The National Highways Authority of India (NHAI) has reached a new low in project awards, managing only 787 km in 2012-13, a level last seen in 2008-09 when the global economy witnessed its worst-ever slowdown.
The global slowdown following the sub-prime crisis in the United States had its effect on NHAI?s performance, which could award only six projects spanning 600 km.
The dismal performance during the current year in terms of project awards was preceded by high performance in 2011-12, when the NHAI and the highways ministry together had awarded a record 8,000 km of projects. Of that, around 6,000 km were awarded by NHAI and the rest by the road transport ministry.
Officials in NHAI say that their board is likely to take up the proposal for another 500 km of road projects in its meeting to be held on Tuesday. But it will be difficult for the highways authority to be able to complete the award of projects before the end of this fiscal.
Low award by NHAI will badly impact the government?s truncated target of awarding 5,000 km for road projects in the current year.
After a robust performance in 2011-12, the Budget set a target of 8,800 km of road projects for 2012-13, which was later increased to 9,500 km by Prime Minister Manmohan Singh. Mid-way, the target was further revised downwards to 8,500 km and further down to 5,000 km, which is unlikely to be achieved.
NHAI, together with the road transport ministry, will likely be able to award 2,300 km of road projects for the current fiscal.
The declining interest for road projects have been attributed to delay in various clearances like environmental and banks holding their funds for the road sector.
The government has resolved the issue of delay in environmental clearances by delinking forest and environmental clearances. To ease funding from banks, the government has asked them to consider toll revenues as tangible assets.
The government is also working on a formula to compensate the road developers for delay in project completion due to delay in approvals from the government.
Even as performance on the award side has been dismal, the construction has touched a high of 12 km a day.
NHAI will be able to complete construction of 2,800 km of roads whereas the road transport ministry will be able to complete construction of 1,600 km of roads by the end of this fiscal.
BUMPY ROAD
* The Budget set a target of 8,800 km of road projects for 2012-13, later increased to 9,500 km by the Prime Minister
* Mid-way, the target was lowered to 8,500 km and then to 5,000 km
* The declining interest for road projects have been attributed to delays in both approvals and disbursal of credit
* Even as project awards have declined, construction has touched 12 km of roads a day