PPP model (Public-Private Partnership).
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The official Twitter handle of the UP government shared the news. It tweeted in Hindi, “The Cabinet approved the proposal for financial proposal/tender for selection of private developer for upgradation/maintenance of Pukhraya-Ghatampur-Bindki State Highway No.46 through a public-private partnership.”
मंत्रिपरिषद ने पुखराया-घाटमपुर-बिन्दकी राज्य राजमार्ग संख्या-46 का उच्चीकरण/अनुरक्षण सार्वजनिक निजी सहभागिता से कराए जाने हेतु निजी विकासकर्ता के चयन के लिए वित्तीय प्रस्ताव/निविदा के प्रस्ताव को स्वीकृति प्रदान की। pic.twitter.com/5XkCNT0G4B
— Government of UP (@UPGovt) April 19, 2022
The widening of the 82.5-km SH 46 from two lanes to four lanes will be taken up by Madhya Pradesh’s private company Prakash Asphaltings & Toll Highways at a cost of ₹1,136.45 Crore. The entire cost will be borne by the company. The project was sanctioned after the Uttar Pradesh State Highways Authority (UPSHA) had floated an E-tender for the selection of Concessioner.
According to a report in The Times of India, this is the fourth state highway to be given to private players for development but instead of sharing the cost of augmenting road infrastructure under the PPP model, this is the first time that the state government will be able to make money through toll collection.
Under the PPP policy, maximum viability gap funding of up to 40% is allowed to make a project feasible for private players. This time, however, instead of providing funds to the company, the UP government will get an opportunity to generate money. After completing the project, the company will share 1% of the toll collection with UPSHA, the report added.
“Though our share is nominal, it is a big achievement for the Yogi government. We had been struggling for the last four years to give a makeover to the crucial state highway since a lot of fatalities are reported from here. We were not able to do much due to a shortage of funds,” a senior officer from UPSHA said.
As Kanpur city, Kanpur Dehat, and Fatehpur have a lot of industries on the outskirts, a lot of commercial vehicles ply on the stretch during the night. The company has agreed to share its revenue with the state government after 3,351 days (9.18 years). After 20 years of operation, the company will hand over the state highway back to UPSHA. Besides widening the highway, it will also augment infrastructure to facilitate movement to neighbouring districts, as per the report.
