The UPA government’s ambitious target to build 20 km of road a day will not fructify as the target is unsustainable, the head of National Highways Authority of India, the country’s apex road building agency said Thursday.
“Building 20 km (of roads) a day target is not sustainable. There is no point in rushing up with projects where we do not have environment clearance; we do not have land acquisitions... We must deal with these projects in a way the private equity gets interested,” NHAI chairman RP Singh said on the sidelines of a FICCI conference on highways.
Singh said the target is not sustainable on account of several reasons like delay in environment clearance and issues of land acquisition.
The NHAI chief’s remarks come at a time when award of highway project during 2012-13 has hit rock bottom. The agency has so far managed to award a little over 800 km stretch as against the original target of 9,500 km. Poor response has now forced the government to scale down the target to 6,600 km. Developers have cited a host of reasons like lack of funds and unwillingness of banks to lend for not coming forward to bid for projects.
Kamal Nath, the then road minister, had in 2009 announced its ambitious target of building 35,000 km of highways in five years, which translates into constructing 20 km of roads in a day. So far, the target was never achieved and even Prime Minister Manmohan Singh had expressed concern over it.
Raising equity was a major concern for awarding road projects of 10,000 kms a year, including 7,000 km of national highways. It requires Rs. 90,000 crore investment, of which one-third (Rs. 30,000 crore) should be private equity. “Can we really raise Rs. 30,000 crore equity,” he wondered while stressing the need for making road projects lucrative.
Achieving up to 60% of the target would be meaningful if the government manages to maintain current rate, he said.