The Build Operate Transfer (Toll) mode of highway construction is expected to languish this year too with National Highways Authority of India deciding to stick to proven models of Hybrid Annuity Model (HAM) and Engineering Procurement and Construction to complete its targets.
For this year the NHAI is expecting to award 65% of the projects under HAM and 35% under EPC.
This is a change from the mix seen in awarding projects under Bharatmala so far with EPC accounting for 46.9% and HAM 51.7% and BOT 1.4%. The initial target was to award 60% projects under HAM, 30% under EPC and 10% under BOT.
“NHAI may not be able to experiment much this year (with the mix),” an official who did not wish to be named said.
In 2023-24, the NHAI aims to award highway projects of 6,036 kilometres, up from 6,003 km awarded in the previous financial year, the official said.
Its actual construction target for the year is 5,060 km but the Ministry of Road Transport and Highways has prodded it to increase it further. New target may be set at 6,000 km.
According to analysts, with the next general election process expected to start from the fourth quarter, the pace of awarding of new projects may slow down.
Keeping the scheduled elections in mind, the ministry has started its capital expenditure programme for the year on a high note. In the first two months of the financial year it has spent 22% of the outlay for the year or `57,380 crore out of `2.58 trillion. As compared to last year it has shown a growth of 42%.
The ministry has set the target of utilising 91% of its capital budget by December-end.
During April-May various highway building arms of the ministry have constructed 1,465 km of highways as compared to 1,307 km in the same period last year. Contracts were awarded for 382 km of highways in the first two months of the financial year compared to 496 km in the same period last year.
The analysts have, however, predicted 75% of the projects that will be awarded for the highway development this year will be through EPC.
The government has repeatedly said that it wants to bring back BOT and has made several changes in rules to make it more attractive.
Between 2007 and 2014, only BOT was used to build highways before it came to a grinding halt. In 2018-19 and 2019-20 no projects were awarded on BOT.