World Bank agrees to increase funds for highways

The World Bank has agreed to look at newer ways to raise its funding commitment for the highways projects, road transport and highways minister Kamal Nath after meeting the Bank chief Robert Zoellick said in New Delhi on Wednesday.

"The World Bank has agreed to look at funding viability gap and in the annuity projects not only in terms of financing but in terms of institutional support as well," he said.

The ministry is seeking a $2.96-billion World Bank funding for double-laning of 6,300 km of single-lane highways, out of a total of about 19,000 km single-lane highways in the country.

"We are also working with the ministry of finance for a $2.96-billion for converting 6,300 km one-lane roads into two-lane ones. That is now in an advanced stage," Nath said, adding however the $3 billion may be provided in tranches and the finance ministry will take a final call on this since there are many projects to be financed by the Bank.

"There are so many projects on the social sector. . .so we may take it in tranches. But the World Bank has to look at it wholistically. . .there is a limit to what the Bank can give to us as a whole. That appropriation is done by the finance ministry," he said.

Under the viability gap scheme funds and concessions are provided to the developers to make the projects viable while annuity is a financing model where the developer finances, builds and maintains the highways contract in exchange of annual grants by the government.