Highway construction grew 20 pct in 2017-18

Construction of highways hit 27 km/day in 2017-18, clocking a 20% growth over the 22.5 km/day in the previous fiscal, though the improved rate is a far cry from the government’s target to build roads at a scorching pace of 41 km/day.

Highway construction has been a priority for the Modi government. When the new dispensation took over in May 2014, the construction rate was at 11.67 km per day. The construction grew to 12 km per day in 2014-15 and 16.6 km per day in 2015-16.

Addressing a press conference, road transport and highways minister Nitin Gadkari said construction pace would now accelerate further. The targets for the current fiscal, he said, would be announced soon.

Among them, all the concerned agencies constructed 9,829 km of highways in the last financial year, compared with 8,231 km in the previous fiscal. While the National Highways Authority of India (NHAI) has developed highways at 8.41 Km/day against the target of 9.5 km/day, the ministry of road transport and highways’ performance has fallen short of target by a wider margin — it could construct just 18.51 km a day against the goal of 31.5 km.

Project awards were also higher in 2017-18. Including NHAI and NHIDCL, a total of 17,05 Km highway length was awarded during the year of which NHAI did 7,397 km, MoRTH did 8,652 km and NHIDCL did the remaining 591 km.

While the ministry is largely implementing the projects via the engineering, procurement and construction (EPC) route under which 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 the government bears 40% of the project cost. During the year, a total of Rs 1,16,324 crore was spent on developing highways by all the agencies.

Of the total highways constructed in 2017-18, 13,449 km was constructed through the EPC mode, 3,396 km through the HAM mode and the remaining 209 km through the BOT (toll) mode. Given the success of the HAM mode, NHAI would award more projects through the this route in the current fiscal.

Apart from the lingering problems of land acquisition and utility transfer, the roll-out of the goods and services tax (GST) also caused a lull in project awards for the authority between July and October. Analysts said the roll-out of the goods and services tax (GST) in July 2017 stalled the preparation of the detailed project reports of road developers since the tax implication of the new indirect tax levy needed to be pencilled in while working out the costs.

Against the yearly average of 5,002 km of highways built in the last three years of the UPA regime, construction in the first three years of the NDA regime went up to an average of 6,234 km/year, a 24% jump.