The ministry of road transport and highways has set an ambitious target to build highways at a pace of 45 km/day in 2018-19. It had built highways at rates of 27 km/day in 2017-18 and 22.7 km/day in 2016-17. The NDA government has done considerably better than the previous UPA regime on the road construction front, but the targets were too high to be met. Of the 16,420 km target for the current fiscal, the MoRTH will construct 9,700 km, National Highways Authority of India 6,000 km and the remaining 720 km by NHIDCL. “The ministry is making all out efforts for improving and strengthening the highway network in the country. This year, the focus would be more on construction, but the awards would be more than last year,” road transport and highways minister Nitin Gadkari said.
Last year, the ministry and its wings like NHAI had together awarded 17,055 km highway projects. This year, the target has been kept by about 25% higher at around 20,000 km. In 2016-17, a total of 15,948 km highway project length was awarded, higher than 10,098 km awarded in 2015-16. “Gadkari has been a practical visionary who has constantly raised the bar. I am not surprised that he is now shooting for 45 km a day. Such kind of stretched target make all participants deliver to their maximum possible potential,” said Vinayak Chatterjee, chairman, Feedback Infra. When the Narendra Modi government took over in May 2014, the construction rate stood at 12.05 km/day. Under the new regime, it grew to 12 km/day in 2014-15 and 16.6 km/day in 2015-16, creating a record of 22.5 km/day in 2016-17 and yet again to an all-time high of 27 km a day in the last fiscal.
While the ministry is largely implementing the projects via the engineering, procurement and construction (EPC) route under which the government bears all project cost, NHAI projects are increasingly being built through the hybrid annuity model (HAM), an improved public-private partnership model in which the government bears 40% of the project cost. In 2017-18, Rs 1,16,324 crore was spent on developing highways by all the agencies. On the awards front too, the government’s first three years have outpaced the previous regime’s last three years in office. While the UPA-II government awarded work for 15,380 km of highways in its last three years, the figure shot up to 34,349 km for 2014-17, 7,972 km in 2014-15, 10,098 km in 2015-16 and 15,948 km in 2016-17.
Apart from the lingering problems of land acquisition and utility transfer, the GST roll-out also caused a lull in project awards for the authority between July and October. Analysts said the GST stalled the preparation of the detailed project reports of road developers since the tax implication of the new indirect tax levy needed to be pencilled in while working out the costs.
The present dispensation has taken several steps to reverse the drying up of private investment in the sector. It eased the exit policy for developers to enable them to invest in new projects and introduced HAM.