After Golden Quadrilateral, it’s NHDP turn to hit roadblocks

The NHDP-III programme has been divided into two projects — NHDP-III(A) and NHDP III(B) — and unlike the GQ, they have to take the build-own-transfer (BOT) route only. However, out of the over 10,000 km marked under NHDP-III, the Cabinet has only approved III(A) and is yet to approve the larger III(B) which already has 61 identified projects totaling 6,470 km.

NHDP-III(A), on the other hand, envisages construction of close to 4,010 km of highways.

According to sources, the Cabinet clearance for III(B) could take another six months.

While the approval for NHDP-III(A) was given last March, there have been slippages of targets and this has already become a matter of serious concern for the Government. Since March, as against a target of 1,476 km, the actual achievement has been only 669 km or 45 per cent of the target (according to NHAI, the total amount of contracts awarded under NHDP-III is 906 km).

However, in terms of the number of contracts, since March last year, though 53 projects under NHDP-III(A) have been identified, only 19 projects have been awarded till June 1, 2006.

When it comes to the current year, since January 2006, NHAI has been able to award only 184 km of contracts and has failed to make up for the slippages seen in the previous year and during the first quarter of this year.

In fact, the issue of why very few BOT projects have been offered for bidding has already been taken up at the Prime Minister’s level at a meeting to discuss the next steps in reforms held on June 28. In fact, the next COI is expected to take stock of the progress of all NHDP programmes.

Sources said that there are two primary factors responsible for the delay. The first is that there are no takers for some projects put up for bidding and the second is the protracted delays in formulating the new model concession agreement for implementing BOT projects. Apart from these, there is a far more serious problem of paucity of adequate number of contractors in the market to take up the several projects on offer and those in the pipeline.

The perennial problem of land acquisition that has affected the GQ and the NS-EW corridor has resurfaced for NHDP-III as the new MCA puts tremendous financial penalties on NHAI for delays in land acquisition. This in turn is acting as a hindrance for NHAI to award projects (using the new MCA) as they are dependent on states for land acquisition.

Ironically, based on the GQ experience, the MCA was tightened to ensure that land acquisition does not delay projects and therefore requires NHAI to acquire around 80 per cent of the land at the time the contract is awarded.

Both the road ministry and officials in the COI now confirm this to be a problem area.

NHAI chairman Santosh Nautiyal told Indian Express that he would approach COI to amend the MCA and seek some flexibility on this aspect and instead of fixing a uniform percentage for land acquisition, would suggest a varying figure on a case to case basis.

While there are no immediate solutions for resolving the issue of paucity of contractors, NHAI sources did say that they would not wait for formulating the detailed project reports (DPRs) for future projects (which takes six months) and would award projects on the basis of feasibility reports itself and would leave it to the bidder to work out the DPRs.

One of the suggestions that is expected to come up at the next COI meet is to establish a credible time-frame for the proposed BOT projects to be taken up in 2006-07 (which could be around 1,700 km) and attract potential investors by giving priority to high-traffic segments. This would ensure that the programme goes ahead without being held back on unresponsive bids.