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Published:Tuesday, June 11, 2019 7:08 AM

What We Can Expect for Roads From Modi 2.0?

What We Can Expect for Roads From Modi 2.0?

With the beginning of second term of existing government, people have more expectations  from the Ministry of Road Transport and Highways, in past 5 years we have witnessed shifting from EPC to HAM and also faster execution of road construction, now return of Mr. Gadkari as Honorable minister of Road Transport and Highways will surely boost infrastructure in the country as we can name few big schemes initiated under his last tenure like Bharatmala, Sagarmala, NHIDCL, INAMPRO etc.
 
It happened first time in FY19 after four years that awarded length by NHAI was lesser than constructed length where the total construction by NHAI was 3380 km against awarded of 2222 km, the main reason behind was land acquisition as ministry has decided now that without certain percentage of land they can’t award the projects which leads to cost escalation and time overrun.
 
The last five years have seen immense spending in roads sector alone and around 52 projects worth INR 37,019 crore were sold between 2015 and 2018.
 
Status of Roads Project As on 31st January 2019

 
 
Delay in Months
Number of Projects
1-12
21
13-24
27
25-60
11
60 and Above
45
 
 
 
Some Major Policy Initiatives
 
  • The Government has succeeded in connecting the roads to 85 per cent of the 178,184 eligible rural habitations and all villages are expected to be connected through the road network by the end of 2019.
  • The Government will spend around INR 1 lakh crore during FY18-20 to build roads in the country under Pradhan Mantri Gram Sadak Yojana as planned.
  • The Ministry of Road Transport and Highways plans to implement 'Value Engineering Programme' in order to enhance the use of new technologies and materials in highway projects being implemented in India.
  • Amendment to the Model Concession Agreement (MCA).
  • Fast-track Judgments related to arbitration and early disbursement of 75% of the amount.
Growth Momentum Still to Continue?
 
Mr. Gadkari’s term one has awarded an aggregate of 51073 kms during FY14-FY18, which is the highest ever by any previous governments, the awarding activity has grown at 47% CAGR during FY13-FY18. Now government needs to balance the award and construction pace to keep the growth momentum continuing. On one hand if they award the project before land acquisition, which can grow the numbers in total awarded length other side it will impact on timely completion of ongoing project and it will lead to cost overrun also at final calculation by end of the year. There will be n number on projects lagging behind schedule because of land acquisition issues. So we only can expect faster award and execution of projects with land acquisition where good compensation is paid.
 
Expectations from next five years
 
26-27 kms per day construction that’s where we left last FY, now expectation is to reach 40+ per day construction length with facing challenges like land acquisition, financial closure and funding anguishes.
 
Lots of work has to be done but we can’t ignore role of Information Technologies and now ministry has to think in this way to reduce road fatalities in the country and should adopt advancement of Intelligent Transport Systems (ITS). Also, with shifting from traditional construction method/material (bitumen) to cement which is comparatively high in cost but needs less maintenance and durable in log run has seen faster adoption in the country.
 
Getting more private participation still could be a challenge but amendment in existing construction mode and giving more relief to private parties by bringing new policies could certainly get more eyes and investment in coming years to the sector. We might witness INR 100 trillion investments in infrastructure by 2024 as per government manifesto. 

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