The Government of India’s decision to award road projects only if a major portion of the land is in possession is expected to remove a key bottleneck in development of national highways and make such projects attractive to developers.
The Ministry of Road Transport and Highways has decided that, henceforth, road projects would be awarded only if 80 per cent of land for BOT projects and 90 per cent of land for EPC projects is already in possession.
Significantly, the government, in Budget 2015-16, announced a plug-and-play mode for new ultra mega power projects wherein all clearances and linkages would be in place before the project is awarded. This “transparent auction system” would also benefit others sectors like road and bridges.
Acquisition of land, along with environment and forest clearance, has been cited as the main reasons for delay in completion of road projects. However, NHAI, the implementing agency for various phases of the National Highways Development Project, has also attributed project delays to extraneous factors beyond its control.
The government is hopeful that clarity on land acquisition will prompt developers to take up new road projects as well as complete ongoing projects languishing for several reasons including lack of funds.
Future investment in road projects has been pegged at `70,000 crore to `80,000 crore per year and this is expected to be met through various resources such as cess fund, toll plough-back, budgetary support, which has been hiked by over `14,000 crore for 2015-16, market borrowings and private sector participation. The government, however, said it was premature to talk about using funds under the Employees Provident Fund Organisation for road projects.
Last year, delays in land acquisition and statutory approvals cost road projects heavily. Against the target of 6,300 km of road construction works under various schemes of the Ministry of Road Transport and Highways during the current year, only 3,038 km was been constructed till January 31, 2015.
Out of 17 highway projects awarded by NHAI in 2013-14, work started in case of 15 projects, which is about 88 per cent of the total projects awarded, although progress has been recorded at 40-50 per cent. In 2012-13, out of 11 projects awarded by NHAI, the Letter of Award for one project was cancelled while, in 2011-12, similar Letters of Award were either terminated or cancelled for 26 out of 48 projects awarded.
Minister of State for Road Transport and Highways Pon Radhakrishnan has admitted that delay in land acquisition and statutory clearances, local law and order issues, and shortage of construction materials, among other things, were the main factors responsible for delay in implementation of NHDP projects.
“Most of these issues have been addressed with the support of the respective state governments and the government is streamlining the process for such statutory clearances. Government is also considering a onetime fund infusion to revive and physically complete some of the projects that are languishing,” Radhakrishnan said. Many of these projects include those awarded under PPP, a mode of delivery which the government has decided to revive.
Incidentally, the Ministry of Finance is believed to have turned down a request by the Ministry of Road Transport and Highways for additional funds to accelerate the pace of road works.
Meanwhile, if the government hopes to achieve its new road building target of 30 km of highways a day, as opposed to 20 km a day till now, it will have to implement seriously the various measures it has chalked out to put highway construction back on the road.