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Baalu trips on national highways

The economic meltdown is threatening to badly hit the country’s National Highways Development Programme.

Written by Anubhutivishnoi | New Delhi | December 16, 2008 12:52:53 am

The economic meltdown is threatening to badly hit the country’s National Highways Development Programme. Against a target of awarding over 16,000 km of NHs for upgradation this year across various phases, the National Highways Authority of India (NHAI) has awarded projects for just some 1,000 km so far. Worse, most of these awarded in February — five projects for 882 kms under NHDP V to reputed firms — are yet to achieve financial closure. Infrastructure majors like Larsen & Toubro, Emirates Trading Agency, Berhard-IDFC Ltd and Soma Enterprises among others have not been able to organise funds for the NHDP V projects for six laning of the Golden Quadrilateral and North South East West corridor stretches. The five projects are scheduled for completion by December 2012. The only major concession inked by NHAI after these five is the 4.4 km-long elevated expressway at Badarpur just off Delhi-Haryana border to Hindustan Construction Company in September.

“Only six odd projects have been awarded so far this year. Initially, the request for qualification (RFQ) norms aimed at bringing only serious bidders discouraged firms and hemmed them in. But now, it is the recession effect. The last 2-3 months have been particularly bad. Bidders are now re-assessing the viability of projects because of limited availability of funds and high interest rates. What it means is that only very lucrative projects will be taken up by bidders and those with a small profit margin will just be dropped,” said an official. This means bad news particularly for NHDP III- the project to connect places of social and economic significance with four lane NHs. “While NHDP V will be still taken up by bidders because it involves six laning of sections already being tolled, it will be difficult for NHDP III. The time line for bidding for nearly 30 projects has been extended considerably to draw more bidders,” the official added.

The latest internal progress report of NHAI throws up troubling figures. A massive 10,000-plus kms are to be awarded under NHDP III, 5,470 kms under NHDP V and 821 kms under North South & East West corridor. NHAI has set the highest-ever highway completion target for 2008-09 and has unveiled the largest ever expenditure plan in the pre-election year. NHAI plans to upgrade 3,597 km of NHs and spend over Rs 28,000 crore this fiscal. The completion target at 3,597 kms for 2008-09 is far above the target set for previous years. In 2007-08, NHAI had targeted to upgrade 2,885 kms of which it only managed 1,614 kms, a target of just 817 kms in 2006-07 and 1,035 kms in 2005-06.

Though NHAI had targeted an expenditure of Rs 17,615 crore for 2007-08, it managed to spend only Rs 15,639 crore. This year’s highway spend is Rs 10,000 crore more than the last year’s expenditure. NHAI also targets to award contracts for 10,000 kms of highways in 2008-09 against last year’s 7,084 kms. It, however, managed to award only 1,203 kms in 2007-08.

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