New Delhi: The government is considering allowing real estate developers to commercially exploit land as part of its plans to build an expressway network around the country to supplement national highways.
Future plans: Roads secretary Brahm Dutt says the Planning Commission is working on a draft expressway legislation. Rajkumar / Mint
Road transport and highways secretary Brahm Dutt said he had held a meeting with real estate developers in October to look at the feasibility of allowing land development to cross subsidize the cost of building the expressways.
The cabinet committee on economic affairs, or CCEA, has so far approved the construction of some 1,000km of expressways at an estimated cost of Rs16,680 crore.
These expressways would be access-controlled, six- to eight-lane roads connecting Vadodara-Mumbai, Bangalore-Chennai, Delhi-Meerut and Kolkata-Dhanbad.
Dutt said that given the high costs of building the expressways, “real estate along expressways should be fully exploited”. He added that the government was looking at several models of land development.
The National Highway Authority of India, or NHAI, currently does not allow the commercial exploitation of land along highways.
Private concessionaires of highway stretches get their revenue solely through tolls. However, some states such as Uttar Pradesh have in the past bid out expressways based on the quantum of land that private concessionaires asked for as a sweetener to build on and finance the road.
Road transport and highways minister Kamal Nath had earlier this year announced the setting up of an expressway division within NHAI, which could eventually be spun off into a separate authority after the introduction of an expressway Bill.
Roads secretary Dutt said the Planning Commission was working on a draft expressway legislation.
Analysts, however, cautioned that in allowing land development to cross-subsidize infrastructure creation, the government runs the risk of the projects turning from being primarily expressway projects into primarily real estate projects.