Road awards hit a speed bump

By: | Published: January 23, 2016 1:22 AM

With only 3,013 km of highway projects having been awarded by it so far, the National Highways Authority of India...

With only 3,013 km of highway projects having been awarded by it so far, the National Highways Authority of India (NHAI) will find it hard to meet the target for the current fiscal as well, reports Surya Sarathi Ray in New Delhi. The target was to award 5,161 km of projects via a combination of BOT, BOT-annuity and EPC contracts.

According to sources, many projects are facing hurdles when it comes to land acquisition. Delays in clearances by the Public Private Partnership Approval Committee and the ministry also proved to be an irritant. A senior official, however, said that the awards could exceed 4,250 km, making 2014-15 the best year in terms of project awards for NHAI since 2011-12.

As far as construction is concerned, the achievement so far has been 1360 km, against the target of 2,000 km for the full year. The ministry reckons that with the pick-up in awards since late last year, the activity on the ground would be more visible next year. Given the slow pace of recovery in the public-private partnership segment, it, however, remains to be seen whether ambitious target to build 30 km of roads a day could be achieved even next year.

Apart from NHAI, the road ministry oversees a number of projects directly — it had awarded 2,000 km of projects during the first half of this year.

In FY16, a total 874 km project has been awarded by NHAI for development through the build, operate, transfer (BOT)-toll route, 2,108 km through the engineering, procurement and construction (EPC) route and another 31 km through the newly-developed hybrid annuity model, in which the government pays 40% of the project cost during the construction period in five equal instalments linked to project milestones.

NHAI has also invited bids to award 12 projects having a total length of 819 km and plans to invite bids for eight more projects with a total length of 592 km. Due to less traffic and other reasons, it has deferred bids for two projects of 282 km.

Sources said the issue of land acquisition has persisted in case of many projects and delayed awards. The government’s new policy is that a BOT project would be awarded only after 80% of the total required land is in possession and 90% for the EPC project. NHAI iterates that it does not have any fund constraints.

As NHAI could not arrange encumbrance free land and forest and environment clearances, it had to terminate about 4,500 km awarded during 2010-11 and 2011-12. Some of these projects are now being bid out afresh after obtaining land and other clearances.

Gr8

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