4-laning of Amritsar to Wagah road okayed

October 14, 2006

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With elections to the Punjab Assembly due early next year, the Union Cabinet today cleared the long-pending demand of four-laning of the Amritsar-Wagah section of National Highway 1 on built-operate-transfer (BOT) basis at an estimated cost of Rs 207 crore.

The government found BOT (toll) to be financially not viable as the cost incurred during construction and maintenance would be higher than the toll collected.

Prime Minister Manmohan Singh had promised the four-laning of this section of the highway during his visit to the state in March.

The cost would include Rs 195.48 crore for cost of work and cost towards land acquisition, rehabilitation and resettlement and utility shifting would cost Rs 11.52 crore.

The upgradation of the section would be under the National Highway Development Project on BOT basis. The upgradation of the existing road would improve traffic safety and provide faster movement of vehicles with improved riding quality and time.

This would provide linkage to other corridors of higher density, economic importance, tourism and pilgrimage.

Financial analysis of building the road on BOT (toll) basis by the government found that the project internal rate of return (pre-tax) was only 9.79 per cent and the expected return on equity was 5.94 per cent with a 40 per cent grant on this project from the government.

The Cabinet dropped the idea of BOT (toll) as even if a 40 per cent grant was provided for meeting the expenditure incurred during construction, the maintenance cost would be higher than toll collected in the section, as the traffic in this section was very low, tollable traffic in 2006 being 3,306 PCU per day.