NHAI gearing up to execute highway projects worth Rs 2.25 trillion

Centre's focus will be finishing under-execution projects but road ministry and NHAI will not shy away from tendering fresh contracts, with certain riders

With the Lok Sabha elections due in less than a year, the Ministry of Road Transport & Highways and the National Highways Authority of India (NHAI) are gearing up to execute highway projects worth Rs 2.25 trillion and of 15,000 km in length.

After the monsoon season, the NHAI will double down on these projects because the requisite clearances are in place, which would allow an uninterrupted run for contract implementation. “This is the consolidation phase for the road sector. It is time for us to execute the highway contracts we bid out in the past few years and they are at various stages of implementation,” a senior official told Business Standard.

The Union government’s focus in the next few months will be finishing the under-execution projects rather than awarding new ones but the road ministry and the NHAI will, however, not shy away from tendering fresh contracts, with certain riders.

“We will award new contracts only for projects in which land acquisition has been completed,” the senior official said.

Experts say the approach of focusing on project execution is correct. However, awarding and implementing can be done simultaneously, according to them.

“Executing the existing highway projects does not mean the Union government will not award new contracts as award and implementation can go hand in hand. Ultimately massive project awards and implementation should be followed up with quality maintenance of those projects,” said Vishwas Udgirkar, partner, Deloitte Touche Tohmatsu India.

The 15,000-km projects under implementation comprise hybrid-annuity contracts, engineering-procurement-construction (EPC) contracts, and build-operate-transfer (BOT) projects.

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 since its inception in 1995. 

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

Of the projects given, 3,791 km was awarded in EPC mode at Rs 430 billion. Hybrid-annuity contracts worth Rs 765 billion and totalling 3,396 km were bid out last year. However, the size of BOT toll contracts was 209 km and the cost Rs 25 billion.

The NHAI had earlier said tendering and awarding projects picked up only after the sanction of the Bharatmala programme and the procedure for sanction was put in place in November last year. Under it, the NHAI board has been given the powers to sanction EPC projects.

A high-powered Projects Appraisal Committee and Cost Committee have been put in place in the NHAI.