The pace of awarding of highway projects is expected to accelerate in the coming months as the issues behind the current slowdown have been “substantially addressed” and the government is now working with a target to award 12,500-km stretches for this financial year, a senior official said.
This year’s target is marginally higher than 12,375 km of awarding achieved last financial year.
In April-August the total length of highways that has been awarded is just 1,756 km as compared to 2706 km in the same period of last year.
The lower numbers seen in the award of projects is because some agencies of the government had exhausted their pipeline and were taking time to prepare for new stretches to be offered for bidding, the official said.
Other reason was that the government insisted on strictly following the condition put in place earlier that all land acquisition and clearances have to be in place before bids are invited for highway projects,
gWith both these issues addressed the pace of awarding of projects would pick up,” the official added.
Of the total 12,500 km of highways to be awarded in the current year, around half would be through National Highways Authority of India and rest through National Highways and Infrastructure Development Corporation and Ministry of Road Transport and Highways’ Road Wing.
The ambitious Bharatmala Project offers a strong pipeline of projects.
While the awarding of projects has lagged, the pace of highway construction has been higher than last year. In the first five months of the fiscal year it has been 3196 km as against 2912 km in the same period of FY 23 despite heavy rains in July slowed down pace of construction in many parts of the country.
The official said that this year’s target of building 13800 km of highways would be met.
To achieve this target the total capital expenditure of the ministry has been kept at Rs 2.58 trillion for FY24, up from the Rs 2.06 trillion spent last year. Of this Rs 1.12 trillion has already been spent.
Taken together with other models of financing highways apart from Engineering Procurement and Construction where NHAI spends all the money, much more resources will be available for highway construction this FY. Other modes of highway construction are Hybrid Annuity Model (HAM) and Build Operate Transfer (BOT).
In hybrid concessionaires are paid by NHAI in instalments and in BOT the private developer pays the cost of construction and recovershis investment through toll.