NEW DELHI: The Centre and state governments have agreed on a new funding model for national highways that are built and maintained by state government agencies. The new scheme involves development of road on a BOT (build-operate-transfer ) basis instead of the earlier system of cash contracts. Under the new model, viability gap funding (VGF) will be provided by the Centre for stretches that are financially unviable.
As per the policy, government can give up to 40% of the project cost in the form of VGF for all national highway projects undertaken on BOT mode, a senior highways ministry official said. The model has been worked out after some state governments such as Madhya Pradesh , Rajasthan and Punjab claimed that they could also implement the highway development programme on the model adopted by NHAI. They had suggested that the projects could be tendered via the BOT route and for that, the VGF amount should come from the Centre.
"The state governments will tender the projects and supervise the work, though they have to follow all central government norms," the official said. Two projects totalling about 200 km with an investment of Rs 1,376 crore, will be implemented by the M government . Four other projects in Rajasthan and one in Punjab have also got in-principle clearance.
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