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Highway projects hit road block, Finmin asked to intervene
It does not look like the government would be able to achieve its ambitious target of building 20 km roads per day anytime soon, Moushumi Das Gupta reports.
It does not look like the government would be able to achieve its ambitious target of building 20 km roads per day anytime soon.
Concerned over the tardy progress on ongoing projects coupled with poor response from private developers in taking up new highway projects, road secretary AK Upadhyay has written to finance ministry seeking its intervention.
Between April and July, as against the target of 20km, the National Highway Authority of India has managed to award contracts for constructing just over 4km of roads per day.
Over three dozen highway projects are awaiting financial closure.
In a letter to DK Mittal, secretary, department of financial services, the road secretary has said that delay in getting environment clearance is one of the main factors holding up completion of projects on time.
“The road secretary has said that environment clearance should be de-linked from forest clearance to expedite work. At present all infrastructure projects that pass through forest land have to secure both forest and environment clearance before work starts,” said a ministry official.
The ministry also wants the threshold for environment clearance to be increased to 100km length from 30km and 60 metre right of way from 30 metre.
Among other issues, the road ministry has also said that stringent lending norms of bankers are scaring away prospective private developers from investing in highway projects.
“We want the finance ministry to talk to bankers to ease stringent lending norms to private developers taking up highway projects.
"Because of the general slowdown in the economy bankers have become over cautious and are now demanding 100% upfront equity from private developers before they start lending. Private developers are finding it difficult to meet the demand,” said a senior road ministry official.
Some of the bankers are also demanding that highway developers should have 100% of the land in their possession before seeking loan.
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