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Nath set to fall short of 7,000km highways target

Nath set to fall short of 7,000km highways target
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First Published: Wed, Feb 10 2010. 12 04 AM IST

Updated: Wed, Feb 10 2010. 12 04 AM IST
New Delhi: The National Highways Authority of India (NHAI) has awarded 27 projects totalling a little more than 2,000km, while price bids for at least another 25 are due in the next two months.
Even if these are awarded on schedule, it would add up to a little more than 5,000km in the year since road minister Kamal Nath took office in May, coming up short against the 7,000km target for the year he set eight months ago.
To sure, Nath has succeeded in raising the profile of the ministry following the perceived underperformance by his lacklustre predecessor T.R. Baalu.
Nath has made changes in almost every major area his ministry handles—administrative ones such as renumbering national highways along the lines of the US; announcing plans for a 18,637km expressway network; proposing changes to the Motor Vehicles Act and toll policy; and announcing mega highway projects of several hundred kilometres each to be built by the private sector.
The ministry is formulating guidelines for the mega projects to ensure only those companies that have the capacity to handle the scale bid for them, officials said.
Proposals being evaluated include capping the number of financial closures that a developer has pending at any given point in time, a senior ministry official said. The officials declined to be named.
The review of the numbering convention followed by the national highways is also almost complete, the same official said, adding that the ministry was checking to see if implementing the changes would require parliamentary approval.
Nath’s key accomplishment involved the setting up of the Prime Minister’s committee to look into problems faced by the national highways sector. The panel recommended that NHAI be given wider powers to decide the mode of execution for projects and easing terms for developers. The panel also made it easier for companies to exit national highway projects rather than be locked into them for its entire duration.
The award for the 27 projects were made between June 2009 and January this year. The final bids for the 25 in the pipeline—totalling another 2,500km—are due in February and March.
Writing in The Wall Street Journal in January, Nath talked of huge investment and momentum building up in the road building programme. “The first $20 billion of contracts will be awarded by June this year and $50 billion within the next 18 months. My target is 7,000km of new roads per year. When I took over as minister last May, progress was slow at 3-4km a day. Currently the figure is 9km a day, but I aim to hit our goal of 20km a day by April,” Nath wrote.
Nath delayed the deadline for meeting that daily target to June on 8 February, PTI reported.
Some analysts point out that many of the projects that have been awarded were prepared when Baalu was in office. They had been scuppered at the time because few bidders were interested amid the economic slowdown, said a senior government official familiar with India’s ambitious road programme.
One NHAI official said the problem with the pace of road building could stem from the composition of the authority itself.
“See, NHAI is supposed to manage highways. But the people coming here are constructors. Their experience is in building highways for state public works departments,” said the highway authority official, who did not want to be identified because he isn’t authorized to speak to the media.
Nath’s critics acknowledge that at the very least, he has brought more energy to the highways building programme after the inertia that had set in at the time of the economic slowdown.
“One thing he has done is get a degree of excitement in the industry, especially compared to last year, when it had been written off,” said Arvind Mahajan, an executive director with consulting firm KPMG Advisory Services Ltd. “But at the same time, we need to see more action happening. The honeymoon period is over. The action has to be there.”
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First Published: Wed, Feb 10 2010. 12 04 AM IST