Road construction across the country failed to pick up after a sluggish July. While the daily average construction was less than one kilometer in July, it was barely two km a day in August.
The slew of measures adopted by the Government — speeding up mandatory forest and environment clearance, fast-tracking land clearances for border roads and relaxing rules in concessionaire agreements — too hasn’t boosted road construction, at least yet.To make matters worse, even the National Highways Authority of India (NHAI) has not been able to find developers for 9 of 12 highway projects adding up to 1,500 km. They have shifted the deadline from September to January for awarding projects after it failed to receive bids.
The developers which showed interest initially backed out when the Government refused to grant them in excess of 40 per cent in order to execute the construction on Build-Operate-Transfer (Toll) mode.
The Ministry of Roads, Transport and Highways (MoRTH) is targeting awarding around 5,500 km worth of projects and constructing around 2,000 km of roads this fiscal. Out of this around 2,000 km were initially slated to be on BOT mode (where the risk burden is on the developer) and the rest on Engineering-Procurement-Construction (EPC) mode, (where Government undertakes all risk), according to an official.
“The proposals for these projects were all designed for BOT modes, but now will be redesigned for bidding on EPC mode. In fact, some have already been sent to the Ministry and are awaiting approval. Bids will be called for once approval has been obtained,” the NHAI official said.
“The PPP projects, particularly toll-based, are unable to find financing from banks. Even in the past, toll-based projects have not necessarily delivered as per expectations, hence the lack of interest of investors in the sector,” he said.
Minister of Roads and Highways Nitin Gadkari has also announced an ambitious target of building 30 kms of roads daily, which seems like a humongous task considering the present scenario. Gadkari said that the situation should improve after completion of two years. Admitting that the roads and highways sector was going through a difficult phase, Gadkari said that 21 out of 51 road widening projects had to be dropped in absence of any bidder.
In the past, Gadkari has blamed UPA Government for poor performance of the sectors. He said that developers gave up projects worth about Rs50,000 crore after suffering huge losses on account of lack of land acquisition and delays in forest and environmental clearances.
He had said that as many as 189 projects with a cost of Rs1,80,000 crore had been stuck due to problems in land acquisition, delays in forest and environment clearances, and hurdles in rail overbridge.
HITTING ROADBlOCK
· While the daily average construction was less than one kilometer in July, it was barely two km a day in August
· The slew of measures adopted by the Government — speeding up mandatory forest and environment clearance, fast-tracking land clearances for border roads and relaxing rules in concessionaire agreements — too hasn’t boosted road construction
· NHAI has not been able to find developers for nine of 12 highway projects adding up to 1,500 km
· The developers who had showed interest initially backed out when the Government refused to grant them in excess of 40 per cent in order to execute the construction on Build-Operate-Transfer (Toll) mode