Several highway projects bite the dust as government sets ambitious target

Seven highway projects worth Rs 17,368 crore bidded out recently, failed to attract even a single bidder. Coupled with the 21 projects worth Rs 26,550 crore that failed to get any bids in 2012 and 2013, the figure adds up to Rs 43,918 crore.

As Narendra Modi government has fixed an ambitious target of building 30km of highways everyday — 10km more than what the UPA government had set but miserably failed to achieve — there are alarm bells ringing in the ministry of road transport and highways headed by Nitin Gadkari.

Seven highway projects worth Rs 17,368 crore bidded out recently, failed to attract even a single bidder.

These included the big ticket Delhi-Meerut expressway and the Eastern Peripheral expressway that was bidded earlier but had failed to impress potential developers. Coupled with the 21 projects worth Rs 26,550 crore that failed to get any bids in 2012 and 2013, the figure adds up to Rs 43,918 crore.

It’s not only the inability to attract bidders for big ticket projects that is giving sleepless nights to ministry officials. As on June 2014, a total of 49 projects worth Rs 53,993 crore are stuck or running way behind schedule because of reasons including incapacity of developers to ramp up equity for projects, delay in land acquisition and failure to get environment and forest clearances.

In the last three years, 28 projects worth `30,300 crore have been terminated either because of concessionaires developing cold feet as they did not find the project viable any longer or NHAI failing to get land and other regulatory clearances on time.

The projects that have been terminated include those by developers like Isolux Soma, Sadhbav, KMC, Hindustan Construction Company and Ramky. Six highway projects have been terminated this fiscal. Besides, projects worth Rs 25, 810 crore are presently under dispute pending before arbitration and courts.

“If you add up, projects worth Rs 1.28 lakh crore are languishing for either want of funds or failure to get various regulatory clearances.

The overall situation is pretty gloomy. Unless the government takes urgent measures to revive languishing projects and expedite award of new projects, the Modi government’s ambitious target of building 30km of highways per day looks like an uphill task,” said a senior highways ministry official.

So far, this fiscal the National Highways Authority of India has managed to award just eight projects worth Rs 4,751 crore and covering a stretch of 797km. The ministry has fixed a target of 8,500km for award during 2014-15.

“It does not look like we will be able to achieve even the 20km/day target that was set by the previous UPA government. Even at our optimistic best we do not hope to award more than 3,000 km length of projects and that too in the new EPC model where government provides the entire funding,” said a senior NHAI official.