The ambitious target of building 20 km of highways a day hit major roadblocks as the key infrastructure sector lost its fancy with banks and financial institutions during 2012.
Against the target of awarding 8,800 km highways during 2012-13, contracts for only 1,100 km could be given by the Government in the first three quarters of the fiscal. These contracts were to be awarded on the build, operate and transfer (BOT) mechanism, but the overall economic slowdown and banks’ reluctance to fund projects took their toll on the sector. Difficulties in land acquisition and delays in environmental clearances added to the problems.
Even intervention of the Prime Minister’s Office (PMO) could not lead to tangible results. The issue of banks’ unwillingness to finance projects is pending at the level of PMO, which asked the Ministry to address the matter to PMEAC so that it can be resolved.
A number of private companies in the road sector had during the year raised the issue of a conservative and rigid approach by banks in providing loans to the highways projects with the Transport Ministry. However, as per the Road Transport and Highways Minister, Mr. C.P. Joshi, the sector continues to retain the positive outlook of achieving the milestones set for the current year amid abundant challenges.
Discussing the ‘roadmap’ for the sector Mr. Joshi admitted that “response (to projects) is not as positive as we expected and the bids which were supposed to materialise could not”. However, he exuded confidence that with the Cabinet approving the EPC document, the Ministry will soon roll out 4,000 km worth of projects under this mode.
“Last year there was aggressive bidding, and the Ministry got Rs. 3,000-crore premium on the projects bid out,” Mr. Joshi said expressing the hope that these projects would come up in 2013 despite bankers being cautious in lending to the sector.
“Times are changing. Hopefully we will get good response in 2013. Last (financial) year, the infrastructure sector witnessed Rs. 80,000 crores worth of investment in infrastructure. It has started to pick up now, and let us hope for the best”, he added.
On the issue of not being able to achieve the target of building 20 km of roads a day, Mr. Joshi said that once projects are awarded, construction takes three years. The difference between the award and start of construction is normally three years. “In 2011-12 we could award more than 7,000 km and we got Rs. 3,000 crores worth of premium. But the scenario changed in 2012-13. We hope that in the coming months once again we will get good response.”
The Ministry faced much criticism on the front with even a parliamentary panel in its latest report saying that building 20 km of highways per day “has been a distant dream so far”.
Meanwhile, leading infrastructure firms are trying to find buyers for their road projects, as per the industry.
The National Highways Authority of India (NHAI) also was in media focus during the year for wrong reasons like inordinate delays in projects like the Golden Quadrilateral (GQ).
“NHAI is not in a position to complete any project and is adding projects after projects without achieving targets in older ones”, the Parliamentary Standing Committee on Transport has said in its latest report, adding, “this shows their deficiency either in planning of programmes or proper execution of the same.”
It said: “The much-publicised Golden Quadrilateral and the North South & East West Corridor under the National Highways Development Project (NHDP) have not been completed till date.”
A length of four km is still to be completed under the GQ project, which aims to provide direct connectivity between four metros – Delhi, Kolkata, Chennai and Mumbai. It was originally scheduled for completion in 2004.
In the North-South & East-West Corridor, out of 7,142 km, 6,031 km has been completed, 691 km is under implementation and 420 km is yet to be awarded to take up 4,000 km on EPC basis.
The year saw NHAI getting a new Chairman – former DIPP Secretary RP Singh – after being headless for nearly two years. It was expected then that the step would give a push to the Government’s flagship road building programme, the National Highways Development Project (NHDP), being implemented by it, but nothing has come out of it.
– PTI Economic Service