After an year-long lull, road infrastructure development in the country seems to gather momentum with the National Highways Authority of India (NHAI) having awarded new projects under the public-private partnership (PPP) programme to develop 4,375 km of roads in the first nine months of this year.
This is much higher than the number of contracts awarded in each of the previous three years. Why, the third quarter of 2012 alone witnessed sanction of almost 1,900 km of road projects. The new projects are part of the massive Rs. 3 lakh-crore National Highways Development Programme (NHDP) aimed at building 50,000 km of highways in seven phases by 2015.
Booming road construction activities have led to a big surge in demand for building material machineries, mining machines and construction vehicles.
Construction companies are virtually struggling to meet the deadline for execution of both orders on hand and those expected. Several of them prefer to enter the PPP format by undertaking projects even on BOT basis. Some domestic companies and even a few international firms are quite eager to enter the fray. With 90 players having already qualified for NHAI projects as of now, the highly competitive road construction sector is in for major transformation.
The targeted highways development is in keeping with the projected growth of the automobile industry. Ensuring transport of men and material, the auto sector, itself an engine of growth, is aiding overall industrialisation. The temporary setback in production and sales of vehicles in the wake of general slowdown notwithstanding, the industry is sure to achieve a quick turnaround and set fresh performance records. The optimism is based on the projections made by the much-hyped Automotive Mission Plan (AMP) – the sector’s annual turnover growth to $145 billion from the current $50 billion and its contribution to GDP soaring to 10 per cent from five per cent by 2016. It is in accord with the world trend that production of vehicles of all categories in the country would keep rising, necessitating in the process an accelerated growth of road infrastructural facilities. All this despite the concerted effort at reducing the number of vehicles plying on roads in order to avoid environmental degradation caused by vehicular emissions.