The Union Road Transport and Highways minister, Nitin Gadkari, announced on 03 June 2023 the commencement of multiple greenfield expressway projects spanning a total distance of 10,000 km. This ambitious Rs 4.5 lakh crore investment plan falls under the umbrella of the Bharatmala Pariyojana initiative, aimed at developing an extensive road network across the nation. The National Highways Authority of India (NHAI), one of the key players in this project, has successfully raised over Rs 70,000 crore through various financing models.
In the first quarter of FY24, according to data from Projects Today, a total of 427 contracts related to roadways were finalised, amounting to a combined value of Rs 27,700 crore. Of this, NHAI awarded 53 contracts worth Rs 3,647 crore.
In the first quarter of the current financial year, highway construction witnessed an impressive year-on-year growth of 9.4 percent. However, new contract awards registered a decline. While 2,150 km of highways were constructed during this period, only 600 km of new projects were awarded, as confirmed by officials. In comparison, the corresponding months of the previous year witnessed the construction of 1,966 km and the awarding of 969 km of highways.
Sector experts have also raised concerns about potential delays caused by the upcoming state assembly elections in December, as the model code of conduct for elections may impact the project’s timelines. Additionally, delayed payments have been identified as a significant factor affecting project activity. Highway builders have expressed grievances regarding the non-receipt of bonuses for timely project completion and the shortage of field officers responsible for granting swift approvals for completed work. An industry executive pointed out that the current construction framework exhibits limited discretion, with cost taking precedence. Consequently, contractors have expressed dissatisfaction with the payment redress mechanism.
Talking about the financing of new highways, Nitin Gadkari shared that the government has successfully raised a sum of Rs 170,000 crore through the monetisation of highway projects. The minister highlighted that Rs 26,000 crore was raised through the Toll Operate Transfer (TOT) model, Rs 10,000 crore through InvIT, and Rs 34,000 crore through the Special Purpose mechanism for identified projects. He emphasised the significant role of asset monetization in driving infrastructure investments and revealed that NHAI holds a share of 27 percent under the national monetization pipeline.
Gadkari also reaffirmed the government’s commitment to the Bharatmala Pariyojana, a visionary plan encompassing the development of 65,000 km of highways across the country. The first phase of this extensive initiative covers a road network spanning 34,800 km. In line with these goals, the government aims to construct 10,000 km of greenfield expressways at a cost of Rs 4.5 trillion, creating a modern and interconnected transportation system for the nation’s progress.
