Nitin Gadkari-led road ministry’s highway construction woefully slow at 18-23km/day; required target 41 km/day

• Posted in Infrastructure
• on February 21, 2017
• No Comments.

The pace of highway construction has gathered momentum to reach at an average of 18.23 km/day till January-end of the current fiscal compared with 16.6 km/day in the 2015-16 fiscal. The pace, however, is still way lower than what is required to meet the construction target of 41 km/day set by the ministry of road transport and highways (MoRTH) for this fiscal. Nitin Gadkari has recently said the pace of construction could reach to 30 km/day by March this year.
The ministry has targeted to build 15,000-km highways in the current fiscal. In 2015-16, total highways construction was 6,061 km only. It has built 5,471 km highways in the April-January period of the current fiscal. Of the total construction till January-end, projects directly implemented by MoRTH was 3,466 km, against 3,217 km a year ago. NHAI constructed 2,005 km in the first ten months of this fiscal, compared with 1,532 km in the corresponding period last fiscal.
Apart from the continued torpor in private investments — build–operate–transfer (BOT) projects have barely kicked off and the hybrid annuity model that mitigates developers’ risk too has seen only moderate success — over-optimistic targets were also to blame for the slippage, analysts said. This year’s construction target is 2.5 times what was accomplished last year.
On the award front also, the 25,000-km target for the current fiscal is unlikely to be met, as only 8,183 km of project awards were made in April-January. The ministry is now hoping to award 15,000 km projects in the current fiscal. In the last fiscal, India had awarded 10,098 km highway projects. While NHAI awarded 2,912 km projects in April-January of FY17 compared with 3,145 km a year ago; MoRTH awarded 5,271 km against 4,495 km a year ago.
Maximum projects (6,187 km) has been awarded through the engineering, procurement and construction (EPC) model while the remaining, 1,996 km, through the BOT (toll), BOT (annuity) and HAM models, sources said.
Clearly, with private investments (read BOT projects) not gathering much steam, the Centre’s efforts to push activity in the sector with the use of its own funds (EPC projects) have brought only moderate results.
The construction and award of highways in the April-January period this year was higher than a year ago by 15% and 7%, respectively. Gadkari had earlier blamed procedural delays in getting clearances for delay in project awards.
The government has taken several steps to address the private investment famine in the sector: It eased the exit policy for developers to enable them invest in new projects and introduced the hybrid annuity model where the Centre bears 40% of the project cost. Russell Wilson Authentic Jersey

Share This