Poor market sentiment and lack of bidders opting for public-private partnership (PPP) projects has forced the Centre to take a cautious approach to road building. To keep the momentum going in the infrastructure sector, the Ministry of Roads, Transport and Highways is now pushing for World Bank-funded projects, till the financial environment improves.
“Of late there have been no bidders coming forward for PPP projects. Most highway projects awarded under PPP since April 2010, have not taken off, so in this situation we are not left with much option but go ahead with budgetary supported projects,” said a senior official from the Ministry of Roads here.
In the last fortnight alone, the Ministry of Roads and Highways has received four encouraging financial bids for 410 kms of road building under World Bank funding. “We have received four bids - for Bihar (155 kms), Rajasthan (two projects - 185 kms and 150 kms) and Odisha (68 kms),” he said.
According to Ministry officials, for the last one and half years, there was no progress in the PPP projects and those awarded are stuck for want of funds. Private road developers had been petitioning to the Government for allowing rescheduling of annual premium payment for about 39 projects under PPP. While the Ministry has agreed to help the “stressed” projects, the decision is still awaited.
“Unlike PPP, where land acquisition and shifting of utilities are not pre-requisite to winning contracts, in engineering, procurement and construction (EPC) mode, the contractor only designs the installation, procures material and builds the project, either directly or by subcontracting work for a decided price. land Acquisition and clearances are the Government’s responsibility,” said officials.
“For EPC or budgetary supported projects, pre-condition is that 90 per cent length of the project land should be free of bottlenecks, meaning, there are the pre-construction hurdles are taken care of by the Government,” he said.
In all, the Ministry has set for itself a target of about 7,000 kms of road construction this year. Of which, about 4000 kms are under the EPC mode. “We have achieved about 1,000 kms and looking at the market situation, we should be able to reach the half way mark by the end of the financial year,” said the official.
According to the last data released by the Ministry of Roads in August this year, about 1,183 km of roads have been constructed in the first quarter of the current fiscal. At the present rate, the daily construction is about 13.14 km, which is less than 2012, when the pace was about15.7 km per day. According to data with the Ministry, during the last financial year, 5,732 km highway was constructed, which also failed to meet the set targets.