Maha Cabinet approves 6,000 km cement concrete roads worth Rs 36,964 crore

Mumbai, Aug 13 (IANS) Maharashtra Cabinet chaired by Chief Minister Eknath Shinde on Tuesday approved the expenses worth Rs 36,964 crore for the construction of 6000 kilometres of cement concrete roads under the revised (Hybrid Annuity Model).

This is a revised approval given to the construction of these roads. Earlier, in February this year, the state cabinet had cleared a Rs 28,500 crore project for the construction of these roads which has now been increased to Rs 36,964 crore.

The hybrid annuity model is a private sector participation model and has been implemented since March 2017 on the lines of the Centre. The model was later revised by the MVA government led by Uddhav Thackeray.

The roads will be built by the newly formed Maharashtra State Infrastructure Development Corporation(MSIDC) under the Public Works Department.

Under the revised HAM the state government's participation would be 30 per cent and the MSIDC which will implement the project and act as a concessionaire will have to raise the remaining 70 per cent from the market.

Owing to revision in the funds approval the amount of state government's participation in the construction of these roads has increased to Rs 2589 crore and the participation amount of MSIDC has increased to Rs 5875 crore.

Sources said that an expenditure of Rs 28,500 crores was expected for these roads as per the approval given by the cabinet in February this year. Sources, however, said that the amount was estimated for the asphalt roads but now a decision has been taken to construct cement concrete roads and hence the cost has been escalated and subsequently has been approved in the meeting.

These 6000 km roads will be handed over to the MSIDC for a period of 17.5 years. All the works under this model will be implemented on an EPC basis and for this purpose, a 2.5-year construction period and 5 5-year liability period have been decided.

Interestingly, when in February the Cabinet gave its approval for the plan of constructing 6000 km of roads at a cost of Rs 28,500 crore, the state's planning and finance department had raised concerns about the financial strain it would pose.

The planning and finance department had pointed out that such a large expenditure on these projects may adversely impact on the other infrastructure projects being implemented by the state.

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