In the last two years, development of the road sector has been unimpressive. But now there is momentum building up as the government has set an ambitious target of constructing 20 kms of roads per day.
To achieve this, NHAI has set a target of 135 projects covering 13,394 kms with an investment of around Rs 1,000bn to be awarded in FY2010. Of these, NHAI plans to award 70 projects covering 7,968 kms with an investment of close to Rs 616bn over the next two quarters.
Also, the governments flagship programme NHDP envisages upgrading close to 55,000 kms in seven phases with total envisaged investment of Rs 3,315bn. Till date, only 22% (11,875 km) of the total length has been completed and 11% (5,850 km) is under construction. leaving us with a massive 66% of the total length or 36,241 km yet to be awarded.
Of the nearly Rs 3,315bn of investment under NHDP, nearly two-third is expected to come from private sector through PPP mode and NHAI has awarded 99 PPP projects covering 6,745 km.
Some of the key policy initiatives taken so far to speed up road development are the introduction of standard bidding documents like request for qualification and request for proposal for PPP projects and enactment of state support agreements.
However, the sector still has some lacunae. One of the key concerns is the massive differential in the estimates of total project cost by NHAI and developers, leading to a lukewarm response from the developers. Land acquisition is also a cumbersome issue for the roads sector, which is ultimately leading to significant time and cost overruns. Removal of utilities and clearances are eventually taken up by the developers who have stakes in the timely completion of projects.