Indian road sector Funding

Road projects are funded through a variety of

sources
Central and state government budgetary resources
Central Road Fund (CRF)
Market borrowings
Private investment
Assistance from multilateral agencies like the World Bank, the
Asian Development Bank and the Japan Bank for International
Cooperation

In recent years, focus has shifted from

traditional sources towards private
investment
 Indian road sector - Formats
BOT (toll) - The private developer
finances and undertakes the
construction and maintenance of a
highway and recovers its
investment (plus a return) from toll
revenues

BOT (annuity)
The developer EPC format
finances and Construction is
undertakes the contracted out to a
construction and third party for a
maintenance of the one time payment.
highway and Ownership stays
recovers its with the developer
investment from
annual payments by
the
government/granting
 Policy and Promotion
The government provides various incentives for private and
foreign sector investment in the roads sector. 100% foreign direct
investment (FDI) under the automatic route is allowed for support
services to land transport such as operation of highway bridges,
toll roads, and vehicular tunnels; services incidental to transport
such as cargo handling is incidental to land transport; construction
and maintenance of roads, bridges; and construction and
maintenance of roads and highways offered on build-operate-
transfer (BOT) basis, including collection of toll.
The ministry has also framed a Special Accelerated Road
Development Programme in North Eastern Region for improving
road connectivity to remote places in this region. The estimated
cost of the proposal is USD 2.53 billion. The Union Budget 201213
proposed an increase of allocation of the Ministry of Road
Transport and Highways by 14% to Rs. 25,360 crore.
Further, the World Bank has approved a USD 975 million loan for
developing the first phase of the eastern arm of the USD 17.21
billion Dedicated Freight Corridor Project in India. The Dedicated
Indian road sector Policy
reforms
Standard bidding
documents Approval of the
new tolling policy

Policy
Formulation of a changes
Reform of the
model concession NHAI
agreement
Move towards privatisation through
amendments in the acts
Indian road sector
Programmes
Central sector
projects State sector projects
CRF projects
National Highways
State road sector
Development
projects multi-lateral
Programme (NHDP)
agency funded
Pradhan Mantri Gram
Public-private
Sadak Yojana (PMGSY)
partnership (PPP)
Special Accelerated
projects
Road Development
Other projects
Programme for North-
NABARD-assisted
eastern Region
projects, Hudco
(SARDP-NE)
projects