New Delhi: The road ministry is considering ways to make its projects attractive to private developers, having failed to attract bidders and after recently securing the Prime Minister’s approval for not rushing into awarding road projects without adequate preparation.

An inter-ministerial committee, chaired by road secretary Vijay Chhibber, is to meet on Monday to discuss the financial structure of the over 8,000 crore Delhi-Jaipur expressway, for which the ministry has listed four options to make it financially viable for private investment.

These include adding an extra route for tolling as a sweetener or levying a development charge on land deals around the expressway, said a road ministry official who requested anonymity.

The ministry will also keep the option of executing the Delhi-Jaipur expressway under the engineering, procurement, construction (EPC) model in case it fails to attract private developers, the official added.

The road ministry has been finding it a challenge recently to attract private companies to bid for its projects. Road projects worth 27,000 crore totalling 2,900km did not receive any bids between March last year and October.

Of the ministry’s four options for the Delhi-Jaipur expressway project, the first is the regular practice of getting revenue from traffic alone with a viability-gap finding (VGF) to the tune of 3,625 crore, equal to 42% of the project cost. VGF is the financial support provided by the government to public-private partnership infrastructure projects to make them commercially viable.

The second option is to add a sweetener to the first option in the form of toll revenue from the existing Gurgaon-Jaipur section from 2022-23 and the Delhi-Gurgaon section from 2023-24 after the existing concession ends. This will mean the government will not have to provide VGF.

The third option is to levy development charges within a 5km radius of nodes for accessing the expressway. “We are assuming 50% of the 7,760 hectares of land can be developed. Under this option, after state government’s consent, we have proposed a 2% development charge to be levied on land deals in the area of land around nodes. This could bring revenue to the tune of 4,600 crore," the ministry official said.

The third option can be clubbed with the first two options, he added.

If, however, none of these options cut ice with the private developers who have been shy of participating in road projects, the ministry will exercise the EPC option, under which the government pays a contractor a sum to build a project awarded through competitive bidding.

The road ministry awarded just 1,322km of road projects in 2012-13 against a target of 9,500km and has had to lower its internal target for the award of road projects a second time this fiscal year. Earlier this week, it nearly halved its target of awarding highway projects under National Highway Development Programme to 2,128km in 2013-14, from 4,028km earlier and much lower than the original 7,500km target.

“In the recent review meeting with the Prime Minister we have secured his approval for not rushing into projects without properly structuring or marketing them just to meet deadlines. Repeatedly, many projects have not been bid for, so it’s better that we prepare well before we open bids," the official said.

The Prime Minister reviewed the infrastructure sector on 11 October.

“While the first is the usual option, the second option is tricky and requires much more clarity on the conditions under which the sweeteners would be handed over to the new developer in terms of the capex requirement for maintaining the existing stretches and keeping uncertainty of the Delhi-Gurgaon stretch currently under arbitration in mind," said Pranavant (he uses only one name), director at Deloitte Touche Tohmatsu India Pvt. Ltd, an audit and consulting firm. “The third option, development fee, should be charged only after delivering of the asset, else there could be resistance. Also, the ministry should find out a way of preventing real estate developers from taking undue advantage in the early stages," said Pranavant. “The ministry can look at other innovative ways of financing such as exploiting the same corridor for some collaboration to develop other modes of transport along the same right of way."