NHAI on track to award Rs 2.25-trillion projects this fiscal: Chairman

The National Highways Authority of India (NHAI), undeterred by the second wave of the pandemic, has firmed up plans to award projects worth Rs 2.25 trillion in the current fiscal year.

“For FY22, the NHAI has set a highway construction target of 4,600 km. We also plan to award projects worth around Rs 2.25 lakh crore (trillion) in the current fiscal year,” NHAI Chairman Sukhbir Singh Sandhu told Business Standard.

The construction target for the year roughly translates into 12-13 km a day.

Asked whether the targets will be revised in view of the current situation, Sandhu said: “Like last year, we are committed to completing our projects in a time-bound manner with all precautions to reduce the impact due to Covid and subsequent situation.”

“The NHAI awarded 141 projects for 4,788 km in 2020-21 — the highest in three years.”

The NHAI constructed 4,192 km of National Highways in FY21. The authority claims it is the highest ever in a financial year by the NHAI.

The pace of construction increased by 5 per cent in 2020-21 against 3,979 km in 2019-20 and was 24 per cent more than the 3,380 km constructed in 2018-19. Considering construction in lane kilometres (kilometres multiplied by the number of lanes), the NHAI constructed 18,500 lane km during FY21, which comes to over 50 lane km per day.

This is 40 per cent more than the 13,243 lane km constructed in 2019-20 and 91 per cent more in comparison to 9,684 lane km in 2018-19.

The lane km matrix was adopted by the Ministry of Road Transport and Highways in April 2018 in line with international practices.

Currently, construction at various sites has been affected both due to the lockdown and workers falling ill during the second wave. 

The situation is, however, not the same across the country with states like Uttar Pradesh and Maharashtra, where the severity of infection is high, reporting higher losses of on-site labourers.

As far as rise in raw material cost is concerned, Sandhu said, “For the development of highway infrastructure, the NHAI awards contracts to the contractors/concessionaires. 

In projects under engineering, procurement and construction, and the hybrid annuity model, there is a provision in the contract agreement to make payments linked to the wholesale price index (WPI). So, if the price of raw material increases, the cost of road projects also increases.” 

This would mean the government would reimburse the increased cost to the contractor while making payments.