The Ministry of Roads, Transport and Highways is leaving no stone unturned to fulfil the target of awarding almost 9,500 km of highways during the current fiscal. In order to get the wary developers' interest back in the road projects, the Cabinet Committee on Infrastructure (CCI) has given a go-ahead to the model engineering, procurement and construction (EPC) agreement document for constructing two-lane national highways. In the EPC model, the government spends the entire funds required to build roads.

With this approval, all the works on national highways being not performed on PPP mode [BOT (Toll) or BOT (Annuity)] will now be constructed primarily through EPC mode."Engineering, Procurement and Construction (EPC) Contract" will minimise, if not eliminate, the time and cost over-runs characteristic of the extant item rate contracts. Further, this will enable a faster roll-out of projects with least costs and greater efficiency." Dr. C.P.Joshi, Road Transport and Highways Minister.

Presently, the national highways that are not feasible on BOT (Toll) / Annuity mode are taken up under traditional item-rate contracts. However, over the years it has been observed that item rate contracts generally lead to time and cost overruns. Such disadvantages of item rate contracts can be overcomed by following the EPC approach which depends on assigning the responsibility for investigation, design and construction to the contractor for a lumpsum price under a fixed time frame determined through competitive bidding. In case of early completion of work, the developer will be given bonus while for faults in construction he will attract penalty. In case government fails to fulfil its commitment, it will give damages to the contractor. Meanwhile, the government will award 30contracts to build about 4,000 km of highways this fiscal under the EPC mode, the model document for which was approved today.

In a related development, the CCI has approved the operation and maintenance of the national highways on Operation, Maintenance and Transfer (OMT) basis. Undertaking Maintenance of National Highways Operation, Maintenance and Transfer Basis. Ex-post facto approval for six OMT Projects on East-West corridor measuring about 963 km which have been awarded after the approval of Standing Finance Committee (SFC) and the subsequent approval of the Minister (RT&H). The users of National Highways from all over the country will be benefited in a big way as the traffic on well maintained roads will be smooth.

This apart, the Central Government has approved relaxations in the transfer policy for government-owned land in order to fast track PPP projects in the infrastructure sector. In 2011, the government had restricted ministries from clearing land transfers, as it feared corruption charges. Cabinet clearance for land transfer was mandatory. However, this resulted in delays in several road, railway, port and civil aviation projects. With the approval, land transfer from ministries to statutory authorities or public sector undertakings will now be allowed, subject to normal Central Government rules. Also covered would be all cases of land transfer on lease or rent or licence to a concessionaire, approved by the finance minister or the minister concerned or by the Cabinet, as the case may be. The development and use of railway land by the Rail Land Development Authority (RLDA) under the provisions of the Railways Amendment Act, 2005 and the prevailing government policies would also be covered.