India: Highway construction: Pace rises but targets missed

  • Construction of highways gathered pace to touch 20.6 km per day during Apr-Nov 17, from 16.7 km a day y/y, though even the improved rate is a far cry from road transport and highways minister Nitin Gadkari’s target of building these roads at a scorching pace of 41km per day.
  • NHAI chairman Deepak Kumar told FE that the authority will likely exceed the target to build 3,500 km of highways in FY17/18. The latter half of a year usually see a pick-up in construction.
  • While the ministry is largely implementing the projects via the engineering, procurement and construction (EPC) route where the government bears all project cost, NHAI projects are increasingly being built through the hybrid annuity model (HAM), an improved public-private partnership model in which government bears the 40% of the project cost.
  • Though the pace of construction has increased during the April-November period from 4,017 km to 4,942 km of the current fiscal, there is a general view among experts that the targets are unrealistic. Ministry officials say a pace of 30 km per day looks achievable in the present fiscal.
  • Though things have improved a lot in recent years, problems of land acquisition and utility shifting, non-availability of aggregates, poor performance of contractors and delay in clearances continue to adversely affect construction. Overall, the National Democratic Alliance (NDA) government has done considerably better than its predecessor United Progressive Alliance (UPA) on the road construction front.
  • When the Narendra Modi government took over in May 14, the construction rate stood at 11.67 km per day. Under the new regime, it grew to 12 km per day in 2014-15 and 16.6 km per day in 2015-16, touching a record 22.5 km per day in the last fiscal.

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