Cabinet approves road building projects worth Rs. 7 lakh crore

Centre's plan to add 83,000 km roads by 2022 may see approval of 7 lakh crore highway development project

With a view to improving infrastructure sector in the country, the government on Tuesday announced to build 83,677 km of roads along with an investment of Rs 6.92 lakh crore over the next five years.

The aim is to improve infrastructure, entail faster transportation and generate employment.

"These road building projects, including the "Bharatmala" project of around 35,000 km with an investment of Rs. 5.35 lakh crore, is likely to create 14.2 crore man-days of jobs", the Cabinet said.

About the funding of the Rs 5.35 lakh crore Bharatmala, he said it has been fully tied up as Rs 2.37 lakh crore would flow from the central road fund, Rs 2.05 lakh crore as market borrowing, Rs 34,000 crore from monetisation of highway projects and Rs 60,000 crore through budgetary allocation.

"With the implementation of this programme, India could get the much needed cost competitiveness in the manufacturing sector by bringing down the logistics cost which is now one of the highest among the emerging markets and way above that prevalent in developed economies", Mint quoted Jagannarayan Padmanabhan, director and practice lead, transport and logistics at CRISIL Infrastructure Advisory as saying.

This in turn would help reduce India's supply chain cost to 6% from the present levels of 18%, said Gadkari, who heads the ministry for road transport, highways and shipping, and water resources, river development and Ganga rejuvenation. Presently only six national corridors have in the country.

Gadkari said Bharartmala will be transparent and corruption free and, in synergy with Sagarmala, boost connectivity to coastal areas to enable port-led economic development and coastal tourism.

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He said 44 economic corridors being created with thrust on job creation.

Gadkari said that the ministry is initiating a slew of measures to ensure expeditious implementation of the program.

Mint reported on 12 September that the government planned to fund large infrastructure projects by raising money in tranches of Rs10,000 crore by selling 10-year bonds at a coupon of 7.25-7.75%. 70 to 80 per cent of freight will move along the national highways against 40 per cent at present.

Around 5,000 km of national corridor will be taken up in Phase-I at an estimated cost of Rs 100,000 crore.

The government also approved the construction of 2,000 km of roads, along the eastern and western borders of the country to boost border roads and global connectivity.

"With the government spending more on EPC under Bharatmala, it should certainly help not only the road industry but also the economy", said another analyst.

A total of around 600 projects have been identified across the components for Bharatmala.

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