NHAI seeks IITs' help in reducing costs, constructing better road

National Highways Authority of India (NHAI) is in discussions will the Indian Institutes of Technology (IITs) for bringing in greater efficiency in the sector by reducing the cost of road construction and improving quality in the long run.

It is learnt that the authority would engage with all the IITs for conducting studies and finding efficient and innovative solutions to highway building by way of technology.

“Reducing cost of construction by bringing in efficiency without compromising on the quality is the idea. Therefore, IITs will do the research for us,” a NHAI official said.

Cost of road construction has increased massively for the authority that recently announced tenders for 950km of road stretches worth Rs 30,000 crore. This translates to approximately Rs 31.5 crore per kilometre.

The projects, spread across 8 states, will come up on the public-private partnership (PPP) model on build-operate-transfer (toll) basis.

The stretches have been selected pan-India after consultations with prospective bidders and cover the states of Andhra Pradesh, Haryana, Maharashtra, Karnataka, Tamil Nadu, West Bengal, Chhattisgarh and Madhya Pradesh.

NHAI has already invited the proposal for Annual Pre-qualification for construction of 4 to 6 lanes of national highways for these stretches.

The process of annual pre-qualification will not only streamline and ease the bid process of the individual project on the BOT (toll) mode, but also give an idea about the market response.

This exercise is NHAI's attempt at reviving the BOT model of construction. Under BOT, private players build, operate and maintain the road for a specified period of time before transferring the asset back to the government. In the case of HAM, the central government bears 40 per cent of the project cost and the remaining amount is arranged by the developer.

The government has made fund allocation to the NHAI for major works under the Bharatmala Pariyojana, entrusted to the organisation for execution this. The money will come from the Central Road Infrastructure Fund (CRIF), Permanent Bridges Fee Fund (PBFF), and Monetisation of National Highways Fund (MNHF).

Rising cost of highways 

• Till about three years back, expansion of a highway from two to four lanes would cost Rs 10-12 crore a km  
• NHAI’s construction cost has risen significantly, led by 30 per cent CAGR in average land acquisition cost to Rs 3.4 crore/hectare in FY13 and 16 per cent CAGR in civil construction cost to Rs 20.5 crore/hectare
• NHAI has announced tendering projects of 950 km at an estimated cost of Rs 31.5 crore per kilometre