Rs 1 lakh cr road projects hit speed breaker

CMIE study puts the blame on land acquisition issues.

Highways and roads projects worth a whopping Rs. 1 trillion have been delayed due to problems related to land acquisition according to a recent report put out by CMIE. A majority of these (44 projects worth Rs. 936 billion) are promoted by the NHAI and of the 66 projects listed in the study, barely 2 have received environmental clearances. 
 

Among the ones delayed the largest is the 400 kms Mumbai-Vadodra Expressway which was first proposed way back in 1998 as well as the six laning project on the NH4 between Pune and Satara that was contracted to Reliance Infrastructure. Maharashtra accounts for close to 30% or 8 of the delayed projects with a majority of them being situated in Mumbai. These include the ambitious Santacruz-Chembur link road, the Panjarpol-Mankhurd-Ghatkopar expansion of the Eastern Freeway and the Virar-Alibaug Multi Modal Corridor project. 
 

Kerala, West Bengal, Andhra Pradesh & Uttar Pradesh are among the other states where implementation has remained tardy, while Rajasthan and Gujarat have been least affected by delays with only one project in each of the states held up according to CMIE.   
 

The Cabinet Committee on Investment which has cleared 36 projects in the roads, railways, power and oil & gas sectors worth 1.83 lakh crore rupees had earlier this year specifically set up a committee to tackle some of the major issues impeding growth in this sector. Steps included delinking forest and environmental clearances. 
 

But private sector developers – both existing and prospective, strapped for cash and with over-leveraged balance sheets have backed off from the sector for a number of reasons which include delays in getting clearances and less lucrative stretches on offer. Amongst the most high profile exits has been that of GMR which quit its 7,200 Cr Kishangarh – Udaipur – Ahmedabad project citing environmental clearance delays. Many other developers like IVRCL, Madhucon Projects and Ashoka Buildcon meawhile, have reportedly put their road assets on the block.
 

With the economy slowing down India’s roads sector has hit a major speed-breaker with barely 1156 kms of roads projects being bid out by NHAI in FY13, hardly 17% of the target of 7,000 km set out for the financial year.