Ailing sector

There is hope that the ailing road construction sector in the country might see a revival if some of the decisions, or plans at the moment, of the new government are implemented.

 Union Road Transport and Highways minister Nitin Gadkari has expressed concern over the lack of progress in the completion of many national highway projects and promised measures to overcome delays and other obstacles. Work on not only the national highways but on all road projects has been affected in the recent past. The momentum given to the road infrastructure sector by the NDA government of AB Vajpayee was lost in later years, especially during the UPA II period. This needs to be regained because good and extensive road connectivity is crucial for economic development.

Gadkari has announced that highway projects worth over Rs 40,000 crore have been cleared by the government for implementation in the next three years. These are mainly in the border states and would largely cater to defence and tourism needs. Projects which are lagging in other areas should also be taken up, and the minister has indicated that the government may take up  more highway projects in the coming years. The plan is to build about 30 km of roads per day as against  3 km per day now. Projects worth about Rs 85,000 crore are pending now.  Only 315 km of national highways were added in the last five years though 147 projects. These, estimated to have cost about Rs 1.47 lakh crore, were awarded under the public private partnership (PPP) mode.

Problems in the working of the PPP mode were an important reason for the deceleration of the road projects. Economic slowdown, the higher cost of funds and difficulties related to land acquisition and environmental clearances were the main reasons for many projects lagging behind schedules or failing to take off. The move to shift many projects to the engineering, procurement and construction (EPC) mode, where the government would fund the project and the developer would only
 undertake construction, may solve some of the problems faced in the PPP mode.

 Fresh ways of financing the projects are also being explored. Even the few thousands of crores now proposed to be spent on roads are not enough to meet the present and the future demand. The plans and projects will also call for close monitoring even on a day-to-day basis for good results.

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