According to a report, only 25% projects have been awarded in last six months
Even as the Government claims that the investor interest is returning into the infrastructure sector, the Government may yet again miss its award target this year. It is six months into the new governance, and so far only 25 per cent of the new projects have been awarded.
According to the data with the Ministry of Road Transport and Highways, the National Highways Authority of India could award only 2,150 kilometres of new roads by mid-October. The Prime Minister has set a target of awarding projects for the construction of 8,500 km of highways by the end of March 2015.
“The private sector is not very willing to come forward for bidding under PPP model. So we are now trying to give out projects under the Engineering, Procurement, Construction (EPC) model, where the financial risk onus is on the Government and the developer only builds at the bid price,” said the official.
“We haven’t been able to find many takers for EPC mode either. The Ministry has decided to split several projects into smaller road lengths to attract investments. We are underway with the new round of bidding,” he said.
Data with the Ministry shows that, close to 50 per cent (1,013 kms) of the awarded road projects are National Highways, of which about 516km of road projects were doled out under the public-private partnership (PPP) model and the rest were awarded under the EPC model.
“The Government has also decided to open up parallel bidding-meaning both under PPP and EPC for the same projects. The builders can bid under any or both models,” said the official.
“For four major projects, which include the eastern peripheral highway, we are trying this new strategy. With the opening up of markets and improve economic scenario, we are hopeful of getting some developers by December,” said the official.
If the Government fails in its award target this year, this will be the third consecutive miss as the last two years have been very disappointing. In 2013-14, the NHAI awarded just 3,169 km of projects against a target of 9,500 km. In 2012-13, the NHAI could award only 1,116 kms of its target of 9,500 kms, which was barely 11 per cent.