NHAI misses its target of 15000 km road awards in FY17

Before start of financial year 2017, the government set a target of awarding 25,000 km of road projects in fiscal 2016-17. Out of this, NHAI was expected to award 15,000 km and the balance 10,000 km was to be awarded by the Ministry of Road Transport and Highways (MoRTH).

However, as per data on NHAI’s website, between April 2016 and January 2017, NHAI has awarded 50 projects crossing about 2,914 km under the build operate transfer (BOT), hybrid annuity model (HAM), and engineering, procurement, construction (EPC) models.

Further, there is a probability that NHAI will achieve around 4,500-5,000 km of road awards in the year ending March 31, 2017 against the target of 15,000 km.

Many street analysts say that, several issues like acquisition of land and getting clearance, etc., came in the way of awarding projects. But, substantial increase in road awards has been seen in last month of the financial year 2017. Moreover, NHAI’s original target for the financial year 2017 was set at 8000 km. Out of 2914 km road awards only 2350 km was constructed.

However, the momentum is expected to see significant uptick in financial year 2018, and construction activity too is expected to witness a rebound. India has the world’s second largest road network of about 4.8 million km, but major highways constitute a small percentage of that.

As per India Ratings and Research, the road awarding pace had slowed down by 20 per cent in the first nine months of FY17 due to the weak environment of the sector. It also added that, the government’s thrust on cash-based contracts, reflects the general stress on the need for more liquidity in the hands of developers to execute the projects.

During April-February 2017, NHAI and MoRTH jointly have awarded 9,700 km of projects compared to 10,098 km road awards by both authorities in financial year of 2016.