Mumbai: The National Highways Authority of India (NHAI) said it will achieve its target of building 20km of national highways a day in the next three years, as contracts being awarded this fiscal year will translate into that daily distance.
All these roads will be built as public-private partnerships, J.N. Singh, member (finance) of NHAI, told reporters in Mumbai on Monday.
“Out of a total 33 projects awarded, 20 fetched a premium” or higher than the estimated cost, Singh said. Such contract winners haven’t faced any hurdles in tying up funds, he said.
A file photo of a national highway project
Set up in 1995, NHAI is an autonomous Union government agency responsible for the development, maintenance and management of national highways. NHAI awarded 3,360km of roads in 2009-10, 5,058km in 2010-11 and has more than 7,300km planned for this fiscal year.
NHAI is in the process of raising as much as Rs 10,000 crore by selling tax-free bonds starting 28 December to meet some of its funding requirements. SBI Capital Markets Ltd and AK Capital Services Ltd are managing the issue along with ICICI Securities Ltd and Kotak Mahindra Capital Co. Ltd.
J.N. Singh of NHAI talks about his organisation’s plans for the coming years and why they’ll soon be able to build 20 kilometres of roads everyday.
“Last fiscal, we awarded 5,000km of roads and this year 7,300-7,500km. We will be awarding at least 7,000km year-on-year starting from next fiscal. Though we are seeing some delays due to land acquisition and a shortage of civil engineers, there are no major concerns in executing national highway projects,” Singh said.
Singh said the award of roads has registered a growth of 42% in the current fiscal from a year earlier and NHAI plans to complete at least 2,400km of roads this year.
He said states including Maharashtra, West Bengal and Kerala have seen some delays in land acquisition, adding that these were “one-of-a-kind instances”. IRB Infrastructure Developers Ltd announced last week that NHAI had cancelled the company’s Goa-Karnataka road project on account of the government agency’s inability to provide land for implementation of the project.
An investment banker, requesting anonymity, said NHAI will be on track to achieve the target of 20km a day as the government is supporting it in raising funds and land acquisition, and private companies are quoting a premium for securing the mandate to build roads.
Despite the economy slowing, NHAI has received record premiums for projects in the current year. The project to widen the 560km Kishangarh-Udaipur-Ahmedabad stretch to six lanes fetched a premium of Rs 636 crore, subject to a 5% annual increase.
NHAI can achieve its 20km a day target over the next three years, Elara Securities (India) Pvt. Ltd had said in a June report. This depends, however, on the uninterrupted award of projects and ensuring that projects are brought fully on stream with a maximum lag of a year’s time, it said.
Singh of NHAI said that on an average, 20-30% of the land is yet to be acquired for building roads. In the current financial year, 7,800 hectares (ha) of land was acquired until November, compared with a total acquisition of 8,533ha in 2010-11 and 6,244ha in 2009-10.