No takers for road project

Private players want the State government to bear the land cost

The government issued notification inviting bids for the project in February this year. So far no company has submitted tenders. Reason is that no private player wished to bear the land expense.

The government has taken up development of roads of 10,000 kms in 51 packages on the DBOT (Design, Build, Operate and Transfer) basis.

As per the notification the selected bidder has to prepare detailed project report and identify the land required for the project. The Government will handle the process of land purchase. However, the concessionaire has to bear the expense, to which many private companies objected.

Pre-bid meeting

Karnataka Road Development Corporation Limited Managing Director Basavaraj said that as many as 42 companies attended the pre-bid meeting. Most of them at the meeting demanded that the land cost be borne by the Government. “That is the procedure followed in various road projects across the country. Now, the corporation has sent a proposal to the State government that it should bear the land expense so that the total project cost would come down. There will be more responses, if the government approves our proposal,” he said.

Now, the proposal is before the Finance Department.

KRDCL issued tender notification in February and the deadline is June 30. If the government decides to acquire land at its cost the same should be conveyed to the bidders and the last date to file the tenders has to be extended by at least 30 days.

Interest shown

Secretary to Public Works Lakshman Rao Peshwe said that the average expenditure on one kilometre stretch will be anywhere between Rs 2.5 crore and Rs 3 crore. Many companies including Reliance, L&T have evinced interest in the projects.

As per a rough estimate the Government will have to acquire about 50,000 acres for development of 10,000 kms of road. The exact extent of land required for the project will be known only after detailed reports are prepared.

The Government would allow concessionaires to get back their investment on road by collecting toll for 20 years. In addition, the government will grant one acre of land against development of 5 km stretch each, which can be used to build hotels, motels, petrol pumps and other utilities for the public. After 22 years (including 2 years of construction period) the concessionaire has to return the roads to the government. However, he will continue to enjoy the ownership of land granted for business establishments.