Road construction picks up pace in April-November period

The pace of road and highway building in the country went up to 24 km per day during April-November period as against 20.5-km per day during the corresponding period in the last fiscal when the construction rate was 26.9 km a day, largely due to big push in awarding contracts. Officals claim that the construction pace will speed up further in the remaining months. However, the pace is far below the target set by road transport and highways minister for 45 km per day. About 5,759 km of highways were built in the first eight months compared to 4,942 km in the corresponding period last year. While the NHAI clocked the pace of 8 km a day from last fiscal's 6.7 km a day, performance improved marginally to 15 km a day against last year's 13 km a day. The ministry is largely implementing projects via EPC, where the government bears all the project costs. NHAI projects are increasingly being built through the hybrid annuity model (HAM), an improved public-private-partnership (PPP) model in which the government bears 40% of project costs. Though the pure-play PPP ventures which had come to a grinding halt by the end of the previous government’s rule haven't picked up even during the NDA rule, the construction pace has gradually improved over the last four-and-half-years, thanks to a higher level of efficiency achieved in government-funded projects and the formulation of concessions-driven ventures that saw some private investments.

Under the current transport minister's watch, the construction pace has picked up from 11.6 km a day during FY14, the last year of the UPA-2, to 27 km a day in FY18. 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. According to analysts, things have improved in recent times, even though problems of land acquisition and utility shifting, non-availability of aggregates, poor performance of contractors and delays in clearances, continue to slow pace of construction. On the award front, the speed is yet to pick up as during the first eight months, a total of 2,105 km of projects were awarded, compared with 2,927 km last year. The target for the current fiscal, however, is a huge 20,000 km.

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Road construction picks up pace in April-November period

NBM Media

NBM Media

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