Patna, Aug. 22: The private investment in the road sector in the state is all set to cross Rs 3,000 crore with the Centre approving the proposal of Bihar government to construct 107-km-long Bakhtiyarpur-Rajauli section of NH-31 under public-private-partnership (PPP) mode.
To be constructed at an estimated cost of Rs 889 crore, the four-lane road would attract minimum Rs 533 crore private investment if the Centre and the state governments provide 40 per cent of the project cost as viability gap funding.
According to rules, maximum 40 per cent cost of a project under PPP mode can be raised through viability gap funding. The Centre and the state concerned share the amount of viability gap funding. This percentage generally goes down during the competitive bidding because the work is awarded to the agency claiming minimum viability gap funding.
Confirming the Centre’s approval to the four-laning of Bakhtiyarpur-Rajauli section of NH-31 under PPP mode, road construction minister Nand Kishore Yadav told The Telegraph: “The bidding process for the road would start within a month and the selection process of the private investor would be complete by the end of the year.”
Sources said major players in the road construction sector would show interest in this project because it is one of the busiest stretches of the national highways passing through the state. “Majority of the commuters between Bihar and Jharkhand use this stretch of NH-31,” a source in the road construction department said.
The Ganga driveway project under which a 20.5-km-long four-lane road along the banks of the river would be constructed in the PPP mode would also attract handsome private investment. The minimum private investment in the Rs 2234.46-crore project would be Rs 1340.78 crore. The tender process for this project would be initiated within a fortnight.
Earlier, Bihar attracted healthy private investment in two road projects Ä the new bridge across the Ganga between Bakhtiyarpur and Tajpur and four-laning of 116km stretch of NH-30 between Ara and Mohania.
The agency selected for constructing the bridge is investing Rs 917.74 crore. The total cost component of the project is Rs 1,602.74 crore. Around 38.93 per cent of the project cost would come through viability gap funding.
The agency awarded the tender for four-laning of the 116km stretch of NH-30 is investing Rs 619 crore. The total project cost is Rs 1,077 crore. The viability gap funding in this project is just 32.97 per cent of the project cost.
Terming the increased interest of private investors in the road sector in Bihar a result of overall improvement in investment climate in the state and improved law and order situation, social scientist and member-secretary of Asian Development Research Institute Shaibal Gupta said: “Even the state government has accorded high priority to this sector as political dividends of good roads are high because this development is not only visible to people, they also perceive its benefits while moving from one place to another.”
He said even the investors did not face much problem in executing the road projects because the land acquisition work was done by the state.
Economist N.K. Choudhary said better business prospects were the driving force behind such investments. “Thanks to the increased economic activities in the past few years, the pressure on roads has increased manifold. This goes in favour of those investing money in the road sector in the state,” he said.
Choudhary also said improved law and order situation had given the investors the confidence that they would not face any problem either in executing the projects or in collecting toll after the projects were complete.
