New Delhi: The finance ministry has asked for a $1 billion (Rs4,610 crore) loan from the World Bank to build two-lane highways in areas that may not support roads built in partnership with private firms, an official of the multilateral lending institution said.

The loan would enable the construction of 4,500km of highways in eight states, the official said, speaking on condition of anonymity because he is not authorized to speak with the media.

Seeking funds: A road under construction in Warangal, Andhra Pradesh. NHAI is in talks to raise funds for its projects. Mint

The roads will be built under engineering, procurement and construction (EPC) contracts with the builder being in charge of design for the project as well. In EPC contracts, a private developer builds the highway for a fee, without owning any stake in the project.

A highways authority official, who declined to named, said the proposal originated from the ministry of road transport and highways and was to cover highways that are not part of the National Highways Development Programme (NHDP).

World Bank spokesperson Sudeep Mozumder confirmed that the department of economic affairs had made the loan request. The planned delivery of the project would be June 2012, he added.

The request comes even as the National Highways Authority of India, which administers the NHDP, is separately negotiating a loan for highways overseen by it, the World Bank official said. The highways authority official said that several proposals were being discussed but no specific request had yet been made.

An infrastructure analyst said building highways in partnership with private firms has hastened the process of bidding.

“The (World Bank’s) loans must meet the speed criteria. They should not sacrifice speed completely at the altar of governance," said Siddhartha Das, infrastructure analyst with consulting firm Ernst and Young Pvt. Ltd.

Close