At a good clip: Modi govt adds pace to highways’ construction

By: | Published: March 7, 2016 11:37 AM

The Modi government’s target to quicken the pace of construction of highways to 30 km/day remains a far cry, but it has indeed managed to add pace to the process...

contrary to road transport and highway minister Nitin Gadkari's claim that highway construction had dipped to 2 km/day under the UPA regime; 11 km/day was the rate of construction in 2013-14 and 15.7 km/day in 2012-13. Contrary to road transport and highway minister Nitin Gadkari’s claim that highway construction had dipped to 2 km/day under the UPA regime; 11 km/day was the rate of construction in 2013-14 and 15.7 km/day in 2012-13.

The Modi government’s target to quicken the pace of construction of highways to 30 km/day remains a far cry, but it has indeed managed to add pace to the process, with various policy initiatives and admin-istrative agility, reports Surya Sarathi Ray in New Delhi. Highways constructed during the first 11 months of this fiscal was 5,391 km or a little over 16 km a day, compared with 12 km in 2014-15 and 11 km in the year before.

With acceleration in the award of projects under various modes — mainly EPC and PPP hybrid — construction is expected to gather additional momentum in the coming months. Sources told FE that while 8,300-km projects got awarded till February-end this year, the target for 2016-17 is 10,000 km.

However, contrary to road transport and highway minister Nitin Gadkari’s claim that highway construction had dipped to 2 km/day under the UPA regime; 11 km/day was the rate of construction in 2013-14 and 15.7 km/day in 2012-13. (It is true that during the last few months of the UPA government, the construction dipped as companies and bankers developed cold feet; yet, Gadkari may be referring to a short period of virtual suspension of work during the election phase).

The Modi government has also added fresh impetus to the rural roads sector– one of the focus areas of the latest Budget. Parliament was informed a few months ago that construction of rural roads under Pradhan Mantri Gram Sadak Yojana (PMGSY) picked up to 36,88 3 km in 2014-15 from 25,316 km in 2013-14. But the fact remains that PMGSY construction stood at 45,109 km in 2010-11 and 60,117 km in 2009-10 in the UPA period. The Congress party tweeted last week quoting rural development ministry that the UPA-I constructed an average of 32,554 km of rural roads and UPA-II 37,140 km while the NDA’s rate, as per latest data available, has been 31,023 km. Indeed, the NDA could outpace the UPA if the current momentum is sustained.

According to Gadkari, funds have never been a constraint for the government when it comes to building of highways.

Finance minister Arun Jaitley has allocated Rs 55,000 crore for roads and highways for 2016-17. This will be topped up by an additional Rs 15,000 crore to be raised by NHAI through bonds. . Initiatives like the National Investment and Infrastructure Fund could also come in handy, in mobilising the equity and debt capital for highways, along with other sectors.

Though the thrust for the next fiscal is in engineering, procurement and construction (EPC) projects where the government bears the entire financial burden, the newly-adopted hybrid annuity model in which government pays 40% of the project cost in phases to the developer has also caught the concessionaires’ fancy.

Jaitley said in his budget speech that PMGSY suffered in the past because of underfunding. “The allocations in 2012-13 and 2013-14 were Rs 8,885 crore and Rs 9,805 crore respectively. We have substantially increased the
allocation in the last two years and have now allocated Rs 19,000 crore in 2016-17. Together with States’ share, totally about Rs 27,000 crore will be spent on this Yojana in 2016-17.”

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