NHAI abandons plan to carve out subsidiary dedicated for expressways

The National Highways Authority of India (NHAI) has decided to abandon its plan to carve out a dedicated subsidiary for implementing expressways projects. 

It has instead gone ahead with entrusting every board member with the job of implementing projects in about four to five states. 

The NHAI has five members.

These projects include ordinary highways as well as expressways in states on contiguous basis. For instance, one official would overlook projects in Maharashtra, Karnataka, Goa, Kerala and likewise.

“Highway or expressway is just a nomenclature and we feel that a separate wing would lead to difficulty in inter-departmental coordination. The current arrangement of assigning four to five states to a member seems better suited,” an official said requesting anonymity.

Union Minister Nitin Gadkari had last year said the government was contemplating setting up two subsidiaries of NHAI — Express Highways and NHAI International. 

The idea behind a separate subsidiary was to streamline the execution of expressways in the country.

However, officials in the Union road ministry did not confirm that the proposal to have a separate subsidiary has been shelved. “We would not like to say that we have shelved the proposal. We have instead adopted a different approach for project execution,” a senior road ministry official said.

Industry experts feel the current approach of the Union government is the right one and the proposal can be revived if the number of highways goes up in the future.

“When the expressway authority was being discussed, at the time the expressways of 20,000 km were being talked about so it made sense. But the plans for expressways got delayed mainly due to the higher cost of land acquisition. They are now being built on case-by-case basis,” said Kushal Kumar Singh, partner, Deloitte Touche Tohmatsu India LLP.

In 2017-18, the NHAI awarded 150 projects of 7,400 km, worth Rs 1.2 trillion, which, the authority said, was an all-time high. 

The average length of projects awarded by the NHAI in the last five years is 2,860 km. 

The Union road ministry and NHAI plan to execute Rs 2.25 trillion worth of projects totaling 15,000 km in the run-up to Lok Sabha elections, scheduled to be held next year.