Gadkari Proposes Market-Driven Flexibility in Highway Construction Model

Union Minister Nitin Gadkari suggested that the construction of highways under the Hybrid Annuity Model (HAM) could be made more flexible and market-driven to ensure timely completion. Currently, the government provides 40% of the project cost to developers to initiate work, while developers cover the remaining 60%.

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Gadkari questioned why the government should always provide 40% of the project cost even if contractors are willing to invest more than 60%. He emphasised that infrastructure development should be driven by contractors and market needs. "What is needed is completion, and the proposals should be market-driven," he said.

GNSS-Based Toll Collection

The minister also highlighted that India's total toll collection will increase by at least Rs 10,000 crore with the implementation of the Global Navigation Satellite System (GNSS)-based electronic toll collection. In 2023-24, toll collection in India reached Rs 64,809.86 crore, a 35% rise over the previous year, surpassing estimates due to increased commercial traffic.

Earlier this month, the National Highways Authority of India (NHAI) invited expressions of interest globally for implementing GNSS-based electronic toll collection. This system aims to provide a seamless and barrier-free tolling experience on national highways, eliminating physical toll booths.

Hybrid Toll Collection Model

NHAI plans to integrate GNSS-based electronic toll collection within the existing FASTag ecosystem. Initially, a hybrid model will be used where both RFID-based ETC and GNSS-based ETC will operate simultaneously. This approach aims to ensure a smooth transition and effective implementation.

Gadkari also proposed that state-transport buses should be exempted from paying tolls on highways. This suggestion aims to reduce operational costs for state transport services and encourage public transportation usage.

The minister reiterated his belief that infrastructure projects should be developed by contractors rather than relying heavily on government funding. He stressed that making HAM more flexible and market-driven would lead to better project completion rates and efficiency in highway construction.

In summary, Gadkari's suggestions aim to make highway construction more efficient and toll collection more seamless through advanced technology. The proposed changes are expected to significantly impact India's infrastructure development and toll revenue generation positively.