Will stick to EPC in road projects for now: Nitin Gadkari


NEW DELHI: The government is focusing on entirely state-funded projects for road development at the moment because that will help in faster monetisation of projects, road transport and highways minister Nitin Gadkari has said.

“We will do more of EPC projects at the moment,” Gadkari told ET in a brief interaction. With the ministry’s priority being monetisation of assets, engineering, procurement, construction (EPC) — which is entirely funded by the government —is the preferred mode of project award, he said.

National Highways Authority of India (NHAI) has set itself a target of awarding 4,500 km of road projects in the current financial year. While the 1,700 km projects awarded this year are on EPC mode, projects with cumulative length of around 2,000 km are to be awarded on the hybrid annuity model (HAM).


Under HAM, the government provides 40% of the construction cost, while the rest is arranged by the developer. Land acquisition and toll collection are government responsibilities. With private investment in the roads sector remaining muted, market watchers feel monetising roads built on EPC is more suited at the moment. “We are currently collecting Rs 40,000 crore as toll income; we want it to increase to `1 lakh crore annually,” Gadkari said.

NHAI will generate revenue by allowing oil marketing companies (OMCs) to set up petrol pumps along national highways, through wayside amenities, among other avenues, he said. Talking about the road construction target, Gadkari said, “We are doing pretty well in the roads sector. We will construct 8,000-10,000 km of roads by March this year.” Road construction has reached around 7,000 km so far this fiscal.

FY19 saw the highest ever pace of road construction with 10,800 km of roads constructed in the financial year.

Gadkari said electric highways, finding new modes of generating toll revenue will remain the priorities of the government.

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