Road developers see polls to slow NHAI targets

Coming elections in the country are going to cause delay in road works. Road developers are set to see challenging business environment as the National Highways Authority of India (NHAI), which missed project award targets in the last year by a huge margin, may not meet them.

A senior Hindustan Construction Company official said that on one side the government may try to implement things quickly, but by the time it happens the model code of conduct will come into play. There are just six months left as post December this year the entire government machinery will come to standstill, he said.

Analysts too said while the build operate and transfer (BOT) projects will be constrained due to economic slowdown and fund crunch, the engineering procurement and construction (EPC) projects would slow due to elections. Edelweiss Capital, said that a tough economic environment will constrain BOT awards.

Achieving the fiscal 2014 target hinges largely on award of 3,500-4,000 km EPC projects. The timing of central and state elections will also cast its shadow on the project award, Edelweiss said in a recent report.

The Ministry of Road Transport and Highways had set an ambitious target of awarding 8,800 km of road length in fiscal 2013, which was raised by the Prime Minister Office to 9,500 km. NHAI, however, was able to award only 1,112 km projects. For this fiscal, the road ministry has again set an ambitious target of awarding 9,000 km projects, about 50% through the EPC route.