5 new State highways planned under WB-aided project

The Karnataka Road Development Corporation Limited is embarking on a World Bank-assisted project of constructing five new State Highways.

The two-year project will be implemented on a Public Private Partnership (PPP) annuity model at a whopping cost of Rs 942 crore.

These roads are expected to be 384-km long, connecting major districts. They include roads which connect locations in the districts of Belagavi, Hassan, Mysuru, Bagalkot, Vijayapura, Haveri, Gadag and Davangere. The projects have received the approval of the World Bank and the State government.

The roads will be taken up on a 10-year annuity basis, with contractors agreeing to build the roads in two years and maintain them for eight years afterwards.
The project will see 20 per cent of the project cost being funded by the World Bank, 20 per cent by the State government and the rest 60 per cent by the contractor. KRDCL will provide bank guarantee for the contractors.

“The annuity model will see KRDCL paying the contractor on a deferred basis for eight years. After 10 years, the road will be handed over to the State,” said KRDCL managing director Krishna Reddy.

According to sources, the width of the roads will vary from place to place. While the roads will be four-laned in habitational places and cities, in other locations it will be two-laned with shoulder roads to connect interiors.

It is said that the tender process for the projects is in progress, with the work orders likely to be issued by November-December. From the time the work orders are issued, the contractors will be given two years to complete the project. At present, KRDCL has begun land acquisition for the projects.

While there is no provision to collect toll in the initial phase, KRDCL is likely to go in for toll collection after the 10-year contract ends.

With the toll collection policy being made official by the State, KRDCL is seeking to reap its benefits from the new roads as well.

Senior officials in PWD said that overall, 11 roads will be tolled as most of them are under PPP model. While two roads - Dharwad-Alnavar and Waghdhari-Rippanpalli are already being tolled, PWD intends to collect toll for using five other roads (mentioned in the box) as well. Overall, nine future roads are in the pipeline to be tolled.