Icra on Thursday said the Ministry of Road Transportation and Highways’ target of awarding 20,000 km in FY19 has increased challenges for the Bharatmala programme.
Icra on Thursday said the Ministry of Road Transportation and Highways’ target of awarding 20,000 km in FY19 has increased challenges for the Bharatmala programme. Shubham Jain, vice-president of Icra, said to achieve the programme’s target of awarding 83,677 km by FY22, the award rate has to be upwards of 40,000 km for the next two years. He said, “In order to catch up with the ambitious target set by the new highway development programme, the award rate has to be more than double from what it was in FY18. The target for FY19 has instead been lowered to 20,000 km from 25,000 km last year, which makes the achievement of Bharatmala targets even more challenging.”
The ministry has fixed a lower award target of around 20,000 km of national highways for the current fiscal from 25,000 km the previous year.This lower target is, however, about 17% more than 17,055 km awarded during FY18, which, by far, has been the best year for the ministry, both in terms of execution and projects awarded.
Unlike in the past, when projects were awarded without acquiring the requisite land, the Bharatmala awarding process is expected to be more transparent with tighter prerequisites. The government has said nearly 80% of the right of way (RoW) for toll projects and 90% of RoW for cash contract projects will be made available before they are awarded to developers. According to Icra, the lower award targets may also be a result of the longer land acquisition process and the lack of detailed project reports.
At the current rate of a 17% annual increase in projects awarded, around 71,000 km can be awarded by FY21. Icra said this would take the pace of execution in a range of between 49,000 km and 50,000 km (assuming an average construction period of two-and-a-half years) by FY22, which is around 60% of the target set by the Bharatmal programme.