UP govt outsources 1st road project to private firm under new model

28 Apr 2022 CW Team

The Uttar Pradesh (UP) government has outsourced its first road construction project to a private firm under a new model, allowing the state to make money through toll collection.

The UP government approved a proposal of the UP State Highways Authority (UPSHA) to award the widening work of State Highway 46, linking Pukhrayan, Bindki, and Ghatampur, to an Indore-based private firm Prakash Asphalting & Toll Highways.

While this is the fourth project to a private firm for development, unlike other projects, it is not awarded on a public-private partnership (PPP) model.

A maximum viability gap funding of up to 40% is allowed to make projects feasible for private parties under the PPP model. With the new model, the UP government, instead of providing funding to the company, will be able to generate money through toll collections.

In the recently devised model, the company, after finishing the project, will be sharing 1% of the total toll collection with the UPSHA.

Though the share is nominal, it is a big accomplishment for the Yogi government. The UP government had been working for the last four years to give a makeover to the important state highway since a lot of fatalities are reported from here, a senior UPSHA official told the media.

The private firm has agreed to invest Rs 1,136.45 crore to broaden the highway from two-lane to four-lane.

Further, the company will provide proper road safety measures at three locations, where the state highway intersects three national highways to prevent motorists from speeding.

The revenue will be shared with the UP government after 3351 days, while UPSHA will be handed over the highway after two decades of function.

The Madhya Pradesh (MP) based private players will also be promoting the movement to neighbouring districts by improving the quality of infrastructure in the concerned area.

Image Source

Also read: Dwarka Expressway to transform Gurgaon, NCR's realty landscape

The Uttar Pradesh (UP) government has outsourced its first road construction project to a private firm under a new model, allowing the state to make money through toll collection. The UP government approved a proposal of the UP State Highways Authority (UPSHA) to award the widening work of State Highway 46, linking Pukhrayan, Bindki, and Ghatampur, to an Indore-based private firm Prakash Asphalting & Toll Highways. While this is the fourth project to a private firm for development, unlike other projects, it is not awarded on a public-private partnership (PPP) model. A maximum viability gap funding of up to 40% is allowed to make projects feasible for private parties under the PPP model. With the new model, the UP government, instead of providing funding to the company, will be able to generate money through toll collections. In the recently devised model, the company, after finishing the project, will be sharing 1% of the total toll collection with the UPSHA. Though the share is nominal, it is a big accomplishment for the Yogi government. The UP government had been working for the last four years to give a makeover to the important state highway since a lot of fatalities are reported from here, a senior UPSHA official told the media. The private firm has agreed to invest Rs 1,136.45 crore to broaden the highway from two-lane to four-lane. Further, the company will provide proper road safety measures at three locations, where the state highway intersects three national highways to prevent motorists from speeding. The revenue will be shared with the UP government after 3351 days, while UPSHA will be handed over the highway after two decades of function. The Madhya Pradesh (MP) based private players will also be promoting the movement to neighbouring districts by improving the quality of infrastructure in the concerned area. Image Source Also read: Dwarka Expressway to transform Gurgaon, NCR's realty landscape

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UP govt outsources 1st road project to private firm under new model

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