NEW DELHI: The highways sector, which was the sole shining light in the infrastructure sector, has joined the list of laggards with the government unable to award new projects due to lack of interest. During the first four months of 2012-13, the National Highways Authority of India (NHAI) could only award contracts for construction of 4.25km-a-day, which is around a quarter of the 20km-a-day target fixed by Prime Minister Manmohan Singh.
The current pace of award is a little better than the situation in 2008-09, when contracts for construction of 643km were awarded. Between April and July this year, contracts for 507km have been awarded, which is one-fifth the target of 2,560km for the period. In terms of onground activity, the report card is only marginally better with daily construction estimated at 6km-a-day.
The government has repeatedly said that it is critical to step up infrastructure construction to remove a key hurdle to faster economic growth. Several countries have used more rapid infrastructure expansion to boost economic activity, something that India too did successfully during the NDA regime when the National Highway Development programme was conceived and four-laning of the Golden Quadrilateral was taken up.
While UPA-I did little to maintain the pace when T R Baalu was the road transport and highways minister, the situation improved after 2009. Kamal Nath tried to ensure that the pace picked up and more contracts were awarded after UPA-II came to power.
Highways are not the only infrastructure sector where the government is facing difficulty. The state of railways, starting with operations to finances, is in a mess and power shortages are taking a toll on the industry. In the ports sector too, data available with the government reveals that targets fixed by the PM were missed. Against the target of awarding 42 projects, the shipping ministry has been able to award only a couple of projects despite weekly monitoring by secretary P K Sinha.
In case of highways, ministry sources said large private players were not bidding for new projects since their hands were full. "Until they tie up funds for the already bagged projects, why will they bid for new projects? In many cases, the developers have sought extra time to achieve financial closure. There is a stress in the market," a senior official said.
Even NHAI chairman R P Singh, in his recent letter to Union highways secretary A K Upadhyay, wrote that there was a perception that in the recent past, the award of highway projects was above their potential.
Edited By Cen Fox Post Team
