Highway ministry has 7,000-km road development plan this fiscal

Written by Timsy Jaipuria | New Delhi | Updated: May 22 2014, 05:30am hrs
Asked to prepare a to-do list by the Cabinet secretariat for the new government, the ministry of road, transport and highways has said that it would award 7,000 km of road projects in the current fiscal.

According to a senior government official, the road ministry said the current fiscal's awards will primarily will be on the engineering, procurement and construction (EPC) mode. Award of PPP projects would be possible only if the market sentiment improves, the ministry said.

"There are various challenges in the road sector, which are hampering the growth. Delays in green clearances, time-consuming land acquisition, pending streamlining of already delayed projects, apart from the overall economic slowdown and lender apathy have hit the sector," said a ministry official.

The ministry has also sounded out the cabinet secretariat that till the bottlenecks are removed, investor sentiment was unlikely to improve.

"To meet this target we will have to take EPC route given its success in the last year. We were late to switch to EPC but this year we would not like to miss our targets," the official said.

Of the current target, 5,000 km will be awarded by the National Highways Authority of India (NHAI) and the remaining 2,000 km will be under the various national highway development programmes and schemes run by the ministry such as SARDP NE and LWE.

The targets for the current fiscal hold a lot of relevance since the sector had seen its worst performance last year where the awards went to as low as 1,400 km against a target of 9,000 km.

As for the BOT model, it would depend on the response of developers bidder interest has been falling over the last couple of years as project costs have shot up due to delays in clearances. The NHAI is also concerned banks may not be willing to fund too many projects.