How fast is India building national highways?

Government departments across ministries regularly release data on the progress they make in completing tasks. The government led by prime minister Narendra Modi has made roads a priority. It has allocated a significant chunk of capital to roads besides railways. 

Here are pointers that explain the progress from a presentation made by the National Highway Authority of India at an investor conference organized by brokerage Motilal Oswal: 

• State of roads: The NHAI is working on 48000 km of national highway network. About half of that has been constructed. Around 10,000 km are at various stages of implementation. The government needs to award work of around 13,800 km to complete all seven phases of the National Highway Development Project launched in 1998.

• More money: The NHAI will spend Rs 71,600 crore in 2015-16 through NHAI. This is a significant increase from Rs 25,000 crore allocated in 2014-15. It has managed this because the government has increased the cess on petrol and diesel as well as through borrowing. 

• Pace of implementation: The pace of implementation that slowed has picked up once again. Between April to August 2015, NHAI has awarded contracts worth 2,400 km. In the whole of 2014-15, NHAI managed to award 3,000 km worth of contracts. In 4 months of this fiscal, construction is also gathering pace with nearly 750km of national highways completed. In 2014-15, around 1,400 km of national highway construction was completed. 

• Problems with build, operate and transfer: The BOT (build operate and transfer) model was used extensively by the United Progressive Alliance or UPA government to award contracts. However, from 2012-13 onwards, these projects received a poor response. This was because the NHAI did not have the land or environment clearances. The slowdown in the economy led to lower collection of fuel cess that funds high construction. Constraints like these resulted in implementation delays. 

• What is the government doing now: The government is supporting highway projects through viability gap funding. This is the amount needed to bring in to complete the financing if costs rise due to delays. NHAI will award contracts only after 80% environmental and land acquisition clearances are received. Among other impediments were bridges over railway lines. The contractor now gets an online approval from Railways to build a bridge for national highway projects.

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Source:Yahoofinance.com