While its ambitious national highway (NH) construction targets have been hard to reach, the NDA government has clearly outdone the previous UPA dispensation when it comes to expanding the country’s national highway network.
While its ambitious national highway (NH) construction targets have been hard to reach, the NDA government has clearly outdone the previous UPA dispensation when it comes to expanding the country’s national highway network. Four-and-a-half years into its tenure, the NDA has built 33,361-km of highways, a trifle more than what UPA did in the seven years between FY-08 and FY14 (see chart).
Of course, pure-play public private partnership (PPP) ventures, which had come to a grinding halt by the end of the UPA regime, hasn’t picked up even during the NDA regime; but with a higher level of efficiency achieved in government-funded projects and the formulation of concessions-driven hybrid annuity model (HAM) ventures that saw some private investments, the construction pace has gradually improved over the last four-and-a-half years.
The construction target set by the minister of road transport and highways Nitin Gadkari for the last two years has been 40km/day and the target for this year is an even higher 45/day.
Under Gadkari’s watch, the construction pace has picked up from 11.7km/day during FY14, the last year of UPA-2, to 27km/day in FY18. During April-October this year, highways were built at a rate of 23km/day.
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The fast-tracking of projects is despite the fact that large private investors, whose projects floundered due to lower-than-expected toll receipts, deserting the sector after turning defaulters to lenders.
Banks have been reluctant to resume lending to the sector for a considerable part of the current regime.
Of the 16,418-km construction target for the whole of 2018-19, the ministry of road transport and highways (MoRTH), which builds national highways through state PWDs, is expected to build 9,698 km and the National Highways Authority of India, 6,000 km. The National Highways Infrastructure Development Corporation (NHIDCL) has been entrusted with the target of building 720 km of national highways in the year.
According to analysts, though things have improved a lot in recent years, problems of land acquisition and utility shifting, non availability of aggregates, poor performance of contractors and delays in clearances continue to slow construction.
NHAI projects are increasingly being built through HAM, a PPP model launched by the current government under which the government bears 40% of the project cost.
Apart from this, the NDA government has taken several other steps to address the problems faced by investors. It has eased the exit policy for developers to enable them invest in new projects, expedited land acquisition, introduced one-time fund infusion scheme in languishing projects.
The award of highway projects, during the first four years of the NDA regime, were 51,073 km, double the level achieved by UPA during its last four years. The target for awards in 2018-19 is set at 20,000 km, a quarter more than 17,055 km awarded during 2017-18.