NHAI spruces up land acquisition activity prior to award of contracts

The roads ministry has set a target of awarding 7,000-km road projects during FY15

Aiming to reduce delays in the award of road projects, the National Highways Authority of India (NHAI) spent Rs 6,870 crore in 2013-14 for acquiring land for future projects, which is about 49 per cent higher than what was spent in the previous year. According to a senior NHAI official, about 8,300 hectares were acquired in 2013-14, against 6,700 hectares at4,600 crore in 2012-13. "This will reduce the delays in the award of projects as the main issue is acquisition of land," the official said.

The Union Ministry of Road Transport and Highways has recently decided to award projects after acquiring a certain percentage of the land. In government-funded projects - through the EPC (engineering- procurement-construction) route, about 90 per cent of land is acquired before the appraisal stage. While in the BOT (build-operate-transfer) projects, 60 per cent of land has to be acquired in the appraisal stage and 80 per cent during the award stage.

Due to the economic slowdown over the last few years, the award of contracts for national highways has slowed down. Besides issues related to environment and forest clearances, land acquisition has seen major problems. Many road projects are stalled by developers running short of cash and the government has even allowed them to reschedule the payment of premiums under a new policy.

"The bad patch seems to be over now. The financial markets are expected to rise and bounce back. This will revive interest in the PPP (public-private-partnership) model," added another official.

The roads ministry has set a target of awarding 7,000 km worth of road projects during the financial year 2014-15, under both BOT and EPC modes. For 2013-14, about 3,169 km of projects were awarded against a target of 7,500 km as there were less takers for PPP projects.

The government funds the entire project under EPC and a developer undertakes the necessary construction work. BOT requires a private-sector developer to raise and invest money for the construction of roads at its own risk and NHAI acquires land for the project.