Road projects may not be able to use allocated funds

The road transport and highways ministry may not be able to fully utilise its budget allocation for this year, too, although it has resolved a number of issues hampering road projects.

Out of the Rs23,602 crore budget allocation for the current financial year, the ministry has been able to spend only Rs7,167 crore, or 30 per cent, in the first half of this financial year, according to ministry data.

The ministry has not been able to utilise the full amount in any of the financial years in the Eleventh Five-Year Plan (2007-12). Of the Rs18,060 crore allocated in the last financial year (2009-10), the ministry could spend Rs14,697 crore.

“It is likely that the road transport ministry may not be able to utilise the fund this time also even though many of the issues hampering road projects have been resolved. There are various reasons like land acquisition, which the ministry cannot rectify by itself and these things lead to delay and non-utilisation of funds,” said Amrit Pandurangi, senior director (infrastructure practice), Deloitte.

The pace of award of road projects has also not been satisfactory in the first six months of 2010-11. The National Highways Authority of India (NHAI) awarded around 40 projects in the first six months of 2010-11. The government’s spending on highways rose over 18 per cent from the beginning of the Plan period to Rs14,697 crore in the last financial year, though allocations rose over 26 per cent to Rs18,060 crore in 2009-10.

In the current year, the ministry is expecting a three-fold increase in private participation at Rs21,256 crore compared with Rs8,573 crore in 2009-10. It targets to build around 60 per cent of the roads through private participation.

Of the total allocations, budgetary support to NHAI increased by 27.9 per cent from 2009-10 to Rs9,471 crore for this year but the highways authority wanted more money to meet the target.