Caught in a web of arbitration,costly debt and equity,and repeated changes in the top management of the National Highways Authority of India (NHAI),the UPA governments flagship National Highways Development Programme (NHDP),has performed poorly.
According to government statistics,till January 31 this year,only 5.44 per cent of the total road length of 12,109 km under NHDP Phase III had been constructed. NHDP Phase V performed worse: till December 31,2008,a mere 1.2 per cent of the planned 6,500 km had been built.
Effectively,the constructed stretch in ten months on NHDP III was 659 km,with 1,416 km under implementation as on January 31,2009. A balance of 10,034 km (82.7 per cent of the total length) was to be bid out by the end of January this year. Constructed length under NHDP V was about 77 km on December 31,2008. In this phase,953 km (of the total 6,500 km) were under implementation; 5,470 km (about 84 per cent of the total length) were yet to be tendered.
2007 and 2008 saw very few projects being awarded. Almost all projects awarded in this period saw the government getting high revenue shares/negative grants,thanks to the bullish mood and excess liquidity. Now,even though the cost of construction has fallen thanks to reduced commodity prices,high debt and equity costs are likely to result in bids asking for high grants, said Jayesh Desai,National Director,Infrastructure and Government,Ernst & Young.
Only about 45 per cent of the North-South and East-West Corridors (3,291 km out of the total 7,300 km) had been four-laned as of January 31 this year. In December,208 km of these corridors were four-laned,constituting NHDPs Phases I and II. In the same month,46 km were built under NHDP III,and only 14 km under NHDP V.
No projects were awarded in any NHDP phase in January 2009.
The expenditure on NHDP III and V projects in the current financial year is estimated to be Rs 2,782 crore and Rs 514 crore respectively. The expenditure on NHDP I &II stood at Rs 8,225 crore in the current fiscal. In December 2008,NHDP III and V expenditure stood at about Rs 221 crore and Rs 72 crore respectively.
The only substantial progress has been along the Golden Quadilateral. The entire 5,846 km have been awarded,and four-laning is complete over 5,713 km or 97.72 per cent of the total.
The UPA government did make significant progress in its first three years as far as the awarding of road projects was concerned. In fact,it awarded some of the most difficult stretches in Bihar,etc. Work also moved on along the Golden Quadilateral. But 2008 has been a complete washout. This has more to do with model documents not being finalized and other process-related issues, said Amrit Pandurangi,Executive Director,Pricewaterhouse Coopers.