UP junks PPP model, to build e-way on contract
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The UP government has finally decided to build the 270-km long Lucknow-Agra Expressway through cash contract by adopting "EPC (Engineering, Procurement and Construction)" model.
Initially, the project was proposed to be built on Public Private Partnership (PPP) model but the private players did not turn up while expressing their doubt over the project's feasibility.
In the latest supplementary budget, the government has set aside Rs 450 crore for the ambitious expressway, which is also the dream project of Chief Minister Akhilesh Yadav. Since then, the decision was pending with the government about the model that would be adopted to develop the project.
Under EPC model, the government would give cash contract to private builders to build the expressway through a bidding process.
The expressway would thus be built on contract basis, for which the payment would be made by the state government. As a result, the developer would have no right on the collection of toll tax on this expressway, unlike Yamuna Expressway, which was built on PPP model and the developer was given land parcel along with the right to collect toll.
"The decision has been taken looking into the existing economic scenario. EPC model would be adopted for the construction of Lucknow-Agra expressway. While the government would give cash contract to the contractor, who would design and build the expressway, the right to collect toll would remain with the state government," said Alok Ranjan, Infrastructure and Industrial Development Commissioner, Uttar Pradesh Government.
According to sources in the government, the decision has been taken as developers were asking for "sweeteners" to make the project viable — as given to the Jaypee Group to build Yamuna Expressway. However, following the SP government's promise to avoid acquisition of fertile land, it had become difficult to provide land parcels. "It is not only the question of land parcel, there is a difference in cost of land parcel in NCR region and in other parts of the state. This would mean more sweetners would have been required to make the project viable for private players" said a senior government officer.