Dedicated land acquisition cells should be formed for roads at the project level

01 Jul 2019 CW Team

Yogesh Kumar Jain, Managing Director, PNC Infratech, shares more on the success of the roads sector and why will it continue to be a focus area for the company with SHRIYAL SETHUMADHAVAN.

How do you view the availability of funds for project execution?

I don’t seeany paucity of funds for implementation of projects in the roads sector as the priority of both the central and state governments will continue to be acceleratingthe development of core infrastructure, which includes the roads sector.Reports suggest that the Minister for Road Transport NitinGadkari had sought total budgetary support of Rs 1.20 trillion for FY20 in the full-fledged Budget. This demand is for Rs 370 billion more than the allocated fundof Rs 830 billion in the interim Budget presented in February this year. As part of monetisation of assets for fund generation, NHAI has already invited bids for the third bundle of toll projects under the TOT model for an estimated upfront fee of Rs 49.95 billion. As subsequent bundles of toll projects on TOT model are on the anvil, successful asset monetisation is expected to generate a sizeable amount of funds for the implementation of new projects. Also, there are a large number of projects on both EPC and HAM modes under various stages of execution that need to be expedited by NHAI by speedy and complete acquisition of land and removal of hindrances/obstructions for early commissioning so that NHAI can bid out these assets either on OMT or TOT models to generate funds.

How do you view the construction opportunities in the sector for the next five years?

As the Roads Ministry (MoRTH) has targeted awarding contracts to construct1,000 km of National Highways in the first 100 days of the new Government, i.e. by mid-September 2019, sizeable opportunities are visible in the short term. In the medium term, the Ministry has already launched the implementation of the ambitious BharatamalaPariyojana, which involves the construction of about 83,000 kmwith a total capex of Rs 7 trillion over the next five years; the bidding process for 24,800 km in the first phase has already commenced. Several states have also initiated the development of greenfield expressway projects and upgradation of state highways in a big way. The above opportunities will help us secure quite a few new mandates, thus catalysing the overall growth of our company sustainably.

Any recommendations to give a further fillip to the sector?

Timely acquisition and possession of vacant land for physical execution continues to be the biggest challenge in the roads sector. With land acquisition in the domain of state governments, a focused approach,effective coordination and relentless efforts by central project proponents such as MoRTH, NHAI and NHIDCL are indispensable for successful project completion. Dedicated land acquisition cells with adequate strength of retired state revenue officials conversant with land records and acquisition process and having a rapport with the local villagers, should be formed at the project level to expedite the process.

Considering roads as well as other construction segments, which sectors will the company’s business focus on?

We will continue to focus on the roads sector with EPC contracts being the preferred mode of implementation. Although we do not have any immediate plans to foray into new infrastructure sectors, we will certainly look for the right opportunities in the airport pavement and rail freight corridor sectors, where there will be significant synergy with our present operations and expertise.

Yogesh Kumar Jain, Managing Director, PNC Infratech, shares more on the success of the roads sector and why will it continue to be a focus area for the company with SHRIYAL SETHUMADHAVAN. How do you view the availability of funds for project execution?I don’t seeany paucity of funds for implementation of projects in the roads sector as the priority of both the central and state governments will continue to be acceleratingthe development of core infrastructure, which includes the roads sector.Reports suggest that the Minister for Road Transport NitinGadkari had sought total budgetary support of Rs 1.20 trillion for FY20 in the full-fledged Budget. This demand is for Rs 370 billion more than the allocated fundof Rs 830 billion in the interim Budget presented in February this year. As part of monetisation of assets for fund generation, NHAI has already invited bids for the third bundle of toll projects under the TOT model for an estimated upfront fee of Rs 49.95 billion. As subsequent bundles of toll projects on TOT model are on the anvil, successful asset monetisation is expected to generate a sizeable amount of funds for the implementation of new projects. Also, there are a large number of projects on both EPC and HAM modes under various stages of execution that need to be expedited by NHAI by speedy and complete acquisition of land and removal of hindrances/obstructions for early commissioning so that NHAI can bid out these assets either on OMT or TOT models to generate funds. How do you view the construction opportunities in the sector for the next five years?As the Roads Ministry (MoRTH) has targeted awarding contracts to construct1,000 km of National Highways in the first 100 days of the new Government, i.e. by mid-September 2019, sizeable opportunities are visible in the short term. In the medium term, the Ministry has already launched the implementation of the ambitious BharatamalaPariyojana, which involves the construction of about 83,000 kmwith a total capex of Rs 7 trillion over the next five years; the bidding process for 24,800 km in the first phase has already commenced. Several states have also initiated the development of greenfield expressway projects and upgradation of state highways in a big way. The above opportunities will help us secure quite a few new mandates, thus catalysing the overall growth of our company sustainably. Any recommendations to give a further fillip to the sector?Timely acquisition and possession of vacant land for physical execution continues to be the biggest challenge in the roads sector. With land acquisition in the domain of state governments, a focused approach,effective coordination and relentless efforts by central project proponents such as MoRTH, NHAI and NHIDCL are indispensable for successful project completion. Dedicated land acquisition cells with adequate strength of retired state revenue officials conversant with land records and acquisition process and having a rapport with the local villagers, should be formed at the project level to expedite the process. Considering roads as well as other construction segments, which sectors will the company’s business focus on?We will continue to focus on the roads sector with EPC contracts being the preferred mode of implementation. Although we do not have any immediate plans to foray into new infrastructure sectors, we will certainly look for the right opportunities in the airport pavement and rail freight corridor sectors, where there will be significant synergy with our present operations and expertise.