State to upgrade 3,400 km of highways

Chief Minister B S Yeddyurappa said that the World Bank had approved a financial assistance of $350 million and it would help in reconstructing and improving 831 km of the highways, which will be upgraded to double lane.”

The implementation of the project is proposed to be taken up through two categories of contracts: EPC contracts (conventional item rate contract) covering 269 km at a cost of Rs 525 crore, and annuity contracts covering 562 km at a cost of Rs 1,500 crore.

The EPC contracts, he said, will involve 80 per cent funding from the World Bank and five EPC contract packages have already been finalised.

The annuity contracts would be of 10 years’ duration with a maximum of three years of construction and seven years of maintenance. Under this format, the World Bank assistance will be available for an upfront payment of 50 per cent of the construction cost.

The remaining payments will be made during the maintenance period of seven years as annuity. The contracts are likely to begin this year-end.

He said the pre-project activities, including land acquisition, shifting of utilities and environmental issues for the entire length of 831 km, were being taken up as per the World Bank norms.

A part of the World Bank assistance will be leveraged to take up 400 km of road work taken up on PPP mode through the Karnataka Road Development Corporation Limited (KRDCL). The duration of the project is five years. The loan is repayable over an 18-year period after the initial moratorium period of five years.

In addition to the upgrading of the State highways, the government has taken up initiatives under Institutional Strengthening Component of the Project to accelerate road sector reforms.

The initiatives include identification of core road network, road asset management system and PWD financial management system.