NHAI to focus on executing contracts where all clearances are in place

NHAI to focus on executing contracts where all clearances are in place

Tightening its fist on project financing, the road ministry, which aims to construct 30 per cent more roads each day this year, will focus on executing contracts where all requisite clearances are in place. Now, its construction wing — the National Highways Authority of India (NHAI) — is focusing on judiciously planning its expenditure for the current financial year.

The length of highways completed by the Ministry of Road Transport and Highways, the NHAI and the National Highways & Infrastructure Development Corporation Limited (NHIDCL) in 2017-18 was 9,829 km, or roughly 27 km per day.

“This year we would construct 15,000 km or 30 per cent more roads per day than what we did last year,” a senior official said.

Union Road Minister Nitin Gadkari had earlier said the daily day road construction target for the current financial year (2018-19) is 45 km. However, the internal target of the ministry is about 35 km per day by the end of this year, an official said, requesting anonymity.

The move is aimed at judiciously planning the expenditure by the central government, the NHAI and the NHIDCL. “Since the NHAI has to borrow money, we only want to invest in the projects that will give returns. We will also focus on completing the pending projects,” an NHAI official said.

The NHAI's borrowings during the current year are Rs 620 billion. In August, the authority tied up loan worth Rs 250 billion with the State Bank of India.

Experts believe that this is a step in the right direction as project implementation is faster once the necessary clearances are in place. “The approach would ensure that the financial costs incurred can derive economic benefits in the shortest time possible,” said Kushal Kumar Singh, partner, Deloitte Touche Tohmatsu India LLP.

Citing an example, Singh said the Jaipur-Kishengarh six-lane project was executed in 24 months because the land acquisition for the contract was in place.

Even as there is nearly a 30 per cent increase in the per day per kilometre of road construction target for the fiscal, in terms of lane kilometers, the target remains 94 km lane per day by the end of this year. A lane-km is defined as a kilometre-long segment of a road that is a single lane in width. For example, a 1-km stretch of a standard two-lane road represents two lane-kilometre).